Negative Pledge Agreement

EXHIBIT 10.35 Customer No.: Loan No.: NEGATIVE PLEDGE AGREEMENT THIS NEGATIVE PLEDGE AGREEMENT ("Agreement") is entered into, as of September 30, 2002, by and between RBC CENTURA BANK ("Bank"), with a mailing address of 3201 Beechleaf Court, Suite 100, Raleigh, North Carolina 27604-1051, and SALIX PHARMACEUTICALS, LTD., a Delaware corporation and SALIX PHARMACEUTICALS, INC. a California corporation, jointly and severally (collectively, "Borrower"), with a mailing address of 8540 Colonnade Center Drive, Suite 501, Raleigh, North Carolina, 27615. RECITALS A. Bank has agreed to make certain advances of money and to extend certain financial accommodation to Borrower (the "Loans") in the amounts and manner set forth in that certain Commercial Promissory Note and that certain Loan and Security Agreement, each entered into contemporaneously herewith by and between Bank and Borrower (as the same may be amended, modified or supplemented from time to time, respectively, the "Note" and the "Loan Agreement"). Capitalized terms not defined herein shall have the meaning ascribed in the Loan Agreement. B. Bank is willing to make the Loans to Borrower, but only upon the condition, among others, that Borrower enter into this Agreement. NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: AGREEMENT 1. From the date of this Agreement through the end of the term hereof as provided hereinbelow, Borrower shall not, without the Bank's prior written approval, directly or indirectly, through its actions and/or those of others, whether voluntarily or involuntarily, sell, transfer, assign, mortgage, pledge, lease, grant a security interest in or encumber (other than to Bank), or permit any other person to sell, transfer, assign, mortgage, pledge, lease, grant a security interest in or encumber any of the Copyrights, Patents or Trademarks listed on Exhibits A , B and C attached hereto or Borrower's other Intellectual Property and/or any parts or parcels thereof or interests or rights therein, including, without limitation, the following: a. Any and all copyrights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held; b. Any and all mask works or similar rights, now or hereafter existing, created, acquired or held; c. Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held; d. Any and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held; e. All and all patents, patent applications and like protections including, without limitation ...