Execution Version
 
GUARANTEE AND COLLATERAL AGREEMENT
 
dated as of
 
June 30, 2014,
 
among
 
RETROPHIN, INC.,
as the Borrower
 
THE GUARANTORS PARTY HERETO
 
and
 
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
 
 
 

--------------------------------------------------------------------------------

 
 
TABLE OF CONTENTS
_________________
 
Page
 
SECTION 1.
Definitions.
1
SECTION 2 .
Guarantees by Guarantors.
10
SECTION 3 .
Grant of Transaction Liens.
13
SECTION 4 .
General Representations and Warranties
15
SECTION 5 .
Further Assurances; General Covenants
17
SECTION 6 .
Recordable Intellectual Property
19
SECTION 7 .
Investment Property
20
SECTION 8 .
Deposit Accounts
23
SECTION 9 .
Cash Collateral Accounts
23
SECTION 10 .
Commercial Tort Claims
23
SECTION 11 .
Transfer Of Record Ownership
24
SECTION 12 .
Right to Vote Securities
24
SECTION 13 .
Certain Cash Distributions
25
SECTION 14 .
Remedies upon Event of Default
25
SECTION 15 .
Application of Proceeds
27
SECTION 16 .
Fees and Expenses; Indemnification
29
SECTION 17 .
Authority to Administer Collateral.
30
SECTION 18 .
Limitation on Duty in Respect of Collateral
31
SECTION 19 .
General Provisions Concerning the Collateral Agent.
31
SECTION 20 .
Termination of Transaction Liens; Release of Collateral
32
SECTION 21 .
Additional Guarantors and Grantors
33
SECTION 22 .
Notices
33
SECTION 23 .
No Implied Waivers; Remedies Not Exclusive
33
SECTION 24 .
Successors and Assigns
33
SECTION 25 .
Amendments and Waivers
33
SECTION 26 .
Choice of Law
34
SECTION 27 .
Waiver of Jury Trial
34
SECTION 28 .      
Severability
35

 
 
i

--------------------------------------------------------------------------------

 
 
EXHIBITS:
 
 
Exhibit A
Guarantee and Collateral Agreement Supplement

 
 
Exhibit B
Copyright Security Agreement

 
 
Exhibit C
Patent Security Agreement

 
 
Exhibit D
Trademark Security Agreement

 
 
Exhibit E
Perfection Certificate

 
 
Exhibit F
Issuer Control Agreement

 
 
Exhibit G
Securities Account Control Agreement

 
 
ii

--------------------------------------------------------------------------------

 
 
GUARANTEE AND COLLATERAL AGREEMENT
 
GUARANTEE AND COLLATERAL AGREEMENT dated as of June 30, 2014, among RETROPHIN,
INC., a Delaware corporation (the “Borrower”), the GUARANTORS party hereto and
U.S. Bank National Association, as Collateral Agent for the benefit of the
Secured Parties.
 
WHEREAS, the Borrower is entering into the Credit Agreement described in Section
1 hereof, pursuant to which the Borrower intends to borrow Loans for the
purposes set forth therein;
 
WHEREAS, the Borrower is willing to secure its obligations under the Credit
Agreement by granting Liens on its assets to the Collateral Agent as provided in
the Security Documents;
 
WHEREAS, the Borrower is willing to cause certain of its Domestic Subsidiaries
to guarantee the foregoing obligations of the Borrower and to secure its
guarantee thereof by granting Liens on its assets to the Collateral Agent as
provided in the Security Documents;
 
WHEREAS, the Lenders are not willing to make Loans under the Credit Agreement
unless (i) the foregoing obligations of the Borrower are secured and guaranteed
as described above and (ii) each guarantee thereof is secured by Liens on assets
of the relevant Guarantor as provided in the Security Documents; and
 
WHEREAS, upon any foreclosure or other enforcement of the Security Documents,
the net proceeds of the relevant Collateral are to be received by or paid over
to the Collateral Agent and applied as provided herein;
 
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
 
SECTION 1.  Definitions.
 
(a)      Terms Defined in Credit Agreement.  Terms defined in the Credit
Agreement and not otherwise defined in subsection (b) or (c) of this Section 1
have, as used herein, the respective meanings provided for therein.  The rules
of construction specified in Section 1.03 of the Credit Agreement also apply to
this Agreement.
 
(b)      Terms Defined in UCC.  As used herein, each of the following terms has
the meaning specified in the UCC:
 
 
 

--------------------------------------------------------------------------------

 
 
Term
UCC
Account
9-102
Authenticate
9-102
Certificated Security
8-102
Chattel Paper
9-102
Commercial Tort Claim
9-102
Commodity Account
9-102
Commodity Customer
9-102
Deposit Account
9-102
Document
9-102
Entitlement Holder
8-102
Entitlement Order
8-102
Equipment
9-102
Financial Asset
8-102 & 103
Fixtures
9-102
General Intangibles
9-102
Goods
9-102
Instrument
9-102
Inventory
9-102
Investment Property
9-102
Letter-of-Credit Right
9-102
Record
9-102
Securities Account
8-501
Securities Intermediary
8-102
Security
8-102 & 103
Security Entitlement
8-102
Supporting Obligations
9-102
Uncertificated Security
8-102

(c)      Additional Definitions.  The following additional terms, as used
herein, have the following meanings:
 
“Cash Collateral Account” has the meaning set forth in Section 9.
 
“Cash Distributions” means dividends, interest and other distributions and
payments (including proceeds of liquidation, sale or other disposition) made or
received in cash upon or with respect to any Collateral.
 
“Collateral” has the meaning set forth in Section 3(a); provided that it is
understood and agreed that the Collateral shall not include the Excluded Assets.
 
“Collateral Accounts” shall mean the Cash Collateral Accounts, the Controlled
Deposit Accounts and the Controlled Securities Accounts.
 
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.
 
 
2

--------------------------------------------------------------------------------

 
 
“Contingent Obligation” shall mean, at any time, any Obligation (or portion
thereof) that is contingent in nature at such time, including any Obligation
that is:
 
(i)        any other obligation (including any guarantee) that is contingent in
nature at such time; or
 
(ii)        an obligation to provide collateral to secure any of the foregoing
types of obligations.
 
“Control” shall have the meaning specified in UCC Section 8-106, 9-104, 9-105,
9-106 or 9-107, as may be applicable to the relevant Collateral.
 
“Controlled Deposit Account” shall mean a Deposit Account that is subject to a
Deposit Account Control Agreement.
 
“Controlled Securities Account” shall mean a Securities Account that (i) is
maintained in the name of a Grantor at an office of a Securities Intermediary
located in the United States and (ii) together with all Financial Assets
credited thereto and all related Security Entitlements, is subject to a
Securities Account Control Agreement among such Grantor, the Collateral Agent
and such Securities Intermediary.
 
“Copyright License” shall mean any agreement now or hereafter in existence
granting to any Grantor, or pursuant to which any Grantor grants to any other
Person, any right to use, copy, reproduce, distribute, prepare derivative works,
display or publish any records or other materials on which a Copyright is in
existence or may come into existence, including any agreement identified in
Schedule 1 to any Copyright Security Agreement.
 
“Copyrights” shall mean all the following (i) all copyrights under the laws of
the United States or any other country (whether or not the underlying works of
authorship have been published), all registrations and recordings thereof, all
copyrightable works of authorship (whether or not published), and all
applications for copyrights under the laws of the United States or any other
country, including registrations, recordings and applications in the United
States Copyright Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof,
including the copyright registrations and copyright applications described in
Schedule 1 to any Copyright Security Agreement, (ii) all renewals of any of the
foregoing, (iii) all claims for, and rights to sue for, past, present or future
infringements of any of the foregoing and (iv) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including damages and payments for past, present or future
infringements thereof.
 
 
3

--------------------------------------------------------------------------------

 
 
“Copyright Security Agreement” shall mean a Copyright Security Agreement,
substantially in the form of Exhibit B (with any changes that the Collateral
Agent shall have approved), executed and delivered by a Grantor in favor of the
Collateral Agent for the benefit of the Secured Parties.
 
“Credit Agreement” shall mean the Credit Agreement dated as of the date hereof
among the Borrower, the lenders that are parties thereto and U.S. Bank National
Association, as Administrative Agent and Collateral Agent.
 
“Deposit Account Control Agreement” shall mean, with respect to any Deposit
Account of any Grantor, a Deposit Account Control Agreement among such Grantor,
the Collateral Agent and the relevant Depositary Bank in form and substance
reasonably satisfactory to the Collateral Agent and the Majority Lenders.
 
“Depositary Bank” shall mean a bank at which a Controlled Deposit Account is
maintained.
 
“Domestic Subsidiary” shall mean each Subsidiary of the Borrower that is not a
Foreign Subsidiary.
 
“Equity Interest” means (i) in the case of a corporation, any shares of its
Capital Stock, (ii) in the case of a limited liability company, any membership
interest therein, (iii) in the case of a partnership, any partnership interest
(whether general or limited) therein, (iv) in the case of any other business
entity, any participation or other interest in the equity or profits thereof,
(v) any warrant, option or other right to acquire any Equity Interest described
in this definition or (vi) any Security Entitlement in respect of any Equity
Interest described in this definition.
 
“Excluded Assets” shall mean, collectively, (i) each Excluded Account; (ii) any
permit or license or any other Contractual Obligation entered into by any
Grantor (a) that prohibits or requires the consent of any Person other than the
Borrower and its Affiliates which has not been obtained as a condition to the
creation by such Grantor of a Lien on any right, title or interest in such
permit, license or Contractual Obligation, (b) to the extent that any
Requirement of Law applicable thereto prohibits the creation of a Lien thereon
or (c) to the extent that a Lien thereon would give any other Person other than
the Borrower and its Affiliates a legally enforceable right to terminate such
permit, license or Contractual Obligation, but only, with respect to the
prohibition or legally enforceable right to terminate in each of (a), (b) and
(c), to the extent, and for as long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the UCC or any other
Requirement of Law, (iii) Property owned by any Grantor that is subject to a
purchase money Lien or a Capitalized Lease permitted under the Credit Agreement
if the Contractual Obligation pursuant to which such Lien is granted (or in the
document providing for such Capitalized Lease) prohibits or requires the consent
of any Person other than the Borrower and its Affiliates which has not been
obtained as a condition to the creation of any other Lien on such Property, (iv)
any “intent to use” Trademark applications for which a statement of use has not
been filed (but only until such statement is filed), (v) all vehicles covered by
a certificate of title law of any state, (vi) other assets subject to
certificates of title, Letter-of-Credit Rights (other than those that constitute
supporting obligations as to other Collateral) with a value of less than
$500,000 and Commercial Tort Claims with a value of less than $500,000, (vii)
any owned Real Property with a Fair Market Value of less than $1,000,000,
(viii) all Excluded Swap Obligations, (ix) all leaseholds, and (x) Equity
Interests in (x) any Excluded Domestic Subsidiary and (y) any Excluded Foreign
Subsidiary to the extent (but only to the extent) required to prevent the
Collateral from including more than 65% of all voting Equity Interests in such
Excluded Foreign Subsidiary, (xi) any United States “intent-to-use” Trademark
application prior to the filing of a “Statement of Use” or “Amendment to Allege
Use” with respect thereto, to the extent, if any, that, and solely during the
period, if any, in which, the grant of a security interest therein would impair
the validity or enforceability of such application under applicable federal
law   and (xii) those assets as to which the Majority Lenders and the Borrower
reasonably agree that the cost of obtaining such a security interest or
perfection thereof are excessive in relation to the benefit to the Lenders of
the security to be afforded thereby.
 
 
4

--------------------------------------------------------------------------------

 
 
“Excluded Swap Obligations” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act
(determined after giving effect to any “keepwell, support or other agreement”
for the benefit of such Guarantor and any and all guarantees of such Guarantor’s
Swap Obligations by other Loan Parties) at the time the Guarantee of such
Guarantor, or a grant by such Guarantor of a security interest, becomes
effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to swaps
for which such Guaranty or security interest is or becomes excluded in
accordance with the first sentence of this definition.
 
“Grantors” shall mean the Borrower and the Guarantors.
 
“Guarantee” shall mean, with respect to each Guarantor, its guarantee of the
Obligations under Section 2 hereof or Section 1 of a Guarantee and Collateral
Agreement Supplement.
 
 
5

--------------------------------------------------------------------------------

 
 
“Guarantee and Collateral Agreement Supplement” shall mean a Guarantee and
Collateral Agreement Supplement, substantially in the form of Exhibit A, signed
and delivered to the Collateral Agent for the purpose of adding a Subsidiary as
a party hereto pursuant to Section 21 and/or adding additional property to the
Collateral.
 
“Guarantors” shall mean each Domestic Subsidiary listed on the signature pages
hereof under the caption “Guarantors” and each Subsidiary that shall, at any
time after the date hereof, become a “Guarantor” pursuant to Section 21;
provided that no AcquisitionCo Subsidiary shall be a Guarantor so long as the
prohibition on such AcquisitionCo Subsidiary providing the Guarantee remains in
effect in the relevant Non-Recourse Indebtedness documentation.
 
“Intellectual Property” shall mean any and all intellectual and similar property
of any Grantor of every kind and nature now owned or hereafter acquired by any
Grantor, including all inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, Software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, and all rights to
sue for any infringement, misappropriation or any violation of, and all income,
royalties, damages and payments due or payable with respect to, any of the
foregoing.
 
“Intellectual Property Filing” shall mean (i) with respect to any Patent, Patent
License, Trademark or Trademark License, the filing of the applicable Patent
Security Agreement or Trademark Security Agreement with the United States Patent
and Trademark Office, together with an appropriately completed recordation form
and (ii) with respect to any Copyright or Copyright License, the filing of the
applicable Copyright Security Agreement with the United States Copyright Office,
together with an appropriately completed recordation form, in each case
sufficient to record the Transaction Lien granted to the Collateral Agent in
such Recordable Intellectual Property.
 
“Intellectual Property Security Agreement” shall mean a Copyright Security
Agreement, a Patent Security Agreement or a Trademark Security Agreement.
 
“Issuer Control Agreement” shall mean an Issuer Control Agreement substantially
in the form of Exhibit F (with any changes that the Collateral Agent shall have
approved).
 
“License” shall mean any Patent License, Trademark License, Copyright License or
other license or sublicense agreement relating to Intellectual Property to which
any Grantor is a party.
 
 
6

--------------------------------------------------------------------------------

 
 
“Mortgage” shall mean a mortgage or deed of trust in form reasonably
satisfactory to the Collateral Agent and the Majority Lenders in each case
creating a Lien on real property in favor of the Collateral Agent (or a
sub-agent appointed pursuant to Section 19(b)) for the benefit of the Secured
Parties and with such changes in the form thereof as the Collateral Agent and
the Majority Lenders shall reasonably request for the purpose of conforming to
local practice for similar instruments in the jurisdiction where such real
property is located.
 
“Non-Contingent Obligation” shall mean at any time any Obligation (or portion
thereof) that is not a Contingent Obligation at such time.
 
“Obligations” shall mean the Loan Obligations; provided that the Obligations
shall not include any Excluded Swap Obligation.
 
“Original Grantor” shall mean any Grantor that grants a Lien on any of its
assets hereunder on the Closing Date.
 
“own” refers to the possession of sufficient rights in property to grant a
security interest therein as contemplated by UCC Section 9-203, and “acquire”
refers to the acquisition of any such rights.
 
“Patent License” shall mean any agreement now or hereafter in existence granting
to any Grantor, or pursuant to which any Grantor grants to any other Person, any
right with respect to any Patent or any invention now or hereafter in existence,
whether patentable or not, whether a patent or application for patent is in
existence on such invention or not, and whether a patent or application for
patent on such invention may come into existence or not, including any agreement
identified in Schedule 1 to any Patent Security Agreement.
 
“Patents” shall mean (i) all letters patent and design letters patent of the
United States or any other country and all applications for letters patent or
design letters patent of the United States or any other country, including
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof, including the issued patents and pending
patent applications described in Schedule 1 to any Patent Security Agreement,
(ii) all reissues, divisions, continuations, continuations in part, revisions
and extensions of any of the foregoing, (iii) all claims for, and rights to sue
for, past, present or future infringements of any of the foregoing and (iv) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including damages and payments for past,
present or future infringements thereof.
 
“Patent Security Agreement” shall mean a Patent Security Agreement,
substantially in the form of Exhibit C (with any changes that the Collateral
Agent shall have approved), executed and delivered by a Grantor in favor of the
Collateral Agent for the benefit of the Secured Parties.
 
 
7

--------------------------------------------------------------------------------

 
 
“Perfection Certificate” shall mean, with respect to any Grantor, a certificate
substantially in the form of Exhibit E (with any changes that the Collateral
Agent shall have approved), completed and supplemented with the schedules
contemplated thereby to the satisfaction of the Majority Lenders, and signed by
an officer of such Grantor.
 
“Personal Property Collateral” shall mean all property included in the
Collateral except Real Property Collateral.
 
“Pledged”, when used in conjunction with any type of asset, shall mean at any
time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time.  For example, “Pledged Equity
Interest” means an Equity Interest that is included in the Collateral at such
time.
 
“Post-Petition Interest” shall mean any interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of any one or more of the Grantors (or would accrue
but for the operation of applicable Debtor Relief Laws), whether or not such
interest is allowed or allowable as a claim in any such proceeding.
 
“Proceeds” shall mean all proceeds of, and all other profits, products, rents or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or other realization upon, any
Collateral, including all claims of the relevant Grantor against third parties
for loss of, damage to or destruction of, or for proceeds payable under, or
unearned premiums with respect to, policies of insurance in respect of, any
Collateral, and any condemnation or requisition payments with respect to any
Collateral.
 
“Real Property Collateral” shall mean all real property (including leasehold
interests in real property) included in the Collateral.
 
“Recordable Intellectual Property” shall mean (i) any Patent registered or
Patent application pending with the United States Patent and Trademark Office,
(ii) any Trademark registered or Trademark application pending with the United
States Patent and Trademark Office, (iii) any Copyright registered or Copyright
application pending with the United States Copyright Office and any exclusive
Copyright License with respect to a Copyright so registered or applied for and
(iv) all rights in or under any of the foregoing.
 
“Release Conditions” shall mean the following conditions for releasing all the
Guarantees and terminating all the Transaction Liens:
 
(i)        all Non-Contingent Obligations shall have been paid in full; and
 
 
8

--------------------------------------------------------------------------------

 
 
(ii)        no Contingent Obligation (other than contingent indemnification and
expense reimbursement obligations as to which no claim shall have been asserted)
shall remain outstanding.
 
“Secured Agreement”, when used with respect to any Obligation, refers
collectively to each instrument, agreement or other document that sets forth
obligations of the Borrower, obligations of a Guarantor and/or rights of the
holder with respect to such Obligation.
 
“Secured Parties” shall mean, collectively, the Administrative Agent, the
Collateral Agent and the Lenders.
 
“Securities Account Control Agreement” shall mean, when used with respect to a
Securities Account, a Securities Account Control Agreement among the relevant
Securities Intermediary, the relevant Grantor and the Collateral Agent
substantially in the form of Exhibit G, or otherwise in form and substance
reasonably satisfactory to the Collateral Agent and the Majority Lenders.
 
“Security Documents” shall mean the “Collateral Documents” as defined in the
Credit Agreement and shall include, without limitation, this Agreement, the
Guarantee and Collateral Agreement Supplements, the Deposit Account Control
Agreements, the Issuer Control Agreements, the Securities Account Control
Agreements, the Mortgages, the Intellectual Property Security Agreements and all
other supplemental or additional security agreements, control agreements,
mortgages or similar instruments delivered pursuant to the Loan Documents.
 
“Software” shall mean all (i) computer programs and supporting information
provided in connection with a transaction relating to the program and
(ii) computer programs embedded in goods and any supporting information provided
in connection with a transaction relating to the program whether or not the
program is associated with the goods in such a manner that it customarily is
considered part of the goods, and whether or not, by becoming the owner of the
goods, a Person acquires a right to use the program in connection with the good
and whether or not the program is embedded in goods that consist solely of the
medium in which the program is embedded.
 
“Swap Obligations” shall mean, with respect to any Grantor, any obligation of
such Grantor to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of Section 1a (47) of the Commodity
Exchange Act.
 
“Trademark License” shall mean any agreement now or hereafter in existence
granting to any Grantor, or pursuant to which any Grantor grants to any other
Person, any right to use any Trademark, including any agreement identified in
Schedule 1 to any Trademark Security Agreement.
 
 
9

--------------------------------------------------------------------------------

 
 
“Trademarks” shall mean (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos, brand names, trade dress, prints and labels on which any of the
foregoing have appeared or appear, package and other designs, and all other
source or business identifiers, and all general intangibles of like nature, and
the rights in any of the foregoing which arise under applicable law, whether
registered or not, (ii) the goodwill of the business symbolized thereby or
associated with each of them, (iii) all registrations and applications in
connection therewith, including registrations and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, including the trademark registrations and trademark
applications described in Schedule 1 to any Trademark Security Agreement, (iv)
all renewals of any of the foregoing, (v) all claims for, and rights to sue for,
past, present or future infringements of any of the foregoing and (vi) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including damages and payments for past,
present or future infringements thereof.
 
“Trademark Security Agreement” shall mean a Trademark Security Agreement,
substantially in the form of Exhibit D (with any changes that the Collateral
Agent shall have approved), executed and delivered by a Grantor in favor of the
and Collateral Agent for the benefit of the Secured Parties.
 
“Transaction Liens” shall mean the Liens granted by the Grantors under the
Security Documents.
 
“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided that, if perfection or the effect of perfection
or non-perfection or the priority of any Transaction Lien on any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, “UCC” means the Uniform Commercial Code as in effect from time to
time in such other jurisdiction for purposes of the provisions hereof relating
to such perfection, effect of perfection or non-perfection or priority.
 
SECTION 2.  Guarantees by Guarantors.
 
(a)      Guarantees.  Each Guarantor unconditionally guarantees the full and
punctual payment of each Obligation when due (whether at stated maturity, upon
acceleration or otherwise).  If the Borrower fails to pay any Obligation
punctually when due, each Guarantor agrees that it will forthwith on demand pay
the amount not so paid at the place and in the manner specified in the relevant
Secured Agreement.
 
(b)      Guarantees Unconditional.  The obligations of each Guarantor under its
Guarantee shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
 
 
10

--------------------------------------------------------------------------------

 
 
(i)      any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Borrower, any other Guarantor or any other
Person under any Secured Agreement, by operation of law or otherwise;
 
(ii)      any modification or amendment of or supplement to any Secured
Agreement;
 
(iii)                 any release, impairment, non-perfection or invalidity of
any direct or indirect security for any obligation of the Borrower, any other
Guarantor or any other Person under any Secured Agreement;
 
(iv)                 any change in the corporate existence, structure or
ownership of the Borrower, any other Guarantor or any other Person or any of
their respective subsidiaries, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Borrower, any other Guarantor or any
other Person or any of their assets or any resulting release or discharge of any
obligation of the Borrower, any other Guarantor or any other Person under any
Secured Agreement;
 
(v)      the existence of any claim, set-off or other right that such Guarantor
may have at any time against the Borrower, any other Guarantor, any Secured
Party or any other Person, whether in connection with the Loan Documents or any
unrelated transactions, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
 
(vi)                 any invalidity or unenforceability relating to or against
the Borrower, any other Guarantor or any other Person for any reason of any
Secured Agreement, or any provision of applicable law or regulation purporting
to prohibit the payment of any Obligation by the Borrower, any other Guarantor
or any other Person; or
 
(vii)                 any other act or omission to act or delay of any kind by
the Borrower, any other Guarantor, any other party to any Secured Agreement, any
Secured Party or any other Person, or any other circumstance whatsoever that
might, but for the provisions of this clause (vii), constitute a legal or
equitable discharge of or defense (other than defense of payment in full in
Cash) to any obligation of any Guarantor hereunder.
 
(c)           Release of Guarantees.  (i) All the Guarantees will be released
when all the Release Conditions are satisfied.  If at any time any payment of an
Obligation is rescinded or must be otherwise restored or returned upon the
insolvency or receivership of the Borrower or otherwise, the Guarantees shall be
reinstated with respect thereto as though such payment had been due but not made
at such time.
 
 
11

--------------------------------------------------------------------------------

 
 
(ii)      If all the Capital Stock of a Guarantor or all the assets of a
Guarantor are sold to a Person other than another Loan Party in a transaction
permitted by the Credit Agreement (any such sale, a “Sale of Guarantor”), the
Collateral Agent shall release such Guarantor from its Guarantee.  Such release
shall not require the consent of any Secured Party, and the Collateral Agent
shall be fully protected in relying on a certificate of the Borrower as to
whether any particular sale constitutes a Sale of Guarantor.
 
(iii)                 In addition to any release permitted by subsection (ii)
above, the Collateral Agent may release any Guarantee with the prior written
consent of the Majority Lenders; provided that any release of all or
substantially all the Guarantees shall require the consent of all the Lenders.
 
(d)      Waiver by Guarantors.  Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any Person
against the Borrower, any other Guarantor or any other Person.
 
(e)      Subrogation.  A Guarantor that makes a payment with respect to an
Obligation hereunder shall be subrogated to the rights of the payee against the
Borrower with respect to such payment; provided that no Guarantor shall enforce
any payment by way of subrogation against the Borrower, or by reason of
contribution against any other Guarantor of such Obligation, until all the
Release Conditions have been satisfied.
 
(f)      Stay of Acceleration.  If acceleration of the time for payment of any
Obligation by the Borrower is stayed by reason of the insolvency or receivership
of the Borrower or otherwise, all Obligations otherwise subject to acceleration
under the terms of any Secured Agreement shall nonetheless be payable by the
Guarantors hereunder forthwith on demand by the Collateral Agent (acting at the
direction of the Majority Lenders).
 
(g)      Right of Setoff. If any Obligation is not paid promptly when due, each
of the Secured Parties and their respective Affiliates is authorized, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Secured Party or Affiliate to or for
the credit or the account of any Guarantor against the obligations of such
Guarantor under its Guarantee, irrespective of whether or not such Secured Party
shall have made any demand thereunder and although such obligations may be
unmatured. The rights of each Secured Party under this subsection (g) are in
addition to all other rights and remedies (including other rights of setoff)
that such Secured Party may have.
 
 
12

--------------------------------------------------------------------------------

 
 
(h)      Continuing Guarantee.  Each Guarantee is a continuing guarantee, shall
be binding on the relevant Guarantor and its successors and assigns, and shall
be enforceable by the Collateral Agent (acting at the direction of the Majority
Lenders) or the Secured Parties.  If all or part of any Secured Party’s interest
in any Obligation is assigned or otherwise transferred, the transferor’s rights
under each Guarantee, to the extent applicable to the obligation so transferred,
shall automatically be transferred with such obligation.
 
(i)      Limitation on Obligations of Subsidiary Guarantor.  The obligations of
each Subsidiary Guarantor under its Guarantee shall be limited to an aggregate
amount equal to the largest amount that would not render such Guarantee subject
to avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of applicable law.
 
SECTION 3.  Grant of Transaction Liens.
 
(a)      The Borrower, in order to secure the Obligations, and each Guarantor
listed on the signature pages hereof, in order to secure its Guarantee, grants
to the Collateral Agent for the benefit of the Secured Parties a continuing
security interest in all the following property of the Borrower or such
Guarantor, as the case may be, whether now owned or existing or hereafter
acquired or arising and regardless of where located (collectively, the
“Collateral”):
 
(i)      all Accounts;
 
(ii)      all Chattel Paper;
 
(iii)     all cash and Deposit Accounts;
 
(iv)     all Documents;
 
(v)      all Equipment (including, without limitation, all machinery, tractors,
trailers, rolling stock and vehicles now owned or hereafter acquired by such
Grantor and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto);
 
(vi)     all General Intangibles (including (x) any Equity Interests in other
Persons that do not constitute Investment Property and (y) any Intellectual
Property);
 
 
13

--------------------------------------------------------------------------------

 
 
(vii)    all Instruments;
 
(viii)   all Inventory;
 
(ix)      all Investment Property;
 
(x)       the Commercial Tort Claims described in Schedule 3;
 
(xi)      all Letter-of-Credit Rights;
 
(xii)     all books and records (including customer lists, credit files,
computer programs, printouts and other computer materials and records) of such
Grantor pertaining to any of its Collateral;
 
(xiii)    such Grantor’s ownership interest in (w) its Collateral Accounts, (x)
all Financial Assets credited to its Collateral Accounts from time to time and
all Security Entitlements in respect thereof, (y) all cash held in its
Collateral Accounts from time to time and (z) all other money in the possession
of the Collateral Agent;
 
(xiv)    all other Goods (including but not limited to Fixtures) and personal
property of such Grantor, whether tangible or intangible;
 
(xv)     all computer records, whether relating to the foregoing Collateral or
otherwise; and
 
(xvi)    all Proceeds of the Property described in the foregoing clauses (i)
through (xv);
 
provided that the Collateral shall not include the Excluded Assets.  Each
Grantor shall, upon request of the Collateral Agent (made at the direction of
the Majority Lenders), use commercially reasonable efforts to obtain any such
required consent that is reasonably obtainable.
 
(b)      With respect to each right to payment or performance included in the
Collateral from time to time, the Transaction Lien granted therein includes a
continuing security interest in i) any Supporting Obligation that supports such
payment or performance and ii) any Lien that (x) secures such right to payment
or performance or (y) secures any such Supporting Obligation.
 
(c)      The Transaction Liens are granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or transfer or in
any way affect or modify, any obligation or liability of any Grantor with
respect to any of the Collateral or any transaction in connection therewith.
 
 
14

--------------------------------------------------------------------------------

 
 
SECTION 4.  General Representations and Warranties. Each Grantor represents and
warrants that:
 
(a)      Such Grantor is duly organized, validly existing and in good standing
under the laws of the jurisdiction identified as its jurisdiction of
organization in its Perfection Certificate.
 
(b)      With respect to each Original Grantor, Schedule 1 lists all Equity
Interests in subsidiaries and Affiliates owned by such Grantor as of the Closing
Date.  Such Grantor holds all such Equity Interests directly (i.e., not through
a subsidiary, a Securities Intermediary or any other Person) and in the amounts
as specified on Schedule 1.
 
(c)      With respect to each Original Grantor, Schedule 2 lists, as of the
Closing Date, (x) all Securities owned by such Grantor (except Securities
evidencing Equity Interests in subsidiaries and Affiliates) and (y) all
Securities Accounts to which Financial Assets are credited in respect of which
such Grantor owns Security Entitlements.
 
(d)      Such Grantor owns no Commodity Account in respect of which such Grantor
is the Commodity Customer.
 
(e)      All shares of Capital Stock included in the Pledged Equity Interests
owned by such Grantor (including shares of Capital Stock in respect of which
such Grantor owns a Security Entitlement), to the extent applicable, have been
duly authorized and validly issued and are fully paid and non-assessable.  Other
than as set forth on Schedule 1, none of such Pledged Equity Interests is
subject to any option to purchase or similar right of any Person.  Except as
otherwise expressly permitted in the Credit Agreement, such Grantor is not and
will not become a party to or otherwise bound by any agreement (except the Loan
Documents) which restricts in any manner the rights of any present or future
holder of any Pledged Equity Interest with respect thereto.
 
(f)      Such Grantor owns all its Collateral, free and clear of any Lien other
than Permitted Liens.
 
(g)      Such Grantor has not performed any acts that could reasonably be
expected to prevent the Collateral Agent from enforcing any of the provisions of
the Security Documents or that could reasonably be expected to limit the
Collateral Agent in any such enforcement.  No financing statement, security
agreement, mortgage or similar or equivalent document or instrument covering all
or part of the Collateral owned by such Grantor is on file or of record in any
jurisdiction in which such filing or recording would be effective to perfect or
record a Lien on such Collateral, except financing statements, mortgages or
other similar or equivalent documents with respect to Permitted Liens or as
otherwise consented to by the Majority Lenders (such consent not to be
unreasonably withheld or delayed).  After the Closing Date, no Collateral owned
by such Grantor will be in the possession or under the Control of any other
Person having a claim thereto or security interest therein, other than a
Permitted Lien.
 
 
15

--------------------------------------------------------------------------------

 
 
(h)      The Transaction Liens on all Personal Property Collateral owned by such
Grantor (x) have been validly created, (y) will attach to each item of such
Collateral on the Closing Date (or, if such Grantor first obtains rights thereto
on a later date, on such later date) and (z) when so attached, will secure all
the Obligations and/or such Grantor’s Guarantee, as the case may be.
 
(i)      When the relevant Mortgages have been duly executed and delivered, the
Transaction Liens on all Real Property Collateral owned by such Grantor as of
the Closing Date will have been validly created and will secure all the
Obligations and/or such Grantor’s Guarantee, as the case may be.  When such
Mortgages have been duly recorded, such Transaction Liens will rank prior to all
other Liens (except Permitted Liens) on such Real Property Collateral.
 
(j)      Such Grantor has delivered a Perfection Certificate to the Collateral
Agent and the Lenders.  With respect to each Original Grantor, information set
forth therein is correct and complete as of the Closing Date. Within 30 days
after the Closing Date, such Original Grantor will furnish to the Lenders a file
search report from each UCC filing office listed in its Perfection Certificate,
showing the filing made at such filing office to perfect the Transaction Liens
on its Personal Property Collateral.
 
(k)      When UCC financing statements describing the Personal Property
Collateral as “all personal property” have been filed in the offices specified
in such Perfection Certificate, the Transaction Liens will constitute perfected
security interests in the Personal Property Collateral owned by such Grantor to
the extent that a security interest therein may be perfected by filing pursuant
to the UCC, prior to all Liens and rights of others therein (except Permitted
Liens). When, in addition to the filing of such UCC financing statements, the
applicable Intellectual Property Filings have been made with respect to such
Grantor’s Recordable Intellectual Property (including any future filings
required pursuant to Sections 5(a) and 6(a)), the Transaction Liens will
constitute perfected security interests in all right, title and interest of such
Grantor in its Recordable Intellectual Property and Licenses to the extent that
security interests therein may be perfected by such filings, prior to all Liens
and rights of others therein (except Permitted Liens).  Except for (x) the
filing of such UCC financing statements, (y) such Intellectual Property Filings
and (z) the due recordation of the Mortgages, no registration, recordation or
filing with any governmental body, agency or official is required in connection
with the execution or delivery of the Security Documents or is necessary for the
validity or enforceability thereof or for the perfection or due recordation of
the Transaction Liens or for the enforcement of the Transaction Liens.
 
 
16

--------------------------------------------------------------------------------

 
 
(l)      Such Grantor has taken, and will continue to take, all actions
necessary under the UCC to perfect its interest in any Accounts or Chattel Paper
purchased or otherwise acquired by it, as against its assignors and creditors of
its assignors.
 
(m)        Such Grantor’s Collateral is insured as required by Section 5.06 of
the Credit Agreement.
 
(n)      All of such Grantor’s Inventory has or will have been produced in
compliance with the applicable requirements of the Fair Labor Standards Act, as
amended.
 
SECTION 5.  Further Assurances; General Covenants.  Each Grantor covenants as
follows, until all of the Obligations have been irrevocably paid in full in Cash
(other than contingent indemnification and expense reimbursement obligations as
to which no claim shall have been asserted):
 
(a)      Such Grantor will, from time to time, at the Borrower’s expense,
execute, deliver, file and record any statement, assignment, instrument,
document, agreement or other paper and take any other action (including any
Intellectual Property Filing) that from time to time may be necessary or
advisable, or that the Majority Lenders may reasonably request in writing, in
order to:
 
(i)      create, preserve, perfect, confirm or validate the Transaction Liens on
such Grantor’s Collateral;
 
(ii)      in the case of Pledged Deposit Accounts, Pledged Investment Property
and Pledged Letter-of-Credit Rights, cause the Collateral Agent to have Control
thereof;
 
(iii)                 enable the Collateral Agent and the other Secured Parties
to obtain the full benefits of the Security Documents; or
 
(iv)                 enable the Collateral Agent to exercise and enforce any of
its rights, powers and remedies with respect to any of such Grantor’s
Collateral.
 
Such Grantor authorizes the Collateral Agent (and any designees of the
Collateral Agent (including any Lender) on behalf of the Collateral Agent) to
execute and file such financing statements or continuation statements in such
jurisdictions with such descriptions of collateral (including “all assets” or
“all personal property” or other words to that effect) and other information set
forth therein as the Majority Lenders may deem necessary or advisable for the
purposes set forth in the preceding sentence.  Each Grantor also ratifies its
authorization for the Collateral Agent (and any designees of the Collateral
Agent (including any Lender) on behalf of the Collateral Agent) to file in any
such jurisdiction any initial financing statements or amendments thereto if
filed prior to the date hereof.  The Collateral Agent and any designees of the
Collateral Agent (including any Lender) are further authorized to file with the
United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country) such documents
as may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the security interests granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party. The Borrower will
pay the costs of, or incidental to, any Intellectual Property Filings and any
recording or filing of any financing or continuation statements or other
documents recorded or filed pursuant hereto.
 
 
17

--------------------------------------------------------------------------------

 
 
(b)      Such Grantor will not (x) change its name or organizational form or
structure, (y) change its location (determined as provided in UCC Section 9-307)
nor (z) except as otherwise expressly permitted under the Loan Documents, become
bound, as provided in UCC Section 9-203(d) or otherwise, by a security agreement
entered into by another Person, unless it shall have given the Collateral Agent
and the Lenders at least 20 days prior notice.
 
(c)      If any portion of its Collateral with an aggregate value in excess of
$250,000 is in the possession or control of a warehouseman, bailee or agent at
any time, such Grantor will notify the Collateral Agent and the Lenders within
10 days of such Person obtaining such possession and (w) notify such
warehouseman, bailee or agent of the relevant Transaction Liens, (x) instruct
such warehouseman, bailee or agent to hold all such Collateral for the
Collateral Agent’s account subject to the Collateral Agent’s instructions (which
shall permit such Collateral to be removed by such Grantor in the ordinary
course of business until the Collateral Agent notifies such warehouseman, bailee
or agent that an Event of Default has occurred and is continuing), (y) cause
such warehouseman, bailee or agent to Authenticate a Record acknowledging that
it holds possession of such Collateral for the Collateral Agent’s benefit and
(z) make such Authenticated Record available to the Collateral Agent.
 
(d)      Such Grantor will not sell, lease, exchange, assign or otherwise
dispose of, or grant any option with respect to, any of its Collateral; provided
that such Grantor may do any of the foregoing unless (x) doing so would violate
a covenant in the Credit Agreement or (y) an Event of Default shall have
occurred and be continuing. Concurrently with any sale, lease or other
disposition (except a sale or disposition to another Grantor or a lease)
permitted by the foregoing proviso, the Transaction Liens on the assets sold or
disposed of (but not in any Proceeds arising from such sale or disposition) will
cease immediately without any action by the Collateral Agent or any other
Secured Party.  The Collateral Agent will, at the Borrower’s expense, execute
and deliver to the relevant Grantor such documents as such Grantor shall
reasonably request to evidence the fact that any asset so sold or disposed of is
no longer subject to a Transaction Lien.
 
 
18

--------------------------------------------------------------------------------

 
 
(e)      Such Grantor will, promptly upon request from the Majority Lenders,
provide to the Collateral Agent all instruments and documents (including legal
opinions, title insurance policies, flood insurance, consulting engineer’s
reports, environmental site assessment reports, other environmental reports,
surveys, landlord consents and lien searches) and all other information and
evidence concerning such Grantor’s Collateral (including as to the perfection
and priority status of each such security interest and Lien) that the Majority
Lenders may reasonably request in writing from time to time to enable the
Collateral Agent to enforce the provisions of the Security Documents.
 
SECTION 6.  Recordable Intellectual Property.  Each Grantor covenants as
follows:
 
(a)      On the Closing Date (in the case of an Original Grantor) or the date on
which it signs and delivers its Guarantee and Collateral Agreement Supplement
(in the case of any other Grantor), such Grantor will sign and deliver to the
Collateral Agent Intellectual Property Security Agreements with respect to all
Recordable Intellectual Property then owned by, or licensed to, such
Grantor.  Within 30 days after each December 31 and June 30 thereafter, it will
sign and deliver to the Collateral Agent an appropriate Intellectual Property
Security Agreement covering any Recordable Intellectual Property owned by, or
licensed to, such Grantor on such December 31 or June 30 that is not covered by
any previous Intellectual Property Security Agreement so signed and delivered by
it.  In each case, it will promptly make all Intellectual Property Filings
necessary to record the Transaction Liens on such Recordable Intellectual
Property.
 
(b)      Such Grantor will notify the Collateral Agent and the Lenders promptly
if it knows that any application or registration relating to any material
Recordable Intellectual Property or Licenses owned by or licensed to such
Grantor has or is reasonably expected to become abandoned or dedicated to the
public (other than due to expiration), or of any material adverse determination
or development (including the institution of, or any adverse determination in,
any proceeding in the United States Copyright Office, the United States Patent
and Trademark Office or any court) regarding such Grantor’s ownership of, or
rights to, such Recordable Intellectual Property or Licenses, its right to
register or patent the same, or its right to keep and maintain the same.  If any
of such Grantor’s rights to any material Recordable Intellectual Property are
determined by Grantor (acting in good faith) to be infringed, misappropriated or
diluted by a third party, such Grantor will notify the Collateral Agent and the
Lenders within 30 days after it makes such determination and will, unless such
Grantor shall reasonably determine that such action would be of negligible
value, economic or otherwise, promptly sue or not sue for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such material Recordable Intellectual Property.
 
 
19

--------------------------------------------------------------------------------

 
 
(c)      Upon the occurrence and during the continuance of any Default or Event
of Default, each Grantor shall use its commercially reasonable efforts to obtain
all requisite consents or approvals by the licensor of each material Copyright
License, Patent License or Trademark License under which such Grantor is a
licensee to effect the assignment of all such Grantor’s right, title and
interest thereunder to the Collateral Agent, for the ratable benefit of the
Secured Parties, or its designee.
 
SECTION 7.  Investment Property.  Each Grantor represents, warrants and
covenants as follows:
 
(a)      Certificated Securities.  On the Closing Date (in the case of an
Original Grantor) or the date on which it signs and delivers its Guarantee and
Collateral Agreement Supplement (in the case of any other Grantor), such Grantor
will deliver to the Collateral Agent as Collateral hereunder all certificates
representing Pledged Certificated Securities then owned by such
Grantor.  Thereafter, whenever such Grantor acquires any other certificate
representing a Pledged Certificated Security, such Grantor will promptly deliver
such certificate to the Collateral Agent as Collateral hereunder. The provisions
of this subsection are subject to the limitation in Section 7(j) in the case of
Equity Interests in any Excluded Domestic Subsidiary and voting Equity Interests
in an Excluded Foreign Subsidiary.
 
(b)      Uncertificated Securities.  On the Closing Date (in the case of an
Original Grantor) or the date on which it signs and delivers its Guarantee and
Collateral Agreement Supplement (in the case of any other Grantor), such Grantor
will enter into (and cause the relevant issuer to enter into) an Issuer Control
Agreement in respect of each Pledged Uncertificated Security then owned by such
Grantor and deliver such Issuer Control Agreement to the Collateral Agent (which
shall enter into the same).  Thereafter, whenever such Grantor acquires any
other Pledged Uncertificated Security, such Grantor will promptly (and in any
event within three Business Days from the acquisition thereof) enter into (and
cause the relevant issuer to enter into) an Issuer Control Agreement in respect
of such Pledged Uncertificated Security and deliver such Issuer Control
Agreement to the Collateral Agent (which shall enter into the same).  The
provisions of this subsection are subject to the limitation in Section 7(j) in
the case of Equity Interests in any Excluded Domestic Subsidiary and voting
Equity Interests in an Excluded Foreign Subsidiary.
 
(c)      Security Entitlements.  On the Closing Date (in the case of an Original
Grantor) or the date on which it signs and delivers its Guarantee and Collateral
Agreement Supplement (in the case of any other Grantor), such Grantor will, with
respect to each Security Entitlement then owned by it, other than with respect
to Cash Security Entitlements in an aggregate amount not to exceed $250,000,
enter into (and cause the relevant Securities Intermediary to enter into) a
Securities Account Control Agreement in respect of such Security Entitlement and
the Securities Account to which the underlying Financial Asset is credited and
will deliver such Securities Account Control Agreement to the Collateral Agent
(which shall enter into the same).  Thereafter, whenever such Grantor acquires
any other Security Entitlement, other than with respect to Cash Security
Entitlements in an aggregate amount not to exceed $250,000, such Grantor will,
as promptly as practicable, cause the underlying Financial Asset to be credited
to a Controlled Securities Account.
 
 
20

--------------------------------------------------------------------------------

 
 
(d)           Perfection as to Certificated Securities.  When such Grantor
delivers the certificate representing any Pledged Certificated Security owned by
it to the Collateral Agent and complies with Section 7(h) in connection with
such delivery, (i) the Transaction Lien on such Pledged Certificated Security
will be perfected, subject to no prior Liens or rights of others (other than
Permitted Liens), (ii) the Collateral Agent will have Control of such Pledged
Certificated Security and (iii) assuming the Collateral Agent does not have
notice of any adverse claim to such Perfected Certificated Security (it being
understood and agreed that as of the Closing Date, the Collateral Agent does not
have notice of any adverse claim to such Perfected Certificated Security), the
Collateral Agent will be a protected purchaser (within the meaning of UCC
Section 8 303) thereof.
 
(e)           Perfection as to Uncertificated Securities.  When such Grantor,
the Collateral Agent and the issuer of any Pledged Uncertificated Security owned
by such Grantor enter into an Issuer Control Agreement with respect thereto, (i)
the Transaction Lien on such Pledged Uncertificated Security will be perfected,
subject to no prior Liens or rights of others (other than Permitted Liens), (ii)
the Collateral Agent will have Control of such Pledged Uncertificated Security
and (iii) assuming the Collateral Agent does not have notice of any adverse
claim to such Perfected Uncertificated Security (it being understood and agreed
that as of the Closing Date, the Collateral Agent does not have notice of any
adverse claim to such Perfected Uncertificated Security), the Collateral Agent
will be a protected purchaser (within the meaning of UCC Section 8 303) thereof.
 
(f)           Perfection as to Security Entitlements.  So long as the Financial
Asset underlying any Security Entitlement owned by such Grantor is credited to a
Controlled Securities Account, (i) the Transaction Lien on such Security
Entitlement will be perfected, subject to no prior Liens or rights of others
(except Liens and rights of the relevant Securities Intermediary that are
Permitted Liens), (ii) the Collateral Agent will have Control of such Security
Entitlement and (iii) assuming the Collateral Agent acquires its Security
Entitlement with respect thereto without notice of any adverse claim thereto (it
being understood and agreed that as of the Closing Date, the Collateral Agent
does not have notice of any adverse claim to such Security Entitlement), no
action based on an adverse claim to such Security Entitlement, whether framed in
conversion, replevin, constructive trust, equitable lien or other theory, may be
asserted against the Collateral Agent.
 
 
21

--------------------------------------------------------------------------------

 
 
(g)      Agreement as to Applicable Jurisdiction.  In respect of all Security
Entitlements owned by such Grantor, and all Securities Accounts to which the
related Financial Assets are credited, the Securities Intermediary’s
jurisdiction (determined as provided in UCC Section 8-110(e)) will at all times
be located in the United States.
 
(h)      Delivery of Pledged Certificates.  All certificates representing
Pledged Certificated Securities, when delivered to the Collateral Agent, will be
in suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Majority Lenders.
 
(i)           Communications.  Each Grantor will promptly give to the Collateral
Agent copies of any notices and other communications (other than ministerial or
other immaterial notices and other communications) received by it with respect
to (i) Pledged Securities registered in the name of such Grantor or its nominee
and (ii) Pledged Security Entitlements as to which such Grantor is the
Entitlement Holder.
 
(j)      Excluded Domestic Subsidiaries; Excluded Foreign Subsidiaries.  A
Grantor will not be obligated to comply with the provisions of this Section 7 at
any time with respect to (i) any Equity Interest in an Excluded Domestic
Subsidiary and (ii) any voting Equity Interest in an Excluded Foreign Subsidiary
if and to the extent (but only to the extent) that such voting Equity Interest
is excluded from the Transaction Liens at such time as an Excluded Asset and/or
the comparable provisions of one or more Guarantee and Collateral Agreement
Supplements.
 
(k)      Certification of Limited Liability Company and Partnership
Interests.  Any limited liability company and any partnership controlled by any
Grantor shall either (x) not include in its operative documents any provision
that any Equity Interests in such limited liability company or such partnership
be a “security” as defined under Article 8 of the Uniform Commercial Code or (y)
certificate any Equity Interests in any such limited liability company or such
partnership.  To the extent an interest in any limited liability company or
partnership controlled by any Grantor and pledged hereunder is certificated or
becomes certificated, each such certificate shall be delivered to the Collateral
Agent pursuant to Section 7(a) and such Grantor shall fulfill all other
requirements under Section 7 applicable in respect thereof.
 
(l)      Compliance with Applicable Foreign Laws.  If and so long as the
Collateral includes any Equity Interest in a legal entity organized under the
laws of a jurisdiction outside the United States that is required to be pledged
to the Collateral Agent pursuant to a Foreign Pledge Agreement in accordance
with the terms of the Credit Agreement, the relevant Grantor will upon
reasonable request of the Majority Lenders take all such action as may be
required under the laws of such foreign jurisdiction to ensure that the
Transaction Lien on such Collateral ranks prior to all Liens and rights of
others therein (other than Permitted Liens).
 
 
22

--------------------------------------------------------------------------------

 
 
SECTION 8.  Deposit Accounts.  Each Grantor represents, warrants and covenants
as follows:
 
(a)      All cash owed by such Grantor required to be deposited into an Account
subject to a Control Agreement pursuant to Section 5.12 of the Credit Agreement
will be deposited promptly after the receipt thereof into one or more Controlled
Deposit Accounts (it being understood and agreed that no Grantor shall be
required to subject any Excluded Account to a Control Agreement).
 
(b)      [Reserved].
 
(c)      So long as the Collateral Agent has Control of a Controlled Deposit
Account, the Transaction Lien on such Controlled Deposit Account will be
perfected, subject to no prior Liens or rights of others (except the Depositary
Bank’s right to deduct its normal operating charges, any uncollected funds
previously credited thereto and other customary depository fees and expenses and
the Depositary Bank’s Lien with respect thereto).
 
SECTION 9.  Cash Collateral Accounts.  If and when required for purposes hereof
or of any other Loan Document, the Collateral Agent will establish with respect
to each Grantor an account (its “Cash Collateral Account”), in the name and
under the exclusive control of the Collateral Agent, into which all amounts
owned by such Grantor that are to be deposited therein pursuant to the Loan
Documents shall be deposited from time to time.  Funds held in any Cash
Collateral Account may, until withdrawn, be invested and reinvested in such Cash
Equivalents as the relevant Grantor shall request from time to time; provided
that if an Event of Default shall have occurred and be continuing, the
Collateral Agent may select such Cash Equivalents.  Subject to Section 15,
withdrawal of funds on deposit in any Cash Collateral Account shall be permitted
if, as and when expressly so provided in or in respect of the applicable
provision of the Loan Documents pursuant to which such Cash Collateral Account
was required to be established.
 
SECTION 10.  Commercial Tort Claims.  Each Grantor represents, warrants and
covenants as follows:
 
(a)      In the case of an Original Grantor, Schedule 3 accurately describes,
with the specificity required to satisfy Official Comment 5 to UCC Section
9-108, each Commercial Tort Claim with a value in excess of $500,000 with
respect to which such Original Grantor is the claimant as of the Closing
Date.  In the case of any other Grantor, Schedule 3 to its Guarantee and
Collateral Agreement Supplement will accurately describe, with the specificity
required to satisfy said Official Comment 5, each Commercial Tort Claim with a
value in excess of $500,000 with respect to which such Grantor is the claimant
as of the date on which it signs and delivers such Guarantee and Collateral
Agreement Supplement.
 
 
23

--------------------------------------------------------------------------------

 
 
(b)      If any Grantor acquires a Commercial Tort Claim with a value in excess
of $500,000 after the Closing Date (in the case of an Original Grantor) or the
date on which it signs and delivers its Guarantee and Collateral Agreement
Supplement (in the case of any other Grantor), such Grantor will promptly sign
and deliver to the Collateral Agent a Guarantee and Collateral Agreement
Supplement granting a security interest in such Commercial Tort Claim (which
shall be described therein with the specificity required to satisfy said
Official Comment 5) to the Collateral Agent for the benefit of the Secured
Parties.
 
SECTION 11.  Transfer Of Record Ownership.  At any time when an Event of Default
shall have occurred and be continuing, the Collateral Agent may (and to the
extent that action by it is required, the relevant Grantor, if directed to do so
by the Collateral Agent, will as promptly as practicable) cause each of the
Pledged Securities (or any portion thereof specified in such direction) to be
transferred of record into the name of the Collateral Agent or its
nominee.  Each Grantor will take any and all actions reasonably requested by the
Majority Lenders to facilitate compliance with this Section 11.  If the
provisions of this Section 11 are implemented, Section 7(b) shall not thereafter
apply to any Pledged Security that is registered in the name of the Collateral
Agent or its nominee.  The Collateral Agent will promptly give to the relevant
Grantor copies of any notices and other communications received by the
Collateral Agent with respect to Pledged Securities registered in the name of
the Collateral Agent or its nominee.
 
SECTION 12.  Right to Vote Securities.  (a) Unless an Event of Default shall
have occurred and be continuing, each Grantor will have the right, from time to
time, to vote and to give consents, ratifications and waivers with respect to
any Pledged Security owned by it and the Financial Asset underlying any Pledged
Security Entitlement owned by it, and the Collateral Agent will, upon receiving
a written request from such Grantor, deliver to such Grantor or as specified in
such request such proxies, powers of attorney, consents, ratifications and
waivers in respect of any such Pledged Security that is registered in the name
of the Collateral Agent or its nominee or any such Pledged Security Entitlement
as to which the Collateral Agent or its nominee is the Entitlement Holder, in
each case as shall be specified in such request and be in form and substance
reasonably satisfactory to the Majority Lenders.
 
(b)      If an Event of Default shall have occurred and be continuing, upon
notice by the Collateral Agent to the relevant Grantor or Grantors, the
Collateral Agent will have the exclusive right to the extent permitted by law to
vote, to give consents, ratifications and waivers and to take any other action
with respect to the Pledged Investment Property, the other Pledged Equity
Interests and the Financial Assets underlying the Pledged Security Entitlements,
with the same force and effect as if the Collateral Agent had an interest
therein identical to that of the applicable Grantor, and each Grantor will take
all such action as the Collateral Agent may reasonably request from time to time
to give effect to such right.
 
 
24

--------------------------------------------------------------------------------

 
 
SECTION 13.  Certain Cash Distributions.  Cash Distributions with respect to
assets held in a Collateral Account shall be deposited and held therein, or
withdrawn therefrom, as provided in Section 9.  Cash Distributions with respect
to any Pledged Equity Interest or Pledged Indebtedness that is not held in a
Collateral Account (whether held in the name of a Grantor or in the name of the
Collateral Agent or its nominee) shall be deposited, promptly upon receipt
thereof, in a Controlled Deposit Account of the relevant Grantor; provided that,
if an Event of Default shall have occurred and be continuing, the Collateral
Agent may deposit, or direct the recipient thereof to deposit, each such Cash
Distribution in the relevant Grantor’s Cash Collateral Account.
 
SECTION 14.  Remedies upon Event of Default.  (a) If an Event of Default shall
have occurred and be continuing, and subject to the terms of the Credit
Agreement and the other Loan Documents, the Collateral Agent may exercise (or
cause its sub-agents to exercise) any or all of the remedies available to it (or
to such sub-agents) under the Security Documents.
 
(b)      Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, the Collateral Agent may exercise
on behalf of the Secured Parties all the rights of a secured party under the UCC
(whether or not in effect in the jurisdiction where such rights are exercised)
with respect to any Personal Property Collateral and, in addition, the
Collateral Agent may, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, sell or
otherwise dispose of the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker’s board or at any of the
Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as the Collateral Agent may deem commercially reasonable, irrespective of
the impact of any such sales on the market price of the Collateral.  To the
maximum extent permitted by applicable law, any Secured Party may be the
purchaser of any or all of the Collateral at any such sale and (with the consent
of the Majority Lenders, which may be withheld in their reasonable discretion)
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply all of any part of the Obligations as a credit on
account of the purchase price of any Collateral payable at such sale.  Upon any
sale of Collateral by the Collateral Agent (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid to the Collateral Agent or such officer or be
answerable in any way for the misapplication thereof.  Each purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay or appraisal that it now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.  The Collateral Agent shall not be obliged to make any
sale of Collateral regardless of notice of sale having been given.  The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.  To
the maximum extent permitted by law, each Grantor hereby waives any claim
against any Secured Party arising because the price at which any Collateral may
have been sold at such a private sale was less than the price that might have
been obtained at a public sale, even if the Collateral Agent accepts the first
offer received and does not offer such Collateral to more than one offeree.  The
Collateral Agent may disclaim any warranty, as to title or as to any other
matter, in connection with such sale or other disposition, and its doing so
shall not be considered adversely to affect the commercial reasonableness of
such sale or other disposition.
 
 
25

--------------------------------------------------------------------------------

 
 
(c)      If the Collateral Agent sells any of the Collateral upon credit, the
Grantors will be credited only with payment actually made by the purchaser,
received by the Collateral Agent and applied in accordance with Section 15
hereof.  In the event the purchaser fails to pay for the Collateral, the
Collateral Agent may resell the same, subject to the same rights and duties set
forth herein.
 
(d)      Notice of any such sale or other disposition shall be given to the
relevant Grantor(s) as (and if) required by applicable law or Section 17.
 
(e)      For the purpose of enabling the Collateral Agent to exercise rights and
remedies under this Agreement at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Collateral Agent an irrevocable license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sublicense any of the Collateral consisting of Intellectual Property now owned
or hereafter acquired by such Grantor, and including in such license access to
all media in which any of the licensed items may be recorded or stored and to
all Software used for the compilation or printout thereof; provided that, with
respect to any Collateral consisting of Trademarks, the applicable Grantor shall
have such rights of quality control which are necessary under applicable law to
maintain the validity and enforceability of such Trademarks.  The use of such
license by the Collateral Agent may be exercised only upon the occurrence and
during the continuation of an Event of Default; provided, that any license,
sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon each Grantor notwithstanding any
subsequent cure of an Event of Default.
 
 
26

--------------------------------------------------------------------------------

 
 
(f)      The foregoing provisions of this Section shall apply to Real Property
Collateral only to the extent permitted by applicable law and contemplated by
the provisions of any applicable Mortgages; provided that the foregoing
provisions of this Section shall also apply to Fixtures to the extent such
Fixtures are governed by Article 9 of the UCC.
 
SECTION 15.  Application of Proceeds.  (a) If an Event of Default shall have
occurred and be continuing, the Collateral Agent may apply (i) any cash held in
the Collateral Accounts and (ii) the proceeds of any sale or other disposition
of all or any part of the Collateral, in the following order of priorities:
 
                 first,to pay the expenses of such sale or other disposition,
including reasonable compensation to agents of and counsel for the Collateral
Agent, and all reasonable expenses, liabilities and advances incurred or made by
the Collateral Agent in connection with the Security Documents, and any other
amounts then due and payable to the Collateral Agent and the Administrative
Agent pursuant to Section 16 or pursuant to Sections 2.03(b) and 9.05 of the
Credit Agreement;
 
                 second,to pay ratably all interest (including Post-Petition
Interest) on and fees in respect of the Obligations payable under the Credit
Agreement, until payment in full of all such interest and fees shall have been
made;
 
                 third,to pay the unpaid principal of the Obligations ratably
(or provide for the payment thereof pursuant to Section 15(b)), until payment in
full of the principal of all Obligations shall have been made (or so provided
for);
 
                 fourth,to pay all other Obligations ratably (or provide for the
payment thereof pursuant to Section 15(b)), until payment in full of all such
other Obligations shall have been made (or so provided for); and
 
                 finally,to pay to the relevant Grantor, or as a court of
competent jurisdiction may direct, any surplus then remaining from the proceeds
of the Collateral owned by it;
 
provided that Collateral owned by a Subsidiary Guarantor and any proceeds
thereof shall be applied pursuant to the foregoing clauses first, second, third
and fourth only to the extent permitted by the limitation in Section 2(i).  The
Collateral Agent may make such distributions hereunder in cash or in kind or, on
a ratable basis, in any combination thereof.
 
 
27

--------------------------------------------------------------------------------

 
 
(b)        If at any time any portion of any monies collected or received by the
Collateral Agent would, but for the provisions of this Section 15(b), be payable
pursuant to Section 15(a) in respect of a Contingent Obligation, the Collateral
Agent shall not apply any monies to pay such Contingent Obligation but instead
shall request the holder thereof, at least 10 days before each proposed
distribution hereunder, to notify the Collateral Agent as to the maximum amount
of such Contingent Obligation if then ascertainable.  If the holder of such
Contingent Obligation does not notify the Collateral Agent of the maximum
ascertainable amount thereof at least two Business Days before such
distribution, such holder will not be entitled to share in such
distribution.  If such holder does so notify the Collateral Agent as to the
maximum ascertainable amount thereof, the Collateral Agent will allocate to such
holder a portion of the monies to be distributed in such distribution,
calculated as if such Contingent Obligation were outstanding in such maximum
ascertainable amount.  However, the Collateral Agent will not apply such portion
of such monies to pay such Contingent Obligation, but instead will hold such
monies or invest such monies in Cash Equivalents.  All such monies and Cash
Equivalents and all proceeds thereof will constitute Collateral hereunder, but
will be subject to distribution in accordance with this Section 15(b) rather
than Section 15(a).  The Collateral Agent will hold all such monies and Cash
Equivalents and the net proceeds thereof in trust until all or part of such
Contingent Obligation becomes a Non-Contingent Obligation, whereupon the
Collateral Agent at the request of the relevant Secured Party will apply the
amount so held in trust to pay such Non-Contingent Obligation; provided that, if
the other Obligations theretofore paid pursuant to the same clause of Section
15(a) (i.e., clause second or fourth) were not paid in full, the Collateral
Agent will apply the amount so held in trust to pay the same percentage of such
Non-Contingent Obligation as the percentage of such other Obligations
theretofore paid pursuant to the same clause of Section 15(a).  If (i) the
holder of such Contingent Obligation shall advise the Collateral Agent that no
portion thereof remains in the category of a Contingent Obligation and (ii) the
Collateral Agent still holds any amount held in trust pursuant to this Section
15(b) in respect of such Contingent Obligation (after paying all amounts payable
pursuant to the preceding sentence with respect to any portions thereof that
became Non-Contingent Obligations), such remaining amount will be applied by the
Collateral Agent in the order of priorities set forth in Section 15(a).
 
(c)      In making the payments and allocations required by this Section 15, the
Collateral Agent may rely upon information supplied to it pursuant to Section
19(c).  All distributions made by the Collateral Agent pursuant to this Section
shall be final (except in the event of manifest error) and the Collateral Agent
shall have no duty to inquire as to the application by any Secured Party of any
amount distributed to it.
 
 
28

--------------------------------------------------------------------------------

 
 
SECTION 16.  Fees and Expenses; Indemnification.  (a) Each Grantor agrees,
jointly and severally, promptly upon demand, to pay to the Collateral Agent:
 
(i)      the amount of any taxes that the Collateral Agent may have been
required to pay by reason of the Transaction Liens or to free any Collateral
from any other Lien thereon;
 
(ii)      the amount of any and all reasonable and documented or invoiced
out-of-pocket fees and expenses (including transfer taxes and reasonable fees
and expenses of counsel and other experts) incurred by the Collateral Agent (or
its Affiliates) and the Lenders, in each case in connection with (x) the
preparation, administration or enforcement of the Security Documents, including
such expenses as are incurred to preserve the value of the Collateral or the
validity, perfection, rank or value of any Transaction Lien, (y) any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions hereby or thereby contemplated shall be consummated) or (z) the
enforcement or protection of its rights in, or the exercise of its rights or
powers under, the Security Documents (including the collection, sale or other
disposition of any Collateral), including the reasonable fees, charges and
disbursements of one primary counsel to the Majority Lenders and one primary
counsel to the Collateral Agent, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of a single counsel
in each appropriate jurisdiction (including local Dutch counsel and which may
also include a single special counsel acting in multiple jurisdictions) for each
of (x) the Majority Lenders and (y) the Collateral Agent (and its Affiliates)
(and, in the case of an actual or perceived conflict of interest, where the
Person affected by such conflict informs the Borrower of such conflict and
thereafter retains its own counsel, of another firm of counsel for such affected
Person);
 
(iii)                 the amount of any fees that the Borrower shall have agreed
in writing to pay to the Collateral Agent and that shall have become due and
payable in accordance with such written agreement; and
 
(iv)                 the amount required to indemnify the Collateral Agent for,
or hold it harmless and defend it against, any loss, claim, damage, liability
and reasonable and documented or invoiced out-of-pocket fees and expense
(including the reasonable fees and expenses of its counsel and any experts or
sub-agents appointed by it hereunder) incurred or suffered by the Collateral
Agent in connection with the Security Documents, except to the extent that such
loss, claim, damage, liability, fee or expense are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence, bad faith or willful misconduct of the Collateral Agent or
any of its controlled Affiliates, in each case acting at the direction of the
Collateral Agent, or breach in bad faith of any duty that the Collateral Agent
has under this Agreement (after giving effect to Section 18).  Any such amount
not paid to the Collateral Agent on demand will bear interest for each day
thereafter until paid at a rate per annum equal to the sum of 2% plus the rate
applicable to Loans under Section 2.06(a) of the Credit Agreement for such day.
 
 
29

--------------------------------------------------------------------------------

 
 
(b)      If any transfer tax, documentary stamp tax or other tax is payable in
connection with any transfer or other transaction provided for in the Security
Documents, the Borrower will pay such tax and provide any required tax stamps to
the Collateral Agent or as otherwise required by law.
 
(c)      Each Grantor agrees, jointly and severally, to indemnify the Secured
Parties and each Related Party of the Secured Parties (each such Person being
called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities in each case on the terms and
conditions set forth in Section 9.05 of the Credit Agreement.
 
SECTION 17.  Authority to Administer Collateral.
 
(a)      Each Grantor irrevocably appoints the Collateral Agent as its true and
lawful attorney, with full power of substitution, in the name of such Grantor,
any Secured Party or otherwise, for the sole use and benefit of the Secured
Parties, but at the Borrower’s expense, to the extent permitted by law to
exercise, at any time and from time to time while an Event of Default shall have
occurred and be continuing, all or any of the following powers with respect to
all or any of such Grantor’s Collateral:
 
(i)      to demand, sue for, collect, receive and give acquittance for any and
all monies due or to become due upon or by virtue thereof,
 
(ii)      to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
 
(iii)                 to sell, lease, license or otherwise dispose of the same
or the proceeds or avails thereof, as fully and effectually as if the Collateral
Agent had an interest therein identical to that of the applicable Grantor, and
 
(iv)                 to extend the time of payment of any or all thereof and to
make any allowance or other adjustment with reference thereto;
 
provided that, except in the case of Personal Property Collateral that is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Collateral Agent will give the relevant Grantor
at least ten days’ prior written notice of the time and place of any public sale
thereof or the time after which any private sale or other intended disposition
thereof will be made. Any such notice shall (x) contain the information
specified in UCC Section 9-613, (y) be Authenticated and (z) be sent to the
parties required to be notified pursuant to UCC Section 9-611(c); provided,
further, that, if the Collateral Agent fails to comply with this sentence in any
respect, its liability for such failure shall be limited to the liability (if
any) imposed on it as a matter of law under the UCC.
 
 
30

--------------------------------------------------------------------------------

 
 
(b)      Notwithstanding anything to the contrary herein, the foregoing
provisions of this Section shall apply to Real Property Collateral only to the
extent permitted by applicable law and contemplated by the provisions of any
applicable Mortgage; provided that the foregoing provisions of this Section 17
shall also apply to Fixtures to the extent such Fixtures are governed by Article
9 of the UCC.
 
SECTION 18.  Limitation on Duty in Respect of Collateral.  Beyond the exercise
of reasonable care in the custody and preservation thereof, the Collateral Agent
will have no duty as to any Collateral in its possession or control or in the
possession or control of any sub-agent or bailee or any income therefrom or as
to the preservation of rights against prior parties or any other rights
pertaining thereto.  The Collateral Agent will be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession or control if such Collateral is accorded treatment substantially
equal to that which it accords its own property, and will not be liable or
responsible for any loss or damage to any Collateral, or for any diminution in
the value thereof, by reason of any act or omission of any sub-agent or bailee
selected by the Collateral Agent in good faith, except to the extent that such
liability arises from the Collateral Agent’s gross negligence or willful
misconduct.
 
SECTION 19.  General Provisions Concerning the Collateral Agent.
 
(a)      The provisions of Article 8 of the Credit Agreement shall inure to the
benefit of the Administrative Agent and the Collateral Agent, to the extent
provided for therein, and shall be binding upon all Grantors and all Secured
Parties, in connection with this Agreement and the other Security
Documents.  Without limiting the generality of the foregoing, (i) the
Administrative Agent and the Collateral Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether an Event of Default has
occurred and is continuing, (ii) the Administrative Agent and the Collateral
Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Security Documents that the Administrative Agent and the
Collateral Agent are required in writing to exercise by the Majority Lenders,
and (iii) except as expressly set forth in the Loan Documents, the
Administrative Agent and the Collateral Agent shall not have any duty to
disclose, and shall not be liable for any failure to disclose, any information
relating to any Grantor that is communicated to or obtained by the bank serving
as Collateral Agent or any of its Affiliates in any capacity.  The
Administrative Agent and the Collateral Agent shall not be responsible for the
existence, genuineness or value of any Collateral or for the validity,
perfection, priority or enforceability of any Transaction Lien, whether impaired
by operation of law or by reason of any action or omission to act on its part
under the Security Documents.  The Administrative Agent and the Collateral Agent
shall be deemed not to have knowledge of any Event of Default unless and until
written notice thereof is given to the Collateral Agent by the Borrower or a
Secured Party.
 
 
 
31

--------------------------------------------------------------------------------

 
 
(b)      Sub-Agents and Related Parties.  The Collateral Agent may perform any
of its duties and exercise any of its rights and powers through one or more
sub-agents appointed by it.  The Collateral Agent and any such sub-agent may
perform any of its duties and exercise any of its rights and powers through its
Related Parties.  The exculpatory provisions of Section 18 and this Section 19
shall apply to any such sub-agent and to the Related Parties of the Collateral
Agent and any such sub-agent.
 
(c)      Information as to Obligations and Actions by Secured Parties.  For all
purposes of the Security Documents, including determining the amounts of the
Obligations and whether an Obligation is a Contingent Obligation or not, or
whether any action has been taken under any Secured Agreement, the Collateral
Agent will be entitled to rely on information from (i) its own records for
information as to the Lenders, their Obligations and actions taken by them, (ii)
any Secured Party for information as to its Obligations and actions taken by it,
to the extent that the Collateral Agent has not obtained such information from
its own records and (iii) the Borrower, to the extent that the Collateral Agent
has not obtained information from the foregoing sources.
 
(d)      Refusal to Act.  The Collateral Agent may refuse to act on any notice,
consent, direction or instruction from any Secured Parties or any agent, trustee
or similar representative thereof that, in the Collateral Agent’s opinion, (i)
is contrary to law or the provisions of any Security Document, (ii) may expose
the Collateral Agent to liability (unless the Collateral Agent shall have been
indemnified, to its reasonable satisfaction, for such liability by the Secured
Parties that gave such notice, consent, direction or instruction) or (iii) is
unduly prejudicial to Secured Parties not joining in such notice, consent,
direction or instruction.
 
SECTION 20.  Termination of Transaction Liens; Release of Collateral.  (a) The
Transaction Liens granted by each Guarantor shall terminate when its Guarantee
is released pursuant to Section 2(c).
 
(b)      The Transaction Liens granted by the Borrower shall terminate when all
the Release Conditions are satisfied.
 
(c)      At any time before the Transaction Liens granted by the Borrower
terminate, the Collateral Agent may, at the written request of the Borrower, (i)
release any Collateral pursuant to Section 5(d),  (ii) release any Collateral
(but not all or substantially all the Collateral) with the prior written consent
of the Majority Lenders or (iii) release all or substantially all the Collateral
with the prior written consent of all Lenders.
 
 
32

--------------------------------------------------------------------------------

 
 
(d)      Upon any termination of a Transaction Lien or release of Collateral,
the Collateral Agent will, at the expense of the relevant Grantor, execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence the termination of such Transaction Lien or the release of such
Collateral, as the case may be, and to terminate Control Agreements, landlord
access agreements, bailee and similar letters and similar third party agreements
with respect to the released Collateral.
 
SECTION 21.  Additional Guarantors and Grantors.  Any Subsidiary may become a
party hereto by signing and delivering to the Collateral Agent a Guarantee and
Collateral Agreement Supplement, whereupon such Subsidiary shall become a
“Guarantor” and a “Grantor” as defined herein.
 
SECTION 22.  Notices.  Each notice, request or other communication given to any
party hereunder shall be given in accordance with Section 9.02 of the Credit
Agreement, and in the case of any such notice, request or other communication to
a Grantor other than the Borrower, shall be given to it in care of the Borrower.
 
SECTION 23.  No Implied Waivers; Remedies Not Exclusive.  No failure by the
Collateral Agent or any Secured Party to exercise, and no delay in exercising
and no course of dealing with respect to, any right or remedy under any Security
Document shall operate as a waiver thereof; nor shall any single or partial
exercise by the Collateral Agent or any Secured Party of any right or remedy
under any Loan Document preclude any other or further exercise thereof or the
exercise of any other right or remedy.  The rights and remedies specified in the
Loan Documents are cumulative and are not exclusive of any other rights or
remedies provided by law.
 
SECTION 24.  Successors and Assigns.  This Agreement is for the benefit of the
Collateral Agent and the Secured Parties.  If all or any part of any Secured
Party’s interest in any Obligation is assigned or otherwise transferred, the
transferor’s rights hereunder, to the extent applicable to the obligation so
transferred, shall be automatically transferred with such obligation.  This
Agreement shall be binding on the Grantors and their respective successors and
assigns.
 
SECTION 25.  Amendments and Waivers.  Neither this Agreement nor any provision
hereof may be waived, amended, modified or terminated except pursuant to an
agreement or agreements in writing entered into by the Grantors and the
Collateral Agent, with the consent of the Majority Lenders.  No such waiver,
amendment or modification shall (i) be binding upon any Grantor, except with its
written consent or (ii) affect the rights of a Secured Party (other than a
Lender) hereunder more adversely than it affects the comparable rights of the
Lenders hereunder, without the consent of such Secured Party.
 
 
33

--------------------------------------------------------------------------------

 
 
SECTION 26.  Choice of Law.  THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS AND
THE RIGHTS AND THE OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL,
EXCEPT AS OTHERWISE PROVIDED IN THE RELEVANT SECURITY DOCUMENT, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, TO THE EXTENT THAT THE
SAME ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION.  ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER SECURITY DOCUMENT (EXCEPT THAT, (X)
IN THE CASE OF ANY MORTGAGE OR OTHER SECURITY DOCUMENT, PROCEEDINGS MAY ALSO BE
BROUGHT BY THE SECURED PARTIES IN THE JURISDICTION IN WHICH THE RELEVANT
MORTGAGED PROPERTY OR COLLATERAL IS LOCATED OR ANY OTHER RELEVANT JURISDICTION
AND (Y) IN THE CASE OF ANY BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS WITH
RESPECT TO ANY GRANTOR, ACTIONS OR PROCEEDINGS RELATED TO THIS AGREEMENT AND THE
OTHER SECURITY DOCUMENTS MAY BE BROUGHT IN SUCH COURT HOLDING SUCH BANKRUPTCY,
INSOLVENCY OR SIMILAR PROCEEDINGS) SHALL BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN
EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT OR ANY OTHER SECURITY DOCUMENT, EACH OF THE PARTIES
HERETO OR THERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS (EXCEPT AS SET FORTH IN THE PARENTHETICAL ABOVE).  EACH PARTY
HERETO HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER SECURITY DOCUMENTS
BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL
JURISDICTION OVER IT.
 
SECTION 27.  Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER SECURITY
DOCUMENTS.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 27.
 
 
34

--------------------------------------------------------------------------------

 
 
SECTION 28.  Severability.  If any provision of any Security Document is invalid
or unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions of the Security Documents shall remain in full
force and effect in such jurisdiction and shall be liberally construed in favor
of the Collateral Agent and the Secured Parties in order to carry out the
intentions of the parties thereto as nearly as may be possible and (ii) the
invalidity or unenforceability of such provision in such jurisdiction shall not
affect the validity or enforceability thereof in any other jurisdiction.
 
 
35

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
 

 
RETROPHIN, INC., as Borrower
 
By:
     
Name:
     
Title:
 

 
 
[Signature Page – Guarantee and Collateral Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 

 
U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent and Collateral Agent
 
By:
     
Name:
     
Title:
 

 
[Signature Page – Guarantee and Collateral Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
Guarantors:
 

 
RETROPHIN THERAPEUTICS I, INC.
 
By:
     
Name:
     
Title:
 

 
RETROPHIN THERAPEUTICS II, INC.
 
 
 
By:
     
Name:
     
Title:
 

 
MANCHESTER PHARMACEUTICALS LLC
 
 
 
By:
     
Name:
     
Title:
 

 
KYALIN BIOSCIENCES INC.
 
 
 
By:
     
Name:
     
Title:
 

 
[Signature Page – Guarantee and Collateral Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 

 
RETROPHIN PHARMACEUTICAL, INC.
 
By:
     
Name:
     
Title:
 

 
[Signature Page – Guarantee and Collateral Agreement]
 
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT A
to Guarantee and Collateral Agreement
 
GUARANTEE AND COLLATERAL AGREEMENT SUPPLEMENT
 
GUARANTEE AND COLLATERAL AGREEMENT SUPPLEMENT dated as of _______, ____, between
[NAME OF GRANTOR] (the “Grantor”) and U.S. BANK NATIONAL ASSOCIATION, as
Collateral Agent.
 
WHEREAS, Retrophin, Inc., (the “Borrower”), the Guarantors that are parties
thereto and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent, are parties to
a Guarantee and Collateral Agreement dated as of June 30, 2014 (as heretofore
amended and/or supplemented, the “Guarantee and Collateral Agreement”) under
which the Borrower secures certain of their obligations under and in connection
with the Credit Agreement (the “Obligations”) and the Guarantors guarantee the
Obligations and secure their respective guarantees thereof;
 
WHEREAS, [name of Grantor] [desires to become] [is] a party to the Guarantee and
Collateral Agreement as a Guarantor and Grantor thereunder;1 and
 
WHEREAS, terms defined in the Guarantee and Collateral Agreement (or whose
definitions are incorporated by reference in Section 1 of the Guarantee and
Collateral Agreement) and not otherwise defined herein have, as used herein, the
respective meanings provided for therein;
 
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
 
1.      Guarantee.2 The Grantor unconditionally guarantees the full and punctual
payment of each Obligation when due (whether at stated maturity, upon
acceleration or otherwise).  The Grantor acknowledges that, by signing this
Guarantee and Collateral Agreement Supplement and delivering it to the
Collateral Agent, the Grantor becomes a “Guarantor” and “Grantor” for all
purposes of the Guarantee and Collateral Agreement and that its obligations
under the foregoing Guarantee are subject to all the provisions of the Guarantee
and Collateral Agreement (including those set forth in Section 2 thereof)
applicable to the obligations of a Guarantor thereunder.
___________________
 
1  If the Grantor is the Borrower, delete this recital and Section 1 hereof.
2  Delete this Section if the Grantor is the Borrower or a Guarantor that is
already a party to the Guaranty and Collateral Agreement.
 
 
A-1

--------------------------------------------------------------------------------

 
 
2.      Grant of Transaction Liens. (a) In order to secure [its Guarantee]  [the
Obligations] , the Grantor grants to the Collateral Agent for the benefit of the
Secured Parties a continuing security interest in all the following property of
the Grantor, whether now owned or existing or hereafter acquired or arising and
regardless of where located (the “New Collateral”):
 
[describe property being added to the Collateral]5
 
(b)      With respect to each right to payment or performance included in the
Collateral from time to time, the Transaction Lien granted therein includes a
continuing security interest in (i) any Supporting Obligation that supports such
payment or performance and (ii) any Lien that (x) secures such right to payment
or performance or (y) secures any such Supporting Obligation.
 
(c)      The foregoing Transaction Liens are granted as security only and shall
not subject the Collateral Agent or any other Secured Party to, or transfer or
in any way affect or modify, any obligation or liability of the Grantor with
respect to any of the New Collateral or any transaction in connection therewith.
 
3.      Delivery of Collateral.  Concurrently with delivering this Guarantee and
Collateral Agreement Supplement to the Collateral Agent, the Grantor is
complying with the provisions of Section 7 of the Guarantee and Collateral
Agreement with respect to Investment Property, in each case if and to the extent
included in the New Collateral at such time.
 
4.      Party to Guarantee and Collateral Agreement.  Upon delivering this
Guarantee and Collateral Agreement Supplement to the Collateral Agent, the
Grantor will become a party to the Guarantee and Collateral Agreement and will
thereafter have all the rights and obligations of a Guarantor and a Grantor
thereunder and be bound by all the provisions thereof as fully as if the Grantor
were one of the original parties thereto.6
 
___________________
3  Delete bracketed words if the Grantor is the Borrower.
 
4  Delete bracketed words if the Grantor is a Guarantor.
 
5  If the Grantor is not already a party to the Guaranty and Collateral
Agreement, clauses (i) through (xvi) of, and the proviso to, Section 3(a) of the
Guaranty and Collateral Agreement may be appropriate.
 
 
A-2

--------------------------------------------------------------------------------

 
 
5.      Representations and Warranties.  (a) The Grantor is duly organized,
validly existing and in good standing under the laws of [jurisdiction of
organization].
 
(b)      The Grantor has delivered a Perfection Certificate to the Lenders.  The
information set forth therein is correct and complete as of the date
hereof.  Within 30 days after the date hereof, the Grantor will furnish to the
Lenders a file search report from each UCC filing office listed in such
Perfection Certificate, showing the filing made at such filing office to perfect
the Transaction Liens on the New Collateral.
 
(c)      The execution and delivery of this Guarantee and Collateral Agreement
Supplement by the Grantor and the performance by it of its obligations under the
Guarantee and Collateral Agreement as supplemented hereby are within its
organizational powers, have been duly authorized by all necessary action
pursuant to its Organizational Documents, require no further action by or in
respect of, or filing with, any governmental body, agency or official (other
than the filing of UCC financing statements and Intellectual Property Filings)
and do not violate, conflict with or cause a breach or a default under, any
provision of applicable law or regulation or of its Organizational Documents, or
of any Material Contract to which the Grantor is a party or by which the Grantor
is bound or to which the Grantor or any of its assets are subject, or any
Statute or Order to which the Grantor or any of its assets are subject or result
in the creation or imposition of any Lien (except a Transaction Lien) on any of
its assets.
 
(d)      The Guarantee and Collateral Agreement as supplemented hereby
constitutes a valid and binding agreement of the Grantor, enforceable in
accordance with its terms, except as limited by (i) applicable bankruptcy,
insolvency, fraudulent conveyance or other similar laws affecting creditors’
rights generally and (ii) general principles of equity.
 
(e)      Each of the representations and warranties set forth in Sections 4
through 11 of the Guarantee and Collateral Agreement is true, in all material
respects, as applied to the Grantor and the New Collateral.  For purposes of the
foregoing sentence, references in said Sections to a “Grantor” shall be deemed
to refer to the Grantor, references to Schedules to the Guarantee and Collateral
Agreement shall be deemed to refer to the corresponding Schedules to this
Guarantee and Collateral Agreement Supplement, references to “Collateral” shall
be deemed to refer to the New Collateral, and references to the “Closing Date”
shall be deemed to refer to the date on which the Grantor signs and delivers
this Guarantee and Collateral Agreement Supplement.
_________________
6  Delete Section 4 if the Grantor is already a party to the Guaranty and
Collateral Agreement.
 
 
A-3

--------------------------------------------------------------------------------

 
 
6.      Governing Law.  This Guarantee and Collateral Agreement Supplement and
any claim, controversy or dispute arising under or related to this Guarantee and
Collateral Agreement (including, without limitation, any claims sounding in
contract law or tort law arising out of the subject matter hereof) shall be
construed in accordance with and governed by the laws of the State of New York.
 
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee and Collateral
Agreement Supplement to be duly executed by their respective authorized officers
as of the day and year first above written.
 

 
[NAME OF GRANTOR]
     
By:
     
Name:
     
Title:
 

 

 
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent
     
By:
     
Name:
     
Title:
 

 
 
A-4

--------------------------------------------------------------------------------

 
 
EXHIBIT B
to Guarantee and Collateral Agreement
 
COPYRIGHT SECURITY AGREEMENT

 
(Copyrights, Copyright Registrations, Copyright
Applications and Copyright Licenses)
 
COPYRIGHT SECURITY AGREEMENT, dated as of _________, ____, between [NAME OF
GRANTOR], a _________ corporation1 (herein referred to as the “Grantor”), and
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent.
 
WHEREAS, the Grantor owns, or in the case of licenses is a party to, the
Copyright Collateral (as defined below);
 
WHEREAS, Retrophin, Inc. (the “Borrower”), the Lenders that are parties thereto,
and U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent, are parties to a
Credit Agreement dated as of June 30, 2014 (as amended from time to time, the
“Credit Agreement”);
 
WHEREAS, pursuant to (i) a Guarantee and Collateral Agreement dated as of June
30, 2014 (as amended and/or supplemented from time to time, the “Guarantee and
Collateral Agreement”) among the Borrower, the Guarantors that are parties
thereto and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent for the Secured
Parties referred to therein (in such capacity, together with its successors in
such capacity, the “Grantee”) and (ii) certain other Security Documents
(including this Copyright Security Agreement), the Grantor has [secured certain
of its obligations (the “Obligations”)]2 [guaranteed certain obligations of the
Borrower and secured such guarantee (the “Grantor’s Guarantee”)]3 by granting to
the Grantee for the benefit of such Secured Parties a continuing security
interest in certain personal property of the Grantor, including all right, title
and interest of the Grantor in, to and under the Copyright Collateral (as
defined below); and
 
WHEREAS, terms defined in the Guarantee and Collateral Agreement (or whose
definitions are incorporated by reference in Section 1 of the Guarantee and
Collateral Agreement) and not otherwise defined herein shall have, the
respective meanings provided for therein;
___________________
 
1  Modify as needed if the Grantor is not a corporation.
 
2  Delete these bracketed words if the Grantor is a Guarantor.
 
3  Delete these bracketed words if the Grantor is the Borrower.
 
 
B-1

--------------------------------------------------------------------------------

 
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Grantor confirms the grant to the Grantee,
to secure the [Obligations] [Grantor’s Guarantee], a continuing security
interest in all of the Grantor’s right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the “Copyright Collateral”), whether now owned or
existing or hereafter acquired or arising:
 
(i)      each Copyright owned by the Grantor, including, without limitation,
each Copyright registration or application therefor referred to in Schedule 1
hereto;
 
(ii)      each Copyright License to which the Grantor is a party, including,
without limitation, each Copyright License identified in Schedule 1 hereto; and
 
(iii)                 all proceeds of, revenues from, and accounts and general
intangibles arising out of, the foregoing, including, without limitation, all
proceeds of and revenues from any claim by the Grantor against third parties for
past, present or future infringement of any Copyright (including, without
limitation, any Copyright owned by the Grantor and identified in Schedule 1),
and all rights and benefits of the Grantor under any Copyright License
(including, without limitation, any Copyright License identified in Schedule 1);
 
provided that the Excluded Assets shall be excluded from the foregoing security
interest.
 
The Grantor irrevocably constitutes and appoints the Grantee and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full power and authority in the name of the Grantor or in
the Grantee’s name, from time to time, in the Grantee’s reasonable discretion,
so long as any Event of Default shall have occurred and be continuing, to take
with respect to the Copyright Collateral any and all appropriate action which
the Grantor might take with respect to the Copyright Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Copyright Security Agreement and to accomplish the
purposes hereof.
 
Except to the extent expressly permitted in the Guarantee and Collateral
Agreement or the Credit Agreement, the Grantor agrees not to sell, license,
exchange, assign or otherwise transfer or dispose of, or grant any rights with
respect to, or mortgage or otherwise encumber, any of the Copyright Collateral.
 
 
B-2

--------------------------------------------------------------------------------

 
 
The foregoing is a confirmation of the security interest granted by the Grantor
to the Grantee pursuant to the Guarantee and Collateral Agreement.  The Grantor
acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Copyright Collateral confirmed hereby
are more fully set forth in the Guarantee and Collateral Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.  In the event that any of the provisions of the Copyright Security
Agreement are deemed to conflict with any of the provisions of the Guarantee and
Collateral Agreement, the provisions of the Guarantee and Collateral Agreement
shall govern.
 
IN WITNESS WHEREOF, the Grantor has caused this Copyright Security Agreement to
be duly executed by its officer thereunto duly authorized as of the date first
written above.
 

 
[NAME OF GRANTOR]
 
By:
     
Name:
     
Title:
 

 
Acknowledged:
     
U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent
     
By:
     
Name:
     
Title:
   

 
 
B-3

--------------------------------------------------------------------------------

 
 
EXHIBIT C
to Guarantee and Collateral Agreement
 
PATENT SECURITY AGREEMENT

 
(Patents, Patent Applications and Patent Licenses)
 
PATENT SECURITY AGREEMENT, dated as of _________, ____, between [NAME OF
GRANTOR], a _________ corporation1 (herein referred to as the “Grantor”), and
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent.
 
WHEREAS, the Grantor owns, or in the case of licenses is a party to, the Patent
Collateral (as defined below);
 
WHEREAS, Retrophin, Inc. (the “Borrower”), the Lenders that are parties thereto,
and U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent, are parties to a
Credit Agreement dated as of June 30, 2014 (as amended from time to time, the
“Credit Agreement”);
 
WHEREAS, pursuant to (i) a Guarantee and Collateral Agreement dated as of June
30, 2014 (as amended and/or supplemented from time to time, the “Guarantee and
Collateral Agreement”) among the Borrower, the Guarantors that are parties
thereto and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent for the Secured
Parties referred to therein (in such capacity, together with its successors in
such capacity, the “Grantee”) and (ii) certain other Security Documents
(including this Patent Security Agreement), the Grantor has [secured certain of
its obligations (the “Obligations”)]2 [guaranteed certain obligations of the
Borrower and secured such guarantee (the “Grantor’s Guarantee”)]3 by granting to
the Grantee for the benefit of such Secured Parties a continuing security
interest in certain personal property of the Grantor, including all right, title
and interest of the Grantor in, to and under the Patent Collateral (as defined
below); and
 
WHEREAS, terms defined in the Guarantee and Collateral Agreement (or whose
definitions are incorporated by reference in Section 1 of the Guarantee and
Collateral Agreement) and not otherwise defined herein shall have, the
respective meanings provided for therein;
_________________
1  Modify as needed if the Grantor is not a corporation.
 
2  Delete these bracketed words if the Grantor is a Guarantor.
 
3  Delete these bracketed words if the Grantor is the Borrower.
 
 
C-1

--------------------------------------------------------------------------------

 
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Grantor confirms the grant to the Grantee,
to secure the [Obligations] [Grantor’s Guarantee], a continuing security
interest in all of the Grantor’s right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the “Patent Collateral”), whether now owned or
existing or hereafter acquired or arising:
 
(i)      each Patent owned by the Grantor, including, without limitation, each
Patent referred to in Schedule 1 hereto;
 
(ii)      each Patent License to which the Grantor is a party, including,
without limitation, each Patent License identified in Schedule 1 hereto; and
 
(iii)     all proceeds of and revenues from the foregoing, including, without
limitation, all proceeds of and revenues from any claim by the Grantor against
third parties for past, present or future infringement of any Patent owned by
the Grantor (including, without limitation, any Patent identified in Schedule 1
hereto) and all rights and benefits of the Grantor under any Patent License
(including, without limitation, any Patent License identified in Schedule 1
hereto);
 
provided that the Excluded Assets shall be excluded from the foregoing security
interest.
 
The Grantor irrevocably constitutes and appoints the Grantee and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full power and authority in the name of the Grantor or in
the Grantee’s name, from time to time, in the Grantee’s reasonable discretion,
so long as any Event of Default shall have occurred and be continuing, to take
with respect to the Patent Collateral any and all appropriate action which the
Grantor might take with respect to the Patent Collateral and to execute any and
all documents and instruments which may be necessary or desirable to carry out
the terms of this Patent Security Agreement and to accomplish the purposes
hereof.
 
Except to the extent expressly permitted in the Guarantee and Collateral
Agreement or the Credit Agreement, the Grantor agrees not to sell, license,
exchange, assign or otherwise transfer or dispose of, or grant any rights with
respect to, or mortgage or otherwise encumber, any of the Patent Collateral.
 
The foregoing security interest is a confirmation of the security interest
granted by the Grantor to the Grantee pursuant to the Guarantee and Collateral
Agreement.  The Grantor acknowledges and affirms that the rights and remedies of
the Grantee with respect to the security interest in the Patent Collateral
confirmed hereby are more fully set forth in the Guarantee and Collateral
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.  In the event that any of the provisions of
the Patent Security Agreement are deemed to conflict with any of the provisions
of the Guarantee and Collateral Agreement, the provisions of the Guarantee and
Collateral Agreement shall govern.
 
 
C-2

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Grantor has caused this Patent Security Agreement to be
duly executed by its officer thereunto duly authorized as of the date first
written above.
 

 
[NAME OF GRANTOR]
     
By:
     
Name:
     
Title:
 

 
Acknowledged:
 
U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent
     
By:
     
Name:
     
Title:
   

 
 
C-3

--------------------------------------------------------------------------------

 
 
EXHIBIT D
to Guarantee and Collateral Agreement
 
TRADEMARK SECURITY AGREEMENT

 
(Trademarks, Trademark Registrations, Trademark
Applications and Trademark Licenses)
 
TRADEMARK SECURITY AGREEMENT, dated as of _________, ____, between [NAME OF
GRANTOR], a _________ corporation1 (herein referred to as the “Grantor”), and
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent.
 
WHEREAS, the Grantor owns, or in the case of licenses is a party to, the
Trademark Collateral (as defined below);
 
WHEREAS, Retrophin, Inc. (the “Borrower”), the Lenders that are parties thereto,
and U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent, are parties to a
Credit Agreement dated as of June 30, 2014 (as amended from time to time, the
“Credit Agreement”);
 
WHEREAS, pursuant to (i) a Guarantee and Collateral Agreement dated as of June
30, 2014 (as amended and/or supplemented from time to time, the “Guarantee and
Collateral Agreement”) among the Borrower, the Guarantors that are
parties  thereto and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent for the
Secured Parties referred to therein (in such capacity, together with its
successors in such capacity, the “Grantee”) and (ii) certain other Security
Documents (including this Trademark Security Agreement), the Grantor has
[secured certain of its obligations (the “Obligations”)]2 [guaranteed certain
obligations of the Borrower and secured such guarantee (the “Grantor’s
Guarantee”)]3 by granting to the Grantee for the benefit of such Secured Parties
a continuing security interest in personal property of the Grantor, including
all right, title and interest of the Grantor in, to and under the Trademark
Collateral (as defined below); and
 
WHEREAS, terms defined in the Guarantee and Collateral Agreement (or whose
definitions are incorporated by reference in Section 1 of the Guarantee and
Collateral Agreement) and not otherwise defined herein shall have, the
respective meanings provided for therein;
_____________________
1  Modify as needed if the Grantor is not a corporation.
2  Delete these bracketed words if the Grantor is a Guarantor.
3  Delete these bracketed words if the Grantor is the Borrower.
 
 
D-1

--------------------------------------------------------------------------------

 
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Grantor confirms the grant to the Grantee,
to secure the [Obligations] [Grantor’s Guarantee], a continuing security
interest in all of the Grantor’s right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the “Trademark Collateral”), whether now owned or
existing or hereafter acquired or arising:
 
(i)      each Trademark (except for any Trademark that constitutes an Excluded
Asset) owned by the Grantor, including, without limitation, each Trademark
registration and application referred to in Schedule 1 hereto, and all of the
goodwill of the business connected with the use of, or symbolized by, each
Trademark;
 
(ii)      each Trademark License to which the Grantor is a party, including,
without limitation, each Trademark License identified in Schedule 1 hereto; and
 
(iii)                 all proceeds of and revenues from the foregoing,
including, without limitation, all proceeds of and revenues from any claim by
the Grantor against third parties for past, present or future unfair competition
with, or violation of intellectual property rights in connection with or injury
to, or infringement or dilution of, any Trademark owned by the Grantor
(including, without limitation, any Trademark identified in Schedule 1 hereto),
and all rights and benefits of the Grantor under any Trademark License
(including, without limitation, any Trademark License identified in Schedule 1
hereto), or for injury to the goodwill associated with any of the foregoing;
 
provided that the Excluded Assets shall be excluded from the foregoing security
interest.
 
The Grantor irrevocably constitutes and appoints the Grantee and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full power and authority in the name of the Grantor or in
the Grantee’s name, from time to time, in the Grantee’s reasonable discretion,
so long as any Event of Default shall have occurred and be continuing, to take
with respect to the Trademark Collateral any and all appropriate action which
the Grantor might take with respect to the Trademark Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Trademark Security Agreement and to accomplish the
purposes hereof.
 
 
D-2

--------------------------------------------------------------------------------

 
 
Except to the extent expressly permitted in the Guarantee and Collateral
Agreement or the Credit Agreement, the Grantor agrees not to sell, license,
exchange, assign or otherwise transfer or dispose of, or grant any rights with
respect to, or mortgage or otherwise encumber, any of the Trademark Collateral.
 
The foregoing is a confirmation of the security interest granted by the Grantor
to the Grantee pursuant to the Guarantee and Collateral Agreement.  The Grantor
acknowledges and affirms that the rights and remedies of the Grantee with
respect to the security interest in the Trademark Collateral confirmed hereby
are more fully set forth in the Guarantee and Collateral Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.  In the event that any of the provisions of the Trademark Security
Agreement are deemed to conflict with any of the provisions of the Guarantee and
Collateral Agreement, the provisions of the Guarantee and Collateral Agreement
shall govern.
 
IN WITNESS WHEREOF, the Grantor has caused this Trademark Security Agreement to
be duly executed by its officer thereunto duly authorized as of the date first
written above.
 

     
[NAME OF GRANTOR]
             
By:
         
Name:
         
Title:
 

 
Acknowledged:
         
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent
         
By:
       
Name:
       
Title:
     

 
D-3

--------------------------------------------------------------------------------

 
 
EXHIBIT E
to Guarantee and Collateral Agreement
 
PERFECTION CERTIFICATE
 
June 30, 2014
 
With reference to the Guarantee and Collateral Agreement dated as of the date
hereof among RETROPHIN, INC. (the “Borrower”), a Delaware corporation, U.S. BANK
NATIONAL ASSOCIATION, as collateral agent (in such capacity, the “Collateral
Agent”) and the Guarantors (together with the Borrower, collectively the
“Grantors” and, individually a “Grantor”) (the “Guarantee and Collateral
Agreement”), each Grantor hereby certifies as follows (capitalized terms used
but not defined herein shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement):
 
Section 1.                      Legal Names, Organizations and Jurisdictions of
Organization.  (a) Set forth on Schedule 1(a) is the exact legal name, the type
of organization and the jurisdiction of organization or formation, as
applicable, of each Grantor.
 
(b) Except as set forth on Schedule 1(b), no Grantor has, within the past five
years, changed its legal name, jurisdiction of organization or its corporate
structure in any way (e.g., by merger or consolidation with any other Person or
acquired all or substantially all of the assets of (or all or substantially all
the assets constituting a business unit, division, product line or line of
business of) another Person (other than any other Grantor)).
 
(c)           Set forth on Schedule 1(c) is each trade name or assumed name used
by any Grantor during the past five years or by which any Grantor has been known
or has transacted any business during the past five years.
 
Section 2.                      Organizational and Federal Taxpayer
Identification Numbers.  Set forth on Schedule 2 is (i) the jurisdiction of
organization and the form of organization of each Grantor, (ii) the
organizational identification number, if any, assigned by such jurisdiction,
(iii) the address (including street address, city, county and state) of the
chief executive office of such Grantor or the registered office of such Grantor,
if applicable, at any time in the past five years and (iv) the U.S. federal
taxpayer identification number of each Grantor.
 
Section 3.                      Acquisitions of Equity Interests or
Assets.  Except as set forth on Schedule 3, no Grantor has acquired any equity
interests of another entity or substantially all the assets of another entity
within the past five years.
 
Section 4.                      UCC Filings; Authorization to File Financing
Statements.  (a) Financing statements have been prepared for filing by counsel
to the Majority Lenders in the proper Uniform Commercial Code filing office in
the jurisdiction in which each Grantor is located.  Set forth on Schedule 4 is a
true and correct list of each such filing and the Uniform Commercial Code filing
office in which such filing is to be made.
 
 
E-1

--------------------------------------------------------------------------------

 
 
(b)           Each Grantor, to the extent permitted by applicable law, hereby
authorizes the Collateral Agent (or the Majority Lenders on behalf of the
Collateral Agent) to file financing or continuation statements, and amendments
thereto, in all jurisdictions and with all filing offices as the Collateral
Agent may determine, in its reasonable discretion, are necessary or advisable to
perfect the security interest granted or to be granted to the Collateral Agent
for the benefit of the Secured Parties.  Such financing statements may describe
the collateral in the same manner as described in the agreement granting a
security interest or may contain an indication or description of collateral that
describes such property in any other manner as the Majority Lenders may
determine, in their reasonable discretion, is necessary or advisable to ensure
the perfection of the security interest in the collateral granted or to be
granted to the Collateral Agent for the benefit of the Secured Parties,
including, without limitation, describing such property as “all assets” or “all
personal property.”

Section 5.                      Real Property. Set forth on Schedule 5 is a true
and correct list of (i) all real property owned, leased or otherwise held by
each Grantor as of the Closing Date, (ii) all real property to be encumbered by
a Mortgage and fixture filing, which real property includes all real property
owned by each Grantor as of the Closing Date with a Fair Market Value equal to
or greater than $1,000,000, (iii) the common names, addresses and uses of each
Mortgaged Property, and (iv) the county or other jurisdiction in which a
Mortgage and, if applicable, a fixture filing on each Mortgage is to be recorded
and/or filed.

Section 6.                      Tangible Personal Property.  Set forth on
Schedule 6 are all the locations where any Grantor currently maintains any of
its tangible personal property (including goods, inventory and equipment),
including property in the possession of a third party (e.g., warehouseman or
other bailee) to the extent not provided pursuant to Section 5 above.

Section 7.                      Investment-Related Property.  Set forth on
Schedule 7 is a true and correct list, for each Grantor, of all the issued and
outstanding stock, partnership interests, limited liability company membership
interests or other Equity Interests of the Borrower or any Subsidiary or (to the
extent such Equity Interest is certificated) of any other Person owned,
beneficially or of record, by such Grantor, specifying the issuer and
certificate number (if any) of, and the number and percentage of ownership
represented by, such Equity Interests and setting forth the percentage of such
Equity Interests pledged under the Security Documents.
 
 
E-2

--------------------------------------------------------------------------------

 
 
Section 8.                      Debt Instruments.  Set forth on Schedule 8 is a
true and correct list, for each Grantor, of all promissory notes and other
instruments held by such Grantor that are required to be pledged under the
Security Documents, including all intercompany notes between or among the
Borrower and the Subsidiaries, and to the extent applicable, specifying the
creditor and debtor thereunder and the outstanding principal amount thereof.

Section 9.                      Intellectual Property.  (a) Set forth on
Schedule 9(a) is a true and correct list, for each Grantor, of all Patents and
Patent applications owned by such Grantor (except, for the avoidance of doubt,
as otherwise indicated on Schedule 9(a)), including the name of the owner,
title, registration or application number of any registrations or applications.

(b)           Set forth on Schedule 9(b) is a true and correct list, for each
Grantor, of all Trademark and service mark registrations and applications owned
by such Grantor (other than intent-to-use Trademark and service mark
applications), including the name of the registered owner and the registration
or application number of any registrations and applications.

(c)           Set forth on Schedule 9(c) is a true and correct list, for each
Grantor, of all Copyright registrations and applications owned by such Grantor,
including the name of the registered owner, title and the registration number of
any Copyright registrations.

(d)           Set forth on Schedule 9(d) is a true and correct list, for each
Grantor, of all exclusive Copyright Licenses under which such Grantor is a
licensee, including the name and address of the licensor under such exclusive
Copyright License and the name of the registered owner, title and the
registration or serial number of any copyright registration to which such
exclusive Copyright License relates.

Section 10.                      Commercial Tort Claims.  Set forth on Schedule
10 is a true and correct list of Commercial Tort Claims held by any Grantor,
including a brief description thereof.

Section 11.                      Letter of Credit Rights.  Set forth on Schedule
11 is a true and correct list of all letters of credit issued in favor of any
Grantor, as beneficiary thereunder.

Section 12.                      Securities Accounts.  Set forth on Schedule 12
is a true and correct list of all securities accounts in which any Grantor
maintains securities or other similar assets.
 
 
E-3

--------------------------------------------------------------------------------

 
 
Section 13.                      Deposit Accounts.  Set forth below on Schedule
13 is a true and correct list of all deposit accounts of each Grantor.
 
 
[Remainder of page intentionally left blank]
 
 
E-4

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, each Grantor has caused this Perfection Certificate to be
executed as of the date first written above by its officer thereunto duly
authorized.
 
Retrophin, Inc.

By:__________________________
Name:
Title:

Retrophin Therapeutics I, Inc.

By:____________________________
Name:
Title:

Retrophin Therapeutics II, Inc.

By:_____________________________
Name:
Title:

 
Manchester Pharmaceuticals, LLC

By:__________________________
Name:
Title:

Kyalin Biosciences Inc.

By:__________________________
Name:
Title:
 
[Signature Page to Perfection Certificate]
 
 
E-5

--------------------------------------------------------------------------------

 
 
Retrophin Pharmaceutical, Inc.

By:__________________________
Name:
Title:
 
[Signature Page to Perfection Certificate]
 
 
E-6

--------------------------------------------------------------------------------

 
 
EXHIBIT F
to Guarantee and Collateral Agreement
 
ISSUER CONTROL AGREEMENT
 
ISSUER CONTROL AGREEMENT dated as of ______, _____ among _____________ (the
“Grantor”), U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent for the benefit
of the Secured Parties (the “Secured Party”), and _________ (the “Issuer”).  All
references herein to the “UCC” refer to the Uniform Commercial Code as in effect
from time to time in [Issuer’s jurisdiction of organization].
 
W I T N E S S E T H :
 
WHEREAS, the Grantor is the registered holder of [specify Pledged Uncertificated
Securities issued by the Issuer] issued by the Issuer (the “Securities”);
 
WHEREAS, pursuant to a Guarantee and Collateral Agreement dated as of June 30,
2014 (as such agreement may be amended and/or supplemented from time to time,
the “Guarantee and Collateral Agreement”), the Grantor has granted to the
Secured Party a continuing security interest (the “Transaction Lien”) in all
right, title and interest of the Grantor in, to and under the Securities,
whether now existing or hereafter arising;
 
WHEREAS, the parties hereto are entering into this Agreement in order to perfect
the Transaction Lien on the Securities; and
 
WHEREAS, terms defined in the Guarantee and Collateral Agreement (or whose
definitions are incorporated by reference in Section 1 of the Guarantee and
Collateral Agreement) and not otherwise defined herein shall have, the
respective meanings provided for therein;
 
NOW, THEREFORE, the parties hereto agree as follows:
 
Section 1.  Nature of Securities.  The Issuer confirms that (x) the Securities
are “uncertificated securities” (as defined in Section 8-102 of the UCC) and (y)
the Grantor is registered on the books of the Issuer as the registered holder of
the Securities.
 
Section 2.  Instructions.  The Issuer agrees to comply with any “instruction”
(as defined in Section 8-102 of the UCC) originated by the Secured Party and
relating to the Securities without further consent by the Grantor or any other
person.  The Grantor consents to the foregoing agreement by the Issuer.
 
 
F-1

--------------------------------------------------------------------------------

 
 
Section 3.  Waiver of Lien; Waiver of Set-off.  The Issuer waives any security
interest, lien or right of set-off that it may now have or hereafter acquire in
or with respect to the Securities.  The Issuer’s obligations in respect of the
Securities will not be subject to deduction, set-off or any other right in favor
of any person other than the Secured Party.
 
Section 4.  Choice of Law.  This Issuer Control Agreement and any claim,
controversy or dispute arising under or related to this Issuer Control Agreement
(including, without limitation, any claims sounding in contract law or tort law
arising out of the subject matter hereof) shall be construed in accordance with
and governed by the laws of the State of New York.
 
Section 5.  Conflict with Other Agreements.  There is no agreement (except this
Agreement) between the Issuer and the Grantor with respect to the Securities
[except for [identify any existing other agreements] (the “Existing Other
Agreements”)].  In the event of any conflict between this Agreement (or any
portion hereof) and any other agreement [(including any Existing Other
Agreement)] between the Issuer and the Grantor with respect to the Securities,
whether now existing or hereafter entered into, the terms of this Agreement
shall prevail.
 
Section 6.  Amendments.  No amendment or modification of this Agreement or
waiver of any right hereunder shall be binding on any party hereto unless it is
in writing and is signed by all the parties hereto.
 
Section 7.  Notice of Adverse Claims.  Except for the claims and interests of
the Secured Party and the Grantor in the Securities, the Issuer does not know of
any claim to, or interest in, the Securities.  If any person asserts any lien,
encumbrance or adverse claim (including any writ, garnishment, judgment,
attachment, execution or similar process) against the Securities, the Issuer
will promptly notify the Secured Party and the Grantor thereof.
 
Section 8.  Maintenance of Securities.  In addition to, and not in lieu of, the
obligation of the Issuer to honor instructions of the Secured Party as agreed in
Section 2 hereof, the Issuer agrees as follows:
 
(i)      Grantor Instructions; Notice of Exclusive Control.  So long as the
Issuer has not received a Notice of Exclusive Control (as defined below), the
Issuer may comply with instructions of the Grantor or any duly authorized agent
of the Grantor in respect of the Securities.  After the Issuer receives a
written notice in the form of Exhibit A hereto from the Secured Party that it is
exercising exclusive control over the Securities (a “Notice of Exclusive
Control”) the Issuer will cease complying with instructions of the Grantor or
any of its agents.
 
 
F-2

--------------------------------------------------------------------------------

 
 
(ii)      Non-Cash Dividends and Distributions.  The Issuer shall deliver to the
Secured Party all non-cash dividends, interest and other non-cash distributions
paid or made upon or with respect to the Securities.
 
(iii)                 Voting Rights.  Until the Issuer receives a Notice of
Exclusive Control, the Grantor shall be entitled to direct the Issuer with
respect to voting the Securities.
 
(iv)                 Statements and Confirmations.  The Issuer will promptly
send copies of all material statements and other material correspondence
concerning the Securities simultaneously to each of the Grantor and the Secured
Party at their respective addresses specified in Section 11 hereof.
 
(v)      Tax Reporting.  All items of income, gain, expense and loss recognized
in respect of the Securities shall be reported to the Internal Revenue Service
and all state and local taxing authorities under the name and taxpayer
identification number of the Grantor.
 
Section 9.  Representations, Warranties and Covenants of the Issuer.  The Issuer
makes the following representations, warranties and covenants:
 
(i)      This Agreement is a valid and binding agreement of the Issuer
enforceable in accordance with its terms.
 
(ii)      The Issuer has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any person other than the
Secured Party relating to the Securities pursuant to which it has agreed, or
will agree, to comply with instructions (as defined in Section 8-102 of the UCC)
of such person.  The Issuer has not entered into any other agreement with the
Grantor or the Secured Party purporting to limit or condition the obligation of
the Issuer to comply with instructions as agreed in Section 2 hereof.
 
Section 10.  Successors.  This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors and
assigns.
 
Section 11.  Notices.  Each notice, request or other communication given to any
party hereunder shall be in writing (which term includes facsimile or other
electronic transmission) and shall be effective (x) when delivered to such party
at its address specified below, (y) when sent to such party by facsimile or
other electronic transmission, addressed to it at its facsimile number or
electronic address specified below, and such party sends back an electronic
confirmation of receipt or (z) ten days after being sent to such party by
certified or registered United States mail, addressed to it at its address
specified below, with first class or airmail postage prepaid:
 
 
F-3

--------------------------------------------------------------------------------

 
 
[Grantor:
 
Secured Party:
 
Issuer:]
 
Any party may change its address, facsimile number and/or e-mail address for
purposes of this Section by giving notice of such change to the other parties in
the manner specified above.
 
Section 12.  Termination.  The rights and powers granted herein to the Secured
Party (x) have been granted in order to perfect the Transaction Lien, (y) are
powers coupled with an interest and (z) will not be affected by any bankruptcy
of the Grantor or any lapse of time.  The obligations of the Issuer hereunder
shall continue in effect until the Secured Party has notified the Issuer in
writing that the Transaction Lien has been terminated pursuant to the Guarantee
and Collateral Agreement.
 
Section 13.  Counterparts.  This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
 

 
[NAME OF GRANTOR]
 
By:
     
Name:
     
Title:
 

 
 
F-4

--------------------------------------------------------------------------------

 
 

 
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent
 
By:
     
Name:
     
Title:
 

 

 
[NAME OF ISSUER]
 
By:
     
Name:
     
Title:
 

 
 
F-5

--------------------------------------------------------------------------------

 
 
Exhibit A
 
[Letterhead of Secured Party]

 
[Date]
 
[Name and Address of Issuer]

 
Attention: ________________________
 
Re:  Notice of Exclusive Control
 
Ladies and Gentlemen:
 
As referenced in the Issuer Control Agreement dated as of ______, ____ among
[name of Grantor], us and you (a copy of which is attached), we notify you that
we will hereafter exercise exclusive control over [specify Pledged
Uncertificated Securities] registered in the name of [name of Grantor] (the
“Securities”).  You are instructed not to accept any directions or instructions
with respect to the Securities from any person other than the undersigned unless
otherwise ordered by a court of competent jurisdiction.
 
You are instructed to deliver a copy of this notice by facsimile transmission to
[name of Grantor].
 

 
Very truly yours,
       
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent
   
By:
       
Name:
       
Title:
 

 
cc: [name of Grantor]
 
F-6

--------------------------------------------------------------------------------