Exhibit
10.15

     

    SECURITY
AND PLEDGE AGREEMENT

     

    This
Security and Pledge Agreement (this “Agreement”), dated
the 19th day of December, 2008, is made by CYALUME TECHNOLOGIES, INC., a
Delaware corporation having its principal place of business and chief executive
office at 96 Windsor Street, West Springfield, Massachusetts (the “Debtor”), for the
benefit of TD BANK, N.A., a national banking association, as Agent (the “Agent”) and for
itself and the other lending institutions (hereinafter, collectively, the “Lenders”) which are
or may become parties to the Loan Agreement (as defined below) (in such capacity
the “Secured
Party”).

     

    WITNESSETH

     

    WHEREAS, pursuant to that certain
Revolving Credit and Term Loan Agreement dated as of December 19, 2008, by and
among the Debtor, Vector Intersect Security Acquisition Corp., a Delaware
corporation (the “Holding Company”),
the Lenders, and the Secured Party, as Agent and Lender (as amended, restated,
modified, supplemented and in effect from time to time, the “Loan Agreement”;
capitalized terms used herein without definition having the respective meanings
ascribed to them in the Loan Agreement), the Lenders have agreed to make Loans
to the Debtor; and

     

    WHEREAS, the obligation of the Lenders
to make such Loans is subject to the condition, among others, that the Debtor
execute and deliver this Agreement and grant the liens in favor of the Secured
Party as hereinafter described.

     

    NOW, THEREFORE, for good and valuable
consideration, receipt and sufficiency of which is hereby acknowledged, it is
hereby agreed as follows:

     

    1.           Security
Interest.  As security for the due and punctual payment and
performance of the Secured Obligations described in Section 2 hereof, the Debtor
hereby grants to the Secured Party for the benefit of the Lenders and itself, a
continuing security interest in and to all of its right, title and interest in
the Collateral, whether now owned or existing or hereafter acquired or
arising.

     

    As used herein, “Collateral” shall
mean all of Debtor’s tangible and intangible personal property and fixtures (but
none of its obligations with respect thereto), including, without limitation,
all of Debtor’s right, title and interest in the property described below, as
each such term is used in the Uniform Commercial Code as in effect from time to
time in The Commonwealth of Massachusetts (the “UCC”):

     

    (i)           all
investment property;

     

    (ii)          goods;

     

    (iii)         equipment;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv)         inventory;

     

    (v)          instruments
(including, without limitation, promissory notes);

     

    (vi)         accounts;

     

    (vii)        documents;

     

    (viii)       chattel
paper (whether tangible or electronic);

     

    (ix)         
deposit accounts;

     

    (x)           fixtures;

     

    (xi)          letter-of-credit
rights and support obligations;

     

    (xii)         the
commercial tort claims (i.e., any claims arising in
tort that the Debtor may have) set forth on Exhibit 1(xii)
hereto;

     

    (xiii)        general
intangibles (including, without limitation, payment intangibles and Intellectual
Property Collateral (as defined below)); and

     

    (xiv)        any
and all additions, accessions and attachments to and of the foregoing and any
substitutions, replacements, proceeds (including, without limitation, insurance
proceeds), products and supporting obligations of the foregoing.

     

    Notwithstanding
anything to the contrary contained herein, the security interests granted under
this Agreement shall not extend to (and such property shall not constitute
Collateral) the equity interests of the Debtor in CTSA, other than as set forth
in that certain Financial Instruments Account Pledge Agreement, dated as of the
date hereof, by the Debtor in favor of the Agent.

     

    It is
understood and agreed that the security interests and liens created hereby and
under the Loan Agreement and the other Loan Documents shall not prevent, as long
as no Event of Default has occurred and continuing and after written notice from
the Agent, Debtor from using the Collateral in the ordinary course of its
business.

     

    2.           Secured
Obligations.  The lien hereby granted shall secure equally and
ratably the due and punctual payment and performance of the following
liabilities and obligations (collectively, the “Secured
Obligations”):

     

    (a)           principal
of and premium, if any, and interest on and fees (including, without limitation,
the Origination Fee, the Commitment Fee and all other fees from time to time due
from Debtor pursuant to the Loan Agreement) and other amounts payable with
respect to the Term A Note, the Term B Note, or the Revolving Credit Note (or
any of them) and all Derivative Contracts and any guarantees thereof;
and

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (b)           any
and all other indebtedness and obligations of the Debtor and/or any of its
Subsidiaries under the Loan Agreement or under any other agreement, document or
instrument relating thereto, all as amended, modified or supplemented from time
to time, related in any way to the Term A Note, the Term B Note or the Revolving
Credit Note or any Derivative Contract (or any of them).

     

    3.           Special Warranties and Covenants of
the Debtor.  Debtor hereby represents and warrants to and
covenants and agrees with the Secured Party and the Lenders that:

     

    (a)           Debtor
is the owner of and has good and marketable title to the Collateral free from
any liens, other than liens created hereby and Permitted Liens, and Debtor will
defend the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein.

     

    (b)           The
address shown at the beginning of this Agreement is the chief executive office
and principal place of business of Debtor and the location of all records
concerning that portion of Collateral consisting of accounts receivable and
other general intangibles.  Debtor’s only additional places of
business and the only additional locations of any Collateral (including
Collateral located at warehouses and the like) are listed on Exhibit 3(b) attached
hereto (which includes legal descriptions of all real property sufficient for
fixture filings).  Except as set forth on Exhibit 3(b) attached
hereto, during the five (5) years ended on the date hereof, neither Debtor nor
any of its predecessors-in-interest has conducted any business or sold any goods
under any name (including any fictitious business or trade name) other than its
legal name.  Debtor’s legal name and jurisdiction of organization is
correctly set forth at the beginning of this Agreement.  Debtor will
not change its corporate form or jurisdiction of organization, or change its
chief executive office or principal place of business or any other place of
business, or the location of any Collateral (other than inventory in transit)
(including, without limitation, the records relating thereto), or make any
change in its legal name or conduct business operations under any fictitious
business or trade name (other than any names specified on Exhibit 3(b) attached
hereto), (i) in contravention of the Loan Agreement or (ii) without, in
each such case, (A) giving at least twenty (20) days’ prior written notice
thereof to the Secured Party and (B) executing, delivering, filing and
recording all necessary financing statements (or amendments thereto) or other
instruments and documents in order to maintain the validity, enforceability,
priority and perfection of the lien arising hereunder and under the other Loan
Documents.

     

    (c)           Except
as explicitly permitted by the Loan Agreement, (i)  Debtor will not sell or
otherwise dispose of any of the Collateral or any interest therein and
(ii)  Debtor will not create, assume, incur or suffer to exist any lien of
any kind (whether senior, pari
passu or subordinate) on the Collateral, other than Permitted
Liens.

     

    (d)           Subject
to the terms of the Loan Agreement, Debtor will keep the Collateral, including,
without limitation, all inventory and equipment, used or useful in the conduct
of its business, in good repair, working order and condition, ordinary wear and
tear excepted, and adequately insured at all times in accordance with the
provisions of the Loan Agreement and the other Loan Documents.  Each
insurance policy pertaining to any of the Collateral shall be in form and
substance and shall have such limits and deductibles as shall be reasonably
satisfactory to the Secured Party and, without limiting the generality of the
foregoing, shall:

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (i)           name
the Secured Party as loss payee (in the case of property insurance) and as an
additional insured (in the case of liability insurance) pursuant to a so-called
standard mortgagee clause and shall contain the so-called agreed upon
replacement cost endorsement and waiver of subrogation;

     

    (ii)          provide
that no action of Debtor or any of its Subsidiaries or any tenant or subtenant
shall void such policy as to the Secured Party;

     

    (iii)         provide
that the Secured Party shall be notified (and Debtor hereby covenants to notify
the Secured Party) of any expiration, cancellation or material amendment of such
policy at least thirty (30) days in advance of the effective date thereof and
provide that the Secured Party shall have the right to cure any deficiency
resulting in the same;

     

    (iv)      
  provide that the Secured Party shall receive (and Debtor shall cause
the Secured Party to receive) annually, certificates of insurance (or other
appropriate documentation) demonstrating compliance by Debtor with all
provisions of the Loan Agreement relating to insurance matters; and

     

    (v)      
   be issued by an insurance company or insurance companies
licensed to do business in the jurisdiction in which the Collateral is located
and having the highest or second highest rating available from A.M. Best Company
or an equivalent Person.

     

    Certified
copies of all such insurance policies relating to the Collateral shall be
delivered to the Secured Party upon written request.  In the event of
any material damage or destruction to the Collateral, Debtor shall give prompt
written notice to the Secured Party.  Debtor shall not adjust,
compromise or settle any claim for insurance proceeds in excess of $100,000
without the prior written consent of the Secured Party.  Subject to
the terms of the Loan Agreement and so long as no Default or Event of Default
shall have occurred and be continuing, and so long as each of the following
conditions are satisfied, Debtor may apply the proceeds of any insurance to the
repair and restoration or replacement of any of the Collateral which was the
subject of the loss, provided that (i) the cost of repair and restoration or
replacement shall not exceed $100,000, (ii)  Debtor continues to be the
sole owner of the Collateral subject to the lien arising hereunder and under the
other Loan Documents and, if applicable, said Permitted Liens, (iii) the
contemplated repair and restoration or replacement shall reconstruct or restore
the Collateral to substantially its previous condition within ninety (90) days
from the date of the damage or destruction to the Collateral, (iv) all sums
necessary to effect the repair and restoration or replacement over and above any
available insurance proceeds shall be at the sole cost and expense of the
Debtor, (v) Debtor shall deposit all available proceeds together with the
additional sums referred to in subsection (iv) with the Secured Party prior to
commencing any repair and restoration or replacement and (vi) at all times
during any repair and restoration or replacement Debtor shall, at its sole cost
and expense, maintain workers’ compensation and public liability insurance in
amounts satisfactory to the Secured Party and in accordance with the provisions
of this Section 3(d).  If at any time the Secured Party determines, in
good faith, that the foregoing conditions have not been or cannot be satisfied,
then the Secured Party may apply the proceeds of insurance to the prepayment,
without premium, of the Term Loans in accordance with Section 5.3 of the Loan
Agreement and, thereafter, to the Revolving Credit Note.  Any
insurance proceeds that are received at a time when a Default or Event of
Default shall have occurred and be continuing may be applied by the Secured
Party to the repayment of the Secured Obligations in accordance with the terms
of the Loan Agreement.  If Debtor fails to provide insurance as
required by this Agreement, the Loan Agreement or any of the other Loan
Documents, the Secured Party may, at its option, provide such insurance, and the
Debtor will on demand pay to the Secured Party the amount of any disbursement
made by the Secured Party for such purpose and any such unreimbursed amounts
shall constitute Secured Obligations for all purposes of this
Agreement.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
anything to the contrary herein, the Mortgage shall control with respect to the
insurance policies required on the Premises and property covered
therein.

     

    (e)           To
the extent required by the Loan Agreement, Debtor will pay and discharge
promptly as they become due and payable all taxes, assessments and other
governmental charges or levies imposed upon it or its income or upon any of its
properties, real, personal or mixed, or upon any part thereof, including,
without limitation, the Collateral or any part of the Collateral, as well as all
claims of any kind (including claims for labor, materials and supplies) which if
unpaid might by law become a lien or charge upon its property.

     

    (f)           Debtor
will, upon the reasonable request of the Secured Party, promptly make, execute
(as applicable), acknowledge and deliver and file and record in all proper
offices and places, including, without limitation, the U.S. Patent and Trademark
Office and the U.S. Copyright Office, such financing statements, continuation
statements, certificates, collateral agreements and other agreements, documents
or instruments as may be necessary to perfect or from time to time renew the
lien arising hereunder and under the other Loan Documents, including, without
limitation, those that may be necessary to perfect such lien in any additional
Collateral hereafter acquired by Debtor or in any replacements or proceeds
thereof, and Debtor will take all such action as may be deemed reasonably
necessary by the Secured Party to carry out the intent and purposes of the Loan
Documents or for assuring and confirming to the Secured Party the grant and
perfection of the lien in the Collateral, including, without limitation, the
Intellectual Property Collateral (as defined below).  To the extent
permitted by law, Debtor authorizes and appoints (such appointment being coupled
with an interest and irrevocable) the Secured Party to execute (as applicable)
and to file and record such financing statements, continuation statements,
certificates, collateral agreements and other agreements, documents and
instruments in its stead, with full power of substitution, as Debtor’s
attorney-in-fact to be exercised only (i) if Debtor fails or refuses to do so
promptly following a written request therefor or (ii) following an Event of
Default and during the continuance thereof.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (g)           Debtor
hereby authorizes the Secured Party to file and record in all proper offices and
places, including, without limitation, the U.S. Patent and Trademark Office and
the U.S. Copyright Office, such financing statements, continuation statements,
certificates, collateral agreements and other agreements, documents and
instruments as may be necessary to perfect from time to time renew the lien
arising hereunder and under the other Loan Documents, including, without
limitation, those that may be necessary to perfect such lien in any additional
Collateral hereafter acquired by Debtor or in any replacements or proceeds
thereof.

     

    (h)           Debtor
agrees that if any warehouse receipt or receipt in the nature of a warehouse
receipt is issued with respect to any of the inventory (or any other
Collateral), such receipt shall not be “negotiable” (as such term is used in the
Uniform Commercial Code as in effect in any relevant jurisdiction or under other
relevant law).  If, notwithstanding the foregoing, any negotiable
warehouse receipts or other negotiable documents are issued with respect to any
of the inventory (or other Collateral), all such instruments shall be held in
trust for the Secured Party and shall be immediately endorsed to the order of
the Secured Party and delivered to the Secured Party to be held by the Secured
Party as Collateral hereunder.  In addition, Debtor will notify all
warehousemen, bailees, agents, processors and other similar Persons of the lien
created pursuant to the Loan Documents and will cause each to hold all
Collateral for the account of, and subject to the instructions of, the Secured
Party.

     

    (i)     
      Except in the ordinary course of business or
as otherwise explicitly permitted by the Loan Agreement, without the prior
written consent of the Secured Party, Debtor shall not amend or modify, or waive
any of its rights under or with respect to, any of the accounts receivable, if
the effect thereof would be to materially and adversely impair any remedies of
the Debtor or the Secured Party under or with respect thereto.  Upon
the occurrence and during the continuance of any Event of Default, the Secured
Party may notify or may require the Debtor to notify (and after any such
notification Debtor shall cause) all Persons obligated on the accounts
receivable to make payment directly to (or in accordance with the instructions
of) the Secured Party.  From and after the occurrence of any Event of
Default and during the continuance thereof, the Secured Party may
require:  (i) all sums collected or received and all property
recovered or possessed by Debtor in connection with any of the Collateral,
including, without limitation, all sums received in respect of any of the
accounts receivable, to be received and held by Debtor in trust for the Secured
Party and to be segregated from the assets and funds of Debtor and to be
immediately delivered to the Secured Party for application to the payment of the
Secured Obligations in accordance with the terms hereof and (ii) the
Debtor, upon the written request of the Secured Party, to institute depositary,
lockbox and other similar credit procedures providing for the direct receipt of
such sums.

     

    (j)    
       Debtor will, to the extent permitted
by applicable law, specifically assign to the Secured Party all federal
government contracts and will cooperate with the Secured Party in giving notice
of such assignment pursuant to the Federal Assignment of Claims
Act.  Debtor will cooperate with the Secured Party in providing such
further information with respect to contracts with any governmental authority as
the Secured Party may reasonably request and will provide such instruments of
further assurance with respect to such contracts as the Secured Party may
reasonably request.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (k)           Debtor
hereby constitutes and appoints the Secured Party its true and lawful attorney,
irrevocably, with full power, upon the occurrence and during the continuance of
any Event of Default, in the name of Debtor or otherwise, at the expense of
Debtor and without notice to or demand upon Debtor, to act, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies due or to become due to Debtor, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take any
action or institute any proceedings which the Secured Party may deem to be
reasonably necessary or advisable to protect the interests of the Secured Party,
which appointment as attorney is coupled with an interest and is
irrevocable.  Without limiting the generality of the foregoing, upon
the occurrence and during the continuance of any Event of Default, the Secured
Party shall have full power: (i) to demand, collect, receive payment of,
receipt for, settle, compromise or adjust, and give discharges and releases in
respect of any of the Collateral including, without limitation, any accounts
receivable; (ii) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect and/or to enforce any other rights in respect of any of the Collateral
including, without limitation, any accounts receivable; (iii) to defend any
suit, action or proceeding brought against Debtor with respect to any of the
Collateral including, without limitation, any account receivable; (iv) to
settle, compromise or adjust any suit, action or proceeding described in
clause (ii) or (iii) above, and, in connection therewith, to give such
discharges or releases as the Secured Party may deem appropriate; (v) to
endorse checks, notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents including, without
limitation, those evidencing or securing the accounts receivable or any of them;
(vi) to receive, open and dispose of all mail addressed to Debtor and to
notify the post office authorities to change the address of delivery of mail
addressed to Debtor to such address, care of the Secured Party, as the Secured
Party may designate; (vii) to act as attorney for Debtor in obtaining,
adjusting, settling and canceling any insurance and endorsing any drafts and
retaining any amounts collected or received under any policies of insurance;
(viii) to discharge any taxes, assessments or other governmental charges or
levies or any other liens to which any Collateral is at any time subject; and
(ix) generally to sell, assign, transfer, pledge, make any agreement in
respect of or otherwise deal with the Collateral as fully and completely as
though the Secured Party was the absolute owner thereof for all
purposes.  Debtor agrees to reimburse the Secured Party upon written
demand for any payments made or reasonable expenses incurred by the Secured
Party pursuant to the foregoing authorization and any unreimbursed amounts shall
constitute Secured Obligations for all purposes hereof.

     

    (l)        
   The powers conferred on the Secured Party by this Agreement,
the Loan Agreement and the other Loan Documents are solely to protect the
interests of the Secured Party and the Lenders and shall not impose any duty
upon the Secured Party to exercise any such power, and if the Secured Party
shall exercise any such power, such exercise by the Secured Party shall not
relieve Debtor of any Default or Event of Default, and the Secured Party shall
be accountable only for amounts actually received as a result
thereof.  Except as otherwise required by applicable law, rule or
regulation, the Secured Party shall be under no obligation to take steps
necessary to preserve the rights in or value of or to collect any sums due in
respect of any Collateral against any other Person but may do so at its
option.  Without limiting the generality of the foregoing, except as
otherwise required by applicable law, rule or regulation, the Secured Party
shall have no duty or liability with respect to any claim or claims regarding
Debtor’s ownership or purported ownership, or rights or purported rights arising
from, the Intellectual Property Collateral (as defined below) (or any portion
thereof) or any use, license, or sublicense thereof, whether arising out of any
past, current or future event, circumstance, act or omission or
otherwise.  All of such duties and liabilities shall be exclusively
the obligation of the Debtor.  All expenses incurred in connection
with the application, protection, maintenance, renewal or preservation of any of
the Collateral including, without limitation, the Intellectual Property
Collateral (as defined below), shall be borne by the Debtor.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    (m)          Debtor
shall defend, indemnify and hold harmless the Secured Party from any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements (including reasonable attorneys’ fees) of any
kind whatsoever which may be imposed on, incurred by or asserted against the
Secured Party in connection with or in any way arising out of or relating to the
Collateral or this Agreement, other than those which result from a breach of
this Agreement by the Secured Party or its gross negligence or willful
misconduct.

     

    (n)           It
is the intention of the parties hereto that none of the Collateral shall become
fixtures and Debtor shall take all reasonable action or actions as may be
necessary to prevent any of the Collateral from becoming
fixtures.  Debtor will, if requested by the Secured Party, use its
best efforts to obtain waivers of lien, in form and substance satisfactory to
the Secured Party, from each Person (including lessors) having any interest in
the real property on which any of the Collateral is or is to be
located.

     

    (o)           To
the best of Debtor’s knowledge, all of Debtor’s inventory manufactured or
produced by Debtor has been (and from and after the date hereof will be)
produced in compliance with all material applicable laws, including, without
limitation, the Fair Labor Standards Act, as amended.

     

    (p)           Debtor
will promptly notify the Secured Party and the Lenders, as provided in the Loan
Agreement, of any loss or damage to any Collateral in excess of $250,000 or any
request by any other Person for any material credit or adjustment with respect
to any accounts receivable.

     

    (q)           Debtor
confirms that value has been given to it by the Secured Party, that it has
rights in the Collateral and that it has not agreed with the Secured Party to
postpone the time for attachment of any of the security interests in any of the
Collateral.  The security interests created by this Agreement will
have effect and be deemed to be effective whether or not the Secured Obligations
are owing or in existence before, after or upon the date of this
Agreement.

     

    (r)      
     Debtor will promptly notify the Secured Party
(which notification shall be deemed to automatically amend Exhibit 1(xii)
hereto) of any commercial tort claim of Debtor not specifically identified
herein and grant to the extent permitted under applicable law, to Secured Party
a security interest in any such commercial tort claim and the proceeds
thereof.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (s)           Debtor
shall and shall cause each of its Subsidiaries to place a conspicuous legend on
each of its contracts which constitutes chattel paper which legend will state:
“THIS IS CHATTEL PAPER IN WHICH A LIEN HAS BEEN GRANTED TO TD BANK, N.A.” and
shall, upon demand, deliver to the Secured Party or to such other Person as the
Secured Party shall designate, to act on its behalf, all Collateral in its
original form consisting of negotiable instruments or documents, certificated
securities, chattel paper and instruments (in each case, accompanied by stock
powers, allonges or other instruments of transfer executed in
blank).

     

    (t)           Debtor
shall take all steps necessary to grant the Secured Party or to such other
Person as the Secured Party shall designate, to act on its behalf, control of
all electronic chattel paper in accordance with the UCC and all “transferable
records” as defined in each of the Uniform Electronic Transactions Act and any
other applicable law.

     

    (u)           The
Debtor has no knowledge of any fact that would impair the validity or make
uncollectible any Collateral that is accounts receivable, chattel paper, general
intangibles, contract rights, documents or instruments, and, to the best of the
Debtor's knowledge, each obligor liable upon such Collateral has and will have
the capacity to contract.

     

    (v)           None
of the Equipment and Inventory has, within the four months preceding the date of
this Security Agreement, been located at any place other than the places
specified on Exhibit
3(b) attached hereto.  Other than as set forth on Exhibit 3(v) attached
hereto the Debtor has no trade names.  During the four months
preceding the date hereof, other than as set forth on Exhibit 3(v) the
Debtor has not been known by any legal name different from the one set forth on
the signature page hereto, nor has the Debtor been the subject of any merger or
other corporate reorganization, except as set forth on Exhibit 3(v)(1)
attached hereto.  The Debtor's federal taxpayer identification number
is (and, during the four months preceding the date hereof, the Debtor has not
had a federal taxpayer identification number different from)
13-3353274.  The Debtor is not a party to any federal, state or local
government contract except as set forth in Exhibit 3(v)(2)
attached hereto.

     

    (w)           The
items making up the Inventory at any time are and will be genuine and saleable
(or, in the case of non-finished goods Inventory, in good condition and
available to be incorporated into finished goods Inventory) in the ordinary
course of the Debtor's business.

     

    (x)           The
Debtor agrees that it will maintain exclusive possession of its goods,
instruments and inventory, other than Inventory in transit in the ordinary
course of business and Inventory which is in the possession or control of a
warehouseman, bailee agent or other Person (other than a Person controlled by or
under common control with the Debtor) that has been notified of the security
interest created in favor of the Debtor pursuant to this Security Agreement, and
has agreed to hold such Inventory subject to the Agent's lien and waive any Lien
held by it against such Inventory.

     

    (y)           Each
Account Receivable is and will be a true and correct statement of the actual
Indebtedness incurred by each account debtor with respect thereto, and arises
and will arise out of or in connection with the sale or lease of goods or for
the rendering of services by the Debtor to each such account debtor and each
Account Receivable included in the Borrowing Base complies with the requirements
of an Eligible Account Receivable.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    4.           Special Provisions Concerning
Intellectual Property Collateral.  Without limiting the
generality of the other provisions of this Agreement:

     

    (a)          Debtor
hereby represents and warrants to and covenants and agrees with the Secured
Party that:

     

    (i)           a
true and complete list of all trademarks, patents and copyrights currently
owned, held (whether pursuant to a license or otherwise) or used by the Debtor,
in whole or in part, in conducting its business is set forth on Exhibit 4(a)(i)
attached hereto, and such exhibit correctly sets forth the information specified
therein;

     

    (ii)           each
and every trademark in use is subsisting; to the extent owned by the Debtor,
each and every trademark, patent and copyright is valid and enforceable; and, to
the best of Debtor’s knowledge, there is no infringement or unauthorized use of
any of the trademarks, patents or copyrights, in whole or in part;

     

    (iii)         no
claim has been made in writing that the use of any of the trademarks or
copyrights or the practice of any of the patents does or may violate the rights
of any other Person, and Debtor is not aware of any basis for any such claim to
be asserted;

     

    (iv)         the
Debtor is the sole and exclusive owner of the entire and unencumbered right,
title and interest in and to each of the trademarks, patents and copyrights
purported to be owned by it, free and clear of any lien, express or implied,
other than Permitted Liens, and except as set forth on Exhibit 4(a)(i)
attached hereto, no other Person has any license or other right with respect to
any of the trademarks, patents, copyrights or any other Intellectual Property
Collateral; and

     

    (v)          Debtor
and, to Debtor’s knowledge, its predecessors in interest has used the proper
statutory notice in connection with its use of the trademarks in all material
respects, and the Debtor has marked its products with all applicable patent
numbers.

     

    (b)          If
Debtor shall create or obtain rights to any trademarks, patents or copyrights
(or any other Intellectual Property Collateral) in addition to those set forth
on Exhibit
4(a)(i) attached hereto, the provisions of this Agreement shall
automatically apply thereto and Debtor shall take such action as the Secured
Party may reasonably request to more fully evidence the same.  Debtor
shall promptly notify the Secured Party in writing of any new patent application
or grant or trademark or copyright application or registration in which Debtor
has an ownership interest.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (c)           Debtor:  (i) authorizes
the Secured Party, without any further action by Debtor, to amend Exhibit 4(a)(i) to
reference any trademark, patent or copyright (or any other Intellectual Property
Collateral (as defined below)) acquired by Debtor after the date hereof or to
delete any reference to any right, title or interest in any trademark or patent
or copyright (or any other Intellectual Property Collateral) in which Debtor no
longer has or claims any right, title or interest; (ii) will promptly (but
in any event within ten (10) days after becoming aware thereof) notify the
Secured Party and the Lenders, as provided in the Loan Agreement, of the
institution of, or any adverse determination in, any proceeding in the U.S.
Patent and Trademark Office, the U.S. Copyright Office or in any federal, state
or foreign court or agency regarding Debtor’s claim of ownership, or the
enforceability or validity of any of the Intellectual Property Collateral, in
each case which could reasonably be expected to materially adversely affect the
value of any of the Intellectual Property Collateral, the ability of Debtor or
the Secured Party to dispose of any of the same or the rights and remedies of
the Secured Party in relation thereto; (iii) will promptly notify the
Secured Party of any suspected infringement of any of the Intellectual Property
Collateral by any third party or any claim by any third party that Debtor is
infringing upon the intellectual property rights of such third party that does
or could reasonably be expected to materially adversely affect the value of any
of the Intellectual Property Collateral; (iv) concurrently with the filing
of any patent application or application for registration of any trademark or
copyright, will execute, deliver and record in all appropriate registers and
offices, an appropriate form of a collateral security agreement evidencing the
Secured Party’s security interest therein; and (v) will keep accurate and
complete records respecting the Intellectual Property Collateral.

     

    (d)           Debtor
shall:  (i) to the extent commercially reasonable, make and
diligently prosecute federal application on any existing or future registrable
but unregistered trademarks or copyrights or unpatented but patentable
inventions, (ii) to the extent still utilized in the operation of the
business, preserve, maintain and renew all of the Intellectual Property
Collateral and rights and interests related thereto, including, without
limitation, by payment of all taxes, annuities, issue and maintenance fees and
by the use of all proper statutory notices, designations and patent numbers, and
(iii) initiate and diligently prosecute in its own name, for its own benefit and
at its own expense, such suits, proceedings or other actions for infringement,
or other damage or opposition, cancellation, concurrent use or interference
proceedings as are reasonably necessary to protect any of the trademarks,
patents or copyrights or other Intellectual Property Collateral which Debtor
reasonably determines is material to its business; provided, that no
such suit, proceeding or other action shall be settled or voluntarily dismissed,
nor shall any party be released or excused from any claims or liability for
infringement, unless, in the reasonable judgment of Debtor, to do so is in the
best interests of the Debtor and is not disadvantageous in any material respect
to the Secured Party.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    (e)           Without
limiting the generality of the other provisions of this Agreement, the Loan
Agreement and the other Loan Documents, and in addition to all other rights and
remedies of the Secured Party hereunder and thereunder and referred to herein
and therein, Debtor hereby collectively assigns to the Secured Party all of its
right, title and interest in and to all and any of the Intellectual Property
Collateral including, without limitation, each patent, trademark and copyright,
now owned or hereafter acquired by Debtor, and all of the goodwill of the
business of Debtor symbolized by the same and all interest of Debtor in and to
any cause of action related thereto, and Debtor hereby grants to the Secured
Party an absolute power of attorney (which grant is coupled with an interest and
is irrevocable) to sign, upon the occurrence and during the continuance of any
Event of Default, any document which may be necessary or required by the U.S.
Patent and Trademark Office, the U.S. Copyright Office or by any other office or
authority in order to further evidence (and to effect and to record) the
foregoing assignment.  Debtor further agrees that, upon the occurrence
and during the continuance of any Event of Default, the Secured Party may take
any or all of the following actions: (i) declare the entire right, title
and interest of Debtor in and to the Intellectual Property Collateral vested in
the Secured Party, in which event such right, title and interest shall
immediately vest in the Secured Party; (ii) take and use and/or, subject to
the terms of Section 7 and applicable law, sell the Intellectual Property
Collateral (or any portion thereof) and carry on the business and use the assets
of Debtor in connection with which the Intellectual Property Collateral (or any
portion thereof) has been used; (iii) bring suit to enforce the Trademarks,
Patents and/or Copyrights or any of the other Intellectual Property Collateral
and/or any licenses thereunder or other rights with respect thereto;
(iv) direct Debtor to refrain, in which event Debtor shall refrain, from
using the Intellectual Property Collateral (or any portion thereof) in any
manner whatsoever, directly or indirectly; and (v) direct Debtor to
execute, in which event Debtor shall execute, other and further documents that
the Secured Party may reasonably request to further confirm the provisions
hereof and to further evidence the foregoing assignment.  Upon request
of the Secured Party, Debtor also shall make available to the Secured Party, to
the extent within Debtor’s power and authority, such individuals then in
Debtor’s employ to assist in the production, advertisement and sale of the
products and services sold under the Trademarks, Copyrights and Patents or any
of the other Intellectual Property Collateral, such individuals to be available
to perform their prior functions on the Secured Party’s behalf and to be
compensated at the expense of the Debtor.

     

    (f)           For
the purposes of this Agreement, “Intellectual Property
Collateral” means:

     

    (i)           all
trademarks, trademark applications and registrations and trade names, together
with the goodwill appurtenant thereto, owned, held (whether pursuant to a
license or otherwise), used or to be used, in whole or in part, in conducting
the Debtor’s business, (the “Trademarks”);

     

    (ii)           all
patents and patent applications of the Debtor, including, without limitation,
the inventions and improvements described and claimed therein (the “Patents”);

     

    (iii)         all
copyrights and applications for registration of copyrights of the Debtor and all
rights in literary property (the “Copyrights”);

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (iv)         all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any Trademarks, Patents and/or Copyrights; all income,
royalties, damages and payments now or hereafter due and/or payable with respect
to any Trademarks, Patents and/or Copyrights, including, without limitation,
damages and payments for past or future infringements thereof; all rights (but
no obligation) to sue for past, present and future infringements of any
Trademarks, Patents and/or Copyrights or bring interference proceedings with
respect thereto; and all rights corresponding to any Trademarks, Patents and/or
Copyrights throughout the world;

     

    (v)          all
rights and interests of the Debtor pertaining to common law and statutory
trademark, service marks, trade names, slogans, labels, trade secrets, patents,
copyrights, corporate names, company names, business names, fictitious business
names, trademark or service mark registrations, designs, logos, trade styles,
applications for trademark registration and any other indicia of origin;
and

     

    (vi)          all
operating methods, formulae, processes, know-how and the like of the
Debtor.

     

    5.           Events of
Default.  The Debtor shall be in default under this Agreement
if any one or more of the following events (each an “Event of Default”)
shall occur and continue (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or Governmental Authority):

     

    (a)           if
default shall be made in the performance or observance of any covenant,
agreement or condition contained in Sections 3(a), 3(b), 3(c), 3(d), or 3(r) of
this Agreement;

     

    (b)           if
default shall be made in the performance or observance of any other of the
covenants, agreements or conditions contained in this Agreement and such default
shall have continued for a period of thirty (30) days after the earlier of
(i) the Debtor’s obtaining actual knowledge of such default or
(ii) the Debtor’s receipt of written notice of such default;

     

    (c)           if
any representation or warranty made by or on behalf of Debtor in this Agreement
or in any agreement, document or instrument delivered under or pursuant to any
provision hereof shall prove to have been materially false or incorrect on the
date as of which made; or

     

    (d)           if
any other Event of Default as defined in the Loan Agreement or any other Loan
Document shall occur.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    6.           Rights and
Remedies.

     

    (a)          Upon
the occurrence and during the continuance of any Event of Default, the Secured
Party shall have the following rights and remedies:

     

    (i)           all
rights and remedies provided by law or in equity, including, without limitation,
those provided by the UCC;

     

    (ii)          all
rights and remedies provided in this Agreement; and

     

    (iii)          all
rights and remedies provided in the Loan Agreement, the other Loan Documents or
in any other agreement, document or instrument pertaining to any of the Secured
Obligations.

     

    (b)          Notwithstanding
anything to the contrary set forth herein, the Secured Party shall have the
right to exercise (after the occurrence of any Event of Default) all of the
rights and remedies of the Secured Party relating to the Collateral which arise
under or are referred to in this Agreement (including the exercise of any power
of attorney granted herein and the right to enforce this Agreement, by judicial
proceedings or otherwise, to foreclose the lien created hereby, to take
possession of and, subject to the terms of Section 7 and applicable law, to sell
the Collateral (or any part thereof), and/or to direct the time, method and
place of conducting any proceeding for any such remedy or exercising any such
right), and all such rights and remedies may be exercised by the Secured Party
or by a duly authorized representative (or representatives) appointed by the
Secured Party.

     

    7.           Right to Dispose of Collateral,
Etc.

     

    (a)           Without
limiting the scope of Section 6 hereof, upon the occurrence and during the
continuance of any Event of Default, the Secured Party shall have the right and
power to take possession of all or any part of the Collateral and, in addition
thereto, the right to enter upon any premises on which all or any part of the
Collateral may be situated and remove the same therefrom and the Secured Party
may sell, resell, assign and deliver, or otherwise dispose of any or all of the
Collateral, for cash and/or credit, in one or more parcels, at any exchange or
broker’s board, or at public or private sale and upon such terms and at such
place or places and at such time or times and to such Persons (including,
without limitation, the Secured Party), to the extent permitted by applicable
law, as the Secured Party deems expedient, all without demand for performance by
the Debtor or any notice or advertisement whatsoever except as may be required
by this Agreement or by law.  The Secured Party may require the Debtor
to make all or any part of the Collateral (to the extent the same is moveable)
available to the Secured Party at a place to be designated by the Secured Party
which is reasonably convenient to the Secured Party and the
Debtor.  Unless the Collateral threatens to decline speedily in value
or is of a type customarily sold on a recognized market, the Secured Party will
give the Debtor at least ten (10) days’ prior written notice of the time and
place of any public sale thereof or of the time after which any private sale or
any other intended disposition thereof is to be made.  Any such notice
shall be deemed to meet any requirement hereunder or under any applicable law
(including the UCC) that reasonable notification be given of the time and place
of such sale or other disposition.  After deducting all costs and
expenses of collection, storage, custody, sale or other disposition and delivery
(including legal costs and reasonable attorneys’ fees) and all other charges
against the Collateral, the residue of the proceeds of any such sale or
disposition shall be applied to the payment of the Secured Obligations in the
manner set forth in Section 15.4 of the Loan Agreement.  In the event
the proceeds of any sale, lease or other disposition of the Collateral hereunder
are insufficient to pay all of the Secured Obligations in full, the Debtor will
be liable for the deficiency, including, if the Secured Party so elects,
interest thereon at a rate per annum equal to the Default Rate applicable
thereto until paid or a late fee as provided in Section 6.8 of the Loan
Agreement, and the cost and expenses of collection of such deficiency,
including, without limitation, reasonable attorneys’ fees, expenses and
disbursements.  Without limiting the generality of the foregoing or
the scope of Section 6 hereof, upon the occurrence and during the continuance of
any Event of Default, any amount owing by the Secured Party to any Debtor may,
without regard to the value of the Collateral, be offset and applied toward the
payment of the Secured Obligations as aforesaid, whether or not the Secured
Obligations, or any part thereof, shall be then due.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    (b)           Debtor
acknowledges that portions of the Collateral could be difficult to preserve and
dispose of and be further subject to complex maintenance and
management.  Accordingly, the Secured Party, in exercising its rights
hereunder, or otherwise, shall have the widest possible latitude to preserve and
protect the Collateral and the Secured Party’s lien
therein.  Moreover, Debtor acknowledges and agrees that the Secured
Party shall have no obligation to, and Debtor hereby waives to the fullest
extent permitted by law any right that it may have to require the Secured Party
to: (i) clean up or otherwise prepare any of the Collateral for sale, (ii)
pursue any Person to collect any of the Obligations, or (iii) exercise
collection remedies against any Persons obligated on the
Collateral.  The Secured Party’s compliance with applicable local,
state or federal law requirements, in addition to those imposed by the UCC, in
connection with a disposition of any or all of the Collateral will not be
considered to adversely affect the commercial reasonableness of any disposition
of any or all of the Collateral under the UCC.

     

    (c)           Certain
Affiliates of Debtor have executed and delivered or may hereafter execute and
deliver to the Secured Party additional Security Documents securing the Secured
Obligations.  Debtor acknowledges and agrees with Secured Party that
Secured Party’s rights and remedies, and recourse to the Collateral, hereunder,
are not in any way affected by and shall not in any manner be delayed or
impaired by Secured Party’s rights under such other Security Documents, or any
defenses available to or asserted by such Affiliates thereunder, or any exercise
or delay or failure to exercise any of Secured Party’s rights and remedies
thereunder.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    8.           Right to Use the Collateral,
Etc.  Without limiting the scope of Section 6 hereof, upon the
occurrence and during the continuance of any Event of Default, but subject to
the provisions of the UCC or other mandatory provisions of applicable law, the
Secured Party shall have the right and power to take possession of all or any
part of the Collateral, and to exclude the Debtor and all Persons claiming under
Debtor wholly or partly therefrom, and thereafter to hold, store, and/or use,
operate, manage and control the same.  Upon any such taking of
possession, the Secured Party, from time to time, at the Debtor’s expense, may
(but shall not be obligated to) make all such repairs, replacements, alterations
and improvements to any of the Collateral and may manage and control the
Collateral and carry on the business and exercise all rights and powers of the
Debtor in respect thereto as the Secured Party shall deem reasonably
appropriate, including, without limitation, the right to enter into any and all
such agreements with respect to the use of the Collateral or any part thereof as
the Secured Party may see fit (including, without limitation, licensing
agreements related to the Intellectual Property Collateral); and the Secured
Party shall be entitled to collect and receive all rents, issues, profits, fees,
revenues and other income of the same and every part thereof.  Such
rents, issues, profits, fees, revenues and other income shall be applied to pay
the expenses of so holding, storing, using, operating, managing and controlling
the Collateral, and of conducting any business related thereto, and of all
maintenance, repairs, replacements, alterations, additions and improvements, and
to make all payments which the Secured Party may be required or may elect to
make, if any, for taxes, assessments, insurance and other charges upon the
Collateral or any part thereof, and all other payments which the Secured Party
may be required or authorized to make under any provision of this Agreement, the
Loan Agreement or any of the other Loan Documents (including legal costs and
reasonable attorneys’ fees).  The remainder of such rents, issues,
profits, fees, revenues and other income shall be applied to the payment of the
Secured Obligations in the manner set forth in Section 15.4 of the Loan
Agreement.

     

    9.           Waivers, Remedies Cumulative,
Etc.

     

    (a)           Debtor
hereby waives presentment, demand, notice, protest and, except as is otherwise
explicitly provided herein or in the Loan Agreement, all other demands and
notices in connection with this Agreement or the enforcement of any of the
rights and remedies of the Secured Party hereunder or in connection with any
Secured Obligations or any Collateral; consents to and waives notice of the
granting of renewals, extensions of time for payment or other indulgences to
Debtor or any other Person, or substitution, release or surrender of any
Collateral, the addition or release of Persons primarily or secondarily liable
on any Secured Obligation, the acceptance of partial payments on any Secured
Obligation and/or the settlement or compromise thereof.  To the extent
permitted by law, Debtor also hereby waives any rights and/or defenses Debtor
may have under any anti-deficiency laws or other laws limiting, qualifying or
discharging the Secured Obligations and/or any of the remedies of the Secured
Party against Debtor.  Debtor further waives, to the extent permitted
by law: (i) any right it may have under any applicable law (including the
constitution of any jurisdiction in which any of the Collateral may be located
and the Constitution of the United States of America) to notice (other than any
requirement of notice explicitly provided herein or in the Loan Agreement) or to
a judicial hearing prior to the exercise of any right or remedy provided by this
Agreement, the Loan Agreement or any of the other Loan Documents and any right
to set aside or invalidate any sale duly consummated in accordance with the
foregoing provisions hereof on the grounds (if such be the case) that the sale
was consummated without a prior judicial hearing; (ii) any right to damages
occasioned by any lawful exercise by the Secured Party of any right or remedy
hereunder or referred to herein, including any damages arising as a result of
any taking of possession of the Collateral; (iii) all other requirements as
to the time, place and terms of sale or other requirements with respect to the
enforcement of the Secured Party’s rights hereunder; (iv) all rights of
redemption, appraisement, valuation, stay, extension or moratorium now or
hereafter in force under any applicable law; and (v) the appointment of a
receiver as provided herein or in the Loan Agreement.  The Secured
Party shall not be required to marshall any Collateral (or any part thereof) in
any particular order.  To the extent permitted by law, Debtor hereby
agrees it will not invoke any right it may have under any law to require the
marshalling of Collateral or any other right under any law which might cause
delay in or impede the enforcement of the rights of the Secured Party under this
Agreement, the Loan Agreement or any of the other Loan Documents, and Debtor
hereby irrevocably waives the benefits of all such laws.  Any sale of,
or the grant of options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of Debtor therein and thereto, and shall be a
perpetual bar both at law and in equity against the Debtor and against any and
all Persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through and under Debtor.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    (b)           To
the extent permitted by law, the obligations of the Debtor under this Agreement
shall remain in full force and effect without regard to, and shall not be
impaired by: (i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Debtor or of any other
Person (including the Holding Company); (ii) any exercise or nonexercise,
or any waiver, by the Secured Party, of any right, remedy, power or privilege
under or in respect of any of the Secured Obligations or any of the Collateral
or any other security therefor (including under any Loan Document executed by
the Holding Company); (iii) any amendment to or modification of or waiver
granted under this Agreement, the Loan Agreement or any of the other Loan
Documents; or (iv) the taking of additional security for or any guarantee
of any of the Secured Obligations or the release or discharge or termination of
any security or guarantee for any of the Secured Obligations including any
waiver granted under a termination of any Loan Document executed by the Holding
Company; and whether or not Debtor shall have notice or knowledge of any of the
foregoing.

     

    (c)           No
remedy conferred herein or in the Loan Agreement or any of the other Loan
Documents upon the Secured Party is intended to be exclusive of any other
remedy, and each and every such remedy (whether granted by Debtor or the Holding
Company) shall be cumulative and shall be in addition to every other remedy
given hereunder or under the Loan Agreement or any of the other Loan Documents
or now or hereafter existing at law or in equity or by statute or
otherwise.  No course of dealing between the Debtor or any Affiliate
of the Debtor (including the Holding Company) and the Secured Party, and no
delay in exercising any rights hereunder or under the Loan Agreement or any of
the other Loan Documents, shall operate as a waiver of any right of the Secured
Party.  No waiver by the Secured Party of any default shall be
effective unless made in writing and otherwise in accordance with the terms of
Article 28 of the Loan Agreement and no such waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent
thereon.

     

    (d)           Debtor’s
waivers set forth in this Agreement (including, without limitation, those set
forth in this Section 9) have been made voluntarily, intelligently and knowingly
and after Debtor has been apprised and counseled by its attorneys as to the
nature thereof and its possible alternative rights.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    10.           Termination.  This
Agreement and the lien on the Collateral created hereby shall automatically
terminate, with no further actions required by any party hereto, when all of the
Secured Obligations have been indefeasibly paid and finally discharged in full
in cash (and all commitments of the Secured Party to lend any additional amounts
to the Debtor under the Loan Agreement shall have been terminated) (other than
contingent indemnification obligations which by their terms survive termination
of the Loan Documents).  Upon termination as aforesaid, the Secured
Party shall execute and deliver such releases and discharges as the Debtor may
reasonably request at Debtor’s expense.

     

    11.           Reinstatement.  Notwithstanding
the provisions of Section 10 to the contrary, and notwithstanding anything else
to the contrary contained herein, this Agreement shall continue to be effective
or be reinstated, as the case may be, if at any time any amount received by the
Secured Party in respect of the Collateral or the Secured Obligations is
rescinded, or must otherwise be restored or returned by the Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of Debtor
or any Affiliates of Debtor or any guarantor of all or any part of the Secured
Obligations, or upon the appointment of any intervenor, receiver or conservator
of, or trustee or similar official for Debtor, any such Affiliate or guarantor,
or any substantial part of their respective properties or assets, or otherwise,
all as though such payment had not been made.

     

    12.           Consents, Approvals,
Etc.  Upon the exercise by the Secured Party of any power,
right, privilege or remedy pursuant to this Agreement, the Loan Agreement or any
of the other Loan Documents which requires any consent, approval, registration,
qualification or authorization of, or declaration or filing with, or other
action by, any other Person, including, without limitation, any governmental
authority or instrumentality, Debtor will execute and deliver, or will cause the
execution and delivery of, all such agreements, documents, applications,
certificates, instruments and other documents and papers and will take, or will
cause to be taken, such other action that may be required to obtain such
consent, approval, registration, qualification or authorization of or other
action by such other Person and/or that may be reasonably requested by the
Secured Party in connection therewith.

     

    13.           Certain
Definitions.  In addition to the descriptions contained in
Section 1 hereof, the items of Collateral referred to therein shall have
all of the meanings ascribed to them in the UCC.

     

    14.           Amendments.  All
amendments of this Agreement and all waivers of compliance herewith shall be in
writing and shall be effected in compliance with the provisions of Article 28 of
the Loan Agreement.

     

    15.           Communications.  All
communications provided for herein shall be made as specified in Article 22 of
the Loan Agreement.

     

    16.           Successors and
Assigns.  This Agreement shall bind and inure to the benefit of
and be enforceable by the Secured Party and the Debtor, successors to the Debtor
and the successors and assigns of the Secured Party.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    17.           Governing Law; Jurisdiction; Waiver
of Jury Trial.  This Agreement, including the validity hereof
and the rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers and consents hereunder, shall be construed in
accordance with and governed by the domestic substantive laws of The
Commonwealth of Massachusetts without giving effect to any choice of law or
conflicts of law provision or rule that would cause the application of the
domestic substantive laws of any other jurisdiction.  Each party
hereto, to the extent that it may lawfully do so, hereby consents to service of
process, and to be sued, in The Commonwealth of Massachusetts and consents to
the jurisdiction of the courts of The Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts, as well as to
the jurisdiction of all courts to which an appeal may be taken from such courts,
for the purpose of any suit, action or other proceeding arising out of any of
its obligations hereunder and under the Loan Agreement and the other Loan
Documents or with respect to the transactions contemplated hereby or thereby,
and expressly waives any and all objections it may have as to venue in any such
courts.  Each party hereto further agrees that a summons and complaint
commencing an action or proceeding in any of such courts shall be properly
served and shall confer personal jurisdiction if served personally or by
certified mail to it in accordance with Section 15 or as otherwise provided
under the laws of The Commonwealth of Massachusetts.  Notwithstanding
the foregoing, each party hereto agrees that nothing contained in this Section
17 shall preclude the institution of any such suit, action or other proceeding
by the Secured Party in any jurisdiction other than The Commonwealth of
Massachusetts.  EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST
IT IN RESPECT OF ITS OBLIGATIONS HEREUNDER AND UNDER THE LOAN AGREEMENT AND ANY
OF THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND BY THE
LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.

     

    18.           Miscellaneous.  The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.  This Agreement
(together with the Loan Agreement and the other Loan Documents) embodies the
entire agreement and understanding between the Secured Party and the Debtor and
supersedes all prior agreements and understandings relating to the subject
matter hereof.  Each covenant contained herein and in the Loan
Agreement and in each of the other Loan Documents shall be construed (absent an
express provision to the contrary) as being independent of each other covenant
contained herein and therein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant.  If any provision in this Agreement, the Loan
Agreement or any of the other Loan Documents refers to any action taken or to be
taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable, whether such action is taken directly or
indirectly by such Person, whether or not expressly specified in such
provision.  In case any provision in this Agreement, the Loan
Agreement or any of the other Loan Documents shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions hereof and thereof shall not in any way be affected or impaired
thereby.  This Agreement may be executed in any number of counterparts
and by the parties hereto on separate counterparts all such counterparts shall
together constitute but one and the same instrument.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    [The remainder of this page is
intentionally left blank.]

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the Debtor has
executed this Agreement as a sealed instrument as of the date first above
written with the intent to be legally bound.

    


    
      
        
          
            
              
                	CYALUME TECHNOLOGIES,
      INC.
	 	 
	
                        By: 

                      	
                        /s/
      Michael Bielonko

                      
	 
      	
                        Chief
      Financial
Officer

                      


              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    	TD BANK, N.A., as Agent and
      Lender
	 	 
	
                            By: 

                          	
                            /s/
      Greg Spurr

                          
	 
      	
                            Senior
      Vice
President

                          


                  

                

              

            

          

        

      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Exhibit
1(xii)

     

    Commercial
Tort Claims

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
3(b)

     

    Places
of Business

     

    Location
of Collateral; Names

     

    Additional Places of
Business:

     

    Location of
Collateral:

     

    Assumed
Names:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
4(a)(i)

     

    Intellectual
Property

     

    Patents:

    


    Registered
Trademarks:

    


    Common Law
Trademarks:

    


    Domain
Names:

    


    Registered
Copyrights: