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subdivision thereof throughout the world, whether now owned or hereafter acquired, including,but not limited to, those described in Schedule A to the Copyright Security Agreementannexed hereto and made a part hereof, together with all extensions, renewals, reversionaryrights, and corrections thereof and all licenses thereof or pertaining thereto.          (d) “Copyright Security Agreement” means each Copyright Security Agreement betweenGrantor and Agent, for the benefit of the Lender Group, in substantially the form of ExhibitB attached hereto, pursuant to which Grantor has granted to Agent, for the benefit of theLender Group, a security interest in all of its Copyrights.          (e) “Deposit Account” means deposit account (as that term is defined in the Code).          (f) “Equipment” means equipment (as that term is defined in the Code).          (g) “General Intangibles” means general intangibles (as that term is defined in theCode and, in any event, including, without limitation, payment intangibles, contract rights, rightsto payment, rights arising under common law, statutes, or regulations, choses or things in action,goodwill (including the goodwill associated with any Trademark, Patent, or Copyright), Patents,Trademarks, Copyrights, URLs and domain names, industrial designs, other industrial or intellectualproperty or rights therein or applications therefor, whether under license or otherwise, programs,programming materials, blueprints, drawings, purchase orders, customer lists, monies due orrecoverable from pension funds, route lists, rights to payment and other rights under any royaltyor licensing agreements, including intellectual property licenses, infringement claims, computerprograms, information contained on computer disks or tapes, software, literature, reports,catalogs, pension plan refunds, pension plan refund claims, insurance premium rebates, tax refunds,and tax refund claims, uncertificated securities, and any other personal property other thancommercial tort claims, money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment RelatedProperty, Negotiable Collateral, and oil, gas, or other minerals before extraction).          (h) “Intellectual Property Collateral” means the Copyrights, the Patents and theTrademarks.          (i) “Inventory” means inventory (as that term is defined in the Code).          (j) “Investment Related Property” means (i) investment property (as that term isdefined in the Code), and (ii) all of the following regardless of whether classified as investmentproperty under the Code: all Pledged Interests, Pledged Operating Agreements, and PledgedPartnership Agreements.          (k) “Patents” means all right, title and interest in and to all inventions and letterspatent and registration applications therefor, and all registrations and recordings thereof,including, without limitation, registration applications, registrations and recordings in theUnited States Patent and Trademark Office or in any similar office or agency of the United Statesor any state thereof, or in any similar office or agency of any country or political subdivisionthereof throughout the world, whether now owned or hereafter acquired, including, but not limitedto, those described in Schedule A to the Patent Security Agreement annexed hereto and madea part hereof, together with all re-examinations, reissues, continuations, continuations-in-part,divisions, improvements and extensions thereof and all licenses thereof or pertaining thereto andall licenses of patent rights now in effect or hereafter entered into and the rights to make, useand sell, and all other rights with respect to, the inventions disclosed or claimed therein, allinventions, designs, proprietary or technical information, know-how, other data or information,software, databases, all embodiments or fixations thereof and related documentation, allinformation having value in connection with the business relating thereto and all other tradesecret rights not described above.          (l) “Patent Security Agreement” means each Patent Security Agreement between Grantorand Agent, for the benefit of the Lender Group, in substantially the form of Exhibit Cattached hereto, pursuant to which Grantor has granted to Agent, for the benefit of the LenderGroup, a security interest in all of its Patents.          (m) “Pledged Companies” means, each Person listed on Schedule 1 hereto as a“Pledged Company”, together with each other Person, all or a portion of whose Stock, is acquired orotherwise owned by Grantor after the Closing Date.
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          (n) “Pledged Interests” means all of Grantor’s right, title and interest in and to allof the Stock now or hereafter owned by Grantor, regardless of class or designation, including,without limitation, in each of the Pledged Companies, and all substitutions therefor andreplacements thereof, all proceeds thereof and all rights relating thereto, including, withoutlimitation, any certificates representing the Stock, the right to request after the occurrence andduring the continuation of an Event of Default that such Stock be registered in the name of Agentor any of its nominees, the right to receive any certificates representing any of the Stock and theright to require that such certificates be delivered to Agent together with undated powers orassignments of investment securities with respect thereto, duly endorsed in blank by Grantor, allwarrants, options, share appreciation rights and other rights, contractual or otherwise, in respectthereof and of all dividends, distributions of income, profits, surplus, or other compensation byway of income or liquidating distributions, in cash or in kind, and cash, instruments, and otherproperty from time to time received, receivable, or otherwise distributed in respect of or inaddition to, in substitution of, on account of, or in exchange for any or all of the foregoing.          (o) “Pledged Interests Addendum” means a Pledged Interests Addendum substantially inthe form of Exhibit D to this Agreement.          (p) “Pledged Operating Agreements” means all of Grantor’s rights, powers, and remediesunder the limited liability company operating agreements of the Pledged Companies that are limitedliability companies.          (q) “Pledged Partnership Agreements” means all of Grantor’s rights, powers, andremedies under the partnership agreements of each of the Pledged Companies that are partnerships.          (r) “Records” means information that is inscribed on a tangible medium or which isstored in an electronic or other medium and is retrievable in perceivable form.          (s) “Securities Accounts” means securities accounts (as that term is defined in theCode).          (t) “Trademarks” means all right, title and interest in and to trademarks, tradenames, trade styles, service marks, logos, emblems, prints and labels, all elements of package ortrade dress of goods, and all general intangibles of like nature, now existing or hereafter adoptedor acquired, together with the goodwill of the business connected with the use thereof andsymbolized thereby, and all registration applications, registrations and recordings thereof,including, without limitation, registration applications, registrations and recordings in theUnited States Patent and Trademark Office or in any similar office or agency of the United Statesor in any office of the Secretary of State (or equivalent) of any state thereof, or in any similaroffice or agency of any country or political subdivision thereof throughout the world, whether nowowned or hereafter acquired, including, but not limited to, those described in Schedule Ato the Trademark Security Agreement and made a part hereof, together with all extensions, renewalsand corrections thereof and all licenses thereof or pertaining thereto.          (u) “Trademark Security Agreement” means each Trademark Security Agreement betweenGrantor and Agent, for the benefit of the Lender Group, in substantially the form of ExhibitE attached hereto, pursuant to which Grantor has granted to Agent, for the benefit of theLender Group, a security interest in all of its Trademarks.          (v) “URL” means “uniform recourse locator,” an internet web address.     2. Grant of Security. Grantor hereby unconditionally grants, assigns and pledges toAgent, for the benefit of the Lender Group, a continuing security interest in all personal propertyof Grantor, whether now owned or hereafter acquired or arising and wherever located (hereinafterreferred to as the “Security Interest”), including, without limitation, Grantor’s right,title, and interest in and to the following, whether now owned or hereafter acquired or arising andwherever located (the “Collateral”):          (a) all of Grantor’s Accounts;
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          (b) all of Grantor’s books and records (including all of its Records indicating, summarizing,or evidencing its assets (including the Collateral) or liabilities, all of its Records relating toits business operations or financial condition, and all of its goods or General Intangibles relatedto such information) (“Books”);          (c) all of Grantor’s chattel paper (as that term is defined in the Code) and, in any event,including, without limitation, tangible chattel paper and electronic chattel paper (“ChattelPaper”);          (d) all of Grantor’s interest with respect to any Deposit Account;          (e) all of Grantor’s Equipment and fixtures;          (f) all of Grantor’s General Intangibles;          (g) all of Grantor’s Intellectual Property Collateral;          (h) all of Grantor’s Inventory;          (i) all of Grantor’s Investment Related Property;          (j) all of Grantor’s letters of credit, letter of credit rights, instruments, promissorynotes, drafts, and documents (as such terms may be defined in the Code) (“NegotiableCollateral”);          (k) all of Grantor’s rights in respect of supporting obligations (as such term is defined inthe Code), including letters of credit and guaranties issued in support of Accounts, Chattel Paper,documents, General Intangibles, instruments, or Investment Related Property (“SupportingObligations”);          (l) all of Grantor’s interest with respect to any commercial tort claims (as that term isdefined in the Code), including, without limitation those commercial tort claims listed onSchedule 2 attached hereto (“Commercial Tort Claims”);          (m) all of Grantor’s money, Cash Equivalents, or other assets of each Grantor that now orhereafter come into the possession, custody, or control of Agent or any other member of the LenderGroup or the Bank Product Provider; and          (n) all of the proceeds and products, whether tangible or intangible, of any of the foregoing,including proceeds of insurance or commercial tort claims covering or relating to any or all of theforegoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, GeneralIntangibles, Inventory, Investment Related Property, Negotiable Collateral, Supporting Obligations,money, or other tangible or intangible property resulting from the sale, lease, license, exchange,collection, or other disposition of any of the foregoing, the proceeds of any award in condemnationwith respect to any of the property of Grantor, any rebates or refunds, whether for taxes orotherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, andthe proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above,whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty,or guaranty payable by reason of loss or damage to, or otherwise with respect to any of theforegoing Collateral (the “Proceeds”). Without limiting the generality of the foregoing,the term “Proceeds” includes whatever is receivable or received when Investment Related Property orproceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition isvoluntary or involuntary, and includes, without limitation, proceeds of any indemnity or guarantypayable to Grantor or Agent from time to time with respect to any of the Investment RelatedProperty.Notwithstanding anything herein to the contrary, in no event shall the Collateral include or thesecurity interest granted under this Section 2 hereof attach to any lease, license, contract,property rights or agreement to which Grantor is a party or any of its rights or intereststhereunder if and for so long as the grant of such security interest shall constitute or result in(i) the abandonment, invalidation or unenforceability of any material right, title or interest ofGrantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under,any such lease, license, contract property rights or agreement (other than to the extent that anysuch term would be rendered
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ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code (or any successorprovision or provisions) of any relevant jurisdiction or any other applicable law (including theBankruptcy Code) or principles of equity) (“Excluded Property”), provided, howeverthat the Collateral shall include and such security interest shall attach immediately (x) at suchtime as the condition causing such abandonment, invalidation or unenforceability shall be remediedand to the extent severable, shall attach immediately to any portion of such lease, license,contract, property rights or agreement that does not result in any of the consequences specified in(i) or (ii) above; and (y) to any proceeds of Excluded Property.     3. Security for Secured Obligations. This Agreement and the Security Interest createdhereby secures the payment and performance of all the Secured Obligations, whether now existing orarising hereafter. Without limiting the generality of the foregoing, this Agreement secures thepayment of all amounts which constitute part of the Obligations owed by Borrower to Agent, theLender Group or any of them.     4. Grantor Remains Liable. Anything herein to the contrary notwithstanding, (a)Grantor shall remain liable under the contracts and agreements included in the Collateral,including, without limitation, the Pledged Operating Agreements and the Pledged PartnershipAgreements, to perform all of the duties and obligations thereunder to the same extent as if thisAgreement had not been executed, (b) the exercise by Agent or any other member of the Lender Groupof any of the rights hereunder shall not release Grantor from any of its duties or obligationsunder such contracts and agreements included in the Collateral, and (c) none of the members of theLender Group shall have any obligation or liability under such contracts and agreements included inthe Collateral by reason of this Agreement, nor shall any of the members of the Lender Group beobligated to perform any of the obligations or duties of Grantor thereunder or to take any actionto collect or enforce any claim for payment assigned hereunder. Until an Event of Default shalloccur and be continuing, except as otherwise provided in this Agreement, the Credit Agreement, orother Loan Documents, Grantor shall have the right to possession and enjoyment of the Collateralfor the purpose of conducting the ordinary course of its business, subject to and upon the termshereof and of the Credit Agreement and the other Loan Documents. Without limiting the generalityof the foregoing, it is the intention of the parties hereto that record and beneficial ownership ofthe Pledged Interests, including, without limitation, all voting, consensual, and dividend rights,shall remain in Grantor until the occurrence of an Event of Default and until Agent shall notifyGrantor of Agent’s exercise of voting, consensual, and/or dividend rights with respect to thePledged Interests pursuant to Section 15 hereof.     5. Representations and Warranties. Grantor hereby represents and warrants as follows,which representations and warranties shall be continuing until the Secured Obligations are paid infull and the Commitments terminated:          (a) The exact legal name of Grantor is set forth on the signature pages of this Agreement or awritten notice provided to Agent pursuant to Section 6.5 of the Credit Agreement.          (b) Schedule 3 attached hereto sets forth all Real Property owned by Grantor as of theClosing Date.          (c) As of the date hereof, Grantor has no Trademarks, Patents or Copyrights registered, orwhich are the subject of any pending application, in the United States Patent and Trademark Office,or any similar office of the United States or in any office of the Secretary of State (orequivalent) of any state thereof, or the United States Register of Copyrights, or in any similaroffice or agency of any country or political subdivision thereof throughout the world, other thanthose identified in Schedule A to each of the Copyright Security Agreement, the PatentSecurity Agreement and the Trademark Security Agreement. The registrations of the Trademarks arevalid and subsisting and in full force and effect. Grantor has not granted a license or otherwiseagreed to allow any third party to use any Trademark (except as disclosed to Agent in writing on orprior to the date of this Agreement). The Patents are valid and subsisting and in full force andeffect and have not been adjudged or, to Grantor’s knowledge, claimed invalid or unenforceable inwhole or in part (except for Permitted Liens). Grantor has not granted a license or otherwiseagreed to allow any third party to use any Patent (except as disclosed to Agent in writing on orprior to the date of this Agreement). None of the Patents has been abandoned or dedicated.          (d) This Agreement creates a security interest in the Collateral of Grantor, to the extent asecurity interest therein can be created under the Code, securing the payment of the SecuredObligations. Upon: (i)
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the filing of financing statements listing Grantor, as a debtor, and Agent, as secured party,in the jurisdictions listed next to such Grantor’s name on Schedule 4 attached hereto; and(ii) the recording in the US Copyright Office and the US Patent and Trademark Office of a notice ofAgent’s security interest in pertinent Intellectual Property, Agent shall have a first priorityperfected security interest in the Collateral (subject only to Permitted Liens) of Grantor to theextent such security interest can be perfected by the filing of a financing statement orrecordation in the US Copyright Office or the US Patent and Trademark Office.          (e) Except for the Security Interest created hereby, Grantor is and will at all times be thesole holder of record and the legal and beneficial owner, free and clear of all Liens other thanPermitted Liens, of the Pledged Interests indicated on Schedule 1 as being owned by Grantorand, when acquired by Grantor, any Pledged Interests acquired after the Closing Date; (ii) all ofthe Pledged Interests are duly authorized, validly issued, fully paid and nonassessable and thePledged Interests constitute or will constitute the percentage of the issued and outstanding equityinterests of the Pledged Companies of Grantor identified on Schedule 1 hereto assupplemented or modified by any Pledged Interests Addendum or any Supplement to this Agreement;(ii) Grantor has the right and requisite authority to pledge the Investment Related Propertypledged by Grantor to Agent as provided herein; (iii) all actions necessary or desirable to perfector establish the first priority of Agent’s Liens in the Investment Related Property (subject toPermitted Liens), and the proceeds thereof, have been duly taken, (A) upon the execution anddelivery of this Agreement; (B) upon the taking of possession by Agent of any certificatesconstituting the Pledged Interests, to the extent such Pledged Interests are represented bycertificates, together with undated powers endorsed in blank by Grantor; (C) upon the filing offinancing statements in the applicable jurisdiction set forth on Schedule 4 attached heretofor Grantor with respect to the Pledged Interests of Grantor that are not represented bycertificates, and (D) with respect to any Securities Accounts, upon the delivery of ControlAgreements with respect thereto; and (iv) Grantor has delivered to and deposited with Agent (or,with respect to any Pledged Interests created after the Closing Date, will deliver and deposit inaccordance with Sections 6 and 8 hereof) all certificates representing the PledgedInterests owned by Grantor to the extent such Pledged Interests are represented by certificates,and undated powers endorsed in blank with respect to such certificates.          (f) Other than execution and delivery of the Subordination Agreements, the filing of financingstatements, Mortgages and the security agreements attached hereto as Exhibits B, Cand E and any requirement under applicable law to register Stock and the other consents andfilings identified on Schedule 4.9(c) to the Credit Agreement, to the best of Grantor’sknowledge, no consent, approval, authorization, or other order or other action by, and no notice toor filing with, any Governmental Authority or any other Person is required (i) for the grant of aSecurity Interest by Grantor in and to the Collateral pursuant to this Agreement or for theexecution, delivery, or performance of this Agreement by Grantor, or (ii) for the exercise by Agentof the voting or other rights provided for in this Agreement with respect to the Investment RelatedProperty or the remedies in respect of the Collateral pursuant to this Agreement, except (x) as maybe required in connection with such disposition of Investment Related Property by laws affectingthe offering and sale of securities generally; and (y) for consents and approvals that have beenobtained and that are still in force and effect.     6. Covenants. Grantor covenants and agrees with Agent and the Lender Group that fromand after the date of this Agreement and until the date of termination of this Agreement inaccordance with Section 22 hereof:          (a) Possession of Collateral. In the event that any Collateral, including proceeds,is evidenced by or consists of Negotiable Collateral, Investment Related Property, or ChattelPaper, and if and to the extent that perfection or priority of Agent’s Security Interest isdependent on or enhanced by possession, Grantor, to the extent required by the SubordinationAgreements, promptly upon the request of Agent and in accordance with Section 8 hereof,shall execute such other documents as shall be reasonably requested by Agent or, if applicable,endorse and deliver physical possession of such Negotiable Collateral, Investment Related Property,or Chattel Paper to Agent, together with such undated powers endorsed in blank as shall berequested by Agent;
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          (b) Chattel Paper.               (i) Upon the request of Agent, Grantor shall take all steps reasonably necessary to grantAgent control of all electronic Chattel Paper in accordance with the Code and all “transferablerecords” as that term is defined in Section 16 of the Uniform Electronic Transaction Act andSection 201 of the federal Electronic Signatures in Global and National Commerce Act as in effectin any relevant jurisdiction;               (ii) If Grantor retains possession of any Chattel Paper or instruments (which retention ofpossession shall be subject to the extent permitted hereby and by the Credit Agreement), promptlyupon the request of Agent, and to the extent the same is practicable, such Chattel Paper andinstruments shall be marked with the following legend: “This writing and the obligations evidencedor secured hereby are subject to the Security Interest of Private Equity Management Group INC., asAgent for the benefit of the Lender Group”;          (c) Control Agreements.               (i) To the extent required by the Credit Agreement and permitted by the SubordinationAgreements, Grantor shall obtain an authenticated Control Agreement, from each bank holding aDeposit Account for Grantor;               (ii) To the extent required by the Credit Agreement and permitted by the SubordinationAgreements, Grantor shall obtain authenticated Control Agreements, from each issuer ofuncertificated securities, securities intermediary, or commodities intermediary issuing or holdingany financial assets or commodities to or for Grantor;          (d) Letter of Credit Rights. Subject to the rights of the Senior Lender, if Grantoris or becomes the beneficiary of a letter of credit in excess of $100,000, Grantor shall promptly(and in any event within 5 Business Days after becoming a beneficiary), notify Agent thereof and,upon the request by Agent, use commercially reasonable efforts to enter into a tri-party agreementwith Agent and the issuer and/or confirmation bank with respect to letter-of-credit rights (as thatterm is defined in the Code) assigning such letter-of-credit rights to Agent and directing allpayments thereunder to Agent’s Account, all in form and substance satisfactory to Agent;          (e) Commercial Tort Claims. Grantor shall promptly (and in any event within 5Business Days of receipt thereof), notify Agent in writing upon incurring or otherwise obtaining aCommercial Tort Claim after the date hereof against any third party in an amount exceeding $100,000and, upon request of Agent, promptly amend Schedule 2 to this Agreement, authorize thefiling of additional or amendments to existing financing statements and do such other acts orthings deemed reasonably necessary or desirable by Agent to give Agent a security interest in anysuch Commercial Tort Claim;          (f) Investment Related Property.               (i) If Grantor shall receive or become entitled to receive any Pledged Interests after theClosing Date, it shall promptly (and in any event within 5 Business Days of receipt thereof)deliver to Agent a duly executed Pledged Interests Addendum identifying such Pledged Interests;               (ii) Grantor agrees that it will cooperate with Agent in obtaining all necessary approvals andmaking all necessary filings under federal, state, local, or foreign law in connection with theSecurity Interest on the Investment Related Property or any sale or transfer thereof;               (iii) As to all limited liability company or partnership interests issued under any PledgedOperating Agreement or Pledged Partnership Agreement, Grantor hereby represents, warrants andcovenants that the Pledged Interests issued pursuant to such agreement (A) are not and shall not bedealt in or traded on securities exchanges or in securities markets, (B) do not and will notconstitute investment company securities, and (C) are not and will not be held by such Pledgor in asecurities account. In addition, none of the Pledged Operating Agreements, the Pledged PartnershipAgreements, or any other agreements governing any of the Pledged Interests issued under any PledgedOperating Agreement or Pledged Partnership Agreement, provide or shall
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provide that such Pledged Interests are securities governed by Article 8 of the UniformCommercial Code as in effect in any relevant jurisdiction;          (g) Real Property; Fixtures. Grantor covenants and agrees that upon the acquisitionof any fee interest in Real Property it will promptly (and in any event within 10 Business Days ofacquisition) notify Agent of the acquisition of such Real Property and will grant to Agent, for thebenefit of the Lender Group, a Mortgage (subject to existing Liens) on each fee interest in RealProperty now or hereafter owned by Grantor and shall deliver such other documentation and opinions,in form and substance reasonably satisfactory to Agent, in connection with the grant of suchMortgage as Agent shall request in its Permitted Discretion, including, without limitation, titleinsurance policies, financing statements, fixture filings and environmental audits and Grantorshall pay all recording costs, intangible taxes and other fees and costs (including reasonableattorneys fees and expenses) incurred in connection therewith. Grantor acknowledges and agreesthat, to the extent permitted by applicable law, all of the Collateral shall remain personalproperty regardless of the manner of its attachment or affixation to real property.          (h) Transfers and Other Liens. Grantor shall not (i) sell, assign (by operation oflaw or otherwise) or otherwise dispose of, or grant any option with respect to, any of theCollateral, except as expressly permitted by the Credit Agreement, or (ii) create or permit toexist any Lien upon or with respect to the Collateral of Grantor, except for Permitted Liens. Theinclusion of Proceeds in the Collateral shall not be deemed to constitute Agent’s consent to anysale or other disposition of any of the Collateral except as expressly permitted in this Agreementor the other Loan Documents.          (i) Other Actions as to Any and All Collateral. Grantor shall promptly (and in anyevent within 5 Business Days of acquiring or obtaining such Collateral) notify Agent in writingupon acquiring or otherwise obtaining any Collateral after the date hereof consisting of InvestmentRelated Property, Chattel Paper (electronic, tangible or otherwise), documents (as defined in theCode), or instruments (as defined in the Code) and, upon the request of Agent and in accordancewith Section 8 hereof, promptly execute such other documents, or if applicable, deliversuch Chattel Paper, other documents or certificates evidencing any Investment Related Property inaccordance with Section 6 hereof and do such other acts or things deemed reasonablynecessary or desirable by Agent to protect Agent’s Security Interest therein.          (j) Intellectual Property Collateral.               (i) Grantor (either itself or through its licensees) will place appropriate notice ofCopyright on all copies embodying material copyrighted works covered by the Copyright which arepublicly distributed, and Grantor will not (and will not permit any licensee thereof to) do any actor knowingly omit to do any act whereby any Copyright may become invalidated or dedicated to thepublic domain. Grantor will continue to use standards of quality in the manufacture of productssold under the Trademarks that are at least equal to those standards in effect as of the date ofthis Agreement. Grantor (either itself or through its licensees) will continue to use theTrademarks on its current lines of goods as reflected in its current catalogs, brochures and pricelists in order to maintain the Trademarks in full force and effect, in the ordinary course ofbusiness, and Grantor will not (or will permit any licensee thereof to) do any act or knowinglyomit to do any act whereby any Trademark may become invalidated. Grantor will not do any act, oromit to do any act, or permit any licensee thereof to do any act whereby any Patent may becomeabandoned or dedicated.               (ii) Grantor will promptly perform all acts and execute all documents, including, withoutlimitation, grants of security in forms acceptable to Agent and suitable for recording with (i) theUnited States Patent and Trademark Office and the United States Register of Copyrights, and (ii)the appropriate offices and agencies of foreign jurisdictions reasonably requested by Agent at anytime to evidence, perfect, maintain, record or enforce the Agent’s security interest in theIntellectual Property Collateral or otherwise in furtherance of the provisions of this Agreement.Grantor hereby authorizes Agent to execute and file one or more financing statements (and anysimilar documents) or copies thereof or of this Agreement with respect to the Intellectual PropertyCollateral (with a copy sent to Administrative Borrower).               (iii) In the event that Grantor, either itself or through any subsidiary, affiliate, agent,employee, licensee or designee, shall file an application for the issuance of any Patent orregistration of any Trademark with the United States Patent and Trademark Office, or any similaroffice of the United States or in any
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office of the Secretary of State (or equivalent) of any state thereof, or for the registrationof any Copyright with the United States Register of Copyrights, or for the registration of anyPatent, Trademark or Copyright in any similar office or agency of any country or politicalsubdivision thereof throughout the world, or shall obtain issuance of any Patent or registration ofany Trademark or Copyright previously applied for, or shall adopt, acquire or obtain rights to anynew trademark, patent application or work for which a copyright application has been or is expectedto be filed, or become entitled to the benefit of any patent application or any patent or any partthereof for reissue, re-examination, continuation, continuation-in-part, division, improvement orextension, Grantor shall (i) inform Agent of any such event or action in periodic reports whichBorrower shall deliver to Agent annually by each anniversary date of this Agreement, and (ii)execute and deliver any and all assignments, agreements, instruments, documents and papers as arenecessary or appropriate or as Agent may reasonably request to evidence the Agent’s securityinterest in such Trademark, Patent or Copyright and the goodwill and general intangibles of Grantorrelating thereto or represented thereby. Effective only upon the occurrence and during thecontinuation of an Event of Default, Grantor hereby constitutes Agent, or Agent’s agent, itsattorney-in-fact to execute and file all such writings for the foregoing purposes, all acts of suchattorney being hereby ratified and confirmed; such power being coupled with an interest isirrevocable until the Secured Obligations are indefeasibly paid in full and the Commitmentsterminated. Grantor authorizes the amendment of the schedules hereto to include any futureIntellectual Property Collateral registrations or applications which may be acquired or made byGrantor.               (iv) Grantor has the authority, right and power to enter into this Agreement and to performits terms and to grant the security interest herein granted, and has not entered and will not enterinto any oral or written agreements which would prevent Grantor from complying with the termshereof, provided, however, Grantor may enter into or maintain in effect such non-exclusive licenseagreements with respect to the Intellectual Property Collateral as Grantor believes in itsreasonable business judgment are in the best interest of Grantor’s business, so long as any suchlicense agreement does not prohibit the assignment thereof to Agent, for the benefit of the LenderGroup. The Intellectual Property Collateral is not now, and at all times will not be, subject toany Liens (other than Permitted Liens); provided, however, Grantor may enter intosuch non-exclusive license agreements with respect to the Intellectual Property Collateral asGrantor believes in its reasonable business judgment are in the best interest of Grantor’sbusiness, so long as any such license agreement does not prohibit the assignment thereof to Agent,for the benefit of the Lender Group. To the best knowledge of Grantor, none of the IntellectualProperty Collateral is subject to any claims of any other party.               (v) Except for Permitted Liens, or to the extent that Agent upon prior written notice fromGrantor, shall consent in writing, Grantor will not assign, sell, mortgage, lease, transfer,pledge, hypothecate, grant a security interest in or lien upon, grant an exclusive license, orotherwise dispose of any of the Intellectual Property Collateral, and nothing in this Agreementshall be deemed a consent by Agent to any such action except as expressly permitted herein.               (vi) Grantor will take commercially reasonable steps in any proceeding before the UnitedStates Patent and Trademark Office, United States Register of Copyrights or similar office oragency of the United States or any office of the Secretary of State (or equivalent) of any statethereof, or in any similar office or agency of any country or political subdivision thereofthroughout the world, to maintain each registration application and registration of theIntellectual Property Collateral, including, without limitation, filing of renewals, extensions,affidavits of use and incontestability, and opposition, interference and cancellation proceedings.Grantor shall notify Agent promptly in writing if any registration application or registrationrelating to any Intellectual Property Collateral may become abandoned or dedicated or subject to anadverse final determination in any proceeding in the United States Patent and Trademark Office orUnited States Register of Copyrights or in any similar office or agency of any country or politicalsubdivision thereof throughout the world or in any court regarding Grantor’s ownership of suchIntellectual Property Collateral, its right to register same, or to keep or maintain the validityof same.               (vii) In the event that Grantor acquires actual knowledge that any Trademark, Patent orCopyright is infringed, misappropriated or diluted by a third party, Grantor shall promptly sue forinfringement, misappropriation and/or dilution and to obtain injunctive relief and recover damagestherefor, unless Grantor shall determine in its reasonable business judgment that such suit is notin the best interest of Grantor’s business, and Grantor shall take such other actions reasonablyrequired to protect such Trademark, Patent or Copyright as Grantor shall deem appropriate in itsreasonable business judgment under the circumstances. Upon the occurrence and
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during the continuation of an Event of Default, Agent shall have the right, but in no wayshall be obligated, to bring suit in its own name to enforce the Trademarks, Patents and Copyrightsand any licenses thereunder, in which event Grantor shall, at the request of Agent, do any and alllawful acts requested by Agent and execute any and all documents required by Agent to aid suchenforcement, and Grantor shall, upon demand, promptly reimburse and indemnify Agent for all costsand expenses incurred in such enforcement.               (viii) Notwithstanding any provision of the Loan Documents to the contrary, Grantor shall notbe obligated to acquire, maintain, or protect any Intellectual Property Collateral in the eventGrantor determines, in its reasonable business judgment and notifies Agent in writing, that suchcollateral is no longer necessary or desirable in the conduct of its business.     7. Relation to Other Loan Documents. The provisions of this Agreement shall be readand construed with the other Loan Documents referred to below in the manner so indicated. In theevent of any conflict between any provision in this Agreement and a provision in the CreditAgreement, such provision of the Credit Agreement shall control.     8. Further Assurances.          (a) Grantor agrees that from time to time, at its own expense, Grantor will promptly executeand deliver all further instruments and documents, and take all further action, that may bereasonably necessary or that Agent may reasonably request, in order to perfect and protect anySecurity Interest granted or purported to be granted hereby or to enable Agent to exercise andenforce its rights and remedies hereunder with respect to any of the Collateral.          (b) Grantor authorizes the filing of such financing or continuation statements, or amendmentsthereto, and Grantor will execute and deliver to Agent such other instruments or notices, as may benecessary or as Agent may reasonably request, in order to perfect and preserve the SecurityInterest granted or purported to be granted hereby.          (c) Grantor authorizes Agent to file, transmit, or communicate, as applicable, financingstatements and amendments describing the Collateral as “all personal property of debtor” or “allassets of debtor” or words of similar effect, in order to perfect Agent’s security interest in theCollateral without Grantor’s signature. Grantor also hereby ratifies its authorization for Agentto have filed in any jurisdiction any financing statements filed prior to the date hereof.          (d) Grantor acknowledges that it is not authorized to file any financing statement oramendment or termination statement with respect to any financing statement filed in connection withthis Agreement without the prior written consent of Agent, subject to Grantor’s rights underSection 9-509(d)(2) of the Code.     9. Agent’s Right to Perform Contracts. Upon the occurrence and during thecontinuation of an Event of Default, Agent (or its designee) may proceed to perform any and all ofthe obligations of any Grantor contained in any contract, lease, or other agreement and exerciseany and all rights of Grantor therein contained as fully as Grantor itself could.     10. Agent Appointed Attorney-in-Fact. Grantor hereby irrevocably appoints Agent itsattorney-in-fact, with full authority in the place and stead of Grantor and in the name of Grantoror otherwise, to take any action and to execute any instrument which Agent may reasonably deemnecessary or advisable to accomplish the purposes of this Agreement, without notice to Grantor,including, without limitation:          (a) at such time as an Event of Default has occurred and is continuing under the CreditAgreement, to ask, demand, collect, sue for, recover, compromise, receive and give acquittance andreceipts for moneys due and to become due under or in connection with the Accounts or any otherCollateral of Grantor;
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          (b) at such time as an Event of Default has occurred and is continuing under the CreditAgreement, to receive and open all mail addressed to such Grantor and to notify postal authoritiesto change the address for the delivery of mail to Grantor to that of Agent;          (c) at such time as an Event of Default has occurred and is continuing under the CreditAgreement, to receive, indorse, and collect any drafts or other instruments, documents, NegotiableCollateral or Chattel Paper;          (d) at such time as an Event of Default has occurred and is continuing under the CreditAgreement, to file any claims or take any action or institute any proceedings which Agent may deemreasonably necessary or desirable for the collection of any of the Collateral of Grantor orotherwise to enforce the rights of Agent with respect to any of the Collateral;          (e) at such time as an Event of Default has occurred and is continuing under the CreditAgreement, to repair, alter, or supply goods, if any, necessary to fulfill in whole or in part thepurchase order of any Person obligated to Grantor in respect of any Account of Grantor;          (f) at such time as an Event of Default has occurred and is continuing under the CreditAgreement, to use any labels, Patents, Trademarks, trade names, URLs, domain names, industrialdesigns, Copyrights, advertising matter or other industrial or intellectual property rights, inadvertising for sale and selling Inventory and other Collateral and to collect any amounts dueunder Accounts, contracts or Negotiable Collateral of Grantor; and          (g) at such time as an Event of Default has occurred and is continuing under the CreditAgreement, Agent on behalf of the Lender Group shall have the right, but shall not be obligated, tobring suit in its own name to enforce the Trademarks, Patents, Copyrights and any intellectualproperty licenses included within the Collateral and, if Agent shall commence any such suit,Grantor shall, at the request of Agent, do any and all lawful acts and execute any and all properdocuments reasonably required by Agent in aid of such enforcement.To the extent permitted by law, Grantor hereby ratifies all that such attorney-in-fact shalllawfully do or cause to be done by virtue hereof. This power of attorney is coupled with aninterest and shall be irrevocable until this Agreement is terminated.     11. Agent May Perform. If Grantor fails to perform any agreement contained herein,Agent may, following the occurrence and during the continuation of an Event of Default, itselfperform, or cause performance of, such agreement, and the reasonable expenses of Agent incurred inconnection therewith shall be payable by Grantor.     12. Agent’s Duties. The powers conferred on Agent hereunder are solely to protectAgent’s interest in the Collateral, for the benefit of the Lender Group, and shall not impose anyduty upon Agent to exercise any such powers. Except for the safe custody of any Collateral in itsactual possession and the accounting for moneys actually received by it hereunder, Agent shall haveno duty as to any Collateral or as to the taking of any necessary steps to preserve rights againstprior parties or any other rights pertaining to any Collateral. Agent shall be deemed to haveexercised reasonable care in the custody and preservation of any Collateral in its actualpossession if such Collateral is accorded treatment substantially equal to that which Agent accordsits own property.     13. Collection of Accounts, General Intangibles and Negotiable Collateral; ControlAgreements. At any time upon the occurrence and during the continuation of an Event ofDefault, Agent or Agent’s designee may (a) notify Account Debtors of Grantor that the Accounts,General Intangibles, Chattel Paper or Negotiable Collateral have been assigned to Agent, for thebenefit of the Lender Group, or that Agent has a security interest therein, and (b) collect theAccounts, General Intangibles and Negotiable Collateral directly, and any collection costs andexpenses shall constitute part of Grantor’s Secured Obligations under the Loan Documents. Withrespect to each Control Agreement delivered pursuant to Section 6(c), at any time upon theoccurrence and during the continuation of an Event of Default, Agent shall be entitled to give anybank or securities intermediary holding the relevant deposit or securities account instructions asto the withdrawal or disposition of funds or assets held therein, all
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without further consent of Grantor; provided that Agent agrees it shall not give any bank orsecurities intermediary such instructions unless an Event of Default has occurred and iscontinuing.     14. Disposition of Pledged Interests by Agent. None of the Pledged Interests existingas of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on thedate of acquisition thereof will be, registered or qualified under the various federal or statesecurities laws of the United States and disposition thereof after an Event of Default may berestricted to one or more private (instead of public) sales in view of the lack of suchregistration. Grantor understands that in connection with such disposition, Agent may approachonly a restricted number of potential purchasers and further understands that a sale under suchcircumstances may yield a lower price for the Pledged Interests than if the Pledged Interests wereregistered and qualified pursuant to federal and state securities laws and sold on the open market.Grantor, therefore, agrees that: (a) if Agent shall, pursuant to the terms of this Agreement,sell or cause the Pledged Interests or any portion thereof to be sold at a private sale, Agentshall have the right to rely upon the advice and opinion of any nationally recognized brokerage orinvestment firm (but shall not be obligated to seek such advice and the failure to do so shall notbe considered in determining the commercial reasonableness of such action) as to the best manner inwhich to offer the Pledged Interest for sale and as to the best price reasonably obtainable at theprivate sale thereof; and (b) such reliance shall be conclusive evidence that Agent has handled thedisposition in a commercially reasonable manner.     15. Voting Rights.          (a) Upon the occurrence and during the continuation of an Event of Default, (i) Agent may, atits option, and with 5 Business Days prior notice to Grantor, and in addition to all rights andremedies available to Agent under any other agreement, at law, in equity, or otherwise, exerciseall voting rights, and all other ownership or consensual rights in respect of the Pledged Interestsowned by Grantor, but under no circumstances is Agent obligated by the terms of this Agreement toexercise such rights, and (ii) if Agent duly exercises its right to vote any of such PledgedInterests, Grantor hereby appoints Agent, Grantor’s true and lawful attorney-in-fact andIRREVOCABLE PROXY to vote such Pledged Interests in any manner Agent deems advisable for or againstall matters submitted or which may be submitted to a vote of shareholders, partners or members, asthe case may be. The power-of-attorney granted hereby is coupled with an interest and shall beirrevocable.          (b) For so long as Grantor shall have the right to vote the Pledged Interests owned by it,Grantor covenants and agrees that it will not, without the prior written consent of Agent, vote ortake any consensual action with respect to such Pledged Interests which would materially adverselyaffect the rights of Agent and the other members of the Lender Group or the value of the PledgedInterests.     16. Remedies. Upon the occurrence and during the continuation of an Event of Default:          (a) Agent may exercise in respect of the Collateral, in addition to other rights and remediesprovided for herein, in the other Loan Documents, or otherwise available to it, all the rights andremedies of a secured party on default under the Code or any other applicable law. Withoutlimiting the generality of the foregoing, Grantor expressly agrees that, in any such event, Agentwithout demand of performance or other demand, advertisement or notice of any kind (except a noticespecified below of time and place of public or private sale) to or upon Grantor or any other Person(all and each of which demands, advertisements and notices are hereby expressly waived to themaximum extent permitted by the Code or any other applicable law), may take immediate possession ofall or any portion of the Collateral and (i) require Grantor to, and Grantor hereby agrees that itwill at its own expense and upon request of Agent forthwith, assemble all or part of the Collateralas directed by Agent and make it available to Agent at one or more locations which are reasonablyconvenient to Grantor, and (ii) without notice except as specified below, sell the Collateral orany part thereof in one or more parcels at public or private sale, at any of Agent’s offices orelsewhere, for cash, on credit, and upon such other terms as Agent may deem commerciallyreasonable. Grantor agrees that, to the extent notice of sale shall be required by law, at least10 days notice to Grantor of the time and place of any public sale or the time after which anyprivate sale is to be made shall constitute reasonable notification and specifically such noticeshall constitute a reasonable “authenticated notification of disposition” within the meaning ofSection 9-611 of the Code. Agent shall not be obligated to make any sale of Collateral regardlessof notice of sale having been given. Agent may adjourn any public or private sale from time totime by announcement at the time and place fixed therefor, and such sale may, without furthernotice, be made at the time and place to which it was so adjourned.
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          (b) Agent is hereby granted a non-exclusive license or other right to use, without liabilityfor royalties or any other charge, Grantor’s labels, Patents, Copyrights, rights of use of anyname, trade secrets, trade names, Trademarks, service marks and advertising matter, URLs, domainnames, industrial designs, other industrial or intellectual property or any property of a similarnature, whether owned by Grantor or with respect to which Grantor has rights under license,sublicense, or other agreements, as it pertains to the Collateral, in preparing for sale,advertising for sale and selling any Collateral, and Grantor’s rights under all licenses and allfranchise agreements shall inure to the benefit of Agent.          (c) Any cash held by Agent as Collateral and all cash proceeds received by Agent in respect ofany sale of, collection from, or other realization upon all or any part of the Collateral shall beapplied against the Secured Obligations in the order set forth in the Credit Agreement. In theevent the proceeds of Collateral are insufficient to satisfy all of the Secured Obligations infull, Grantor shall remain jointly and severally liable for any such deficiency.          (d) Grantor hereby acknowledges that the Secured Obligations arose out of a commercialtransaction, and agrees that if an Event of Default shall occur and be continuing Agent shall havethe right to an immediate writ of possession without notice of a hearing. Agent shall have theright to the appointment of a receiver for the properties and assets of Grantor, and Grantor herebyconsents to such rights and such appointment and hereby waives, to the fullest extent permitted bylaw, any objection such Grantors may have thereto or the right to have a bond or other securityposted by Agent.     17. Remedies Cumulative. (a) Each right, power, and remedy of Agent as provided forin this Agreement or in the other Loan Documents or now or hereafter existing at law or in equityor by statute or otherwise shall be cumulative and concurrent and shall be in addition to everyother right, power, or remedy provided for in this Agreement or in the other Loan Documents or nowor hereafter existing at law or in equity or by statute or otherwise (each a “Remedy” andcollectively, the “Remedies”), and the exercise or beginning of the exercise by Agent, of any oneor more of such rights, powers, or remedies shall not preclude the simultaneous or later exerciseby Agent of any or all such other rights, powers, or remedies, and (b) Agent’s exercise of anyRemedy in each and every instance is subject to the terms of the Subordination Agreements.     18. Marshaling. Agent shall not be required to marshal any present or futurecollateral security (including but not limited to the Collateral) for, or other assurances ofpayment of, the Secured Obligations or any of them or to resort to such collateral security orother assurances of payment in any particular order, and all of its rights and remedies hereunderand in respect of such collateral security and other assurances of payment shall be cumulative andin addition to all other rights and remedies, however existing or arising. To the extent that itlawfully may, Grantor hereby agrees that it will not invoke any law relating to the marshaling ofcollateral which might cause delay in or impede the enforcement of Agent’s rights and remediesunder this Agreement or under any other instrument creating or evidencing any of the SecuredObligations or under which any of the Secured Obligations is outstanding or by which any of theSecured Obligations is secured or payment thereof is otherwise assured, and, to the extent that itlawfully may, Grantor hereby irrevocably waives the benefits of all such laws.     19. Indemnity and Expenses.          (a) Grantor agrees to indemnify Agent and the other members of the Lender Group from andagainst all claims, lawsuits and liabilities (including reasonable attorneys fees) growing out ofor resulting from this Agreement (including, without limitation, enforcement of this Agreement) orany other Loan Document to which Grantor is a party, except claims, losses or liabilities resultingfrom the gross negligence or willful misconduct of the party seeking indemnification as determinedby a final non-appealable order of a court of competent jurisdiction. This provision shall survivethe termination of this Agreement and the Credit Agreement and the repayment of the SecuredObligations.          (b) Grantor, shall, upon demand, pay to Agent (or Agent, may charge to the Loan Account) allthe Lender Group Expenses which Agent may incur in connection with (i) the administration of thisAgreement, (ii) the custody, preservation, use or operation of, or, upon an Event of Default, thesale of, collection from, or other realization upon, any of the Collateral in accordance with thisAgreement and the other Loan Documents, (iii) the
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exercise or enforcement of any of the rights of Agent hereunder or (iv) the failure by Grantorto perform or observe any of the provisions hereof.     20. Merger, Amendments; Etc. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOANDOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BYEVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NOUNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this Agreement, and noconsent to any departure by Grantor herefrom, shall in any event be effective unless the same shallbe in writing and signed by Agent, and then such waiver or consent shall be effective only in thespecific instance and for the specific purpose for which given. No amendment of any provision ofthis Agreement shall be effective unless the same shall be in writing and signed by Agent andGrantor to which such amendment applies.     21. Addresses for Notices. All notices and other communications provided forhereunder shall be given in the form and manner and delivered to Agent at its address specified inthe Credit Agreement, and to Grantor at its address specified in the Credit Agreement or, as to anyparty, at such other address as shall be designated by such party in a written notice to the otherparty.     22. Continuing Security Interest: Assignments under Credit Agreement. This Agreementshall create a continuing security interest in the Collateral and shall (a) remain in full forceand effect until the Obligations have been paid in full in cash in accordance with the provisionsof the Credit Agreement and the Commitments have expired or have been terminated, (b) be bindingupon Grantor and its successors and assigns, and (c) inure to the benefit of, and be enforceableby, Agent, and its successors, transferees and assigns. Without limiting the generality of theforegoing clause (c), any Lender may, in accordance with the provisions of the Credit Agreement,assign or otherwise transfer all or any portion of its rights and obligations under the CreditAgreement to any other Person, and such other Person shall thereupon become vested with all thebenefits in respect thereof granted to such Lender herein or otherwise. Upon payment in full incash of the Obligations in accordance with the provisions of the Credit Agreement and theexpiration or termination of the Commitments, the Security Interest granted hereby shall terminateand all rights to the Collateral shall revert to Grantor or any other Person entitled thereto. Atsuch time, Agent will authorize the filing of appropriate termination statements to terminate suchSecurity Interests. No transfer or renewal, extension, assignment, or termination of thisAgreement or of the Credit Agreement, any other Loan Document, or any other instrument or documentexecuted and delivered by any Grantor to Agent nor any additional Loans made by any of the LenderGroup to Borrower, nor the taking of further security, nor the retaking or re-delivery of theCollateral to Grantor, by Agent, nor any other act of the Lender Group, or any of them, shallrelease Grantor from any obligation, except a release or discharge executed in writing by Agent inaccordance with the provisions of the Credit Agreement. Agent shall not by any act, delay,omission or otherwise, be deemed to have waived any of its rights or remedies hereunder, unlesssuch waiver is in writing and signed by Agent and then only to the extent therein set forth. Awaiver by Agent of any right or remedy on any occasion shall not be construed as a bar to theexercise of any such right or remedy which Agent would otherwise have had on any other occasion.     23. Governing Law.          (a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TOTHE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION,INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO ANDTHERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETOSHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OFCALIFORNIA WITHOUT REGARD TO ITS CONFLICTS OF LAWS RULES.          (b) TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGSARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATEDONLY IN THE STATE OF CALIFORNIA AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTSLOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT
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ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, ATAGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERESUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. GRANTOR AND EACH MEMBER OF THE LENDER GROUP WAIVE,TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OFFORUMNONCONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING ISBROUGHT IN ACCORDANCE WITH THIS SECTION 23(b).          (c) TO THE MAXIMUM EXTENT PERMITTED BY LAW, GRANTOR AND EACH MEMBER OF THE LENDER GROUP HEREBYWAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISINGOUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDINGCONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.GRANTOR AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACHKNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIALBY THE COURT.          (d) Subsidiaries. Pursuant to Section 5.18 of the Credit Agreement, any newdirect or indirect Subsidiary (whether by acquisition or creation) of Parent is required to enterinto this Agreement by executing and delivering in favor of Agent an instrument in the form ofAnnex 1 attached hereto. Upon the execution and delivery of Annex 1 by such newSubsidiary, such Subsidiary shall become a Grantor hereunder with the same force and effect as iforiginally named as a Grantor herein. The execution and delivery of any instrument adding anadditional Grantor as a party to this Agreement shall not require the consent of any Grantorhereunder. The rights and obligations of each Grantor hereunder are joint and several and shallremain in full force and effect notwithstanding the addition of any new Grantor hereunder.     24. Agent. Each reference herein to any right granted to, benefit conferred upon orpower exercisable by the “Agent” shall be a reference to Agent, for the benefit of the LenderGroup.     25. Miscellaneous.          (a) This Agreement may be executed in any number of counterparts and by different parties onseparate counterparts, each of which, when executed and delivered, shall be deemed to be anoriginal, and all of which, when taken together, shall constitute but one and the same Agreement.Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic methodof transmission shall be equally as effective as delivery of an original executed counterpart ofthis Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile orother electronic method of transmission also shall deliver an original executed counterpart of thisAgreement but the failure to deliver an original executed counterpart shall not affect thevalidity, enforceability, and binding effect of this Agreement. The foregoing shall apply to eachother Loan Document *mutatis mutandis*.          (b) Any provision of this Agreement which is prohibited or unenforceable shall be ineffectiveto the extent of such prohibition or unenforceability without invalidating the remaining provisionshereof in that jurisdiction or affecting the validity or enforceability of such provision in anyother jurisdiction.          (c) Headings used in this Agreement are for convenience only and shall not be used inconnection with the interpretation of any provision hereof.          (d) The pronouns used herein shall include, when appropriate, either gender and both singularand plural, and the grammatical construction of sentences shall conform thereto.          (e) The representation, warranties and covenants of each Grantor hereunder are joint andseveral.
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          (f) All exhibits and schedules hereto are incorporated into this Agreement.     26. Subordination Agreements. Notwithstanding anything set forth herein to thecontrary, all undertakings and obligations of Borrower hereunder, and all rights, privileges,undertakings and obligations of the Agent and the Lender Group hereunder are subject to the terms,conditions and covenants set forth in the Subordination Agreements.
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          IN WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement by and throughtheir duly authorized officers, as of the day and year first above written.       **GRANTOR:** **BAKERS FOOTWEAR GROUP, INC.**           By: /s/ Peter Edison     Name: Peter A. Edison    Title: Chairman, CEO, President         **AGENT:** **PRIVATE EQUITY MANAGEMENT GROUP, INC.,**asAgent           By: /s/ Danny Pang           Name: Danny Pang    Title: Chairman, CEO  **[Signature Page to the Security Agreement]**

 
**SCHEDULE 1****Pledged Companies**None.

 
**SCHEDULE 2****Commercial Tort Claims**None.

 
**SCHEDULE 3****Real Property**None.

 
**SCHEDULE 4****Financing Statements**   **Grantor** **Jurisdiction**Bakers Footwear Group, Inc. Missouri

 
ANNEX 1 TO SECURITY AGREEMENT