SECURITY AGREEMENT


 


This
SECURITY AGREEMENT, dated as of February 3, 2012 (this “Agreement”), is among People’s Liberation,
Inc., a Delaware corporation (the “Company”), all of the Subsidiaries of the Company
listed on the signature pages hereto (such subsidiaries, the “Guarantors”
and together with the Company, the “Debtors”) and the holders of the Company’s Variable Rate Senior Secured
Convertible Debentures due three (3) years following their issuance (collectively, the “Debentures”) signatory
hereto, their endorsees, transferees and assigns (collectively, the “Secured Parties”).


 


WITNESSETH:


 


WHEREAS, pursuant to the
Purchase Agreement (as defined in the Debentures), the Secured Parties have severally agreed to extend the loans to the Company
evidenced by the Debentures;


 


WHEREAS, pursuant to a
certain Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantors
have jointly and severally agreed to guarantee and act as surety for payment of such Debentures; and


 


WHEREAS, in order to induce
the Secured Parties to extend the loans evidenced by the Debentures, each Debtor has agreed to execute and deliver to the Secured
Parties this Agreement and to grant the Secured Parties, pari passu with each other Secured Party and through the
Agent (as defined in Section 18 hereof), a security interest in certain property of such Debtor to secure the prompt payment, performance
and discharge in full of all of the Company’s obligations under the Debentures and the Guarantors’ obligations under
the Guarantee.


 


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


 


1. Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined
in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial tort claim”, “deposit
account”, “document”, “equipment”, “fixtures”, “general intangibles”, “goods”,
“instruments”, “inventory”, “investment property”, “letter-of-credit rights”,
“proceeds” and “supporting obligations”) shall have the respective meanings given such terms in Article
9 of the UCC.


 


(a) “Collateral”
means the collateral in which the Secured Parties are granted a security interest by this Agreement and which shall include the
following personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence,
wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products
and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection therewith:


 






    	



    	 



    



 


(i) All goods,
including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and
wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in
connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;


 


(ii) All
contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests,
stock or other securities, rights under any of the Organizational Documents, agreements related
to the Pledged Securities, distribution and other agreements, leases, franchises, customer lists, quality control procedures,
grants and rights, goodwill, service marks, and income tax refunds;


(iii) All accounts,
together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods,
equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect
to each account, including any right of stoppage in transit;


 


(iv)All documents,
letter-of-credit rights, instruments and chattel paper;


 


(v)All commercial
tort claims;


 


(vi)All deposit
accounts and all cash (whether or not deposited in such deposit accounts);


 


(vii)All investment
property;


 


(viii)All supporting
obligations; and


 


(ix)All files,
records, books of account, business papers, and computer programs;


 


(x)All
trademarks, registered copyrights and copyright applications, registered and unregistered inventions, improvements, patent applications,
patents (including reissues, continuations, continuations-in-part, revisions, extensions and re-examinations thereof), software,
licenses, permissions, Internet domain names and websites, trade dress works of authorship, unregistered copyrights, databases,
logos, slogans, trade secrets, designs including but not limited to package, product and fabric designs, photographs, drawings,
models, floor plans, know-how and similar confidential and proprietary information (collectively, the “Intellectual Property”);


 






    	2



    	 



    



 


(xi)all
dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired, received
or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined below); without
limiting the generality of the foregoing, “Collateral” shall include all investment property and general intangibles
respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock
and the other equity interests listed on Schedule H hereto (as the same may be modified from time to time pursuant to the terms
hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of any
Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each
case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable
or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged
Securities; and


 


(xii)the
products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(xi) above.


Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes
void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent
that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided,
however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset
and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.


(b)“Majority
in Interest” means, at any time of determination, the majority in interest (based on then-outstanding principal amounts
of Debentures at the time of such determination) of the Secured Parties.





 


(c)“Necessary
Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and
such other instruments or documents as the Agent (as that term is defined below) may reasonably request.





 


(d)
“Obligations” means all of the liabilities and obligations (primary, secondary, direct, contingent, sole,
joint or several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing to, of any Debtor
to the Secured Parties, including, without limitation, all obligations under this Agreement, the Debentures,
the Guarantee and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith,
in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any
part of such payment is avoided or recovered directly or indirectly from any of the Secured Parties as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without
limiting the generality of the foregoing, the term “Obligations” shall include, without limitation: (i) principal of,
and interest on the Debentures and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations
and liabilities of the Debtors from time to time under or in connection with this Agreement, the Debentures, the Guarantee and
any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all
amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact
that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization
or similar proceeding involving any Debtor.


 






    	3



    	 



    



 


(e)
“Organizational Documents” means with respect to any Debtor, the documents by which such Debtor was organized
(such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without
limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal
governance of such Debtor (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).


 


(f)
“Permitted Liens” means (i) any lien for taxes not yet due or delinquent or being contested in good faith
by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory lien arising
in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any
lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in
the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good
faith by appropriate proceedings, and (iv) liens securing the Debtor’s obligations under the Purchase Agreement, this Security
Agreement, the Guarantee and the Debentures.


 


(g)“Pledged
Interests” shall have the meaning ascribed to such term in Section 4(j).


 


(h)
“Pledged Securities” shall have the meaning ascribed to such term in Section 4(i).


 


(i)“UCC”
means the Uniform Commercial Code of the State of New York and or any other applicable law of any state or states which has jurisdiction
with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that
defined terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed
in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions,
they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones
shall be controlling.


 






    	4



    	 



    
  


2. Grant of Security Interest in
Collateral. As an inducement for the Secured Parties to extend the loans as evidenced by the Debentures and to secure the complete
and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each Debtor hereby unconditionally
and irrevocably pledges, grants and hypothecates to the Secured Parties a security interest in and to, a lien upon and a right
of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to, the Collateral (a
“Security Interest” and, collectively, the “Security Interests”).


 


3.Delivery
of Certain Collateral. Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to
be delivered to the Agent (a) any and all certificates and other instruments representing or evidencing the Pledged Securities,
and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together
with all Necessary Endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to Agent, or have previously
delivered to Agent, a true and correct copy of each Organizational Document governing any of the Pledged Securities.


 


4.
Representations, Warranties, Covenants and Agreements of the Debtors. Except as set forth under the corresponding section
of the disclosure schedules delivered to the Secured Parties concurrently herewith (the “Disclosure Schedules”),
which Disclosure Schedules shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with,
the Secured Parties as follows:


 


(a) Each Debtor
has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and
otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and
the filings contemplated herein have been duly authorized by all necessary action on the part of such Debtor and no further action
is required by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal, valid and
binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting
the rights and remedies of creditors and by general principles of equity.


 


(b) The Debtors
have no place of business or offices where their respective books of account and records are kept (other than temporarily at the
offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A
attached hereto. Except as specifically set forth on Schedule A, each Debtor is the record owner of the real property where
such Collateral is located, and there exist no mortgages or other liens on any such real property except for Permitted Liens. Except
as disclosed on Schedule A, none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or
processor.


 


(c) Except
for Permitted Liens and except as set forth on Schedule B attached hereto, the Debtors are the sole owner of the Collateral
(except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interests. Except as set forth on Schedule
C attached hereto, there is not on file in any governmental or regulatory authority, agency or recording office an effective
financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those that will
be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting any of the Collateral. Except as set
forth on Schedule C attached hereto and except pursuant to this Agreement, as long as this Agreement shall be in effect,
the Debtors shall not execute and shall not knowingly permit to be on file in any such office or agency any other financing statement
or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of
this Agreement).


 






    	5



    	 



    



 


(d) No written
claim has been received that any Collateral or any Debtor's use of any Collateral violates the rights of any third party. There
has been no adverse decision to any Debtor's claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction
or to any Debtor's right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said
rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative or regulatory
agency, arbitrator or other governmental authority.


 


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


 


(f) This
Agreement creates in favor of the Secured Parties a valid security interest in the Collateral, subject only to Permitted Liens
securing the payment and performance of the Obligations. Upon making the filings described in the immediately following paragraph,
all security interests created hereunder in any Collateral which may be perfected by filing Uniform Commercial Code financing statements
shall have been duly perfected. Except for the filing of the Uniform Commercial Code financing statements referred to in the immediately
following paragraph, the execution and delivery of deposit account control agreements satisfying the requirements of Section 9-104(a)(2)
of the UCC with respect to each deposit account of the Debtors, and the delivery of the certificates
and other instruments provided in Section 3, no action is necessary to create, perfect or protect the security interests
created hereunder. Without limiting the generality of the foregoing, except for the filing of said financing statements and the
execution and delivery of said deposit account control agreements, no consent of any third parties and no authorization, approval
or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for (i) the execution,
delivery and performance of this Agreement, (ii) the creation or perfection of the Security Interests created hereunder in the
Collateral or (iii) the enforcement of the rights of the Agent and the Secured Parties hereunder.


 






    	6



    	 



    



 


(g) Each
Debtor hereby authorizes the Agent to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it.


 


(h) The execution,
delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational Documents
of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule
or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor's
debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound
or affected. If any, all required consents (including, without limitation, from stockholders or creditors of any Debtor) necessary
for any Debtor to enter into and perform its obligations hereunder have been obtained.


 


(i) The
capital stock and other equity interests listed on Schedule H hereto (the “Pledged Securities”)
represent all of the capital stock and other equity interests of the Guarantors, and represent all capital stock and other equity
interests owned, directly or indirectly, by the Company. All of the Pledged Securities are validly issued, fully paid and nonassessable,
and the Company is the legal and beneficial owner of the Pledged Securities, free and clear of any lien, security interest or other
encumbrance except for the security interests created by this Agreement and other Permitted Liens.


 


(j)
The ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral
(the “Pledged Interests”) by their express terms do not provide that they are securities governed by
Article 8 of the UCC and are not held in a securities account or by any financial intermediary.


 


(k)
Except for Permitted Liens, each Debtor shall at all times maintain the liens and Security Interests provided for hereunder
as valid and perfected first priority liens and security interests in the Collateral in favor of the Secured Parties until this
Agreement and the Security Interest hereunder shall be terminated pursuant to Section 14 hereof. Each Debtor hereby agrees to defend
the same against the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral for the
account of the Secured Parties. At the request of the Agent, each Debtor will sign and deliver to the Agent on behalf of the Secured
Parties at any time or from time to time one or more financing statements pursuant to the UCC in form reasonably satisfactory to
the Agent and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Agent to be, necessary
or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, each Debtor
shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interests hereunder, and each
Debtor shall obtain and furnish to the Agent from time to time, upon demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the Security Interests hereunder.


 






    	7



    	 



    



 


(l)
No Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except
for licenses granted by a Debtor in its ordinary course of business and sales of inventory by a Debtor in its ordinary course of
business) without the prior written consent of a Majority in Interest.


 


(m)Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order and shall
not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.


 


(n)Each
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances
by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof. Each Debtor shall cause each insurance policy issued in connection herewith to provide, and
the insurer issuing such policy to certify to the Agent, that (a) the Agent will be named as lender loss payee and additional insured
under each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever,
such insurer will promptly notify the Agent and such cancellation or change shall not be effective as to the Agent for at least
thirty (30) days after receipt by the Agent of such notice, unless the effect of such change is to extend or increase coverage
under the policy; and (c) the Agent will have the right (but no obligation) at its election to remedy any default in the payment
of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default (as defined in the Debentures)
exists and if the proceeds arising out of any claim or series of related claims do not exceed $100,000, loss payments in each instance
will be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred
to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall
be payable to the applicable Debtor; provided, however, that payments received by any Debtor after an Event
of Default occurs and is continuing or in excess of $100,000 for any occurrence or series of related occurrences shall be paid
to the Agent on behalf of the Secured Parties and, if received by such Debtor, shall be held in trust for the Secured Parties and
immediately paid over to the Agent unless otherwise directed in writing by the Agent. Copies of such policies or the related certificates,
in each case, naming the Agent as lender loss payee and additional insured shall be delivered to the Agent at least annually and
at the time any new policy of insurance is issued.


 






    	8



    	 



    



 


(o)
Each Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Agent promptly, in sufficient detail,
of any material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect
on the value of the Collateral or on the Secured Parties’ security interest, through the Agent, therein.


 


(p)
Each Debtor shall promptly execute and deliver to the Agent such further deeds, mortgages, assignments, security agreements,
financing statements or other instruments, documents, certificates and assurances and take such further action as the Agent may
from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce the Secured Parties’
security interest in the Collateral including, without limitation, if applicable, the execution and delivery of a separate security
agreement with respect to each Debtor’s Intellectual Property (“Intellectual Property Security Agreement”)
in which the Secured Parties have been granted a security interest hereunder, substantially in a form reasonably acceptable to
the Agent, which Intellectual Property Security Agreement, other than as stated therein, shall be subject to all of the terms and
conditions hereof.


 


(q)
Each Debtor shall permit the Agent and its representatives and agents to inspect the Collateral during normal business hours
and upon reasonable prior notice, and to make copies of records pertaining to the Collateral as may be reasonably requested by
the Agent from time to time.


 


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


 


(s)
Each Debtor shall promptly notify the Agent in sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other information received by such Debtor that may materially affect
the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.


 


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


 


(u)
The Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing
and any rights and franchises material to its business.


 


(v)
No Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if
it has one), legal or corporate structure, or identity, or add any new fictitious name unless it provides at least 15 days prior
written notice to the Agent of such change and, at the time of such written notification, such Debtor provides any financing statements
or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.


 






    	9



    	 



    



 


(w)Except
in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold, sale
or return, sale on approval, or other conditional terms of sale without the consent of the Agent which shall not be unreasonably
withheld.


 


(x)
No Debtor may relocate its chief executive office to a new location without providing 15 days prior written notification thereof
to the Secured Parties and so long as, at the time of such written notification, such Debtor provides any financing statements
or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.


 


(y)Each
Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule
D attached hereto, which Schedule D sets forth each Debtor’s organizational identification number or, if any Debtor
does not have one, states that one does not exist.


 


(z)
(i) The actual name of each Debtor is the name set forth in Schedule D attached hereto; (ii) no Debtor has any trade names
except as set forth on Schedule E attached hereto; (iii) no Debtor has used any name other than that stated in the preamble
hereto or as set forth on Schedule E for the preceding five years; and (iv) no entity has merged into any Debtor or been
acquired by any Debtor within the past five years except as set forth on Schedule E.


 


(aa)At
any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require
or permit possession by the secured party to perfect the security interest created hereby, the applicable Debtor shall deliver
such Collateral to the Agent.


 


(bb)
Each Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Agent regarding
the Pledged Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by
Section 8-106 (or any successor section) of the UCC. Further, each Debtor agrees that it shall not enter into a similar agreement
(or one that would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.


 


(cc)Each
Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to the Agent, or, if such delivery is not
possible, then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created
by this Agreement. To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall cause the
underlying chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).


 


(dd)If
there is any investment property or deposit account included as Collateral that can be perfected by “control” through
an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each
case satisfactory to the Agent, to be entered into and delivered to the Agent for the benefit of the Secured Parties.


 






    	10



    	 



    



 


(ee)
To the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each
underlying letter of credit to consent to an assignment of the proceeds thereof to the Agent for the benefit of the Secured Parties.


 


(ff)
To the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with the Agent
in notifying such third party of the Secured Parties’ security interest in such Collateral and shall use commercially reasonable
efforts to obtain an acknowledgement and agreement from such third party with respect to the Collateral, in form and substance
reasonably satisfactory to the Agent.


 


(gg)If
any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Agent in a writing
signed by such Debtor of the particulars thereof and grant to the Agent for the benefit of the Secured Parties in such writing
a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form
and substance satisfactory to the Agent.


 


(hh)Each
Debtor shall immediately provide written notice to the Agent of any and all accounts which arise out of contracts with any governmental
authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests in such accounts and
proceeds thereof, shall execute and deliver to the Agent an assignment of claims for such accounts and cooperate with the Agent
in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar federal, state or
local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds thereof.


 


(ii)Each
Debtor shall cause each subsidiary of such Debtor to immediately become a party hereto
(an “Additional Debtor”), by executing and delivering an Additional Debtor Joinder in substantially the form of Annex
A attached hereto and comply with the provisions hereof applicable to the Debtors. Concurrent therewith, the Additional Debtor
shall deliver replacement schedules for, or supplements to all other Schedules to (or referred to in) this Agreement, as applicable,
which replacement schedules shall supersede, or supplements shall modify, the Schedules then in effect. The Additional Debtor shall
also deliver such opinions of counsel, authorizing resolutions, good standing certificates, incumbency certificates, organizational
documents, financing statements and other information and documentation as the Agent may reasonably request. Upon delivery of the
foregoing to the Agent, the Additional Debtor shall be and become a party to this Agreement with the same rights and obligations
as the Debtors, for all purposes hereof as fully and to the same extent as if it were an original signatory hereto and shall be
deemed to have made the representations, warranties and covenants set forth herein as of the date of execution and delivery of
such Additional Debtor Joinder, and all references herein to the “Debtors” shall be deemed to include each Additional
Debtor.


 






    	11



    	 



    



 


(jj)
Intentionally Omitted.


 


(kk)Each
Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each
issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Parties on
the books of such issuer. Further, except with respect to certificated securities delivered to the Agent, the applicable Debtor
shall deliver to Agent an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the relevant
UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement
shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by Agent during the
continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of
any designee of Agent, will take such steps as may be necessary to effect the transfer, and will comply with all other instructions
of Agent regarding such Pledged Securities without the further consent of the applicable Debtor.


 


(ll)
In the event that, upon an occurrence and during the continuance of an Event of Default, Agent shall sell all or any of the
Pledged Securities to another party or parties (herein called the “Transferee”) or shall purchase or
retain all or any of the Pledged Securities, each Debtor shall, to the extent applicable: (i) deliver to Agent or the Transferee,
as the case may be, the articles of incorporation, bylaws, minute books, stock certificate books, corporate seals, deeds, leases,
indentures, agreements, evidences of indebtedness, books of account, financial records and all other Organizational Documents and
records of the Debtors and their direct and indirect subsidiaries; (ii) use commercially reasonable efforts to obtain resignations
of the persons then serving as officers and directors of the Debtors and their direct and indirect subsidiaries, if so requested;
and (iii) use commercially reasoanble efforts to obtain any approvals that are required by any governmental or regulatory body
in order to permit the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged Securities
by Agent and allow the Transferee or Agent to continue the business of the Debtors and their direct and indirect subsidiaries.


(mm)Without
limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered
at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with
respect to all Intellectual Property registered at the United States Copyright Office, United States Patent and Trademark Office
or applicable foreign copyright, patent, trademark or equivalent office, to be duly recorded at the applicable office, and (iii)
give the Agent notice whenever it acquires (whether absolutely or by license) or creates any additional material Intellectual Property.


 


(nn)Each
Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments
and documents, and take all such further action as may be necessary or desirable, or as the Agent may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Parties to exercise
and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes of this
Agreement.


 






    	12



    	 



    



 


(oo)Schedule
F attached hereto lists all of the patents, patent applications, registered trademarks, trademark applications, registered
copyrights, copyright applications and domain names owned by any of the Debtors as of the date hereof. Schedule F lists
all material licenses in favor of any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date
hereof. All material patents and trademarks of the Debtors shall be duly recorded at the United States Patent and Trademark Office
or at the applicable foreign patent, trademark or equivalent office where permitted and all material copyrights of the Debtors
shall be duly recorded at the United States Copyright Office.


 


(pp)Except
as set forth on Schedule G attached hereto, none of the account debtors or other persons or entities obligated on any of
the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local
statute or rule in respect of such Collateral.


 


(qq)Until
the Obligations shall have been paid and performed in full, the Company covenants that it shall promptly direct any direct or indirect
subsidiary of the Company formed or acquired after the date hereof to enter into a Subsidiary Guarantee in favor of the Secured
Party, in the form of Exhibit F to the Purchase Agreement.


 


5.Effect
of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership
interests (regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests
upon the occurrence of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets
of the issuer), it is agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement
of any of Agent’s rights hereunder shall not be deemed to be the type of event which would trigger such conversion rights
notwithstanding any provisions in the Organizational Documents or agreements to which any Debtor is subject or to which any Debtor
is party.


 


6. Defaults.
The following events shall be “Events of Default”:


 


(a) The occurrence
of an Event of Default (as defined in the Debentures) under the Debentures;


 


(b) Any representation
or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;


 


(c) The failure
by any Debtor to observe or perform any of its obligations hereunder for ten (10) days after delivery to such Debtor of notice
of such failure by or on behalf of a Secured Party unless such default is capable of cure but cannot be cured within such time
frame and such Debtor is using commercially reasonable efforts to cure same in a timely fashion; or


 






    	13



    	 



    



 


(d) If any provision
of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall
be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having jurisdiction
over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any Debtor has
any liability or obligation purported to be created under this Agreement.


 


7.
Duty To Hold In Trust.


 


(a)Upon
the occurrence of any Event of Default and at any time thereafter while such Event of Default is continuing, each Debtor shall,
upon receipt of any revenue, income, dividend, interest or other sums subject to the Security
Interests, whether payable pursuant to the Debentures or otherwise, or of any check, draft, note, trade acceptance or other instrument
evidencing an obligation to pay any such sum, hold the same in trust for the Secured Parties and shall, at the request of Agent,
forthwith endorse and transfer any such sums or instruments, or both, to the Secured Parties, pro-rata in proportion to their respective
then-currently outstanding principal amount of Debentures for application to the satisfaction of the Obligations (and if any Debenture
is not outstanding, pro-rata in proportion to the initial purchases of the remaining Debentures).


 


(b)If
any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares
of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants,
rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of
its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in
exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Parties;
(ii) hold the same in trust on behalf of and for the benefit of the Secured Parties; and (iii) to deliver any and all certificates
or instruments evidencing the same to Agent on or before the close of business on the fifth business day following the receipt
thereof by such Debtor, in the exact form received together with the Necessary Endorsements, to be held by Agent subject to the
terms of this Agreement as Collateral.


 


8.
Rights and Remedies Upon Default.


 


(a)Upon
the occurrence of any Event of Default and at any time thereafter while such Event of Default is continuing, the Secured Parties,
acting through the Agent, shall have the right to exercise all of the remedies conferred hereunder and under the Debentures, and
the Secured Parties shall have all the rights and remedies of a secured party under the UCC. Without limitation, the Agent, for
the benefit of the Secured Parties, shall have the following rights and powers: 


 



    	14



    	 



    



 


(i)
The Agent shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of
any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall
assemble the Collateral and make it available to the Agent at places which the Agent shall reasonably select, whether at such Debtor's
premises or elsewhere, and make available to the Agent, without rent, all of such Debtor’s respective premises and facilities
for the purpose of the Agent taking possession of, removing or putting the Collateral in saleable or disposable form.


 


(ii)Upon
notice to the Debtors by Agent, all rights of each Debtor to exercise the voting and other consensual rights which it would otherwise
be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise be authorized
to receive and retain, shall cease. Upon such notice, Agent shall have the right to receive, for the benefit of the Secured Parties,
any interest, cash dividends or other payments on the Collateral and, at the option of Agent, to exercise in such Agent’s
discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, Agent shall have the right (but
not the obligation) to exercise all rights with respect to the Collateral as it were the sole and absolute owner thereof, including,
without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger,
reorganization, consolidation, recapitalization or other readjustment concerning or involving the Collateral or any Debtor or any
of its direct or indirect subsidiaries.


 


(iii)
The Agent shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either
with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and
at such time or times and at such place or places, and upon such terms and conditions as the Agent may deem commercially reasonable,
all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to
any Debtor or right of redemption of a Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other
transfer of Collateral, the Agent, for the benefit of the Secured Parties, may, unless prohibited by applicable law which cannot
be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption
and equities of any Debtor, which are hereby waived and released.


 


(iv)The
Agent shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts
to make payments directly to the Agent, on behalf of the Secured Parties, and to enforce the Debtors’ rights against such
account debtors and obligors.


 






    	15



    	 



    



 


(v)The
Agent, for the benefit of the Secured Parties, may (but is not obligated to) direct any financial intermediary or any other person
or entity holding any investment property to transfer the same to the Agent, on behalf of the Secured Parties, or its designee.


 


(vi)The
Agent may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United
States Patent and Trademark Office and/or Copyright Office and/or other appropriate governmental office in all relevant jurisdictions
into the name of the Secured Parties or any designee or any purchaser of any Collateral.


 


(b)The
Agent shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral. The Agent may sell the Collateral without giving
any warranties and may specifically disclaim such warranties. If the Agent sells any of the Collateral on credit, the Debtors will
only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights that it may have
to a judicial hearing in advance of the enforcement of any of the Agent’s rights and remedies hereunder, including, without
limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and
remedies with respect thereto.





 


(c)For
the purpose of enabling the Agent to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement
or applicable law, each Debtor hereby grants to the Agent, for the benefit of the Agent and the Secured Parties, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense
following an Event of Default and during the continuance of such Event of Default, any Intellectual Property now owned or hereafter
acquired by such Debtor, and wherever the same may be located, and including in such license access to all media in which any of
the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.


 


9.
Applications of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from
payments made on account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes,
fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses
incurred by the Agent in enforcing the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing
of the Collateral, and then to satisfaction of the Obligations pro rata among the Secured Parties (based on then-outstanding principal
amounts of Debentures at the time of any such determination), and to the payment of any other amounts required by applicable law,
after which the Secured Parties shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition
of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled,
the Debtors will be liable for the deficiency, together with interest thereon, at the rate of 12% per annum or the lesser amount
permitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employed by the Secured
Parties to collect such deficiency. To the extent permitted by applicable law, each Debtor waives all claims, damages and demands
against the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to
the gross negligence or willful misconduct of the Secured Parties as determined by a final judgment (not subject to further appeal)
of a court of competent jurisdiction.


 






    	16



    	 



    
  


10.Securities
Law Provision. Each Debtor recognizes that Agent may be limited in its ability to effect a sale to the public of all or part
of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state
securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more
sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account,
for investment and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices
and on terms less favorable than if the Pledged Securities were sold to the public, and that Agent has no obligation to delay
the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the public
under the Securities Laws. Each Debtor shall cooperate with Agent in its attempt to satisfy any requirements under the Securities
Laws (including, without limitation, registration thereunder if requested by Agent) applicable to the sale of the Pledged Securities
by Agent.


 


11.
Costs and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection
with any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements,
partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Agent.
The Debtors shall also pay all other claims and charges which in the reasonable opinion of the Agent is reasonably likely to prejudice,
imperil or otherwise affect the Collateral or the Security Interests therein. The Debtors will also, upon demand, pay to the Agent
the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Agent, for the benefit of the Secured Parties, may incur in connection with the creation, perfection, protection,
satisfaction, foreclosure, collection or enforcement of the Security Interest and the preparation, administration, continuance,
amendment or enforcement of this Agreement and pay to the Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Agent, for the benefit of the Secured Parties, and the
Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the
rights of the Secured Parties under the Debentures. Until so paid, any fees payable hereunder shall be added to the principal amount
of the Debentures and shall bear interest at the Default Rate.


 


12.
Responsibility for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral,
and the Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the
Collateral or its unavailability for any reason. Without limiting the generality of the foregoing, (a) neither the Agent nor any
Secured Party (i) has any duty (either before or after an Event of Default) to collect any amounts in respect of the Collateral
or to preserve any rights relating to the Collateral, or (ii) has any obligation to clean-up or otherwise prepare the Collateral
for sale, and (b) each Debtor shall remain obligated and liable under each contract or agreement included in the Collateral to
be observed or performed by such Debtor thereunder. Neither the Agent nor any Secured Party shall have any obligation or liability
under any such contract or agreement by reason of or arising out of this Agreement or the receipt by the Agent or any Secured Party
of any payment relating to any of the Collateral, nor shall the Agent or any Secured Party be obligated in any manner to perform
any of the obligations of any Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Agent or any Secured Party in respect of the Collateral or as to the sufficiency of any performance
by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance
or to collect the payment of any amounts which may have been assigned to the Agent or to which the Agent or any Secured Party may
be entitled at any time or times.


 






    	17



    	 



    



 


13.
Security Interests Absolute. All rights of the Secured Parties and all obligations of the Debtors hereunder, shall be
absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Debentures or any
agreement entered into in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or
place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of
or any consent to any departure from the Debentures or any other agreement entered into in connection with the foregoing; (c) any
exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from
any other collateral for, or any guarantee, or any other security, for all or any of the Obligations; (d) any action by the Secured
Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection
with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to
a Debtor, or a discharge of all or any part of the Security Interests granted hereby. Until the Obligations shall have been paid
and performed in full, the rights of the Secured Parties shall continue even if the Obligations are barred for any reason, including,
without limitation, the running of the statute of limitations or bankruptcy. Each Debtor expressly waives presentment, protest,
notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral
or any payment received by the Secured Parties hereunder shall be deemed by final order of a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall
be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event, each Debtor’s obligations
hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or
cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions
hereof. Each Debtor waives all right to require the Secured Parties to proceed against any other person or entity
or to apply any Collateral which the Secured Parties may hold at any time, or to marshal assets, or to pursue any other
remedy. Each Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured
hereby.


 


14.
Term of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments
under the Debentures have been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however,
that all indemnities of the Debtors contained in this Agreement (including, without limitation, Annex B hereto) shall survive and
remain operative and in full force and effect regardless of the termination of this Agreement.


 






    	18



    	 



    



 


15.
Power of Attorney; Further Assurances.


 


(a) Each
Debtor authorizes the Agent, and does hereby make, constitute and appoint the Agent and its officers, agents, successors or assigns
with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the Agent
or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts,
money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect
of the Collateral that may come into possession of the Agent; (ii) to sign and endorse any financing statement pursuant to the
UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv)
to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual
Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Agent, and at the expense
of the Debtors, at any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts
and things which the Agent deems necessary to protect, preserve and realize upon the Collateral and the Security Interests granted
therein in order to effect the intent of this Agreement and the Debentures all as fully and effectually as the Debtors might or
could do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power
of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of
the Obligations shall be outstanding. The designation set forth herein shall be deemed to amend
and supersede any inconsistent provision in the Organizational Documents or other documents or agreements to which any Debtor is
subject or to which any Debtor is a party. Without limiting the generality of the foregoing, after the occurrence and during
the continuance of an Event of Default, each Secured Party is specifically authorized to execute and file any applications for
or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United
States Patent and Trademark Office, the United States Copyright Office and the appropriate governmental office in all relevant
jurisdictions.


 


(b) On a
continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper filing
and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule C attached
hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested
by the Agent, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes of this Agreement,
or for assuring and confirming to the Agent the grant or perfection of a perfected security interest in all the Collateral under
the UCC.


 






    	19



    	 



    



 


(c) Each
Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact, with full authority in the place and instead
of such Debtor and in the name of such Debtor, from time to time in the Agent’s discretion, to file, in its sole discretion,
of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature
of such Debtor where permitted by law, which financing statements may (but need not) describe the Collateral as “all assets”
or “all personal property” or words of like import, and ratifies all such actions taken by the Agent. This power of
attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.


 


16.
Notices. All notices, requests, demands and other communications hereunder shall be subject to the notice provision
of the Purchase Agreement (as such term is defined in the Debentures).


 


17.
Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral
or by the guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Agent shall have
the right, in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without
in any way modifying or affecting any of the Secured Parties’ rights and remedies hereunder.


 


18.
Appointment of Agent. The Secured Parties hereby appoint TCP WR Acquisition, LLC to act as their agent (“Agent”)
for purposes of exercising any and all rights and remedies of the Secured Parties hereunder. Such appointment shall continue until
revoked in writing by a Majority in Interest, at which time a Majority in Interest shall
appoint a new Agent, provided that TCP WR Acquisition, LLC may not be removed as Agent unless TCP WR Acquisition, LLC shall then
hold less than $500,000 in principal amount of Debentures; provided, further,
that such removal may occur only if each of the other Secured Parties shall then hold not less than an aggregate of $500,000 in
principal amount of Debentures. The Agent shall have the rights, responsibilities and immunities set forth in Annex B hereto.


 


19.
Miscellaneous.


 


(a) No course
of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Parties, any right, power or privilege hereunder or under the Debentures shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.


 


(b) All of
the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Debentures
or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.


 






    	20



    	 



    



 


(c)
This Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto.
No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Debtors and the Majority In Interest.


 


(d)
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.


 


(e)
No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such
right.


 


(f)
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company and the Guarantors may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of the Majority in Interest (other than by merger). Any Secured Party may assign any or all of its rights under this Agreement
to any Person (as defined in the Purchase Agreement) to whom such Secured Party assigns or transfers any Obligations, provided
such transferee agrees in writing to be bound, with respect to the transferred Obligations, by the provisions of this Agreement
that apply to the “Secured Parties.”


 


(g) Each
party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.


 


(h)     Except to
the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, all questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Except to the extent mandatorily
governed by the jurisdiction or situs where the Collateral is located, each Debtor agrees that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and the Debentures (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan. Except to the extent mandatorily
governed by the jurisdiction or situs where the Collateral is located, each Debtor hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to
process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.


 






    	21



    	 



    
  


(i) This
Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and,
all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature
is executed) the same with the same force and effect as if such facsimile signature were the original thereof.


 


(j)All Debtors
shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties hereunder.


 


(k)Each Debtor
shall indemnify, reimburse and hold harmless the Agent and the Secured Parties and their respective partners, members, shareholders,
officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively,
“Indemnitees”) from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and
expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed
on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from this Agreement
or the Collateral, except any such losses, claims, liabilities, damages, penalties, suits, costs and expenses which result from
the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of competent
jurisdiction. This indemnification provision is in addition to, and not in limitation of, any other indemnification provision in
the Debentures, the Purchase Agreement (as such term is defined in the Debentures) or any other agreement, instrument or other
document executed or delivered in connection herewith or therewith.


 






    	22



    	 



    



 


(l)Nothing
in this Agreement shall be construed to subject Agent or any Secured Party to liability as a partner in any Debtor or any if its
direct or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries
that is a limited liability company, nor shall Agent or any Secured Party be deemed to have assumed any obligations under any partnership
agreement or limited liability company agreement, as applicable, of any such Debtor or any of its direct or indirect subsidiaries
or otherwise, unless and until any such Secured Party exercises its right to be substituted for such Debtor as a partner or member,
as applicable, pursuant hereto.


 


(m)
To the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the
consent, approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any
Debtor or compliance with any provisions of any of the Organizational Documents, the Debtors, to the extent legally permitted to
do so, hereby grant such consent and approval and waive any such noncompliance with the terms of said documents.


 


[SIGNATURE PAGES FOLLOW]


 


 



    	23



    	 



    
IN WITNESS WHEREOF, the
parties hereto have caused this Security Agreement to be duly executed on the day and year first above written.


 


	
        people’s liberation,
        inc.

         

	
        By: /s/ Colin Dyne                                      

        Name: Colin Dyne

        Title: Chief Executive Officer

         

	
        VERSATILE ENTERTAINMENT,
        iNC.

         

         

	
        By: /s/ Colin Dyne                                      

        Name: Colin Dyne

        Title: Chief Executive Officer

         



 


	
        BELLA ROSE, LLC

         

	
        BY:
people’s liberation, inc.

         

	
        By: /s/ Colin Dyne                                      

        Name: Colin Dyne

        Title: Chief Executive Officer

         

	
        WILLIAM RAST LICENSING, LLC

         

         

	
        By: /s/ Colin Dyne                                      

        Name: Colin Dyne

        Title: Manager

         

	
        WILLIAM RAST SOURCING, LLC

         

         

	
        By: /s/ Colin Dyne                                      

        Name: Colin Dyne

        Title: Manager

         

	
        WILLIAM RAST RETAIL, LLC

         

	
        BY: WILLIAM RAST SOURCING, LLC

         

	
        By: /s/ Colin Dyne                                      

        Name: Colin Dyne

        Title: Manager

         



 


 


[SIGNATURE PAGE OF HOLDERS FOLLOWS]





 






    	24



    	 



    








 


[SIGNATURE PAGE OF HOLDERS TO PPLB SA]


 


Name of Investing Entity: TCP WR Acquisition,
LLC        


Signature of Authorized Signatory of
Investing entity: /s/ Matthew Eby


Name of Authorized Signatory: Matthew
Eby


Title of Authorized Signatory: Member


 






    	25