**Exhibit10.3**

SECURITY AGREEMENT

By

SCIELE PHARMA,INC.,as US Borrower

and

THE  OTHER GUARANTORS PARTY HERETO

and

UBS AG, STAMFORDBRANCH,as Collateral Agent

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Dated as ofSeptember 18, 2006

 

 

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TABLE OF CONTENTS
|               | ** ** |                                                                                     | ** ** | ** ** | ** ** |
|---------------|------------|-------------------------------------------------------------------------------------|------------|------------|------------|
| PREAMBLE      |       |                                                                                |       | 1          |       |
|          |       |                                                                                |       |       |       |
| RECITALS      |       |                                                                                |       | 1          |       |
|          |       |                                                                                |       |       |       |
| AGREEMENT     |       |                                                                                |       | 2          |       |
|          |       |                                                                                |       |       |       |
|          |       | ARTICLE I                                                                           |       |       |       |
|          |       |                                                                                |       |       |       |
|          |       | DEFINITIONS AND  INTERPRETATION                                                     |       |       |       |
|          |       |                                                                                |       |       |       |
| SECTION  1.1. |       | DEFINITIONS                                                                         |       | 2          |       |
| SECTION  1.2. |       | INTERPRETATION                                                                      |       | 9          |       |
| SECTION  1.3. |       | RESOLUTION OF DRAFTING  AMBIGUITIES                                                 |       | 9          |       |
| SECTION  1.4. |       | PERFECTION CERTIFICATE                                                              |       | 9          |       |
|          |       |                                                                                |       |       |       |
|          |       | ARTICLE II                                                                          |       |       |       |
|          |       |                                                                                |       |       |       |
|          |       | GRANT OF  SECURITY AND SECURED US OBLIGATIONS                                       |       |       |       |
|          |       |                                                                                |       |       |       |
| SECTION  2.1. |       | GRANT OF SECURITY  INTEREST                                                         |       | 9          |       |
| SECTION  2.2. |       | FILINGS                                                                             |       | 10         |       |
|          |       |                                                                                |       |       |       |
|          |       | ARTICLE III                                                                         |       |       |       |
|          |       |                                                                                |       |       |       |
|          |       | PERFECTION;  SUPPLEMENTS; FURTHER ASSURANCES;                                       |       |       |       |
|          |       | USE OF PLEDGED  COLLATERAL                                                          |       |       |       |
|          |       |                                                                                |       |       |       |
| SECTION  3.1. |       | DELIVERY OF  CERTIFICATED SECURITIES COLLATERAL                                     |       | 11         |       |
| SECTION  3.2. |       | PERFECTION OF  UNCERTIFICATED SECURITIES COLLATERAL                                 |       | 12         |       |
| SECTION  3.3. |       | FINANCING STATEMENTS  AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY INTEREST |       | 12         |       |
| SECTION  3.4. |       | OTHER ACTIONS                                                                       |       | 12         |       |
| SECTION  3.5. |       | JOINDER OF ADDITIONAL  GUARANTORS                                                   |       | 16         |       |
| SECTION 3.6.  |       | SUPPLEMENTS; FURTHER ASSURANCES                                                     |       | 16         |       |

 

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|               | ** ** |                                                                            | ** ** | ** ** | ** ** |
|---------------|------------|----------------------------------------------------------------------------|------------|------------|------------|
|          |       | ARTICLE IV                                                                 |       |       |       |
|          |       |                                                                       |       |       |       |
|          |       | REPRESENTATIONS,  WARRANTIES AND COVENANTS                                 |       |       |       |
|          |       |                                                                       |       |       |       |
| SECTION  4.1. |       | TITLE                                                                      |       | 17         |       |
| SECTION  4.2. |       | VALIDITY OF SECURITY  INTEREST                                             |       | 17         |       |
| SECTION  4.3. |       | DEFENSE OF CLAIMS;  TRANSFERABILITY OF PLEDGED COLLATERAL                  |       | 18         |       |
| SECTION  4.4. |       | OTHER FINANCING  STATEMENTS                                                |       | 18         |       |
| SECTION  4.5. |       | LOCATION OF INVENTORY  AND EQUIPMENT                                       |       | 18         |       |
| SECTION  4.6. |       | DUE AUTHORIZATION AND  ISSUANCE                                            |       | 18         |       |
| SECTION  4.7. |       | CONSENTS, ETC.                                                             |       | 19         |       |
| SECTION  4.8. |       | PLEDGED COLLATERAL                                                         |       | 19         |       |
| SECTION  4.9. |       | INSURANCE                                                                  |       | 19         |       |
|          |       |                                                                       |       |       |       |
|          |       | ARTICLE V                                                                  |       |       |       |
|          |       |                                                                       |       |       |       |
|          |       | CERTAIN  PROVISIONS CONCERNING SECURITIES COLLATERAL                       |       |       |       |
|          |       |                                                                       |       |       |       |
| SECTION  5.1. |       | PLEDGE OF ADDITIONAL  SECURITIES COLLATERAL                                |       | 19         |       |
| SECTION  5.2. |       | VOTING RIGHTS;  DISTRIBUTIONS; ETC.                                        |       | 20         |       |
| SECTION  5.3. |       | DEFAULTS, ETC                                                              |       | 21         |       |
| SECTION  5.4. |       | CERTAIN AGREEMENTS OF  PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS |       | 21         |       |
|          |       |                                                                       |       |       |       |
|          |       | ARTICLE VI                                                                 |       |       |       |
|          |       |                                                                       |       |       |       |
|          |       | CERTAIN  PROVISIONS CONCERNING INTELLECTUAL                                |       |       |       |
|          |       | PROPERTY  COLLATERAL                                                       |       |       |       |
|          |       |                                                                       |       |       |       |
| SECTION  6.1. |       | GRANT OF INTELLECTUAL  PROPERTY LICENSE                                    |       | 22         |       |
| SECTION  6.2. |       | PROTECTION OF  COLLATERAL AGENT’S SECURITY                            |       | 22         |       |
| SECTION  6.3. |       | AFTER-ACQUIRED PROPERTY                                                    |       | 23         |       |
| SECTION  6.4. |       | LITIGATION                                                                 |       | 23         |       |
|          |       |                                                                       |       |       |       |
|          |       | ARTICLE VII                                                                |       |       |       |
|          |       |                                                                       |       |       |       |
|          |       | CERTAIN  PROVISIONS CONCERNING RECEIVABLES                                 |       |       |       |
|          |       |                                                                       |       |       |       |
| SECTION  7.1. |       | MAINTENANCE OF RECORDS                                                     |       | 24         |       |
| SECTION  7.2. |       | LEGEND                                                                     |       | 24         |       |
| SECTION  7.3. |       | MODIFICATION OF TERMS,  ETC                                                |       | 24         |       |
| SECTION 7.4.  |       | COLLECTION                                                                 |       | 24         |       |

 

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|                 | ** ** |                                                                                      | ** ** | ** ** | ** ** |
|-----------------|------------|--------------------------------------------------------------------------------------|------------|------------|------------|
|            |       | ARTICLE VIII                                                                         |       |       |       |
|            |       |                                                                                 |       |       |       |
|            |       | TRANSFERS                                                                            |       |       |       |
|            |       |                                                                                 |       |       |       |
| SECTION  8.1.   |       | TRANSFERS OF  PLEDGED COLLATERAL                                                     |       | 25         |       |
|            |       |                                                                                 |       |       |       |
|            |       | ARTICLE IX                                                                           |       |       |       |
|            |       |                                                                                 |       |       |       |
|            |       | REMEDIES                                                                             |       |       |       |
|            |       |                                                                                 |       |       |       |
| SECTION  9.1.   |       | REMEDIES                                                                             |       | 25         |       |
| SECTION  9.2.   |       | NOTICE OF SALE                                                                       |       | 27         |       |
| SECTION  9.3.   |       | WAIVER OF NOTICE  AND CLAIMS                                                         |       | 27         |       |
| SECTION  9.4.   |       | CERTAIN SALES OF  PLEDGED COLLATERAL                                                 |       | 28         |       |
| SECTION  9.5.   |       | NO WAIVER;  CUMULATIVE REMEDIES                                                      |       | 29         |       |
| SECTION  9.6.   |       | CERTAIN  ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY                          |       | 30         |       |
|            |       |                                                                                 |       |       |       |
|            |       | ARTICLE X                                                                            |       |       |       |
|            |       |                                                                                 |       |       |       |
|            |       | APPLICATION OF PROCEEDS                                                              |       | 30         |       |
|            |       |                                                                                 |       |       |       |
| SECTION  10.1.  |       | APPLICATION OF  PROCEEDS                                                             |       |       |       |
|            |       |                                                                                 |       |       |       |
|            |       | ARTICLE XI                                                                           |       |       |       |
|            |       |                                                                                 |       |       |       |
|            |       | MISCELLANEOUS                                                                        |       |       |       |
|            |       |                                                                                 |       |       |       |
| SECTION  11.1.  |       | CONCERNING  COLLATERAL AGENT                                                         |       | 30         |       |
| SECTION  11.2.  |       | COLLATERAL AGENT  MAY PERFORM; COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT           |       | 32         |       |
| SECTION  11.3.  |       | CONTINUING SECURITY  INTEREST; ASSIGNMENT                                            |       | 32         |       |
| SECTION  11.4.  |       | TERMINATION;  RELEASE                                                                |       | 33         |       |
| SECTION  11.5.  |       | MODIFICATION IN  WRITING                                                             |       | 34         |       |
| SECTION  11.6.  |       | NOTICES                                                                              |       | 34         |       |
| SECTION  11.7.  |       | GOVERNING LAW,  CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL |       | 34         |       |
| SECTION  11.8.  |       | SEVERABILITY OF  PROVISIONS                                                          |       | 34         |       |
| SECTION  11.9.  |       | EXECUTION IN  COUNTERPARTS                                                           |       | 34         |       |
| SECTION  11.10. |       | BUSINESS DAYS                                                                        |       | 34         |       |
| SECTION  11.11. |       | NO CREDIT FOR  PAYMENT OF TAXES OR IMPOSITION                                        |       | 34         |       |
| SECTION  11.12. |       | NO CLAIMS  AGAINST COLLATERAL AGENT                                                  |       | 35         |       |
| SECTION 11.13.  |       | NO RELEASE                                                                           |       | 35         |       |

 

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|                 | ** ** |                      | ** ** | ** ** | ** ** |
|-----------------|------------|----------------------|------------|------------|------------|
| SECTION  11.14. |       | OBLIGATIONS ABSOLUTE |       | 35         |       |
|            |       |                 |       |       |       |
| SIGNATURES      |       |                 |       | S-1        |       |

 
| EXHIBIT 1 |   | Form of Issuer’s Acknowledgment                      |
|-----------|--------|-----------------------------------------------------------|
| EXHIBIT 2 |   | Form of Securities Pledge Amendment                       |
| EXHIBIT 3 |   | Form of Joinder Agreement                                 |
| EXHIBIT 4 |   | Form of Control Agreement Concerning Securities  Accounts |
| EXHIBIT 5 |   | Form of Control Agreement Concerning Deposit  Accounts    |
| EXHIBIT 6 |   | Form of Copyright Security Agreement                      |
| EXHIBIT 7 |   | Form of Patent Security Agreement                         |
| EXHIBIT 8 |   | Form of Trademark Security Agreement                      |
| EXHIBIT 9 |   | Form of Bailee’s Letter                              |

 

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SECURITY AGREEMENT

This SECURITY AGREEMENTdated as of September 18, 2006 (as amended, amended and restated, supplementedor otherwise modified from time to time in accordance with the provisionshereof, this “Agreement”) made by SCIELE PHARMA, INC., a Delaware corporation(the “US Borrower”) and the Guarantors from to time to time party hereto(the “Guarantors”), as pledgors, assignors and debtors (the US Borrower,together with the Guarantors, in such capacities and together with anysuccessors in such capacities, the “Pledgors,” and each, a “Pledgor”),in favor of UBS AG, STAMFORD BRANCH, in its capacity as collateral agent pursuantto the Credit Agreement (as hereinafter defined), as pledgee, assignee andsecured party (in such capacities and together with any successors in suchcapacities, the “Collateral Agent”).

R E C I T A L S :

A.            The US Borrower, Sciele PharmaCayman Ltd., an exempted company incorporated under Cayman Islands law (the “CaymanBorrower” and together with the US Borrower, “Borrowers”), theGuarantors, the Collateral Agent, the lending institutions listed therein (the “Lenders”)and certain other parties thereto have, in connection with the execution and deliveryof this Agreement, entered into that certain credit agreement, dated as ofSeptember 18, 2006 (as amended, amended and restated, supplemented or otherwisemodified from time to time, the “Credit Agreement”; which term shallalso include and refer to any increase in the amount of indebtedness under theCredit Agreement and any refinancing or replacement of the Credit Agreement(whether under a bank facility, securities offering or otherwise) or one ormore successor or replacement facilities whether or not with a different groupof agents or lenders (whether under a bank facility, securities offering orotherwise) and whether or not with different obligors upon the AdministrativeAgent’s acknowledgment of the termination of the predecessor Credit Agreement).

B.            Each Guarantor has, pursuant to theCredit Agreement, unconditionally guaranteed the Secured US Obligations.

C.            The Borrowers and each Guarantorwill receive substantial benefits from the execution, delivery and performanceof the obligations under the Credit Agreement and the other Loan Documents andeach is, therefore, willing to enter into this Agreement.

D.            This Agreement is given by eachPledgor in favor of the Collateral Agent for the benefit of the Secured Parties(as hereinafter defined) to secure the payment and performance of all of theSecured US Obligations.

F.             It is a condition to (i) theobligations of the Lenders to make the Loans under the Credit Agreement, (ii)the obligations of the Issuing Bank to issue Letters of Credit, and (iii) theperformance of the obligations of the Secured Parties under Hedging Agreements 

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that constitute SecuredUS Obligations that each Pledgor execute and deliver the applicable LoanDocuments, including this Agreement.

A G R E E M E N T :

NOW THEREFORE, inconsideration of the foregoing premises and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, each Pledgor andthe Collateral Agent hereby agree as follows:

# ARTICLE I

# DEFINITIONS ANDINTERPRETATION

## SECTION 1.1.              Definitions.

### (a)           Unless otherwisedefined herein or in the Credit Agreement, capitalized terms used herein thatare defined in the UCC shall have the meanings assigned to them in the UCC; providedthat in any event, the following terms shall have the meanings assigned to themin the UCC:

“Accounts”; “Bank”;“Chattel Paper”; “Commercial Tort Claim”; “Commodity Account”;“Commodity Contract”; “Commodity Intermediary”; “Documents”;“Electronic Chattel Paper”; “Entitlement Order”; “Equipment”;“Financial Asset”; “Fixtures”; “Goods”, “Inventory”;“Letter-of-Credit Rights”; “Letters of Credit”; “Money”; “PaymentIntangibles”; “Proceeds”; “ Records”; “Securities Account”;“Securities Intermediary”; “Supporting Obligations”; and “TangibleChattel Paper.”

### (b)           Terms used but nototherwise defined herein that are defined in the Credit Agreement shall havethe meanings given to them in the Credit Agreement.  Sections 1.03 and 1.05 of the CreditAgreement shall apply herein *mutatis mutandis*.

### (c)           Thefollowing terms shall have the following meanings:

“Account Debtor”shall mean each person who is obligated on a Receivable or SupportingObligation related thereto.

“Agreement” shallhave the meaning assigned to such term in the Preamble hereof.

“Bailee Letter”shall be an agreement in form substantially similar to Exhibit 9 hereto.

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“Borrowers” shallhave the meaning assigned to such term in the Preamble hereof.

“Collateral Agent”shall have the meaning assigned to such term in the Preamble hereof.

“Collateral Support”shall mean all property (real or personal) assigned, hypothecated or otherwisesecuring any Pledged Collateral and shall include any security agreement orother agreement granting a lien or security interest in such real or personalproperty.

“Commodity AccountControl Agreement” shall mean a control agreement in a form that is reasonablysatisfactory to the Administrative Agent establishing the Collateral Agent’sControl with respect to any Commodity Account.

“Contracts” shallmean, collectively, with respect to each Pledgor, all sale, service,performance, equipment or property lease contracts, agreements and grants andall other contracts, agreements or grants (in each case, whether written ororal, or third party or intercompany), between such Pledgor and any thirdparty, and all assignments, amendments, restatements, supplements, extensions,renewals, replacements or modifications thereof.

“Control” shallmean (i) in the case of each Deposit Account, “control,” as such term isdefined in Section 9-104 of the UCC, (ii) in the case of anySecurity Entitlement, “control,” as such term is defined in Section 8-106of the UCC, and (iii) in the case of any Commodity Contract, “control,” assuch term is defined in Section 9-106 of the UCC.

“Control Agreements”shall mean, collectively, the Deposit Account Control Agreement, the SecuritiesAccount Control Agreement and the Commodity Account Control Agreement.

“Copyrights”shall mean, collectively, with respect to each Pledgor, all copyrights (whetherstatutory or common law, whether established or registered in the United Statesor any other country or any political subdivision thereof, whether registeredor unregistered and whether published or unpublished) and all copyrightregistrations and applications made by such Pledgor, in each case, whether nowowned or hereafter created or acquired by or assigned to such Pledgor, togetherwith any and all (i) rights and privileges arising under applicable lawwith respect to such Pledgor’s use of such copyrights, (ii) reissues,renewals, continuations and extensions thereof and amendments thereto, (iii)income, fees, royalties, damages, claims and payments now or hereafter dueand/or payable with respect thereto, including damages and payments for past,present or future infringements thereof, (iv) rights corresponding theretothroughout the world and (v) rights to sue for past, present or futureinfringements thereof.

“Copyright SecurityAgreement” shall mean an agreement substantially in the form of Exhibit 6hereto.

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“Credit Agreement”shall have the meaning assigned to such term in Recital A hereof.

“Deposit AccountControl Agreement” shall mean an agreement substantially in the form of Exhibit5 hereto or such other form that is reasonably satisfactory to theCollateral Agent establishing the Collateral Agent’s Control with respect toany Deposit Account.

“Deposit Accounts”shall mean, collectively, with respect to each Pledgor, (i) all “depositaccounts” as such term is defined in the UCC and in any event shall include theLC Account and all accounts and sub-accounts relating to any of the foregoingaccounts and (ii) all cash, funds, checks, notes and instruments from time totime on deposit in any of the accounts or sub-accounts described in clause (i)of this definition.

“Distributions”shall mean, collectively, with respect to each Pledgor, all dividends, cash,options, warrants, rights, instruments, distributions, returns of capital orprincipal, income, interest, profits and other property, interests (debt orequity) or proceeds, including as a result of a split, revision,reclassification or other like change of the Pledged Securities, from time totime received, receivable or otherwise distributed to such Pledgor in respectof or in exchange for any or all of the Pledged Securities or IntercompanyNotes.

“Excluded Property”shall mean

###### (a)           any permit or license issued by aGovernmental Authority to any Pledgor or any agreement to which any Pledgor isa party (including any Intellectual Property Licenses), in each case, only tothe extent and for so long as the terms of such permit, license or agreement orany Requirement of Law applicable thereto, validly prohibit the creation bysuch Pledgor of a security interest in such permit, license or agreement (or inany underlying Intellectual Property Collateral that is the subject matter ofsuch agreement) in favor of the Collateral Agent (after giving effect toSections 9-406(d), 9-407(a), 9-408(a) or 9-409 of theUCC (or any successor provision or provisions) or any other applicable law(including the Bankruptcy Code) or principles of equity), and

###### (b)           Equipment owned by any Pledgor on thedate hereof or hereafter acquired that is subject to a Lien securing a PurchaseMoney Obligation or Capital Lease Obligation permitted to be incurred pursuantto the provisions of the Credit Agreement if the contract or other agreement inwhich such Lien is granted (or the documentation providing for such PurchaseMoney Obligation or Capital Lease Obligation) validly prohibits the creation ofany other Lien on such Equipment;

provided, however,that Excluded Property shall not include any Proceeds, substitutions or replacementsof any Excluded Property referred to in clause (a) or (b) (unless suchProceeds, substitutions or replacements would constitute Excluded Propertyreferred to in clause (a) or (b)).

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“Excluded CaymanShares” shall mean all issued and outstanding Equity Interests in theCayman Borrower held by the US Borrower which have been pledged by the USBorrower to the Collateral Agent for the benefit of Secured Parties pursuant tothe Cayman Share Charge.

“General Intangibles”shall mean, collectively, with respect to each Pledgor, all “generalintangibles,” as such term is defined in the UCC, of such Pledgor and, in anyevent, shall include (i) all of such Pledgor’s rights, title and interestin, to and under all Contracts and insurance policies (including allrights and remedies relating to monetary damages, including indemnificationrights and remedies, and claims for damages or other relief pursuant to or in respectof any Contract), (ii) all know-how and warranties relating to any of thePledged Collateral or the Mortgaged Property, (iii) any and all otherrights, claims, choses-in-action and causes of action of such Pledgor againstany other person and the benefits of any and all collateral or other securitygiven by any other person in connection therewith, (iv) all guarantees,endorsements and indemnifications on, or of, any of the Pledged Collateral orany of the Mortgaged Property, (v) all lists, books, records,correspondence, ledgers, printouts, files (whether in printed form or storedelectronically), tapes and other papers or materials containing informationrelating to any of the Pledged Collateral or any of the Mortgaged Property,including all customer or tenant lists, identification of suppliers, data,plans, blueprints, specifications, designs, drawings, appraisals, recordedknowledge, surveys, studies, engineering reports, test reports, manuals,standards, processing standards, performance standards, catalogs, researchdata, computer and automatic machinery software and programs and the like,field repair data, accounting information pertaining to such Pledgor’soperations or any of the Pledged Collateral or any of the Mortgaged Propertyand all media in which or on which any of the information or knowledge or dataor records may be recorded or stored and all computer programs used for thecompilation or printout of such information, knowledge, records or data,(vi) all licenses, consents, permits, variances, certifications,authorizations and approvals, however characterized, now or hereafter acquiredor held by such Pledgor, including building permits, certificates of occupancy,environmental certificates, industrial permits or licenses and certificates ofoperation and (vii) all rights to reserves, deferred payments, deposits,refunds, indemnification of claims and claims for tax or other refunds againstany Governmental Authority.

“Goodwill” shallmean, collectively, with respect to each Pledgor, the goodwill connected withsuch Pledgor’s business including all goodwill connected with (i) the use ofand symbolized by any Trademark or Intellectual Property License with respectto any Trademark in which such Pledgor has any interest, (ii) allknow-how, trade secrets, customer and supplier lists, proprietary information,inventions, methods, procedures, formulae, descriptions, compositions,technical data, drawings, specifications, name plates, catalogs, confidentialinformation and the right to limit the use or disclosure thereof by any person,pricing and cost information, business and marketing plans and proposals,consulting agreements, engineering contracts and such other assets which relateto such goodwill and (iii) all product lines of such Pledgor’s business.

“Guarantors”shall have the meaning assigned to such term in the Preamble hereof.

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“Instruments”shall mean, collectively, with respect to each Pledgor, all “instruments,” assuch term is defined in Article 9, rather than Article 3, of the UCC,and shall include all promissory notes, drafts, bills of exchange oracceptances.

“IntellectualProperty Collateral” shall mean, collectively, the Patents, Trademarks,Copyrights, Intellectual Property Licenses and Goodwill.

“IntellectualProperty Licenses” shall mean, collectively, with respect to each Pledgor,all license and distribution agreements with, and covenants not to sue, anyother party with respect to any Patent, Trademark or Copyright or any otherpatent, trademark or copyright, whether such Pledgor is a licensor or licensee,distributor or distributee under any such license or distribution agreement,together with any and all (i) renewals, extensions, supplements and continuationsthereof, (ii) income, fees, royalties, damages, claims and payments nowand hereafter due and/or payable thereunder and with respect thereto includingdamages and payments for past, present or future infringements or violationsthereof, (iii) rights to sue for past, present and future infringements orviolations thereof and (iv) other rights to use, exploit or practice any or allof the Patents, Trademarks or Copyrights or any other patent, trademark orcopyright.

“Intercompany Notes”shall mean, with respect to each Pledgor, all intercompany notes described in Schedule 11to the Perfection Certificate and intercompany notes hereafter acquired by suchPledgor and all certificates, instruments or agreements evidencing such intercompanynotes, and all assignments, amendments, restatements, supplements, extensions,renewals, replacements or modifications thereof to the extent permitted pursuantto the terms hereof.

“Investment Property”shall mean a security, whether certificated or uncertificated, SecurityEntitlement, Securities Account, Commodity Contract or Commodity Account,excluding, however, the Securities Collateral.

“Joinder Agreement”shall mean an agreement substantially in the form of Exhibit 3hereto.

“LC Account”shall mean any account established and maintained in accordance with theprovisions of Section 2.18(i) of the Credit Agreement and all propertyfrom time to time on deposit in such LC Account.

“Lenders” shallhave the meaning assigned to such term in Recital A hereof.

“MaterialIntellectual Property Collateral” shall mean any Intellectual PropertyCollateral that is material (i) to the use and operation of the PledgedCollateral or Mortgaged Property or (ii) to the business, results ofoperations, prospects or condition, financial or otherwise, of any Pledgor.

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“Mortgaged Property”shall have the meaning assigned to such term in the Mortgages.

“Patents” shallmean, collectively, with respect to each Pledgor, all patents issued orassigned to, and all patent applications and registrations made by, suchPledgor (whether established or registered or recorded in the United States orany other country or any political subdivision thereof), together with any andall (i) rights and privileges arising under applicable law with respect tosuch Pledgor’s use of any patents, (ii) inventions and improvements describedand claimed therein, (iii) reissues, divisions, continuations, renewals,extensions and continuations-in-part thereof and amendments thereto, (iv)income, fees, royalties, damages, claims and payments now or hereafter dueand/or payable thereunder and with respect thereto including damages and paymentsfor past, present or future infringements thereof, (v) rightscorresponding thereto throughout the world and (vi) rights to sue for past,present or future infringements thereof.

“Patent SecurityAgreement” shall mean an agreement substantially in the form of Exhibit 7hereto.

“PerfectionCertificate” shall mean that certain perfection certificate dated September18, 2006, executed and delivered by each Pledgor in favor of the CollateralAgent for the benefit of the Secured Parties, and each other PerfectionCertificate (which shall be in form and substance reasonably acceptable to theCollateral Agent) executed and delivered by the applicable Guarantor in favorof the Collateral Agent for the benefit of the Secured Parties contemporaneouslywith the execution and delivery of each Joinder Agreement executed in accordancewith Section 3.5 hereof, in each case, as the same may be amended,amended and restated, supplemented or otherwise modified from time to time in accordancewith the Credit Agreement or upon the request of the Collateral Agent.

“Pledge Amendment”shall have the meaning assigned to such term in Section 5.1 hereof.

“Pledged Collateral”shall have the meaning assigned to such term in Section 2.1 hereof.

“Pledged Securities”shall mean, collectively, with respect to each Pledgor, (i) all issued andoutstanding Equity Interests of each issuer set forth on Schedules 10(a)and 10(b) to the Perfection Certificate as being owned by such Pledgorand all options, warrants, rights, agreements and additional Equity Interestsof whatever class of any such issuer acquired by such Pledgor (including byissuance), together with all rights, privileges, authority and powers of suchPledgor relating to such Equity Interests in each such issuer or under any OrganizationalDocument of each such issuer, and the certificates, instruments and agreementsrepresenting such Equity Interests and any and all interest of such Pledgor inthe entries on the books of any financial intermediary pertaining to suchEquity Interests, (ii) all Equity Interests of any issuer, which EquityInterests are hereafter acquired by such Pledgor (including by issuance) andall options, 

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warrants, rights,agreements and additional Equity Interests of whatever class of any such issueracquired by such Pledgor (including by issuance), together with all rights,privileges, authority and powers of such Pledgor relating to such EquityInterests or under any Organizational Document of any such issuer, and thecertificates, instruments and agreements representing such Equity Interests andany and all interest of such Pledgor in the entries on the books of anyfinancial intermediary pertaining to such Equity Interests, from time to timeacquired by such Pledgor in any manner, and (iii) all Equity Interests issuedin respect of the Equity Interests referred to in clause (i) or (ii) upon anyconsolidation or merger of any issuer of such Equity Interests; provided,however, that Pledged Securities shall not include (x) any EquityInterests which are not required to be pledged pursuant to Section 5.11(b)of the Credit Agreement or (y) the Excluded Cayman Shares.

“Pledgor” shallhave the meaning assigned to such term in the Preamble hereof.

“Receivables”shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles,(iv) General Intangibles, (v) Instruments and (vi) all other rights to payment,whether or not earned by performance, for goods or other property sold, leased,licensed, assigned or otherwise disposed of, or services rendered or to berendered, regardless of how classified under the UCC together with all ofPledgors’ rights, if any, in any goods or other property giving rise to suchright to payment and all Collateral Support and Supporting Obligations relatedthereto and all Records relating thereto.

“Securities AccountControl Agreement” shall mean an agreement substantially in the form of Exhibit4 hereto or such other form that is reasonably satisfactory to theCollateral Agent establishing the Collateral Agent’s Control with respect toany Securities Account.

“SecuritiesCollateral” shall mean, collectively, the Pledged Securities, the IntercompanyNotes and the Distributions.

“Trademarks”shall mean, collectively, with respect to each Pledgor, all trademarks(including service marks), slogans, logos, certification marks, trade dress,uniform resource locations (URL’s), domain names, corporate names and tradenames, whether registered or unregistered, owned by or assigned to such Pledgorand all registrations and applications for the foregoing (whether statutory orcommon law and whether established or registered in the United States or anyother country or any political subdivision thereof), together with any and all(i) rights and privileges arising under applicable law with respect tosuch Pledgor’s use of any trademarks, (ii) reissues, continuations,extensions and renewals thereof and amendments thereto, (iii) income,fees, royalties, damages and payments now and hereafter due and/or payablethereunder and with respect thereto, including damages, claims and payments forpast, present or future infringements thereof, (iv) rights correspondingthereto throughout the world and (v) rights to sue for past, present and futureinfringements thereof.

“Trademark SecurityAgreement” shall mean an agreement substantially in the form of Exhibit 8hereto.

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“UCC” shall meanthe Uniform Commercial Code as in effect from time to time in the State of NewYork; provided, however, that, at any time, if by reason ofmandatory provisions of law, any or all of the perfection or priority of theCollateral Agent’s and the Secured Parties’ security interest in any item orportion of the Pledged Collateral is governed by the Uniform Commercial Code asin effect in a jurisdiction other than the State of New York, the term “UCC”shall mean the Uniform Commercial Code as in effect, at such time, in suchother jurisdiction for purposes of the provisions hereof relating to suchperfection or priority and for purposes of definitions relating to suchprovisions.

## SECTION 1.2.              Interpretation.  The rules of interpretation specified in theCredit Agreement (including Section 1.03 thereof) shall be applicableto this Agreement.

## SECTION 1.3.              Resolutionof Drafting Ambiguities.  EachPledgor acknowledges and agrees that it was represented by counsel inconnection with the execution and delivery hereof, that it and its counselreviewed and participated in the preparation and negotiation hereof and thatany rule of construction to the effect that ambiguities are to be resolvedagainst the drafting party (i.e., the Collateral Agent) shall not beemployed in the interpretation hereof.

## SECTION 1.4.              PerfectionCertificate.  The Collateral Agentand each Secured Party agree that the Perfection Certificate and alldescriptions of Pledged Collateral, schedules, amendments and supplementsthereto are and shall at all times remain a part of this Agreement.

# ARTICLE II

# GRANT OF SECURITY ANDSECURED US OBLIGATIONS

## SECTION 2.1.              Grantof Security Interest.  As collateralsecurity for the payment and performance in full of all the Secured USObligations, each Pledgor hereby pledges and grants to the Collateral Agent forthe benefit of the Secured Parties, a lien on and security interest in all ofthe right, title and interest of such Pledgor in, to and under the followingproperty, wherever located, and whether now existing or hereafter arising oracquired from time to time (collectively, the “Pledged Collateral”):

(i)                     all Accounts;

(ii)                  all Equipment,Goods, Inventory and Fixtures;

(iii)               all Documents,Instruments and Chattel Paper;

(iv)              all Letters ofCredit and Letter-of-Credit Rights;

 

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(v)                 all SecuritiesCollateral;

(vi)              all InvestmentProperty;

(vii)           all IntellectualProperty Collateral;

(viii)        the Commercial Tort Claimsdescribed on Schedule 13 to the Perfection Certificate;

(ix)                all GeneralIntangibles;

(x)                   all Money andall Deposit Accounts;

(xi)                all SupportingObligations;

(xii)             all books and recordsrelating to the Pledged Collateral; and

(xiii)          to the extent notcovered by clauses (i) through (xii) of this sentence, all other personalproperty of such Pledgor, whether tangible or intangible, and all Proceeds andproducts of each of the foregoing and all accessions to, substitutions andreplacements for, and rents, profits and products of, each of the foregoing,any and all Proceeds of any insurance, indemnity, warranty or guaranty payableto such Pledgor from time to time with respect to any of the foregoing.

Notwithstanding anythingto the contrary contained in clauses (i) through (xiii) above, the securityinterest created by this Agreement shall not extend to, and the term “PledgedCollateral” shall not include, any Excluded Property and (i) the Pledgorsshall from time to time at the request of the Collateral Agent give writtennotice to the Collateral Agent identifying in reasonable detail the ExcludedProperty and shall provide to the Collateral Agent such other informationregarding the Excluded Property as the Collateral Agent may reasonably requestand (ii) from and after the Closing Date, no Pledgor shall permit tobecome effective in any document creating, governing or providing for anypermit, license or agreement a provision that would prohibit the creation of aLien on such permit, license or agreement in favor of the Collateral Agentunless such Pledgor believes, in its reasonable judgment, that such prohibitionis usual and customary in transactions of such type.

SECTION 2.2.        Filings.  (a) Each Pledgor hereby irrevocably authorizes the Collateral Agent at anytime and from time to time to file in any relevant jurisdiction any financingstatements (including fixture filings) and amendments thereto that contain theinformation required by Article 9 of the Uniform Commercial Code of eachapplicable jurisdiction for the filing of any financing statement or amendmentrelating to the Pledged Collateral, including (i) whether such Pledgor is anorganization, the type of organization and any organizational identificationnumber issued to such Pledgor, (ii) any financing or continuation statements orother 

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documents without thesignature of such Pledgor where permitted by law, including the filing of afinancing statement describing the Pledged Collateral as “all assets now ownedor hereafter acquired by the Pledgor or in which Pledgor otherwise has rights”and (iii) in the case of a financing statement filed as a fixture filing orcovering Pledged Collateral constituting minerals or the like to be extractedor timber to be cut, a sufficient description of the real property to whichsuch Pledged Collateral relates.  TheCollateral Agent shall promptly, prior to filing, provide Borrower with a copyof each such financing statement and amendment. Each Pledgor agrees to provide all information described in theimmediately preceding sentence to the Collateral Agent promptly upon request bythe Collateral Agent.

### (b)           Each Pledgor herebyratifies its authorization for the Collateral Agent to file in any relevantjurisdiction any financing statements relating to the Pledged Collateral iffiled prior to the date hereof.

### (c)           Each Pledgor herebyfurther authorizes the Collateral Agent to file filings with the United StatesPatent and Trademark Office or United States Copyright Office (or any successoroffice or any similar office in any other country), including this Agreement,any Copyright Security Agreement, the Patent Security Agreement and theTrademark Security Agreement, or other documents for the purpose of perfecting,confirming, continuing, enforcing or protecting the security interest grantedby such Pledgor hereunder, without the signature of such Pledgor, and namingsuch Pledgor, as debtor, and the Collateral Agent, as secured party.  Collateral Agent shall, prior to filing,provide Borrower with a copy of each such document to be filed.

# ARTICLE III

# PERFECTION; SUPPLEMENTS;FURTHER ASSURANCES;USE OF PLEDGED COLLATERAL

SECTION 3.1.        Delivery of Certificated SecuritiesCollateral.  Each Pledgor representsand warrants that all certificates, agreements or instruments representing orevidencing the Securities Collateral in existence on the date hereof have beendelivered to the Collateral Agent in suitable form for transfer by delivery oraccompanied by duly executed instruments of transfer or assignment in blank andthat the Collateral Agent has a perfected first priority security interesttherein.  Each Pledgor hereby agrees thatall certificates, agreements or instruments representing or evidencingSecurities Collateral acquired by such Pledgor after the date hereof shallpromptly (but in any event within five days after receipt thereof by suchPledgor) be delivered to and held by or on behalf of the Collateral Agent pursuanthereto.  All certificated Securities Collateralshall be in suitable form for transfer by delivery or shall be accompanied byduly executed instruments of transfer or assignment in blank, all in form andsubstance satisfactory to the Collateral Agent. The Collateral Agent shall have the right, at any time upon theoccurrence and during the continuance of any Event of Default, to endorse,assign or otherwise transfer to or to 

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register in the name ofthe Collateral Agent or any of its nominees or endorse for negotiation any orall of the Securities Collateral, without any indication that such SecuritiesCollateral is subject to the security interest hereunder.  In addition, upon the occurrence and duringthe continuance of an Event of Default, the Collateral Agent shall have theright at any time to exchange certificates representing or evidencingSecurities Collateral for certificates of smaller or larger denominations.

SECTION 3.2.        Perfection of Uncertificated SecuritiesCollateral.  Each Pledgor representsand warrants that the Collateral Agent has a perfected first priority securityinterest in all uncertificated Pledged Securities pledged by it hereunder thatare in existence on the date hereof. Each Pledgor hereby agrees that if any of the Pledged Securities are atany time not evidenced by certificates of ownership, then each applicablePledgor shall, to the extent permitted by applicable law, (i) cause the issuerto execute and deliver to the Collateral Agent an acknowledgment of the pledgeof such Pledged Securities substantially in the form of Exhibit 1hereto or such other form that is reasonably satisfactory to the CollateralAgent, (ii) if necessary or desirable to perfect a security interest in suchPledged Securities, cause such pledge to be recorded on the equityholderregister or the books of the issuer, execute any customary pledge forms orother documents necessary or appropriate to complete the pledge and give theCollateral Agent the right to transfer such Pledged Securities under the termshereof, (iii) upon request by the Collateral Agent, provide to the CollateralAgent an opinion of counsel, in form and substance reasonably satisfactory tothe Collateral Agent, confirming such pledge and perfection thereof, and (iv)after the occurrence and during the continuance of any Event of Default, uponrequest by the Collateral Agent, (A) cause the Organizational Documents of eachsuch issuer that is a Subsidiary of the US Borrower to be amended to provide thatsuch Pledged Securities shall be treated as “securities” for purposes of theUCC and (B) cause such Pledged Securities to become certificated and deliveredto the Collateral Agent in accordance with the provisions of Section 3.1.

SECTION 3.3.        Financing Statements and OtherFilings; Maintenance of Perfected Security Interest.  Each Pledgor represents and warrants that allfinancing statements, agreements, instruments and other documents necessary toperfect the security interest granted by it to the Collateral Agent in respectof the Pledged Collateral have been delivered to the Collateral Agent incompleted and, to the extent necessary or appropriate, duly executed form forfiling in each governmental, municipal or other office specified in Schedule7 to the Perfection Certificate. Each Pledgor agrees that at the sole cost and expense of the Pledgors,such Pledgor will maintain the security interest created by this Agreement inthe Pledged Collateral as a perfected first priority security interest subjectonly to Permitted Collateral Liens.

SECTION 3.4.        Other Actions.  In order to further ensure the attachment,perfection and priority of, and the ability of the Collateral Agent to enforce,the Collateral Agent’s security interest in the Pledged Collateral, eachPledgor represents and warrants (as to itself) as follows and agrees, in eachcase at such Pledgor’s own expense, to take the following actions with respectto the following Pledged Collateral:

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(a)           Instruments andTangible Chattel Paper.  As of thedate hereof, no amounts payable under or in connection with any of the PledgedCollateral are evidenced by any Instrument or Tangible Chattel Paper other thansuch Instruments and Tangible Chattel Paper listed in Schedule 11to the Perfection Certificate.  EachInstrument and each item of Tangible Chattel Paper listed in Schedule 11to the Perfection Certificate has been properly endorsed, assigned anddelivered to the Collateral Agent, accompanied by instruments of transfer orassignment duly executed in blank.  Ifany amount then payable under or in connection with any of the PledgedCollateral shall be evidenced by any Instrument or Tangible Chattel Paper, andsuch amount, together with all amounts payable evidenced by any Instrument orTangible Chattel Paper not previously delivered to the Collateral Agent exceeds$500,000 in the aggregate for all Pledgors, the Pledgor acquiring suchInstrument or Tangible Chattel Paper shall promptly (but in any event withinfive days after receipt thereof) endorse, assign and deliver the same to theCollateral Agent, accompanied by such instruments of transfer or assignmentduly executed in blank as the Collateral Agent may from time to time specify.

(b)           Deposit Accounts.  As of the date hereof, no Pledgor has anyDeposit Accounts other than the accounts listed in Schedule 14 to thePerfection Certificate.  The CollateralAgent has a first priority security interest in each such Deposit Account,which security interest is perfected by Control.  No Pledgor shall hereafter establish and maintainany Deposit Account unless (1) it shall have given the Collateral Agent 30days’ prior written notice of its intention to establish such new DepositAccount with a Bank, (2) such Bank shall be reasonably acceptable to theCollateral Agent and (3) such Bank and such Pledgor shall have dulyexecuted and delivered to the Collateral Agent a Deposit Account ControlAgreement with respect to such Deposit Account. The Collateral Agent agrees with each Pledgor that the Collateral Agentshall not give any instructions directing the disposition of funds from time totime credited to any Deposit Account or withhold any withdrawal rights fromsuch Pledgor with respect to funds from time to time credited to any DepositAccount unless an Event of Default has occurred and is continuing.  The provisions of this Section 3.4(b)shall not apply to the LC Account or to any other Deposit Accounts for whichthe Collateral Agent is the Bank.  NoPledgor shall grant Control of any Deposit Account to any person other than theCollateral Agent.

(c)           SecuritiesAccounts and Commodity Accounts. (i)  As of the date hereof, noPledgor has any Securities Accounts or Commodity Accounts other than thoselisted in Schedule 14 to the Perfection Certificate.  Except as set forth on Schedule 14 tothe Perfection Certificate, the Collateral Agent has a first priority securityinterest in each such Securities Account and Commodity Account, which securityinterest is perfected by Control.  NoPledgor shall hereafter establish and maintain any Securities Account orCommodity Account with any Securities Intermediary or Commodity Intermediaryunless (1) it shall have given the Collateral Agent 30 days’ prior writtennotice of its intention to establish such new Securities Account or CommodityAccount with such Securities Intermediary or Commodity Intermediary,(2) such Securities Intermediary or

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Commodity Intermediaryshall be reasonably acceptable to the Collateral Agent and (3) such SecuritiesIntermediary or Commodity Intermediary, as the case may be, and such Pledgorshall have duly executed and delivered a Control Agreement with respect to suchSecurities Account or Commodity Account, as the case may be.  Each Pledgor shall accept any cash and InvestmentProperty in trust for the benefit of the Collateral Agent and within one (1)Business Day of actual receipt thereof, deposit any and all cash and InvestmentProperty received by it into a Deposit Account or Securities Account subject toCollateral Agent’s Control.  The CollateralAgent agrees with each Pledgor that the Collateral Agent shall not give anyEntitlement Orders or instructions or directions to any issuer of uncertificatedsecurities, Securities Intermediary or Commodity Intermediary, and shall notwithhold its consent to the exercise of any withdrawal or dealingrights by such Pledgor, unless an Event of Default has occurred and iscontinuing or, after giving effect to any such investment and withdrawalrights, would occur.  The provisions ofthis Section 3.4(c) shall not apply to any Financial Assets credited toa Securities Account for which the Collateral Agent is the SecuritiesIntermediary.  No Pledgor shall grantControl over any Investment Property to any person other than the CollateralAgent.

(ii)           As between theCollateral Agent and the Pledgors, the Pledgors shall bear the investment riskwith respect to the Investment Property and Pledged Securities, and the risk ofloss of, damage to, or the destruction of the Investment Property and PledgedSecurities, whether in the possession of, or maintained as a SecurityEntitlement or deposit by, or subject to the Control of, the Collateral Agent,a Securities Intermediary, a Commodity Intermediary, any Pledgor or any otherperson.

(d)           ElectronicChattel Paper and Transferable Records. As of the date hereof, no amount under or in connection with any of thePledged Collateral is evidenced by any Electronic Chattel Paper or any “transferablerecord” (as that term is defined in Section 201 of the Federal Electronic Signaturesin Global and National Commerce Act, or in Section 16 of the UniformElectronic Transactions Act as in effect in any relevant jurisdiction) otherthan such Electronic Chattel Paper and transferable records listed in Schedule11 to the Perfection Certificate.  Ifany amount payable under or in connection with any of the Pledged Collateralshall be evidenced by any Electronic Chattel Paper or any transferable record,the Pledgor acquiring such Electronic Chattel Paper or transferable recordshall promptly notify the Collateral Agent thereof and shall take such actionas the Collateral Agent may reasonably request to vest in the Collateral Agentcontrol of such Electronic Chattel Paper under Section 9-105 of theUCC or control under Section 201 of the Federal Electronic Signatures in Globaland National Commerce Act or, as the case may be, Section 16 of theUniform Electronic Transactions Act, as so in effect in such jurisdiction, ofsuch transferable record.  Therequirement in the preceding sentence shall not apply to the extent that suchamount, together with all amounts payable evidenced by Electronic Chattel Paperor any transferable record in which the Collateral Agent has not been vestedcontrol within the meaning of the statutes described in the immediately precedingsentence, does not exceed $1,000,000 in the aggregate for all Pledgors.  The 

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Collateral Agent agreeswith such Pledgor that the Collateral Agent will arrange, pursuant toprocedures satisfactory to the Collateral Agent and so long as such procedureswill not result in the Collateral Agent’s loss of control, for the Pledgor tomake alterations to the Electronic Chattel Paper or transferable recordpermitted under Section 9-105 of the UCC or, as the case may be,Section 201 of the Federal Electronic Signatures in Global and NationalCommerce Act or Section 16 of the Uniform Electronic Transactions Act fora party in control to allow without loss of control, unless an Event of Defaulthas occurred and is continuing or would occur after taking into account anyaction by such Pledgor with respect to such Electronic Chattel Paper or transferablerecord.

(e)           Letter-of-CreditRights.  If any Pledgor is at anytime a beneficiary under a Letter of Credit now or hereafter issued, suchPledgor shall promptly notify the Collateral Agent thereof and such Pledgorshall, at the request of the Collateral Agent, pursuant to an agreement in formand substance reasonably satisfactory to the Collateral Agent, either (i)arrange for the issuer and any confirmer of such Letter of Credit to consent toan assignment to the Collateral Agent of the proceeds of any drawing under theLetter of Credit or (ii) arrange for the Collateral Agent to become thetransferee beneficiary of such Letter of Credit, with the Collateral Agentagreeing, in each case, that the proceeds of any drawing under the Letter ofCredit are to be applied as provided in the Credit Agreement.  The actions in the preceding sentence shallnot be required to the extent that the amount of any such Letter of Credit,together with the aggregate amount of all other Letters of Credit for which theactions described above in clause (i) and (ii) have not been taken, does notexceed $1,000,000 in the aggregate for all Pledgors.

(f)            Commercial TortClaims.   As of the date hereof, eachPledgor hereby represents and warrants that it holds no Commercial Tort Claimsother than those listed in Schedule 13 to the PerfectionCertificate.  If any Pledgor shall at anytime hold or acquire a Commercial Tort Claim, such Pledgor shall immediatelynotify the Collateral Agent in writing signed by such Pledgor of the briefdetails thereof and grant to the Collateral Agent in such writing a securityinterest therein and in the Proceeds thereof, all upon the terms of this Agreement,with such writing to be in form and substance reasonably satisfactory to theCollateral Agent.  The requirement in thepreceding sentence shall not apply to the extent that the amount of suchCommercial Tort Claim, together with the amount of all other Commercial TortClaims held by any Pledgor in which the Collateral Agent does not have asecurity interest, does not exceed $1,000,000 in the aggregate for allPledgors.

(g)           Landlord’s AccessAgreements/Bailee Letters.  EachPledgor shall use its commercially reasonable efforts to obtain as soon aspracticable after the date hereof with respect to each location set forth in Schedule 4.01(n)(vi)to the Credit Agreement, where such Pledgor maintains Pledged Collateral, aBailee Letter and/or Landlord Access Agreement, as applicable, and usecommercially reasonable efforts to obtain a Bailee Letter, Landlord AccessAgreement and/or landlord’s lien waiver, as applicable, from all 

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such bailees andlandlords, as applicable, who from time to time have possession of any PledgedCollateral if reasonably requested by the Collateral Agent.  A waiver of bailee’s lien shall not berequired if the value of the Pledged Collateral held by such bailee is lessthen $5,000,000, provided that the aggregate value of the Pledged Collateralheld by all bailees who have not delivered a Bailee Letter is less than$10,000,000 in the aggregate.

(h)           Motor Vehicles.  Upon the request of the Collateral Agent,each Pledgor shall deliver to the Collateral Agent originals of the certificatesof title or ownership for the motor vehicles (and any other Equipment coveredby certificates of title or ownership) owned by it, with the Collateral Agentlisted as lienholder therein.  Suchrequirement shall not apply if any such motor vehicle (or any such otherEquipment) is valued at less than $75,000, provided that the aggregate value ofall motor vehicles (and such Equipment) as to which any Pledgor has notdelivered a certificate of title or ownership is less than $500,000.

SECTION 3.5.        Joinder of Additional Guarantors.  The Pledgors shall cause each Subsidiary ofthe US Borrower which, from time to time, after the date hereof shall be requiredto pledge any assets to the Collateral Agent for the benefit of the SecuredParties pursuant to the provisions of the Credit Agreement, (a) to execute anddeliver to the Collateral Agent (i) a Joinder Agreement substantially inthe form of Exhibit 3 hereto within thirty (30) days of the date onwhich it was acquired or created and (ii) a Perfection Certificate, in eachcase, within thirty (30) days of the date on which it was acquired or createdor (b) in the case of a Subsidiary organized outside of the United Statesrequired to pledge any assets to the Collateral Agent, to execute and deliverto the Collateral Agent such documentation as the Collateral Agent shallreasonably request and, in each case with respect to clauses (a) and (b) above,upon such execution and delivery, such Subsidiary shall constitute a “Guarantor”and a “Pledgor” for all purposes hereunder with the same force and effect as iforiginally named as a Guarantor and Pledgor herein.  The execution and delivery of such JoinderAgreement shall not require the consent of any Pledgor hereunder.  The rights and obligations of each Pledgorhereunder shall remain in full force and effect notwithstanding the addition ofany new Guarantor and Pledgor as a party to this Agreement.

SECTION 3.6.        Supplements; Further Assurances.  Each Pledgor shall take such further actions,and execute and/or deliver to the Collateral Agent such additional financingstatements, amendments, assignments, agreements, supplements, powers andinstruments, as the Collateral Agent may in its reasonable judgment deemnecessary or appropriate in order to create, perfect, preserve and protect thesecurity interest in the Pledged Collateral as provided herein and the rightsand interests granted to the Collateral Agent hereunder, to carry into effectthe purposes hereof or better to assure and confirm the validity,enforceability and priority of the Collateral Agent’s security interest in thePledged Collateral or permit the Collateral Agent to exercise and enforce itsrights, powers and remedies hereunder with respect to any Pledged Collateral,including the filing of financing statements, continuation statements and otherdocuments (including this Agreement) under the Uniform Commercial Code (orother similar laws) in effect 

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in any jurisdiction withrespect to the security interest created hereby and the execution and deliveryof Control Agreements, all in form reasonably satisfactory to the CollateralAgent and in such offices (including the United States Patent and TrademarkOffice and the United States Copyright Office) wherever required by law toperfect, continue and maintain the validity, enforceablity and priority of thesecurity interest in the Pledged Collateral as provided herein and to preservethe other rights and interests granted to the Collateral Agent hereunder, asagainst third parties, with respect to the Pledged Collateral.  Without limiting the generality of theforegoing, each Pledgor shall make, execute, endorse, acknowledge, file orrefile and/or deliver to the Collateral Agent from time to time upon reasonablerequest by the Collateral Agent such lists, schedules, descriptions anddesignations of the Pledged Collateral, copies of warehouse receipts, receiptsin the nature of warehouse receipts, bills of lading, documents of title,vouchers, invoices, schedules, confirmatory assignments, supplements,additional security agreements, conveyances, financing statements, transferendorsements, powers of attorney, certificates, reports and other assurances orinstruments as the Collateral Agent shall reasonably request.  If an Event of Default has occurred and iscontinuing, the Collateral Agent may institute and maintain, in its own name orin the name of any Pledgor, such suits and proceedings as the Collateral Agentmay be advised by counsel shall be necessary or expedient to prevent anyimpairment of the security interest in or the perfection thereof in the PledgedCollateral.  All of the foregoing shallbe at the sole cost and expense of the Pledgors.

# ARTICLE IV

# REPRESENTATIONS,WARRANTIES AND COVENANTS

EachPledgor represents, warrants and covenants as follows:

SECTION 4.1.        Title.  Except for the security interest granted tothe Collateral Agent for the ratable benefit of the Secured Parties pursuant tothis Agreement and Permitted Liens, such Pledgor owns and has rights and, as toPledged Collateral acquired by it from time to time after the date hereof, willown and/or have rights in each item of Pledged Collateral pledged by ithereunder, free and clear of any and all Liens or claims of others.  In addition, no Liens or claims exist on theSecurities Collateral, other than as permitted by Section 6.02 ofthe Credit Agreement.

SECTION 4.2.        Validity of Security Interest.  The security interest in and Lien on thePledged Collateral granted to the Collateral Agent for the benefit of theSecured Parties hereunder constitutes (a) a legal and valid securityinterest in all the Pledged Collateral securing the payment and performance ofthe Secured US Obligations, and (b) subject to the filings and other actionsdescribed in Schedule 7 to the Perfection Certificate (to the extentrequired to be listed on the schedules to the Perfection Certificate as of thedate this representation is made or deemed made), a perfected security interestin all the Pledged Collateral.  Thesecurity interest 

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and Lien granted to theCollateral Agent for the benefit of the Secured Parties pursuant to thisAgreement in and on the Pledged Collateral will at all times constitute aperfected, continuing security interest therein, prior to all other Liens onthe Pledged Collateral except for Permitted Collateral Liens.

SECTION 4.3.        Defense of Claims; Transferability ofPledged Collateral.  Subject to Section5.05 of the Credit Agreement, each Pledgor shall, at its own cost andexpense, defend title to the Pledged Collateral pledged by it hereunder and thesecurity interest therein and Lien thereon granted to the Collateral Agent andthe priority thereof against all claims and demands of all persons, at its owncost and expense, at any time claiming any interest therein adverse to theCollateral Agent or any other Secured Party other than Permitted CollateralLiens.  There is no agreement, order,judgment or decree, and no Pledgor shall enter into any agreement or take anyother action, that would restrict the transferability of any of the PledgedCollateral or otherwise impair or conflict with such Pledgor’s obligations orthe rights of the Collateral Agent hereunder.

SECTION 4.4.        Other Financing Statements.  It has not filed, nor authorized any thirdparty to file (nor will there be), any valid or effective financing statement(or similar statement, instrument of registration or public notice under thelaw of any jurisdiction) covering or purporting to cover any interest of anykind in the Pledged Collateral, except such as have been filed in favor of theCollateral Agent pursuant to this Agreement or in favor of any holder of aPermitted Collateral Lien with respect to such Permitted Collateral Lien orfinancing statements or public notices relating to the termination statementslisted on Schedule 9 to the Perfection Certificate.  No Pledgor shall execute, authorize or permitto be filed in any public office any financing statement (or similar statement,instrument of registration or public notice under the law of any jurisdiction)relating to any Pledged Collateral, except financing statements and otherstatements and instruments filed or to be filed in respect of and covering thesecurity interests granted by such Pledgor to the holder of the Permitted CollateralLiens.

SECTION 4.5.        Location of Inventory and Equipment.  It shall not move any Equipment or Inventory(other than Equipment and Inventory the aggregate book value of which does notexceed $3,000,000 for all such Equipment and Inventory) to any location, otherthan any location that is listed in the relevant Schedules to the PerfectionCertificate, unless (i) it shall have given the Collateral Agent not less than30 days’ prior written notice (in the form of an Officers’ Certificate) of itsintention so to do, clearly describing such new location and providing suchother information in connection therewith as the Collateral Agent may requestand (ii) to the extent applicable with respect to such new location, suchPledgor shall have complied with Section 3.4(g); provided that in no eventshall any Equipment or Inventory be moved to any location outside of the continentalUnited States.

SECTION 4.6.        Due Authorization and Issuance.  All of the Pledged Securities existing on thedate hereof have been, and to the extent any Pledged Securities are hereafter issued,such Pledged Securities will be, upon such issuance, duly authorized, validlyissued and 

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fully paid andnon-assessable to the extent applicable. There is no amount or other obligation owing by any Pledgor to anyissuer of the Pledged Securities in exchange for or in connection with the issuanceof the Pledged Securities or any Pledgor’s status as a partner or a member ofany issuer of the Pledged Securities.

SECTION 4.7.        Consents, etc.  In the event that the Collateral Agentdesires to exercise any remedies, voting or consensual rights orattorney-in-fact powers set forth in this Agreement and determines it necessaryto obtain any approvals or consents of any Governmental Authority or any otherperson therefor, then, upon the reasonable request of the Collateral Agent,such Pledgor agrees to use commercially reasonable efforts to assist and aidthe Collateral Agent to obtain as soon as practicable any necessary approvalsor consents for the exercise of any such remedies, rights and powers.

SECTION 4.8.        Pledged Collateral.  All information set forth herein, includingthe schedules hereto, and all information contained in any documents, schedulesand lists heretofore delivered to any Secured Party, including the PerfectionCertificate and the schedules thereto, in connection with this Agreement, ineach case, relating to the Pledged Collateral, is accurate and complete in allmaterial respects.  The PledgedCollateral described on the schedules to the Perfection Certificate constitutesall of the property of such type of Pledged Collateral owned or held by thePledgors.

SECTION 4.9.        Insurance.  In the event that the proceeds of anyinsurance claim are paid to any Pledgor after the Collateral Agent hasexercised its right to foreclose after an Event of Default, such Net CashProceeds shall be held in trust for the benefit of the Collateral Agent andimmediately after receipt thereof shall be paid to the Collateral Agent forapplication in accordance with the Credit Agreement.

# ARTICLE V

# CERTAIN PROVISIONSCONCERNING SECURITIES COLLATERAL

SECTION 5.1.        Pledge of Additional SecuritiesCollateral.  Each Pledgor shall, uponobtaining any Pledged Securities or Intercompany Notes of any person, acceptthe same in trust for the benefit of the Collateral Agent and promptly (but inany event within five days after receipt thereof) deliver to the CollateralAgent a pledge amendment, duly executed by such Pledgor, in substantially theform of Exhibit 2 hereto (each, a “Pledge Amendment”), and thecertificates and other documents required under Section 3.1 and Section 3.2hereof in respect of the additional Pledged Securities or Intercompany Noteswhich are to be pledged pursuant to this Agreement, and confirming theattachment of the Lien hereby created on and in respect of such additionalPledged Securities or Intercompany Notes.  Each Pledgor hereby authorizes the CollateralAgent to attach each Pledge Amendment to this Agreement and agrees that allPledged

 

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Securities orIntercompany Notes.  Each Pledgor herebyauthorizes the Collateral Agent to attach each Pledge Amendment to this Agreementand agrees that all Pledged Securities or Intercompany Notes listed on anyPledge Amendment delivered to the Collateral Agent shall for all purposeshereunder be considered Pledged Collateral.

## SECTION 5.2.              VotingRights; Distributions; etc.

### (a)           So long as no Eventof Default shall have occurred and be continuing:

(i)            EachPledgor shall be entitled to exercise any and all voting and other consensualrights pertaining to the Securities Collateral or any part thereof for any purposenot inconsistent with the terms or purposes hereof, the Credit Agreement or anyother document evidencing the Secured US Obligations; provided, however,that no Pledgor shall in any event exercise such rights in any manner whichcould reasonably be expected to have a Material Adverse Effect.

(ii)           EachPledgor shall be entitled to receive and retain, and to utilize free and clearof the Lien hereof, any and all Distributions, but only if and to the extentmade in accordance with the provisions of the Credit Agreement; provided,however, that any and all such Distributions consisting of rights orinterests in the form of securities shall be forthwith delivered to theCollateral Agent to hold as Pledged Collateral and shall, if received by anyPledgor, be received in trust for the benefit of the Collateral Agent, be segregatedfrom the other property or funds of such Pledgor and be promptly (but in any eventwithin five days after receipt thereof) delivered to the Collateral Agent asPledged Collateral in the same form as so received (with any necessary endorsement).

### (b)           So long as no Eventof Default shall have occurred and be continuing, the Collateral Agent shall bedeemed without further action or formality to have granted to each Pledgor allnecessary consents relating to voting rights and shall, if necessary, uponwritten request of any Pledgor and at the sole cost and expense of thePledgors, from time to time execute and deliver (or cause to be executed anddelivered) to such Pledgor all such instruments as such Pledgor may reasonablyrequest in order to permit such Pledgor to exercise the voting and other rightswhich it is entitled to exercise pursuant to Section 5.2(a)(i)hereof and to receive the Distributions which it is authorized to receive andretain pursuant to Section 5.2(a)(ii) hereof.

### (c)           Upon the occurrenceand during the continuance of any Event of Default:

(i)            Allrights of each Pledgor to exercise the voting and other consensual rights itwould otherwise be entitled to exercise pursuant to Section 5.2(a)(i)hereof shall immediately cease, and all such rights shall thereupon becomevested in the Collateral Agent, which shall thereupon have the sole right toexercise such voting and other consensual rights.

(ii)           Allrights of each Pledgor to receive Distributions which it would otherwise beauthorized to receive and retain pursuant to Section 5.2(a)(ii)hereof shall immediately cease and all such rights shall thereupon becomevested in the Collateral Agent, 

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which shallthereupon have the sole right to receive and hold as Pledged Collateral suchDistributions.

### (d)           Each Pledgor shall,at its sole cost and expense, from time to time execute and deliver to theCollateral Agent appropriate instruments as the Collateral Agent may request inorder to permit the Collateral Agent to exercise the voting and other rightswhich it may be entitled to exercise pursuant to Section 5.2(a)(i)hereof and to receive all Distributions which it may be entitled to receive underSection 5.2(a)(ii) hereof.

### (e)           All Distributionswhich are received by any Pledgor contrary to the provisions of Section 5.2(a)(ii)hereof shall be received in trust for the benefit of the Collateral Agent,shall be segregated from other funds of such Pledgor and shall immediately bepaid over to the Collateral Agent as Pledged Collateral in the same form as soreceived (with any necessary endorsement).

## SECTION 5.3.              Defaults,etc.  Such Pledgor is not in defaultin the payment of any portion of any mandatory capital contribution, if any,required to be made under any agreement to which such Pledgor is a partyrelating to the Pledged Securities pledged by it, and such Pledgor is not inviolation of any other provisions of any such agreement to which such Pledgoris a party, or otherwise in default or violation thereunder.  No Securities Collateral pledged by suchPledgor is subject to any defense, offset or counterclaim, nor have any of the foregoingbeen asserted or alleged against such Pledgor by any person with respectthereto, and as of the date hereof, there are no certificates, instruments,documents or other writings (other than the Organizational Documents and certificatesrepresenting such Pledged Securities that have been delivered to the CollateralAgent) which evidence any Pledged Securities of such Pledgor.

## SECTION 5.4.              Certain Agreements of PledgorsAs Issuers and Holders of Equity Interests

(a)           In the case of eachPledgor which is an issuer of Securities Collateral, such Pledgor agrees to bebound by the terms of this Agreement relating to the Securities Collateralissued by it and will comply with such terms insofar as such terms areapplicable to it.

### (b)           In the case of eachPledgor which is a partner, shareholder or member, as the case may be, in apartnership, limited liability company or other entity, such Pledgor herebyconsents to the extent required by the applicable Organizational Document tothe pledge by each other Pledgor, pursuant to the terms hereof, of the PledgedSecurities in such partnership, limited liability company or other entity and,upon the occurrence and during the continuance of an Event of Default, to thetransfer of such Pledged Securities to the Collateral Agent or its nominee andto the substitution of the Collateral Agent or its nominee as a substitutedpartner, shareholder or member in such partnership, limited liability companyor other entity with all the rights, powers and duties of a general partner,limited partner, shareholder or member, as the case may be.

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# ARTICLE VI

# CERTAIN PROVISIONSCONCERNING INTELLECTUALPROPERTY COLLATERAL

## SECTION 6.1.              Grantof Intellectual Property License.  Forthe purpose of enabling the Collateral Agent, during the continuance of anEvent of Default, to exercise rights and remedies under Article IXhereof at such time as the Collateral Agent shall be lawfully entitled toexercise such rights and remedies, and for no other purpose, each Pledgorhereby grants to the Collateral Agent, to the extent assignable, an irrevocable,non-exclusive license to use, assign, license or sublicense any of theIntellectual Property Collateral now owned or hereafter acquired by suchPledgor and which constitutes Pledged Collateral, wherever the same may belocated.  Such license shall includeaccess to all media in which any of the licensed items may be recorded orstored and to all computer programs used for the compilation or printouthereof.

## SECTION 6.2.              Protectionof Collateral Agent’s Security.  On acontinuing basis, each Pledgor shall, at its sole cost and expense, (i)promptly following its becoming aware thereof, notify the Collateral Agent ofany adverse determination in any proceeding or the institution of anyproceeding in any federal, state or local court or administrative body or inthe United States Patent and Trademark Office or the United States CopyrightOffice regarding any Material Intellectual Property Collateral, such Pledgor’sright to register such Material Intellectual Property Collateral or its rightto keep and maintain such registration in full force and effect,(ii) maintain all Material Intellectual Property Collateral as presentlyused and operated, (iii) not permit to lapse or become abandoned anyMaterial Intellectual Property Collateral, and not settle or compromise anypending or future litigation or administrative proceeding with respect to anysuch Material Intellectual Property Collateral, in either case except as shallbe consistent with commercially reasonable business judgment, (iv) uponsuch Pledgor obtaining knowledge thereof, promptly notify the Collateral Agentin writing of any event which may be reasonably expected to materially andadversely affect the value or utility of any Material Intellectual PropertyCollateral or the rights and remedies of the Collateral Agent in relationthereto including a levy or threat of levy or any legal process against anyMaterial Intellectual Property Collateral, (v) not license anyIntellectual Property Collateral other than licenses entered into by suchPledgor in, or incidental to, the ordinary course of business, or amend or permitthe amendment of any of the licenses in a manner that materially and adverselyaffects the right to receive payments thereunder, or in any manner that wouldmaterially impair the value of any Intellectual Property Collateral or the Lienon and security interest in the Intellectual Property Collateral createdtherein hereby, without the consent of the Collateral Agent,(vi) diligently keep adequate records respecting all Intellectual PropertyCollateral and (vii) furnish to the Collateral Agent from time to timeupon the Collateral Agent’s request therefor reasonably detailed statements andamended schedules further identifying and describing the Intellectual PropertyCollateral and such other materials evidencing or reports pertaining to anyIntellectual Property Collateral as the Collateral Agent may from time to timerequest.

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## SECTION 6.3.              After-AcquiredProperty.  If any Pledgor shall atany time after the date hereof (i) obtain any rights to any additionalIntellectual Property Collateral or (ii) become entitled to the benefit ofany additional Intellectual Property Collateral or any renewal or extensionthereof, including any reissue, division, continuation, or continuation-in-partof any Intellectual Property Collateral, or any improvement on any IntellectualProperty Collateral, the provisions hereof shall automatically apply theretoand any such item enumerated in the preceding clause (i) or (ii) shallautomatically constitute Intellectual Property Collateral as if such would haveconstituted Intellectual Property Collateral (and would not have constituted ExcludedProperty) at the time of execution hereof and be subject to the Lien andsecurity interest created by this Agreement without further action by anyparty.  Each Pledgor shall promptly provideto the Collateral Agent written notice of any of the foregoing and confirm theattachment of the Lien and security interest created by this Agreement to anyrights described in clauses (i) and (ii) above by execution of an instrument inform reasonably acceptable to the Collateral Agent and the filing of anyinstruments or statements as shall be reasonably necessary to create, preserve,protect or perfect the Collateral Agent’s security interest in suchIntellectual Property Collateral. Further, each Pledgor authorizes the Collateral Agent to modify thisAgreement by amending Schedules 12(a) and 12(b) to the PerfectionCertificate to include any Intellectual Property Collateral of such Pledgoracquired or arising after the date hereof.

## SECTION 6.4.              Litigation.  Unless there shall occur and be continuingany Event of Default, each Pledgor shall have the right to commence andprosecute in its own name, as the party in interest, for its own benefit and atthe sole cost and expense of the Pledgors, such applications for protection ofthe Intellectual Property Collateral and suits, proceedings or other actions toprevent the infringement, counterfeiting, unfair competition, dilution,diminution in value or other damage as are necessary to protect theIntellectual Property Collateral.  Uponthe occurrence and during the continuance of any Event of Default, theCollateral Agent shall have the right but shall in no way be obligated to fileapplications for protection of the Intellectual Property Collateral and/orbring suit in the name of any Pledgor, the Collateral Agent or the SecuredParties to enforce the Intellectual Property Collateral and any license thereunder.  In the event of such suit, each Pledgorshall, at the reasonable request of the Collateral Agent, do any and all lawfulacts and execute any and all documents requested by the Collateral Agent in aidof such enforcement and the Pledgors shall promptly reimburse and indemnify theCollateral Agent for all costs and expenses incurred by the Collateral Agent inthe exercise of its rights under this Section 6.4 in accordancewith Section 10.03 of the Credit Agreement.  In the event that the Collateral Agent shallelect not to bring suit to enforce the Intellectual Property Collateral, eachPledgor agrees, at the reasonable request of the Collateral Agent, to take allcommercially reasonable actions necessary, whether by suit, proceeding or otheraction, to prevent the infringement, counterfeiting, unfair competition,dilution, diminution in value of or other damage to any of the IntellectualProperty Collateral by any person.

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# ARTICLE VII

# CERTAIN PROVISIONSCONCERNING RECEIVABLES

## SECTION 7.1.              Maintenanceof Records.  Each Pledgor shall keepand maintain at its own cost and expense complete records of each Receivable,in a manner consistent with prudent business practice, including records of allpayments received, all credits granted thereon, all merchandise returned andall other documentation relating thereto. Each Pledgor shall, at such Pledgor’s sole cost and expense, upon theCollateral Agent’s demand made at any time after the occurrence and during thecontinuance of any Event of Default, deliver all tangible evidence ofReceivables, including all documents evidencing Receivables and any books andrecords relating thereto to the Collateral Agent or to its representatives (copiesof which evidence and books and records may be retained by such Pledgor).  Upon the occurrence and during the continuanceof any Event of Default, the Collateral Agent may transfer a full and completecopy of any Pledgor’s books, records, credit information, reports, memorandaand all other writings relating to the Receivables to and for the use by anyperson that has acquired or is contemplating acquisition of an interest in theReceivables or the Collateral Agent’s security interest therein without the consentof any Pledgor.

## SECTION 7.2.              Legend.  Each Pledgor shall legend, at the request ofthe Collateral Agent and in form and manner satisfactory to the CollateralAgent, the Receivables and the other books, records and documents of suchPledgor evidencing or pertaining to the Receivables with an appropriate referenceto the fact that the Receivables have been assigned to the Collateral Agent forthe benefit of the Secured Parties and that the Collateral Agent has a securityinterest therein.

## SECTION 7.3.              Modificationof Terms, etc.  No Pledgor shallrescind or cancel any obligations evidenced by any Receivable or modify anyterm thereof or make any adjustment with respect thereto except in the ordinarycourse of business consistent with prudent business practice, or extend orrenew any such obligations except in the ordinary course of business consistentwith prudent business practice or compromise or settle any dispute, claim, suitor legal proceeding relating thereto or sell any Receivable or interest thereinexcept in the ordinary course of business consistent with prudent businesspractice without the prior written consent of the Collateral Agent.  Each Pledgor shall timely fulfill allobligations on its part to be fulfilled under or in connection with theReceivables.

## SECTION 7.4.              Collection.  Each Pledgor shall cause to be collected fromthe Account Debtor of each of the Receivables, as and when due in the ordinarycourse of business and consistent with prudent business practice (includingReceivables that are delinquent, such Receivables to be collected in accordancewith generally accepted commercial collection procedures), any and all amountsowing under or on account of such Receivable, and apply forthwith upon receiptthereof all such amounts as are so collected to the outstanding balance of suchReceivable, 

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## except that any Pledgor may, with respect to a Receivable, allow in theordinary course of business (i) a refund or credit due as a result of returnedor damaged or defective merchandise and (ii) such extensions of time to payamounts due in respect of Receivables and such other modifications of paymentterms or settlements in respect of Receivables as shall be commerciallyreasonable in the circumstances, all in accordance with such Pledgor’s ordinarycourse of business consistent with its collection practices as in effect fromtime to time.  The costs and expenses(including attorneys’ fees) of collection, in any case, whether incurred by anyPledgor, the Collateral Agent or any Secured Party, shall be paid by thePledgors.

# ARTICLE VIII

# TRANSFERS

## SECTION 8.1.              Transfersof Pledged Collateral.  No Pledgorshall sell, convey, assign or otherwise dispose of, or grant any option withrespect to, any of the Pledged Collateral pledged by it hereunder except asexpressly permitted by the Credit Agreement.

# ARTICLE IX

# REMEDIES

## SECTION 9.1.              Remedies.  Upon the occurrence and during thecontinuance of any Event of Default, the Collateral Agent may from time to timeexercise in respect of the Pledged Collateral, in addition to the other rightsand remedies provided for herein or otherwise available to it, the followingremedies:

##### (i)         Personally,or by agents or attorneys, immediately take possession of the PledgedCollateral or any part thereof, from any Pledgor or any other person who thenhas possession of any part thereof with or without notice or process of law,and for that purpose may enter upon any Pledgor’s premises where any of thePledged Collateral is located, remove such Pledged Collateral, remain presentat such premises to receive copies of all communications and remittancesrelating to the Pledged Collateral and use in connection with such removal andpossession any and all services, supplies, aids and other facilities of anyPledgor;

##### (ii)        Demand,sue for, collect or receive any money or property at any time payable orreceivable in respect of the Pledged Collateral including instructing theobligor or obligors on any agreement, instrument or other obligationconstituting part of the Pledged Collateral to make any payment required by theterms of such agreement, instrument or other obligation directly to theCollateral Agent, and in connection with any of the foregoing, compromise, 

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##### settle, extend the time for payment and make other modifications withrespect thereto; provided, however, that in the event that any suchpayments are made directly to any Pledgor, prior to receipt by any such obligorof such instruction, such Pledgor shall segregate all amounts received pursuantthereto in trust for the benefit of the Collateral Agent and shall promptly(but in no event later than one (1) Business Day after receipt thereof) paysuch amounts to the Collateral Agent;

##### (iii)       Sell,assign, grant a license to use or otherwise liquidate, or direct any Pledgor tosell, assign, grant a license to use or otherwise liquidate, any and all investmentsmade in whole or in part with the Pledged Collateral or any part thereof, andtake possession of the proceeds of any such sale, assignment, license or liquidation;

##### (iv)       Takepossession of the Pledged Collateral or any part thereof, by directing anyPledgor in writing to deliver the same to the Collateral Agent at any place orplaces so designated by the Collateral Agent, in which event such Pledgor shallat its own expense:  (A) forthwithcause the same to be moved to the place or places designated by the CollateralAgent and therewith delivered to the Collateral Agent, (B) store and keepany Pledged Collateral so delivered to the Collateral Agent at such place orplaces pending further action by the Collateral Agent and (C) while thePledged Collateral shall be so stored and kept, provide such security andmaintenance services as shall be necessary to protect the same and to preserveand maintain them in good condition. Each Pledgor’s obligation to deliver the Pledged Collateral as contemplatedin this Section 9.1(iv) is of the essence hereof.  Upon application to a court of equity havingjurisdiction, the Collateral Agent shall be entitled to a decree requiringspecific performance by any Pledgor of such obligation;

##### (v)        Withdrawall moneys, instruments, securities and other property in any bank, financialsecurities, deposit or other account of any Pledgor constituting PledgedCollateral for application to the Secured US Obligations as provided in ArticleX hereof;

##### (vi)       Retainand apply the Distributions to the Secured US Obligations as provided in Article Xhereof;

##### (vii)      Exerciseany and all rights as beneficial and legal owner of the Pledged Collateral,including perfecting assignment of and exercising any and all voting,consensual and other rights and powers with respect to any Pledged Collateral;and

##### (viii)     Exerciseall the rights and remedies of a secured party on default under the UCC, andthe Collateral Agent may also in its sole discretion, without notice except asspecified in Section 9.2 hereof, sell, assign or grant a license touse the Pledged Collateral or any part thereof in one or more parcels at publicor private sale, at any exchange, broker’s board or at any of the CollateralAgent’s offices or elsewhere, for cash, on credit or for future delivery, andat such price or prices and upon such other terms as the Collateral Agent maydeem commercially reasonable.  TheCollateral Agent or any other Secured Party or any of their respective Affiliatesmay be the purchaser, licensee, assignee or recipient of the Pledged Collateralor any part thereof 

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##### at any such sale and shall be entitled, for the purpose of bidding andmaking settlement or payment of the purchase price for all or any portion ofthe Pledged Collateral sold, assigned or licensed at such sale, to use andapply any of the Secured US Obligations owed to such person as a credit on accountof the purchase price of the Pledged Collateral or any part thereof payable bysuch person at such sale.  Eachpurchaser, assignee, licensee or recipient at any such sale shall acquire theproperty sold, assigned or licensed absolutely free from any claim or right onthe part of any Pledgor, and each Pledgor hereby waives, to the fullest extentpermitted by law, all rights of redemption, stay and/or appraisal which it nowhas or may at any time in the future have under any rule of law or statute nowexisting or hereafter enacted.  TheCollateral Agent shall not be obligated to make any sale of the PledgedCollateral or any part thereof regardless of notice of sale having beengiven.  The Collateral Agent may adjournany public or private sale from time to time by announcement at the time andplace fixed therefor, and such sale may, without further notice, be made at thetime and place to which it was so adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law, anyclaims against the Collateral Agent arising by reason of the fact that theprice at which the Pledged Collateral or any part thereof may have been sold,assigned or licensed at such a private sale was less than the price which mighthave been obtained at a public sale, even if the Collateral Agent accepts thefirst offer received and does not offer such Pledged Collateral to more thanone offeree.

## SECTION 9.2.              Noticeof Sale.  Each Pledgor acknowledgesand agrees that, to the extent notice of sale or other disposition of thePledged Collateral or any part thereof shall be required by law, ten (10) days’prior notice to such Pledgor of the time and place of any public sale or of thetime after which any private sale or other intended disposition is to takeplace shall be commercially reasonable notification of such matters.  No notification need be given to any Pledgorif it has signed, after the occurrence of an Event of Default, a statementrenouncing or modifying any right to notification of sale or other intendeddisposition.

## SECTION 9.3.              Waiverof Notice and Claims.  Each Pledgorhereby waives, to the fullest extent permitted by applicable law, notice orjudicial hearing in connection with the Collateral Agent’s taking possession orthe Collateral Agent’s disposition of the Pledged Collateral or any partthereof, including any and all prior notice and hearing for any prejudgmentremedy or remedies and any such right which such Pledgor would otherwise haveunder law, and each Pledgor hereby further waives, to the fullest extentpermitted by applicable law: (i) all damages occasioned by such taking of possession,(ii) all other requirements as to the time, place and terms of sale orother requirements with respect to the enforcement of the Collateral Agent’srights hereunder and (iii) all rights of redemption, appraisal, valuation,stay, extension or moratorium now or hereafter in force under any applicable law.  The Collateral Agent shall not be liable forany incorrect or improper payment made pursuant to this Article IXin the absence of gross negligence or willful misconduct on the part of theCollateral Agent.  Any sale of, or thegrant of options to purchase, or any other realization upon, any PledgedCollateral shall operate to divest all right, title, interest, claim and demand,either at law or in equity, of the applicable Pledgor therein and thereto, andshall be a perpetual bar both at law and in equity against such Pledgor 

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## and against any and all persons claiming or attempting to claim thePledged Collateral so sold, optioned or realized upon, or any part thereof,from, through or under such Pledgor.

## SECTION 9.4.              CertainSales of Pledged Collateral.

### (a)           Each Pledgorrecognizes that, by reason of certain prohibitions contained in law, rules,regulations or orders of any Governmental Authority, the Collateral Agent maybe compelled, with respect to any sale of all or any part of the PledgedCollateral, to limit purchasers to those who meet the requirements of suchGovernmental Authority.  Each Pledgor acknowledgesthat any such sales may be at prices and on terms less favorable to theCollateral Agent than those obtainable through a public sale without suchrestrictions, and, notwithstanding such circumstances, agrees that any suchrestricted sale shall be deemed to have been made in a commercially reasonablemanner and that, except as may be required by applicable law, the CollateralAgent shall have no obligation to engage in public sales.

### (b)           Each Pledgorrecognizes that, by reason of certain prohibitions contained in the SecuritiesAct, and applicable state securities laws, the Collateral Agent may be compelled,with respect to any sale of all or any part of the Securities Collateral andInvestment Property, to limit purchasers to persons who will agree, among otherthings, to acquire such Securities Collateral or Investment  Property for their own account, forinvestment and not with a view to the distribution or resale thereof.  Each Pledgor acknowledges that any suchprivate sales may be at prices and on terms less favorable to the CollateralAgent than those obtainable through a public sale without such restrictions(including a public offering made pursuant to a registration statement underthe Securities Act), and, notwithstanding such circumstances, agrees that anysuch private sale shall be deemed to have been made in a commerciallyreasonable manner and that the Collateral Agent shall have no obligation toengage in public sales and no obligation to delay the sale of any SecuritiesCollateral or Investment Property for the period of time necessary to permitthe issuer thereof to register it for a form of public sale requiringregistration under the Securities Act or under applicable state securitieslaws, even if such issuer would agree to do so.

### (c)           Notwithstanding theforegoing, each Pledgor shall, upon the occurrence and during the continuanceof any Event of Default, at the reasonable request of the Collateral Agent, forthe benefit of the Collateral Agent, cause any registration, qualificationunder or compliance with any Federal or state securities law or laws to beeffected with respect to all or any part of the Securities Collateral as soonas practicable and at the sole cost and expense of the Pledgors.  Each Pledgor will use its commerciallyreasonable efforts to cause such registration to be effected (and be kepteffective) and will use its commercially reasonable efforts to cause such qualificationand compliance to be effected (and be kept effective) as may be so requestedand as would permit or facilitate the sale and distribution of such SecuritiesCollateral including registration under the Securities Act (or any similarstatute then in effect), appropriate qualifications under applicable blue skyor other state securities laws and appropriate compliance with all otherrequirements of any Governmental Authority. Each Pledgor shall use its commercially reasonable 

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### efforts to cause the Collateral Agent to be kept advised in writing asto the progress of each such registration, qualification or compliance and asto the completion thereof, shall furnish to the Collateral Agent such number ofprospectuses, offering circulars or other documents incident thereto as theCollateral Agent from time to time may request, and shall indemnify and shallcause the issuer of the Securities Collateral to indemnify the Collateral Agentand all others participating in the distribution of such Securities Collateralagainst all claims, losses, damages and liabilities caused by any untruestatement (or alleged untrue statement) of a material fact contained therein(or in any related registration statement, notification or the like) or by anyomission (or alleged omission) to state therein (or in any related registrationstatement, notification or the like) a material fact required to be statedtherein or necessary to make the statements therein not misleading.

### (d)           If the CollateralAgent determines to exercise its right to sell any or all of the SecuritiesCollateral or Investment Property, upon written request, the applicable Pledgorshall from time to time furnish to the Collateral Agent all such information asthe Collateral Agent may request in order to determine the number of securitiesincluded in the Securities Collateral or Investment Property which may be soldby the Collateral Agent as exempt transactions under the Securities Act and therules of the Securities and Exchange Commission thereunder, as the same arefrom time to time in effect.

### (e)           Each Pledgor furtheragrees that a breach of any of the covenants contained in this Section 9.4will cause irreparable injury to the Collateral Agent and the other SecuredParties, that the Collateral Agent and the other Secured Parties have noadequate remedy at law in respect of such breach and, as a consequence, thateach and every covenant contained in this Section 9.4 shall bespecifically enforceable against such Pledgor, and such Pledgor hereby waivesand agrees not to assert any defenses against an action for specificperformance of such covenants except for a defense that no Event of Default hasoccurred and is continuing.

## SECTION 9.5.              NoWaiver; Cumulative Remedies.

### (a)           No failure on thepart of the Collateral Agent to exercise, no course of dealing with respect to,and no delay on the part of the Collateral Agent in exercising, any right,power or remedy hereunder shall operate as a waiver thereof; nor shall anysingle or partial exercise of any such right, power, privilege or remedyhereunder preclude any other or further exercise thereof or the exercise of anyother right, power, privilege or remedy; nor shall the Collateral Agent berequired to look first to, enforce or exhaust any other security, collateral orguaranties.  All rights and remediesherein provided are cumulative and are not exclusive of any rights or remediesprovided by law or otherwise available.

(b)           Inthe event that the Collateral Agent shall have instituted any proceeding toenforce any right, power, privilege or remedy under this Agreement or any otherLoan Document by foreclosure, sale, entry or otherwise, and such proceedingshall have been discontinued or abandoned for any reason or shall have beendetermined adversely to the Collateral Agent,

 

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then and in every such case, the Pledgors,the Collateral Agent and each other Secured Party shall be restored to theirrespective former positions and rights hereunder with respect to the PledgedCollateral, and all rights, remedies, privileges and powers of the CollateralAgent and the other Secured Parties shall continue as if no such proceeding hadbeen instituted.

## SECTION 9.6.              CertainAdditional Actions Regarding Intellectual Property.  If any Event of Default shall have occurredand be continuing, upon the written demand of the Collateral Agent, eachPledgor shall execute and deliver to the Collateral Agent an assignment orassignments of the Pledged Collateral consisting of the registered Patents,Trademarks and/or Copyrights and Goodwill and such other documents as arenecessary or appropriate to carry out the intent and purposes hereof.  Within five (5) Business Days of writtennotice thereafter from the Collateral Agent, each Pledgor shall make availableto the Collateral Agent, to the extent within such Pledgor’s power andauthority, such personnel in such Pledgor’s employ on the date of the Event ofDefault as the Collateral Agent may reasonably designate to permit such Pledgorto continue, directly or indirectly, to produce, advertise and sell theproducts and services sold by such Pledgor under the registered Patents, Trademarksand/or Copyrights, and such persons shall be available to perform their priorfunctions on the Collateral Agent’s behalf.

# ARTICLE X

# APPLICATION OF PROCEEDS

## SECTION 10.1.            Applicationof Proceeds.  The proceeds receivedby the Collateral Agent in respect of any sale of, collection from or otherrealization upon all or any part of the Pledged Collateral pursuant to the exerciseby the Collateral Agent of its remedies shall be applied, together with anyother sums then held by the Collateral Agent pursuant to this Agreement, inaccordance with the Credit Agreement.

# ARTICLE XI

# MISCELLANEOUS

## SECTION 11.1.            ConcerningCollateral Agent.

### (a)           The Collateral Agenthas been appointed as collateral agent pursuant to the Credit Agreement.  The actions of the Collateral Agent hereunderare subject to the provisions of the Credit Agreement.  The Collateral Agent shall have the righthereunder to make demands, to give notices, to exercise or refrain fromexercising any rights, and to take or refrain from taking action (including therelease or substitution of the Pledged Collateral), in accordance 

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### with this Agreement and the Credit Agreement.  The Collateral Agent may employ agents andattorneys-in-fact in connection herewith and shall not be liable for thenegligence or misconduct of any such agents or attorneys-in-fact selected by itin good faith.  The Collateral Agent mayresign and a successor Collateral Agent may be appointed in the manner providedin the Credit Agreement.  Upon theacceptance of any appointment as the Collateral Agent by a successor CollateralAgent, that successor Collateral Agent shall thereupon succeed to and becomevested with all the rights, powers, privileges and duties of the retiringCollateral Agent under this Agreement, and the retiring Collateral Agent shallthereupon be discharged from its duties and obligations under thisAgreement.  After any retiring CollateralAgent’s resignation, the provisions hereof shall inure to its benefit as to anyactions taken or omitted to be taken by it under this Agreement while it wasthe Collateral Agent.

### (b)           The Collateral Agentshall be deemed to have exercised reasonable care in the custody andpreservation of the Pledged Collateral in its possession if such Pledged Collateralis accorded treatment substantially equivalent to that which the CollateralAgent, in its individual capacity, accords its own property consisting ofsimilar instruments or interests, it being understood that neither theCollateral Agent nor any of the Secured Parties shall have responsibility for(i) ascertaining or taking action with respect to calls, conversions,exchanges, maturities, tenders or other matters relating to any Securities Collateral,whether or not the Collateral Agent or any other Secured Party has or is deemedto have knowledge of such matters or (ii) taking any necessary steps topreserve rights against any person with respect to any Pledged Collateral.

(c)           TheCollateral Agent shall be entitled to rely upon any written notice, statement,certificate, order or other document or any telephone message believed by it tobe genuine and correct and to have been signed, sent or made by the properperson, and, with respect to all matters pertaining to this Agreement and itsduties hereunder, upon advice of counsel selected by it.

(d)           Ifany item of Pledged Collateral also constitutes collateral granted to theCollateral Agent under any other deed of trust, mortgage, security agreement,pledge or instrument of any type, in the event of any conflict between theprovisions hereof and the provisions of such other deed of trust, mortgage,security agreement, pledge or instrument of any type in respect of suchcollateral, the Collateral Agent, in its sole discretion, shall select whichprovision or provisions shall control.

(e)           TheCollateral Agent may rely on advice of counsel as to whether any or all UCCfinancing statements of the Pledgors need to be amended as a result of any ofthe changes described in Section 5.13(a) of the Credit Agreement.  If any Pledgor fails to provide informationto the Collateral Agent about such changes on a timely basis, the CollateralAgent shall not be liable or responsible to any party for any failure tomaintain a perfected security interest in such Pledgor’s property constitutingPledged Collateral, for which the Collateral Agent needed to have informationrelating to such changes.  The CollateralAgent shall have no duty to 

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inquire about such changes if any Pledgordoes not inform the Collateral Agent of such changes, the parties acknowledgingand agreeing that it would not be feasible or practical for the CollateralAgent to search for information on such changes if such information is notprovided by any Pledgor.

## SECTION 11.2.            Collateral Agent May Perform;Collateral Agent Appointed Attorney-in-Fact.  If any Pledgor shall fail to perform anycovenants contained in this Agreement (including such Pledgor’s covenants to(i) pay the premiums in respect of all required insurance policies hereunder,(ii) pay and discharge any taxes, assessments and special assessments, levies,fees and governmental charges imposed upon or assessed against, and landlords’,carriers’, mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s,suppliers’ and warehousemen’s Liens and other claims arising by operation oflaw against, all or any portion of the Pledged Collateral, (iii) make repairs,(iv) discharge Liens or (v) pay or perform any obligations of such Pledgor underany Pledged Collateral) or if any representation or warranty on the part of anyPledgor contained herein shall be breached, the Collateral Agent may (but shallnot be obligated to) do the same or cause it to be done or remedy any suchbreach, and may expend funds for such purpose; provided, however,that the Collateral Agent shall in no event be bound to inquire into thevalidity of any tax, Lien, imposition or other obligation which such Pledgorfails to pay or perform as and when required hereby and which such Pledgor doesnot contest in accordance with the provisions of the Credit Agreement.  Any and all amounts so expended by theCollateral Agent shall be paid by the Pledgors in accordance with theprovisions of Section 10.03 of the Credit Agreement.  Neither the provisions of this Section11.2 nor any action taken by the Collateral Agent pursuant to theprovisions of this Section 11.2 shall prevent any such failure to observeany covenant contained in this Agreement nor any breach of representation orwarranty from constituting an Event of Default. Each Pledgor hereby appoints the Collateral Agent its attorney-in-fact,with full power and authority in the place and stead of such Pledgor and in thename of such Pledgor, or otherwise, from time to time in the Collateral Agent’sdiscretion to take any action and to execute any instrument consistent with theterms of the Credit Agreement, this Agreement and the other Security Documentswhich the Collateral Agent may deem necessary or advisable to accomplish thepurposes hereof (but the Collateral Agent shall not be obligated to and shallhave no liability to such Pledgor or any third party for failure to so do ortake action).  The foregoing grant ofauthority is a power of attorney coupled with an interest is given to securethe performance of each Pledgor’s obligations hereunder and such appointmentshall be irrevocable for the term hereof. Each Pledgor hereby ratifies all that such attorney shall lawfully do orcause to be done by virtue hereof.

## SECTION 11.3.            ContinuingSecurity Interest; Assignment.  ThisAgreement shall create a continuing security interest in the Pledged Collateraland shall (i) be binding upon the Pledgors, their respective successorsand assigns and (ii) inure, together with the rights and remedies of theCollateral Agent hereunder, to the benefit of the Collateral Agent and theother Secured Parties and each of their respective successors, transferees andassigns.  No other persons (including anyother creditor of any Pledgor) shall have any interest herein or any right orbenefit with respect hereto.  Withoutlimiting the generality of the foregoing clause (ii), any 

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## Secured Party may assign or otherwise transfer any indebtedness held byit secured by this Agreement to any other person, and such other person shallthereupon become vested with all the benefits in respect thereof granted tosuch Secured Party, herein or otherwise, subject however, to the provisions ofthe Credit Agreement and, in the case of a Secured Party that is a party to aHedging Agreement, such Hedging Agreement. Each of the Pledgors agrees that its obligations hereunder and thesecurity interest created hereunder shall continue to be effective or bereinstated, as applicable, if at any time payment, or any part thereof, of allor any part of the Secured US Obligations is rescinded or must otherwise be restoredby the Secured Party upon the bankruptcy or reorganization of any Pledgor orotherwise.

## SECTION 11.4.            Termination;Release.  (a)             When all the Secured Obligations have been paid in fulland the Commitments of the Lenders to make any Loan or to issue any Letter ofCredit under the Credit Agreement shall have expired or been sooner terminatedand all Letters of Credit have been terminated or cash collateralized inaccordance with the provisions of the Credit Agreement, this Agreement shallterminate.  Upon termination of thisAgreement the Pledged Collateral shall be released from the Lien of thisAgreement.  Upon such release or anyrelease of Pledged Collateral or any part thereof in accordance with theprovisions of the Credit Agreement, the Collateral Agent shall, upon therequest and at the sole cost and expense of the Pledgors, assign, transfer anddeliver to Pledgor, against receipt and without recourse to or warranty by theCollateral Agent except as to the fact that the Collateral Agent has notencumbered the released assets, such of the Pledged Collateral or any partthereof to be released (in the case of a release) as may be in possession ofthe Collateral Agent and as shall not have been sold or otherwise applied pursuantto the terms hereof, and, with respect to any other Pledged Collateral, properdocuments and instruments (including UCC-3 termination financingstatements or releases) acknowledging the termination hereof or the release ofsuch Pledged Collateral, as the case may be.

(b)           Notwithstanding the foregoing, if (i)the Obligations have been paid in full and the Commitments of the Lenders tomake any Loan or to issue any Letter of Credit under the Credit Agreement shallhave expired or been sooner terminated and all Letters of Credit have beenterminated or cash collateralized in accordance with the provisions of theCredit Agreement, (ii) Secured US Obligations of the type described in clause(b) and/or clause (c) of the definition of Secured US Obligations (“RemainingSecured Obligations”) remain outstanding and (iii) all or a portion of therepayment of the Obligations is financed by the proceeds of Indebtedness of oneor more Loan Parties or any affiliate of a Loan Party (“Refinancing Indebtedness”)which Refinancing Indebtedness is secured by property of such persons on anequal and ratable basis with the Remaining Secured Obligations, this Agreementshall terminate as if the Remaining Secured Obligations have been paid in fulland the provisions of paragraph (a) of this Section 11.4 shallapply concurrently with the incurrence of such Refinancing Indebtedness. Forthe avoidance of doubt, if the Refinancing Indebtedness is not secured, thisAgreement shall not terminate but shall remain in full force and effect.

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SECTION 11.5.      Modificationin Writing. No amendment, modification, supplement, termination or waiver of or toany provision hereof, nor consent to any departure by any Pledgor therefrom,shall be effective unless the same shall be made in accordance with the termsof the Credit Agreement and unless in writing and signed by the CollateralAgent.  Any amendment, modification orsupplement of or to any provision hereof, any waiver of any provision hereofand any consent to any departure by any Pledgor from the terms of any provisionhereof in each case shall be effective only in the specific instance and forthe specific purpose for which made or given. Except where notice is specifically required by this Agreement or anyother document evidencing the Secured US Obligations, no notice to or demand onany Pledgor in any case shall entitle any Pledgor to any other or furthernotice or demand in similar or other circumstances.

## SECTION 11.6.            Notices.  Unless otherwise provided herein or in theCredit Agreement, any notice or other communication herein required or permittedto be given shall be given in the manner and become effective as set forth inthe Credit Agreement, as to any Pledgor, addressed to it at the address of theUS Borrower set forth in the Credit Agreement and as to the Collateral Agent, addressedto it at the address set forth in the Credit Agreement, or in each case at suchother address as shall be designated by such party in a written notice to theother party complying as to delivery with the terms of this Section 11.6.

## SECTION 11.7.            GoverningLaw, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.  Sections 10.09 and 10.10of the Credit Agreement are incorporated herein, *mutatis mutandis*, as if a part hereof.

## SECTION 11.8.            Severabilityof Provisions.  Any provision hereofwhich is invalid, illegal or unenforceable in any jurisdiction shall, as tosuch jurisdiction, be ineffective to the extent of such invalidity, illegalityor unenforceability without invalidating the remaining provisions hereof oraffecting the validity, legality or enforceability of such provision in anyother jurisdiction.

## SECTION 11.9.            Executionin Counterparts.  This Agreement andany amendments, waivers, consents or supplements hereto may be executed in anynumber of counterparts and by different parties hereto in separate counterparts,each of which when so executed and delivered shall be deemed to be an original,but all such counterparts together shall constitute one and the same agreement.

## SECTION 11.10.            Business Days. In the event any time period or any date provided in this Agreement endsor falls on a day other than a Business Day, then such time period shall bedeemed to end and such date shall be deemed to fall on the next succeeding BusinessDay, and performance herein may be made on such Business Day, with the sameforce and effect as if made on such other day.

## SECTION 11.11.            No Credit for Payment of Taxes or Imposition.  Such Pledgor shall not be entitled to anycredit against the principal, premium, if any, or interest payable under 

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## the Credit Agreement, and such Pledgor shall not be entitled to anycredit against any other sums which may become payable under the terms thereofor hereof, by reason of the payment of any Tax on the Pledged Collateral or anypart thereof.

## SECTION 11.12.            No Claims Against Collateral Agent.  Nothing contained in this Agreement shallconstitute any consent or request by the Collateral Agent, express or implied,for the performance of any labor or services or the furnishing of any materialsor other property in respect of the Pledged Collateral or any part thereof, noras giving any Pledgor any right, power or authority to contract for or permitthe performance of any labor or services or the furnishing of any materials orother property in such fashion as would permit the making of any claim againstthe Collateral Agent in respect thereof or any claim that any Lien based on theperformance of such labor or services or the furnishing of any such materialsor other property is prior to the Lien hereof.

## SECTION 11.13.            No Release. Nothing set forth in this Agreement or any other Loan Document, nor theexercise by the Collateral Agent of any of the rights or remedies hereunder,shall relieve any Pledgor from the performance of any term, covenant, conditionor agreement on such Pledgor’s part to be performed or observed under or in respectof any of the Pledged Collateral or from any liability to any person under orin respect of any of the Pledged Collateral or shall impose any obligation onthe Collateral Agent or any other Secured Party to perform or observe any suchterm, covenant, condition or agreement on such Pledgor’s part to be soperformed or observed or shall impose any liability on the Collateral Agent orany other Secured Party for any act or omission on the part of such Pledgorrelating thereto or for any breach of any representation or warranty on thepart of such Pledgor contained in this Agreement, the Credit Agreement or theother Loan Documents, or under or in respect of the Pledged Collateral or madein connection herewith or therewith. Anything herein to the contrary notwithstanding, neither the CollateralAgent nor any other Secured Party shall have any obligation or liability underany contracts, agreements and other documents included in the PledgedCollateral by reason of this Agreement, nor shall the Collateral Agent or anyother Secured Party be obligated to perform any of the obligations or duties ofany Pledgor thereunder or to take any action to collect or enforce any suchcontract, agreement or other document included in the Pledged Collateralhereunder.  The obligations of eachPledgor contained in this Section 11.13 shall survive the terminationhereof and the discharge of such Pledgor’s other obligations under thisAgreement, the Credit Agreement and the other Loan Documents.

## SECTION 11.14.            Obligations Absolute.  All obligations of each Pledgor hereundershall be absolute and unconditional irrespective of:

(i)          any bankruptcy, insolvency,reorganization, arrangement, readjustment, composition, liquidation or the likeof any other Pledgor;

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(ii)         any lack of validity or enforceabilityof the Credit Agreement, any Hedging Agreement or any other Loan Document, orany other agreement or instrument relating thereto;

(iii)        any change in the time, manner or placeof payment of, or in any other term of, all or any of the Secured USObligations, or any other amendment or waiver of or any consent to anydeparture from the Credit Agreement, any Hedging Agreement or any other LoanDocument or any other agreement or instrument relating thereto;

(iv)       any pledge, exchange, release ornon-perfection of any other collateral, or any release or amendment or waiverof or consent to any departure from any guarantee, for all or any of theSecured US Obligations;

(v)        any exercise, non-exercise or waiver ofany right, remedy, power or privilege under or in respect hereof, the CreditAgreement, any Hedging Agreement or any other Loan Document except asspecifically set forth in a waiver granted pursuant to the provisions of Section 11.5hereof; or

(vi)       any other circumstances which mightotherwise constitute a defense available to, or a discharge of, any Pledgor.

[REMAINDER OFTHIS PAGE INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, eachPledgor and the Collateral Agent have caused this Agreement to be duly executedand delivered by their duly authorized officers as of the date first above written.
|        |   | SCIELE PHARMA, INC.,       |
|--------|--------|----------------------------|
|   |   | as Pledgor                 |
|   |   |                       |
|   |   |                       |
|   |   | By:                        |   | /s/ Darrell Borne |
|   |   |                       |   | Name: Darrell Borne |
|   |   |                       |   | Title: EVP, CFO, Secretary and Treasurer |
|   |   |                       |   |   |
|   |   |                       |   |   |
|   |   | SCIELE PHARMA SALES, INC., |
|   |   | as Pledgor                 |
|   |   |                       |
|   |   |                       |
|   |   | By:                        |   | /s/ David Fisherskeller |
|   |   |                       |   | Name: David Fisherskeller |
|   |   |                       |   | Title: Secretary |

[Signature Page to Security Agreement]

 

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|        |   | UBS AG, STAMFORD BRANCH, |
|--------|--------|--------------------------|
|   |   | as Collateral Agent      |
|   |   |                     |
|   |   |                     |   |   |
|   |   | By:                      |   | /s/ Richard L. Tavrow |
|   |   |                     |   | Name: Richard L. Tavrow |
|   |   |                     |   | Title: Director |
|   |   |                     |   |   |
|   |   |                     |   |   |
|   |   | By:                      |   | /s/ Irja R. Otsa |
|   |   |                     |   | Name: Irja R. Otsa |
|   |   |                     |   | Title: Associate Director |

 

[Signature Page toSecurity Agreement]

 

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