**Exhibit 10.3**

 

**AMENDED AND RESTATED FIRSTLIEN SECURITY AGREEMENT**

** **

Dated as of May 6, 2010FromThe Grantors referred to hereinas GrantorsToGE BUSINESS FINANCIAL SERVICES INC.as Collateral Agent

 

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** **

**T**ABLE  OF  CONTENTS

** **
| ** **                                                                             | **Page** |
|----------------------------------------------------------------------------------------|----------|
|                                                                                   |     |
| SECTION 1.  Grant of Security                                                     | 2        |
|                                                                                   |     |
| SECTION 2.  Security for Obligations                                              | 5        |
|                                                                                   |     |
| SECTION 3.  Grantors Remain Liable                                                | 5        |
|                                                                                   |     |
| SECTION 4.  Delivery and Control of Security Collateral and Chattel Paper         | 5        |
|                                                                                   |     |
| SECTION 5.  Maintaining the Collateral Account; Pledged Accounts                  | 6        |
|                                                                                   |     |
| SECTION 6.  Investing of Amounts in the Collateral Account                        | 6        |
|                                                                                   |     |
| SECTION 7.  Release of Amounts                                                    | 7        |
|                                                                                   |     |
| SECTION 8.  Representations and Warranties                                        | 7        |
|                                                                                   |     |
| SECTION 9.  Further Assurances                                                    | 9        |
|                                                                                   |     |
| SECTION 10.  As to Equipment and Inventory                                        | 10       |
|                                                                                   |     |
| SECTION 11.  Insurance                                                            | 10       |
|                                                                                   |     |
| SECTION 12.  Post-Closing Changes                                                 | 11       |
|                                                                                   |     |
| SECTION 13.  As to Intellectual Property Collateral                               | 11       |
|                                                                                   |     |
| SECTION 14.  Commercial Tort Claims                                               | 12       |
|                                                                                   |     |
| SECTION 15.  Transfers and Other Liens                                            | 12       |
|                                                                                   |     |
| SECTION 16.  Collateral Agent Appointed Attorney in Fact                          | 12       |
|                                                                                   |     |
| SECTION 17.  Collateral Agent May Perform                                    | 13       |
|                                                                                   |     |
| SECTION 18.  The Collateral Agent’s Duties                                   | 13       |
|                                                                                   |     |
| SECTION 19.  As to Receivables and Security Collateral                            | 13       |
|                                                                                   |     |
| SECTION 20.  Remedies                                                             | 13       |
|                                                                                   |     |
| SECTION 21.  Indemnity and Expenses                                               | 15       |
|                                                                                   |     |
| SECTION 22.  Amendments; Waivers; Additional Grantors; Etc.                       | 15       |
|                                                                                   |     |
| SECTION 23.  Notices, Etc.                                                        | 16       |
|                                                                                   |     |
| SECTION 24.  Continuing Security Interest; Assignments under the Credit Agreement | 16       |

 

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| SECTION 25.  Release; Termination      | 16     |
|---------------------------------------------|--------|
|                                        |   |
| SECTION 26.  Execution in Counterparts | 17     |
|                                        |   |
| SECTION 27. Governing  Law             | 17     |

 
| Schedules      |   |                                                                                                                            |
|----------------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                            |
| Schedule I     | — | Investment  Property                                                                                                            |
| Schedule II    | — | Pledged  Accounts                                                                                                               |
| Schedule III   | — | [Intentionally  Omitted].                                                                                                       |
| Schedule IV    | — | Intellectual  Property                                                                                                          |
| Schedule V     | — | Commercial  Tort Claims                                                                                                         |
| Schedule VI    | — | Location,  Chief Executive Office, Type of Organization, Jurisdiction of Organization  and Organizational Identification Number |
| Schedule VII   | — | Changes  in Name, Location, Etc.                                                                                                |
| Schedule VIII  | — | Locations  of Equipment and Inventory                                                                                           |
|           |   |                                                                                                                            |
| Exhibits       |   |                                                                                                                            |
|           |   |                                                                                                                            |
| Exhibit A | — | [Intentionally  Omitted]                                                                                                        |
| Exhibit B | — | Form of  Copyright Security Agreement                                                                                      |
| Exhibit C | — | Form of  Patent Security Agreement                                                                                         |
| Exhibit D | — | Form of  Trademark Security Agreement                                                                                      |
| Exhibit E | — | Form of  Security Agreement Supplement                                                                                     |

 

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** **

**AMENDED AND RESTATED FIRSTLIEN SECURITY AGREEMENT**

** **

AMENDED AND RESTATED FIRST LIEN SECURITY AGREEMENTdated as of May 6, 2010 (this “**Agreement**”)made by UNIVERSAL HOSPITAL SERVICES, INC., a Delaware corporation (the “**Borrower**”), UHS HOLDCO, INC., a Delawarecorporation (the “**Parent**”) andany other Person that subsequently becomes a party hereto (together with theBorrower, the “**Grantors**”),to GE BUSINESS FINANCIAL SERVICES INC. (formerly known as Merrill LynchBusiness Financial Services Inc.), as collateral agent (together with anysuccessor collateral agent appointed pursuant to Article 9 of theCredit Agreement referred to below, the “**Collateral Agent**”) for the SecuredParties (as defined in the Credit Agreement referred to below).

 

**PRELIMINARY STATEMENTS**

** **

The Borrower and the Parent, have entered into a FirstLien Security Agreement dated May 31,2007 (the “**Existing Security Agreement**”)securing the obligations of Borrower under that certain Credit Agreement datedas of May 31, 2007 (the “**Existing Credit Agreement**”)among the Borrower, the Parent, the lenders andfinancial institutions from time to time party thereto, and GE BusinessFinancial Services, Inc., as Administrative Agent.

 

Theparties thereto have amended and restated the Existing Credit Agreementpursuant to the Amended and Restated Credit Agreement dated as of the datehereof (as amended, amended and restated, supplemented or otherwise modifiedfrom time to time, the “**Credit Agreement**”) among the Borrower, the Parent, theLenders party thereto, the Initial L/C Issuer, the Initial Swing Line Lender,the Administrative Agent, and GE Capital Markets, Inc. and Banc of AmericaSecurities, LLC, as Co-Lead Arrangers and as Co-Book Runners.

 

Each Grantor is the owner ofthe indebtedness (the “**Initial Pledged Debt**”)set forth opposite such Grantor’s name on and as otherwise described inSchedule I hereto and issued by the obligors named therein.

 

Each Grantor is the owner ofthe deposit accounts (the “**Pledged Deposit Accounts**”) and the securities accounts (the“**PledgedSecurities Accounts**”) set forth opposite such Grantor’s name onSchedule II hereto.

 

The Borrower will be theowner of an account to be opened at the request of the Collateral Agent (the “**Collateral Account**”and, together with the Pledged Deposit Accounts and the Pledged SecuritiesAccounts, the “**Pledged Accounts**”).

 

The Grantors own the otherCollateral described below.

 

It is a condition precedentto the effectiveness of the amendment and restatement of the Existing CreditAgreement that the Grantors shall have amended and restated the ExistingSecurity Agreement and granted the security interest contemplated by thisAgreement.  Each Grantor will derivesubstantial direct and indirect benefit from the transactions contemplated bythe Loan Documents.

 

Terms defined in the CreditAgreement and not otherwise defined in this Agreement are used in thisAgreement as defined in the Credit Agreement. Further, unless otherwise defined in this Agreement or in the CreditAgreement, terms defined in Article 8 or 9 of the UCC (as defined below)are used in this Agreement as such terms are defined in such Article 8 or9.  “**UCC**” means the Uniform Commercial Codeas in effect from time to time in the State of New York; provided that, if perfection or theeffect of perfection or non-perfection or the priority of the security interestin any Collateral is governed by the 

 

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Uniform Commercial Code asin effect in a jurisdiction other than the State of New York,  “**UCC**” means the Uniform Commercial Code as in effect fromtime to time in such other jurisdiction for purposes of the provisions hereofrelating to such perfection, effect of perfection or non-perfection orpriority.

 

NOW, THEREFORE, in considerationof the premises and in order to induce (a) the Lenders to amend andrestate the Existing Credit Agreement and make Loans and issue Letters ofCredit under the Credit Agreement, (b) Affiliates of the Lenders to incurCash Management Obligations, and (c) the Hedge Banks to enter into SecuredHedge Agreements from time to time, each Grantor hereby agrees with theCollateral Agent for the ratable benefit of the Secured Parties as follows:

 

SECTION 1.  Grant of Security.  Each Grantor hereby grants to the CollateralAgent, for the ratable benefit of the Secured Parties, a security interest insuch Grantor’s right, title and interest in and to the following, in each case,as to each type of property described below, whether now owned or hereafteracquired by such Grantor, wherever located, and whether now or hereafterexisting or arising (collectively, the “**Collateral**”):

 

## (a)                                  all equipmentin all of its forms, including, without limitation, all machinery, tools, motorvehicles, vessels, aircraft, furniture and fixtures, and all parts thereof andall accessions thereto, including, without limitation, computer programs andsupporting information that constitute equipment within the meaning of the UCC(any and all such property being the “**Equipment**”);

##  

## (b)                                 all inventoryin all of its forms, including, without limitation, (i) all raw materials,work in process, finished goods and materials used or consumed in themanufacture, production, preparation or shipping thereof, (ii) goods inwhich such Grantor has an interest in mass or a joint or other interest orright of any kind (including, without limitation, goods in which such Grantorhas an interest or right as consignee) and (iii) goods that are returnedto or repossessed or stopped in transit by such Grantor), and all accessionsthereto and products thereof and documents therefor, including, withoutlimitation, computer programs and supporting information that constituteinventory within the meaning of the UCC (any and all such property being the “**Inventory**”);

##  

## (c)                                  all accounts(including, without limitation, health-care-insurance receivables), chattelpaper (including, without limitation, tangible chattel paper and electronicchattel paper), instruments (including, without limitation, promissory notes),deposit accounts, securities accounts, letter-of-credit rights, generalintangibles (including, without limitation, payment intangibles) and otherobligations of any kind, whether or not arising out of or in connection withthe sale or lease of goods or the rendering of services and whether or notearned by performance, and all rights now or hereafter existing in and to allsupporting obligations and in and to all security agreements, mortgages, Liens,leases, letters of credit and other contracts securing or otherwise relating tothe foregoing property (any and all of such accounts, chattel paper,instruments, deposit accounts, securities accounts, letter-of-credit rights,general intangibles and other obligations, to the extent not referred to insubsection (d) or (e) below, being the “**Receivables**,” and any and all such supporting obligations,security agreements, mortgages, Liens, leases, letters of credit and othercontracts being the “**Related Contracts**”);

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## (d)                                 the following(collectively, the “**Security****Collateral**”):

##  

### (i)                                     the InitialPledged Debt and the instruments, if any, evidencing the Initial Pledged Debt,and all interest, cash, instruments and other property from time to timereceived, receivable or otherwise distributed in respect of or in exchange forany or all of the Initial Pledged Debt;

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### ****

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### (ii)                                  all additionalindebtedness from time to time owed to such Grantor (such indebtedness,together with the Initial Pledged Debt, being the “**Pledged Debt**”) and the instruments,if any, evidencing such indebtedness, and all interest, cash, instruments andother property from time to time received, receivable or otherwise distributedin respect of or in exchange for any or all of such indebtedness;

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## (e)                                  Contracts;

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## (f)                                    the following(collectively, the “**Account Collateral**”):

##  

### (i)                                     the PledgedDeposit Accounts, the Pledged Securities Accounts, the Collateral Account andall funds and financial assets from time to time credited thereto (includingwithout limitation, all Cash Equivalents), all interest, dividends, distributions,cash, instruments and other property from time to time received, receivable orotherwise distributed in respect of or in exchange for any or all of such fundsand financial assets, and all certificates and instruments, if any, from timeto time representing or evidencing the Pledged Deposit Accounts, the PledgedSecurities Accounts or the Collateral Account;

###  

### (ii)                                  all promissorynotes, certificates of deposit, checks and other instruments from time to timedelivered to or otherwise possessed by the Collateral Agent for or on behalf ofsuch Grantor in substitution for or in addition to any or all of the thenexisting Account Collateral; and

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### (iii)                               all interest,dividends, distributions, cash, instruments and other property from time totime received, receivable or otherwise distributed in respect of or in exchangefor any or all of the then existing Account Collateral; and

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## (g)                                 the following(collectively, the “**Intellectual PropertyCollateral**”):

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### (i)                                     all patents,patent applications, utility models and statutory invention registrations, allinventions claimed or disclosed therein and all improvements thereto (“**Patents**”);

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### (ii)                                  all trademarks,service marks, domain names, trade dress, logos, designs, slogans, trade names,business names, corporate names and other source identifiers, whetherregistered or unregistered (provided that no security interest shall be grantedin United States intent-to-use trademark applications to the extent that, andsolely during the period in which, the grant of a security interest thereinwould impair the validity or enforceability of such intent-to-use trademarkapplications under applicable federal law), together, in each case, with thegoodwill symbolized thereby (“**Trademarks**”);

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### (iii)                               all copyrights,including, without limitation, copyrights in Computer Software (as hereinafterdefined), internet web sites and the content thereof, whether registered orunregistered (“**Copyrights**”);

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### (iv)                              all computersoftware, programs and databases (including, without limitation, source code,object code and all related applications and data files), firmware anddocumentation and materials relating thereto, together with any and allmaintenance rights, service rights, programming rights, hosting rights, testrights, improvement rights, renewal rights and indemnification rights and anysubstitutions, replacements, improvements, error corrections, updates and newversions of any of the foregoing (“**Computer Software**”);

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### ****

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### (v)                                 allconfidential and proprietary information, including, without limitation,know-how, trade secrets, manufacturing and production processes and techniques,inventions, research and development information, databases and data,including, without limitation, technical data, financial, marketing andbusiness data, pricing and cost information, business and marketing plans andcustomer and supplier lists and information (collectively, “**Trade Secrets**”),and all other intellectual, industrial and intangible property of any type,including, without limitation, industrial designs and mask works;

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### (vi)                              allregistrations and applications for registration for any of the foregoing,including, without limitation, those registrations and applications forregistration set forth in Schedule IV hereto, together with all reissues,divisions, continuations, continuations-in-part, extensions, renewals andreexaminations thereof;

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### (vii)                           all tangibleembodiments of the foregoing, all rights in the foregoing provided byinternational treaties or conventions, all rights corresponding theretothroughout the world and all other rights of any kind whatsoever of suchGrantor accruing thereunder or pertaining thereto;

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### (viii)                        all agreements,permits, consents, orders and franchises relating to the license, development,use or disclosure of any of the foregoing to which such Grantor, now orhereafter, is a party or a beneficiary (all of the foregoing collectivelyreferred to as “**IPAgreements**”); and

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### (ix)                                any and allclaims for damages and injunctive relief for past, present and futureinfringement, dilution, misappropriation, violation, misuse or breach withrespect to any of the foregoing, with the right, but not the obligation, to suefor and collect, or otherwise recover, such damages;

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## (h)                                 the commercialtort claims described in Schedule V hereto (together with any commercial tortclaims as to which the Grantors have complied with the requirements of Section 14,the “**Commercial Tort Claims Collateral**”);

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## (i)                                     all books andrecords (including, without limitation, customer lists, credit files, printoutsand other computer output materials and records) of such Grantor pertaining toany of the Collateral; and

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## (j)                                     all proceedsof, collateral for, income, royalties and other payments now or hereafter dueand payable with respect to, and supporting obligations relating to, any andall of the Collateral (including, without limitation, proceeds, collateral andsupporting obligations that constitute property of the types described insubsections (a) through (i) of this Section 1) and, tothe extent not otherwise included, all (A) payments under insurance(whether or not the Collateral Agent is the loss payee thereof), or anyindemnity, warranty or guaranty, payable by reason of loss or damage to orotherwise with respect to any of the foregoing Collateral, and (B) cash.

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Notwithstanding anythingherein to the contrary, this Agreement shall not constitute a grant of securityinterest in (and the term “Collateral” shall be deemed not to include) (A) anylease, license, contract, property rights or agreement to which any Grantor isa party or any of its rights or interests thereunder, to the extent that andfor so long as (but only for so long as), the grant of such security interestshall (1) constitute or result in the abandonment, invalidation orunenforceability under applicable law of any right, title or interest of anyGrantor therein or (2) constitute or result in a material breach ortermination pursuant to the terms of, or a material default, under, any suchlease, license, contract, property rights or agreement (other than to theextent that any such term would be rendered ineffective pursuant to Sections9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or 

 

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provisions)); (B) anyEquipment owned by any Grantor that is subject to a purchase money Lien or aCapitalized Lease (as defined in the Credit Agreement) permitted pursuant tothe Credit Agreement if the contract or other agreement in which such Lien isgranted (or in the documentation providing for such Capitalized Lease)prohibits the creation of any other Lien on such Equipment, but only, in eachcase, to the extent and for so long as (but only for so long as), theIndebtedness (as defined in the Credit Agreement) secured by the applicableLien or the applicable Capitalized Lease has not been repaid in full or theapplicable prohibition has not otherwise been removed or terminated; *provided* that any proceeds, substitutions or replacements of anyproperty included in subclauses (A) and (B) above shall not beexcluded (unless such proceeds, substitutions or replacements would itselfconstitute property excluded under subclause (A) or (B)); (C) anyEquity Interests or investment property in any subsidiary or joint venture; or (D) motorvehicles and other assets subject to certificates of title and letter of creditrights, and assets requiring perfection through control agreements (other thandeposit accounts and securities accounts (excluding any payroll, trust, pettycash, zero balance and tax withholding accounts).

 

SECTION 2.  Security for Obligations.  This Agreement secures, in the case of eachGrantor, the payment of all Obligations of such Grantor now or hereafterexisting under the Loan Documents and all Cash Management Obligations andSecured Hedge Obligations of such Grantor, whether direct or indirect, absoluteor contingent, and whether for principal, reimbursement obligations, interest,fees, premiums, penalties, indemnifications, contract causes of action, costs,expenses or otherwise (all such Obligations being the “**Secured Obligations**”). Without limiting the generality of the foregoing, this Agreementsecures, as to each Grantor, the payment of all amounts that constitute part ofthe Secured Obligations and would be owed by such Grantor to any Secured Partyunder the Loan Documents, but for the fact that they are unenforceable or notallowable due to the existence of a bankruptcy, reorganization or similarproceeding involving a Loan Party.

 

SECTION 3.  Grantors Remain Liable.  Anything herein to the contrarynotwithstanding, (a) each Grantor shall remain liable under the contractsand agreements included in such Grantor’s Collateral to the extent set forththerein to perform all of its duties and obligations thereunder to the sameextent as if this Agreement had not been executed, (b) the exercise by theCollateral Agent of any of the rights hereunder shall not release any Grantorfrom any of its duties or obligations under the contracts and agreementsincluded in the Collateral and (c) no Secured Party shall have any obligationor liability under the contracts and agreements included in the Collateral byreason of this Agreement or any other Loan Document, nor shall any SecuredParty be obligated to perform any of the obligations or duties of any Grantorthereunder or to take any action to collect or enforce any claim for paymentassigned hereunder.

 

SECTION 4.  Delivery and Control of SecurityCollateral and Chattel Paper. (a)  All instruments representing or evidencing Security Collateralin excess of $500,000 in principal amount individually shall be delivered toand held by or on behalf of the Collateral Agent pursuant hereto and shall bein suitable form for transfer by delivery, or shall be accompanied by dulyexecuted instruments of transfer or assignment in blank, all in form andsubstance reasonably satisfactory to the Collateral Agent.  Upon the occurrence and during thecontinuance of (x) an Event of Default, the Collateral Agent shall havethe right, at any time, to (i) transfer to or to register in the name ofthe Collateral Agent or any of its nominees any or all of the SecurityCollateral and (ii) exchange instruments representing or evidencingSecurity Collateral for instruments of smaller or larger denominations; *provided*that the Collateral Agent provides written noticeto the applicable Grantor.  If anyGrantor has possession of any Chattel Paper representing monetary obligationsin excess of $500,000, such Chattel Paper shall be marked with the followinglegend: “This writing and the obligations evidenced or secured thereby aresubject to the security interest of Merrill Lynch Capital, a division ofMerrill Lynch Business Financial Services Inc., as Collateral Agent, for thebenefit of the Collateral Agent and certain Lenders”.  If any Grantor has possession of any electronicchattel paper representing monetary obligations in excess of $500,000, eachGrantor shall take all steps necessary to grant the Collateral Agent control ofall such electronic chattel paper in accordance

 

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#  

# with the UCC and all “transferable records” asdefined in each of the Uniform Electronic Transactions Act and the ElectronicSignatures in Global and National Commerce Act.

 

## (b)                                 Upon theoccurrence and during the continuance of an Event of Default, the CollateralAgent shall have the right to transfer to or to register in the name of theCollateral Agent or any of its nominees any or all of the Security Collateral.

##  

## (c)                                  Upon therequest of the Collateral Agent upon the occurrence and during the continuanceof an Event of Default, each Grantor will notify each issuer of SecurityCollateral granted by it hereunder that such Security Collateral is subject tothe security interest granted hereunder.

##  

SECTION 5.  Maintaining the Collateral Account;Pledged Accounts.  So long as anyLoan or any other Obligation of any Loan Party under any Loan Document shallremain unpaid (other than contingent indemnification obligations not yetaccrued and payable and which by their terms survive termination of the LoanDocument), any Letter of Credit shall be outstanding, or any Lender shall haveany Commitment (*provided* that Letters of Creditshall be deemed no longer outstanding hereunder in accordance with the CashCollateralization or back-to-back letter of credit provisions set forth in Section 2.03(g) ofthe Credit Agreement):

 

## (a)                                  Each Grantorwill maintain the Pledged Accounts only with the financial institution actingas Collateral Agent hereunder or with a bank or other institution (a “**Pledged Account Bank**”) that has agreed withsuch Grantor and the Collateral Agent to comply, upon the occurrence and duringthe continuance of an Event of Default, and upon a receipt of notice ofexclusive control, to comply with instructions originated by the CollateralAgent directing the disposition of funds in such deposit account without thefurther consent of such Grantor, such agreement to be in form and substancereasonably satisfactory to the Collateral Agent (a “**Control Agreement**”); *provided,however*, that this Section 5(a) shall not apply (i) todeposit accounts to the extent the average daily balance, measurable over atrailing 30 day period, on deposit in each such deposit account does not exceed$50,000 at any time or operated solely as a payroll account, zero balanceaccount or tax withholding account, (ii) to securities accounts to theextent that the average daily value, measurable over a 30 day trailing period,of financial assets credited to each such securities account does not exceed$50,000 at any time, and (iii) as expressly limited by clause (c) below.  Each Grantor agrees that at no time shall thesum of (x) the average daily balance, measurable over a trailing 30 dayperiod, of amounts on deposit in all deposit accounts for which there is not ineffect a Control Agreement and (y) the average daily value, measurableover a trailing 30 day period, of financial assets credited to all securitiesaccounts for which there is not in effect a Control Agreement, exceed in theaggregate $250,000.

##  

## (b)                                 If an Event ofDefault shall have occurred or be continuing, the Collateral Agent may, at anytime and without notice to, or consent from, the Grantor, transfer, or directthe transfer of funds from the Pledged Accounts to satisfy the Grantor’sObligations under the Loan Documents.

##  

## (c)                                  Anything inclause (a) above to the contrary notwithstanding, the Grantors shall notbe required to deliver fully-executed Control Agreements with respect to thePledged Securities Accounts until June 21, 2010.  At the request of the Grantors, such date maybe extended in the reasonable discretion of the Collateral Agent.

##  

SECTION 6.  Investing of Amounts in the CollateralAccount.  During periods when theCollateral Agent exercises sole control over the Collateral Account, theCollateral Agent shall, subject to the provisions of Sections 5, 7and 20:  (a) from timeto time, invest, or direct the applicable Pledged Account Bank to invest,amounts received with respect to the Collateral Account in such CashEquivalents credited to the Collateral Account as the Borrower may select,(b) from time to time, invest

 

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# interest paid on the Cash Equivalents referred to insubsection (a) above and reinvest other proceeds of any such CashEquivalents that may mature or be sold, in each case in such Cash Equivalentscredited in the same manner, (c) deposit interest and proceeds that arenot invested or reinvested in Cash Equivalents as provided above in theCollateral Account and (d) have the right to exchange, or direct theapplicable Pledged Account Bank to exchange, such Cash Equivalents for similarCash Equivalents of smaller or larger determinations, or for other CashEquivalents, credited to the Collateral Account.

 

SECTION 7.  Release of Amounts.  To the extent that (a) any proceeds weredeposited in a Pledged Account during the continuance of an Event of Defaultand (b) there are remaining proceeds in such Pledged Account upon thetermination of such Event of Default, so long as no Event of Default shall haveoccurred and be continuing, the Collateral Agent will pay and release, ordirect the applicable Pledged Account Bank to pay and release, to theapplicable Grantor or at its order or, at the request of such Grantor, to theCollateral Agent to be applied to the Obligations of the Grantors under theLoan Documents, such amount, if any, as is then on deposit in such PledgedAccount, in each case to the extent permitted to be released under the terms ofthe Credit Agreement.

 

SECTION 8.  Representations and Warranties.  Each Grantor represents and warrants asfollows:

 

## (a)                                  Such Grantor’sexact legal name, as defined in Section 9-503(a) of the UCC, iscorrectly set forth in Schedule VI hereto. Such Grantor’s location, chief executive office, type of organization,jurisdiction of organization and organizational identification number, if any,is set forth in Schedule VI hereto and is accurate in all materialrespects.  Within the five yearspreceding the date hereof, such Grantor has not changed its legal name,location (as defined in the UCC), chief executive office, type of organization,jurisdiction of organization or organizational identification number, if any,from those set forth in Schedule VI hereto except as set forth inSchedule VII hereto.

##  

## (b)                                 Such Grantor isthe legal and beneficial owner of, or with respect to Intellectual Property hasthe right to use, the Collateral for which a security interest is granted orpurported to be granted by it under this Agreement free and clear of any Lien,claim, option or right of others, except for the security interest createdunder this Agreement or otherwise permitted under the Credit Agreement.  No effective financing statement or otherinstrument similar in effect covering all or any part of the Collateral orlisting such Grantor as debtor is on file in any relevant recording office,except such as may have been filed in favor of the Collateral Agent relating tothe Loan Documents or as otherwise permitted under the Credit Agreement.

##  

## (c)                                  All of theEquipment and Inventory (other than Equipment and Inventory that is (i) locatedat customer or supplier locations in the normal course of business or (ii) intransit or out for repair or further process) of such Grantor are located atthe places specified therefor in Schedule VIII hereto or at another owned orleased location as to which such Grantor has complied (or will comply withinthe period set forth therein) with the requirements of Section 10or otherwise has an aggregate book value of no more than $250,000.

##  

## (d)                                 None of theReceivables or Agreement Collateral is evidenced by a promissory note or other instrumentin excess of (i) $250,000 individually and (ii) $1,000,000 in theaggregate, that has not been delivered to the Collateral Agent.

##  

## (e)                                  If such Grantoris an issuer of Security Collateral, such Grantor confirms that it has receivednotice of the security interest granted hereunder.

##  

## (f)                                    The PledgedDebt pledged by such Grantor hereunder has been duly authorized, authenticatedor issued and delivered, is the legal, valid and binding obligation of theissuers thereof, is

 

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## not in default and, to the extent applicable,is evidenced by one or more promissory notes (which promissory notes have beendelivered to the Collateral Agent).

##  

## (g)                                 The InitialPledged Debt constitutes all of the outstanding indebtedness in excess of (i) $100,000individually and (ii) $500,000 in the aggregate, owed to such Grantor bythe issuers thereof evidenced by a note or other instrument and is outstandingin the principal amount indicated on Schedule I hereto.

##  

## (h)                                 Such Grantorhas (i) no deposit accounts to the extent that the average daily balance,measurable over a 30 day trailing period, on deposit in each such depositaccount is in excess of $50,000 other than the Collateral Account, or PledgedDeposit Accounts listed on Schedule II hereto or operated solely as a payrollaccount, zero balance account or tax withholding account and additional PledgedDeposit Accounts as to which such Grantor has complied with the applicablerequirements of Section 5, and (ii) no securities accounts tothe extent that the average daily value, measurable over a 30 day trailingperiod, of financial assets credited to each such securities account is inexcess of $50,000 other than the Pledged Securities Accounts listed on ScheduleII hereto and additional Pledged Securities Accounts as to which such Grantorhas complied with the applicable requirements of Section 5.

##  

## (i)                                     This Agreementcreates in favor of the Collateral Agent for the benefit of the Secured Partiesa valid first priority security interest, except as otherwise provided forunder the Loan Documents, in the Collateral granted by such Grantor, securingthe payment of the Secured Obligations. Each Grantor has authorized the Collateral Agent to file financing andcontinuation statements under the UCC and record Intellectual Property SecurityAgreements referred to in Section 13(c) with the U.S. Patentand Trademark Office and the U.S. Copyright Office necessary to perfect a firstpriority security interest in the respective Collateral, as applicable, subjectto certain exceptions contained herein and in the Credit Agreement.

##  

## (j)                                     Noauthorization or approval or other action by, and no notice to or filing with,any governmental authority or regulatory body is required (other than asotherwise provided for under the Credit Agreement or this Agreement) for (i) thegrant by such Grantor of the security interest granted hereunder or for theexecution, delivery or performance of this Agreement by such Grantor, (ii) theperfection (to the extent required hereunder and excluding any security interestin cash) or maintenance of the security interest created hereunder (includingthe first priority nature of such security interest), except for the filing offinancing and continuation statements under the UCC, which, upon filing of thefinancing statements delivered pursuant to Section 4.01(a)(iv)(B) ofthe Credit Agreement, have been duly filed and are in full force and effect,upon the recordation of the Intellectual Property Security Agreements referredto in Section 13(d) with the U.S. Patent and Trademark Officeand the U.S. Copyright Office, any filings outside the United States requiredto perfect a security interest in Intellectual Property Collateral, and theactions described in Section 4 with respect to the SecurityCollateral, which actions, upon filing of the Intellectual Property SecurityAgreement executed by the Loan Parties on the Closing Date, have been taken andare in full force and effect, or (iii) the exercise by the CollateralAgent of its voting or other rights provided for in this Agreement or theremedies in respect of the Collateral pursuant to this Agreement, except as maybe required in connection with the disposition of any portion of the SecurityCollateral by laws affecting the offering and sale of securities generally.

##  

## (k)                                  As to itselfand its Intellectual Property Collateral:

##  

### (i)                                     Except as couldnot be reasonably expected to have a Material Adverse Effect, the operation ofsuch Grantor’s business as currently conducted and the use of the MaterialIntellectual Property Collateral (as defined below) in connection therewithdoes not infringe,

 

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### misappropriate,dilute, misuse or otherwise violate the intellectual property rights of anythird party.

###  

### (ii)                                  Such Grantor isthe exclusive owner or joint owner of all right, title and interest in and tothe Material Intellectual Property Collateral, or is entitled to use theMaterial Intellectual Property Collateral subject only to the terms of therelated IP Agreements.

###  

### (iii)                               TheIntellectual Property Collateral set forth on Schedule IV hereto includes allpatents, patent applications, domain names, trademark registrations andapplications, copyright registrations and applications that are owned by andmaterial to the business of such Grantor in each case which are reasonably necessaryto the operation of such Grantor’s respective business.

###  

### (iv)                              The MaterialIntellectual Property Collateral owned by such Grantor is subsisting and hasnot been adjudged invalid or unenforceable in whole or part, and is valid andenforceable.

###  

### (v)                                 Except as setforth on Schedule IV hereto, such Grantor has not granted any material license,release, covenant not to sue, non-assertion assurance, or other material rightto any Person with respect to any part of the Material Intellectual PropertyCollateral (other than (A) licenses granted to such Grantor’s customers inthe ordinary course of business), the effect of which would create a materialimpairment of such Grantor’s use of such Material Intellectual PropertyCollateral as intended in the operation of its respective business. Theconsummation of the transactions contemplated by the Transaction Documents willnot result in the termination or impairment of any of the Material IntellectualProperty Collateral.

###  

### (vi)                              With respect toeach material IP Agreement, except as could not be reasonably expected to havea Material Adverse Effect:  (A) suchIP Agreement is valid and binding and in full force and effect with respect tosuch Grantor, and to the knowledge of any Specified Officer of such Grantor, withrespect to any other party thereto, and represents the entire agreement betweenthe respective parties thereto with respect to the subject matter thereof; (B) suchIP Agreement will not cease to be valid and binding and in full force andeffect on terms identical to those currently in effect as a result of therights and interest granted herein, nor will the grant of such rights andinterest constitute a material breach or default under such IP Agreement orotherwise give any party thereto a right to terminate such IP Agreement; (C) suchGrantor has not received any written notice of termination or cancellationunder such IP Agreement; (D) such Grantor has not received any notice of abreach or default under such IP Agreement, which breach or default has not beencured; and (E) neither such Grantor nor, to the knowledge of any SpecifiedOfficer of such Grantor, is any other party to such IP Agreement is in breachor default thereof in any material respect, and, to the knowledge of anySpecified Officer of such Grantor no event has occurred that, with notice orlapse of time or both, would constitute such a breach or default or permittermination, modification or acceleration under such IP Agreement.

###  

## (l)                                     Such Grantorhas no commercial tort claims in excess of $2,500,000 other than those listedin Schedule V hereto and additional commercial tort claims as to which suchGrantor has complied with the requirements of Section 14.

##  

SECTION 9.  Further Assurances.  (a)  Each Grantor agrees that from timeto time, at the expense of such Grantor, such Grantor will promptly execute anddeliver, or otherwise authenticate, all further instruments and documents, andtake all further commercially reasonable action that is necessary, or that theCollateral Agent may reasonably request, in order to perfect and protect anypledge or security interest granted or purported to be granted by such Grantorhereunder or to enable the Collateral Agent to exercise and enforce its rightsand remedies hereunder with respect to any Collateral of such Grantor.  Each

 

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# Grantor further agrees that it shall, at the expenseof such Grantor, take any and all commercially reasonable actions necessary todefend title to the Collateral against all Persons and to defend the securityinterest created hereunder and the priority thereof against any Lien prohibitedunder the Credit Agreement.

 

## (b)                                 Each Grantorhereby authorizes the Collateral Agent to file one or more financing orcontinuation statements, and amendments thereto, including, without limitation,one or more financing statements indicating that such financing statementscover all assets or all personal property (or words of similar effect) of suchGrantor, regardless of whether any particular asset described in such financingstatements falls within the scope of the UCC or the granting clause of thisAgreement.  A photocopy or otherreproduction of this Agreement shall be sufficient as a financing statementwhere permitted by law.

##  

## (c)                                  Each Grantorwill furnish to the Collateral Agent from time to time statements and schedulesfurther identifying and describing the Collateral of such Grantor and suchother reports in connection with such Collateral as the Collateral Agent mayreasonably request, all in reasonable detail.

##  

## (d)                                 Notwithstandinganything to the contrary in this Agreement or any other Collateral Document,this Agreement shall be subject to the provisions of Section 6.12of the Credit Agreement.

##  

SECTION 10.  As to Equipment and Inventory.  Each Grantor will keep its Equipment (otherthan Equipment that is located at a customer or supplier location or isintransit in the ordinary course of business or sold in accordance with theCredit Agreement) and Inventory (other than Inventory on consignment or sold inthe ordinary course of business) at the places therefor specified in Section 8(c) orat such other places identified by UHS concurrently with the delivery of thefinancial statements pursuant to Section 6.01(b) of the CreditAgreement.

 

## (a)                                  Each Grantorwill cause its Equipment to be maintained and preserved in accordance with Section 6.06of the Credit Agreement.

##  

## (b)                                 Each Grantorwill pay promptly when due all property and other material taxes, assessmentsand governmental charges or levies imposed upon, and all claims (including,without limitation, claims for labor, materials and supplies) against, itsEquipment and Inventory, except to the extent payment thereof is not requiredby Section 6.04 of the Credit Agreement.

##  

## (c)                                  Each Grantor,at its own expense, shall deliver to the Collateral Agent the results of eachphysical verification, if any, which such Grantor may in its discretion havemade, or caused any other Person to make on its behalf, of all or a portion ofits Inventory.

##  

SECTION 11.  Insurance.  Each Grantor will, at itsown expense, maintain insurance as required by the terms of the CreditAgreement.  Each casualty, property andliability (excluding business interruption) policy shall in addition(a) name the Collateral Agent as loss payee or additional insured party, asapplicable, thereunder (without any representation or warranty by or obligationupon the Collateral Agent) or other language satisfactory to the CollateralAgent, (b) provide that there shall be no recourse against the CollateralAgent for payment of premiums or other amounts with respect thereto and(c) provide that at least 10 days’ prior written notice of cancellation orof lapse shall be given to the Collateral Agent by the insurer or otherlanguage satisfactory to the Collateral Agent. Each Grantor will, if so reasonably requested by the Collateral Agent,deliver to the Collateral Agent original or duplicate policies of suchinsurance.  Reimbursement under anyliability insurance maintained by any Grantor

 

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#  

pursuant to this Section 11 maybe paid directly to the Person who shall have incurred liability covered bysuch insurance.

 

SECTION 12.  Post-Closing Changes.  Each Grantor agrees to promptly notify theCollateral Agent in writing of any change to its legal name, type oforganization, jurisdiction of organization or organizational identificationnumber (if any) and shall take all action reasonably required by the CollateralAgent for the purposes of perfecting or protecting the security interestgranted by this Agreement.  Each Grantorwill hold and preserve its records relating to the Collateral, including,without limitation and the Related Contracts, and will permit representativesof the Collateral Agent at any reasonable time during normal business hours toinspect and make abstracts from such records and other documents, uponreasonable advance notice to such Grantor; *provided* that,excluding any such visits and inspections during the continuance of an Event ofDefault, only the Collateral Agent may exercise rights under this Section 12and the Collateral Agent shall not exercise such rights more often than one(1) time during any calendar year absent the existence of an Event ofDefault; *provided further* that, upon theoccurrence and during the continuance of an Event of Default, the CollateralAgent or any Lender (or any respective representative or independentcontractor) may do any of the foregoing at the reasonable expense of suchGrantor at any time during normal business hours and upon reasonable advancenotice. If any Grantor does not have an organizational identification numberand later obtains one, within thirty (30) days, it will notify the CollateralAgent of such organizational identification number.

 

SECTION 13.  As to Intellectual Property Collateral.  (a)  With respect to each item of itsIntellectual Property Collateral that is material to the business of anyGrantor (any such item of Intellectual Property Collateral being “**Material Intellectual Property Collateral**”), except to theextent failure to act could not reasonably be expected to have a MaterialAdverse Effect, with respect to each item of Material Intellectual PropertyCollateral owned by such Grantor, each Grantor agrees to take, at its expense,commercially reasonable actions that it determines are necessary in accordancewith the exercise of its business discretion, including, without limitation, inthe U.S. Patent and Trademark Office, the U.S. Copyright Office and any othergovernmental authority, to (i) maintain the validity and enforceability ofsuch Material Intellectual Property Collateral and maintain such MaterialIntellectual Property Collateral in full force and effect, and (ii) pursuethe registration and maintenance of each patent, trademark, or copyrightregistration or application, now or hereafter included in such MaterialIntellectual Property Collateral of such Grantor, including, withoutlimitation, the payment of required fees and taxes, the filing of responses tooffice actions issued by the U.S. Patent and Trademark Office, the U.S.Copyright Office or other governmental authorities, the filing of applicationsfor renewal or extension, the filing of affidavits under Sections 8 and 15 ofthe U.S. Trademark Act, the filing of divisional, continuation,continuation-in-part, reissue and renewal applications or extensions, thepayment of maintenance fees and the participation in interference,reexamination, opposition, cancellation, infringement and misappropriationproceedings.

 

## (b)                                 Except as couldnot be reasonably expected to have a Material Adverse Effect, no Grantor shalldo or permit any act or knowingly omit to do any act whereby any of itsMaterial Intellectual Property Collateral may lapse, be terminated or becomeinvalid or unenforceable or placed in the public domain (or, in case of a tradesecret, lose its competitive value) other than the expiration of patents at theend of their statutory term.

##  

## (c)                                  Except whenfailure to do so could not reasonably be expected to cause a Material AdverseEffect, each Grantor shall take commercially reasonable actions that itdetermines are necessary in accordance with the exercise of its businessdiscretion to preserve and protect each item of its Material IntellectualProperty Collateral.

 

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## (d)           Withrespect to its Material Intellectual Property, on the Closing Date or suchlater date as provided under the terms of the Credit Agreement or which theCollateral Agent consents to in writing, each Grantor agrees to execute anddeliver to the Collateral Agent, with respect to all Material IntellectualProperty that is registered or with respect to which registration is pending(i) an agreement, in substantially the form set forth in Exhibit Bhereto or otherwise in form and substance reasonably satisfactory to theCollateral Agent (a “**Copyright SecurityAgreement**”), (ii) an agreement, in substantially the form setforth in Exhibit C hereto or otherwise in form and substance reasonablysatisfactory to the Collateral Agent (a “**PatentSecurity Agreement**”) and (iii) an agreement, in substantiallythe form set forth in Exhibit D hereto or otherwise in form and substancereasonably satisfactory to the Collateral Agent (a “**Trademark Security Agreement**” and, together with eachCopyright Security Agreement and each Patent Security Agreement, the “**Intellectual Property Security Agreements**”),in each case for recording the security interest granted hereunder to theCollateral Agent in such Intellectual Property Collateral with the U.S. Patentand Trademark Office or the U.S. Copyright Office, as applicable.

##  

## (e)           EachGrantor agrees that should it obtain an ownership interest in any item of thetype set forth in Section 1(g) that is not on the date hereofa part of the Intellectual Property Collateral (“**After-Acquired Intellectual Property**”) (i) the provisionsof this Agreement shall automatically apply thereto, and (ii) any suchAfter-Acquired Material Intellectual Property and, in the case of trademarks,the goodwill symbolized thereby, shall automatically become part of theIntellectual Property Collateral subject to the terms and conditions of thisAgreement with respect thereto.  Afterthe end of each fiscal quarter of the Borrower, as set forth in Section 6.14(b) ofthe Credit Agreement, each Grantor shall provide written notice to theCollateral Agent identifying the After-Acquired Intellectual Propertyconsisting of material patents, patent applications, trademark registrations,trademark applications, copyright registrations, and copyright applications acquiredduring such fiscal quarter, and such Grantor shall execute and deliver to theCollateral Agent with such written notice, or otherwise authenticate, anagreement in form and substance reasonably satisfactory to the Collateral Agent(an “**IP Security Agreement Supplement**”)covering such After-Acquired Intellectual Property, which IP Security AgreementSupplement shall be recorded with the U.S. Patent and Trademark Office, theU.S. Copyright Office and any other governmental authorities necessary toperfect (subject to the exceptions contained herein and in the CreditAgreement) the security interest hereunder in such After-Acquired IntellectualProperty in the United States.

##  

SECTION 14. Commercial Tort Claims. Each Grantor will promptly after the end of each fiscal quarter givenotice to the Collateral Agent of any commercial tort claim individually inexcess of $2,500,000 that may arise after the date hereof and will immediatelyexecute or otherwise authenticate a supplement to this Agreement, and otherwisetake all necessary action, to subject such commercial tort claim to the firstpriority security interest created under this Agreement.

 

SECTION 15. Transfers and Other Liens. (a)  Each Grantor agrees that it will not (i) sell, assign orotherwise dispose of, or grant any option with respect to, any of theCollateral, other than sales, assignments and other dispositions of Collateraland options relating to Collateral permitted under the terms of the CreditAgreement or (ii) create or suffer to exist any Lien upon or with respectto any of the Collateral of such Grantor except for the pledge, assignment andsecurity interest created under this Agreement and Liens permitted under theLoan Documents.

 

SECTION 16. Collateral Agent Appointed Attorney in Fact.  Each Grantor hereby irrevocably appoints theCollateral Agent such Grantor’s attorney in fact, with full authority in theplace and stead of such Grantor and in the name of such Grantor or otherwise,from time to time, upon the occurrence and during the continuance of an Eventof Default, in the Collateral Agent’s reasonable discretion, to take any 

 

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action and to execute any instrument that the Collateral Agent may deemnecessary or advisable to effect the provisions of this Agreement, including, withoutlimitation:

 

#### (a)           to obtain and adjust insurancerequired to be paid to the Collateral Agent pursuant to Section 11,

####  

#### (b)           to ask for, demand, collect, sue for,recover, compromise, receive and give acquittance and receipts for moneys dueand to become due under or in respect of any of the Collateral,

####  

#### (c)           to receive, indorse and collect anydrafts or other instruments, documents and chattel paper, in connection withsubsection (a) or (b) above, and

####  

#### (d)           to file any claims or take any actionor institute any proceedings that the Collateral Agent may deem necessary ordesirable for the collection of any of the Collateral or the rights of theCollateral Agent with respect to any of the Collateral.

####  

SECTION 17. Collateral Agent May Perform.  If any Grantor fails to perform any agreementcontained herein, the Collateral Agent may, but without any obligation to doso, with notice (or upon the occurrence and during the continuance of an Eventof Default, without notice), itself perform, or cause performance of, suchagreement, and the expenses of the Collateral Agent incurred in connectiontherewith shall be payable by such Grantor under Section 21.

 

SECTION 18. The Collateral Agent’s Duties. The powers conferred on the Collateral Agent hereunder are solely toprotect the Secured Parties’ interest in the Collateral and shall not imposeany duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and theaccounting for moneys actually received by it hereunder, the Collateral Agentshall have no duty (other than as imposed by law, this Agreement or any otherLoan Document) as to any Collateral, as to ascertaining or taking action withrespect to calls, conversions, exchanges, maturities, tenders or other matters relativeto any Collateral, whether or not any Secured Party has or is deemed to haveknowledge of such matters, or as to the taking of any necessary steps topreserve rights against any parties or any other rights pertaining to anyCollateral.  The Collateral Agent shallbe deemed to have exercised reasonable care in the custody and preservation ofany Collateral in its possession if such Collateral is accorded treatmentsubstantially equal to that which it accords its own property or as required bylaw and will not be liable or responsible for any loss or damage to anyCollateral, or for any diminution in the value thereof, by reason of any act oromission of any sub-agent or bailee selected by the Collateral Agent in goodfaith, except to the extent that such liability arises from the CollateralAgent’s gross negligence, bad faith or willful misconduct.

 

SECTION 19. As to Receivables and Security Collateral.  The Collateral Agent may at any time in theCollateral Agent’s own name, in the name of a nominee of the Collateral Agentor in the name of any Grantor communicate (by mail, telephone, facsimile orotherwise) with Account Debtors and obligors in respect of any SecurityCollateral to verify with such Persons, to the Collateral Agent’s satisfaction,the existence, the amount, the terms of, and any other matter relating toReceivables, payment intangibles, Security Collateral or Chattel Paper.

 

SECTION 20. Remedies.  Subject to Section 8.02of the Credit Agreement, if any Event of Default shall have occurred and becontinuing:

 

## (a)           TheCollateral Agent may exercise in respect of the Collateral, in addition toother rights and remedies provided for herein or otherwise available to it, allthe rights and remedies of a 

 

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## secured party upon default under the UCC (whether or not the UCCapplies to the affected Collateral) and also may:  (i) require each Grantor to, and eachGrantor hereby agrees that it will at its expense and upon request of theCollateral Agent forthwith, assemble all or part of the Collateral as directedby the Collateral Agent and make it available to the Collateral Agent at aplace and time to be designated by the Collateral Agent that is reasonablyconvenient to both parties; (ii) without notice except as specified below,sell the Collateral or any part thereof in one or more parcels at public orprivate sale, at any of the Collateral Agent’s offices or elsewhere, for cash,on credit or for future delivery, and upon such other terms as the CollateralAgent may deem commercially reasonable; (iii) occupy any premises ownedor, to the extent lawful and permitted, leased by any of the Grantors where theCollateral or any part thereof is assembled or located for a reasonable periodin order to effectuate its rights and remedies hereunder or under law, withoutobligation to such Grantor in respect of such occupation; and(iv) exercise any and all rights and remedies of any of the Grantors underor in connection with the Collateral, or otherwise in respect of theCollateral, including, without limitation, (A) any and all rights of suchGrantor to demand or otherwise require payment of any amount under, orperformance of any provision of, the Receivables, the Related Contracts and theother Collateral, (B) withdraw, or cause or direct the withdrawal, of allfunds with respect to the Account Collateral and (C) exercise all otherrights and remedies with respect to the Receivables, the Related Contracts andthe other Collateral, including, without limitation, those set forth inSection 9-607 of the UCC.  EachGrantor agrees that, to the extent notice of sale shall be required by law, atleast ten days’ notice to such Grantor of the time and place of any public saleor the time after which any private sale is to be made shall constitutereasonable notification.  The CollateralAgent shall not be obligated to make any sale of Collateral regardless ofnotice of sale having been given.  TheCollateral Agent may adjourn any public or private sale from time to time byannouncement at the time and place fixed therefor, and such sale may, withoutfurther notice, be made at the time and place to which it was so adjourned.

##  

## (b)           Anycash held by or on behalf of the Collateral Agent and all cash proceedsreceived by or on behalf of the Collateral Agent in respect of any sale of,collection from, or other realization upon all or any part of the Collateralmay, in the discretion of the Collateral Agent, be held by the Collateral Agentas collateral for, or at any time thereafter applied (after payment of anyamounts payable to the Collateral Agent pursuant to Section 21) inwhole or in part by the Collateral Agent for the ratable benefit of the SecuredParties against, all or any part of the Secured Obligations, as set forth in Section 8.03of the Credit Agreement.

##  

## (c)           [Intentionallyomitted].

##  

## (d)           TheCollateral Agent may, without notice to any Grantor except as required by lawand at any time or from time to time, charge, set off and otherwise apply allor any part of the Secured Obligations against any funds held with respect tothe Account Collateral or in any other deposit account or securities account.

##  

## (e)           TheCollateral Agent may send to each bank party to any Control Agreement a “Noticeof Exclusive Control” (or similar term) as defined in and under such Agreement.

##  

## (f)            Inthe event of any sale or other disposition of any of the Intellectual PropertyCollateral of any Grantor, the goodwill symbolized by any Trademarks subject tosuch sale or other disposition shall be included therein, and such Grantorshall supply to the Collateral Agent or its designee such Grantor’s know-howand expertise, and documents and things relating to any Intellectual PropertyCollateral subject to such sale or other disposition, and such Grantor’scustomer lists and other records and documents relating to such IntellectualProperty Collateral and to the manufacture, distribution, advertising and saleof products and services of such Grantor.

 

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## (g)           Ifthe Collateral Agent shall determine to exercise its right to sell all or anyof the Security Collateral of any Grantor pursuant to this Section 20,each Grantor agrees that, upon request of the Collateral Agent, such Grantorwill, at its own reasonable expense, do or cause to be done all such othercommercially reasonable acts and things as may be reasonably necessary to makesuch sale of such Security Collateral or any part thereof valid and binding andin compliance with applicable law.

##  

## (h)           Notwithstandinganything to the contrary in this Agreement, the exercise of remedies by theCollateral Agent under this Agreement upon the occurrence and during thecontinuance of an Event of Default shall be subject to Section 8.02of the Credit Agreement.

##  

SECTION 21. Indemnity and Expenses. (a)  Each Grantor agrees to indemnify, defend and save and holdharmless each Secured Party and each Representative Party (as defined below) ofany of the foregoing Persons (each, an “**Indemnified Party**”) from and against,and shall pay on demand, any and all claims, damages, losses, liabilities andexpenses (including, without limitation, reasonable fees and expenses ofcounsel (which shall be limited to one (1) counsel to the Collateral Agentand the Lenders (exclusive of one local counsel to the Collateral Agent and theLenders in each appropriate jurisdiction), unless (x) the interests of theCollateral Agent and the Lenders are sufficiently divergent, in which case one(1) additional counsel may be appointed and (y) if the interests ofany Lender or group of Lenders (other than all of the Lenders) are distinctlyor disproportionately affected, one (1) additional counsel for such Lenderor group of Lenders))) that may be incurred by or asserted or awarded againstany Indemnified Party, in each case arising out of or in connection with orresulting from this Agreement (including, without limitation, enforcement ofthis Agreement), *provided* that such indemnityshall not, as to any Indemnitee, be available to the extent that such losses,claims, damages, liabilities or related expenses (x) are determined by acourt of competent jurisdiction by final judgment to have resulted from thegross negligence, bad faith or willful misconduct of such Indemnitee or suchIndemnitee’s Representative Parties or (y) result from a claim brought byany Grantor against an Indemnitee for breach of such Indemnitee’s obligationsunder this Agreement, if such Grantor has obtained a final judgment in itsfavor on such claim as determined by a court of competent jurisdiction.  For purposes of this Section 21(a),“**Representative Partie**s” means, as toany Person, (i) such Person’s officers, directors and employees and(ii) such Person’s Affiliates, agents, advisers and other representatives,in each case to the extent acting at the direction of such Person.

 

## (b)           EachGrantor will within 30 days of written demand pay to the Collateral Agent theamount of any and all reasonable expenses, including, without limitation, thereasonable fees and reasonable out-of-pocket expenses of its counsel and of anyexperts and agents, that the Collateral Agent may incur in connection with(i) the custody, preservation, use or operation of, or the sale of,collection from or other realization upon, any of the Collateral of suchGrantor, (ii) the exercise or enforcement of any of the rights of the CollateralAgent or the other Secured Parties hereunder or (iii) the failure by suchGrantor to perform or observe any of the provisions hereof.

##  

SECTION 22. Amendments; Waivers; Additional Grantors; Etc.  (a)  No amendment or waiver of anyprovision of this Agreement, and no consent to any departure by any Grantorherefrom, shall in any event be effective unless the same shall be in writingand signed by the Collateral Agent and the Grantors, and then such waiver orconsent shall be effective only in the specific instance and for the specificpurpose for which given.  No failure onthe part of the Collateral Agent or any other Secured Party to exercise, and nodelay in exercising any right hereunder, shall operate as a waiver thereof; norshall any single or partial exercise of any such right preclude any other orfurther exercise thereof or the exercise of any other right.

 

## (b)           Uponthe execution and delivery by any Person of a security agreement supplement insubstantially the form of Exhibit E hereto (each a “**Security Agreement Supplement**”), 

 

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## such Person shall be referred to as an “**Additional Grantor**” and shall be and become a Grantorhereunder, and each reference in this Agreement and the other Loan Documents to“Grantor” shall also mean and be a reference to such Additional Grantor, eachreference in this Agreement and the other Loan Documents to the “**Collateral**” shall also mean and be areference to the Collateral granted by such Additional Grantor and eachreference in this Agreement to a Schedule shall also mean and be a reference tothe schedules attached to such Security Agreement Supplement.

##  

SECTION 23. Notices, Etc.  All noticesand other communications provided for hereunder shall be either (a) inwriting (including telegraphic, telecopier or telex communication) and mailed,telegraphed, telecopied, telexed or otherwise delivered or (b) byelectronic mail (if electronic mail addresses are designated as provided below)confirmed immediately in writing, in the case of the Borrower or the CollateralAgent (as provided for the Administrative Agent thereunder), addressed to it atits address specified in the Credit Agreement and, in the case of each Grantorother than the Borrower, addressed to it at its address set forth opposite suchGrantor’s name on the signature pages hereto or on the signaturepage to the Security Agreement Supplement pursuant to which it became aparty hereto; or, as to any party, at such other address as shall be designatedby such party in a written notice to the other parties.  All such notices and other communicationsshall be deemed to be given or made upon the earlier to occur of(a) actual receipt by the relevant party hereto and (b) (i) ifdelivered by hand or by courier, when signed for by or on behalf of the relevantparty hereto; (ii) if delivered by mail, four (4) Business Days afterdeposit in the mails, postage prepaid; (iii) if delivered by facsimile,when sent and receipt has been confirmed; and (iv) if delivered byelectronic mail, when delivered.  Delivery by telecopier of “pdf” of anexecuted counterpart of any amendment or waiver of any provision of thisAgreement or of any Security Agreement Supplement or Schedule hereto shall beeffective as delivery of an original executed counterpart thereof.

 

SECTION 24. Continuing Security Interest; Assignments under the Credit Agreement.  This Agreement shall create a continuingsecurity interest in the Collateral and shall (a) remain in full force andeffect until the latest of (i) the payment in full in cash of the SecuredObligations (other than (x) obligations with respect to Secured HedgeAgreements, (y) Cash Management Obligations not yet due and payable and(z) the contingent obligations not yet accrued and payable under the LoanDocuments), (ii) the Maturity Date for the Revolving Credit Facility,(iii) the Maturity Date for the Term Loan Facility and (iv) thetermination or expiration of all Letters of Credit, (b) be binding uponeach Grantor, its permitted successors and assigns and (c) inure, togetherwith the rights and remedies of the Collateral Agent hereunder, to the benefitof the Secured Parties and their respective permitted successors, transfereesand assigns.  Without limiting thegenerality of the foregoing subsection (c), any Lender may assign or otherwisetransfer all or any portion of its rights and obligations under the CreditAgreement (including, without limitation, all or any portion of itsCommitments, the Loans owing to it and the Note or Notes, if any, held by it)to any other Person, and such other Person shall thereupon become vested withall the benefits in respect thereof granted to such Lender herein or otherwise,in each case as provided in Section 10.07 of the Credit Agreement.

 

SECTION 25.  Release;Termination.  (a)  Upon anysale, lease, transfer or other disposition of any item of Collateral of anyGrantor in accordance with the terms of the Loan Documents (other than sales ofInventory in the ordinary course of business), the Collateral Agent will, atsuch Grantor’s expense, execute and deliver to such Grantor such documents assuch Grantor shall reasonably request to evidence the release of such item ofCollateral from the assignment and security interest granted hereby; *provided*, *however*,that (i) such Grantor shall have delivered to the Collateral Agent awritten request for release describing the item of Collateral and the terms ofthe sale, lease, 

 

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transfer or other disposition in reasonable detail, together with aform of release for execution by the Collateral Agent and a certificate of suchGrantor to the effect that the transaction is in compliance with the LoanDocuments and as to such other matters as the Collateral Agent may reasonablyrequest, and (ii) the proceeds of any such sale, lease, transfer or otherdisposition required to be applied, or any payment to be made in connectiontherewith, in accordance with Section 2.05(b) of the CreditAgreement shall, to the extent so required, be paid or made to, or inaccordance with the instructions of, the Collateral Agent when and as requiredunder Section 2.05(b) of the Credit Agreement.

 

## (b)           Uponthe latest of (i) the payment in full in cash of the Secured Obligations(other than (x) obligations with respect to Secured Hedge Agreements,(y) Cash Management Obligations not yet due and payable and(z) contingent indemnification obligations not yet accrued and payableunder the Loan Documents), (ii) the Maturity Date for the Revolving CreditFacility, (iii) the Maturity Date for the Term Loan Facility and(iv) the cash collateralization, back-stop (on terms reasonablysatisfactory to the Collateral Agent), termination or expiration of all Lettersof Credit, the pledge and security interest granted hereby shall terminate andall rights to the Collateral shall revert to the applicable Grantor.  Upon any such termination, the CollateralAgent will, at the applicable Grantor’s expense, execute and deliver to suchGrantor such documents as such Grantor shall reasonably request to evidencesuch termination.

##  

SECTION 26. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each ofwhich when so executed shall be deemed to be an original and all of which takentogether shall constitute one and the same agreement.  Delivery of an executed counterpart of asignature page to this Agreement by telecopier shall be effective asdelivery of an original executed counterpart of this Agreement.

 

SECTION 27. Governing Law.  ThisAgreement shall be governed by, and construed in accordance with, the laws ofthe State of New York.

 

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INWITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed anddelivered by its officer thereunto duly authorized as of the date first abovewritten.

 

 
| ** ** | **UHS  HOLDCO, INC.** |
|------------|-----------------------|
| ** ** |                  |
| ** ** |                  |
|       | By:                   | /s/ Rex T. Clevenger |
|       |                  | Name: Rex T. Clevenger |
|       |                  | Title: CFO &  Executive Vice President |
|       |                  |   |
|       | Address  for Notices: |
|       |                  |
|       |                  |

 

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|   | **UNIVERSAL HOSPITAL SERVICES,  INC.** |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    | /s/ Rex T. Clevenger |
|   |                                   | Name: Rex T. Clevenger |
|   |                                   | Title: CFO &  Executive Vice President |
|   |                                   |   |
|   | Address for Notices:                   |
|   |                                   |
|   |                                   |

 

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