PLEDGE AND SECURITY AGREEMENT

Exhibit 10.3

EXECUTION COPY

Portions of this Exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. Such omissions are designated as ***.

PLEDGE AND SECURITY AGREEMENT

This PLEDGE AND SECURITY AGREEMENT , dated as of September 30, 2008 (this “ Agreement ”), is entered into by and among Unigene Laboratories, Inc. (“ Principal Borrower ”), Victory Park Management, LLC (“ Victory Park ”), as the collateral agent (the “ Collateral Agent ”), the holders of the Notes (the “ Holders ”), the holders of the Shares (the “ Lenders ” and together with Victory Park and the Holders, the “ Secured Parties ”) and each Person which becomes a party hereto pursuant to the joinder provisions of Section 20 hereof (hereinafter Principal Borrower and such other Persons are collectively referred to as the “ Obligors ” or individually referred to as an “ Obligor ”).

WHEREAS:

A. Pursuant to that certain Financing Agreement entered into by and among the Obligors and the Secured Parties dated as of even date herewith (as modified, amended, extended, restated, amended and restated or supplemented from time to time, the “ Financing Agreement ”) the Holders have agreed to purchase those certain Senior Secured Notes issued by the Obligors to the Holders due September 30, 2011 (or other date as set forth therein) in the original aggregate principal amount of $15,000,000 (as the same may be amended from time to time, the “ Initial Notes ”) and may purchase additional Senior Secured Notes issued by the Obligors to the Holders in the original aggregate principal amount of up to $5,000,000 (together with the Initial Notes, the “ Notes ”), from the Obligors.

B. Pursuant to the Financing Agreement, the Lenders have agreed to purchase 1,125,000 shares of common stock, par value $0.01 per share, of Principal Borrower (the “ Initial Shares ”), and may purchase up to 375,000 additional shares of common stock, par value $0.01 per share, of Principal Borrower (together with the Initial Shares, the “ Shares ”), from Principal Borrower.

D. Pursuant to that certain Registration Rights Agreement entered into by and among Principal Borrower and the Lenders dated as of even date herewith (as modified, amended, extended, restated, amended and restated or supplemented from time to time, the “ Registration Rights Agreement ”), Principal Borrower has agreed to provide the Lenders with certain registration rights with respect to the Shares.

E. In order to secure the payment of Principal Borrower under the Notes and as an inducement to the Holders to purchase the Notes, and in order to secure the performance of Principal Borrower under the Registration Rights Agreement and as an inducement to the Lenders to purchase the Shares, Principal Borrower has agreed to enter into this Agreement for the benefit of the Secured Parties.

NOW, THEREFORE , in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. CERTAIN DEFINITIONS . As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined in the UCC shall have the respective meanings given such terms in the UCC (and if such terms are defined in more than one article of the UCC, such terms shall have the meaning given in Article 9 thereof), and capitalized terms not otherwise defined herein shall have the meaning given to them in the Financing Agreement or the Notes, as applicable.

(a) “ Collateral ” means the following property of the Obligors, whether presently owned or existing or hereafter acquired or coming into existence and wherever located, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer thereof and of insurance covering the same and of any tort claims in connection therewith:

(i) all Accounts, Deposit Accounts, Instruments, Documents, Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel Paper), Goods (including Inventory, Equipment, Fixtures and Motor Vehicles), Money, Payment Intangibles, Software, customer lists and other General Intangibles and all Letter-of-Credit Rights;

(ii) the shares of common stock and preferred stock, or partnership, membership and other ownership interests, now or hereafter owned by the Obligors (other than any ownership interests owned by the Obligors in Unigene U.K. Limited) (collectively, the “ Pledged Equity ”), provided, however that the foregoing shall not include shares of common stock, preferred stock or other ownership interests of a Controlled Foreign Corporation that exceeds 66% of the total combined voting power of all classes of such stock or other ownership interest entitled to vote and all certificates evidencing the same, together with, in each case, all shares, securities, monies or property representing a dividend on any of the Pledged Equity, or representing a distribution or return of capital upon or in respect of the Pledged Equity, or resulting from a split up, revision, reclassification or other like change of the Pledged Equity or otherwise received in exchange therefor, and any subscription warrants, rights or options issued to the holders of, or otherwise in respect of, the Pledged Equity (the Pledged Equity, together with all other certificates, shares, securities, properties, ownership interests, or moneys, dividends, distributions, returns of capital subscription, warrants, rights or options as may from time to time be pledged hereunder pursuant to this clause being herein collectively called the “ Equity Collateral ”);

(iii) all Investment Property, Financial Assets and Securities Accounts not covered by the foregoing clauses (i) and (ii);

(iv) all Intellectual Property;

(v) all commercial tort claims now or hereafter described on Schedule C hereto;

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(vi) all other tangible and intangible property of the Obligors, including all books, correspondence, credit files, records, invoices, tapes, cards, computer runs and other papers and documents in the possession or under the control of the Obligors or any computer bureau or service company from time to time acting for the Obligors; and

(vii) all Proceeds and products in whatever form of all or any part of the other Collateral, including all rents, profits, income and benefits and all proceeds of insurance and all condemnation awards and all other compensation for any event of loss with respect to all or any part of the other Collateral (together with all rights to recover and proceed with respect to the same), and all accessions to, substitutions for and replacements of all or any part of the other Collateral.

(b) “ Controlled Account ” means the bank accounts (including, without limitation, all Deposit Accounts and Securities Accounts) of the Obligors, including without limitation those set forth on Schedule F hereto, but excluding any accounts used exclusively to fund payroll or any accounts with an average monthly balance of less than $10,000.

(c) “ Controlled Foreign Corporation ” shall mean a “controlled foreign corporation” as defined in the United States Internal Revenue Code of 1986, as amended from time to time.

(d) “ Copyright Licenses ” shall mean any and all agreements, licenses and covenants to which an Obligor is a party providing for the granting of any right in or to Copyrights or otherwise providing for a covenant not to sue with respect to a Copyright (whether such Obligor is licensee or licensor thereunder).

(e) “ Copyrights ” shall mean all United States and foreign copyrights owned by an Obligor (including community designs), including but not limited to copyrights in software (if any) and all rights in and to databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, moral rights, reversionary interests, termination rights, and, with respect to any and all of the foregoing: (i) all registrations and applications therefor, (ii) all extensions and renewals thereof, (iii) all rights corresponding thereto throughout the world, (iv) all rights to sue for past, present and future infringements thereof and (v) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages and proceeds of suit.

(f) “ Event of Default ” shall have the meaning ascribed in the Financing Agreement.

(g) “ Intellectual Property ” shall mean, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trade Secrets, the Trade Secret Licenses, the Trademarks and the Trademark Licenses.

(h) “ Obligations ” shall have the meaning ascribed in the Financing Agreement.

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(i) “ Patent Licenses ” means all agreements, licenses and covenants to which an Obligor is a party providing for the granting of any right in or to Patents or otherwise providing for a covenant not to sue with respect to a Patent (whether such Obligor is licensee or licensor thereunder).

(j) “ Patents ” shall mean all United States and foreign patents and certificates of invention, or similar industrial property rights, and applications for any of the foregoing owned by an Obligor, including, but not limited to: (i) all registrations and applications therefor, (ii) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii) all rights corresponding thereto throughout the world, (iv) all inventions and improvements described therein, (v) all rights to sue for past, present and future infringements thereof, (vi) all licenses, claims, damages, and proceeds of suit arising therefrom, and (vii) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.

(k) “ Permitted Liens ” shall have the meaning ascribed in the Financing Agreement (excluding clause (i) of the definition thereof).

(l) “ Requirements of Laws ” means any U.S. federal, state and local, and any non-U.S. laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority and applicable to an Obligor.

(m) “ Trade Secret Licenses ” shall mean any and all agreements to which an Obligor is a party providing for the granting of any right in or to Trade Secrets (whether such Obligor is licensee or licensor thereunder).

(n) “ Trade Secrets ” shall mean all trade secrets and all other confidential or proprietary information and know-how owned by an Obligor whether or not such Trade Secret has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to such Trade Secret, including but not limited to: (i) the right to sue for past, present and future misappropriation or other violation of any Trade Secret, and (ii) all proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and Proceeds of suit.

(o) “ Trademark Licenses ” means any and all agreements, licenses and covenants to which an Obligor is a party providing for the granting of any right in or to Trademarks or otherwise providing for a covenant not to sue or permitting co-existence with respect to a Trademark (whether such Obligor is licensee or licensor thereunder).

(p) “ Trademarks ” means United States and foreign trademarks, trade names, corporate names, company names, business names, fictitious business names, Internet domain names, service marks, certification marks, collective marks, logos, other source or business identifiers, designs and general intangibles of a like nature owned by an Obligor, all registrations and applications for any of the foregoing including, but not limited to: (i) all registrations and applications therefor, (ii) all extensions or renewals of any of the foregoing, (iii) all of the goodwill of the business connected with the use of and symbolized by the foregoing, (iv) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.

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(q) “ Unasserted Contingent Obligations ” means Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding Obligations (i) in respect of the principal of, and interest and premium (if any) on, and fees and expenses relating to, any Obligation and (ii) owing under the Registration Rights Agreement) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

2. GRANT OF SECURITY INTEREST . As an inducement for the Secured Parties to purchase the Notes and the Shares and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each Obligor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to the Collateral (the “ Security Interest ”).

3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE OBLIGOR . Each Obligor represents and warrants to, and covenants and agrees with, the Collateral Agent for the benefit of the Secured Parties as follows:

(a) Such Obligor has the requisite corporate power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by such Obligor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the part of such Obligor and no further action is required by such Obligor.

(b) Such Obligor has no place of business or offices where its books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached hereto.

(c) Such Obligor is the sole owner of the Collateral (except for non-exclusive licenses granted by such Obligor in the ordinary course of business), and, except for the Permitted Liens and liens in favor of the Secured Parties, such Collateral is free and clear of any liens, security interests, encumbrances, rights or claims, and such Obligor is fully authorized to grant the Security Interest in and to pledge the Collateral. There is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those filed in favor of the Secured Parties) covering or affecting any of the Collateral except for the Permitted Liens and liens in favor of the Secured Parties. So long as this Agreement shall be in effect, such Obligor shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement and except those arising from the Permitted Liens).

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(d) No part of the Intellectual Property constituting Collateral has been judged invalid or unenforceable. Except as disclosed in the Schedules to the Loan Agreement, no written claim has been received that any Intellectual Property or such Obligor’s use of any Collateral violates the intellectual property rights of any third party. There has been no adverse decision to such Obligor’s claim of ownership rights in or rights to use the Collateral in any jurisdiction or to such Obligor’s right to keep and maintain such Collateral in full force and effect, and, except as disclosed in the Schedules to the Loan Agreement, there is no proceeding pending or threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority contesting or challenging the validity, scope or enforceability of, or an Obligor’s ownership of or right to use such Collateral.

(e) Such Obligor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records or tangible Collateral unless it delivers to the Collateral Agent at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interest to create in favor of each of the Secured Parties a valid, perfected and continuing perfected first priority (except for the Permitted Liens) Lien in the Collateral.

(f) This Agreement creates in favor of the Secured Parties a valid security interest in the Collateral securing the payment and performance of the Obligations and, upon making the filings described in clause (g) below with respect to Collateral that may be perfected by such filing and upon the timely effecting of actions required by applicable law to perfect security interests in other Collateral which actions shall be taken by such Obligor (including, without limitation, the transfer of possession of original certificated securities together with appropriate transfer instruments and the delivery of deposit account control agreements), a perfected first priority (except for the Permitted Liens) Lien in such Collateral.

(g) Such Obligor hereby authorizes each of the Secured Parties to file one or more financing statements under the UCC, with respect to the Security Interest with the filing and recording agencies in any jurisdiction deemed necessary or desirable in the sole and absolute discretion of the Collateral Agent, and to file the Intellectual Property Security Agreements with the U.S. Patent and Trademark Office or the U.S. Copyright Office as appropriate. Without limiting the foregoing, each Obligor authorizes the Collateral Agent to file the UCC financing statement naming such Obligor as debtor set forth on Exhibit B hereto.

(h) The execution, delivery and performance of this Agreement by such Obligor does not conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other instrument (evidencing such Obligor’s debt or otherwise) to which such Obligor is a party or by which any property or asset of such Obligor is bound or affected. No consent (including, without limitation, any consent from any holder of stock or other type of ownership interest, any creditors, or any Governmental Authority that currently regulates the business of such Obligor) is required for such Obligor to enter into and perform its obligations hereunder.

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(i) Such Obligor shall at all times maintain the Liens and Security Interest provided for hereunder as valid and perfected first priority (except for Permitted Liens) Liens and Security Interests in the Collateral in favor of the Secured Parties until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 13 hereof. Such Obligor hereby agrees to defend the same against any and all persons except for the Secured Parties. Such Obligor shall safeguard and protect all Collateral for the account of the Secured Parties; provided that an Obligor may, upon 60 days’ prior written notice to the Collateral Agent, permit to lapse, or become abandoned, cancelled or expired, items of Intellectual Property (other than items of Intellectual Property relating to any project or development that has progressed into or beyond phase one) that an Obligor determines, in the exercise of its reasonable business judgment, have no material value to the business of such Obligor. Each Obligor irrevocably authorizes the Secured Parties at any time and from time to time to file in any filing office in any jurisdiction any initial financing statement or amendment thereto that indicates the collateral as “all assets” or “all personal property” of such Obligor or words of similar effect. Such Obligor will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Parties to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, such Obligor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interest hereunder, and such Obligor shall obtain and furnish to the Secured Parties from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the Security Interest hereunder.

(j) Except for the Permitted Liens and as expressly permitted under the Financing Agreement, such Obligor will not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral without the prior written consent of the Collateral Agent.

(k) Such Obligor shall keep and preserve its Equipment, Inventory and other tangible Collateral in good condition, repair and order, and shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage or otherwise prohibited by any applicable Requirement of Law.

(l) Such Obligor shall, within three (3) Business Days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail, of any substantial change in the Collateral, and of the occurrence of any event which would have a Material Adverse Effect on the value of the Collateral or on the Secured Parties’ Lien thereon.

(m) Such Obligor shall promptly execute and deliver to the Secured Parties such further deeds, mortgages, fixture filings, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as any Secured Party may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Collateral or any additional collateral, including, without limitation, the execution and delivery of separate mortgages and fixture filings, which shall be satisfactory to the Secured Parties in their sole discretion for real or personal property interest.

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(n) Such Obligor shall permit the Secured Parties and their representatives and agents to inspect the Collateral and to make copies of records pertaining to the Collateral in accordance with the terms of the Financing Agreement.

(o) Such Obligor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable in respect of the Collateral.

(p) Such Obligor shall within three (3) Business Days notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against any Collateral and of any other information received by such Obligor that may materially affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.

(q) All information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of such Obligor with respect to the Collateral is accurate and complete in all material respects as of the date furnished.

(r) Such Obligor shall, and shall cause its Subsidiaries to, at all times preserve and keep in full force and effect their respective valid existence and good standing and any rights, permits, licenses and franchises material to their businesses.

(s) Such Obligor will not change its name, corporate structure, or identity, or add any new fictitious name unless it provides at least thirty (30) Business Days prior written notice to the Collateral Agent of such change and, at the time of such written notification, such Obligor provides any financing statements or fixture filings necessary to perfect and continue perfected the perfected first priority (except for Permitted Liens) Security Interest granted and evidenced by the Security Documents.

(t) Such Obligor may not consign any of its Inventory or sell any of its Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent of the Collateral Agent, which shall not be unreasonably withheld.

(u) Such Obligor may not relocate its chief executive office to a new location without providing thirty (30) days prior written notification thereof to the Secured Parties and so long as, at the time of such written notification, such Obligor provides any financing statements or fixture filings necessary to perfect and continue perfected the perfected first priority (except for Permitted Liens ) Security Interest granted and evidenced by the Security Documents.

(v) Such Obligor’s exact legal name and jurisdiction of organization is set forth in the introduction paragraph of this Agreement.

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(w) With respect to the Pledged Companies (as set forth in Schedule D):

(i) The Obligors shall deliver, or cause to be delivered, all certificates or instruments representing or evidencing the Pledged Equity of the Pledged Companies to the Collateral Agent, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent, and each Obligor agrees to execute and deliver, or cause to be executed and delivered, to the Collateral Agent with respect to each Pledged Company a Consent, in the form attached hereto as Exhibit A-1, and a Pledge Instruction, in the form attached hereto as Exhibit A-2 and by this reference each made a part hereof. The Collateral Agent shall have the right, at any time in its discretion and without notice to any Obligor, after the occurrence of any Event of Default, to transfer to or to register in the name of the Collateral Agent or any of its nominees any or all of such Pledged Equity with respect to such Pledged Companies. The Collateral Agent shall also have the right at any time, in connection with exercising its rights hereunder, to exchange certificates or instruments, if any, representing or evidencing such Pledged Equity for certificates or instruments of smaller or larger denominations provided that the aggregate number of interests on such certificates or instruments issued in exchange thereof shall not exceed the number of interests pledged by the Obligors in the Pledged Companies;

(ii) in addition, all other steps necessary or advisable under any applicable law to be taken in order to perfect the first priority (except for Permitted Liens ) Security Interest granted free from adverse claims hereunder shall be taken by or on behalf of each Obligor, including without limitation, any notation on any certificate or instrument representing the Pledged Equity of the Pledged Companies and any notation on any share register or similar document or Instrument;

(iii) upon the proper filing of UCC financing statements, which have been delivered to the Collateral Agent for filing with the Secretary of State of the jurisdiction of such Obligor’s organization or formation, and/or upon delivery to the Collateral Agent of certificates representing the Pledged Equity of the Pledged Companies and the taking of any other steps that may be required in accordance with this Section 3(w) or otherwise, the pledge of Pledged Equity of the Pledged Companies pursuant to this Agreement creates a valid and perfected first priority (except for Permitted Liens) Security Interest free from adverse claims in the Equity Collateral in respect of the Pledged Companies securing the payment of the Obligations for the benefit of the Collateral Agent and the Secured Parties; and

(iv) Schedules D and Schedule E to this Agreement with respect to the Pledged Companies are true and correct and complete; and without limiting the generality of the foregoing, the Pledged Equity set forth opposite such Obligor’s name on Schedule E hereto, constitutes, as of the date hereof, the number of the issued and outstanding equity interests of each Pledged Company indicated on Schedule D hereto, the percentage of each Pledged Company indicated on Schedule E hereto and the Pledged Equity constitutes all of the Equity Interests of any such Pledged Company owned by such Obligor.

(x) (i) So long as no Event of Default shall have occurred and be continuing, each applicable Obligor shall be entitled to exercise any and all voting and other rights pertaining to the Pledged Companies, as applicable, or any part thereof for any purpose not

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inconsistent with the terms of this Agreement and the Transaction Documents; provided , however , that such Obligor shall not exercise or shall refrain from exercising any such right if such action or inaction could reasonably be expected to have a Material Adverse Effect on the value of the Pledged Companies or any part thereof or be inconsistent with or violate any provisions of this Agreement and the Transaction Documents.

(ii) So long as no Event of Default shall have occurred and be continuing, each applicable Obligor shall be entitled to receive all dividends, distributions and payments paid from time to time in respect of the Collateral, Equity Collateral and Pledged Companies to the extent permitted by the Transaction Documents.

(iii) So long as an Event of Default has occurred and is continuing, any and all (A) dividends and other distributions paid or payable in cash in respect of any Equity Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (B) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Equity Collateral, shall be in each case forthwith delivered to the Collateral Agent, to hold and shall, if received by an Obligor, be received in trust for the benefit of the Collateral Agent and the Secured Parties, be segregated from the other property or funds of such Obligor, and be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement).

(iv) The Collateral Agent shall execute and deliver (or cause to be executed and delivered) to the applicable Obligor all such proxies and other Instruments as such Obligor may reasonably request for the purpose of enabling such Obligor to exercise the voting and other rights which it is entitled to exercise pursuant to Section 3(x)(i) above.

(v) All dividends or other distributions which are received by an Obligor contrary to the provisions of this Section 3(x) shall be received in trust for the benefit of the Collateral Agent and the Secured Parties, shall be segregated from other funds of such Obligor and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary endorsement).

(vi) Subject to the provisions of Section 4 hereof, upon the occurrence of an Event of Default, (A) all voting and other rights of an Obligor to exercise the rights which it would otherwise be entitled to exercise pursuant to Section 3(x)(i) shall cease, and all such rights shall thereupon (unless expressly waived by the Collateral Agent) become vested in the Collateral Agent for the benefit of itself and the Secured Parties, which shall (unless expressly waived by the Collateral Agent) thereupon have the sole right to exercise such rights in accordance with Article 5 hereof, and (B) all cash dividends or other distributions payable in respect of the Pledged Companies shall be paid to the Collateral Agent, for the benefit of itself and the Secured Parties and such Obligor’s right to receive such cash payments pursuant to Sections 3(x)(ii) and 3(x)(iii) hereof shall immediately cease.

(y) Schedule F attached hereto correctly sets forth all Controlled Accounts of each Obligor as of the date hereof. Each Controlled Account is governed by an account control agreement, in form and substance satisfactory to the Collateral Agent. Each Obligor agrees that (i) upon the creation of a new Controlled Account, it will promptly enter into an account control

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agreement for such Controlled Account in form and substance satisfactory to the Collateral Agent, and (ii) no proceeds of any Accounts will be deposited in or at any time transferred to any Controlled Account other than a Controlled Account governed by an account control agreement in form and substance satisfactory to the Collateral Agent.

(z) Except as set forth on Schedule G attached hereto, Obligor owns no motor vehicles for which a certificate of title