Document:

exv10w15

Exhibit 10.15

GUARANTY

     THIS GUARANTY (as the same may be amended, restated, supplemented or otherwise modified from
time to time, this “Guaranty”) is made as of
March 15, 2010 by and among each of the
Subsidiaries of Kendle International Inc. (the “Borrower”) listed on the signature pages
hereto (each an “Initial Guarantor”) and those additional Subsidiaries of the Borrower
which become parties to this Guaranty by executing a supplement hereto (a “Guaranty
Supplement”) in the form attached hereto as Annex I (such additional Subsidiaries,
together with the Initial Guarantors, the “Guarantors”), in favor of JPMorgan Chase Bank,
N.A., as Administrative Agent (the “Administrative Agent”), for the benefit of the Secured
Parties under the Credit Agreement described below. Unless otherwise defined herein, capitalized
terms used herein and not defined herein shall have the meanings ascribed to such terms in the
Credit Agreement.

WITNESSETH:

     WHEREAS, the Borrower, the financial institutions from time to time party thereto
(collectively, the “Lenders”), and the Administrative Agent have entered into that certain
Credit Agreement of even date herewith (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), which Credit Agreement
provides, subject to the terms and conditions thereof, for extensions of credit and other financial
accommodations to be made by the Lenders to or for the benefit of the Borrower;

     WHEREAS, it is a condition precedent to the extensions of credit by the Lenders under the
Credit Agreement that each of the Guarantors (constituting all of the Subsidiaries of the Borrower
required to execute this Guaranty pursuant to Section 5.11 of the Credit Agreement) execute
and deliver this Guaranty, whereby each of the Guarantors, without limitation and with full
recourse, shall guarantee the payment when due of all Secured Obligations, including, without
limitation, all principal, interest, letter of credit reimbursement obligations and other amounts
that shall be at any time payable by the Borrower under the Credit Agreement or the other Loan
Documents; and

     WHEREAS, in consideration of the direct and indirect financial and other support and benefits
that the Borrower has provided, and such direct and indirect financial and other support and
benefits as the Borrower may in the future provide, to the Guarantors, and in consideration of the
increased ability of each Guarantor that is a Subsidiary of the Borrower to receive funds through
contributions to capital, and for each Guarantor to receive funds through intercompany advances or
otherwise, from funds provided to the Borrower pursuant to the Credit Agreement and the flexibility
provided by the Credit Agreement for each Guarantor to do so which significantly facilitates the
business operations of the Borrower and each Guarantor and in order to induce the Lenders and the
Administrative Agent to enter into the Credit Agreement, and to make the Loans and the other
financial accommodations to the Borrower and to issue the Letters of Credit described in the Credit
Agreement, each of the Guarantors is willing to guarantee the Secured Obligations under the Credit
Agreement and the other Loan Documents;

     NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

     SECTION 1. Representations, Warranties and Covenants. Each of the Guarantors represents and
warrants to each Lender and the Administrative Agent as of the date of this Guaranty, giving effect
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the consummation of the transactions contemplated by the Loan Documents on the Effective Date,
and thereafter on each date as required by Section 4.02 of the Credit Agreement that:

     (a) It (i) is a corporation, partnership or limited liability company duly incorporated or
organized, as the case may be, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, (ii) is duly qualified to do business as a foreign
entity and is in good standing (to the extent such concept is applicable) under the laws of each
jurisdiction where the business conducted by it makes such qualification necessary, and (iii) has
all requisite corporate, partnership or limited liability company power and authority, as the case
may be, to own, operate and encumber its property and to conduct its business in each jurisdiction
in which its business is conducted, except to the extent that the failure to be qualified or to
have such authority could not reasonably be expected to result in a Material Adverse Effect.

     (b) It has the requisite corporate, limited liability company or partnership, as applicable,
power and authority and legal right to execute and deliver this Guaranty and to perform its
obligations hereunder. The execution and delivery by it of this Guaranty and the performance of
its obligations hereunder have been duly authorized by proper corporate, limited liability company
or partnership proceedings, including any required shareholder, member or partner approval, and
this Guaranty constitutes a legal, valid and binding obligation of such Guarantor, enforceable
against such Guarantor, in accordance with its terms, except as enforceability may be limited by
(i) bankruptcy, insolvency, fraudulent conveyances, reorganization or similar laws relating to or
affecting the enforcement of creditors’ rights generally, (ii) general equitable principles
(whether considered in a proceeding in equity or at law), and (iii) requirements of reasonableness,
good faith and fair dealing.

     (c) Neither the execution and delivery by it of this Guaranty, nor the consummation by it of
the transactions herein contemplated, nor compliance by it with the terms and provisions hereof,
will (i) conflict with the charter or other organizational documents of such Guarantor, (ii)
conflict with, result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any law, rule, regulation, order, writ, judgment, injunction, decree or award
(including, without limitation, any environmental property transfer laws or regulations) applicable
to such Guarantor or any provisions of any indenture, instrument or agreement to which the Borrower
or any of the Borrower’s Subsidiaries is party or is subject or by which it or its property is
bound or affected, or require termination of any such indenture, instrument or agreement except for
any conflict, breach or default which could not reasonably be expected to result in a Material
Adverse Effect, (iii) result in the creation or imposition of any Lien whatsoever upon any of the
property or assets of such Guarantor, other than Liens permitted or created by the Loan Documents,
or (iv) require any approval of such Guarantor’s board of directors, shareholders, members,
partners or unitholders except such as have been obtained. Except as set forth on Schedule 3.03 to
the Credit Agreement, the execution, delivery and performance by such Guarantor of each of the Loan
Documents to which such Guarantor is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by any Governmental Authority,
including under any environmental property transfer act or environmental laws or regulations,
except filings, consents or notices which have been made.

     (d) It has no Indebtedness other than Indebtedness permitted under Section 6.01 of the
Credit Agreement.

     In addition to the foregoing, each of the Guarantors covenants that, prior to the discharge of
the Guaranty as contemplated by Section 4, so long as any Lender has any Commitment or
Letter of Credit outstanding under the Credit Agreement or any amount payable under the Credit
Agreement or any other Secured Obligations shall remain unpaid, it will, and, if necessary, will
cause the Borrower to, fully

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comply with those covenants and agreements of the Borrower applicable to such Guarantor set forth
in the Credit Agreement.

     SECTION 2. The Guaranty. Each of the Guarantors hereby irrevocably and
unconditionally guarantees, jointly and severally with the other Guarantors, the full and punctual
payment and performance when due (whether at stated maturity, upon acceleration or otherwise) of
the Secured Obligations, including, without limitation, (i) the principal of and interest on each
Loan made to the Borrower pursuant to the Credit Agreement, (ii) obligations owing under or in
connection with Letters of Credit, (iii) all other amounts payable by the Borrower under the Credit
Agreement and the other Loan Documents, and including, without limitation, all Swap Obligations and
Banking Services Obligations, and (iv) the punctual and faithful performance, keeping, observance,
and fulfillment by the Borrower of all of the agreements, conditions, covenants, and obligations of
the Borrower contained in the Loan Documents (all of the foregoing being referred to collectively
as the “Guaranteed Obligations”). Notwithstanding the foregoing, the release of a
Guarantor permitted under the Loan Documents shall not require the consent of the holders of
obligations under such Swap Obligations or Banking Services Obligations. Upon the failure by the
Borrower, or any of its Affiliates, as applicable, to pay punctually any such amount or perform
such obligation, subject to any applicable grace or notice and cure period, each of the Guarantors
agrees that it shall forthwith on demand pay such amount or perform such obligation at the place
and in the manner specified in the Credit Agreement or the relevant other Loan Document, as the
case may be. Each of the Guarantors hereby agrees that this Guaranty is an absolute, irrevocable
and unconditional guaranty of payment and is not a guaranty of collection.

     SECTION 3. Guaranty Unconditional. The obligations of each of the
Guarantors hereunder shall be unconditional and absolute and, without limiting the generality of
the foregoing, shall not be released, discharged or otherwise affected by:

     (i) any extension, renewal, settlement, indulgence, compromise, waiver or release of or
with respect to the Guaranteed Obligations or any part thereof or any agreement relating
thereto, or with respect to any obligation of any other guarantor of any of the Guaranteed
Obligations, whether (in any such case) by operation of law or otherwise, or any failure or
omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or with respect to any obligation of any
other guarantor of any of the Guaranteed Obligations;

     (ii) any modification or amendment of or supplement to the Credit Agreement, any Swap
Agreement, any Banking Services Agreement or any other Loan Document, including, without
limitation, any such amendment which may increase the amount of, or the interest rates
applicable to, any of the Guaranteed Obligations guaranteed hereby;

     (iii) any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral securing the Guaranteed
Obligations or any part thereof, any other guaranties with respect to the Guaranteed
Obligations or any part thereof, or any other obligation of any person or entity with
respect to the Guaranteed Obligations or any part thereof, or any nonperfection or
invalidity of any direct or indirect security for the Guaranteed Obligations;

     (iv) any change in the corporate, partnership, limited liability company or other
existence, structure or ownership of the Borrower or any other guarantor of any of the
Guaranteed Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or any other guarantor of the Guaranteed Obligations, or
any of their respective

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assets or any resulting release or discharge of any obligation of the Borrower or any
other guarantor of any of the Guaranteed Obligations;

     (v) the existence of any claim, setoff or other rights which the Guarantors may have at
any time against the Borrower, any other guarantor of any of the Guaranteed Obligations, the
Administrative Agent, any Secured Party or any other Person, whether in connection herewith
or in connection with any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory counterclaim;

     (vi) the enforceability or validity of the Guaranteed Obligations or any part thereof
or the genuineness, enforceability or validity of any agreement relating thereto or with
respect to any collateral securing the Guaranteed Obligations or any part thereof, or any
other invalidity or unenforceability relating to or against the Borrower or any other
guarantor of any of the Guaranteed Obligations, for any reason related to the Credit
Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document, or
any provision of applicable law, decree, order or regulation purporting to prohibit the
payment by the Borrower or any other guarantor of the Guaranteed Obligations, of any of the
Guaranteed Obligations or otherwise affecting any term of any of the Guaranteed Obligations;

     (vii) the failure of the Administrative Agent to take any steps to perfect and maintain
any security interest in, or to preserve any rights to, any security or collateral for the
Guaranteed Obligations, if any;

     (viii) the election by, or on behalf of, any one or more of the Secured Parties, in any
proceeding instituted under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101
et seq.) (or any successor statute, the “Bankruptcy Code”), of the application of
Section 1111(b)(2) of the Bankruptcy Code;

     (ix) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code;

     (x) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion
of the claims of the Secured Parties or the Administrative Agent for repayment of all or any
part of the Guaranteed Obligations;

     (xi) the failure of any other guarantor to sign or become party to this Guaranty or any
amendment, change, or reaffirmation hereof; or

     (xii) any other act or omission to act or delay of any kind by the Borrower, any other
guarantor of the Guaranteed Obligations, the Administrative Agent, any Secured Party or any
other Person or any other circumstance whatsoever which might, but for the provisions of
this Section 3, constitute a legal or equitable discharge of any Guarantor’s
obligations hereunder or otherwise reduce, release, prejudice or extinguish its liability
under this Guaranty.

     SECTION 4. Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances. Each of the Guarantors’ obligations hereunder shall remain in full force and
effect until all Guaranteed Obligations shall have been paid in full in cash (other than
Unliquidated Obligations) and the Commitments and all Letters of Credit issued under the Credit
Agreement shall have terminated or expired or, in the case of all Letters of Credit, are fully
collateralized on terms reasonably acceptable to the Administrative Agent, at which time, subject
to all the foregoing conditions, the guarantees made hereunder shall automatically terminate. If
at any time any payment of the principal of or interest on any

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Loan, Secured Obligation or any other amount payable by the Borrower or any other party under
the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document
is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, each of the Guarantors’ obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due but not made at
such time. The parties hereto acknowledge and agree that each of the Guaranteed Obligations shall
be due and payable in the same currency as such Guaranteed Obligation is denominated, but if
currency control or exchange regulations are imposed in the country which issues such currency with
the result that such currency (the “Original Currency”) no longer exists or the relevant
Guarantor is not able to make payment in such Original Currency, then all payments to be made by
such Guarantor hereunder in such currency shall instead be made when due in Dollars in an amount
equal to the Dollar Amount (as of the date of payment) of such payment due, it being the intention
of the parties hereto that each Guarantor takes all risks of the imposition of any such currency
control or exchange regulations.

     SECTION 5. General Waivers; Additional Waivers.

     (a) General Waivers. Each of the Guarantors irrevocably waives acceptance hereof,
presentment, demand or action on delinquency, protest, the benefit of any statutes of limitations
and, to the fullest extent permitted by law, any notice not provided for herein or under the other
Loan Documents, as well as any requirement that at any time any action be taken by any Person
against the Borrower, any other guarantor of the Guaranteed Obligations, or any other Person.

     (b) Additional Waivers. Notwithstanding anything herein to the contrary, each of the
Guarantors hereby absolutely, unconditionally, knowingly, and expressly waives, to the fullest
extent permitted by law:

     (i) any right it may have to revoke this Guaranty as to future indebtedness or notice
of acceptance hereof;

     (ii) (1) notice of acceptance hereof; (2) notice of any Loans, Letters of Credit or
other financial accommodations made or extended under the Loan Documents or the creation or
existence of any Guaranteed Obligations; (3) notice of the amount of the Guaranteed
Obligations, subject, however, to each Guarantor’s right to make inquiry of the
Administrative Agent and the Secured Parties to ascertain the amount of the Guaranteed
Obligations at any reasonable time; (4) notice of any adverse change in the financial
condition of the Borrower or of any other fact that might increase such Guarantor’s risk
hereunder; (5) notice of presentment for payment, demand, protest, and notice thereof as to
any instruments among the Loan Documents; (6) notice of any Default or Event of Default; and
(7) all other notices (except if such notice is specifically required to be given to such
Guarantor hereunder or under the Loan Documents) and demands to which each Guarantor might
otherwise be entitled;

     (iii) its right, if any, to require the Administrative Agent and the other Secured
Parties to institute suit against, or to exhaust any rights and remedies which the
Administrative Agent and the other Secured Parties has or may have against, the other
Guarantors or any third party, or against any Collateral provided by the other Guarantors,
or any third party; and each Guarantor further waives any defense arising by reason of any
disability or other defense (other than the defense that the Guaranteed Obligations shall
have been fully and finally performed and indefeasibly paid in full in cash) of the other
Guarantors or by reason of the cessation from any cause whatsoever of the liability of the
other Guarantors in respect thereof;

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     (iv) (a) any rights to assert against the Administrative Agent and the other Secured
Parties any defense (legal or equitable), set-off, counterclaim, or claim which such
Guarantor may now or at any time hereafter have against the other Guarantors or any other
party liable to the Administrative Agent and the other Secured Parties; (b) any defense,
set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from
the present or future lack of perfection, sufficiency, validity, or enforceability of the
Guaranteed Obligations or any security therefor; (c) any defense such Guarantor has to
performance hereunder, and any right such Guarantor has to be exonerated, arising by reason
of: (1) the impairment or suspension of the Administrative Agent’s and the other Secured
Parties’ rights or remedies against the other guarantor of the Guaranteed Obligations; (2)
the alteration by the Administrative Agent and the other Secured Parties of the Guaranteed
Obligations; (3) any discharge of the other Guarantors’ obligations to the Administrative
Agent and the other Secured Parties by operation of law as a result of the Administrative
Agent’s and the other Secured Parties’ intervention or omission; or (4) the acceptance by
the Administrative Agent and the other Secured Parties of anything in partial satisfaction
of the Guaranteed Obligations; and (d) the benefit of any statute of limitations affecting
such Guarantor’s liability hereunder or the enforcement thereof, and any act which shall
defer or delay the operation of any statute of limitations applicable to the Guaranteed
Obligations shall similarly operate to defer or delay the operation of such statute of
limitations applicable to such Guarantor’s liability hereunder; and

     (v) any defense arising by reason of or deriving from (a) any claim or defense based
upon an election of remedies by the Administrative Agent and the Secured Parties; or (b) any
election by the Administrative Agent and the other Secured Parties under the Bankruptcy
Code, to limit the amount of, or any collateral securing, its claim against the Guarantors.

     SECTION 6. Subordination of Subrogation; Subordination of Intercompany
Indebtedness.

     (a) Subordination of Subrogation. Until the Guaranteed Obligations have been fully
and finally performed and indefeasibly paid in full in cash (other than Unliquidated Obligations),
the Guarantors (i) shall not enforce any right of subrogation with respect to such Guaranteed
Obligations and (ii) agree not to enforce any remedy which the Issuing Bank, any of the Secured
Parties or the Administrative Agent now have or may hereafter have against the Borrower, any
endorser or any guarantor of all or any part of the Secured Obligations or any other Person, and
until such time the Guarantors agree not to enforce any benefit of, and any right to participate
in, any security or collateral given to the Secured Parties, the Issuing Bank and the
Administrative Agent to secure the payment or performance of all or any part of the Guaranteed
Obligations or any other liability of the Borrower to the Secured Parties, the Issuing Bank or the
Administrative Agent. Should any Guarantor have the right, notwithstanding the foregoing, to
exercise its subrogation rights, each Guarantor hereby expressly and irrevocably (A) subordinates
any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off that such Guarantor may have to the payment in full in cash of the
Guaranteed Obligations until the Guaranteed Obligations are indefeasibly paid in full in cash
(other than Unliquidated Obligations) and (B) waives any and all defenses available to a surety,
guarantor or accommodation co-obligor until the Guaranteed Obligations are indefeasibly paid in
full in cash (other than Unliquidated Obligations). Each Guarantor acknowledges and agrees that
this subordination is intended to benefit the Administrative Agent and the Secured Parties and
shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of
this Guaranty, and that the Administrative Agent, the Secured Parties and their respective
successors and assigns are intended third party beneficiaries of the waivers and agreements set
forth in this Section 6(a).

     (b) Subordination of Intercompany Indebtedness. Each Guarantor agrees that any and
all claims of such Guarantor against the Borrower or any other Guarantor hereunder (each an
“Obligor”)

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with respect to any “Intercompany Indebtedness” (as hereinafter defined), any endorser,
obligor or any other guarantor of all or any part of the Guaranteed Obligations, or against any of
its properties shall be subordinate and subject in right of payment to the prior payment, in full
and in cash, of all Guaranteed Obligations; provided that, as long as no Event of Default has
occurred and is continuing, such Guarantor may receive payments of principal and interest from any
Obligor with respect to Intercompany Indebtedness. Notwithstanding any right of any Guarantor to
ask, demand, sue for, take or receive any payment from any Obligor, all rights, liens and security
interests of such Guarantor, whether now or hereafter arising and howsoever existing, in any assets
of any other Obligor shall be and are subordinated to the rights of the Secured Parties and the
Administrative Agent in those assets. No Guarantor shall have any right to possession of any such
asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and
until all of the Guaranteed Obligations shall have been fully paid and satisfied (in cash) and all
financing arrangements pursuant to any Loan Document, any Swap Agreement or any Banking Services
Agreement have been terminated. If all or any part of the assets of any Obligor, or the proceeds
thereof, are subject to any distribution, division or application to the creditors of such Obligor,
whether partial or complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action
or proceeding, or if the business of any such Obligor is dissolved or if substantially all of the
assets of any such Obligor are sold, then, and in any such event (such events being herein referred
to as an “Insolvency Event”), any payment or distribution of any kind or character, either
in cash, securities or other property, which shall be payable or deliverable upon or with respect
to any indebtedness of any Obligor to any Guarantor (“Intercompany Indebtedness”) shall be
paid or delivered directly to the Administrative Agent for application on any of the Guaranteed
Obligations, due or to become due, until such Guaranteed Obligations shall have first been fully
paid and satisfied (in cash). Should any payment, distribution, security or instrument or proceeds
thereof be received by the applicable Guarantor upon or with respect to the Intercompany
Indebtedness after any Insolvency Event and prior to the satisfaction of all of the Guaranteed
Obligations (other than Unliquidated Obligations) and the termination of all financing arrangements
pursuant to any Loan Document among the Borrower and the Holders of Secured Obligations, such
Guarantor shall receive and hold the same in trust, as trustee, for the benefit of the Secured
Parties and shall forthwith deliver the same to the Administrative Agent, for the benefit of the
Secured Parties, in precisely the form received (except for the endorsement or assignment of the
Guarantor where necessary), for application to any of the Guaranteed Obligations, due or not due,
and, until so delivered, the same shall be held in trust by the Guarantor as the property of the
Secured Parties. If any such Guarantor fails to make any such endorsement or assignment to the
Administrative Agent, the Administrative Agent or any of its officers or employees is irrevocably
authorized to make the same. Each Guarantor agrees that until the Guaranteed Obligations (other
than the Unliquidated Obligations) have been paid in full (in cash) and satisfied and all financing
arrangements pursuant to any Loan Document among the Borrower and the Secured Parties have been
terminated, no Guarantor will assign or transfer to any Person (other than the Administrative
Agent) any claim any such Guarantor has or may have against any Obligor.

     SECTION 7. Contribution with Respect to Guaranteed Obligations.

     (a) To the extent that any Guarantor shall make a payment under this Guaranty (a
“Guarantor Payment”) which, taking into account all other Guarantor Payments then
previously or concurrently made by any other Guarantor, exceeds the amount which otherwise would
have been paid by or attributable to such Guarantor if each Guarantor had paid the aggregate
Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such
Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantors as determined
immediately prior to the making of such Guarantor Payment, then, following indefeasible
payment in full in cash of the Guarantor Payment and the Guaranteed Obligations (other than
Unliquidated Obligations), and all Commitments and Letters of Credit have

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terminated or expired or, in the case of all Letters of Credit, are fully collateralized on
terms reasonably acceptable to the Administrative Agent, and the Credit Agreement has terminated,
such Guarantor shall be entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Guarantor for the amount of such excess, pro rata based
upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

     (b) As of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to
the maximum amount of the claim which could then be recovered from such Guarantor under this
Guaranty without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.

     (c) This Section 7 is intended only to define the relative rights of the Guarantors,
and nothing set forth in this Section 7 is intended to or shall impair the obligations of
the Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Guaranty.

     (d) The parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of the Guarantor or Guarantors to which such contribution and
indemnification is owing.

     (e) The rights of the indemnifying Guarantors against other Guarantors under this Section
7 shall be exercisable upon the full and indefeasible payment of the Guaranteed Obligations in
cash (other than Unliquidated Obligations that have not yet arisen) and the termination or expiry
(or in the case of all Letters of Credit full collateralization), on terms reasonably acceptable to
the Administrative Agent, of the Commitments and all Letters of Credit issued under the Credit
Agreement and the termination of the Credit Agreement.

     SECTION 8. Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrower under the Credit Agreement, any counterparty to any Swap
Agreement, any Banking Services Agreement or any other Loan Document is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower or any of its Affiliates, all such amounts otherwise
subject to acceleration under the terms of the Credit Agreement, any Swap Agreement, any Banking
Services Agreement or any other Loan Document shall nonetheless be payable by each of the
Guarantors hereunder forthwith on demand by the Administrative Agent.

     SECTION 9. Notices. All notices, requests and other communications to any
party hereunder shall be given in the manner prescribed in Section 9.01 of the Credit
Agreement with respect to the Administrative Agent at its notice address therein and, with respect
to any Guarantor, in the care of the Borrower at the address of the Borrower set forth in the
Credit Agreement, or such other address or telecopy number as such party may hereafter specify for
such purpose in accordance with the provisions of Section 9.01 of the Credit Agreement.

     SECTION 10. No Waivers. No failure or delay by the Administrative Agent or
any Secured Party in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies provided
in this Guaranty, the Credit Agreement, any Swap Agreement, any Banking Services Agreement and the
other Loan Documents shall be cumulative and not exclusive of any rights or remedies provided by
law.

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     SECTION 11. Successors and Assigns. This Guaranty is for the benefit of the
Administrative Agent and the Secured Parties and their respective successors and permitted assigns,
provided, that no Guarantor shall have any right to assign its rights or obligations
hereunder without the consent of the Administrative Agent, and any such assignment in violation of
this Section 11 shall be null and void; and in the event of an assignment of any amounts
payable under the Credit Agreement, any Swap Agreement, any Banking Services Agreement or the other
Loan Documents in accordance with the respective terms thereof, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such indebtedness. This
Guaranty shall be binding upon each of the Guarantors and their respective successors and assigns.

     SECTION 12. Changes in Writing. Other than in connection with the addition
of additional Subsidiaries, which become parties hereto by executing a Guaranty Supplement hereto
in the form attached as Annex I, neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated orally, but only in writing signed by each of the
Guarantors and the Administrative Agent with the consent of the Required Lenders under the Credit
Agreement.

     SECTION 13. Governing Law; Jurisdiction.

     (a) THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
OF NEW YORK.

     (b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court of the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Guaranty or any other Loan Document, or for recognition or enforcement of any judgment, and
each Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to the extent permitted
by law, in such Federal court. Each Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Guaranty or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have
to bring any action or proceeding relating to this Guaranty or any other Loan Document against any
Guarantor or its properties in the courts of any jurisdiction.

     (c) Each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Guaranty or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.

     (d) Each party to this Guaranty irrevocably consents to service of process in the manner
provided for notices in Section 9 of this Guaranty, and each of the Guarantors hereby
appoints the Borrower as its agent for service of process. Nothing in this Guaranty or any other
Loan Document will affect the right of any party to this Guaranty to serve process in any other
manner permitted by law.

     SECTION 14. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN

9

 

DOCUMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH GUARANTOR (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER GUARANTOR HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER GUARANTOR WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER GUARANTORS HAVE BEEN INDUCED TO ENTER
INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     SECTION 15. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Guaranty. In the event an ambiguity or question of
intent or interpretation arises, this Guaranty shall be construed as if drafted jointly by the
parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any provisions of this Guaranty.

     SECTION 16. Taxes, Expenses of Enforcement, Etc.

     (a) Taxes.

     (i) Any and all payments by or on account of any obligation of any Guarantor hereunder
shall be made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if any Guarantor shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, such Lender, the
Issuing Bank or any other Secured Party (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such Guarantor shall make
such deductions and (iii) such Guarantor shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

     (ii) In addition, the Guarantors shall pay any Other Taxes imposed on or incurred by
the Administrative Agent, a Lender, the Issuing Bank or any other Secured Party to the
relevant Governmental Authority in accordance with applicable law.

     (iii) The Guarantors shall indemnify the Administrative Agent, each Lender, the Issuing
Bank and each other Secured Party, within ten (10) days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender, the Issuing Bank or such other Secured Party, as the case may be, on or with
respect to any payment by or on account of any obligation of the Guarantors hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority;
provided that the Guarantors shall not be required to indemnify the Administrative
Agent, any Lender, the Issuing Bank or any other Secured Party for any loss, cost or expense
(including any penalty or interest) arising out of any failure by the Administrative Agent,
such Lender, the Issuing Bank or such other Secured Party to timely pay or file a return
relating to an Indemnified Tax or Other Tax if either the Guarantors have paid the amount of
such Tax to the Administrative Agent, such Lender, the Issuing Bank or such other Secured
Party or the Administrative Agent, such Lender, the Issuing Bank or such other Secured Party
has failed to demand such payment within 120 days of becoming aware of any such Indemnified
Tax or Other Tax. A certificate setting forth in reasonable detail the

10

 

amount of such payment or liability delivered to the Guarantors by a Lender, the
Issuing Bank or any other Secured Party, or by the Administrative Agent on its own behalf or
on behalf of a Lender, the Issuing Bank or any other Secured Party, shall be conclusive
absent manifest error.

     (iv) By accepting the benefits hereof, each Foreign Lender agrees that it will comply
with Section 2.17(e) of the Credit Agreement.

     (b) Expenses of Enforcement, Etc. Subject to the terms of the Credit Agreement, after
the occurrence of an Event of Default the Lenders shall have the right at any time to direct the
Administrative Agent to commence enforcement proceedings with respect to the Guaranteed
Obligations. The Guarantors shall pay all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Bank, any Lender or any other Secured Party, including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Issuing Bank, any Lender or any
other Secured Party, in connection with the enforcement or protection of its rights in connection
with this Guaranty and any other Loan Document, including its rights under this Section;
provided, however, that in no event shall the Guarantors be required to reimburse the
Lenders or any other Secured Party for more than one counsel to the Administrative Agent (and up to
one local counsel to the Administrative Agent in each applicable jurisdiction and regulatory
counsel) and one counsel for all of the other Lenders and Secured Parties (and up to one local
counsel in each applicable jurisdiction and regulatory counsel), unless a Lender or its counsel or
any other Secured Party or its counsel determines that it is impractical or inappropriate (or would
create actual or potential conflicts of interest) to not have individual counsel, in which case
such Lender or such Secured Party may have its own counsel which shall be reimbursed in accordance
with the foregoing.

     SECTION 17. Setoff. At any time after all or any part of the Guaranteed
Obligations have become due and payable (by acceleration or otherwise), each Secured Party and the
Administrative Agent may, without notice to any Guarantor and regardless of the acceptance of any
security or collateral for the payment hereof, set off and apply toward the payment of all or any
part of the Guaranteed Obligations any and all deposits (general or special, time or demand,
provisional or final and in whatever currency denominated at any time held) and other obligations
at any time owing by such Secured Party or the Administrative Agent or any of their Affiliates to
or for the credit or the account of any Guarantor against any of and all the Guaranteed
Obligations, irrespective of whether or not such Secured Party or the Administrative Agent shall
have made any demand under this Guaranty and although such obligations may be unmatured. The
rights of each Secured Party or the Administrative Agent under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Secured Party or the
Administrative Agent may have.

     SECTION 18. Financial Information. Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of the Borrower, the other
Guarantors and any and all endorsers and/or other guarantors of all or any part of the Guaranteed
Obligations, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations, or any part thereof, that diligent inquiry would reveal, and each Guarantor hereby
agrees that none of the Secured Parties or the Administrative Agent shall have any duty to advise
such Guarantor of information known to any of them regarding such condition or any such
circumstances. In the event any Secured Party or the Administrative Agent, in its sole discretion,
undertakes at any time or from time to time to provide any such information to a Guarantor, such
Secured Party or the Administrative Agent shall be under no obligation (i) to undertake any
investigation not a part of its regular business routine, (ii) to disclose any information which
such Secured Party or the Administrative Agent, pursuant to accepted or reasonable commercial
finance or banking practices, wishes to maintain confidential or (iii) to make any other or future
disclosures of such information or any other information to such Guarantor.

11

 

     SECTION 19. Severability. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but
if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Guaranty.

     SECTION 20. Merger. This Guaranty represents the final agreement of each of
the Guarantors with respect to the matters contained herein and may not be contradicted by evidence
of prior or contemporaneous agreements, or subsequent oral agreements, between each such Guarantor
and any Secured Party or the Administrative Agent.

     SECTION 21. Headings. Section headings in this Guaranty are for convenience
of reference only and shall not govern the interpretation of any provision of this Guaranty.

     SECTION 22. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from any Guarantor hereunder in the currency
expressed to be payable herein (the “Specified Currency”) into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the Specified Currency with such other currency at the
Administrative Agent’s main New York City office on the Business Day preceding that on which final,
non-appealable judgment is given. The obligations of each Guarantor in respect of any sum due
hereunder shall, notwithstanding any judgment in a currency other than the Specified Currency, be
discharged only to the extent that on the Business Day following receipt by any Secured Party
(including the Administrative Agent), as the case may be, of any sum adjudged to be so due in such
other currency such Secured Party (including the Administrative Agent), as the case may be, may in
accordance with normal, reasonable banking procedures purchase the Specified Currency with such
other currency. If the amount of the Specified Currency so purchased is less than the sum
originally due to such Secured Party (including the Administrative Agent), as the case may be, in
the Specified Currency, each Guarantor agrees, to the fullest extent that it may effectively do so,
as a separate obligation and notwithstanding any such judgment, to indemnify such Secured Party
(including the Administrative Agent), as the case may be, against such loss, and if the amount of
the Specified Currency so purchased exceeds (a) the sum originally due to any Secured Party
(including the Administrative Agent), as the case may be, in the Specified Currency and (b) amounts
shared with other Secured Parties as a result of allocations of such excess as a disproportionate
payment to such other Secured Party under Section 2.18 of the Credit Agreement, such
Secured Party (including the Administrative Agent), as the case may be, agrees, by accepting the
benefits hereof, to remit such excess to such Guarantor.

[SIGNATURE PAGES TO FOLLOW]

12

 

     IN WITNESS WHEREOF, each Initial Guarantor has caused this Guaranty to be duly executed by its
authorized officer as of the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	AAC CONSULTING GROUP, INC.	 	 	 	ACER/EXCEL INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	 	 	By:	 	/s/ Keith A. Cheesman	 	 
	 

	 	 

Name: Keith A. Cheesman
	 	 
	 	 	 	 

Name: Keith A. Cheesman
	 	 
	 

	 	Title: Director, Senior Vice
President and
Chief Financial Officer
	 	 	 	 	 	Title: Director, Senior Vice
President and
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	KENDLE AMERICAS HOLDING INC.	 	 	 	KENDLE AMERICAS INVESTMENT INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	 	 	By:	 	/s/ Keith A. Cheesman	 	 
	 

	 	 

Name: Keith A. Cheesman
	 	 
	 	 	 	 

Name: Keith A. Cheesman
	 	 
	 

	 	Title: Director, Senior Vice
President and
Chief Financial Officer
	 	 	 	 	 	Title: Director, Senior Vice
President and
Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	KENDLE AMERICAS MANAGEMENT INC.	 	 	 	KENDLE INTERNATIONAL CPU LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	 	 	 
	 	 	 	 
	 

	 	 

Name: Keith A. Cheesman
	 	 
	 	By:	 	/s/ Keith A. Cheesman	 	 
	 

	 	Title: Director, Senior Vice
President and
Chief Financial Officer
	 	 	 	 	 	 

Name: Keith A. Cheesman
Title: Manager
	 	 
	 

	 	 	 	 	 	 	 		 	 
	 
	 	 	 	 	 	 	 	 	 	 
	KENDLE DELAWARE LLC	 	 	 	KENDLE NC LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	 	 	By:	 	/s/ Keith A. Cheesman	 	 
	 

	 	 

Name: Keith A. Cheesman
	 	 
	 	 	 	 

Name: Keith A. Cheesman
	 	 
	 

	 	Title: Manager
	 	 	 	 	 	Title: Manager	 	 

Signature Page to Guaranty

 

 

Acknowledged and Agreed to:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

	 	 	 	 	 
	 	 	 
	By:  	
/s/ Richard B. Kuertz	 	 
	 	Name:  	Richard B. Kuertz	 	 
	 	Title:  	Senior Vice President	 	 
	 

Signature Page to Guaranty

 

 

ANNEX I TO GUARANTY

     Reference is hereby made to the Guaranty (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the
“Guaranty”), dated as of March 15, 2010,
made by each of the Subsidiaries of Kendle International Inc. (the “Borrower”) listed on
the signature pages thereto (each an “Initial Guarantor”, and together with any additional
Subsidiaries which become parties to the Guaranty by executing Guaranty Supplements thereto
substantially similar in form and substance hereto, the “Guarantors”), in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, under the Credit Agreement.
Each capitalized term used herein and not defined herein shall have the meaning given to it in the
Guaranty.

     By its execution below, the undersigned, [NAME OF NEW
GUARANTOR], a [__________________]
[corporation] [partnership] [limited liability company] (the “New Guarantor”), agrees to
become, and does hereby become, a Guarantor under the Guaranty and agrees to be bound by such
Guaranty as if originally a party thereto. By its execution below, the undersigned represents and
warrants as to itself that all of the representations and warranties contained in Section 1
of the Guaranty are true and correct in all respects as of the date hereof.

     IN WITNESS WHEREOF, the New Guarantor has executed and delivered this Annex I
counterpart to the Guaranty as of this _______________ day of _________, 20___.

	 	 	 	 	 
	 	[NAME OF NEW GUARANTOR]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Signature Page to Guarantyexv10w16

Exhibit 10.16

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT (as the same may be amended, restated, supplemented or
otherwise modified from time to time, this “Security Agreement”) is entered into as of
March 15, 2010 by and among KENDLE INTERNATIONAL INC., an Ohio corporation (the
“Borrower”), the Subsidiaries of the Borrower listed on the signature pages hereto
(together with the Borrower, the “Initial Grantors,” and together with any additional
Subsidiaries, whether now existing or hereafter formed or acquired which become parties to this
Security Agreement from time to time, in accordance with the terms of the Credit Agreement (as
defined below), by executing a Supplement hereto in substantially the form of Annex I, the
“Grantors”), and JPMORGAN CHASE BANK, N.A., a national banking association, in its capacity
as administrative agent (the “Administrative Agent”) for itself and for the Secured Parties
(as defined in the Credit Agreement identified below).

PRELIMINARY STATEMENT

     The Borrower, the Administrative Agent and the Lenders are entering into a Credit Agreement
dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). The Grantors are entering into this
Security Agreement in order to induce the Lenders to enter into and extend credit to the Borrower
under the Credit Agreement.

     ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured Parties,
hereby agree as follows:

ARTICLE I

DEFINITIONS

     1.1. Terms Defined in the Credit Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

     1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined
in this Security Agreement are used herein as defined in the UCC.

     1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in
addition to the terms defined in the Preliminary Statement, the following terms shall have the
following meanings:

     “Accounts” shall have the meaning set forth in Article 9 of the UCC.

     “Article” means a numbered article of this Security Agreement, unless another document
is specifically referenced.

     “Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

 

 

     “Collateral” means all Accounts, Chattel Paper, Commercial Tort Claims, Copyrights,
Deposit Accounts, Documents, Equipment, Farm Products, Fixtures, General Intangibles, Goods,
Instruments, Inventory, Investment Property, letters of credit, Letter-of-Credit Rights, Licenses,
Patents, Pledged Deposits, Supporting Obligations, Trademarks and Other Collateral, wherever
located, in which any Grantor now has or hereafter acquires any right or interest, and the proceeds
(including Stock Rights), insurance proceeds and products thereof, together with all books and
records, customer lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto; provided, however, that in no event shall Collateral
include any Excluded Property.

     “Commercial Tort Claims” means those certain currently existing commercial tort
claims, as defined in the UCC of any Grantor, including each commercial tort claim specifically
described in Exhibit “F”.

     “Control” shall have the meaning set forth in Article 8 or, if applicable, in Section
9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

     “Copyrights” means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations, and copyright applications; (b) all extensions
of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation, damages or payments for
past or future infringements for any of the foregoing; (d) the right to sue for past, present, and
future infringements of any of the foregoing; and (e) all rights corresponding to any of the
foregoing throughout the world.

     “Default” has the meaning ascribed thereto in the Credit Agreement.

     “Deposit Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Administrative Agent, among any Loan Party, a banking institution
holding such Loan Party’s funds, and the Administrative Agent with respect to collection and
Control of all deposits and balances held in a deposit account maintained by any Loan Party with
such banking institution.

     “Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC; provided,
however, that Deposit Accounts shall not include (a) any trust, fiduciary or similar accounts
maintained by any Grantor or (b) any Restricted Cash Account or (c) any amounts or other property
credited to any such account or Restricted Cash Account.

     “Documents” shall have the meaning set forth in Article 9 of the UCC.

     “Excluded Property” shall mean:

     (a) any permit or license issued by a Governmental Authority to any Grantor or
any agreement to which any Grantor is a party, in each case, only to the extent and
for so long as the terms of such permit, license or agreement or any Requirement of
Law applicable thereto, prohibit the creation by such Grantor of a security interest
in such permit, license or agreement in favor of the Collateral Agent (after giving
effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any
successor provision or provisions) or any other applicable law (including the
Bankruptcy Code) or principles of equity),

     (b) Equipment owned by any Grantor on the date hereof or hereafter acquired
that is subject to a Lien securing a Purchase Money Obligation or Capital Lease

2

 

Obligation permitted to be incurred pursuant to the provisions of the Credit
Agreement if the contract or other agreement in which such Lien is granted (or the
documentation providing for such Purchase Money Obligation or Capital Lease
Obligation) prohibits the creation of any other Lien on such Equipment; and

     (c) Excluded Intercompany Notes and any other property (including any
Instrument, Securities, Investment Property, General Intangibles, Account, note,
payment intangible or general tangible relating to any amount due from a Foreign
Subsidiary), the security interest in which, would result in an investment of
earnings in United States property under Section 956 (or a successor provision) of
the Code, which investment would or could reasonably be expected to trigger an
increase in the net income of a Grantor pursuant to Section 951 (or a successor
provision) of the Code (assuming that the person obligated with respect to such
Property has positive income and earnings and profits at all applicable times);

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

     “Equipment” shall have the meaning set forth in Article 9 of the UCC.

     “Exhibit” refers to a specific exhibit to this Security Agreement, unless another
document is specifically referenced.

     “Farm Products” shall have the meaning set forth in Article 9 of the UCC.

     “Fixtures” shall have the meaning set forth in Article 9 of the UCC.

     “General Intangibles” shall have the meaning set forth in Article 9 of the UCC and, in
any event, includes payment intangibles, contract rights, rights to payment, rights arising under
common law, statutes, or regulations, choses or things in action, goodwill (including the goodwill
associated with any Trademark), Patents, Trademarks, Copyrights, URLs and domain names, other
industrial or Intellectual Property or rights therein or applications therefor, whether under
license or otherwise, programs, programming materials, blueprints, drawings, purchase orders,
customer lists, monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, including Intellectual Property Licenses,
infringement claims, computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, pension plan refunds, pension plan refund claims, insurance premium
rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability
company which do not constitute a security under Article 8 of the Code, and any other personal
property other than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts,
Goods, Investment Property, negotiable Collateral, and oil, gas, or other minerals before
extraction.

     “Goods” shall have the meaning set forth in Article 9 of the UCC.

     “Instruments” shall have the meaning set forth in Article 9 of the UCC.

     “Intellectual Property” means all Patents, Trademarks, Copyrights and any other
intellectual property.

     “Inventory” shall have the meaning set forth in Article 9 of the UCC.

3

 

     “Investment Property” shall have the meaning set forth in Article 9 of the UCC.

     “Letter of Credit Rights” shall have the meaning set forth in Article 9 of the UCC.

     “Licenses” means, with respect to any Person, all of such Person’s right, title, and
interest in and to (a) any and all licensing agreements or similar arrangements in and to its
Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or
hereafter due or payable under and with respect thereto, including, without limitation, damages and
payments for past and future breaches thereof, and (c) all rights to sue for past, present, and
future breaches thereof.

     “Other Collateral” means any property of the Grantors, not included within the defined
terms Accounts, Chattel Paper, Commercial Tort Claims, Copyrights, Deposit Accounts, Documents,
Equipment, Fixtures, Farm Products, General Intangibles, Goods, Instruments, Inventory, Investment
Property, Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Supporting Obligations and
Trademarks, including, without limitation, all cash on hand, letters of credit, Stock Rights or any
other deposits (general or special, time or demand, provisional or final) with any bank or other
financial institution, it being intended that the Collateral include all real and personal property
of the Grantors.

     “Patents” means, with respect to any Person, all of such Person’s right, title, and
interest in and to: (a) any and all patents and patent applications; (b) all inventions and
improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals,
extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and
payments now or hereafter due or payable under and with respect thereto, including, without
limitation, damages and payments for past and future infringements thereof; (e) all rights to sue
for past, present, and future infringements thereof; and (f) all rights corresponding to any of the
foregoing throughout the world.

     “Pledged Collateral” means all Instruments, Securities and other Investment Property
of the Grantors, whether or not physically delivered to the Administrative Agent pursuant to this
Security Agreement.

     “Pledged Deposits” means all time deposits of money (other than Deposit Accounts and
Instruments), whether or not evidenced by certificates, which a Grantor may from time to time
designate as pledged to the Administrative Agent or to any Secured Party as security for any
Secured Obligations, and all rights to receive interest on said deposits.

     “Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments or Pledged Deposits, and any other rights or claims to receive money which are General
Intangibles or which are otherwise included as Collateral.

     “Restricted Cash Accounts” shall mean any deposit account maintained by a Grantor in
accordance with the terms of an agreement with a customer entered into in the ordinary course and
in good faith (other than an agreement with a customer that is an Affiliate of such Grantor), which
agreement requires certain of the customer’s funds paid or advanced under such agreement to be used
solely for the payment of costs and expenses associated with, arising out of or related to such
agreement.

     “Section” means a numbered section of this Security Agreement, unless another document
is specifically referenced.

     “Security” shall have the meaning set forth in Article 8 of the UCC.

     “Securities Account” has the meaning set forth in Article 8 of the UCC.

4

 

     “Stock Rights” means any securities, dividends, instruments or other distributions and
any other right or property which any Grantor shall receive or shall become entitled to receive for
any reason whatsoever with respect to, in substitution for or in exchange for any securities or
other ownership interests in a corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and any right to
receive earnings, in which any Grantor now has or hereafter acquires any right, issued by an issuer
of such securities.

     “Supporting Obligation” shall have the meaning set forth in Article 9 of the UCC.

     “Trademarks” means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all trademarks (including service marks), trade names, trade
dress, and trade styles and the registrations and applications for registration thereof and the
goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and
payments now or hereafter due or payable with respect thereto, including, without limitation,
damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for
past, present, and future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights corresponding to any of the
foregoing throughout the world.

     The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.

ARTICLE II

GRANT OF SECURITY INTEREST

     Each of the Grantors hereby pledges, assigns and grants to the Administrative Agent, on behalf
of and for the benefit of the Secured Parties, a security interest in all of such Grantor’s right,
title and interest, whether now owned or hereafter acquired, in and to the Collateral to secure the
prompt and complete payment and performance of the Secured Obligations. For the avoidance of
doubt, the grant of a security interest herein shall not be deemed to be an assignment of
intellectual property rights owned by the Grantors.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     Each of the Initial Grantors represents and warrants to the Administrative Agent and the
Secured Parties, and each Grantor that becomes a party to this Security Agreement pursuant to the
execution of a Security Agreement Supplement in substantially the form of Annex I
represents and warrants (after giving effect to supplements to each of the Exhibits hereto with
respect to such subsequent Grantor as attached to such Security Agreement Supplement), that:

     3.1. Title, Authorization, Validity and Enforceability. Such Grantor has good and
valid rights in or the power to transfer the Collateral owned by it and title to the Collateral
with respect to which it has purported to grant a security interest hereunder, free and clear of
all Liens except for Liens permitted under Section 4.1.6 hereof, and has full corporate,
limited liability company or partnership, as applicable, power and authority to grant to the
Administrative Agent the security interest in such Collateral pursuant hereto. The execution and
delivery by such Grantor of this Security Agreement are within such Grantor’s powers and have been
duly authorized by all necessary action on the part of such Grantor. This Security Agreement has
been duly executed and delivered by such Grantor and constitutes a legal, valid and

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binding obligation of such Grantor, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law. When financing statements have been filed in the appropriate
offices against such Grantor in the locations listed in Exhibit “E”, the Administrative
Agent will have a fully perfected first priority security interest in the Collateral owned by such
Grantor in which a security interest may be perfected by filing of a financing statement under the
UCC, subject only to Liens permitted under Section 4.1.6 hereof.

     3.2. Conflicting Laws and Contracts. Except as set forth on Schedule 3.03 to the
Credit Agreement, the execution and delivery by such Grantor of this Security Agreement, the
creation and perfection of the security interest in the Collateral granted hereunder, or compliance
with the terms and provisions hereof (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except (i) such as have been
obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created
by this Security Agreement and the other Loan Documents and (iii) consents, approvals,
registrations, filings, permits or actions the failure to obtain or perform which could not
reasonably be expected to result in a Material Adverse Effect, (b) will not violate the
Organizational Documents of such Grantor, (c) will not violate any Requirement of Law, except for
violations that could not reasonably be expected to result in a Material Adverse Effect, (d) will
not violate or result in a default or require any consent or approval under any indenture,
agreement or other instrument binding upon such Grantor or its property, or give rise to a right
thereunder to require any payment to be made by such Grantor, except for violations, defaults or
the creation of such rights that could not reasonably be expected to result in a Material Adverse
Effect and (e) will not result in the creation or imposition of any Lien on any property of such
Grantor, except Liens created by this Security Agreement, the other Loan Documents and Permitted
Liens.

     3.3. Principal Location. Such Grantor’s mailing address and the location of its
principal place of business (if it has only one) or its chief executive office (if it has more than
one place of business), are disclosed in Exhibit “A”.

     3.4. Property Locations. The Inventory, Equipment and Fixtures of each Grantor are
located solely at the locations of such Grantor described in Exhibit “A”. All of said
locations are owned by such Grantor except for locations (i) which are leased by such Grantor as
lessee and designated in Part B of Exhibit “A” and (ii) at which Inventory is held in a
public warehouse or is otherwise held by a bailee or on consignment by such Grantor as designated
in Part C of Exhibit “A”.

     3.5. No Other Names; Etc.. Within the five-year period ending as of the date such
Person becomes a Grantor hereunder, such Grantor has not conducted business under any name, changed
its jurisdiction of formation, merged with or into or consolidated with any other Person, except as
disclosed in Exhibit “A”. The name in which such Grantor has executed this Security
Agreement is the exact name as it appears in such Grantor’s organizational documents, as amended,
as filed with such Grantor’s jurisdiction of organization as of the date such Person becomes a
Grantor hereunder.

     3.6. No Default. No Default or Event of Default exists.

     3.7. Accounts and Chattel Paper. The names of the obligors, amounts owing, due dates
and other information with respect to the Accounts and Chattel Paper owned by such Grantor are and
will be correctly stated in all records of such Grantor relating thereto and in all invoices. As
of the time when each Account or each item of Chattel Paper arises, such Grantor shall be deemed to
have represented and warranted that such Account or Chattel Paper, as the case may be, and all
records relating thereto, are genuine and in all respects what they purport to be.

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     3.8. Filing Requirements. None of the Equipment (constituting Collateral) owned by
such Grantor is covered by any certificate of title, except for motor vehicles. None of the
Collateral owned by such Grantor is of a type for which security interests or liens may be
perfected by the Administrative Agent by filing under any federal statute except for (i) motor
vehicles and (ii) Patents, Trademarks and Copyrights held by such Grantor and described in Part C
of Exhibit “B”. The county and street address of the property on which any Fixtures owned
by such Grantor are located is set forth in Exhibit “C”.

     3.9. No Financing Statements, Security Agreements. No financing statement or security
agreement describing all or any portion of the Collateral which has not lapsed or been terminated
naming such Grantor as debtor has been filed or is of record in any jurisdiction except financing
statements (i) naming the Administrative Agent on behalf of the Secured Parties as the secured
party and (ii) in respect of Liens permitted by Section 6.02 of the Credit Agreement;
provided, that nothing herein shall be deemed to constitute an agreement to subordinate any
of the Liens of the Administrative Agent under the Loan Documents to any Liens otherwise permitted
under Section 6.02 of the Credit Agreement.

     3.10. Federal Employer Identification Number; State Organization Number; Jurisdiction of
Organization. Such Grantor’s federal employer identification number is, and if such Grantor is
a registered organization, such Grantor’s State of organization, type of organization and State of
organization identification number (if any) are, listed in Exhibit “G”.

     3.11. Pledged Securities and Other Investment Property. Exhibit “D” sets
forth a complete and accurate list of the Instruments, Securities and other Investment Property
constituting Collateral and delivered to the Administrative Agent. Each Grantor is the direct and
beneficial owner of each Instrument, Security and other type of Investment Property listed in
Exhibit “D” as being owned by it, free and clear of any Liens, except for the security
interest granted to the Administrative Agent for the benefit of the Secured Parties hereunder or as
permitted by Section 6.02 of the Credit Agreement. Each Grantor further represents and warrants
that (i) all such Instruments, Securities or other types of Investment Property which are shares of
stock in a corporation or ownership interests in a partnership or limited liability company have
been (to the extent such concepts are relevant with respect to such Instrument, Security or other
type of Investment Property) duly and validly issued, are fully paid and non-assessable and
constitute the percentage of the issued and outstanding shares of stock (or other equity interests)
of the respective issuers thereof indicated in Exhibit “D” hereto, (ii) with respect to any
certificates delivered to the Administrative Agent representing an ownership interest in a
partnership or limited liability company, either such certificates are Securities as defined in
Article 8 of the UCC of the applicable jurisdiction as a result of actions by the issuer or
otherwise, or, if such certificates are not Securities, such Grantor has so informed the
Administrative Agent so that the Administrative Agent may take steps to perfect its security
interest therein as a General Intangible and (iii) to the extent requested by the Administrative
Agent prior to the Effective Date, all such Pledged Collateral held by a securities intermediary is
covered by a control agreement among such Grantor, the securities intermediary and the
Administrative Agent pursuant to which the Administrative Agent has Control.

     3.12. Intellectual Property. Exhibit “B” contains a complete and accurate
listing as of the Effective Date of all Patents, Trademarks and Copyrights for which registration
is pending or registered under United States federal law or foreign federal law of each of the
Grantors, including, but not limited to the following: (i) U.S. and foreign trademark registrations
and applications for trademark registration, (ii) U.S. and foreign patents and patents
applications, together with all reissuances, continuations, continuations in part, revisions,
extensions, and reexaminations thereof, (iii) U.S. and foreign copyright registrations and
applications for registration, (iv) foreign industrial design registrations and industrial design
applications, all forms of Intellectual Property described in clauses (i)-(iii) above that are
owned by a third party and licensed to the Grantors other than license agreements and other user
agreements entered into by the Grantor in the ordinary course of business. Exhibit B sets forth
the names of any

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Person who has been granted rights in respect thereof pursuant to a license outside of the
ordinary course of business. All of the U.S. registrations, applications for registration or
applications for issuance of the Intellectual Property are valid and subsisting, in good standing
and are recorded or is in the process of being recorded in the name of the applicable Grantor.

     3.13. Deposit Accounts and Securities Accounts. All of such Grantor’s Deposit
Accounts and Securities Accounts are listed on Exhibit “H”.

ARTICLE IV

COVENANTS

     From the date of this Security Agreement and thereafter until this Security Agreement is
terminated, each of the Initial Grantors agrees, and from and after the effective date of any
Security Agreement Supplement applicable to any Grantor (and after giving effect to supplements to
each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Security
Agreement Supplement) and thereafter until this Security Agreement is terminated each such
subsequent Grantor agrees:

     4.1. General.

     4.1.1 Inspection. Each Grantor will permit any representatives designated by
the Administrative Agent or any Lender to visit and inspect the financial records and the
property of such Grantor (so long as such Lender’s representatives coordinate through the
Administrative Agent and all such representatives of the Administrative Agent and each
Lender conduct such visit and inspection at the same time) at reasonable times and on
reasonable prior notice (not more often than once per year so long as no Event of Default
has occurred and is continuing) and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent or any Lender
to discuss the affairs, finances, accounts and condition of such Grantor with the officers
and employees thereof and advisors therefor, including independent accountants (so long as
such Lender’s representatives coordinate through the Administrative Agent and all such
representatives of the Administrative Agent and each Lender conduct such discussion at the
same time).

     4.1.2 Taxes. Each Grantor will pay and discharge promptly when due all Taxes,
assessments and governmental charges or levies imposed upon it or upon its income or profits
or in respect of its property, before the same shall become delinquent or in default, as
well as all lawful claims for labor, services, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien other than a Permitted Lien upon such properties or any
part thereof; provided that such payment and discharge shall not be required with respect to
any such Tax, assessment, charge, levy or claim so long as (x)(i) the validity or amount
thereof shall be contested in good faith by appropriate proceedings timely instituted and
diligently conducted and such Grantor shall have set aside on its books adequate reserves or
other appropriate provisions with respect thereto in accordance with GAAP, (ii) such contest
operates to suspend collection of the contested obligation, Tax, assessment or charge and
enforcement of a Lien other than a Permitted Lien and (iii) in the case of Collateral, such
Grantor shall have otherwise complied with the Contested Collateral Lien Conditions and (y)
the failure to pay could not reasonably be expected to result in a Material Adverse Effect.

     4.1.3 Records and Reports; Notification of Default. Each Grantor shall keep
proper books of record and account in which full, true and correct entries in conformity
with GAAP and

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all Requirements of Law are made of all dealings and transactions in relation to its
business and activities.

     4.1.4 Financing Statements and Other Actions; Defense of Title. Each Grantor
hereby authorizes the Administrative Agent to file, and if requested will execute and
deliver to the Administrative Agent, all financing statements describing the Collateral
owned by such Grantor. Such financing statements may describe the Collateral in the same
manner as described herein or may contain an indication or description of collateral that
describes such property in any other manner as the Administrative Agent may determine, in
its sole discretion, is necessary, advisable or prudent to ensure that the perfection of the
security interest in the Collateral granted to the Administrative Agent herein, including,
without limitation, describing such property as “all assets of the Debtor whether now owned
or hereafter acquired and wheresoever located, including all accessions thereto and proceeds
thereof.” Each Grantor will take any and all actions necessary to defend title to the
Collateral owned by such Grantor against all persons and to defend the security interest of
the Administrative Agent in such Collateral and the priority thereof against any Lien not
expressly permitted hereunder.

     4.1.5 Disposition of Collateral. No Grantor will sell, lease or otherwise
dispose of the Collateral owned by such Grantor except (i) dispositions specifically
permitted pursuant to the Credit Agreement, (ii) sales or leases of Inventory in the
ordinary course of business, and (iii) proceeds of Inventory and Accounts collected in the
ordinary course of business.

     4.1.6 Liens. No Grantor will create, incur, or suffer to exist any Lien on
the Collateral owned by such Grantor except Liens permitted pursuant to Section 6.02 of the
Credit Agreement, provided, that nothing herein shall be deemed to constitute an
agreement to subordinate any of the Liens of the Administrative Agent under the Loan
Documents to any Liens otherwise permitted under Section 6.02 of the Credit Agreement.

     4.1.7 Change in Corporate Existence, Type or Jurisdiction of Organization,
Location, Name. Each Grantor will comply with Section 5.13 of the Credit Agreement as
if it were a party thereto.

     4.1.8 Other Financing Statements. Except as otherwise permitted or
contemplated by the Credit Agreement, no Grantor will suffer to exist or authorize the
filing of any financing statement naming it as debtor covering all or any portion of the
Collateral owned by such Grantor, except any financing statement authorized under
Section 4.1.4 hereof. Each Grantor acknowledges that it is not authorized to file
any financing statement or amendment or termination statement with respect to any financing
statement filed in connection herewith without the prior written consent of the
Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

     4.2. Receivables.

     4.2.1 Certain Agreements on Receivables. Prior to the occurrence and
continuation of a Default, such Grantor may reduce the amount of Accounts arising from the
sale of Inventory or the rendering of services in accordance with its present policies and
in the ordinary course of business and as otherwise permitted under the Credit Agreement.

     4.2.2 Collection of Receivables. Except as otherwise provided in this
Security Agreement, each Grantor will collect and enforce, at such Grantor’s sole expense,
all amounts due or hereafter due to such Grantor under the Receivables owned by such
Grantor, in each case,

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in the ordinary course of business and consistent with past practice; provided,
however, that any Grantor may (i) allow refunds or credits relating to faulty, damaged or
defective goods or services, (ii) allow such extensions of time and modifications of terms
in respect of any Receivables as Grantor shall determine are commercially reasonable and
(iii) abandoned any Receivable where the estimated time, cost or expense relating to the
collection of such Receivable is material in relation to the value of such Receivable and/or
the expected amount to be collected thereon.

     4.2.3 Delivery of Invoices. Each Grantor will deliver to the Administrative
Agent promptly upon its request after the occurrence of an Event of Default duplicate
invoices with respect to each Account owned by such Grantor.

     4.2.4 Disclosure of Counterclaims on Receivables. If (i) any discount, credit
or agreement to make a rebate or to otherwise reduce the amount owing on a Receivable owned
by such Grantor exists or (ii) if, to the knowledge of such Grantor, any dispute, setoff,
claim, counterclaim or defense exists or has been asserted or threatened with respect to a
Receivable, such Grantor will accurately reflect such fact in the records of such Grantor
relating to such Receivable.

     4.3. [Intentionally Omitted].

     4.4. Instruments, Securities, Chattel Paper, Documents and Pledged Deposits. Each
Grantor will (i) deliver to the Administrative Agent immediately upon execution of this Security
Agreement the originals of all Chattel Paper, Securities (to the extent certificated) and
Instruments, in each case to the extent constituting Collateral (if any then exist), (ii) hold in
trust for the Administrative Agent upon receipt and immediately thereafter deliver to the
Administrative Agent any Chattel Paper, Securities and Instruments, in each case to the extent
constituting Collateral, (iii) upon the designation of any Pledged Deposits (as set forth in the
definition thereof), deliver to the Administrative Agent such Pledged Deposits which are evidenced
by certificates included in the Collateral endorsed in blank, marked with such legends and assigned
as the Administrative Agent shall specify, and (iv) upon the Administrative Agent’s request, after
the occurrence and during the continuance of a Default, deliver to the Administrative Agent (and
thereafter hold in trust for the Administrative Agent upon receipt and immediately deliver to the
Administrative Agent) any Document evidencing or constituting Collateral.

     4.5. Uncertificated Securities and Certain Other Investment Property. Each Grantor
will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if
held with a securities intermediary, such securities intermediary) of uncertificated securities or
other types of Investment Property (which constitutes Collateral) not represented by certificates
which are Collateral owned by such Grantor to mark their books and records with the numbers and
face amounts of all such uncertificated securities or other types of Investment Property not
represented by certificates and all rollovers and replacements therefor to reflect the Lien of the
Administrative Agent granted pursuant to this Security Agreement. To the extent requested by the
Administrative Agent, each Grantor will use all commercially reasonable efforts, with respect to
Investment Property constituting Collateral owned by such Grantor held with a financial
intermediary, to cause such financial intermediary to enter into a control agreement with the
Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent.

     4.6. Stock and Other Ownership Interests.

     4.6.1 Changes in Capital Structure of Issuers. Except as permitted in the
Credit Agreement, no Grantor will vote any of the Instruments, Securities or other
Investment Property

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owned by such Grantor in favor of any of the dissolution or liquidation of any Person,
the retirement of any Equity Interest owned by such Grantor in such Person or the merger or
consolidation of such Person.

4.6.2 Issuance of Additional Securities. Except as otherwise permitted by the
Credit Agreement, no Grantor will vote any Equity Interests to permit or suffer the issuer
of privately held corporate securities or other ownership interests in a corporation,
partnership, joint venture or limited liability company constituting Collateral to issue any
such securities or other ownership interests, any right to receive the same or any right to
receive earnings, except to such Grantor.

4.6.3 Registration of Pledged Securities and other Investment Property. Each
Grantor will permit any registrable Collateral owned by such Grantor to be registered in the
name of the Administrative Agent or its nominee at any time at the option of the Required
Lenders following the occurrence and during the continuance of an Event of Default and
without any further consent of such Grantor.

4.6.4 Exercise of Rights in Pledged Securities and other Investment Property.
Each Grantor will permit the Administrative Agent or its nominee at any time after the
continuance of an Event of Default, without notice, to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the Collateral owned by such
Grantor or any part thereof, and to receive all dividends and interest in respect of such
Collateral.

     4.7. Deposit Accounts. Each Grantor will (i) upon the Administrative Agent’s request,
use commercially reasonable efforts to cause each bank or other financial institution (other than
the Administrative Agent) in which it maintains (a) a Deposit Account to enter into a control
agreement with the Administrative Agent, in form and substance satisfactory to the Administrative
Agent in order to give the Administrative Agent Control of the Deposit Account or (b) other
deposits (general or special, time or demand, provisional or final) to be notified of the security
interest granted to the Administrative Agent hereunder and cause each such bank or other financial
institution to acknowledge such notification in writing and (ii) upon the Administrative Agent’s
request after the occurrence and during the continuance of an Event of Default, deliver to each
such bank or other financial institution a letter, in form and substance acceptable to the
Administrative Agent, transferring ownership of the Deposit Account to the Administrative Agent or
transferring dominion and control over each such other deposit to the Administrative Agent until
such time as no Default exists. In the case of deposits maintained with Lenders, the terms of such
letter shall be subject to the provisions of the Credit Agreement regarding setoffs.

     4.8. Letter-of-Credit Rights. Each Grantor will, upon the Administrative Agent’s
request, cause each issuer of a letter of credit for the benefit of any Grantor, to consent to the
assignment of proceeds of the letter of credit in order to give the Administrative Agent Control of
the letter-of-credit rights to such letter of credit.

     4.9. Federal, State or Municipal Claims. Each Grantor will notify the Administrative
Agent of any Collateral owned by such Grantor which constitutes a claim against the United States
government or any state or local government or any instrumentality or agency thereof, the
assignment of which claim is restricted by federal, state or municipal law, in each case, to the
extent that the fair market value of such Collateral individually, or in the aggregate with respect
to any Person against whom such a claim may be made, exceeds $1,000,000.

     4.10. Intellectual Property.

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     4.10.1 If, after the date hereof, any Grantor obtains rights to any registered Patent,
Copyright or Trademark or any Patent, Copyright or Trademark for which registration is
pending, including, but not limited to filing and acceptance of a statement of use or an
amendment to allege use with the United States Patent and Trademark Office, or applies for
or seeks registration of, any new patentable invention, Trademark or Copyright in addition
to the Patents, Trademarks and Copyrights described in Part C of Exhibit “B”, which
are all of such Grantor’s Patents, Trademarks and Copyrights as of the Effective Date, then
such Grantor shall give the Administrative Agent notice thereof, as part of the compliance
certificate provided to the Administrative Agent in connection with the financial statements
delivered pursuant to Section 5.01 of the Credit Agreement. Each Grantor agrees promptly
upon request by the Administrative Agent to execute and deliver to the Administrative Agent
any supplement to this Security Agreement or any other document reasonably requested by the
Administrative Agent to evidence such security interest in a form appropriate for recording
in the applicable federal office. Each Grantor also hereby authorizes the Administrative
Agent to modify this Security Agreement unilaterally (i) by amending Part C of Exhibit
“B” to include any future Patents, Trademarks and/or Copyrights of which the
Administrative Agent receives notification from such Grantor pursuant hereto and (ii) by
recording, in addition to and not in substitution for this Security Agreement, a duplicate
original of this Security Agreement containing in Part C of Exhibit “B” a
description of such future Patents, Trademarks and/or Copyrights.

     4.10.2 This Agreement is effective to create a valid and continuing Lien on the
Copyrights, Patents and Trademarks for which registration is pending, or registered, with
the United States Patent and Trademark Office or the United States Copyright Office, as
applicable, and, upon filing of the Confirmatory Grant of Security Interest in Copyrights
with the United States Copyright Office and filing of the Confirmatory Grant of Security
Interest in Patents with the United States Patent and Trademark Office, and the filing of
appropriate financing statements in the jurisdictions listed in Exhibit “E” hereto, all
action necessary or desirable to protect and perfect the security interest in, to and on
such Patents, Trademarks or Copyrights has been taken and such perfected security interest
is enforceable as such as against any and all creditors of and purchasers from any Grantor.

     4.11. Commercial Tort Claims. If, after the date hereof, any Grantor identifies the
existence of a Commercial Tort Claim belonging to such Grantor that has arisen in the course of
such Grantor’s business in addition to the Commercial Tort Claims described in Exhibit “F”, which
are all of such Grantor’s Commercial Tort Claims as of the Effective Date, then such Grantor shall
give the Administrative Agent notice thereof, at the time of delivery of its compliance certificate
delivered with the financial statements required by Section 5.01(a) of the Credit Agreement. Each
Grantor agrees promptly upon request by the Administrative Agent to execute and deliver to the
Administrative Agent any supplement to this Security Agreement or any other document reasonably
requested by the Administrative Agent to evidence the grant of a security interest therein in favor
of the Administrative Agent.

     4.12. Updating of Exhibits to Security Agreement. The Borrower will provide to the
Administrative Agent, concurrently with the delivery of the certificate of a Financial Officer of
the Borrower as required by Section 5.01(c) of the Credit Agreement with respect to financial
statements delivered under Section 5.01(a) of the Credit Agreement, updated versions of the
Exhibits to this Security Agreement (provided that if there have been no changes to any such
Exhibits since the previous updating thereof required hereby, the Borrower shall indicate that
there has been “no change” to the applicable Exhibit(s)).

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ARTICLE V

DEFAULT AND REMEDIES

     5.1. Acceleration and Remedies. Upon the acceleration of the Obligations under the
Credit Agreement pursuant to Article VII thereof:

     5.1.1 The Obligations under the Credit Agreement and, to the extent provided for under
the Swap Agreements and the Banking Services Agreements evidencing the same, the Swap
Obligations and the Banking Services Obligations, shall immediately become due and payable
without presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, and the Administrative Agent may, with the concurrence or at the direction
of the Required Lenders, exercise any or all of the following rights and remedies:

	 	(i)	 	Those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document, provided that this clause (i)
shall not be understood to limit any rights or remedies available to the Administrative
Agent and the Secured Parties prior to a Default.
	 
	 	(ii)	 	Those rights and remedies available to a secured party under the UCC (whether
or not the UCC applies to the affected Collateral) or under any other applicable law
(including, without limitation, any law governing the exercise of a bank’s right of
setoff or bankers’ lien) when a debtor is in default under a security agreement.
	 
	 	(iii)	 	Give notice of sole control or any other instruction under any Deposit Account
Control Agreement or other control agreement with any securities intermediary and take
any action therein with respect to such Collateral.
	 
	 	(iv)	 	Without notice except as specifically provided in Section 8.1 hereof or
elsewhere herein, sell, lease, assign, grant an option or options to purchase or
otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in
one or more parcels at public or private sale or sales (which sales may be adjourned or
continued from time to time with or without notice and may take place at any Grantor’s
premises of elsewhere), for cash, on credit or for future delivery without assumption
of any credit risk, and upon such other terms as the Administrative Agent may deem
commercially reasonable.
	 
	 	(v)	 	Concurrently with written notice to the applicable Grantor, transfer and
register in its name or in the name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations, to
exercise the voting and all other rights as a holder with respect thereto, to collect
and receive all cash dividends, interest, principal and other distributions made
thereon and to otherwise act with respect to the Pledged Collateral as though the
Administrative Agent was the outright owner thereof.

     5.1.2 The Administrative Agent, on behalf of the Secured Parties, may comply with any
applicable state or federal law requirements in connection with a disposition of the
Collateral, and such compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

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     5.1.3 The Administrative Agent shall have the right upon any such public sale or sales
and, to the extent permitted by law, upon any such private sale or sales, to purchase for
the benefit of the Administrative Agent and the other Secured Parties, the whole or any part
of the Collateral so sold, free of any right of equity redemption, which equity redemption
the Grantor hereby expressly releases.

     5.1.4 Until the Administrative Agent is able to effect a sale, lease, or other
disposition of Collateral, the Administrative Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of
preserving Collateral or its value or for any other purpose deemed appropriate by the
Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment
of a receiver or keeper to take possession of Collateral and to enforce any of the
Administrative Agent’s remedies (for the benefit of the Administrative Agent and other
Secured Parties), with respect to such appointment without prior notice or hearing as to
such appointment.

     5.1.5 If, after the Credit Agreement has terminated by its terms and all of the
Secured Obligations have been paid in full, there remain outstanding Swap Obligations or
Banking Services Obligations, the Required Lenders may exercise the remedies provided in
this Section 5.1 upon the occurrence of any event which would allow or require the
termination or acceleration of any Swap Obligations or Banking Services Obligations but only
to the extent that the Administrative Agent has a Lien on any Collateral.

     5.1.6 Notwithstanding the foregoing, neither the Administrative Agent nor any other
Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of
their rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any
other Person with respect to the payment of the Secured Obligations or to pursue or exhaust
any of their rights or remedies with respect to any Collateral therefor or any direct or
indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured
Obligations or to resort to the Collateral or any such guarantee in any particular order, or
(iii) effect a public sale of any Collateral.

     5.1.7 Each Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to resort to one or
more private sales thereof in accordance with Section 5.1.1 above. Each Grantor
also acknowledges that any private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. The Administrative Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral for the period
of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register
such securities for public sale under the Securities Act of 1933, as amended, or under
applicable state securities laws, even if the applicable Grantor and the issuer would agree
to do so.

     5.2. Grantors’ Obligations Upon Default. Upon the request of the Administrative Agent
after the occurrence of an Event of Default, each Grantor will:

     5.2.1 Assembly of Collateral. Assemble and make available to the
Administrative Agent the Collateral and all records relating thereto at any place or places
specified by the Administrative Agent.

     5.2.2 Secured Party Access. Permit the Administrative Agent, by the
Administrative Agent’s representatives and agents, to enter, occupy and use any premises
where all or any part of

14

 

the Collateral, or the books and records relating thereto, or both, are located, to
take possession of all or any part of the Collateral, or the books and records relating
thereto, or both, to remove all or any part of the Collateral, or the books and records
relating thereto, or both, and to conduct sales of the Collateral, without any obligation to
pay the Grantor for such use and occupancy.

     5.3. License. The Administrative Agent is hereby granted a license or other right to
use, following the occurrence and during the continuance of an Event of Default, without charge,
each Grantor’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, customer lists and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of, advertising for sale, and
selling any Collateral, and, following the occurrence and during the continuance of an Event of
Default, such Grantor’s rights under all licenses and all franchise agreements shall inure to the
Administrative Agent’s benefit. In addition, each Grantor hereby irrevocably agrees that the
Administrative Agent may, following the occurrence and during the continuance of an Event of
Default, sell any of such Grantor’s Inventory directly to any person, including without limitation
persons who have previously purchased such Grantor’s Inventory from such Grantor and in connection
with any such sale or other enforcement of the Administrative Agent’s rights under this Security
Agreement, may sell Inventory which bears any trademark owned by or licensed to such Grantor and
any Inventory that is covered by any copyright owned by or licensed to such Grantor and the
Administrative Agent may finish any work in process and affix any trademark owned by or licensed to
such Grantor and sell such Inventory as provided herein.

ARTICLE VI

WAIVERS, AMENDMENTS AND REMEDIES

     No delay or omission of the Administrative Agent or any Secured Party to exercise any right or
remedy granted under this Security Agreement shall impair such right or remedy or be construed to
be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any
such right or remedy shall not preclude any other or further exercise thereof or the exercise of
any other right or remedy. No waiver, amendment or other variation of the terms, conditions or
provisions of this Security Agreement whatsoever shall be valid unless in writing signed by the
Administrative Agent and each Grantor, and then only to the extent specifically set forth in such
writing, provided that the addition of any Subsidiary as a Grantor hereunder by execution of a
Security Agreement Supplement in the form of Annex I (with such modifications as shall be
acceptable to the Administrative Agent) shall not require receipt of any consent from or execution
of any documentation by any other Grantor party hereto. All rights and remedies contained in this
Security Agreement or by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Secured Parties until the Secured Obligations have been paid in full.

ARTICLE VII

PROCEEDS; COLLECTION OF RECEIVABLES

     7.1. Lockboxes. Upon request of the Administrative Agent after the occurrence and
during the continuance of an Event of Default, each Grantor shall execute and deliver to the
Administrative Agent irrevocable lockbox agreements in the form provided by or otherwise acceptable
to the Administrative Agent, which agreements shall be accompanied by an acknowledgment by the bank
where the lockbox is located of the Lien of the Administrative Agent granted hereunder and of
irrevocable instructions to wire all amounts collected therein to a special collateral account at
the Administrative Agent.

15

 

     7.2. Collection of Receivables. The Administrative Agent may at any time after the
occurrence and during the continuance of an Event of Default, by giving each Grantor written
notice, elect to require that the Receivables be paid directly to the Administrative Agent for the
benefit of the Secured Parties. In such event, each Grantor shall, and shall permit the
Administrative Agent to, promptly notify the account debtors or obligors under the Receivables
owned by such Grantor of the Administrative Agent’s interest therein and direct such account
debtors or obligors to make payment of all amounts then or thereafter due under such Receivables
directly to the Administrative Agent. Upon receipt of any such notice from the Administrative
Agent, each Grantor shall thereafter for so long as an Event of Default is continuing hold in trust
for the Administrative Agent, on behalf of the Secured Parties, all amounts and proceeds received
by it with respect to the Receivables and Other Collateral and immediately and at all times
thereafter deliver to the Administrative Agent all such amounts and proceeds in the same form as so
received, whether by cash, check, draft or otherwise, with any necessary endorsements. The
Administrative Agent shall hold and apply funds so received as provided by the terms of
Sections 7.3 and 7.4 hereof.

     7.3. Special Collateral Account. After the occurrence, and during the continuance of
an Event of Default, the Administrative Agent may require all cash proceeds of the Collateral to be
deposited in a special non-interest bearing cash collateral account with the Administrative Agent
and held there as security for the Secured Obligations. No Grantor shall have any control
whatsoever over said cash collateral account. If any Event of Default has occurred and is
continuing, the Administrative Agent may (and shall, at the direction of the Required Lenders),
from time to time, apply the collected balances in said cash collateral account to the payment of
the Secured Obligations whether or not the Secured Obligations shall then be due.

     7.4. Application of Proceeds. The proceeds of the Collateral shall be applied by the
Administrative Agent to payment of the Secured Obligations as provided under Section 2.18 of the
Credit Agreement.

ARTICLE VIII

GENERAL PROVISIONS

     8.1. Notice of Disposition of Collateral; Condition of Collateral. To the extent
notice of the time and place of any public sale or the time after which any private sale or other
disposition of all or any part of the Collateral may be made is required under applicable law, such
notice shall be deemed reasonable if sent to the Borrower, addressed as set forth in Article IX, at
least ten (10) days prior to (i) the date of any such public sale or (ii) the time after which any
such private sale or other disposition may be made. The Administrative Agent shall have no
obligation to clean-up or otherwise prepare the Collateral for sale. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages, and demands against the
Administrative Agent or any other Secured Party arising out of the repossession, retention or sale
of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of
the Administrative Agent or such other Secured Party as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert against the
Administrative Agent or any other Secured Party, any valuation, stay, appraisal, extension,
moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety
now or hereafter existing which, but for this provision, might be applicable to the sale of any
Collateral made under the judgment, order or decree of any court, or privately under the power of
sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided
herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this Security Agreement or any
Collateral.

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     8.2. Limitation on Administrative Agent’s and other Secured Parties’ Duty with Respect to
the Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise
prepare the Collateral for sale. The Administrative Agent and each other Secured Party shall use
reasonable care with respect to the Collateral in its possession or under its control. Neither the
Administrative Agent nor any other Secured Party shall have any other duty as to any Collateral in
its possession or control or in the possession or control of any agent or nominee of the
Administrative Agent or such other Secured Party, or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto. To the extent that
applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially
reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the
Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent
to prepare Collateral for disposition or otherwise to transform raw material or work in process
into finished goods or other finished products for disposition, (ii) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against
account debtors or other Persons obligated on Collateral or to remove Liens on or any adverse
claims against Collateral, (iv) to exercise collection remedies against account debtors and other
Persons obligated on Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through publications or media
of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact
other Persons, whether or not in the same business as such Grantor, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of a specialized
nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail
markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi)
to purchase insurance or credit enhancements to insure the Administrative Agent against risks of
loss, collection or disposition of Collateral or to provide to the Administrative Agent a
guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by the Administrative Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Administrative Agent in the collection
or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this
Section 8.2 is to provide non-exhaustive indications of what actions or omissions by the
Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of
remedies against the Collateral and that other actions or omissions by the Administrative Agent
shall not be deemed commercially unreasonable solely on account of not being indicated in this
Section 8.2. Without limitation upon the foregoing, nothing contained in this Section
8.2 shall be construed to grant any rights to any Grantor or to impose any duties on the
Administrative Agent that would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section 8.2.

     8.3. Compromises and Collection of Collateral. Each Grantor and the Administrative
Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors
with respect to certain of the Receivables, that certain of the Receivables may be or become
uncollectible in whole or in part and that the expense and probability of success in litigating a
disputed Receivable may exceed the amount that reasonably may be expected to be recovered with
respect to a Receivable. In view of the foregoing, each Grantor agrees that the Administrative
Agent may at any time and from time to time, if an Event of Default has occurred and is continuing,
compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount
as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and
any such action by the Administrative Agent shall be commercially reasonable so long as the
Administrative Agent acts in good faith based on information known to it at the time it takes any
such action.

17

 

     8.4. Secured Party Performance of Grantor’s Obligations. Without having any
obligation to do so, the Administrative Agent may perform or pay any obligation which any Grantor
has agreed to perform or pay in this Security Agreement and such Grantor shall reimburse the
Administrative Agent for any reasonable amounts paid by the Administrative Agent pursuant to this
Section 8.4. Each Grantor’s obligation to reimburse the Administrative Agent pursuant to
the preceding sentence shall be a Secured Obligation payable on demand.

     8.5. Authorization for Secured Party to Take Certain Action. Each Grantor irrevocably
authorizes the Administrative Agent at any time and from time to time in the sole discretion of the
Administrative Agent (for clauses (ii), (iv), (v), (vi) and (vii), only upon the occurrence and
continuation of an Event of Default) and appoints the Administrative Agent as its attorney in fact
(i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or
desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection
and priority of the Administrative Agent’s security interest in the Collateral, (ii) to indorse and
collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other
reproduction of this Security Agreement or any financing statement with respect to the Collateral
as a financing statement and to file any other financing statement or amendment of a financing
statement (which does not add new collateral or add a debtor) in such offices as the Administrative
Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection
and priority of the Administrative Agent’s security interest in the Collateral, (iv) to contact and
enter into one or more agreements with the issuers of uncertificated securities which are
Collateral owned by such Grantor and which are Securities or with financial intermediaries holding
other Investment Property as may be necessary or advisable to give the Administrative Agent Control
over such Securities or other Investment Property, (v) subject to the terms of Section
4.1.5 hereof, to enforce payment of the Instruments, Accounts and Receivables in the name of
the Administrative Agent or such Grantor, (vi) to apply the proceeds of any Collateral received by
the Administrative Agent to the Secured Obligations as provided in Article VII and (vii) to
discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such
Liens as are specifically permitted hereunder or under any other Loan Document), and each Grantor
agrees to reimburse the Administrative Agent on demand for any reasonable payment made or any
reasonable expense incurred by the Administrative Agent in connection therewith, provided that this
authorization shall not relieve any Grantor of any of its obligations under this Security Agreement
or under the Credit Agreement.

     8.6. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees
that a breach of any of the covenants contained in Section 5.3 hereof will cause
irreparable injury to the Administrative Agent and the Secured Parties, that the Administrative
Agent and Secured Parties have no adequate remedy at law in respect of such breaches and therefore
agrees, without limiting the right of the Administrative Agent or the Secured Parties to seek and
obtain specific performance of other obligations of the Grantors contained in this Security
Agreement, that the covenants of the Grantors contained in the Sections referred to in this
Section 8.6 shall be specifically enforceable against the Grantors.

     8.7. Use and Possession of Certain Premises. Upon the occurrence of a Default, the
Administrative Agent shall be entitled to occupy and use any premises owned or leased by the
Grantors where any of the Collateral or any records relating to the Collateral are located until
the Secured Obligations are paid or the Collateral is removed therefrom, whichever first occurs,
without any obligation to pay any Grantor for such use and occupancy.

     8.8. [Intentionally Omitted].

     8.9. Reinstatement. This Security Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Grantor for liquidation or
reorganization, should any Grantor become insolvent or make an assignment for the benefit of any

18

 

creditor or creditors or should a receiver or trustee be appointed for all or any significant
part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may
be, if at any time payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

     8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall
be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the Secured
Parties and their respective successors and assigns (including all persons who become bound as a
debtor to this Security Agreement), except that the Grantors shall not have the right to assign
their rights or delegate their obligations under this Security Agreement or any interest herein,
without the prior written consent of the Administrative Agent. No sales of participations,
assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or
any portion thereof or interest therein shall in any manner impair the Lien granted to the
Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties,
hereunder.

     8.11. Survival of Representations. All representations and warranties of the Grantors
contained in this Security Agreement shall survive the execution and delivery of this Security
Agreement.

     8.12. Taxes and Expenses. To the extent required by Section 2.17 of the Credit
Agreement, any Other Taxes payable or ruled payable by a Federal or State authority in respect of
this Security Agreement shall be paid by the Grantors, together, to the extent required by Section
2.17 of the Credit Agreement, with interest and penalties, if any. The Grantors shall pay all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank, any Lender or any
other Secured Party, including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank, any Lender or any other Secured Party, in connection with
the enforcement or protection of its rights in connection with this
Security Agreement and any other Loan
Document, including its rights under this Section; provided, however, that in no event
shall the Grantors be required to reimburse the Lenders or any other Secured Party for more than
one counsel to the Administrative Agent (and up to one local counsel to the Administrative Agent in
each applicable jurisdiction and regulatory counsel) and one counsel for all of the other Lenders
and Secured Parties (and up to one local counsel in each applicable jurisdiction and regulatory
counsel), unless a Lender or its counsel or any other Secured Party or its counsel determines that
it is impractical or inappropriate (or would create actual or potential conflicts of interest) to
not have individual counsel, in which case such Lender or such Secured Party may have its own
counsel which shall be reimbursed in accordance with the foregoing. Any and all costs and expenses
incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall
be borne solely by the Grantors.

     8.13. Headings. The title of and section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and
provisions of this Security Agreement.

     8.14. Termination. This Security Agreement shall continue in effect (notwithstanding
the fact that from time to time there may be no Secured Obligations outstanding) until (i) any and
all commitments to extend credit under the Loan Documents have terminated, and the Credit Agreement
has terminated pursuant to its express terms and (ii) all of the Secured Obligations (other than
Unliquidated Obligations) have been indefeasibly paid in cash and performed in full (or with
respect to any outstanding Letters of Credit, a cash deposit or backup Letter of Credit has been
delivered to the Administrative Agent

19

 

as required by the Credit Agreement) and no commitments of the Administrative Agent or the
Secured Parties which would give rise to any Obligations are outstanding.

     8.15. Entire Agreement. This Security Agreement embodies the entire agreement and
understanding between the Grantors and the Administrative Agent relating to the Collateral and
supersedes all prior agreements and understandings among the Grantors and the Administrative Agent
relating to the Collateral.

     8.16. Governing Law; Jurisdiction; Waiver of Jury Trial.

     8.16.1 THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.

     8.16.2 Each of the Administrative Agent and each Grantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of
the Supreme Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Security Agreement
or any other Loan Document, or for recognition or enforcement of any judgment, and each of
the Administrative Agent and each Grantor hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each of the
Administrative Agent and each Grantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Security Agreement or any
other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to this Security
Agreement or any other Loan Document against any Grantor or its properties in the courts of
any jurisdiction.

     8.16.3 Each of the Administrative Agent and each Grantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Security Agreement or any other Loan Document
in any court referred to in Section 8.16.2. Each of the Administrative Agent and
each Grantor hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court.

     8.16.4 Each party to this Security Agreement irrevocably consents to service of
process in the manner provided for notices in Article IX of this Security Agreement, and
each of the Grantors hereby appoints the Borrower as its agent for service of process.
Nothing in this Security Agreement or any other Loan Document will affect the right of any
party to this Security Agreement to serve process in any other manner permitted by law.

     8.16.5 WAIVER OF JURY TRIAL. EACH OF THE ADMINISTRATIVE AGENT AND EACH
GRANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HEREIN (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR

20

 

ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HEREIN HAVE BEEN INDUCED TO ENTER INTO THIS
SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

     8.17. Indemnity. Each Grantor hereby agrees, jointly with the other Grantors and
severally, to indemnify the Administrative Agent and the Secured Parties, and their respective
successors, assigns, agents and employees, from and against any and all liabilities, damages,
penalties, suits, costs, and expenses of any kind and nature (including, without limitation, all
expenses of litigation or preparation therefor whether or not the Administrative Agent or any
Secured Party is a party thereto) imposed on, incurred by or asserted against the Administrative
Agent or the Secured Parties, or their respective successors, assigns, agents and employees, in any
way relating to or arising out of this Security Agreement or any other Loan Document, or the
manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of any Collateral (including, without
limitation, latent and other defects, whether or not discoverable by the Administrative Agent or
the Secured Parties or any Grantor, and any claim for patent, trademark or copyright infringement);
provided that such indemnity shall not, as to any Person indemnified hereunder, be
available to the extent that such liabilities, damages, penalties, situs, costs and expenses are
determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the material breach by any such Person of its express obligations under the Loan
Documents or the gross negligence or willful misconduct of such Person.

     8.18. Subordination of Intercompany Indebtedness. Each Grantor agrees that any and
all claims of such Grantor against any other Grantor (each an “Obligor”) with respect to
any “Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Secured Obligations, or against any of its properties shall be
subordinate and subject in right of payment to the prior payment, in full and in cash, of all
Secured Obligations, provided that, and not in contravention of the foregoing, so long as no
Default or Event of Default has occurred and is continuing, such Grantor may make loans to and
receive payments with respect to such Intercompany Indebtedness from each such Obligor to the
extent not prohibited by the terms of this Security Agreement and the other Loan Documents.
Notwithstanding any right of any Grantor to ask, demand, sue for, take or receive any payment from
any Obligor, all rights, liens and security interests of such Grantor, whether now or hereafter
arising and howsoever existing, in any assets of any other Obligor shall be and are subordinated to
the rights of the Secured Parties and the Administrative Agent in those assets. No Grantor shall
have any right to possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until this Security Agreement has terminated in accordance
with Section 8.14. If all or any part of the assets of any Obligor, or the proceeds
thereof, are subject to any distribution, division or application to the creditors of such Obligor,
whether partial or complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action
or proceeding, or if the business of any such Obligor is dissolved or if substantially all of the
assets of any such Obligor are sold, then, and in any such event (such events being herein referred
to as an “Insolvency Event”), any payment or distribution of any kind or character, either
in cash, securities or other property, which shall be payable or deliverable upon or with respect
to any indebtedness of any Obligor to any Grantor (“Intercompany Indebtedness”) shall be
paid or delivered directly to the Administrative Agent for application on any of the Secured
Obligations, due or to become due, until such Secured Obligations (other than Unliquidated
Obligations) shall have first been fully paid and satisfied (in cash). Should any payment,
distribution, security or instrument or proceeds thereof be received by the applicable Grantor upon
or with respect to the Intercompany Indebtedness after any

21

 

Insolvency Event and prior to the termination of this Security Agreement in accordance with
Section 8.14, such Grantor shall receive and hold the same in trust, as trustee, for the
benefit of the Secured Parties and shall forthwith deliver the same to the Administrative Agent,
for the benefit of the Secured Parties, in precisely the form received (except for the endorsement
or assignment of the Grantor where necessary), for application to any of the Secured Obligations,
due or not due, and, until so delivered, the same shall be held in trust by the Grantor as the
property of the Secured Parties. If any such Grantor fails to make any such endorsement or
assignment to the Administrative Agent, the Administrative Agent or any of its officers or
employees is irrevocably authorized to make the same. Each Grantor agrees that until the
termination of this Security Agreement in accordance with Section 8.14, no Grantor will
assign or transfer to any Person (other than the Administrative Agent or the Borrower or another
Grantor) any claim any such Grantor has or may have against any Obligor.

     8.19. Severability. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Security Agreement are declared to be
severable.

     8.20. Counterparts. This Security Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Security Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Security Agreement.

ARTICLE IX

NOTICES

     9.1. Sending Notices. Any notice required or permitted to be given under this
Security Agreement shall be sent (and deemed received) in the manner and to the addresses set forth
in Section 9.01 of the Credit Agreement. Any notice delivered to the Borrower shall be deemed to
have been delivered to all of the Grantors.

     9.2. Change in Address for Notices. Each of the Grantors, the Administrative Agent
and the Lenders may change the address for service of notice upon it by a notice in writing to the
other parties.

ARTICLE X

THE ADMINISTRATIVE AGENT

     JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Secured Parties
hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed
by the parties to this Security Agreement that any authority conferred upon the Administrative
Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties
to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has
agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the
express conditions contained in such Article VIII. Any successor Administrative Agent
appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights,
interests and benefits of the Administrative Agent hereunder.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, each of the Grantors and the Administrative Agent have executed this
Security Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	 	 	KENDLE INTERNATIONAL INC., as a Grantor

	 

	 	 	 	By:	 	/s/ Keith A. Cheesman
	 

	 	 	 	 	 	 
	 

	 	 	 	 	Name:	Keith A. Cheesman
	 

	 	 	 	 	Title:	Senior Vice President
and
Chief Financial Officer
	 
	 	 	 	 	 	 
	AAC CONSULTING GROUP, INC., as a Grantor	 	ACER/EXCEL INC., as a Grantor
	 
	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	By:	 	/s/ Keith A. Cheesman
	 

	 	 
	 	 	 	 
	 	Name:

	Keith A. Cheesman	 	 	Name:	Keith A. Cheesman
	 	Title:

	Director, Senior Vice President
and
Chief Financial Officer	 	 	Title:	Director, Senior Vice President
and
Chief Financial Officer
	 
	 	 	 	 	 	 
	KENDLE AMERICAS HOLDING INC., as a Grantor	 	KENDLE AMERICAS INVESTMENT INC., as a Grantor
	 
	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	By:	 	/s/ Keith A. Cheesman
	 
	 	 	 	 	 	 
	 	Name:

	Keith A. Cheesman	 	 	Name:	Keith A. Cheesman
	 	Title:

	Director, Senior Vice President
and
Chief Financial Officer	 	 	Title:	Director, Senior Vice President
and
Chief Financial Officer
	 
	 	 	 	 	 	 
	KENDLE AMERICAS MANAGEMENT INC., as 
a Grantor	 	KENDLE INTERNATIONAL CPU LLC, as a 
Grantor
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	By:	 	/s/ Keith A. Cheesman
	 
	 	 	 	 	 	 
	 	Name:

	Keith A. Cheesman	 	 	Name:	Keith A. Cheesman
	 	Title:

	Director, Senior Vice President and

Chief Financial Officer	 	 	Title:	Manager
	 
	KENDLE DELAWARE LLC, as a Grantor	 	KENDLE NC LLC, as a Grantor
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Keith A. Cheesman	 	By:	 	/s/ Keith A. Cheesman
	 
	 	 	 	 	 	 
	 	Name:

	Keith A. Cheesman	 	 	Name:	Keith A. Cheesman
	 	Title:

	Manager	 	 	Title:	Manager

Signature Page to Pledge and Security Agreement

 

	 	 	 	 	 
	Acknowledged and Agreed to:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

 	 	 
	By:  	
/s/ Richard B. Kuertz	 	 
	 	Name:  	Richard B. Kuertz	 	 
	 	Title:  	Senior Vice President	 	 
	 

Signature Page to Pledge and Security Agreement

 

EXHIBIT “A”

(See Sections 3.3, 3.4, 3.5 and 4.1.7 of Security Agreement)

Prior names, jurisdiction of formation, place of business (if Grantor has only
one place of business), chief executive office (if Grantor has more than one
place of business), mergers and mailing address:

 

 

 

 

Attention:                                          

Locations of Real Property, Inventory, Equipment and Fixtures:

	A.	 	Owned Locations of Inventory, Equipment and Fixtures of the Grantors:
	 
	 
	B.	 	Leased Locations of Inventory, Equipment and Fixtures of the Grantors
(Include Landlord’s Name):
	 
	 
	C.	 	Public Warehouses or other Locations pursuant to Bailment or
Consignment Arrangements (include name of warehouse operator or other
bailee or consignee of Inventory and Equipment of the Grantors):

1

 

EXHIBIT “B”

(See Sections 3.8 and 3.12 of Security Agreement)

A. [Reserved]

B. Aircraft/engines, ships, vessels, railcars, other vehicles and similar equipment governed by federal statute:

	 	 	 
	Description	 	Registration Number
	 

	 	 

C. Patents, copyrights and trademarks protected under federal law*:

 

			
	*	 	For (i) trademarks, show the trademark
itself, the registration date and the registration number; (ii) trademark
applications, show the trademark applied for, the application filing date and
the serial number of the application; (iii) patents, show the patent number,
issue date and a brief description of the subject matter of the patent; and
(iv) patent applications, show the serial number of the application, the
application filing date and a brief description of the subject matter of the
patent applied for. Any licensing agreements for patents or trademarks should
be described on a separate schedule.

2

 

EXHIBIT “C”

(See Section 3.8 of Security Agreement)

County and street address of property on which

Fixtures are located:

3

 

EXHIBIT “D”

List of Pledged Securities

(See Section 3.11 of Security Agreement)

A. STOCKS:

	 	 	 	 	 	 	 	 	 
	Issuer	 	Certificate Number	 	 	Number of Shares	 
	 
	 	 	 	 	 	 	 	 

B. BONDS:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Issuer	 	Number	 	 	Face Amount	 	 	Coupon Rate	 	 	Maturity	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

C. GOVERNMENT SECURITIES:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Issuer	 	Number	 	 	Type	 	 	Face Amount	 	 	Coupon Rate	 	 	Maturity	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

D. OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED):

	 	 	 	 	 	 	 	 	 
	Issuer	 	Description of Collateral	 	 	Percentage Ownership Interest	 
	 
	 	 	 	 	 	 	 	 

4

 

EXHIBIT “E”

(See Section 3.1 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

5

 

EXHIBIT “F”

(See Definition of “Commercial Tort Claims”)

COMMERCIAL TORT CLAIMS

[Describe parties, case number (if applicable), nature of dispute]

6

 

EXHIBIT “G”

(See Section 3.10 of Security Agreement)

FEDERAL EMPLOYER IDENTIFICATION NUMBER;

STATE ORGANIZATION NUMBER; JURISDICTION OF INCORPORATION

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Federal Employer	 	 	 	State of	 	 
	 	 	Identification	 	 	 	Organization or	 	State Organization
	GRANTOR1	 	Number	 	Type of Organization	 	Incorporation	 	Number
	 
	 	 	 	 	 	 	 	 	 	 
	Kendle International Inc.

	 	31-1274091
	 	Corporation
	 	Ohio
	 	 	752727	 
	 
	 	 	 	 	 	 	 	 	 	 
	AAC Consulting Group,
Inc.

	 	52-1034846
	 	Corporation
	 	Maryland
	 	DO591545

	 
	 	 	 	 	 	 	 	 	 	 
	ACER/EXCEL Inc.

	 	22-2949627
	 	Corporation
	 	New Jersey
	 	 	0100400602	 
	 
	 	 	 	 	 	 	 	 	 	 
	Kendle Americas Holding
Inc.

	 	20-4034709
	 	Corporation
	 	Ohio
	 	 	1570288	 
	 
	 	 	 	 	 	 	 	 	 	 
	Kendle Americas
Investment Inc.

	 	20-4034832
	 	Corporation
	 	Ohio
	 	 	1570287	 
	 
	 	 	 	 	 	 	 	 	 	 
	Kendle Americas
Management Inc.

	 	20-4035152
	 	Corporation
	 	Ohio
	 	 	1570286	 
	 
	 	 	 	 	 	 	 	 	 	 
	Kendle International CPU
LLC

	 	30-0040178
	 	Limited liability
company
	 	Ohio
	 	 	1290841	 
	 
	 	 	 	 	 	 	 	 	 	 
	Kendle Delaware LLC

	 	62-1406017
	 	Limited liability
company
	 	Delaware
	 	 	2207905	 
	 
	 	 	 	 	 	 	 	 	 	 
	Kendle NC LLC

	 	56-1479782
	 	Limited liability
company
	 	North Carolina
	 	 	0171365	 

 

			
	1	 	Borrower to confirm.

7

 

EXHIBIT “H”

(See Section 3.5 of Security Agreement)

DEPOSIT ACCOUNTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Check here if	 	 	Description of	 
	 	 	 	 	 	 	 	 	 	 	Deposit Account is	 	 	Deposit Account	 
	 	 	 	 	 	 	 	 	 	 	a Collateral	 	 	if not a Collateral	 
	Name of Grantor	 	Name of Institution	 	 	Account Number	 	 	Deposit Account	 	 	Deposit Account	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

SECURITIES ACCOUNTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Check here if	 	 	Description of	 
	 	 	 	 	 	 	 	 	 	 	Securities Account	 	 	Securities Account	 
	 	 	 	 	 	 	 	 	 	 	is a Collateral	 	 	if not a Collateral	 
	Name of Grantor	 	Name of Institution	 	 	Account Number	 	 	Deposit Account	 	 	Deposit Account	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

8

 

ANNEX I

to

PLEDGE AND

SECURITY AGREEMENT

     Reference is hereby made to the Pledge and Security Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the
“Agreement”), dated as of March 15, 2010, made by each of KENDLE INTERNATIONAL INC., an Ohio corporation (the “Borrower”)
and the other Subsidiaries of the Borrower listed on the signature pages thereto (together with the
Borrower, the “Initial Grantors”, and together with any additional Subsidiaries, including
the undersigned, which become parties thereto by executing a Supplement in substantially the form
hereof, the “Grantors”), in favor of the Administrative Agent. Capitalized terms used
herein and not defined herein shall have the meanings given to them in the Agreement. By its
execution below, the undersigned, [NAME OF NEW GRANTOR], a [                    ] [corporation/limited
liability company/limited partnership] (the “New Grantor”) agrees to become, and does
hereby become, a Grantor under the Agreement and agrees to be bound by the Agreement as if
originally a party thereto. By its execution below, the undersigned represents and warrants as to
itself that all of the representations and warranties contained in the Agreement are true and
correct in all respects as of the date hereof. New Grantor represents and warrants that the
supplements to the Exhibits to the Agreement attached hereto are true and correct in all respects
and such supplements set forth all information required to be scheduled under the Agreement. New
Grantor shall take all steps necessary and required under the Agreement to perfect, in favor of the
Administrative Agent, a first-priority security interest in and lien against New Grantor’s
Collateral.

     IN WITNESS WHEREOF, the New Grantor has executed and delivered this Annex I
counterpart to the Agreement as of this                      day of                     , 20___.

	 	 	 	 	 
	 	[NAME OF NEW GRANTOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 

1

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