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agreed to grant to Asta Group a security interest in certain collateral in order to securetheir liability under the Asta Group Guaranty; and     WHEREAS, the Collateral Agent and Asta Group have agreed to enter into the Junior CreditorIntercreditor Agreement to provide, among other things, that its liens will be paripasu .     NOW, THEREFORE, THE PARTIES HERETO FOR GOOD AND VALUABLE CONSIDERATION AGREE AS FOLLOWS:          1. DEFINED TERMS.               (a) Unless otherwise defined herein, terms defined in the Receivables Financing Agreement orthe Guaranty are used in this Security Agreement (including the recitals hereof) as thereindefined. All other terms contained in this Security Agreement, unless the context indicatesotherwise or such terms are defined below, have the meanings provided for by the UCC to the extentthe same are used or defined therein and, otherwise, as set forth in the Receivables FinancingAgreement or the Guaranty, as applicable. In addition, the following terms shall have thefollowing meanings (such meanings to be applicable to both the singular and plural forms of theterms defined):               “Asta” means Asta Funding, Inc.               “Borrower” has the meaning set forth in the preamble, or its permittedsuccessors or assigns.               “Collateral” has the meaning set forth in Section 2.               “Collateral Agent” has the meaning set forth in the preamble; or its permittedsuccessors or assigns.               “Excluded Assets” has the meaning set forth in Section 2(a).               “Guaranty” has the meaning set forth in the preamble.               “IDB” means Israel Discount Bank of New York, a New York banking corporation, in itscapacity as collateral agent, together with its successors and assigns.               “Loan Agreement” means the Fourth Amended and Restated Loan Agreement, entered into asof July 11, 2006, by and among Asta, each of the Borrowers party thereto, each of the Guarantorsparty thereto, IDB and Merrill Lynch Capital, as amended, supplemented or otherwise modified fromtime to time.               “Intercreditor Agreements” means the Senior Lender Intercreditor Agreement and theJunior Lender Intercreditor Agreement.               “Junior Lender Intercreditor Agreement” means the intercreditor agreement, dated as ofthe date hereof, by and between Asta Group, Incorporated and the Collateral Agent.
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               “Lien” means any mortgage, lien, pledge, charge, right, claim, security interest orencumbrance of any kind of or on any Person’s assets or properties in favor of any other Person(including any UCC financing statement or any similar instrument filed against such Person’s assetsor properties).               “Permitted Encumbrances” means any “Senior Lien” (as defined in the Senior LenderIntercreditor Agreement), any “Junior Lien” (as defined in the Junior Lender IntercreditorAgreement), Liens permitted under any “Senior Indebtedness” (as defined in the Senior LenderIntercreditor Agreement) or otherwise consented to by the “Senior Agent” (as defined in the SeniorLender Intercreditor Agreement) and purchase money Liens against assets other than Portfolios.               “Portfolio” means each group or pool or consumer loans acquired by any of theBorrowers (as defined in the IDB Loan Agreement) from a single seller (or seller and itsaffiliates) in a single purchase transaction, which consumer loans are recorded and administered inthe books and records of the Borrower acquiring the same as a separate group or pool of consumerloans.               “Portfolio Acquisition Document” means the purchase and other agreements between aCredit Party (as defined in the Loan Agreement) and the seller of each Portfolio, as each may beamended.               “Receivables Financing Agreement” has the meaning set forth in the preamble.               “Security Agreement” has the meaning set forth in the preamble.               “Senior Creditor Intercreditor Agreement” means the subordination and intercreditoragreement, dated as of the date hereof, by and between IDB and the Collateral Agent.               “Servicing Agreement” has the meaning set forth in Section 2(a)(xvii).               “Tangible Net Worth” means, with respect to the Grantors, the aggregate shareholders’equity (or the equivalent thereof) of the Grantors calculated in accordance with GAAP consistentlyapplied after subtracting therefrom the aggregate amount of the Grantors’ intangible assets (asdetermined in accordance with GAAP), including, without limitation, goodwill, franchises, licenses,patents, trademarks, tradenames, copyrights and service marks and after subtracting any equity ofthe Borrower calculated in accordance with GAAP.               “Tangible Net Worth Trigger Event” means on any date that the Tangible Net Worth isless than $50,000,000.               (b) “UCC jurisdiction” means any jurisdiction that has adopted all or substantially all ofArticle 9 as contained in the 2000 Official Text of the Uniform Commercial Code, as recommended bythe National Conference of Commissioners on Uniform State Laws and the American Law Institute,together with any subsequent amendments or modifications to the Official Text.
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          2. GRANT OF LIEN.               (a) To secure the prompt and complete payment, performance and observance of all of theGuaranteed Obligations, each Grantor hereby grants, assigns, conveys, mortgages, pledges,hypothecates and transfers to Collateral Agent, for the benefit of the Secured Parties, a securityinterest in and Lien that is prior to any Lien or security interest other than PermittedEncumbrances upon all of its right, title and interest in, to and under all property, includingpersonal property and other assets, whether now owned by or owing to, or hereafter acquired by orarising in favor of such Grantor (including under any trade names, styles or derivations thereof),and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless ofwhere located (all of which being hereinafter collectively referred to as the“Collateral”), including, without limitation, the following:                    (i) all Accounts;                    (ii) all Chattel Paper (including Electronic chattel paper and Tangible chattel paper);                    (iii) all Documents;                    (iv) all General Intangibles (including Payment intangibles and Software and tax refunds);                    (v) all Contracts;                    (vi) all Licenses;(vii) all Goods (including Inventory, Equipment and Fixtures);(viii) all Consumer Loans;(ix) all Instruments;                    (x) all Investment Property;                    (xi) all Intellectual Property;                    (xii) all Deposit Accounts and Securities Accounts of any Grantor, and all other bank accountsand all deposits therein;                    (xiii) all money, cash or cash equivalents of any Grantor;                    (xiv) all Supporting Obligations and Letter-of-credit rights of any Grantor;                    (xv) all Commercial tort claims;                    (xvi) without limiting any of the foregoing, all Portfolios and Portfolio AcquisitionDocuments and all accounts receivable, consumer receivables, rights to
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payment of a monetary obligation, whether or not earned by performance, and other Accountsconstituting any or all of the Portfolios;                    (xvii) the Collateral (as defined in the Senior Lender Intercreditor Agreement); and                    (xviii) all right, title and interest of Grantors in and to all servicing agreements, masterservicing agreements, servicing and collection agreements and other similar contracts andagreements relating to any Portfolio (or any portion of a Portfolio) or Account (the “ServicingAgreements”) and any right to payment arising under the Servicing Agreements; and to the extent nototherwise included, all Proceeds, tort claims, insurance claims and other rights to payments nototherwise included in the foregoing and products of the foregoing and all accessions to,substitutions and replacements for, and rents and profits of, each of the foregoing.Notwithstanding the foregoing, the Collateral shall not include any assets leased or licensed toany Grantor from any unaffiliated third party if the granting of a security interest therein isprohibited by or otherwise would materially breach the terms of such lease or license (the propertycovered by such lease or license being hereinafter referred to as “Excluded Assets”).               (b) Subject to the terms of the Guaranty, to secure the prompt and complete payment,performance and observance of the Guaranteed Obligations, each Grantor hereby grants to CollateralAgent, for itself and the benefit of Secured Parties, a right of setoff against the Cash CollateralAccount (as defined in the Guaranty).          3. COLLATERAL AGENT’S AND SECURED PARTIES’ RIGHTS: LIMITATIONS ON COLLATERAL AGENT’S ANDSECURED PARTIES’ OBLIGATIONS.               (a) It is expressly agreed by Grantors that, anything herein to the contrary notwithstanding,each Grantor shall remain liable for the Collateral and all aspects of the Collateral. NeitherCollateral Agent nor any Secured Party shall have any obligation or liability under any Contract orLicense by reason of or arising out of this Security Agreement or the granting herein of a securityinterest or Lien thereon or the receipt by Collateral Agent or any Secured Party of any paymentrelating to any Contract or License pursuant hereto. Neither Collateral Agent nor any SecuredParty shall be required or obligated in any manner to perform or fulfill any of the obligations ofany Grantor under or pursuant to any Contract or License, or to make any payment, or to make anyinquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of anyperformance by any party under any Contract or License, or to present or file any claims, or totake any action to collect or enforce any performance or the payment of any amounts which may havebeen assigned to it or to which it may be entitled at any time or times.               (b) Subject to the terms of the Intercreditor Agreements and the limitations set forth in theGuaranty, Collateral Agent may, at any time upon the occurrence and continuance of a TerminationEvent, upon notice to any Grantor, notify Account Debtors and/or servicers thereof and otherPersons obligated on the Collateral that Collateral Agent has a security interest therein, and thatpayments shall be made directly to Collateral Agent upon the occurrence of a Termination Event.Subject to the terms of the Intercreditor Agreements and the
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limitations set forth in the Guaranty, upon the occurrence and during the continuance of aTermination Event, at the request of Collateral Agent, in its reasonable business discretion, eachGrantor shall notify Account Debtors and other Persons obligated on the Collateral that CollateralAgent has a first-priority security interest in the Collateral (subject to Permitted Encumbrances).Once any such notice has been given to any Account Debtor or other Person obligated on theCollateral, the affected Grantor shall not give any contrary instructions to such Account Debtor orother Person without Collateral Agent’s prior written consent.               (c) Subject to the terms of the Intercreditor Agreements and the limitations set forth in theGuaranty, Collateral Agent may at any time in Collateral Agent’s own name, in the name of a nomineeof Collateral Agent or in the name of any Grantor communicate (by mail, telephone, facsimile orotherwise) with Account Debtors and/or servicers thereof, any parties to Contracts and obligors inrespect of Instruments to verify, to Collateral Agent’s satisfaction, the existence, amount, termsof, and any other matter relating to, Accounts, payment intangibles, Instruments or Chattel Paperor other Collateral.          4. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and warrants that:               (a) Each Grantor has rights in and the power to transfer each item of the Collateral (otherthan Excluded Assets) upon which it purports to grant a security interest and Lien hereunder, freeand clear of any and all Liens other than Permitted Encumbrances.               (b) No effective security agreement, financing statement, equivalent security or Lieninstrument or continuation statement covering all or any part of the Collateral is on file or ofrecord in any public office, except such as may have been filed (i) by any Grantor in favor ofCollateral Agent pursuant to this Security Agreement or the other Transaction Documents, (ii) inconnection with any other Permitted Encumbrances, and (iii) financing statements describing aGrantor’s purchase or sale of Collateral.               (c) This Security Agreement is effective to create a valid and continuing security interest inand other Lien (as applicable) on the Collateral and, upon the filing of the appropriate financingstatements listed on Schedule I attached hereto, a perfected security interest in favor ofCollateral Agent, for itself and the benefit of Secured Parties on the Collateral, with respect towhich a security interest may be perfected by filing pursuant to the UCC. Such security interestin favor of Collateral Agent, for the benefit of Collateral Agent and Secured Parties, is seniorand prior to all other security interests and Liens in the Collateral, except PermittedEncumbrances, and is enforceable as such as against any and all creditors of and purchasers fromany Grantor (other than purchasers and lessees of Accounts in the ordinary course of business,non-exclusive licensees of General Intangibles in the ordinary course of business). All action byany Grantor necessary or reasonably desirable to protect and perfect such Lien on each item of theCollateral has been duly taken which can be perfected by filing a UCC financing statement.               (d) Upon the occurrence of the Tangible Net Worth Trigger Event (for so long as the TangibleNet Worth Trigger Event continues) and to the extent that all Senior Indebtedness has been Paid inFull, upon the request of the Collateral Agent, the Grantors shall
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prepare a schedule from time to time upon the request of the Collateral Agent listing allInstruments and Chattel Paper of each Grantor. The Lien of Collateral Agent, for the benefit ofCollateral Agent and Secured Parties, on the Collateral listed on such schedule is senior and priorto all other Liens, except Permitted Encumbrances, that would be prior to the Liens in favor ofCollateral Agent as a matter of law, and is enforceable as such against any and all creditors ofand purchasers from any Grantor.               (e) Each Grantor’s name as it appears in official filings in the state of its incorporation orother organization, the type of entity of each Grantor (including corporation, partnership, limitedpartnership or limited liability company), organizational identification number issued by eachGrantor’s state of incorporation or organization or a statement that no such number has beenissued, each Grantor’s state of organization or incorporation, and the location of each Grantor’schief executive office, are set forth on Schedules IIA — IIH, respectively,hereto. Each Grantor has only one state of incorporation or organization.               (f) With respect to Accounts: (i) the Accounts are owned by Grantors, free and clear of allLiens, except for Permitted Encumbrances; and (ii) Grantors have the right to pursue the collectionof the Accounts.          5. COVENANTS. Each Grantor, jointly and severally, covenants and agrees withCollateral Agent, for the benefit of Collateral Agent and Secured Parties, that from and after thedate of this Security Agreement and until the Guaranteed Obligations have been indefeasibly paid infull:               (a) Further Assurances.                    (i) Upon the occurrence of the Tangible Net Worth Trigger Event (for so long as the TangibleNet Worth Trigger Event continues), upon the written request of the Collateral Agent and at thesole expense of Grantors, each Grantor shall promptly and duly execute and deliver any and all suchfurther instruments and documents and take such further actions with respect to any Collateralvalued (in accordance with GAAP) at or above twenty-five thousand dollars ($25,000) as CollateralAgent may reasonably deem desirable to obtain the full benefits of this Security Agreement and ofthe rights and powers herein granted. Each Grantor hereby authorizes Collateral Agent and theSecured Parties to file and record in such public records offices as Collateral Agent and theSecured Parties may reasonably determine such financing statements as Collateral Agent and theSecured Parties may reasonably determine relative to the transactions contemplated by this SecurityAgreement.                    (ii) Each Grantor hereby irrevocably authorizes Collateral Agent and Secured Parties at anytime and from time to time to file in any filing office in any UCC jurisdiction any initialfinancing statements and amendments thereto that (a) indicate the Collateral (i) as all assets ofsuch Grantor or words of similar effect, regardless of whether any particular asset comprised inthe Collateral falls within the scope of Article 9 of the UCC or such jurisdiction, or (ii) asbeing of an equal or lesser scope or with greater detail, and (b) contain any other informationrequired by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of anyfinancing statement or amendment, including whether such Grantor is an organization, the type oforganization and any organization identification number issued to such
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Grantor. Each Grantor agrees to furnish any such information to Collateral Agent promptlyupon request. Each Grantor also ratifies its authorization for Collateral Agent to have filed inany UCC jurisdiction any initial financing statements or amendments thereto if filed prior to thedate hereof.                    (iii) Subject to the terms of the Intercreditor Agreements, upon the occurrence of theTangible Net Worth Trigger Event, upon the request of the Collateral Agent, each Grantor shallpromptly notify Collateral Agent of any material commercial tort claim (as defined in the UCC)acquired by it and unless otherwise consented by Collateral Agent, such Grantor shall enter into asupplement to this Security Agreement, granting to Collateral Agent a Lien in such materialcommercial tort claim.               (b) Maintenance of Records. Grantors shall keep and maintain, at their own cost andexpense, records of the Collateral kept in the ordinary course of business, including a record ofany and all payments received and any and all credits granted with respect to the Collateral andall other dealings with the Collateral.               (c) Indemnification. Subject to the limitations set forth in the IntercreditorAgreements and the Guaranty, in any suit, proceeding or action brought by Collateral Agent or anySecured Party relating to any Collateral for any sum owing with respect thereto or to enforce anyrights or claims with respect thereto, each Grantor will save, indemnify and keep Collateral Agentand Secured Parties harmless from and against all expense (including reasonable attorneys’ fees andexpenses), loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment orreduction of liability whatsoever of the Account Debtor or other Person obligated on theCollateral, arising out of a breach by any Grantor of any obligation thereunder or arising out ofany other agreement, indebtedness or liability at any time owing to, or in favor of, such obligoror its successors from such Grantor, except in the case of Collateral Agent or any Secured Party,to the extent: (i) such expense, loss, or damage is attributable to the gross negligence or willfulmisconduct of Collateral Agent or such Secured Party as finally determined by a court of competentjurisdiction, or (ii) of Collateral Agent’s or any Secured Party’s failure to act in a commerciallyreasonable manner (as finally determined by a court of competent jurisdiction) such that suchfailure is determined by a court of competent jurisdiction to be egregious, unconscionable andbeyond the standards of experienced commercial lenders in similar circumstances. All suchobligations of Grantors shall be and remain enforceable against and only against Grantors and shallnot be enforceable against Collateral Agent or any Secured Party.               (d) Compliance with Terms of Accounts, etc. In all material respects, each Grantorwill perform and comply with all obligations in respect of the Collateral and all other agreementsto which it is a party or by which it is bound relating to the Collateral.               (e) Limitation on Liens on Collateral. No Grantor will create, permit or suffer toexist, and each Grantor will defend the Collateral against, and take such other action as isnecessary to remove, any Lien on the Collateral except Permitted Encumbrances, and will defend theright, title and interest of Collateral Agent and Secured Parties in and to any of such Grantor’srights under the Collateral against the claims and demands of all Persons whomsoever.
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               (f) Limitations on Disposition. On or after the occurrence of the Tangible Net WorthTrigger Event (for so long as the Tangible Net Worth Trigger Event continues), no Grantor willsell, license, lease, transfer or otherwise dispose of any of the Collateral, or attempt orcontract to do so, except for sales of Accounts and Portfolios in the ordinary course of business,as permitted by the Intercreditor Agreements or as consented to by the Senior Creditor (as definedin the Intercreditor Agreement as of the date hereof or such other definition after the date hereofas is consented to in writing by the Guarantors).               (g) Notices. On or after the occurrence of the Tangible Net Worth Trigger Event (forso long as the Tangible Net Worth Trigger Event continues), Grantors will advise Collateral Agentpromptly, in reasonable detail, (i) of Liens in aggregate of $100,000 (other than PermittedEncumbrances) made or asserted against any of the Collateral, and (ii) of the occurrence of anyother event which could reasonably be expected to have a material adverse effect on the aggregatevalue of the Collateral or on the Liens created hereunder or under any other Transaction Document.The Guarantors shall cause the termination of any Liens on the Collateral (other than PermittedEncumbrances) in excess of $100,000 in the aggregate within 30 days after such Liens attach to theCollateral.               (h) No Reincorporation. No Grantor shall reincorporate or reorganize itself under thelaws of any jurisdiction other than the jurisdiction in which it is incorporated or organized as ofthe date hereof without giving at least 10 days prior notice to Collateral Agent.               (i) Terminations; Amendments Not Authorized. Except upon delivery of the Letter ofCredit in an amount equal to the Aggregate Liability pursuant to Section 2 of the Guaranty or theGuaranteed Obligations are indefeasibly paid in full in cash (in which cases, each Grantor is soauthorized), each Grantor acknowledges that it is not authorized to file any financing statement oramendment or termination statement with respect to any financing statement without the priorwritten consent of Collateral Agent and agrees that it will not do so without the prior writtenconsent of Collateral Agent.               (j) Tangible Net Worth Trigger Event. The Grantors shall promptly notify theCollateral Agent of the occurrence of a Tangible Net Worth Trigger Event.          6. RESERVED.          7. REMEDIES: RIGHTS UPON DEFAULT.               (a) Subject to the terms of the Intercreditor Agreements and the Guaranty, in addition to allother rights and remedies granted to it under this Security Agreement, the Guaranty, theTransaction Documents and under any other instrument or agreement securing, evidencing or relatingto any of the Guaranteed Obligations, if any Termination Event shall have occurred and iscontinuing, after thirty (30) days written notice to Grantors, and subject to the terms of theIntercreditor Agreements, Collateral Agent may exercise all rights and remedies of a secured partyunder the UCC. Without limiting the generality of the foregoing, but subject to the terms of theIntercreditor Agreements and the Guaranty and such notice, to the extent permitted by law, eachGrantor expressly agrees that in any such event Collateral Agent, without demand of performance orother demand,
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advertisement or notice of any kind (except the notice specified below of time and place ofpublic or private sale) to or upon such Grantor or any other Person (all and each of which demands,advertisements and notices are hereby expressly waived to the maximum extent permitted by the UCCand other applicable law), may forthwith enter upon the premises of such Grantor where anyCollateral is located through self-help, without judicial process, without first obtaining a finaljudgment or giving such Grantor or any other Person notice and opportunity for a hearing onCollateral Agent’s claim or action and may collect, receive, assemble, process, appropriate andrealize upon the Collateral, or any part thereof, and may forthwith sell, lease, license, assign,give an option or options to purchase, or sell or otherwise dispose of and deliver said Collateral(or contract to do so), or any part thereof, in one or more parcels at a public or private sale orsales, at any exchange at such prices as it may deem acceptable, for cash or on credit or forfuture delivery without assumption of any credit risk. Subject to the terms of the IntercreditorAgreements, the Guaranty and after such notice, Collateral Agent or any Secured Party shall havethe right upon any such public sale or sales and, to the extent permitted by law, upon any suchprivate sale or sales, to purchase for the benefit of Collateral Agent and Secured Parties, thewhole or any part of said Collateral so sold, free of any right or equity of redemption, whichequity of redemption each Grantor hereby waives and releases. Such sales may be adjourned andcontinued from time to time with or without notice. Collateral Agent shall have the right toconduct such sales on any Grantor’s premises or elsewhere and shall have the right to use anyGrantor’s premises without charge for such time or times as Collateral Agent deems necessary oradvisable.          Subject to the terms of the Intercreditor Agreements and the Guaranty, if any TerminationEvent shall have occurred and is continuing, each Grantor further agrees, after such notice, atCollateral Agent’s request, to assemble the Collateral and make it available to Collateral Agent ata place or places designated by Collateral Agent which are reasonably convenient to CollateralAgent and such Grantor, whether at such Grantor’s premises or elsewhere. Subject to the terms ofthe Intercreditor Agreements, after such notice, until Collateral Agent is able to effect a sale,lease, or other disposition of Collateral, Collateral Agent shall have the right to hold or useCollateral, or any part thereof, to the extent that it deems appropriate for the purpose ofpreserving Collateral or its value or for any other purpose deemed appropriate by Collateral Agent.Collateral Agent shall have no obligation to any Grantor to maintain or preserve the rights ofsuch Grantor as against third parties with respect to Collateral while Collateral is in thepossession of Collateral Agent. Subject to the terms of the Intercreditor Agreements, CollateralAgent may, if it so elects, seek the appointment of a receiver or keeper to take possession ofCollateral and to enforce any of Collateral Agent’s remedies (for the benefit of Collateral Agentand Secured Parties), with respect to such appointment without prior notice or hearing as to suchappointment. Collateral Agent shall apply the net proceeds of any such collection, recovery,receipt, appropriation, realization or sale to the Guaranteed Obligations as provided in theReceivables Financing Agreement, and only after so paying over such net proceeds, and after thepayment by Collateral Agent of any other amount required by any provision of law, need CollateralAgent account for the surplus, if any, to any Grantor. To the maximum extent permitted byapplicable law, each Grantor waives all claims, damages, and demands against Collateral Agent orany Secured Party arising out of the repossession, retention or sale of the Collateral except suchas arise solely out of the gross negligence or willful misconduct of Collateral Agent or suchSecured Party as finally determined by a court of competent jurisdiction. Each Grantor agrees thatten (10) days prior notice by Collateral Agent
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of the time and place of any public sale or of the time after which a private sale may takeplace is reasonable notification of such matters. Grantors shall remain liable for any deficiencyif the proceeds of any sale or disposition of the Collateral are insufficient to pay all GuaranteedObligations, including any attorneys’ fees and other expenses incurred by Collateral Agent or anySecured Party to collect such deficiency.               (b) Except as otherwise specifically provided herein, each Grantor hereby waives presentment,demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind inconnection with this Security Agreement or any Collateral.               (c) To the extent that applicable law imposes duties on Collateral Agent to exercise remediesin a commercially reasonable manner, each Grantor acknowledges and agrees that it is notcommercially unreasonable for Collateral Agent (i) to fail to incur expenses reasonably deemedsignificant by Collateral Agent to prepare Collateral for disposition, (ii) to fail to obtain thirdparty consents for access to Collateral to be disposed of, or to obtain or, if not required byother law, to fail to obtain governmental or third party consents for the collection or dispositionof Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies againstAccount Debtors or other Persons obligated on Collateral or to remove Liens on or any adverseclaims against Collateral, (iv) to exercise collection remedies against Account Debtors and otherPersons obligated on Collateral directly or through the use of collection agencies and othercollection specialists, (v) to advertise dispositions of Collateral through publications or mediaof general circulation, whether or not the Collateral is of a specialized nature, (vi) to contactother Persons, whether or not in the same business as the Grantor, for expressions of interest inacquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneersto assist in the disposition of Collateral, whether or not the Collateral is of a specializednature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction ofassets of the types included in the Collateral or that have the reasonable capacity of doing so, orthat match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retailmarkets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi)to purchase insurance or credit enhancements to insure Collateral Agent against risks of loss,collection or disposition of Collateral or to provide to Collateral Agent a guaranteed return fromthe collection or disposition of Collateral, or (xii) to the extent deemed appropriate byCollateral Agent, to obtain the services of other brokers, investment bankers, consultants andother professionals to assist Collateral Agent in the collection or disposition of any of theCollateral. Each Grantor acknowledges that the purpose of this Section 7(c) is to providenon-exhaustive indications of what actions or omissions by Collateral Agent would not becommercially unreasonable in Collateral Agent’s exercise of remedies against the Collateral andthat other actions or omissions by Collateral Agent shall not be deemed commercially unreasonablesolely on account of not being indicated in this Section 7(c). Without limitation upon theforegoing, nothing contained in this Section 7(c) shall be construed to grant any rights toany Grantor or to impose any duties on Collateral Agent that would not have been granted or imposedby this Security Agreement or by applicable law in the absence of this Section 7(c).               (d) Neither Collateral Agent nor the Secured Parties shall be required to make any demandupon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor,guarantor, pledgor or any other Person with respect to the payment of
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the Guaranteed Obligations or to pursue or exhaust any of their rights or remedies withrespect to any Collateral therefore or any direct or indirect guarantee thereof. NeitherCollateral Agent nor the Secured Parties shall be required to marshal the Collateral or anyguarantee of the Guaranteed Obligations or to resort to the Collateral or any such guarantee in anyparticular order, and all of its and their rights hereunder or under any other Transaction Documentshall be cumulative. To the extent it may lawfully do so, each Grantor absolutely and irrevocablywaives and relinquishes the benefit and advantage of, and covenants not to assert againstCollateral Agent or any Secured Party, any valuation, stay, appraisement, extension, redemption orsimilar laws and any and all rights or defenses it may have as a surety now or hereafter existingwhich, but for this provision, might be applicable to the sale of any Collateral made under thejudgment, order or decree of any court, or privately under the power of sale conferred by thisSecurity Agreement, or otherwise.          8. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTYCOLLATERAL. For the purposeof enabling Collateral Agent to exercise rights and remedies under Section 7 hereof(including, without limiting the terms of Section 7 hereof, in order to take possession of,hold, preserve, process, assemble, prepare for sale, market for sale, sell or otherwise dispose ofthe Collateral) at such time as Collateral Agent shall be lawfully entitled to exercise such rightsand remedies, each Grantor hereby grants to Collateral Agent, for the benefit of Collateral Agentand Secured Parties, an irrevocable (until the IDB Termination Date), nonexclusive license(exercisable without payment of royalty or other compensation to such Grantor) to use, license orsublicense any Intellectual Property now owned or hereafter acquired by such Grantor, and whereverthe same may be located, and including in such license access to all media in which any of thelicensed items may be recorded or stored and to all computer software and programs used for thecompilation or printout thereof, all without compensation to Grantor.          9. LIMITATION ON COLLATERAL AGENT’S AND SECURED PARTIES’ DUTY IN RESPECT OFCOLLATERAL. Collateral Agent and each Secured Party shall use reasonable care with respect tothe Collateral in its possession or under its control. Neither Collateral Agent nor any SecuredParty shall have any other duty as to any Collateral in its possession or control or in thepossession or control of any agent or nominee of Collateral Agent or such Secured Party, or anyincome thereon or as to the preservation of rights against prior parties or any other rightspertaining thereto.          10. REINSTATEMENT. This Security Agreement shall remain in full force and effect andcontinue to be effective should any petition be filed by or against any Grantor for liquidation orreorganization, should any Grantor become insolvent or make an assignment for the benefit of anycreditor or creditors or should a receiver or trustee be appointed for all or any significant partof any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be,if at any time payment and performance of the Guaranteed Obligations, or any part thereof, is,pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored orreturned by any obligee of the Guaranteed Obligations, whether as a “voidable preference,”“fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made.In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned,the Guaranteed Obligations shall be reinstated and deemed reduced only by such amount paid and notso rescinded, reduced, restored or returned.
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          11. NOTICES. All notices and other communications provided for hereunder shall be inwriting or by facsimile and, if to any other party hereto, transmitted or delivered to it,addressed to it at the address specified for it on the signature page hereto or as to any party atsuch other address as shall be designated by such party in a written notice to each other partycomplying as to delivery with the terms of this Section. All such notices and other communicationsshall if properly addressed and sent by pre-paid courier service, be deemed given when received;any notice or other communication, if transmitted by facsimile, shall be deemed given whentransmitted and receipt thereof has been confirmed by telephone or electronic means.          12. SEVERABILITY. Whenever possible, each provision of this Security Agreement shallbe interpreted in a manner as to be effective and valid under applicable law, but if any provisionof this Security Agreement shall be prohibited by or invalid under applicable law, such provisionshall be ineffective to the extent of such prohibition or invalidity without invalidating theremainder of such provision or the remaining provisions of this Security Agreement. This SecurityAgreement is to be read, construed and applied together with the Receivables Financing Agreementand the other Transaction Documents which, taken together, set forth the complete understanding andagreement of Collateral Agent, Secured Parties and Grantors with respect to the matters referred toherein and therein. Except as otherwise specifically provided, if any provision contained in thisSecurity Agreement or any other Transaction Document conflicts with any provision in theReceivables Financing Agreement, the provision in the Receivables Financing Agreement shall governand control.          13. NO WAIVER; CUMULATIVE REMEDIES; AMENDMENTS. Neither Collateral Agent nor anySecured Party shall by any act, delay, omission or otherwise be deemed to have waived any of itsrights or remedies hereunder, and no waiver shall be valid unless in writing, signed by CollateralAgent and then only to the extent therein set forth. A waiver by Collateral Agent or SecuredParties of any right or remedy hereunder on any one occasion shall not be construed as a bar to anyright or remedy which Collateral Agent or Secured Parties would otherwise have had on any futureoccasion. No failure to exercise nor any delay in exercising on the part of Collateral Agent orany Secured Party, any right, power or privilege hereunder, shall operate as a waiver thereof, norshall any single or partial exercise of any right, power or privilege hereunder preclude any otheror future exercise thereof or the exercise of any other right, power or privilege. The rights andremedies hereunder provided are cumulative and may be exercised singly or concurrently, and are notexclusive of any rights and remedies provided by law. None of the terms or provisions of thisSecurity Agreement may be waived, altered, modified or amended except by an instrument in writing,duly executed by Collateral Agent and the applicable party to be charged.          14. LIMITATION BY LAW. All rights, remedies and powers provided in this SecurityAgreement may be exercised only to the extent that the exercise thereof does not violate anyapplicable provision of law, and all the provisions of this Security Agreement are intended to besubject to all applicable mandatory provisions of law that may be controlling and to be limited tothe extent necessary so that they shall not render this Security Agreement invalid, unenforceable,in whole or in part, or not entitled to be recorded, registered or filed under the provisions ofany applicable law.
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          15. CONTINUING SECURITY INTEREST. This Security Agreement shall create a continuingsecurity interest in the Collateral and shall remain in full force and effect until delivery of theLetter of Credit in an amount equal to the Aggregate Liability pursuant to Section 2 of theGuaranty or payment in full in cash and performance of all the Guaranteed Obligations (other thanany indemnification obligations) and a release by Grantors of all claims against the CollateralAgent and Secured Parties under the Guarantor Security Documents, and so long as no suits, actions,proceedings, or claims are pending or threatened asserting any damages, losses or liabilities thatare Guaranteed Obligations, in which case the Collateral Agent shall deliver to the Grantorstermination statements and other documents necessary or appropriate to evidence the termination ofthe Liens securing payment of the Guaranteed Obligations.          16. SUCCESSORS AND ASSIGNS. This Security Agreement and all obligations of Grantorshereunder shall be binding upon the successors and assigns of each Grantor (including anydebtor-in-possession on behalf of such Grantor) and shall, together with the rights and remedies ofCollateral Agent, for the benefit of Collateral Agent and Secured Parties, hereunder, inure to thebenefit of Collateral Agent and Secured Parties, all future holders of any instrument evidencingany of the Guaranteed Obligations and their respective successors and assigns. No sales ofparticipations, other sales, assignments, transfers or other dispositions of any agreementgoverning or instrument evidencing the Guaranteed Obligations or any portion thereof or interesttherein shall in any manner impair the Lien granted to Collateral Agent, for the benefit ofCollateral Agent and Secured Parties, hereunder. No Grantor may assign, sell, hypothecate orotherwise transfer any interest in or obligation under this Security Agreement.          17. COUNTERPARTS. This Security Agreement may be executed in any number of separatecounterparts, each of which shall collectively and separately constitute one agreement. ThisSecurity Agreement may be executed by manual signature, facsimile or, if approved in writing byCollateral Agent, electronic means, all of which shall be equally valid.          18. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE TRANSACTIONDOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THISSECURITY AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED ANDENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE ANDPERFORMED IN THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH GRANTORHEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEWYORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTESBETWEEN GRANTORS, COLLATERAL AGENT AND SECURED PARTIES PERTAINING TO THIS SECURITY AGREEMENT OR ANYOF THE OTHER TRANSACTION DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITYAGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS, PROVIDED, THAT COLLATERAL AGENT,SECURED PARTIES AND GRANTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BYA COURT LOCATED OUTSIDE OF NEW YORK COUNTY, AND, PROVIDED,FURTHER, NOTHING IN THISAGREEMENT
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SHALL BE DEEMED OR OPERATE TO PRECLUDE COLLATERAL AGENT FROM BRINGING SUIT OR TAKING OTHERLEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THEGUARANTEED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF COLLATERAL AGENT.EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUITCOMMENCED IN ANY SUCH COURT, AND EACH GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASEDUPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUMNONCONVENIENSAND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BYSUCH COURT. EACH GRANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHERPROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS ANDOTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH GRANTOR AT THE ADDRESSSET FORTH ON ANNEX I TO THE RECEIVABLES FINANCING AGREEMENT AND THAT SERVICE SO MADE SHALLBE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER DEPOSIT INTHE U.S. MAILS, PROPER POSTAGE PREPAID.          19. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEXFINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERTPERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATIONRULES), THE PARTIES DESIRE THAT DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY AJUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BYJURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING INCONTRACT, TORT, OR OTHERWISE, AMONG COLLATERAL AGENT, SECURED PARTIES, AND GRANTORS ARISING OUT OF,CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THISSECURITY AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS RELATED HERETO ORTHERETO.          20. SECTION TITLES. The Section titles contained in this Security Agreement are andshall be without substantive meaning or content of any kind whatsoever and are not a part of theagreement between the parties hereto.          21. NO STRICT CONSTRUCTION. The parties hereto have participated jointly in thenegotiation and drafting of this Security Agreement. In the event an ambiguity or question ofintent or interpretation arises, this Security Agreement shall be construed as if drafted jointlyby the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring anyparty by virtue of the authorship of any provisions of this Security Agreement.
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          22. ADVICE OF COUNSEL. Each of the parties represents to each other party hereto thatit has discussed this Security Agreement and, specifically, the provisions of Section 18and Section 19, with its counsel.          23. BENEFIT OF SECURED PARTIES. All Liens granted or contemplated hereby shall be forthe benefit of Collateral Agent, individually, and Secured Parties, and all proceeds or paymentsrealized from the Collateral in accordance herewith shall be applied to the Guaranteed Obligationsin accordance with the terms of the Guaranty.          24. NO PETITION. The Grantors agree that they will not institute against, or join orassist any person in instituting against, the Borrower any bankruptcy, reorganization, arrangement,insolvency or liquidation proceeding, or other similar proceeding under the laws of anyjurisdiction, for one year and one day after the Obligations have been indefeasibly paid in full.The obligations of the Grantors under this Section 24 shall survive any termination of thisSecurity Agreement.          25. ADDITIONAL GRANTORS. The Grantors shall cause each affiliated entity that hasexecuted a security agreement in favor of [IDB] to become party to the Guaranty and this SecurityAgreement as a Grantor. From time to time subsequent to the date hereof, additional Persons maybecome parties hereto as additional Grantors (each, an “Additional Grantor”), by executinga counterpart of this Security Agreement substantially in the form of Exhibit A attachedhereto. Upon delivery of any such counterpart to Collateral Agent, notice of which is hereby waivedby the Grantors, each Additional Grantor shall be a Grantor and shall be as fully a party hereto asif such Additional Grantor were an original signatory hereto. Each Grantor expressly agrees thatits obligations arising hereunder shall not be affected or diminished by the addition or release ofany other Grantor hereunder nor by any election of Collateral Agent not to cause any Credit Party(as defined in the Loan Agreement) or any other Person to become an Additional Grantor hereunder.This Security Agreement shall be fully effective as to any Grantor that is or becomes a partyhereto regardless of whether any other Person becomes or fails to become or ceases to be a Grantorhereunder.          26. INTERCREDITOR AGREEMENTS. The terms of this Agreement are subject to theprovisions of the Intercreditor Agreements, if any terms of this Agreement or the Junior LenderIntercreditor Agreement conflict with the terms of the Senior Lender Intercreditor Agreement, theterms of the Senior Lender Intercreditor Agreement shall govern and if the terms of this Agreementdo not conflict with the terms of the Senior Lender Intercreditor Agreement but do conflict withthe terms of the Junior Lender Intercreditor Agreement, the terms of the Junior LenderIntercreditor Agreement shall govern.[Signature Pages to Follow]
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     IN WITNESS WHEREOF, each of the undersigned have caused this Security Agreement to be dulyexecuted and delivered by its officer thereunto duly authorized as of the date first above written.         **ASTA FUNDING ACQUISITION II, LLC, a****Delaware limited liability company**           By: