**STOCKPLEDGE AGREEMENT**

                    **THISSTOCK PLEDGE AGREEMENT**is entered intoas of this 10th day of November, 2005, by and between **IBF FUNDLIQUIDATING LLC**a Delaware limited liability company (“**Secured Party**”), and **SUNSETBRANDS, INC.** a Nevada corporation (“**Pledgor**”).

                    **WHEREAS**,pursuant to that certain Amendedand Restated Acquisition Agreement and Plan of Merger dated as of November 10,2005 (as amended, restated, supplemented or otherwise modified from time totime, the “**Acquisition Agreement**”),by and among Pledgor, Secured Party, U.S. Mills, Inc. (“**US Mills**”) and USM Acquisition Sub, Inc.,Pledgor will acquire US Mills by merger;

                    **WHEREAS**,Secured Party and Pledgor are party to that certain Security Agreement, datedas of the date hereof (as amended, restated, supplemented or otherwise modifiedfrom time to time, the “**Security Agreement**”),by and among Secured Party, Pledgor and US Mills;

                    **WHEREAS,**Secured Party and Pledgor are party to that certain Master Subordination andIntercreditor Agreement, dated as of the date hereof (as amended, restated,supplemented or otherwise modified from time to time, the “**Subordination Agreement**”), by andamongSecured Party, as seller, Pledgor, US Mills, the Debenture Holder (as definedtherein) and CapitalSource Finance LLC (“**CapitalSource**”);

                    **WHEREAS**,as a condition precedent to theobligation of Secured Party to execute and deliver and perform under theAcquisition Agreement and the other Acquisition Documents (as defined in theSecurity Agreement), Pledgor is required, and has agreed, to enter into anddeliver this Agreement and to pledge to Secured Party, and grant a securityinterest in, the Pledged Collateral (as hereinafter defined) as security forPledgor’s obligations under the Security Agreement; and

                    **WHEREAS**,Secured Party is willing to execute,deliver and perform under the Acquisition Agreement and the other AcquisitionDocuments only upon the condition that Pledgor executes and delivers to SecuredParty this Agreement and agrees to perform and to comply with its obligationsunder this Agreement. 

                    **NOW,THEREFORE**, in consideration of theforegoing and of the mutual covenants and agreements hereinafter set forth, thereceipt and sufficiency of which are hereby acknowledged, and as an inducementfor Secured Party to enter into the Acquisition Agreement and the otherAcquisition Documents, the parties hereto, intending to be legally bound hereby,do agree as follows:

**1. DEFINITIONS AND REFERENCES**

          **1.1.****Defined Terms**

                    Asused in this Agreement, the following terms shall have the meanings specifiedin this Section 1.1:

                    “**Agreement**”shall be defined to mean thisStock Pledge Agreement as amended, supplemented or modified from time to time.

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                    “**Default**” shall mean any event, fact,circumstance or condition that, with the giving of applicable notice or passageof time or both, would constitute or be or result in an Event of Defaulthereunder or under any Acquisition Document.

                    “**Event of Default**” shall mean theoccurrence of any of the events set forth in Article VI.

                    “**Pledged Collateral**” shall mean,collectively and each individually, (i) the issued and outstanding shares ofcapital stock and other equity securities and ownership interests of theSubsidiaries of Pledgor owned or held of record or beneficially by Pledgor onthe date hereof in the amounts set forth on and as listed on Schedule 1.1(and the certificates, copies of which are attached hereto, representing suchshares and other equity securities and ownership interests); (ii) allother shares of capital stock and other equity securities and ownershipinterests of Subsidiaries of Pledgor and all shares of capital stock and otherequity securities and ownership interests of any entity that hereafter becomesa Subsidiary of Pledgor, in each case owned or held of record or beneficiallyby Pledgor at any time (and the certificates representing such shares and otherequity securities and ownership interests); and (iii) any and allreplacements, products and proceeds of, and dividends, distributions inproperty, returns of capital or other distributions made on or with respect to,any of the foregoing shares and other equity securities and ownershipinterests. 

          **1.2.****GeneralTerms**

                    Allcapitalized terms in this Agreement and not defined herein shall have thedefined meanings provided in the Security Agreement. Unless otherwisespecified, as used in this Agreement or in any certificate, report, instrumentor other document made or delivered pursuant to this Agreement, all accountingterms not defined in this Agreement or in the Security Agreement shall have themeanings given to such terms in and shall be interpreted in accordance withGAAP.            

**2. PLEDGE OF COLLATERAL**

                    (a)As security for the due and punctual payment and performance by Pledgor of allthe Obligations, including, without limitation, all of its obligations toSecured Party under the Security Agreement, this Agreement, the PromissoryNotes and the other Acquisition Documents (collectively, the “**Secured Obligations**”), Pledgorhereby (i)pledges and assigns to Secured Party all of the Pledged Collateral and all ofits right, title and interest in and to the Pledged Collateral, and (ii) grantsto Secured Party a continuing security interest in and Lien upon the PledgedCollateral senior in priority to all Encumbrances except with respect to thesecurity interest granted to CapitalSource pursuant to the terms of the CreditAgreement and other Loan Documents (as defined in the Credit Agreement).

                    (b)Pledgor has delivered to CapitalSource all certificates representing thePledged Collateral described in clause (i) of the definition of PledgedCollateral and, until the termination of the Subordination Agreement, willdeliver to CapitalSource (or to Secured Party once the Subordination Agreementhas terminated) all certificates representing the Pledged Collateral describedin clauses (ii) and (iii) of the definition of Pledged Collateral within five(5) Business Days after Pledgor’s acquisition of such shares or other equitysecurities or ownership interests or other items. Until such time as theSubordination Agreement has terminated, all Pledged Collateral shall be held byCapitalSource for the benefit of Secured Party for the purpose of perfectingSecured Party’s security interest therein. Concurrently with the termination ofthe Subordination Agreement, CapitalSource shall deliver all Pledged Collateralto Secured Party. Subject to the terms of the Subordination Agreement, eachsuch certificate shall be registered in the name of Pledgor, duly endorsed inblank or accompanied by a stock power duly executed by Pledgor in blank, inform and substance satisfactory to Secured Party, with any 

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and all documentary tax stamps and other documentsnecessary to cause Secured Party to have a good, valid and perfected continuingpledge of, Lien on and security interest in the Pledged Collateral, free andclear of any mortgage, pledge, Lien, security interest, hypothecation,assignment, charge, right, encumbrance or transfer or other restriction (individually,“**Encumbrance**” and collectively, “**Encumbrances**”), senior in priority to allEncumbrances except with respect to the security interest granted toCapitalSource pursuant to the terms of the Credit Agreement and other LoanDocuments (as defined in the Credit Agreement), including, without limitation,any necessary notations in the corporate or other records books of Pledgor orthe entity in which such shares, equity securities or ownership interestsevidence an ownership stake. Subject to the terms of the SubordinationAgreement, at any time following the occurrence and continuation of an Event ofDefault, any or all of the Pledged Collateral, at the option of Secured Partyexercised in accordance with Section 3 hereof, may be registered inthe name of Secured Party or of its nominee, and Pledgor hereby covenants that,upon demand therefor by Secured Party, Pledgor shall or shall cause the entityin which such shares, equity securities or ownership interests evidence anownership stake to effect such registration.

                    (c)Intentionally Omitted.

                    (d)In addition to and notwithstanding any other provision of this Agreement,subject to the terms of the Subordination Agreement, Secured Party, in its solediscretion, shall have the right, at any time that Pledgor fails to do so,without prior notice to Pledgor, to: (i) obtain insurance covering any of thePledged Collateral to the extent required under the Security Agreement; (ii)pay for the performance of any of the Pledgor’s obligations hereunder; (iii)discharge taxes, liens, security interests, or other encumbrances at any timelevied or placed on any of the Pledged Collateral in violation of thisAgreement unless Pledgor is in good faith with due diligence by appropriateproceedings contesting those items; and (iv) pay for the maintenance andpreservation of any of the Pledged Collateral. Such expenses and advances shallbe added to the Secured Obligations until reimbursed to Secured Party and shallbe secured by the Pledged Collateral. Any such payments and advances by SecuredParty shall not be construed as a waiver by Secured Party of an Event ofDefault or any other rights, remedies or powers of Secured Party hereunder orotherwise.

                    (e)Within five (5) Business Days of any request by Secured Party, Pledgor, at itsown cost and expense, will duly execute and deliver to Secured Party suchfinancing statements, continuation statements, assignments, certificates and/orsuch other agreements, assignments, instructions or documents as Secured Partymay request relating to the Pledged Collateral or otherwise to enable SecuredParty to create, maintain and perfect or from time to time renew the securityinterests granted hereby or to create, maintain and perfect a security interestin any additional Pledged Collateral hereafter acquired by Pledgor or in anyand all additions to and/or replacements, products and proceeds of any of theforegoing, all in form and substance satisfactory to Secured Party. Pledgorwill pay all costs associated therewith, including without limitation, the costof filing any of the foregoing in all public offices or other locationswherever Secured Party deems filing to be necessary or desirable. Pledgorirrevocably grants Secured Party the right, at Secured Party’s option, to fileany or all of the foregoing pursuant to the UCC and otherwise, and Pledgorirrevocably appoints Secured Party as Pledgor’s attorney in fact to execute anyof the foregoing in Pledgor’s name and to perform all other acts that SecuredParty deems appropriate to perfect and continue the security interestsconferred by this Agreement or otherwise to effect fully the purposes, termsand conditions of this Agreement, the Security Agreement and the other AcquisitionDocuments.

                    (f)No injury to, or loss or destruction of, the Pledged Collateral or any MaterialAdverse Effect or Material Adverse Change shall relieve Pledgor of any of theSecured Obligations.

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**3. VOTING RIGHTS, DIVIDENDS AND DISTRIBUTIONS**

                    Solong as no Event of Default shall have occurred and be continuing or wouldresult from or be caused by any of the following:

                    (a)Pledgor shall be entitled to exercise any and all voting and/or consensualrights and powers relating or pertaining to the Pledged Collateral or any partthereof, subject to the terms hereof;

                    (b)Pledgor shall be entitled to receive and retain cash dividends payable on thePledged Collateral; provided, however, that all other dividends(including, without limitation, stock and liquidating dividends), distributionsin property, returns of capital and other distributions made on or in respectof the Pledged Collateral, whether resulting from a subdivision, combination orreclassification of the outstanding capital stock, equity securities or otherownership interests of Pledgor, any Subsidiary of Pledgor or any other Personor received in exchange for the Pledged Collateral or any part thereof or as aresult of any merger, consolidation, acquisition, transfer, sale or dispositionof the Pledged Collateral or other exchange of assets to which Pledgor, anySubsidiary of Pledgor or any other Person may be a party or otherwise, and anyand all cash and other property received in exchange for or redemption of anyof the Pledged Collateral, shall, subject to the terms of the SubordinationAgreement, be retained by Secured Party, or, if delivered to Pledgor, shall beheld in trust for the benefit of Secured Party and forthwith delivered toSecured Party and shall be considered as part of the Pledged Collateral for allpurposes of this Agreement;

                    (c)Secured Party shall execute and deliver (or cause to be executed and delivered)to Pledgor all such proxies, powers of attorney, dividend orders and otherinstruments as Pledgor may request for the purpose of enabling Pledgor toexercise the voting and/or consensual rights and powers that Pledgor isentitled to exercise pursuant to Section 3(a) and/or to receive thedividends that Pledgor is authorized to receive and retain pursuant to Section 3(b);and Pledgor shall execute and deliver to Secured Party all proxies, powers ofattorney, dividend orders and other instruments and documents as may berequired or may be requested by Secured Party to enable Secured Party toreceive and retain the dividends, distributions in property, returns of capitaland other distributions it is authorized to receive and retain pursuant to Section 3(b);and

                    (d)Upon the occurrence and continuation of an Event of Default, all rights ofPledgor to exercise the voting and/or consensual rights and powers that Pledgoris entitled to exercise pursuant to Section 3(a) and/or to receivethe dividends that Pledgor is authorized to receive and retain pursuant to Section 3(b)shall cease immediately, without any notice to Pledgor or action by or onbehalf of Secured Party or any other Person, and all such rights thereuponshall become vested in Secured Party automatically without any action by anyPerson, and Secured Party shall have the sole and exclusive right and authorityto exercise such voting and/or consensual rights and powers and/or to receiveand retain such dividends. In such case, Pledgor shall execute and deliver suchproxies, powers of attorney, dividend orders and other instruments anddocuments as Secured Party may request or as may be otherwise required ordesirable to enable Secured Party to exercise such rights and receive suchdividends. In addition, Secured Party is hereby appointed the attorney-in-factof Pledgor, with full power of substitution, which appointment asattorney-in-fact is irrevocable and coupled with an interest, to take all suchactions after the occurrence and continuation of an Event of Default, whetherin the name of Secured Party or Pledgor, as Secured Party may considernecessary or desirable for the purpose of exercising such rights and receivingsuch dividends. Any and all money and other property paid over to or receivedby Secured Party pursuant to the provisions of this Section 3(d)shall be retained by Secured Party as part of the Pledged Collateral and shallbe applied in accordance with the provisions hereof.

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**4. REMEDIES ON DEFAULT**

                    (a)Notwithstanding and without limiting any other provision of this Agreement orany of the Acquisition Documents, if at any time an Event of Default shall haveoccurred and be continuing, then, in addition to having the right to exerciseany right or remedy of a secured party upon default under the UCC (as definedin the Security Agreement) or applicable law or at equity, subject to the termsof the Subordination Agreement, Secured Party may, to the extent permitted bylaw, without being required to give any notice to Pledgor or to take or do anyaction (except as provided below):

                              (i)apply any cash held by it hereunder in the manner provided in Section 4(1);and

                              (ii) if there shall be no such cash or if the cash so applied shall beinsufficient to pay in full the items specified in Section 4(1)(i)and 4(1)(ii), collect, receive, appropriate and realize upon the PledgedCollateral or any part thereof, and/or sell, assign, transfer, contract to sellor otherwise dispose of and deliver the Pledged Collateral or any part thereof,in its entirety or in portions, at public or private sale or at any broker’sboard, on any securities exchange or at any of Secured Party’s places ofbusiness or elsewhere, for cash, upon credit or for future delivery, and atsuch price or prices as Secured Party may deem best, and Secured Party may(except as otherwise provided by law) be the purchaser of any or all of thePledged Collateral so sold and thereafter may hold the same, absolutely, freefrom any right or claim of whatsoever kind.

                    (b)In the event of a sale as aforesaid, Secured Party may, at any such sale,restrict the number of prospective bidders or purchasers and/or furtherrestrict such prospective bidders or purchasers to Persons who will representand agree that they are purchasing for their own account, for investment andnot with a view to the distribution or resale of the Pledged Collateral, andmay otherwise require that such sale be conducted subject to restrictions as tosuch other matters as Secured Party may deem necessary in order that such salemay be effected in such manner as to comply with all applicable state andfederal securities and other laws. Upon any such sale, Secured Party shall havethe right to deliver, assign and transfer the Pledged Collateral so sold to thepurchaser thereof.

                    (c)Pledgor hereby acknowledges that, notwithstanding that a higher price might beobtained for the Pledged Collateral at a public sale than at a private sale orsales, the making of a public sale of the Pledged Collateral may be subject toregistration requirements under applicable securities laws and other legalrestrictions, compliance with which would make a public sale of the Pledged Collateralimpractical. Accordingly, Pledgor hereby agrees that private sales made bySecured Party in good faith in accordance with the provisions of this Article4 may be at prices and on other terms less favorable to the seller than ifthe Pledged Collateral were sold at a public sale, and that Secured Party shallnot have any obligation to take any steps in order to permit the PledgedCollateral to be sold at a public sale. 

                    (d)If any applicable requirements under the Securities Act of 1933, as amended, orsuch other laws cannot be satisfied at the time of a proposed sale of thePledged Collateral by Secured Party, Pledgor hereby agrees to substitute forthe Pledged Collateral other property owned by Pledgor, free and clear of allEncumbrances, of at least equal value as the Pledged Collateral as of the dateof such proposed sale.

                    (e)Each purchaser at any such sale shall hold the property sold, absolutely freefrom any claim or right whatsoever, including any equity or right of redemptionof Pledgor, and Pledgor hereby specifically waives all rights of redemption,stay or appraisal and other rights that Pledgor has or may have under any law,regulation or statute now existing or hereafter adopted or otherwise. Secured Partyshall give Pledgor not less than ten (10) calendar days’ written notice of itsintention to make any such 

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public or private sale. Such notice, in case of apublic sale, shall state the time and place fixed for such sale, and, in caseof a sale at broker’s board, on a securities exchange, at one or more ofSecured Party’s places of business or elsewhere, shall state the board,exchange or other location at which such sale is to be made and the day onwhich the Pledged Collateral, or that portion thereof so being sold, will firstbe offered for sale at such location. Such notice, in case of a private sale,shall state only the date on or after which such sale may be made. Any suchnotice given as aforesaid shall be deemed to be reasonable notification.

                    (f)Any such public sale shall be held at such time or times within ordinarybusiness hours and at such place or places as Secured Party may fix in thenotice of such sale. At any sale the Pledged Collateral may be sold in one lotas an entirety or in parts, as Secured Party may determine. Secured Party shallnot be obligated to make any sale pursuant to any such notice. Secured Partymay, without notice or publication, adjourn any sale or cause the same to beadjourned from time to time by announcement at the time and place fixed for thesale, and such sale may be made at any time or place to which the same may beso adjourned. In case of any sale of all or any part of the Pledged Collateralon credit or for future delivery, the Pledged Collateral so sold may beretained by Secured Party until the selling price is paid by the purchaserthereof, but Secured Party shall not incur any liability in case of the failureof such purchaser to take up and pay for the Pledged Collateral so sold and, incase of any such failure, such Pledged Collateral may again be sold upon likenotice.

                    (g)Secured Party, instead of exercising the power of sale herein conferred uponit, may proceed by a suit or suits at law or in equity to foreclose its Lien orsecurity interest arising from this Agreement and sell the Pledged Collateral,or any portion thereof, under a judgment or decree of a court or courts ofcompetent jurisdiction.

                    (h)Notwithstanding and without limiting any other provision of this Agreement orany of the Acquisition Documents, upon the occurrence and continuation of anEvent of Default, subject to the terms of the Subordination Agreement, SecuredParty or its nominee shall have the right, without notice to or the consent ofPledgor, to exercise any and all rights of conversion, exchange or subscriptionand any other rights, privileges or options pertaining to any of the PledgedCollateral as if it were the absolute owner thereof, including, without limitation,the right to transfer, sell, dispose of or exchange, at its discretion, any orall of the Pledged Collateral upon the merger, consolidation, reorganization,recapitalization or other readjustment of Pledgor or Subsidiary of Pledgor orsuch other Person.

                    (i)On any sale of any part of the Pledged Collateral, Secured Party is herebyauthorized to comply with any limitation or restriction in connection with suchsale that may be necessary in order to avoid any violation of applicable law orin order to obtain any required approval of the purchaser(s) by anyGovernmental Authority or officer or court.

                    (j)Pledgor hereby acknowledges, understands and agrees that Secured Party (i) mayexercise its rights under the Acquisition Documents, whether or not theyprovide security for any of the Secured Obligations, without exercising itsrights hereunder or affecting the security provided hereunder, and (ii) mayproceed against all or any portion of the Pledged Collateral and all othercollateral securing any of the Secured Obligations in such order and at suchtime as determined by Secured Party in its sole discretion. Pledgor herebyexpressly waives any rights under the doctrine of marshalling of assets.

                    (k)Pledgor hereby acknowledges, understands and agrees that compliance with theforegoing procedures shall satisfy any applicable requirements that such saleor disposition be made in a commercially reasonable manner. 

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                    (l)The proceeds of any collection, recovery, receipt, appropriation, realization,transfer, exchange, disposition or sale as aforesaid shall be applied bySecured Party in the following order:

                              (i)First, to the payment of all costs and expenses of every kind incurredby Secured Party in connection therewith or incidental to the care, safekeepingor otherwise of any of the Pledged Collateral, and to the payment of all sumswhich Secured Party may be required or may elect to pay, if any, for taxes,assessments, insurance and other charges upon the Pledged Collateral or anypart thereof, and all other payments that Secured Party may be required orauthorized to make under any provision of this Agreement including, withoutlimitation, in-house documentation and diligence fees, search, audit,recording, and filing fees and expenses and reasonable attorneys’ fees andexpenses;

                              (ii) Second, to the payment of any other amounts due under the SecuredObligations (to be applied in accordance with the Security Agreement);

                              (iii)Third, to the satisfaction of indebtedness secured by any subordinatesecurity interest of record in the Pledged Collateral if written notificationof demand therefor is received before distribution of the proceeds iscompleted; provided that the holder of a subordinate security interestshall furnish reasonable proof of its interest to Secured Party, and unless itdoes so, Secured Party need not address its claims; and

                              (iv)Finally, to the payment to Pledgor of any surplus then remaining fromsuch proceeds, unless otherwise required by law or directed by a court ofcompetent jurisdiction; provided that Pledgor shall be liable for anydeficiency if such proceeds are insufficient to satisfy all of the SecuredObligations.

**5. REPRESENTATIONS, WARRANTIES ANDCOVENANTS OF PLEDGOR**

                    (a)Pledgor represents and warrants to Secured Party as of the date hereof (whichrepresentations and warranties shall survive the execution and delivery of thisAgreement as follows:

                              (i)Pledgor is a corporation duly organized, validly existing and in good standingunder the laws of the State of Nevada and has full power, right and authorityto (A) own the Pledged Collateral, (B) execute, deliver and perform thisAgreement, (C) pledge the Pledged Collateral, and (D) grant the securityinterests and Liens in the Pledged Collateral pursuant to this Agreement andotherwise consummate the transactions contemplated under the other AcquisitionDocuments to which it is a party;

                              (ii)the execution, delivery and performance by Pledgor of this Agreement and theconsummation of the transactions contemplated hereby have been duly and validlyauthorized by all necessary actions on the part of Pledgor (none of whichactions have been modified or rescinded, and all of which actions are in fullforce and effect), and this Agreement has been duly executed and delivered byPledgor and constitutes the legal, valid and binding obligation of Pledgor,enforceable against Pledgor in accordance with its terms, subject to the effectof any applicable bankruptcy, moratorium, insolvency, reorganization or othersimilar law affecting the enforceability of creditors’ rights generally and tothe effect of general principles of equity which may limit the availability ofequitable remedies (whether in a proceeding at law or in equity);

                              (iii)Pledgor is, or, with respect to the Pledged Collateral described in clauses(ii) and (iii) of the definition of Pledged Collateral not later than the timeof delivery of certificates 

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therefor will be, the direct record and beneficialowner of each share, security and other interest that comprises the PledgedCollateral, and Pledgor has and will have good, valid and marketable titlethereto, free and clear of all Encumbrances other than the security interestscreated by this Agreement and the security interest granted to CapitalSourcepursuant to the terms of the Credit Agreement and other Loan Documents (asdefined in the Credit Agreement);

                              (iv)all of the Pledged Collateral has been, or, with respect to the PledgedCollateral described in clauses (ii) and (iii) of the definition of PledgedCollateral not later than the time of delivery of certificates therefor willbe, duly and validly issued, fully paid and nonassessable;

                              (v)the Pledged Collateral described in clause (i) of the definition of PledgedCollateral constitutes 100% of the issued and outstanding capital stock andother equity securities and ownership interests of each Subsidiary of Pledgorand other Person in which such Pledged Collateral represents an ownershipinterest (calculated on a fully diluted, as converted basis);

                              (vi)the Pledged Collateral is and will be duly and validly pledged to Secured Partyin accordance with law, and Secured Party has a good, valid and perfected Lienon and security interest in the Pledged Collateral and the proceeds thereofsubject to no Encumbrances in favor of any other Person except for the securityinterest granted to CapitalSource pursuant to the terms of the Credit Agreementand other Loan Documents (as defined in the Credit Agreement);

                              (vii) the execution, delivery and performance by Pledgor of this Agreement andthe consummation of the transactions and the creation and granting of thesecurity interests and Liens contemplated thereby do not and will not (A)conflict with or violate the certificate of incorporation, by-laws, limitedliability company agreement or similar documents of Pledgor or of any entitywhose securities constitute part of the Pledged Collateral or any agreement byand between Pledgor or any such entity and its respective shareholders orequity owners or among any such shareholders or equity owners;(B) conflict with, result in a breach of, constitute a default of or anevent of default under, or any event, fact, condition or circumstance which,with notice or passage of time or both, would constitute or result in aconflict, breach, default or event of default under, require any consent notobtained under, or result in or require the acceleration of any indebtednesspursuant to, any agreement, indenture or other instrument to which Pledgor orany entity whose securities constitute part of the Pledged Collateral is aparty or by which Pledgor or any entity whose securities constitute part of thePledged Collateral or any of its or their respective properties or assets arebound or subject, the effect of which could reasonably be expected to have orresult in a Material Adverse Effect; (C) conflict with or violate any provisionof any applicable law, statute, rule, regulation, ordinance, license or tariffor any judgment, decree or order of any court or other Governmental Authoritybinding on or applicable to Pledgor or any entity whose securities constitutepart of the Pledged Collateral or any of its or their respective properties orassets or any of the Pledged Collateral, or (D) result in the creation orimposition of any Lien of any nature whatsoever upon any of the properties orassets of Pledgor or any entity whose securities constitute part of the PledgedCollateral except those contemplated hereunder;

                              (viii)no approval, consent or authorization of, filing, registration or qualificationwith, or other action by, Pledgor or any entity whose securities constitutepart of the Pledged Collateral, any Governmental Authority or any other Personis or will be necessary to permit the valid execution, delivery or performanceof this Agreement by Pledgor or consummation of the transactions or creation orgranting of the Liens and security interests contemplated hereby;

                              (ix) there is no action, claim, suit, proceeding or investigation pending or,to the knowledge of Pledgor, currently threatened against or affecting the PledgedCollateral, or Pledgor or any entity whose securities constitute part of thePledged Collateral, or this Agreement or the transactions 

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contemplated hereby, before or by any court,arbitrator or Governmental Authority (a) that questions or could prevent thevalidity of this Agreement or the right or ability of Pledgor to enter intothis Agreement or to consummate the transactions or create or grant the Liensand security interests contemplated hereby, (b) that could reasonably beexpected to have or result in, either individually or in the aggregate, anyMaterial Adverse Change or Material Adverse Effect, or (c) that couldreasonably be expected to result in any change in the current equity ownershipof Pledgor or any entity whose securities constitute part of the PledgedCollateral or otherwise in a Change of Control, nor is Pledgor aware that thereis any basis for any of the foregoing;

                              (x)neither Pledgor nor any entity whose securities constitute part of the PledgedCollateral is (A) a party or subject to any judgment, order or decree or anyagreement, document or instrument or subject to any restriction, any of whichdo or would materially adversely affect or prevent Pledgor’s ability to executeor deliver, or perform under, consummate the transactions contemplated by or toobserve the covenants and agreements contained in, this Agreement; (B) indefault or breach of the performance, observance or fulfillment of anyobligation, covenant or condition contained in any agreement, document orinstrument to which Pledgor or such entity is a party or by which any of its ortheir properties or assets are bound or subject, which default or breach, ifnot remedied within any applicable grace or cure period could reasonably be expectedto have or result in a Material Adverse Effect, nor is there any event, fact,condition or circumstance which, with notice or passage of time, or both, wouldconstitute or result in a conflict, breach, default or event of default under,any of the foregoing which, if not remedied within any applicable grace or cureperiod could reasonably be expected to have or result in a Material AdverseEffect; or (C) a party or subject to any agreement (oral or written), documentor instrument with respect to, or obligation to pay any, service or managementfee with respect to the ownership, operation, leasing or performance of any ofits business or any facility, nor is there any manager with respect to any suchfacility.

                              (xi) Pledgor is in compliance with all laws, statutes, rules, regulations,ordinances and tariffs of any Governmental Authority with respect to orapplicable to Pledgor and/or Pledgor’s assets and properties and is not inviolation of any order, judgment or decree of any court or other GovernmentalAuthority or arbitration board or tribunal, in each case except wherenoncompliance or violation could not reasonably be expected to have or resultin a Material Adverse Effect, and there is no event, fact, condition or circumstancewhich, with notice or passage of time, or both, would constitute or result inany noncompliance with, or any violation of, any of the foregoing, in each caseexcept where noncompliance or violation could not reasonably be expected tohave or result in a Material Adverse Effect, and there is no Liability Event asof the date hereof; 

                              (xii) the obligations of Pledgor under this Agreement are not subordinated inany way to any other obligation of Pledgor or to the rights of any otherPerson, except to the extent set forth in the Subordination Agreement.

                    (b)Until all Secured Obligations have been performed and satisfied in full andindefeasibly paid in full in cash and the Security Agreement has beenterminated, Pledgor hereby covenants that:

                              (i) Except as set forth in the Credit Agreement and the other Loan Documents(as defined in the Credit Agreement) (A) Pledgor shall not sell, lease,transfer, pledge, assign or otherwise dispose of any of the Pledged Collateralor any interest therein, and (B) Pledgor shall not create, incur, assume orsuffer to exist any Encumbrance upon, in, against or with respect to any of thePledged Collateral or any interest therein (except pursuant hereto);

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                              (ii)Pledgor shall, and shall cause each entity whose securities constitute part ofthe Pledged Collateral to: (A) preserve and maintain its existence in goodstanding (except as permitted or required under the Security Agreement);(B) comply with all laws, rules, statutes, regulations, ordinances andtariffs and orders of all applicable Governmental Authorities with respect toor applicable to its business, assets or operations or to any of the PledgedCollateral, except where the failure to comply could not reasonably be expectedto have or result in a Material Adverse Effect; and (C) promptly upon theoccurrence thereof and in any event within three (3) calendar days afterPledgor or any authorized officer of Pledgor obtains knowledge thereof, givewritten notice to Secured Party of (1) any action, suit, litigation,investigation, arbitration, dispute resolution proceeding or proceeding of anykind pending, instituted or threatened against or affecting, involving orrelating to Pledgor, any such entity or the Pledged Collateral or any of theirrespective properties or assets, whether or not the claim is covered byinsurance, to the extent the amount in controversy exceeds $10,000 or to theextent such litigation, suit, investigation, arbitration, dispute resolutionproceeding or administrative proceeding seeks injunctive relief, (2) thefiling, recording or assessment of any federal, state, local or foreign taxlien against the Pledged Collateral, Pledgor or any such entity, (3) theoccurrence of any Default or Event of Default, which notice shall specify thenature and status thereof, the period of existence thereof and what action isproposed to be taken with respect thereto, (4) the occurrence or existenceof any event, fact, circumstance or condition which constitutes or results in,or would constitute or result in with the giving of notice or passage of timeor both, an Event of Default, which notice shall specify the nature and statusthereof, the period of existence thereof and what action is proposed to betaken with respect thereto, and (5) any other development, event, fact,circumstance, condition or action of any nature against or affecting Pledgor orany such entity or otherwise, which could reasonably be expected to have, leadto or result in a Material Adverse Effect, a Default or an Event of Default, ineach case describing the nature and status thereof and the action Pledgorproposes to take with respect thereto, and (6) any matter(s) affecting thevalue, enforceability or collectability of any of the Pledged Collateral,including, without limitation, claims or disputes asserted by any obligor orobligors in the amount of $10,000 or more, singly or in the aggregate, inexistence at any one time.

                              (iii)Pledgor shall, and shall cause each entity whose securities constitute part ofthe Pledged Collateral to, (a) perform in accordance with its terms everycontract, agreement or other arrangement (oral or written) to which it is aparty or by which it or any of the Pledged Collateral is bound, except wherethe failure to perform could not reasonably be expected to have or result in aMaterial Adverse Effect, (b) comply with all laws, statutes, rules,regulations, ordinances and tariffs of any applicable Governmental Authoritywith respect or applicable to its business, assets or operations or to thePledged Collateral, except where the failure to comply could not reasonably beexpected to have or result in a Material Adverse Effect, (c) pay, discharge orotherwise satisfy at or before maturity (subject where applicable to specifiedgrace periods and, in the case of the trade payable, to ordinary course paymentpractices) all of its and/or their material obligations and liabilities ofwhatsoever nature, except when the amount or validity thereof is currentlybeing contested in good faith by appropriate proceedings and it shall haveprovided for such reserves as Secured Party may deem proper and necessary inits sole discretion, (d) pay all taxes, assessments, fees, governmentalcharges, claims for labor, supplies, rent and all other obligations orliabilities of any kind of or imposed upon such Person or upon the PledgedCollateral, except liabilities being contested in good faith and against whichadequate reserves have been established, except where the failure to pay couldnot reasonably be expected to have or result in a Material Adverse Effect, (e)obtain and deliver all required consents, approvals and agreements from such thirdparties as Secured Party shall determine are necessary or desirable in its solediscretion that are satisfactory to Secured Party with respect to (I) thisAgreement and the other Acquisition Documents and the transactions contemplatedhereby and thereby, (II) claims against Pledgor, any such entity or any of thePledged Collateral, and/or (III) any agreement (oral or written), consent,document or instrument to which any of them is a party or by which any of theirproperties or assets are bound or subject, (f) perform in accordance with itsterms every contract, agreement or other arrangement (oral or written) to whichit is 

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a party or by which it or any of the PledgedCollateral is bound, and (g) furnish to Secured Party such additional informationas Secured Party may reasonably request from a credit or security perspectiveor otherwise from time to time;

                              (iv)Pledgor shall, and shall cause each entity whose securities constitute part ofthe Pledged Collateral to, keep true, complete and accurate books of recordwith respect to the Pledged Collateral in accordance with commerciallyreasonable business practices; and

                              (v)Pledgor shall not take or permit to be taken, or permit or cause any entitywhose securities constitute part of the Pledged Collateral to take or permit tobe taken, any action in connection with the Pledged Collateral or otherwisewhich would impair the value of the Pledged Collateral or any portion thereofor the value of the interests or rights of Pledgor or Secured Party therein orwith respect thereto, including, without limitation, any amendment to ormodification of the certificate of incorporation (or similar charter documents)or bylaws (or similar documents) of Pledgor or such Person which would resultin or cause any of the foregoing.

**6. EVENTS OF DEFAULT**

                    (a)The occurrence of any one or more of the following shall constitute an “Eventof Default” under this Agreement:

                              (i)Pledgor shall fail to perform, observe or comply with any covenant, obligationor agreement set forth in this Agreement and such failure shall not be curedwithin the applicable period set forth herein, provided that, withrespect to the covenants set forth in Sections 5(b) (other than Sections5(b)(i), 5(b)(ii)(A), and 5(b)(v), for which there shall beno cure period) Pledgor shall have a fifteen (15) calendar day cure periodcommencing from the earlier of (i) Receipt by Pledgor of written notice ofsuch failure, and (ii) the time at which Pledgor or any authorized officerthereof knew or became aware, or should have known or been aware, of suchfailure, breach or default;

                              (ii)any representation or warranty made or deemed made by Pledgor in this Agreementshall not be true and correct in all material respects or shall have been falseor misleading in any material respect on the date when made or deemed to havebeen made (except to the extent the representation or warranty is alreadyqualified by materiality or the phrase “Material Adverse Effect” or “MaterialAdverse Change,” in which case it shall be true and correct in all respects andshall not be false or misleading in any respect); 

                              (iii)any Event of Default under any Acquisition Document shall occur and becontinuing past any cure period and shall not have been waived in writing; or

                              (iv)this Agreement shall cease to be in full force and effect or any Lien orsecurity interest created hereunder shall cease to constitute a valid perfectedLien and security interest on the Pledged Collateral that is senior in priorityto all Encumbrances except with respect to the security interest granted toCapitalSource pursuant to the terms of the Credit Agreement and other LoanDocuments (as defined in the Credit Agreement).

                    (b) Notwithstanding and without limiting or being limited by any otherprovision of this Agreement or the Acquisition Documents, upon the occurrenceand continuation of any Event of Default, Secured Party may, by notice toPledgor take any actions permitted hereunder or under the AcquisitionDocuments. 

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                    (c)Notwithstanding the foregoing, in the case of an Event of Default under Section 6(a)(iv),the Promissory Notes, all interest thereon and all other Secured Obligationsautomatically, without demand or further act by Secured Party, shall beimmediately due and payable (provided that, with respect to minor, non-materialbreaches or violations that constitute Events of Default under Section6(a)(iv), Pledgor shall have a three (3) Business Day cure period commencingfrom the earlier of (i) Receipt by Pledgor of written notice of suchbreach or violation and resulting Event of Default or of any event, fact orcircumstance constituting or resulting in any of the foregoing, and (ii) thetime at which Pledgor or any authorized officer thereof knew or became aware,or should have known or been aware, of such breach or violation and resultingEvent of Default or of any event, fact or circumstance constituting orresulting in any of the foregoing).

**7. MISCELLANEOUS PROVISIONS**

**          7.1.Expenses**

                    Withoutlimiting or being limited by any other provision of this Agreement or theAcquisition Documents, Pledgor shall pay all costs and expenses incurred bySecured Party or any of its Affiliates, including, without limitation,documentation and diligence fees and expenses, all search, audit, appraisal, recording,professional and filing fees and expenses and all other out-of-pocket chargesand expenses (including, without limitation, UCC and judgment and tax liensearches and UCC filings and fees for post-Closing UCC and judgment and taxlien searches), and reasonable attorneys’ fees and expenses, (a) in any effortto enforce this Agreement, any other Acquisition Document and/or any relatedagreement, document or instrument, or to effect collection hereunder orthereunder, (b) in connection with entering into, negotiating, preparing,reviewing and executing this Agreement and the other Acquisition Documents andall related agreements, documents and instruments, (c) arising in any way outof administration of the Secured Obligations or the security interests or Lienscreated hereunder, (d) in connection with instituting, maintaining, preservingand enforcing Secured Party’s rights hereunder and enforcing and/or foreclosingon the security interests and/or Liens in any of the Pledged Collateral,through judicial process or otherwise, (e) in defending or prosecuting anyactions, claims or proceedings arising out of or relating to this Agreementand/or any related agreement, document or instrument, (f) in seeking orreceiving any advice with respect to its rights and obligations under thisAgreement, any of the other Acquisition Documents and/or all relatedagreements, documents and instruments, and/or (g) in connection with anymodification, supplement, amendment, waiver or extension of this Agreement, anyother Acquisition Document or any related agreement, document or instrument,and all of the same may be added to, and shall be part of, the SecuredObligations. If Secured Party or any of its Affiliates uses in-house counselfor any of the purposes set forth above or any other purposes under thisAgreement for which Pledgor is responsible to pay or indemnify, Pledgorexpressly agrees that its Secured Obligations include reasonable charges forsuch work commensurate with the fees that would otherwise be charged by outsidelegal counsel selected by Secured Party or such Affiliate in its solediscretion for the work performed. In addition and without limiting theforegoing, Pledgor shall pay all taxes (other than taxes based upon or measuredby Secured Party’s income or revenues or any personal property tax), if any, inconnection with the issuance of the Promissory Notes and the recording of thesecurity documents and financing statements therefor and pursuant to theSecurity Documents. 

**          7.2.Notices**

                    Anynotice or request under this Agreementshall be given to any party to this Agreement at such party’s address set forthbeneath its signature on the signature page to this Agreement, or at such otheraddress as such party may hereafter specify in a notice given in the mannerrequired under this 

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Section7.2. Any notice orrequest hereunder shall be given only by, and shall be deemed to have beenreceived upon (each, a “**Receipt**”): (i) registered orcertified mail, return receipt requested, on the date on which such received asindicated in such return receipt, (ii) delivery by a nationally recognizedovernight courier, one (1) Business Day after deposit with such courier, or(iii) facsimile or electronic transmission, in each case upon telephone orfurther electronic communication from the recipient acknowledging receipt(whether automatic or manual from recipient), as applicable. 

**          7.3.Delay**

                    Nocourse of action or dealing, renewal, release or extension of any provision ofthis Agreement, or single or partial exercise of any such provision, or delay,failure or omission on Secured Party’s part in enforcing any such provisionshall affect the liability of Pledgor or operate as a waiver of such provisionor affect the liability of Pledgor or preclude any other or further exercise ofsuch provision. No waiver by any party to any Acquisition Document of any oneor more defaults by any other party in the performance of any of the provisionsof any Acquisition Document shall operate or be construed as a waiver of anyfuture default, whether of a like or different nature, and each such waivershall be limited solely to the express terms and provisions of such waiver.Notwithstanding any other provision of any Acquisition Document, by completingthe Closing under this Agreement, Secured Party does not waive any breach ofany representation or warranty of under any Acquisition Document, and all ofSecured Party’s claims andrights resulting from any such breach or misrepresentation are specificallyreserved.

**          7.4.Release of Pledged Collateral**

                    Promptlyfollowing full performance and satisfaction and indefeasible payment in full incash of the Secured Obligations and the termination of the Security Agreement,the security interests and Liens created hereby shall terminate and SecuredParty shall execute and deliver such documents, at Pledgor’s expense, as arenecessary to release Secured Party’s security interests and Liens in thePledged Collateral and shall return the Pledged Collateral to Pledgor at theaddress of Pledgor set forth herein or at such other address as Pledgor maydirect in writing. Secured Party shall not be deemed to have made anyrepresentation or warranty with respect to any Pledged Collateral so delivered,except that such Pledged Collateral is free and clear, on the date of suchdelivery, of any and all liens, charges and encumbrances arising from SecuredParty’s own acts.

**          7.5.Successors and Assigns; Participations; New Secured Parties**

                    ThisAgreement shall inure to the benefit of Secured Party, Transferees and allfuture holders of the Promissory Notes, the Secured Obligations and/or any ofthe Pledged Collateral, and each of their respective successors and assigns.This Agreement shall be binding upon Pledgor other than Secured Party that areparties to this Agreement and their respective successors and assigns, and nosuch Person may assign, delegate or transfer this Agreement or any of its rightsor obligations under this Agreement without the prior written consent ofSecured Party. No rights are intended to be created under this Agreement forthe benefit of any third party donee, creditor or incidental beneficiary ofPledgor. Nothing contained in any Acquisition Document shall be construed as adelegation to Secured Party of any other Person’s duty of performance. PLEDGORACKNOWLEDGES AND AGREES THAT SECURED PARTY AT ANY TIME AND FROM TIME TO TIMEMAY (I) DIVIDE AND RESTATE ANY NOTE, AND/OR (II) SELL, ASSIGN OR GRANTPARTICIPATING INTERESTS IN OR TRANSFER ALL OR ANY PART OF ITS RIGHTS OROBLIGATIONS UNDER ANY ACQUISITION DOCUMENT, THE PROMISSORY NOTES, THEOBLIGATIONS AND/OR THE PLEDGED COLLATERAL TO OTHER PERSONS (EACH SUCHTRANSFEREE, ASSIGNEE OR 

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PURCHASER, A “**TRANSFEREE**”).Each Transferee shall have all of the rights and benefits with respect to theSecured Obligations and Pledged Collateral held by it as fully as if theoriginal holder thereof, and either Secured Party or any Transferee may bedesignated as the sole agent to manage the transactions and obligationscontemplated therein; provided that, notwithstanding anything to thecontrary in any Acquisition Document, Pledgor shall not be obligated to payunder this Agreement to any Transferee any sum in excess of the sum whichPledgor would have been obligated to pay to Secured Party had suchparticipation not been effected. Notwithstanding any other provision of anyAcquisition Document, Secured Party may disclose to any Transferee allinformation, reports, financial statements, certificates and documents obtainedunder any provision of any Acquisition Document.

**          7.6.Severability; Captions; Counterparts; Facsimile Signatures**

                    Ifany provision of this Agreement is adjudicated to be invalid under applicablelaws or regulations, such provision shall be inapplicable to the extent of suchinvalidity without affecting the validity or enforceability of the remainder ofthis Agreement which shall be given effect so far as possible. The captions inthis Agreement are intended for convenience and reference only and shall notaffect the meaning or interpretation of this Agreement. The Agreement may beexecuted in one or more counterparts (which taken together, as applicable,shall constitute one and the same instrument) and by facsimile transmission,which facsimile signatures shall be considered original executed counterparts.Each party to this Agreement agrees that it will be bound by its own facsimilesignature and that it accepts the facsimile signature of each other party.

**          7.7.Survival**

                    Itis the express intention and agreement of the parties hereto that allobligations, covenants, agreements, representations, warranties, waivers andindemnities made by Pledgor herein shall survive the execution, delivery andtermination of this Agreement until all Secured Obligations are performed infull and indefeasibly paid in full in cash and the Security Agreement isterminated. 

**          7.8.****GoverningLaw; Jurisdiction; Service of Process; Venue**

                    ThisAgreement shall be governed by and construed in accordance with the internallaws of the State of New York without giving effect to its choice of lawprovisions. Any judicial proceeding against Pledgor with respect to the SecuredObligations, this Agreement or any related agreement may be brought in anyfederal or state court of competent jurisdiction located in the State of NewYork. By execution and delivery of each Acquisition Document to which it is aparty, Pledgor (i) accepts the non-exclusive jurisdiction of the aforesaidcourts and irrevocably agrees to be bound by any judgment rendered thereby,(ii) waives personal service of process, (iii) agrees that service of process uponit may be made by certified or registered mail, return receipt requested,pursuant to Section 7.2 hereof, and (iv) waives any objection tojurisdiction and venue of any action instituted hereunder and agrees not toassert any defense based on lack of jurisdiction, venue or convenience. Nothing shall affect theright of Secured Party to serve process in any manner permitted by law or shalllimit the right of Secured Party to bring proceedings against Pledgor in thecourts of any other jurisdiction having jurisdiction. Any judicial proceedingsagainst Secured Party involving, directly or indirectly, the SecuredObligations, this Agreement or any related agreement shall be brought only in afederal or state court located in the State of New York. All parties acknowledgethat they participated in the negotiation and drafting of this Agreement andthat, accordingly, no party shall move or petition a court construing thisAgreement to construe it more stringently against one party than against anyother.

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**          7.9.Indemnity**

                    Pledgorjointly and severally shall indemnify Secured Party, its affiliates and its andtheir respective managers, members, officers, employees, affiliates, agents,representatives, successors, assigns, accountants and attorneys (collectively,the “**Indemnified Persons**”) from and against any and all liabilities,obligations, losses, damages, penalties, actions, judgments, suits, costs,expenses and disbursements of any kind or nature whatsoever (including, withoutlimitation, reasonable fees and disbursements of counsel and in-housedocumentation and diligence fees and legal expenses) which may be imposed on,incurred by or asserted against any Indemnified Person with respect to orarising out of, or in any litigation, proceeding or investigation instituted orconducted by any Person with respect to any aspect of, or any transactioncontemplated by or referred to in, or any matter related to, any AcquisitionDocument or any agreement, document or transaction contemplated thereby,whether or not such Indemnified Person is a party thereto, except to the extentthat any of the foregoing arises out of the gross negligence or willfulmisconduct of such Indemnified Person. If any Indemnified Person uses in-housecounsel for any purpose for which Pledgor is responsible to pay or indemnify,Pledgor expressly agrees that its indemnification obligations includereasonable charges for such work commensurate with the fees that wouldotherwise be charged by outside legal counsel selected by such IndemnifiedPerson in its sole discretion for the work performed. Secured Party agrees togive Pledgor reasonable notice of any event of which Secured Party becomesaware for which indemnification may be required under this Section 7.9,and Secured Party may elect (but is not obligated) to direct the defensethereof, provided that the selection of counsel shall be subject to Pledgor’sconsent, which consent shall not be unreasonably withheld or delayed. AnyIndemnified Person may, in its reasonable discretion, take such actions as itdeems necessary and appropriate to investigate, defend or settle any event ortake other remedial or corrective actions with respect thereto as may benecessary for the protection of such Indemnified Person or the PledgedCollateral. Notwithstanding the foregoing, if any insurer agrees to undertakethe defense of an event (an “**Insured Event**”), Secured Party agrees not toexercise its right to select counsel to defend the event if that would causePledgor’s insurer to deny coverage; provided, however, thatSecured Party reserves the right to retain counsel to represent any IndemnifiedPerson with respect to an Insured Event at its sole cost and expense. To theextent that Secured Party obtains recovery from a third party other than anIndemnified Person of any of the amounts that Pledgor has paid to Secured Partypursuant to the indemnity set forth in this Section 7.9, then SecuredParty shall promptly pay to Pledgor the amount of such recovery. 

**          7.10.Waiver of Notice; Waiver of Statute of Limitations; Defenses**

          Pledgorhereby waives demand, presentment, protest, notice of dishonor or non-payment,as well as all defenses with respect to any and all instruments, notice ofacceptance hereof, credit extended, collateral received or delivered, or anyother action taken by Secured Party in reliance hereon, and all other demandsand notices of any description, except such as are expressly provided forherein. The pleading of any statute of limitations as a defense to any demandagainst Pledgor hereunder and under the Acquisition Documents is expresslywaived by Pledgor. Pledgor hereby waives any and all defenses and counterclaimsit may have or could interpose in any action or procedure brought by Secured Partyto obtain an order of court recognizing the assignment of or security interestsand Liens of Secured Party in and to the Pledged Collateral. 

**          7.11.Jury Waiver**

                    EACHPARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OFANY CLAIM OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAYCONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF 

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THE PARTIES WITH RESPECT TOANY OF THE ACQUISITION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY,WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,TORT OR OTHERWISE. EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM ORCAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANYPARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THISSECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES TOTHE WAIVER OF THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY.

**          7.12.Entire Agreement**

                    ThisAgreement and the other Acquisition Documents to which Pledgor is a partyconstitute the entire agreement between Pledgor and Secured Party with respectto the subject matter hereof and thereof, and supersede all prior agreementsand understandings, if any, relating to the subject matter hereof or thereof.Any promises, representations, warranties or guarantees not herein containedand hereinafter made shall have no force and effect unless in writing signed byPledgor and Secured Party. No provision of this Agreement may be changed,modified, amended, restated, waived, supplemented, discharged, canceled orterminated orally or by any course of dealing or in any other manner other thanby an agreement in writing signed by Secured Party and Pledgor. Each partyhereto acknowledges that it has been advised by counsel in connection with thenegotiation and execution of this Agreement and is not relying upon oralrepresentations or statements inconsistent with the terms and provisionshereof.

**          7.13.No Duty of Secured Party**

                    SecuredParty shall have no responsibility for or obligation or duty with respect toall or any part of the Pledged Collateral or any matter or proceeding arisingout of or relating thereto, including without limitation, any obligation orduty to collect any sums due in respect thereof or to protect or preserve anyrights pertaining thereto. 

**          7.14.Confidentiality and Publicity**

                    Pledgoragrees, and agrees to cause each of its affiliates, (i) not to transmit ordisclose provision of any Acquisition Document to any Person (other than toPledgor’s advisors and officers on a need-to-know basis) without SecuredParty’s prior written consent, (ii) to inform all Persons of the confidentialnature of the Acquisition Documents and to direct them not to disclose the sameto any other Person and to require each of them to be bound by theseprovisions. Secured Party reserves the right to review and approve allmaterials that Pledgor or any of its affiliates prepares that contain SecuredParty’s name or describe or refer to any Acquisition Document, any of the termsthereof or any of the transactions contemplated thereby. Pledgor shall not, andshall not permit any of its affiliates to, use Secured Party’s name (or the nameof any of Secured Party’s affiliates) in connection with any of its businessoperations. Nothing contained in any Acquisition Document is intended to permitor authorize Pledgor or any of its affiliates to contract on behalf of SecuredParty. 

**          7.15Release of Secured Party**

                    Notwithstandingany other provision of this Agreement or any other Acquisition Document,Pledgor voluntarily, knowingly, unconditionally and irrevocably, with specificand express intent, for and on behalf of itself and its Affiliates and its andtheir respective heirs, managers, members, 

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directors, officers, employees, shareholders,Affiliates, agents, representatives, accountants, attorneys, successors andassigns and their respective Affiliates (collectively, the “**Releasing Parties**”) herebydoes fully and completely release and forever discharge the Indemnified Partiesand any other Person, business or insurer which may be responsible or liablefor the acts or omissions of any of the Indemnified Parties, or who may beliable for the injury or damage resulting therefrom (collectively, with theIndemnified Parties, the “**Released Parties**”), of and from any andall actions, causes of action, damages, claims, obligations, liabilities,costs, expenses and demands of any kind whatsoever, at law or in equity orotherwise, whether matured or unmatured, vested or contingent, whether or notresulting from acts or conduct of any or all of them, that the ReleasingParties or any of them have against the Released Parties or any of tem (whetherdirectly or indirectly) at any time or any other financial accommodation ismade or extended to Pledgor or under any Acquisition Document. Pledgoracknowledges that the foregoing release is a material inducement to SecuredParty’s decision to enter into and perform the Acquisition Agreement and hasbeen relied upon by Secured Party in agreeing to enter into and perform theAcquisition Agreement.

**          7.16Cooperation in Discovery and Litigation**

                    Inany litigation, arbitration or other dispute resolution proceeding relating toany Acquisition Document, Pledgor waives any and all defenses, objections andcounterclaims it may have or could interpose with respect to (i) any of itsdirectors, officers, employees or agents being deemed to be employees ormanaging agents of Pledgor for purposes of all applicable law or court rulesregarding the production of witnesses by notice for testimony (whether in adeposition, at trial or otherwise), (ii) Secured Party’s counsel examining anysuch individuals as if under cross-examination and using any discoverydeposition of any of them as if it were an evidence deposition, and/or (iii)using all commercially reasonable efforts to produce in any such disputeresolution proceeding, at the time and in the manner requested by SecuredParty, all Persons, documents (whether in tangible, electronic or other form)and/or other things under its control and relating to the dispute.

**          7.17Subordination Agreement**

                    ThisAgreement and the exercise of any right or remedy hereunder by Secured Partyare subject to the terms of the Subordination Agreement. The Liens in thePledged Collateral granted herein are subordinated to the Liens in the PledgedCollateral granted to CapitalSource Finance LLC in the manner and to the extentset forth in the Subordination Agreement. 

[SIGNATURES APPEARON THE FOLLOWING PAGE]

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                    INWITNESS WHEREOF, each of the parties hereto has duly executed this Agreement asof the date first written above.

 

 

 

 

**SUNSET  BRANDS, INC.**