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          “Copyrights” shall mean all of the following now or hereafter acquired by Grantor: (i)all copyrights and registrations and applications therefor, (ii) all renewals thereof, (iii) allincome, royalties, damages and payments now and hereafter due or payable or both with respectthereto, including, without limitation, damages and payments for past or future infringements ormisappropriations thereof, (iv) all rights to sue for past, present and future infringements ormisappropriations thereof, and (v) all other rights corresponding thereto throughout the world.          “Documents” shall mean all “documents,” as such term is defined in section 9102(a)(30) of the UCC, now owned or hereafter acquired by Grantor.          “Equipment” shall mean all “equipment,” as such term is defined in section 9102(a)(33)of the UCC, now owned or hereafter acquired by Grantor and, in any event, shall include, withoutlimitation, all machinery, equipment, furnishings, fixtures, vehicles and computers and otherelectronic data-processing and other office equipment now owned or hereafter acquired by Grantorand any and all additions, substitutions and replacements of any of the foregoing, whereverlocated, together with all attachments, components, parts, equipment and accessories installedthereon or affixed thereto.          “General Intangibles” shall mean all “general intangibles,” as such term is defined insection 9102(a)(42) of the UCC, now owned or hereafter acquired by Grantor and, in any event, shallinclude, without limitation, all right, title and interest that Grantor may now or hereafter havein or under any and all Contracts, customer lists, customer data, Copyrights, Trademarks, Patents,rights in any other intellectual property, Licenses, permits, trade secrets, proprietary orconfidential information, inventions (whether patented or patentable or not) and technicalinformation, procedures, designs, knowledge, know-how, software (including source code), databases, data, skill, expertise, experience, processes, models, drawings, materials and records nowowned or hereafter acquired by Grantor, goodwill and rights of indemnification.          “Instruments” shall mean all “instruments,” as such term is defined in section9102(a)(47) of the UCC, now owned or hereafter acquired by Grantor, other than instruments thatconstitute, or are a part of a group of writings that constitute, Chattel Paper.          “Inventory” shall mean all “inventory,” as such term is defined in section 9102(a)(48)of the UCC, now owned or hereafter acquired by Grantor and, in any event, shall include, withoutlimitation, all inventory, merchandise, goods and other personal property now owned or hereafteracquired by Grantor that are held for sale or lease or are furnished or are to be furnished under acontract of service or that constitute raw materials, work in process or materials used or consumedor to be used or consumed in Grantor’s business, or the processing, packaging, delivery or shippingof the same, and all finished goods.          “Licenses” shall mean all Patent Licenses, Trademark Licenses and other licenses as towhich Secured Party has been granted a security interest hereunder, except to the extent that anyof such licenses will be breached by the assignment or pledge of Grantor’s rights hereunder.          “Patent Licenses” shall mean all of the following now owned or hereafter acquired byGrantor: all written agreements granting any right to practice any invention on which a Patent isin existence, except to the extent that any of such written agreements would be breached by theassignment or pledge of Grantor’s rights thereunder.          “Patents” shall mean all of the following now or hereafter owned by Grantor: (i) allpatents and patent applications, (ii) all inventions and improvements described and claimedtherein, (iii) all reissues, divisions, continuations, renewals, extensions andcontinuations-in-part thereof, (iv) all income, royalties, damages and payments now and hereafterdue and/or payable to such Company with respect thereto, including, without limitation, damages andpayments for past or future infringements or misappropriations thereof, (v) all rights to sue forpast, present and future infringements or misappropriations thereof, and (vi) all other rightscorresponding thereto throughout the world.          “Proceeds” shall mean all “proceeds,” as such term is defined in section 9102(a)(64)of the UCC and, in any event, shall include, without limitation, (i) all proceeds of any insurance,indemnity, warranty or guaranty payable to Grantor from time to time with respect to any of theCollateral (as defined below), (ii) all payments (in any form whatsoever) made or due and payableto Grantor from time to time in connection with any requisition, confiscation, condemnation,seizure or
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forfeiture of all or any part of the Collateral by any governmental body, authority, bureau oragency (or any person acting under color of governmental authority), (iii) all claims of Grantoragainst third parties (A) for past, present or future infringement of any Patent or breach of aPatent License or (B) for past, present or future infringement or dilution of any Trademark orbreach of a Trademark License or for injury to the goodwill associated with any Trademark orTrademark registration and (iv) any and all other amounts from time to time paid or payable underor in connection with any of the Collateral.          “Trademarks” shall mean all of the following now owned or hereafter acquired byGrantor: (i) all trade-marks (including service marks, logos and trade names, whether registeredor at common law), registrations and applications therefor, and the goodwill of Grantor’s productor business associated therewith and symbolized thereby, (ii) all renewals thereof, (iii) allincome, royalties, damages and payments now and hereafter due or payable or both with respectthereto, including, without limitation, damages and payments for past or future infringements,dilutions or misappropriations thereof, (iv) all rights to sue for past, present and futureinfringements or misappropriations thereof, and (v) all other rights corresponding theretothroughout the world.          “Trademark Licenses” shall mean all of the following now owned or hereafter acquiredby Grantor: all written agreements granting any right to use any Trademark or Trademarkregistration, except to the extent that any of such written agreements would be breached by theassignment or pledge of Grantor’s rights thereunder.          “UCC” shall mean the Uniform Commercial Code as the same may, from time to time, be ineffect in the State of California; provided, however, in the event that, by reason of mandatoryprovisions of law, any or all of the perfection or priority of Secured Party’s security interest inany Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other thanthe State of California, the term “UCC” shall mean the Uniform Commercial Code as in effect in suchother jurisdiction for purposes of the provisions hereof relating to such perfection or priorityand for purposes of definitions related to such provisions.          2. GRANT OF SECURITY INTEREST.               (a) As collateral security for the prompt and complete payment and performance when due(whether at stated maturity, by acceleration or otherwise) of all the Obligations and to induceSecured Party to make the Loan in accordance with the terms thereof, Grantor hereby assigns,conveys, mortgages, pledges, hypothecates and transfers to Secured Party, and hereby grants toSecured Party a security interest in, all of Grantor’s right, title and interest in, to and underthe following (all of which being referred to herein collectively as the “Collateral”):                    (i) All goods, building and other materials, supplies, work in process, Equipment, machinery,fixtures, furniture, furnishings, signs and other personal property, wherever situated, which areor are to be incorporated into, used in connection with or appropriated for use on the Property;all rents, issues, deposits and profits of the Property; all Inventory, Accounts, cash receipts,deposit accounts, impounds, accounts receivable, contract rights, General Intangibles, software,Chattel Paper, Instruments, Documents, promissory notes, drafts, letters of credit, letter ofcredit rights, supporting obligations, insurance policies, insurance and condemnation awards andProceeds, any other rights to the payment of money, trade names, Trademarks and service marksarising from or related to the Property or any business now or hereafter conducted thereon byBorrower; all permits, consents, approvals, Licenses, authorizations and other rights granted by,given by or obtained from, any governmental entity with respect to the Property; all deposits orother security now or hereafter made with or given to utility companies by Borrower with respect tothe Property; all advance payments of insurance premiums made by Borrower with respect to theProperty; all plans, drawings and specifications relating to the Property; all loan funds held byLender, whether or not disbursed; all funds deposited with Lender pursuant to any Loan Document;all reserves, deferred payments, deposits, Accounts, refunds, cost savings and payments of any kindrelated to the Property or any portion thereof; together with all replacements and Proceeds of, andadditions and accessions to, any of the foregoing, and all books, records and files relating to anyof the foregoing;                    (ii) all other goods of Grantor whether tangible or intangible or whether nowowned or hereafter acquired by Grantor and wherever located; and                    (iii) to the extent not otherwise included, all Proceeds of each of theforegoing and all accessions to, substitutions and replacements for, and rents,profits and products of each of the foregoing.
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               (b) This Agreement is a continuing and irrevocable agreement and all the rights, powers,privileges and remedies hereunder shall apply to any and all of the Obligations, including thosearising under successive transactions which shall either continue the Obligations, increase ordecrease them, or from time to time create new Obligations after all or any prior Obligations havebeen satisfied, and notwithstanding the bankruptcy of Grantor or any other person or any otherevent or proceeding affecting any person.          3. FURTHER ASSURANCES. At any time and from time to time at the request of SecuredParty, Grantor shall execute and deliver to Secured Party all such financing statements and otherinstruments and documents in form and substance satisfactory to Secured Party as shall be necessaryor desirable to fully perfect, when filed and/or recorded, Secured Party’s security interestsgranted pursuant to this Agreement. At any time and from time to time, Grantor shall take all suchother actions as Secured Party may deem appropriate to perfect and to maintain perfected thesecurity interests granted in this Agreement. At Secured Party’s request, Grantor shall executeall such further financing statements, instruments and documents, and shall do all such furtheracts and things, as may be deemed necessary or desirable by Secured Party to create and perfect,and to continue and preserve, a security interest in the Collateral in favor of Secured Party, orthe priority thereof. With respect to any of the Collateral consisting of certificated securities,instruments, documents, certificates of title or the like, as to which Secured Party’s securityinterest need be perfected by, or the priority thereof need be assured by, possession of suchCollateral, Grantor shall upon demand of Secured Party deliver possession of same in pledge toSecured Party. With respect to any Collateral consisting of securities, instruments, partnershipor joint venture interests or the like, Grantor hereby consents and agrees that the issuers of, orobligors on, any such Collateral, or any registrar or transfer agent or trustee for any suchCollateral, shall be entitled to accept the provisions of this Agreement as conclusive evidence ofthe right of Secured Party to effect any transfer or exercise any right hereunder or with respectto any such Collateral, notwithstanding any other notice or direction to the contrary heretofore orhereafter given by Grantor or any other person to such issuers or such obligors or to any suchregistrar or transfer agent or trustee.          4. LIMITATIONS ON SECURED PARTY’S OBLIGATIONS. Secured Party shall not have anyobligation or liability under any contract or by reason of or arising out of this Agreement or thegranting to Secured Party of a security interest therein or the receipt by Secured Party of anypayment relating to any contract or pursuant hereto, nor shall Secured Party be required orobligated in any manner to perform or fulfill any of the obligations of Grantor under or pursuantto any contract or to make any payment, or to make any inquiry as to the nature or the sufficiencyof any payment received by it or the sufficiency of any performance by any party under any contractor to present or file any claim, or to take any action to collect or enforce any performance or thepayment of any amounts that may have been assigned to it or to which it may be entitled at any timeor times.          5. REPRESENTATIONS AND WARRANTIES. Grantor hereby represents and warrants that:               (a) Except for the security interest granted to Secured Party pursuant to this Agreement,Grantor is the sole owner of each item of the Collateral in which it purports to grant a securityinterest hereunder, having good and marketable title thereto, free and clear of any and all liens.               (b) No effective security agreement, financing statement, equivalent security or lieninstrument or continuation statement covering all or any part of the Collateral is on file or ofrecord in any public office, except such as may have been filed by Grantor in favor of SecuredParty pursuant to this Agreement and the other Loan Documents and the permitted encumbrancespreviously approved by the Secured Party (the “Permitted Encumbrances”).               (c) To the best of Grantor’s knowledge, there exist no (i) contracts, undertakings, or otheragreements in or under which Grantor has any right, title or interest or (ii) other license underwhich Grantor has rights, which would be breached by the assignment or pledge or Grantor’s rightsthereunder pursuant to the terms of this Agreement.          6. COVENANTS. Grantor covenants and agrees with Secured Party that from and after thedate of this Agreement and until the Obligations are fully satisfied:               (a) Payment of Liens and Assessments. Grantor shall pay, prior to delinquency, alltaxes, charges, liens and assessments against the Collateral owned by Grantor, except such as aretimely contested in good faith, and
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upon its failure to pay or so contest such taxes, charges, liens and assessments, SecuredParty at Secured Party’s option may pay any of them, and Secured Party shall be the sole judge ofthe legality or validity thereof and the amount necessary to discharge the same.               (b) Repair and Maintenance. Grantor shall, to the extent consistent with goodbusiness practice, keep the Collateral owned by Grantor in good repair, working order andcondition, and from time to time make all needful and proper repairs, renewals, replacements,additions and improvements thereto and, as appropriate and applicable, otherwise deal with theCollateral in all such ways as are considered good practice by owners of like property.               (c) Preservation and Protection. Grantor shall take all steps to preserve and protectthe Collateral.               (d) Insurance. Grantor shall maintain, with responsible insurance companies,insurance covering the Collateral against such insurable losses as is required by the LoanDocuments and as is consistent with sound business practice. Grantor shall cause Secured Party tobe designated as an additional insured and loss payee with respect to such insurance, and obtainthe written agreement of the insurers that such insurance shall not be canceled, terminated ormaterially modified to the detriment of Secured Party without at least thirty (30) days priorwritten notice to Secured Party. Grantor shall furnish copies of such insurance policies orcertificates to Secured Party promptly upon request therefor. If Grantor fails to maintain suchinsurance, Secured Party may arrange for such insurance at Grantor’s expense and without anyresponsibility on Secured Party’s part for obtaining the insurance, the solvency of the insurancecompanies, the adequacy of the coverage, or the collection of claims. Upon the occurrence of anEvent of Default under any of the Loan Documents (“Event of Default”) which is not waivedor cured to Secured Party’s satisfaction, Secured Party shall, subject to the rights of any holdersof Permitted Encumbrances holding claims senior to Secured Party, have the sole right, in the nameof Secured Party or Grantor, to file claims under any insurance policies, to receive, receipt andgive acquittance for any payments that may be payable thereunder, and to execute any and allendorsements, receipts, releases, assignments, reassignments or other documents that may benecessary to effect the collection, compromise or settlement of any claims under any such insurancepolicies.               (e) Damage; Removal. Grantor shall promptly notify Secured Party in writing in theevent of any substantial or material damage to the Collateral from any source whatsoever, andexcept for the disposition of collections and other Proceeds of the Collateral permitted under thisAgreement, Grantor shall not remove or permit to be removed any part of the Collateral fromGrantor’s place of business without the prior written consent of Secured Party, except for suchitems of the Collateral as are removed in the ordinary course of business or in connection with anytransaction or disposition otherwise permitted by the Deed of Trust.               (f) Compliance with Laws, etc. Grantor shall not, nor cause or allow, the Collateralto be used for any unlawful purpose or in violation of any law, regulation or ordinance, nor usedin any way that will void or impair any insurance required to be carried in connection therewith.Grantor shall comply, in all material respects, with all acts, rules, regulations, orders, decreesand directions of any governmental authority applicable to the Collateral or any part thereof or tothe operation of Grantor’s business, except where the failure to comply would not have a materialadverse effect; provided, however, that Grantor may contest any act, regulation, order, decree ordirection in any reasonable manner that shall not materially and adversely affect Secured Party’srights hereunder or the priority of Secured Party’s security interest in the Collateral.               (g) Indemnification. In any suit, proceeding or action brought by Secured Partyrelating to the Collateral, or to enforce any provision of the Collateral, Grantor shall save,indemnify and keep Secured Party harmless from and against all reasonable expense, loss or damagesuffered by reason of any defense, setoff, counterclaim, recoupment or reduction of liabilitywhatsoever of the obligor thereunder, arising out of a breach or default by Grantor of anyobligation thereunder or arising out of any other agreement, indebtedness or liability at any timeowing to, or in favor of, such obligor or its successors from Grantor, and all such obligations ofGrantor shall be and remain enforceable against and only against Grantor and shall not beenforceable against Secured Party.               (h) Further Identification of Collateral. Grantor shall if so requested by SecuredParty furnish to Secured Party, as often as Secured Party reasonably requests, statements andschedules further identifying and describing
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the Collateral and such other reports in connection with the Collateral as Secured Party mayreasonably request, all in reasonable detail.               (i) Name/Address Change. In the event Grantor changes Grantor’s name, businessaddress or organizational structure as they are set forth herein or in the Deed of Trust, Grantorshall notify Secured Party in writing of such name and/or address change promptly, but in anyevent, within thirty (30) days thereof; provided that if such change may make any financingstatement file in connection herewith materially misleading, Grantor shall provide Secured Partywith such notice at least thirty (30) days prior to the effective date of the change.               (j) Notification of Third Parties. If any Collateral at any time is in the possessionof one or more persons other than Grantor, Grantor, if requested by Secured Party, shall notifysuch person(s), in writing, of Secured Party’s security interest covering such Collateral and shallinstruct such person(s) to hold such Collateral for the account and benefit of Secured Party andsubject to the instructions of Secured Party.               (k) Limitation on Liens on Collateral. Grantor shall not create, permit or suffer toexist, and shall defend the Collateral against and take such other action as is necessary toremove, any lien on the Collateral except Permitted Encumbrances, and shall defend the right, titleand interest of Secured Party in and to any of Grantor’s rights under the Collateral.               (l) Notification of Liens. Grantor shall advise Secured Party promptly, in reasonabledetail, (i) of any material lien, security interest, encumbrance or claim made or asserted againstany of the Collateral and (ii) of the occurrence of any other event that would have a materialadverse effect on the aggregate value of the Collateral or on the security interests createdhereunder.          7. RIGHTS OF SECURED PARTY. At any time (whether or not an Event of Default hasoccurred), without notice or demand and at the expense of Grantor, Secured Party may, to the extentit may be necessary or desirable to protect the security hereunder, but Secured Party shall not beobligated to: (a) enter upon any premises on which Collateral is situated and examine the same or(b) perform any obligation of Grantor under this Agreement or any other Loan Document. At any timeand from time to time, at the expense of Grantor with regard to the portion of the Collateral ownedby it, Secured Party may, to the extent it may be necessary or desirable to protect the securityhereunder, but Secured Party shall not be obligated to: (i) notify obligors on the Collateral thatthe Collateral has been assigned to Secured Party; (ii) at any time and from time to time requestfrom obligors on the Collateral, in the name of Grantor or in the name of Secured Party,information concerning the Collateral and the amounts owing thereon; and (iii) cause the Collateralto be registered in the name of Secured Party, as legal owner for purposes of security hereunder.Grantor shall maintain books and records pertaining to the Collateral in such detail, form andscope as Secured Party shall require consistent with Secured Party’s interests hereunder. Grantorshall at any time at Secured Party’s request mark the Collateral and/or such Grantor’s ledgercards, books of account and other records relating to the Collateral with appropriate notationssatisfactory to Secured Party disclosing that they are subject to Secured Party’s securityinterests. Secured Party shall at all times have full access to and the right to audit any and allof Grantor’s books and records pertaining to the Collateral, and to confirm and verify the value ofthe Collateral and to do whatever else Secured Party may deem necessary or desirable to protect itsinterests; provided, however, that any such action which involves communicating with customers ofGrantor shall be carried out by Secured Party through Grantor’s independent auditors unless SecuredParty shall then have the right directly to notify obligors on the Collateral. Secured Party shallbe under no duty or obligation whatsoever to take any action to preserve any rights of or againstany prior or other parties in connection with the Collateral, to exercise any voting rights ormanagerial rights with respect to any Collateral, whether or not an Event of Default shall haveoccurred, or to make or give any presentments, demands for performance, notices of non-performance,protests, notices of protests, notices of dishonor or notices of any other nature whatsoever inconnection with the Collateral or the Obligations. Secured Party shall be under no duty orobligation whatsoever to take any action to protect or preserve the Collateral or any rights ofGrantor therein, or to make collections or enforce payment thereon, or to participate in anyforeclosure or other proceeding in connection therewith.          8. POSSESSION OF COLLATERAL BY SECURED PARTY. All the Collateral now, heretofore orhereafter delivered to Secured Party shall be held by Secured Party in Secured Party’s possession,custody and control. Any or all of the Collateral delivered to Secured Party may be held in aninterest bearing or non-interest bearing account, in Secured Party’s sole and absolute discretion,and Secured Party may, in Secured Party’s discretion, apply any such interest to payment of theObligations. Nothing herein shall obligate Secured Party to invest any Collateral or obtain anyparticular return thereon. Upon the occurrence and during the continuation of an Event of Default,whenever any of the Collateral is in
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Secured Party’s possession, custody or control, Secured Party may use, operate and consume theCollateral, whether for the purpose of preserving and/or protecting the Collateral, or for thepurpose of performing any of Grantor’s obligations with respect thereto, or otherwise. SecuredParty may at any time deliver or redeliver the Collateral or any part thereof to Grantor, and thereceipt of any of the same by any Grantor shall be complete and full acquittance for the Collateralso delivered, and Secured Party thereafter shall be discharged from any liability or responsibilitytherefor. So long as Secured Party exercises reasonable care with respect to any Collateral in itspossession, custody or control, Secured Party shall have no liability for any loss of or damage tosuch Collateral, and in no event shall Secured Party have liability for any diminution in value ofCollateral occasioned by economic or market conditions or events. Secured Party shall be deemed tohave exercised reasonable care within the meaning of the preceding sentence if the Collateral inthe possession, custody or control of Secured Party is accorded treatment substantially equal tothat which Secured Party accords its own property, it being understood that Secured Party shall nothave any responsibility for (a) ascertaining or taking action with respect to calls, conversions,exchanges, maturities, tenders or other matters relating to any Collateral, whether or not SecuredParty has or is deemed to have knowledge of such matters, or (b) taking any necessary steps topreserve rights against any person with respect to any Collateral.          9. SECURED PARTY’S APPOINTMENT AS ATTORNEY-IN-FACT.               (a) Grantor hereby irrevocably constitutes and appoints Secured Party and any officer or agentthereof, with full power of substitution, as Grantor’s true and lawful attorney-in-fact with fullirrevocable power and authority in the place and stead of Grantor and in the name of Grantor or inits own name, from time to time in Secured Party’s discretion, for the purpose of carrying out theterms of this Agreement, to take any and all appropriate action and to execute and deliver any andall documents and instruments that may be necessary or desirable to accomplish the purposes of thisAgreement and, without limiting the generality of the foregoing, hereby gives Secured Party thepower and right, on behalf of Grantor, without notice to or assent by Grantor to do the following:                         (i) to ask, demand, collect, receive and give acquittances and receipts for anyand all moneys due and to become due under any Collateral and, in the name of Grantoror Secured Party’s own name or otherwise, to take possession of and endorse andcollect any checks, drafts, notes, acceptances or other instruments for the paymentof moneys due under any Collateral and to file any claim or to take any other actionor proceeding in any court of law or equity or otherwise deemed appropriate bySecured Party for the purpose of collecting any and all such moneys due under anyCollateral whenever payable and to file any claim or to take any other action orproceeding in any court of law or equity or otherwise deemed appropriate by SecuredParty for the purpose of collecting any and all such moneys due under any Collateralwhenever payable;                         (ii) to pay or discharge taxes, liens, security interests or other encumbranceslevied or placed on or threatened against the Collateral, to effect any repairs orany insurance called for by the terms of this Agreement and to pay all or any part ofthe premiums therefor and the costs thereof; and                         (iii) (A) to direct any party liable for any payment under any of the Collateralto make payment of any and all moneys due, and to become due thereunder, directly toSecured Party or as Secured Party shall direct; (B) to receive payment of and receiptfor any and all moneys, claims and other amounts due, and to become due at any time,in respect of or arising out of any Collateral; (C) to sign and endorse any invoices,freight or express bills, bills of lading, storage or warehouse receipts, draftsagainst debtors, assignments, verifications and notices in connection with accountsand other documents constituting or relating to the Collateral; (D) to commence andprosecute any suits, actions or proceedings at law or in equity in any court ofcompetent jurisdiction to collect the Collateral or any part thereof and to enforceany other right in respect of any Collateral; (E) to defend any suit, action orproceeding brought against Grantor with respect to any Collateral; (F) to settle,compromise or adjust any suit, action or proceeding described above and, inconnection therewith, to give such discharges or releases as Secured Party may deemappropriate; and (G) generally to sell, transfer, pledge, make any agreement withrespect to or otherwise deal with any of the Collateral as fully and completely asthough Secured Party were the absolute owner thereof for all purposes, and to do, atSecured Party’s option and Grantor’s expense, at any time, or from time to time, allacts and things that Secured Party reasonably deems necessary to protect, preserve orrealize upon the Collateral and Secured Party’s security interest and lien therein,in order to effect the intent of this Agreement, all as fully and effectively asGrantor might do.
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               (b) Secured Party agrees that, except upon the occurrence and during the continuation of anEvent of Default, Secured Party will forebear from exercising the power of attorney or any rightsgranted to Secured Party pursuant to this Section. Grantor hereby ratifies, to the extentpermitted by law, all that said attorneys shall lawfully do or cause to be done by virtue hereof.The power of attorney granted pursuant to this Section is a power coupled with an interest andshall be irrevocable until the Obligations are indefeasibly paid in full.               (c) The powers conferred on Secured Party hereunder are solely to protect Secured Party’sinterests in the Collateral and shall not impose any duty upon it to exercise any such powers.Secured Party shall be accountable only for amounts that Secured Party actually receives as aresult of the exercise of such powers and neither it nor any of its officers, directors, employeesor agents shall be responsible to Grantor for any act or failure to act, except for Secured Party’sown gross negligence or willful misconduct.               (d) Grantor also authorizes Secured Party, at any time and from time to time upon theoccurrence and during the continuation of any Event of Default, (i) to communicate in SecuredParty’s own name with any party to any contract with regard to the assignment of the right, titleand interest of Grantor in and under the contracts hereunder and other matters relating thereto,and (ii) to execute, in connection with the sale provided for in Section 11 hereof, anyendorsements, assignments or other instruments of conveyance or transfer with respect to theCollateral.          10. PERFORMANCE BY SECURED PARTY OF GRANTOR’S OBLIGATIONS. If Grantor fails toperform or comply with any of Grantor’s agreements contained herein and Secured Party, as providedfor by the terms of this Agreement, shall itself elect to perform or comply, or otherwise causeperformance or compliance, with such agreement, then the reasonable expenses of Secured Partyincurred in connection with such performance or compliance, together with interest thereon at theDefault Rate as provided in the Note, shall be payable by Grantor to Secured Party on demand andshall constitute Obligations secured hereby.          11. REMEDIES, RIGHTS UPON EVENT OF DEFAULT. Upon the occurrence and during thecontinuance of an Event of Default, Secured Party shall have, in any jurisdiction where enforcementhereof is sought, in addition to all other rights and remedies that Secured Party may have underapplicable law or in equity or under this Agreement or under any other Loan Document, all rightsand remedies of a secured party under the UCC as enacted in any jurisdiction, and, in addition, thefollowing rights and remedies, all of which may be exercised with or without notice to Grantor andwithout affecting the Obligations of Grantor hereunder or under any other Loan Document, or theenforceability of the liens and security interests created hereby:               (a) to foreclose the liens and security interests created hereunder or under any otheragreement relating to any Collateral by any available judicial procedure or without judicialprocess;               (b) to enter any premises where any Collateral may be located for the purpose of securing,protecting, inventorying, appraising, inspecting, repairing, preserving, storing, preparing,processing, taking possession of or removing the same;               (c) to sell, assign, lease or otherwise dispose of any Collateral or any part thereof, eitherat public or private sale or at any broker’s board, in lot or in bulk, for cash, on credit orotherwise, with or without representations or warranties and upon such terms as shall be acceptableto Secured Party;               (d) to notify obligors on the Collateral that the Collateral has been assigned to SecuredParty and that all payments thereon are to be made directly and exclusively to Secured Party;               (e) to collect by legal proceedings or otherwise all dividends, distributions, interest,principal or other sums now or hereafter payable upon or on account of the collateral;
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               (f) to enter into any extension, reorganization, deposit, merger or consolidation agreement,or any other agreement relating to or affecting the Collateral, and in connection therewith SecuredParty may deposit or surrender control of the Collateral and/or accept other property in exchangefor the Collateral;               (g) to settle, compromise or release, on terms acceptable to Secured Party, in whole or inpart, any amounts owing on the Collateral and/or any disputes with respect thereto;               (h) to extend the time of payment, make allowances and adjustments and issue credits inconnection with the Collateral in the name of Secured Party or in the name of any Grantor;               (i) to enforce payment and prosecute any action or proceeding with respect to any or all ofthe Collateral and take or bring, in the name of Secured Party or in the name of any Grantor, anyand all steps, actions, suits or proceedings deemed by Secured Party necessary or desirable toeffect collection of or to realize upon the Collateral, including any judicial or nonjudicialforeclosure thereof or thereon, and Grantor specifically consents to any nonjudicial foreclosure ofany or all of the Collateral or any other action taken by Secured Party which may release anyobligor from personal liability on any of the Collateral, and Grantor waives any right notexpressly provided for in this Agreement to receive notice of any public or private judicial ornonjudicial sale or foreclosure of any security or any of the Collateral; and any money or otherproperty received by Secured Party in exchange for or on account of the Collateral, whetherrepresenting collections or proceeds of Collateral, and whether resulting from voluntary paymentsor foreclosure proceedings or other legal action taken by Secured Party or Grantor may be appliedby Secured Party without notice to Grantor to the Obligations in such order and manner as SecuredParty in its sole discretion shall determine;               (j) to insure, process and preserve the Collateral;               (k) to exercise all rights, remedies, powers or privileges provided under the Loan Documents;               (l) to remove, from any premises where the same may be located, the Collateral and any and alldocuments, instruments, files and records, and any receptacles and cabinets containing the same,relating to the Collateral, and Secured Party may, at the cost and expense of Grantor, use such ofGrantor’s supplies, equipment, facilities and space at Grantor’s places of business as may benecessary or appropriate to properly administer, process, store, control, prepare for sale ordisposition and/or sell or dispose of the Collateral owned by Grantor or to properly administer andcontrol the handling of collections and realizations thereon, and Secured Party shall be deemed tohave a rent-free tenancy (as between Grantor and Secured Party) of any premises owned, leased orotherwise used by Grantor for such purposes and for such periods of time as required by SecuredParty;               (m) to receive, open and dispose of all mail addressed to Grantor and notify postalauthorities to change the address for delivery thereof to such address as Secured Party maydesignate; provided that Secured Party agrees that Secured Party will promptly deliver over toGrantor such opened mail as does not relate to the Collateral; and               (n) to exercise all other rights, powers, privileges and remedies of an owner of theCollateral, all at Secured Party’s sole option and as Secured Party in Secured Party’s solediscretion may deem advisable. Grantor shall, at Secured Party’s request, assemble the Collateraland make it available to Secured Party at places which Secured Party may designate, whether at thepremises of Grantor or elsewhere, and shall make available to Secured Party, free of cost, allpremises, equipment and facilities of Grantor for the purpose of Secured Party’s taking possessionof the Collateral or storing same or removing or putting the Collateral in salable form or sellingor disposing of same.          Upon the occurrence and during the continuation of an Event of Default, Secured Party alsoshall have the right, without notice or demand, either in person, by agent or by a receiver to beappointed by a court (and Grantor hereby expressly consents upon the occurrence and during thecontinuance of an Event of Default to the appointment of such a receiver), and without regard tothe adequacy of any security for the Obligations, to take possession of the Collateral or any partthereof and to collect and receive the rents, issues, profits, income and Proceeds thereof. Takingpossession of the
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Collateral shall not cure or waive any Event of Default or notice thereof or invalidate anyact done pursuant to such notice. The rights, remedies and powers of any receiver appointed by acourt shall be as ordered by said court.          Any public or private sale or other disposition of the Collateral may be held at any office ofSecured Party, or at Grantor’s place of business, or at any other place permitted by applicablelaw, and without the necessity of the Collateral being within the view of prospective purchasers.Secured Party may direct the order and manner of sale of the Collateral, or portions thereof, asSecured Party in Secured Party’s sole and absolute discretion may determine, and Grantor expresslywaives any right to direct the order and manner of sale of any Collateral. Secured Party or anyperson on Secured Party’s behalf may bid and purchase at any such sale or other disposition. Thenet cash proceeds resulting from the collection, liquidation, sale, lease or other disposition ofthe Collateral shall be applied, first, to the expenses (including attorneys’ fees anddisbursements) of retaking, holding, storing, processing and preparing for sale or lease, selling,leasing, collecting, liquidating and the like, and then to the satisfaction of the Obligations insuch order as shall be determined by Secured Party in its sole and absolute discretion. Grantorand any other person then obligated therefor shall pay to Secured Party on demand any deficiencywith regard thereto which may remain after such sale, disposition, collection or liquidation of theCollateral.          Unless the Collateral is perishable or threatens to decline speedily in value or is of a typecustomarily sold on a recognized market, Secured Party will send or otherwise make available toGrantor, notice of the time and place of any public sale thereof or of the time on or after whichany private sale thereof is to be made. Grantor agrees that any public or private sale shall bedeemed to be commercially reasonable if (i) Secured Party mails written notice of such sale byfirst class mail, postage prepaid, to Grantor at Grantor’s address set forth herein, or deliveredor otherwise sent to Grantor, at least ten (10) days before the date of the sale (ii) Secured Partypublishes notice of such sale in a local daily newspaper of general circulation once per week fortwo weeks immediately preceding such sale and (iii) upon receipt of any written request, SecuredParty makes the Collateral to be sold available to any bona fide prospective purchaser forinspection during reasonable business hours. Secured Party shall be entitled to conduct any publicor private sale in any other commercially reasonable manner permitted by law.          Upon consummation of any sale of Collateral hereunder, Secured Party shall have the right toassign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Eachsuch purchaser at any such sale shall hold the Collateral so sold absolutely free from any claim orright upon the part of Grantor or any other person claiming through Grantor, and Grantor herebywaives (to the extent permitted by applicable laws) all rights of redemption, stay and appraisalwhich it now has or may at any time in the future have under any rule of law or statute nowexisting or hereafter enacted. If the sale of all or any part of the Collateral is made on creditor for future delivery, Secured Party shall not be required to apply any portion of the sale priceto the Obligations until such amount actually is received by Secured Party, and any Collateral sosold may be retained by Secured Party until the sale price is paid in full by the purchaser orpurchasers thereof. Secured Party shall not incur any liability in cash any such purchaser orpurchasers shall fail to pay for the Collateral so sold, and, in case of any such failure, theCollateral may be sold again.          12. REINSTATEMENT. This Agreement shall remain in full force and effect and continueto be effective, should any petition be filed by or against Grantor for liquidation orreorganization, should Grantor become insolvent or make an assignment for the benefit of creditorsor should a receiver or trustee be appointed for all or any significant part of Grantor’s assets,and shall continue to be effective or be reinstated, as the case may be, if at any time payment andperformance of the Obligations, or any part thereof is, pursuant to applicable law, rescinded orreduced in amount, or must otherwise be restored or returned by any obligee of the Obligations,whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though suchpayment or performance had not been made. In the event that any payment, or any part thereof, isrescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reducedonly by such amount paid and not so rescinded, reduced, restored or returned.          13. SEVERABILITY. Any provision of this Agreement that is prohibited or unenforceablein any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of suchprohibition or unenforceability without invalidating the remaining provisions hereof, and any suchprohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceablesuch provision in any other jurisdiction.          14. COSTS AND EXPENSES. Grantor agrees to pay to Secured Party all costs and expenses(including attorneys’ fees and disbursements) incurred by Secured Party in the enforcement orattempted enforcement of this Agreement, whether or not an action is filed in connection therewith,and in connection with any waiver or amendment of
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any term or provision hereof. All advances, charges, costs and expenses, including attorneys’fees and disbursements, incurred or paid by Secured Party in exercising any right, privilege, poweror remedy conferred by this Agreement (including the right to perform any Obligation of Grantorunder the Loan Documents), or in the enforcement or attempted enforcement thereof, shall be securedhereby and shall become a part of the Obligations and shall be paid to Secured Party by Grantor,immediately upon demand, together with interest thereon at the rate(s) provided for under the Note.          15. NO WAIVER; CUMULATIVE REMEDIES. Secured Party shall not by any act, delay, omitor otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shallbe valid unless in writing, signed by Secured Party, and then only to the extent therein set forth.A waiver by Secured Party of any right or remedy hereunder on any one occasion shall not beconstrued as a bar to any right or remedy that Secured Party would otherwise have had on any futureoccasion. No failure to exercise nor any delay in exercising on the part of Secured Party, anyright, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single orpartial exercise of any right, power or privilege hereunder preclude any other or future exercisethereof or the exercise of any other right, power or privilege. The rights and remedies hereunderprovided are cumulative and may be exercised singly or concurrently, and are not exclusive of anyrights and remedies provided by law. None of the terms or provisions of this Agreement may bewaived, altered, modified or amended except by an instrument in writing, duly executed by SecuredParty and, if applicable, by Grantor.          16. SUCCESSORS AND ASSIGNS; GOVERNING LAW.               (a) This Agreement and all obligations of Grantor hereunder shall be binding upon thesuccessors and assigns of Grantor, and shall, together with the rights and remedies of SecuredParty hereunder, inure to the benefit of Secured Party, all future holders of an interest in theNote and their respective successors and assigns as permitted in the Note. No sales ofparticipations, other sales, assignments, transfers or other dispositions of any agreementgoverning or instrument evidencing the Obligations or any portion thereof or interest therein shallin any manner affect the security interest granted to Secured Party hereunder.               (b) THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THEINTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REFERENCE TO THE RULES OF CONFLICTS OF LAW.          17. FURTHER INDEMNIFICATION. Grantor shall indemnify and hold Secured Party andSecured Party’s members, directors, officers, employees, agents, attorneys and advisors (each an“Indemnified Party”) harmless from and against any and all suits, actions, proceedings,claims, damages, losses, liabilities and expenses (including, without limitation, attorneys’ feesand disbursements, including those incurred upon any appeal) which may be instituted or assertedagainst or incurred by an Indemnified Party as a result of Secured Party having entered into thisAgreement or exercised any of its rights or remedies hereunder; provided, however, that Grantorshall not be liable for such indemnification of an Indemnified Party to the extent that any suchsuit, claim, damage, loss, liability or expense results solely from the Indemnified Party’s grossnegligence or willful misconduct. Grantor shall pay, and hold Secured Party harmless from, any andall liabilities with respect to, or resulting from any delay in paying, any and all excise, salesor other similar taxes that may be payable or determined to be payable with respect to any of theCollateral or in connection with any of the transactions contemplated by this Agreement, other thanliabilities which result from Secured Party’s own gross negligence or willful misconduct.          18. WAIVER OF MARSHALLING. Grantor agrees that Secured Party shall be under noobligation to marshal any assets in favor of Grantor in payment of any or all of the Obligationsand Grantor hereby waives any statutory, implied or legal right to require marshalling of anyassets in connection with any enforcement of any right by Secured Party.          19. WAIVER OF PRESENTMENT. Grantor hereby waives any right to presentment, demand,protest or any notice of any kind in connection with this Agreement or any of the Collateral to themaximum extent permitted by applicable law.          20. STATUTE OF LIMITATIONS AND OTHER LAWS. Until the Obligations shall have been paidand performed in full, the power of sale and all other rights, privileges, powers and remediesgranted to Secured Party
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hereunder shall continue to exist and may be exercised by Secured Party at any time and fromtime to time irrespective of the fact that any of the Obligations may have become barred by anystatute of limitations. Grantor expressly waives the benefit of any and all statutes oflimitation, and any and all laws providing for exemption of property from execution or forvaluation and appraisal upon foreclosure, to the maximum extent permitted by applicable law.          21. OTHER AGREEMENTS. Nothing herein shall in any way modify or limit the effect ofterms or conditions set forth in any of the other Loan Documents, but each and every term andcondition hereof shall be in addition thereto. All provisions contained in the any of the LoanDocuments are incorporated herein by this reference.          22. NOTICES. Any notice, demand, request, statement or consent made hereunder shallbe in writing, signed by the party giving such notice, request, demand, statement, or consent, andshall be deemed to have been properly given or served when actually received by the party to whichsuch notice is addressed at their address set forth below. If delivery of such notice is refusedby addressee, such notice shall be deemed to have been properly given on the date delivery to suchaddressee is attempted and refused. The effective date of any notice given as aforesaid shall bethe date of actual receipt by the addressee, or if delivery is refused, the date delivery isattempted. For purposes hereof, the addresses are as follows:      If to Grantor:                                                                                                                                                                                                      Attn:                                                         Facsimile:                                                     with a courtesy                                                                 copy to:                                                                                                                                          Attn:                                                         Facsimile:                                                  If to Secured Party:   Secured Principal, LLC                                                                                                                                       Attn:                                                         Facsimile:                                                     with a courtesy                                                                 copy to:                                                                                                                                          Attn:                                                         Facsimile:                                                      Notwithstanding the foregoing agreement to provide a courtesy copy, such copy shall be acourtesy copy only, and failure to provide such courtesy copy shall have absolutely no effect orentitle Grantor to any remedy whatsoever. Any notice duly given to Grantor shall be effectivewhether or not the courtesy copy was given. Any party may designate a change of address by writtennotice to the others, which notice must be received at least ten (10) days before such change ofaddress is to become effective.          24. TERMINATION. This Agreement shall terminate and be of no further force or effectat such time when all obligations of Secured Party to lend Grantor sums under the terms of the LoanDocuments have been terminated and all of the Obligations have been paid in full and fullyperformed. Upon full payment and full performance of the Obligations, Secured Party shall deliverto Grantor such documents as Grantor may reasonably request to evidence such termination.
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          IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed anddelivered by its duly authorized officer on the date first set forth above.      “GRANTOR”