Document:

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EXHIBIT 4.6

                                                                  CONFORMED COPY

                               SECURITY AGREEMENT

      SECURITY AGREEMENT, dated as of June 10, 2004, among ROCKFORD CORPORATION,
an Arizona corporation (the "Company"), and Audio Innovations, Inc., an Oklahoma
corporation ("AII" and, together with the Company, the "Grantors" and each
individually a "Grantor"), and BNY Western Trust Company, in its capacity as
collateral agent (and any successor collateral agent, the "Agent") for the
holders of the Notes (the "Holders").

                              W I T N E S S E T H:

            WHEREAS, pursuant to that certain Indenture dated as of the date
hereof by and between Company and BNY Western Trust Company (the "Trustee"), as
from time to time amended, restated, supplemented or otherwise modified (the
"Indenture"), the Company has authorized issuance from time to time of 4.5%
Convertible Senior Subordinated Secured Notes due 2009 (the "Notes");

            WHEREAS, the Grantors will receive substantial direct and indirect
benefits from the Indenture and the Notes issued thereunder;

            WHEREAS, the Grantors have agreed to grant a continuing second
priority Lien on the Collateral (as hereinafter defined) to secure the
Obligations;

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

            1. DEFINED TERMS. The following terms shall have the following
respective meanings:

            "Accounts" shall mean all present and future rights of any Grantor
to payment of a monetary obligation, whether or not earned by performance, which
is not evidenced by chattel paper or an instrument, (a) for property that has
been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b)
for services rendered or to be rendered, (c) for a secondary obligation incurred
or to be incurred, or (d) arising out of the use of a credit, charge or debit
card along with all information contained on or for use with such card.

            "Affiliate" shall mean, with respect to a specified Person, any
other Person which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with such Person, and
without limiting the generality of the foregoing, includes (a) any Person which
beneficially owns or holds five percent (5%) or more of any class of Voting
Stock of such Person or other equity interests in such Person, (b) any Person of
which such Person beneficially owns or holds five percent (5%) or more of any
class of Voting Stock or in which such Person beneficially owns or holds five
percent (5%) or more of the equity interests and (c) any director or executive
officer of such Person. For purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common

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control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by agreement or otherwise.

            "Agent's Commercial Judgment" means the commercially reasonable
judgment of the Agent as to credit or, where applicable, other matters, in each
case exercised in good faith.

            "Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's capital stock, or partnership, limited liability company or other
equity interests at any time outstanding, and any and all rights, warrants or
options exchangeable for or convertible into such capital stock or other
interests (but excluding any debt security that is exchangeable for or
convertible into such capital stock).

            "Code" shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.

            "Collateral" shall have the meaning set forth in Section 2 hereof.

            "Documents" means all documents as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by each Grantor.

            "Direct Foreign Subsidiaries" shall mean, collectively, Rockford
(Europe) Elektronik Vertriebs GmbH, a German GmbH, and Rockford Foreign Sales
Corporation, a Barbados corporation, as the direct foreign Subsidiaries of the
Company.

            "EBITDA" shall mean for any fiscal period, as applicable, of the
Company, the sum of operating income of the Company and its Subsidiaries on a
consolidated basis, excluding any non-recurring or special items, plus
depreciation and amortization expense deducted therefrom, as calculated by the
Company's chief financial officer consistent with the information presented in
the financial statements of the Company filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act.

            "Equipment" mean all of each Grantor's now owned and hereafter
acquired equipment, wherever located, including machinery, data processing and
computer equipment and computer hardware and software, whether owned or
licensed, and including embedded software, vehicles, tools, furniture, fixtures,
all attachments, accessions and property now or hereafter affixed thereto or
used in connection therewith, and substitutions and replacements thereof,
wherever located.

            "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, together with all rules, regulations and interpretations
thereunder or related thereto.

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            "ERISA Affiliate" shall mean any person required to be aggregated
with any Borrower or any Borrower's Subsidiary under Sections 414(b), 414(c),
414(m) or 414(o) of the Code.

            "Intellectual Property" shall mean all of each Grantor's now owned
and hereafter arising or acquired: patents, patent rights, patent applications,
copyrights, works which are the subject matter of copyrights, copyright
registrations, trademarks, service marks, trade names, trade styles, trademark
and service mark applications, and licenses and rights to use any of the
foregoing; all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all rights to sue for past,
present and future infringement of any of the foregoing; inventions, trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports, manuals, and operating standards; goodwill (including any goodwill
associated with any trademark or the license of any trademark); customer and
other lists in whatever form maintained; and trade secret rights, copyright
rights, rights in works of authorship, domain names and domain name
registrations; software and contract rights relating to software, in whatever
form created or maintained.

            "Instruments" means all instruments as such term is defined in the
UCC, now owned or hereafter acquired by each Grantor.

            "Inventory" shall mean all of each Grantor's now owned and hereafter
existing or acquired goods, wherever located, which (a) are leased by such
Grantor as lessor; (b) are held by such Grantor for sale or lease or to be
furnished under a contract of service; (c) are furnished by such Grantor under a
contract of service; or (d) consist of raw materials, work in process, finished
goods or materials used or consumed in its business.

            "Lien" means, with respect to any asset, any mortgage, deed of
trust, deed to secure debt, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law (including any conditional sale or
other title retention agreement or any lease in the nature thereof); provided
that in no event shall an operating lease be deemed to constitute a Lien.

            "Multiemployer Plan" shall mean a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by any Borrower
or any ERISA Affiliate.

            "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the Notes, the Indenture, the Securities and all other obligations, liabilities
and indebtedness of every kind, nature and description owing by the Company
under the Securities, the Indenture, the Securities Purchase Agreement, the
Registration Rights Agreement and the Warrant Agent Agreement, in each case
whether now or hereafter existing, direct or indirect, absolute or contingent,
due or not due, primary or secondary, liquidated or unliquidated, renewed or
restructured, whether or not from time to time decreased or extinguished and
later increased, created or incurred, whether or not arising on or after the
commencement of a proceeding under Title 11, U.S. Code or any similar federal or
state law for the relief of debtors (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding.

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            "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects subchapter S
status under the Code), limited liability company, limited liability
partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.

            "Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Grantor sponsors, maintains, or to which it makes, is making,
or is obligated to make contributions, or in the case of a Multiemployer Plan
has made contributions at any time during the immediately preceding six (6) plan
years.

            "Real Property" shall mean all now owned and hereafter acquired real
property of each Grantor, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located.

            "Receivables" shall mean all of the following now owned or hereafter
arising or acquired property of each Grantor: (a) all Accounts; (b) all
interest, fees, late charges, penalties, collection fees and other amounts due
or to become due or otherwise payable in connection with any Account; and (c)
all payment intangibles of such Grantor and other contract rights, chattel
paper, instruments, notes, and other forms of obligations owing to such Grantor,
whether from the sale and lease of goods or other property, licensing of any
property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by such Grantor or to or for the
benefit of any third person (including loans or advances to any Affiliates or
Subsidiaries of such Grantor) or otherwise associated with any Accounts,
Inventory or general intangibles of such Grantor (including, without limitation,
choses in action, causes of action, tax refunds, tax refund claims, any funds
which may become payable to such Grantor in connection with the termination of
any Plan or other employee benefit plan and any other amounts payable to such
Grantor from any Plan or other employee benefit plan, rights and claims against
carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, casualty or any similar types of insurance and
any proceeds thereof and proceeds of insurance covering the lives of employees
on which such Grantor is a beneficiary).

            "Records" shall mean all of each Grantor's present and future books
of account of every kind or nature, purchase and sale agreements, invoices,
ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other data relating to the
Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers
in or on which the foregoing are stored (including any rights of such Grantor
with respect to the foregoing maintained with or by any other person).

            "Required Holders" means such Holder(s) as are entitled to take
action or direct the Trustee pursuant to the terms of the Indenture.

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            "Securities" shall have the meaning ascribed to it in the Securities
Purchase Agreement.

            "Subsidiary" or "subsidiary" shall mean, with respect to any Person,
any corporation, limited liability company, limited liability partnership or
other limited or general partnership, trust, association or other business
entity of which an aggregate of at least a majority of the outstanding Capital
Stock or other interests entitled to vote in the election of the board of
directors of such corporation (irrespective of whether, at the time, Capital
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency), managers, trustees
or other controlling persons, or an equivalent controlling interest therein, of
such Person is, at the time, directly or indirectly, owned by such Person and/or
one or more subsidiaries of such Person.

            "UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of California or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests.

            "Uniform Commercial Code jurisdiction" means any jurisdiction that
has adopted "Revised Article 9" of the UCC on or after July 1, 2001.

            "Voting Stock" shall mean with respect to any Person, (a) one (1) or
more classes of Capital Stock of such Person having general voting powers to
elect at least a majority of the board of directors, managers or trustees of
such Person, irrespective of whether at the time Capital Stock of any other
class or classes have or might have voting power by reason of the happening of
any contingency, and (b) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (a) of this definition.

            All other capitalized terms used but not otherwise defined herein
have the meanings given to them in the Indenture. All other undefined terms
contained in this Security Agreement, unless the context indicates otherwise,
have the meanings provided for by the UCC to the extent the same are used or
defined therein.

      2. GRANT OF LIEN.

            As security for all Obligations, each Grantor hereby grants to the
Agent, for the benefit of the Agent, the Trustee and the Holders, a continuing
security interest in, lien on, assignment of and right of set-off against, all
personal and real property and fixtures and interests in property and fixtures
of such Grantor, whether now owned or hereafter acquired or existing, and
wherever located (together with all other collateral security for the
Obligations at any time granted to or held or acquired by Agent, collectively,
the "Collateral"), including:

      (a) all Accounts;

      (b) all general intangibles, including, without limitation, all
Intellectual Property;

      (c) all goods, including, without limitation, Inventory and Equipment;

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      (d) all Real Property and fixtures;

      (e) all chattel paper (including all tangible and electronic chattel
paper);

      (f) all Instruments (including all promissory notes);

      (g) all Documents;

      (h) all deposit accounts;

      (i) all letters of credit, banker's acceptances and similar instruments
and including all letter-of-credit rights;

      (j) all supporting obligations and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect of
Receivables and other Collateral, including (i) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (iv) deposits by and property of account debtors or
other persons securing the obligations of account debtors;

      (k) all (i) investment property (including securities, whether
certificated or uncertificated, securities accounts, security entitlements,
commodity contracts or commodity accounts) and (ii) monies, credit balances,
deposits and other property of such Grantor now or hereafter held or received by
or in transit to Agent, any Holder or any of their respective Affiliates or at
any other depository or other institution from or for the account of such
Grantor, whether for safekeeping, pledge, custody, transmission, collection or
otherwise;

      (l) all commercial tort claims;

      (m) to the extent not otherwise described above, all Receivables;

      (n) all Records; and

      (o) all products and proceeds of the foregoing, in any form, including
insurance proceeds and all claims against third parties for loss or damage to or
destruction of or other involuntary conversion of any kind or nature of any or
all of the other Collateral.

Notwithstanding the generality of the foregoing, one-third of the Capital Stock
of each of the Direct Foreign Subsidiaries shall be excluded from "Collateral".

      3. PERFECTION AND PROTECTION OF SECURITY INTEREST.

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            (a) Each of the Grantors shall, at their own expense, perform all
steps reasonably requested by the Agent at any time to perfect, maintain,
protect, and enforce the Agent's Liens, including: (i) executing and filing
financing or continuation statements, and amendments thereof, in form and
substance reasonably satisfactory to the Agent; (ii) placing notations on such
Grantor's books of account to disclose the Agent's security interest; and (iii)
taking such other steps as are reasonably deemed necessary or desirable to
maintain and protect the Agent's Liens; provided that on the anniversary of the
Closing Date and within 30 days after the Agent's request therefor, the Company
shall furnish the Agent an Opinion of Counsel pursuant to Section 17.4 of the
Indenture, whether or not such Opinion of Counsel is required by the TIA. Each
Grantor agrees that a carbon, photographic, photostatic, or other reproduction
of this Security Agreement or of a financing statement is sufficient as a
financing statement.

            (b) Each Grantor hereby irrevocably authorizes the Agent at any time
and from time to time to file in any filing office in any Uniform Commercial
Code jurisdiction any initial financing statements and amendments thereto that
(i) accurately describe the Collateral and (ii) contain any other information
required by part 5 of Article 9 of the UCC for the sufficiency or filing office
acceptance of any financing statement or amendment, including whether such
Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor. Each Grantor agrees to furnish any
such information to the Agent promptly upon request. Each Grantor also ratifies
its authorization for the Agent to have filed in any Uniform Commercial Code
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof.

            (c) From time to time, each Grantor shall, upon the Agent's
reasonable request, execute and deliver confirmatory written instruments
pledging to the Agent, for the ratable benefit of the Agent and the Lenders, the
Collateral, but any Grantor's failure to do so shall not affect or limit any
security interest or any other rights of the Agent or any Lender in and to the
Collateral with respect to any Grantor. Subject to Section 20(f), so long as the
Indenture is in effect and until all Obligations have been fully satisfied, the
Agent's Liens shall continue in full force and effect in all Collateral.

            (d) Terminations, Amendments Not Authorized. Each Grantor
acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement
without the prior written consent of Agent and agrees that it will not do so
without the prior written consent of Agent, subject to such Grantor's rights
under Section 9-509(d)(2) of the UCC.

            4. LOCATION OF COLLATERAL. (a) Each of the Grantors represents and
warrants to the Agent, the Trustee and the Holders that: (A) Schedule I is a
correct and complete list of the location of its chief executive office, the
location of its books and records, the locations of the Collateral, and the
locations of all of its other places of business. Each Grantor covenants and
agrees that it will not (i) maintain any Collateral at any location other than
those locations listed for such Grantor on Schedule I, (ii) otherwise change or
add to any of such locations, or (iii) change the location of its chief
executive office from the location identified in Schedule I, unless it gives the
Agent at least thirty (30) days' prior written notice thereof and

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executes any and all financing statements and other documents that the Agent
reasonably requests in connection therewith.

            5. Jurisdiction of Organization. Schedule II hereto identifies each
Grantor's name as of the Closing Date as it appears in official filings in the
state of its incorporation or other organization, the type of entity of such
Grantor (including corporation, partnership, limited partnership or limited
liability company), organizational identification number issued by such
Grantor's state of incorporation or organization or a statement that no such
number has been issued and the jurisdiction in which the such Grantor is
incorporated or organized. Each Grantor has only one state of incorporation or
organization.

            6. Title to, Liens on, and Sale and Use of Collateral. Each Grantor
represents and warrants to the Agent, the Trustee and the Holders and agrees
with the Agent, the Trustee and the Holders that: (a) such Grantor has rights in
and the power to transfer all of the Collateral free and clear of all Liens
whatsoever, except for Liens securing the Senior Facility and all Liens
permitted thereunder; (b) the Agent's Liens in the Collateral will not be
subject to any prior Lien except as set forth in the Indenture; and (c) such
Grantor will use, store, and maintain the Collateral with all reasonable care
and will use such Collateral for lawful purposes only.

            7. Access and Examination. The Grantors shall permit representatives
and independent contractors of Agent access to their properties and records from
time to time upon the reasonable request of Agent.

            8. Collateral Reporting. Each Grantor shall provide the Agent with
the following documents at the following times in form reasonably satisfactory
to the Agent: (a) upon request, copies of invoices in connection with the
Grantor's Accounts, customer statements, credit memos, remittance advices and
reports, deposit slips, shipping and delivery documents in connection with such
Grantor's Accounts and for Inventory and Equipment acquired by such Grantor,
purchase orders and invoices; (b) such other reports as to the Collateral of
such Grantor as the Agent shall in the Agent's Commercial Judgment request from
time to time; and (c) with the delivery of each of the foregoing, a certificate
of such Grantor executed by an officer thereof certifying as to the accuracy and
completeness of the foregoing. If either of the Grantor's records or reports of
the Collateral of type required to be delivered hereunder are prepared by an
accounting service or other agent, such Grantor hereby authorizes such service
or agent to deliver such records, reports, and related documents (but only to
the extent necessary to satisfy the foregoing reporting requirements) to the
Agent, for distribution to the Trustee and the Holders.

            9. ACCOUNTS. Each Grantor hereby represents and warrants to the
Agent, the Trustee and the Holders, with respect to such Grantor's Accounts,
that each existing Account represents, and each future Account will represent, a
bona fide sale or lease and shipment of goods by such Grantor, or rendition of
services by such Grantor, in the ordinary course of such Grantor's business.

      10. INVENTORY.

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            Each Grantor represents and warrants to the Agent, the Trustee and
the Holders and agrees with the Agent, the Trustee and the Holders that all of
the Inventory owned by such Grantor is and will be held for sale or lease, or to
be furnished in connection with the rendition of services, in the ordinary
course of such Grantor's business, and is and will be fit for such purposes.
Each Grantor will keep its Inventory in good and marketable condition, except
for damaged or defective goods arising in the ordinary course of such Grantor's
business. Each Grantor agrees that all Inventory produced by such Grantor in the
United States of America will be produced in accordance with the Federal Fair
Labor Standards Act of 1938, as amended, and all rules, regulations, and orders
thereunder. After and during the continuation of an Event of Default, each
Grantor will conduct a physical count of the Inventory at such times as the
Agent requests.

      11. EQUIPMENT.

            (a) Each Grantor represents and warrants to the Agent, the Trustee
and the Holders and agrees with the Agent, the Trustee and the Holders that all
of the Equipment owned by such Grantor is and will be used or held for use in
such Grantor's business, and is and will be fit for such purposes. Each Grantor
shall keep and maintain its Equipment in good operating condition and repair
(ordinary wear and tear excepted) and shall make all necessary replacements
thereof.

            (b) Each Grantor shall promptly inform the Agent of any material
additions to or deletions from the Equipment. No Grantor shall permit any
Equipment to become a fixture with respect to real property or to become an
accession with respect to other personal property with respect to which real or
personal property the Agent does not have a Lien. No Grantor will, without the
Agent's prior written consent, alter or remove any identifying symbol or number
on any of such Grantor's Equipment constituting Collateral.

            12. Documents, Instruments, and Chattel Paper. Each Grantor
represents and warrants to the Agent and the Lenders that all Documents,
Instruments, and chattel paper describing, evidencing, or constituting
Collateral, and all signatures and endorsements thereon, are and will be
complete, valid, and genuine in all material respects.

            13. Right to Cure. The Agent may, in its discretion, and shall, at
the direction of the Trustee (acting at the direction of the Required Holders),
pay any amount or do any act required of any Grantor hereunder or under the
Indenture or any other Security Document in order to preserve, protect, maintain
or enforce the Obligations, the Collateral or the Agent's Liens therein, and
which any Grantor fails to pay or do, including payment of any judgment against
such Grantor, any insurance premium, any warehouse charge, any finishing or
processing charge, any landlord's or bailee's claim, and any other Lien upon or
with respect to the Collateral; provided, however, that the Agent shall be under
no obligation to take any action which in its sole discretion would subject the
Agent to personal or financial liability. Any payment made or other action taken
by the Agent under this Section 13 shall be without prejudice to any right to
assert an Event of Default hereunder and to proceed thereafter as herein
provided.

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            14. LIMITED Power of Attorney. Each Grantor hereby appoints the
Agent and the Agent's designee as such Grantor's attorney, with power: (a) to
endorse such Grantor's name on any checks, notes, acceptances, money orders, or
other forms of payment or security that come into the Agent's or any Lender's
possession; (b) to sign such Grantor's name on any invoice, bill of lading,
warehouse receipt or other negotiable or non-negotiable Document constituting
Collateral, on drafts against customers, on assignments of Accounts, on notices
of assignment, financing statements and other public records and to file any
such financing statements by electronic means with or without a signature as
authorized or required by applicable law or filing procedure; (c) so long as any
Event of Default has occurred and is continuing, to notify the post office
authorities to change the address for delivery of such Grantor's mail to an
address designated by the Agent and to receive, open and dispose of all mail
addressed to such Grantor; (d) so long as any Event of Default has occurred and
is continuing, to send requests for verification of Accounts to customers; (e)
to complete in such Grantor's name or the Agent's name, any order, sale or
transaction, obtain the necessary Documents in connection therewith, and collect
the proceeds thereof; (f) to clear Inventory through customs in such Grantor's
name, the Agent's name or the name of the Agent's designee, and to sign and
deliver to customs officials limited powers of attorney in such Grantor's name
for such purpose; (g) to the extent that such Grantor's authorization given in
Section 3 of this Security Agreement is not sufficient, to file such financing
statements with respect to this Security Agreement, with or without such
Grantor's signature, or to file a photocopy of this Security Agreement in
substitution for a financing statement, as the Agent may deem appropriate and to
execute in such Grantor's name such financing statements and amendments thereto
and continuation statements which may require such Grantor's signature; and (h)
to do all things necessary to carry out the Indenture and this Security
Agreement. Each Grantor ratifies and approves all acts of such attorney. None of
Agent nor its attorneys will be liable for any acts or omissions or for any
error of judgment or mistake of fact or law except for their willful misconduct.
This power, being coupled with an interest, is irrevocable until the Indenture
has been terminated and the Obligations have been fully satisfied.

      15. THE AGENT'S AND HOLDERS' RIGHTS, DUTIES AND LIABILITIES.

            (a) Each Holder hereby appoints BNY Western Trust Company to act as
the Agent for such Person under this Security Agreement and the other Security
Documents. Each Holder hereby irrevocably authorizes the Agent to take such
action on its behalf under the provisions of this Security Agreement and the
other Security Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto and the Agent shall hold all Collateral, charges and
collections received pursuant to this Security Agreement, for the ratable
benefit of the Holders. The Agent may perform any of its duties hereunder by or
through its agents or employees. As to any matters not expressly provided for by
this Security Agreement (including without limitation, collection of the Notes)
the Agent shall not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Trustee or the Required Holders, and such instructions shall be binding;
provided, however, that the Agent shall not be required to take any action which
in the Agent's reasonable discretion exposes it to liability or which is
contrary to this Security Agreement or the other Security Documents or
applicable law unless the Agent is

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furnished with an indemnification reasonably acceptable to the Agent in its sole
discretion with respect thereto and the Agent shall not be responsible for any
misconduct or negligence on the part of any agents appointed with due care by
the Agent. The Agent shall have no duties or responsibilities except those
expressly set forth in this Security Agreement and the other Security Documents.
The Agent shall not be under any obligation to any Holder to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Security Agreement or any of the other Security
Documents. The Agent shall not have by reason of this Security Agreement a
fiduciary relationship in respect of any Holder; and nothing in this Security
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Security Agreement
except as expressly set forth herein.

            (b) The Grantors assume jointly and severally all responsibility and
liability arising from or relating to the use, sale, license or other
disposition of the Collateral. The Obligations shall not be affected by any
failure of the Agent, the Trustee or any Holder to take any steps to perfect the
Agent's Liens or to collect or realize upon the Collateral, nor shall loss of or
damage to the Collateral release any Grantor from any of the Obligations.
Following the occurrence and during the continuation of an Event of Default, the
Agent may (but shall not be required to), and at the direction of the Required
Holders shall, without notice to or consent from any Grantor, sue upon or
otherwise collect, extend the time for payment of, modify or amend the terms of,
compromise or settle for cash, credit, or otherwise upon any terms, grant other
indulgences, extensions, renewals, compositions, or releases, and take or omit
to take any other action with respect to the Collateral, any security therefor,
any agreement relating thereto, any insurance applicable thereto, or any Person
liable directly or indirectly in connection with any of the foregoing, without
discharging or otherwise affecting the liability of any Grantor for the
Obligations or under the Indenture or any other agreement now or hereafter
existing between the Agent and/or the Trustee or any Holder and any Grantor.

            (c) It is expressly agreed by each Grantor that, anything herein to
the contrary notwithstanding, each Grantor shall remain liable under each of its
contracts and each of its licenses to observe and perform all the conditions and
obligations to be observed and performed by it thereunder. None of the Agent,
the Trustee nor any Holder shall have any obligation or liability under any
contract or license by reason of or arising out of this Security Agreement or
the granting herein of a Lien thereon or the receipt by Agent, the Trustee or
any Holder of any payment relating to any contract or license pursuant hereto.
None of the Agent, the Trustee nor any Holder shall be required or obligated in
any manner to perform or fulfill any of the obligations of any Grantor under or
pursuant to any contract or license, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any contract or license, or to
present or file any claims, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.

      16. COST AND EXPENSES; INDEMNIFICATION.

            (a) The Grantors agree to pay to the Agent, for its benefit, on
demand, all reasonable costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, administration, enforcement, and
termination of this Security Agreement or any of

<PAGE>
                                       12

the other Security Documents, including: (a) all reasonable fees, expenses and
disbursements of any law firm or other counsel engaged by the Agent; (b) costs
and expenses (including reasonable attorneys' and paralegals' fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with the Security Documents and the transactions
contemplated thereby; (c) costs and expenses of lien searches; (d) taxes, fees
and other charges for filing financing statements and continuations, and other
actions to perfect, protect, and continue the Agent's Liens (including costs and
expenses paid or incurred by the Agent in connection with the consummation of
this Security Agreement); (e) sums paid or incurred to pay any amount or take
any action required of the Grantors under this Agreement that the Grantors fail
to pay or take; and (f) costs and expenses of preserving and protecting the
Collateral. The foregoing shall not be construed to limit any other directly
contrary provisions of this Agreement regarding costs and expenses to be paid by
any Grantor.

            (b) In any suit, proceeding or action brought by Agent, the Trustee
or any Holder to enforce its rights with respect to any Collateral for any sum
owing with respect thereto or to enforce any rights or claims with respect
thereto, each Grantor will jointly and severally save, indemnify and keep Agent,
the Trustee and Holders harmless from and against all expense (including
reasonable attorneys' fees and expenses), loss or damage suffered by reason of
any defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever of any Person obligated on the Collateral, arising out of a breach by
any Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favor of, such obligor or
its successors from such Grantor, except in the case of Agent, the Trustee or
any Holder, to the extent such expense, loss, or damage is determined by a court
of competent jurisdiction in a final nonappealable judgment to have resulted
primarily from the gross negligence or willful misconduct of Agent, the Trustee
or such Holder as finally determined by a court of competent jurisdiction. All
such obligations of the Grantors shall be and remain enforceable against and
only against each Grantor and shall not be enforceable against Agent, the
Trustee or any Holder.

      17. REMEDIES; RIGHTS UPON DEFAULT.

            (a) In addition to all other rights and remedies granted to it under
this Security Agreement, the Indenture, and under any other instrument or
agreement securing, evidencing or relating to any of the Obligations, and
subject to the terms of the Intercreditor Agreement, if any Event of Default
shall have occurred and be continuing, Agent may exercise all rights and
remedies of a secured party under the UCC. Without limiting the generality of
the foregoing, each Grantor expressly agrees that in any such event Agent,
without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public 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 UCC and other applicable law), may forthwith enter upon
the premises of such Grantor where any Collateral is located through self-help,
without judicial process, without first obtaining a final judgment or giving
such Grantor or any other Person notice and opportunity for a hearing on Agent's
claim or action and may collect, receive, assemble, process, appropriate and
realize 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 or

<PAGE>
                                       13

sales, at any exchange at such prices as it may deem acceptable, for cash or on
credit or for future delivery without assumption of any credit risk. Agent, the
Trustee or any Holder shall have the right upon any such public sale or sales
and, to the extent permitted by law, upon any such private sale or sales, to
purchase for the benefit of Agent, the Trustee and Holders, the whole or any
part of said Collateral so sold, free of any right or equity of redemption,
which equity of redemption each Grantor hereby releases. Such sales may be
adjourned and continued from time to time with or without notice. Agent shall
have the right to conduct such sales on the Grantors' premises or elsewhere and
shall have the right to use the Grantors' premises without charge for such time
or times as Agent reasonably deems necessary or advisable.

            (b) Each Grantor further agrees, at Agent's request, to assemble the
Collateral and make it available to Agent at a place or places designated by
Agent which are reasonably convenient to Agent and Grantor, whether at such
Grantor's premises or elsewhere. Until Agent is able to effect a sale, lease, or
other disposition of Collateral, Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving Collateral or its value or for any other purpose deemed
appropriate by Agent. Agent shall have no obligation to any Grantor to maintain
or preserve the rights of such Grantor as against third parties with respect to
Collateral while Collateral is in the possession of Agent. Agent may, if it so
elects, seek the appointment of a receiver or keeper to take possession of
Collateral and to enforce any of Agent's remedies (for the benefit of Agent, the
Trustee and Holders), with respect to such appointment without prior notice or
hearing as to such appointment. Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale to the
Obligations as provided herein, in the Intercreditor Agreement and in the
Indenture, and only after so paying over such net proceeds, and after the
payment by Agent of any other amount required by any provision of law, need
Agent account for the surplus, if any, to the applicable Grantor. To the maximum
extent permitted by applicable law, each Grantor waives all claims, damages, and
demands against Agent, the Trustee or any Holder arising out of the
repossession, retention or sale of the Collateral except such as determined by a
court of competent jurisdiction in a final nonappealable judgment to have
resulted primarily from the gross negligence or willful misconduct of Agent, the
Trustee or such Holder. Each Grantor agrees that ten (10) days prior written
notice by Agent of the time and place of any public sale or of the time after
which a private sale may take place is reasonable notification of such matters.
Each Grantor shall remain liable for any deficiency if the proceeds of any sale
or disposition of the Collateral are insufficient to pay all Obligations,
including any reasonable attorneys' fees or other out-of-pocket expenses
actually incurred by Agent, the Trustee or any Holder to collect such
deficiency.

            (c) 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 in connection with this Security
Agreement or any Collateral.

            (d) To the extent that applicable law imposes duties on the Agent to
exercise remedies in a commercially reasonable manner, each Grantor acknowledges
and agrees that it is not commercially unreasonable for the Agent (a) to fail to
incur expenses reasonably deemed significant by the Agent to prepare Collateral
for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (b) to fail to obtain
third party consents for access to Collateral to be disposed of, or to obtain
or, if not

<PAGE>
                                       14

required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of,
(c) to fail to exercise collection remedies against account debtors or other
Persons obligated on Collateral or to remove Liens on or any adverse claims
against Collateral, (d) to exercise collection remedies against account debtors
and other Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (f) to contact other
Persons, whether or not in the same business as such Grantor, for expressions of
interest in acquiring all or any portion of such Collateral, (g) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (k) to purchase insurance or
credit enhancements to insure the Agent against risks of loss, collection or
disposition of Collateral or to provide to the Agent a guaranteed return from
the collection or disposition of Collateral, or (l) to the extent deemed
appropriate by the Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Agent in the
collection or disposition of any of the Collateral. Each Grantor acknowledges
that the purpose of this Section 17(d) is to provide non-exhaustive indications
of what actions or omissions by the Agent would not be commercially unreasonable
in the Agent's exercise of remedies against the Collateral and that other
actions or omissions by the Agent shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 17(d). Without
limitation upon the foregoing, nothing contained in this Section 17(d) shall be
construed to grant any rights to any Grantor or to impose any duties on Agent
that would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section 17(d).

            18. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the purpose
of enabling Agent to exercise rights and remedies under Section 17 hereof
(including, without limiting the terms of Section 17 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for
sale, sell or otherwise dispose of Collateral) at such time as Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to Agent, for the benefit of Agent, the Trustee and Holders, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Grantor) to use, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof.

            19. LIMITATION ON AGENT'S AND HOLDERS' DUTY IN RESPECT OF
COLLATERAL.

            (a) None of Agent, the Trustee or any Holder shall have any other
duty as to any Collateral in its possession or control or in the possession or
control of any agent or nominee of Agent, the Trustee or such Holder, or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.

<PAGE>
                                       15

            (b) The Agent shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. The Agent shall be deemed
to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property and shall not be liable or responsible for any
loss or diminution in the value of any of the Collateral, by reason of the act
or omission of any carrier, forwarding agency or other agent or bailee selected
by the Agent in good faith.

            (c) The Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
gross negligence, bad faith or willful misconduct on the part of the Agent, for
the validity or sufficiency of the Collateral or any agreement or assignment
contained therein, for the validity of the title of the Grantors to the
Collateral, for insuring the Collateral or for the payment of taxes, charges,
assessments or Liens upon the Collateral or otherwise as to the maintenance of
the Collateral.

      20. MISCELLANEOUS.

            (a) REINSTATEMENT. This Security Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by or
against any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of 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 Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the 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
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

            (b) NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give and
serve upon any other party any communication with respect to this Security
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be given in the manner, and
deemed received, as provided for in the Indenture; provided, however that notice
to the Agent shall be delivered to the following address or such other address
as notified by the Agent from time to time:

            BNY Western Trust Company
            Attention:  Corporate Trust Administration
            700 S. Flower Street - Suite 500
            Los Angeles, CA  90017

<PAGE>
                                       16

            Fax:  213-630-6298

            (c) SEVERABILITY. Whenever possible, each provision of this Security
Agreement shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement. This Security Agreement is to be read, construed and applied together
with the Indenture and the other Security Documents which, taken together, set
forth the complete understanding and agreement of Agent, the Trustee, the
Holders and the Grantors with respect to the matters referred to herein and
therein.

            (d) NO WAIVER; CUMULATIVE REMEDIES. Neither Agent, the Trustee nor
any Holder shall by any act, delay, omission or otherwise be deemed to have
waived any of its rights or remedies hereunder, and no waiver shall be valid
unless in writing, signed by Agent and then only to the extent therein set
forth. A waiver by Agent of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which Agent would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of Agent, the Trustee or any Holder, any right, power
or privilege hereunder, shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law. None of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by Agent and the Grantors.

            (e) LIMITATION BY LAW. All rights, remedies and powers provided in
this Security Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Security Agreement are intended to be subject to all applicable
mandatory provisions of law that may be controlling and to be limited to the
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 of any applicable law.

            (f) TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 20(a)
hereof, this Security Agreement shall terminate upon the earlier of (i) payment
or satisfaction in full of all other Obligations (other than indemnification
Obligations as to which no claim has been asserted) or (ii) the Company's
furnishing of an Officer's Certificate to the Agent certifying that the
Company's average monthly EBITDA for any twelve consecutive months commencing
with the month ending June 30, 2004 has been positive.

            (g) INTERCREDITOR AGREEMENT. Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Trustee pursuant to this
Agreement and the exercise of any right or remedy by the Trustee hereunder are
subject to the provisions of the Intercreditor Agreement, dated as of June 10,
2004 (the "Intercreditor Agreement") among Congress Financial Corporation
(Western) as Senior Agent, BNY Western Trust Company, as

<PAGE>
                                       17

Trustee, and the Grantors. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern.

            (h) SUCCESSORS AND ASSIGNS. This Security Agreement and all
obligations of the Grantors hereunder shall be binding upon the successors and
assigns of the Grantors (including any debtor-in-possession on behalf of any
Grantor) and shall, together with the rights and remedies of Agent, for the
benefit of Agent, the Trustee and Holders, hereunder, inure to the benefit of
Agent, the Trustee and Holders, all future holders of any instrument evidencing
any of the Obligations and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Obligations or any portion
thereof or interest therein shall in any manner affect the Lien granted to
Agent, for the benefit of Agent, the Trustee and Holders, hereunder. No Grantor
may assign, sell, hypothecate or otherwise transfer any interest in or
obligation under this Security Agreement.

            (i) COUNTERPARTS. This Security Agreement may be authenticated in
any number of separate counterparts, each of which shall collectively and
separately constitute one and the same agreement. This Security Agreement may be
authenticated by manual signature, facsimile or, if approved in writing by
Agent, electronic means, all of which shall be equally valid.

            (j) GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. EACH GRANTOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN LOS ANGELES COUNTY, LOS ANGELES, SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY GRANTOR,
AGENT, THE TRUSTEE AND HOLDERS PERTAINING TO THIS SECURITY AGREEMENT OR ANY OF
THE OTHER SECURITY DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS; PROVIDED, THAT AGENT,
THE TRUSTEE, HOLDERS AND THE GRANTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF LOS ANGELES COUNTY,
LOS ANGELES, AND, PROVIDED, FURTHER, NOTHING IN THIS SECURITY AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF AGENT. EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH GRANTOR
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR

<PAGE>
                                       18

EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH GRANTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
GRANTOR AT THE ADDRESS SET FORTH IN SECTION 18.3 OF THE INDENTURE (SUCH NOTICE
TO AII BEING DELIVERED TO THE COMPANY IN CARE OF AII AT THE COMPANY'S ADDRESS
SET FORTH IN SECTION 18.3 OF THE INDENTURE) AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

            (k) WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING
SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, LENDERS, AND
GRANTORS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS SECURITY AGREEMENT OR ANY OF
THE OTHER SECURITY DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.

            (l) SECTION TITLES. The Section titles contained in this Security
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

            (m) NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Security Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Security
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Security Agreement.

            (n) BENEFIT OF HOLDERS. All Liens granted or contemplated hereby
shall be for the benefit of Agent, the Trustee and Holders, and all proceeds or
payments realized from Collateral in accordance herewith shall be applied to the
Obligations in accordance with the terms of the Indenture.

            (o) INCORPORATION BY REFERENCE. All of the rights, protections,
immunities and privileges granted to the Trustee under the Indenture are
incorporated by reference herein and shall inure to the benefit of the Agent
herein.

<PAGE>

            IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.

                                       ROCKFORD CORPORATION, as a Grantor

                                       By:  /s/ James M. Thomson
                                            ------------------------------------
                                       Name: James M. Thomson
                                             -----------------------------------
                                       Title:  Chief Financial Officer
                                               ---------------------------------

                                       AUDIO INNOVATIONS, INC., as a Grantor

                                       By:  /s/ James M. Thomson
                                            ------------------------------------
                                       Name: James M. Thomson
                                             -----------------------------------
                                       Title:  Chief Financial Officer
                                               ---------------------------------

                                       BNY WESTERN TRUST COMPANY,
                                       as Agent

                                       By:  /s/ Daren M. DiNicola
                                            ------------------------------------
                                       Name:  Daren M. DiNicola
                                              ----------------------------------
                                       Title:  V.P. & Bus. Group Manager
                                               ---------------------------------

<PAGE>

                                   SCHEDULE I

                              ROCKFORD CORPORATION

1.    The chief executive office of Rockford Corporation is located at the
      street address set forth below, which is in Maricopa County, in the State
      of Arizona.

      600 South Rockford Drive
      Tempe, Arizona 85281

2.    The books and records of Rockford Corporation pertaining to accounts,
      contract rights, inventory, etc. are located at the following street
      address:

      600 South Rockford Drive
      Tempe, Arizona 85281

3.    In addition to the chief executive office, Rockford Corporation has
      Collateral located at the addresses set forth below.

      a. Rockford Corporation
         600 South Rockford Drive
         Tempe, Arizona 85281

      b. Rockford Corporation
         2356 Turner Avenue
         Grand Rapids, Michigan 49544

      c. Rockford Corporation
         648 South River Drive
         Tempe, Arizona 85181

      d. Rockford Corporation
         609 Myrtle Street NW
         Grand Rapids, Michigan 49546

      e. Rockford Corporation
         636 South River Drive
         Tempe, Arizona 85281

      f. Rockford Corporation
         600 Webster Street NW
         Grand Rapids, Michigan 49504

      g. Rockford Corporation
         955 North Fiesta Boulevard, #4
         Gilbert, Arizona 85233

      h. Rockford Corporation
         3056 Walker Ridge Drive
         Walker, Michigan 49512

      i. Rockford Corporation
         546 South Rockford Drive
         Tempe, Arizona 85281

      j. Rockford Corporation
         6400 Goodyear Road
         Benecia, California

      k. Rockford Corporation
         2055 East 5th Street
         Tempe, Arizona 85281

      l. Rockford (Europe) Elektronik Vertriebs GmbH
         An Der Autobahn 26, 28876 Oyten
         Germany

      m. MB Quart GmbH
         Neckarstrasse 20, 74847 Obrigheim
         Germany

4.    There are no other places of business or other locations of any assets
      used by Rockford Corporation.

<PAGE>
      AUDIO INNOVATIONS, INC.

1.    The chief executive office of Audio Innovations, Inc. is located at the
      street address set forth below, which is in Payne County, in the State of
      Oklahoma.

      2805 East Sixth Street
      Stillwater, Oklahoma 74074

2.    The books and records of Audio Innovations, Inc. pertaining to accounts,
      contract rights, inventory, etc. are located at the following street
      address:

      2805 East Sixth Street
      Stillwater, Oklahoma 74074

3.    In addition to the chief executive office, Audio Innovations, Inc. has
      Collateral located at the addresses set forth below.

      a. 3324 N. Park Drive
         Stillwater, Oklahoma 74074

      b. 2811 East Sixth St.
         Stillwater, Oklahoma 74074

      c. 2723 East Sixth St.
         Stillwater, Oklahoma 74074

      d. 2805 East Sixth St.
         Stillwater, Oklahoma 74074

      e. 2817 East Sixth St.
         Stillwater, Oklahoma 74074

4.    There are no other places of business or other locations of any assets
      used by Audio Innovations, Inc.

<PAGE>

                                   SCHEDULE II

<TABLE>
<CAPTION>
                                                 Organizational      Jurisdiction of
Name of Entity               Type of Entity         ID Number         Incorporation
--------------               --------------         ---------         -------------
<S>                          <C>                 <C>                 <C>
Rockford Corporation           Corporation          0131298-2             Arizona

Audio Innovations, Inc.        Corporation         1900386865             Oklahoma
</TABLE><PAGE>
EXHIBIT 4.7

                                                                  CONFORMED COPY

                             INTERCREDITOR AGREEMENT

      This INTERCREDITOR AGREEMENT, dated as of June 10, 2004 is entered into by
and among CONGRESS FINANCIAL CORPORATION (WESTERN), as Senior Agent (as defined
below), BNY Western Trust Company, as trustee and collateral agent under the
Indenture referred to below, ROCKFORD CORPORATION, an Arizona corporation (the
"Company"), and Audio Innovations, Inc., an Oklahoma corporation ("AII" and,
together with the Company, the "Borrowers" and each individually a "Borrower").

                                   WITNESSETH:

      WHEREAS, the Borrowers, the financial institutions party to the Senior
Facility referred to below as lenders (the "Senior Lenders"), Congress Financial
Corporation (Western), as administrative agent and collateral agent for the
Senior Lenders (in such capacity, the "Senior Agent"), and Wachovia Bank,
National Association, as arranger, have entered into a Loan and Security
Agreement dated as of March 29, 2004 (as such agreement may be amended,
restated, amended and restated, extended, supplemented or otherwise modified,
from time to time at the option of the parties thereto, and any other agreements
pursuant to which any of the indebtedness, commitments, obligations, costs,
expenses, fees, reimbursements, indemnities or other obligations payable or
owing thereunder may be refinanced, restructured, renewed, extended, increased,
refunded or replaced as any such other agreements may from time to time at the
option of the parties thereto be amended, restated, amended and restated,
supplemented, renewed or otherwise modified, being collectively referred to
herein as the "Senior Facility"); and

      WHEREAS, the Company and BNY Western Trust Company, as the trustee and the
collateral agent (in its capacity as collateral agent and any successor
collateral agent thereunder, the "Trustee") under the Indenture referred to
below, propose to enter into an Indenture, dated as of June 10, 2004 (as such
Indenture may be amended, amended and restated, supplemented or otherwise
modified, from time to time at the option of the parties thereto, the
"Indenture"), governing the rights and duties of the Company under the 4.5%
Convertible Senior Subordinated Secured Notes due 2009 (the "Notes"); and

      WHEREAS, it is a condition to the Closing of the purchase and sale of the
Notes under the Securities Purchase Agreement dated as of June 10, 2004 that the
Senior Agent (for itself and for the benefit of the Senior Lenders), the Trustee
(for itself and for the benefit of the trustee under the Indenture and the
Noteholders (as defined herein)) and the Borrowers enter into this Agreement;

      NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the adequacy and receipt of which are hereby acknowledged, and in reliance upon
the representations, warranties and covenants herein contained, the parties
hereto, intending to be legally bound, hereby agree as follows:
<PAGE>
      Section 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and the plural form of the terms indicated) and capitalized
terms defined in the Indenture used (but not otherwise defined) herein shall
have the meanings ascribed to them in the Indenture:

      "Agreement" shall mean this Agreement, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

      "Bankruptcy Code" shall mean title 11 of the United States Code (11 U.S.C.
101 et seq.), as amended from time to time and any successor statute.

      "Common Collateral" shall mean all of the assets of the Borrowers or any
of their Subsidiaries whether real, personal or mixed, constituting both Senior
Lender Collateral and Noteholder Collateral.

      "Comparable Noteholder Collateral Document" means, in relation to any
Common Collateral subject to any Senior Lender Collateral Document, that
Noteholder Collateral Document which creates a security interest in the same
Common Collateral, granted by the Borrowers or their Subsidiaries.

      "Discharge of First Priority Lien Obligations" shall mean, payment in full
of the principal of, interest and premium, if any, on all First Priority Lien
Obligations and the termination of any commitments of the Senior Lenders under
the Senior Facility.

      "Indenture" shall have the meaning set forth in the recitals hereto.

      "Insolvency or Liquidation Proceeding" shall mean (a) any voluntary or
involuntary case or proceeding under the Bankruptcy Code with respect to a
Borrower or a Subsidiary of a Borrower, (b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to a Borrower or a Subsidiary of a Borrower or with respect to any
of its assets, (c) any liquidation, dissolution, reorganization or winding up of
a Borrower or a Subsidiary of a Borrower whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of a
Borrower or a Subsidiary of a Borrower.

      "Noteholder Collateral" shall mean all of the assets of a Borrower or any
of the Borrower's Subsidiaries whether real, personal or mixed, in which the
Noteholders or the Trustee or any of them now or hereafter holds a Lien as
security for the Obligations.

      "Noteholder Collateral Documents" shall mean the Noteholder Security
Agreement, and any document or instrument executed and delivered pursuant to any
Noteholder Document at any time or otherwise pursuant to which a Lien is granted
by the Borrowers or their Subsidiaries to secure the Obligations or under which
rights or remedies with respect to any such Lien are

                                       2
<PAGE>
governed, as the same may be amended, renewed, restated, extended, supplemented
or modified from time to time.

      "Noteholder Documents" shall mean the Securities Purchase Agreement, the
Registration Rights Agreement, the Indenture, the Notes (as defined in the
Indenture), the Noteholder Collateral Documents, and any other related document
or instrument executed and delivered pursuant to any Noteholder Document at any
time or otherwise evidencing any Obligations, as the same may be amended,
renewed, restated, extended, supplemented or modified from time to time.

      "Noteholder Security Agreement" shall mean the Security Agreement, dated
as of June 10, 2004, between the Borrowers and the Trustee, as the same may be
amended, renewed, extended, supplemented or modified from time to time.

      "Noteholders" shall mean the Persons holding the Notes or otherwise
entitled to the benefit of the Obligations.

      "Person" shall mean any person, individual, sole proprietorship,
partnership, joint venture, limited liability company, corporation, trust,
unincorporated organization, association, institution, entity or other party,
including, without limitation, any government and any political subdivision,
agency or instrumentality thereof.

      "Recovery" shall have the meaning set forth in Section 6.5 hereof.

      "Required Lenders" shall mean, with respect to any amendment or
modification of the Senior Facility, or any termination or waiver of any
provision of the Senior Facility, or any consent or departure by the Borrowers
therefrom, those Senior Lenders, the approval of which is required to approve
such amendment or modification, termination or waiver or consent or departure.

      "Senior Agent" shall include, in addition to the Senior Agent referred to
in the recitals hereto, the then acting collateral agent for the Senior Lenders
(or if there is more than one agent, a majority of them) under the Senior Lender
Documents and any successor thereto exercising substantially the same rights and
powers, or if there is no acting Senior Agent under the Senior Facility, the
Required Lenders.

      "Senior Facility" shall have the meaning set forth in the recitals hereto.

      "Senior Lender Collateral" shall mean all of the assets of the Borrowers
or any of their Subsidiaries whether real, personal or mixed, which is the
subject of a Lien that secures any First Priority Lien Obligation.

      "Senior Lender Collateral Documents" shall mean the Senior Facility and
any other document or instrument pursuant to which a Lien is granted securing
the First Priority Lien Obligations, as the same may be amended, renewed,
restated, extended, supplemented or modified from time to time.

                                       3
<PAGE>
      "Senior Lender Documents" shall mean the Senior Facility, all documents
and instruments evidencing any other obligation under the Senior Facility or any
First Priority Lien Obligation and any other related document or instrument
executed or delivered pursuant to any Senior Lender Document at any time or
otherwise evidencing any First Priority Lien Obligations, as any such document
or instrument may from time to time be amended, renewed, restated, extended,
supplemented or otherwise modified.

      "Senior Lenders" shall mean the Persons holding First Priority Lien
Obligations, including, without limitation, the Senior Agent.

      "Trustee" shall include, in addition to the Trustee referred to in the
recitals hereto, the then acting collateral agent under the Indenture and any
successor thereto exercising substantially the same rights and powers, or if
there is no acting collateral agent under the Indenture, the Noteholders holding
a majority in principal amount of Notes then outstanding.

      "Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial Code
of the State of New York, as amended.

      Section 2. Lien Priorities.

      2.1 Subordination. Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens granted to the Trustee or the Noteholders
on the Common Collateral or of any Liens granted to the Senior Agent or the
Senior Lenders on the Common Collateral and notwithstanding any provision of the
UCC, or any applicable law or the Noteholder Documents or the Senior Lender
Documents or any other circumstance whatsoever, the Trustee, on behalf of
itself, the trustee under the Indenture and the Noteholders, hereby agrees that:
(a) any Lien on the Common Collateral securing the First Priority Lien
Obligations now or hereafter held by the Senior Agent or the Senior Lenders
shall be senior and prior to any Lien on the Common Collateral securing the
Obligations; and (b) any Lien on the Common Collateral now or hereafter held by
the Trustee or the Noteholders regardless of how acquired, whether by grant,
statute, operation of law, subrogation or otherwise, shall be junior and
subordinate in all respects to all Liens on the Common Collateral securing the
First Priority Lien Obligations. All Liens on the Common Collateral securing the
First Priority Lien Obligations shall be and remain senior to all Liens on the
Common Collateral securing the Obligations for all purposes, whether or not such
Liens securing the First Priority Lien Obligations are subordinated to any Lien
securing any other obligation of the Borrowers or their Subsidiaries.

      2.2 Prohibition on Contesting Liens. Each of the Trustee, for itself and
on behalf of each Noteholder, and the Senior Agent, for itself and on behalf of
each Senior Lender, agrees that it shall not (and hereby waives any right to)
contest or support any other Person in contesting, in any proceeding (including,
without limitation, any Insolvency or Liquidation Proceeding), the
unavoidability, priority, validity or enforceability of a Lien held by the
Senior Agent or the Senior Lenders in the Senior Lender Collateral or by the
Noteholders in the Common Collateral, as the case may be.

                                       4
<PAGE>
      2.3 No New Liens. So long as the Discharge of First Priority Lien
Obligations has not occurred, (a) the parties hereto agree that, after the date
hereof, if the Trustee shall hold any Lien on any assets of the Borrowers or
their Subsidiaries securing the Obligations that are not also subject to the
First Priority Liens of the Senior Agent under the Senior Lender Documents, the
Trustee, upon demand by the Senior Agent, will either release such Lien or
assign it to the Senior Agent as security for the First Priority Lien
Obligations, (b) the parties hereto agree that, after the date hereof, if the
Senior Agent shall hold any Lien on any assets of the Borrowers securing the
First Priority Lien Obligations that are not also subject to the second-priority
Lien of the Trustee under the Noteholder Documents, the Borrowers shall grant a
second-priority Lien on such assets to the Trustee as security for the
Obligations, and (c) the Borrowers agree not to grant or to permit any of their
Subsidiaries to grant any Lien on any of their assets in favor of the Trustee or
the Noteholders unless such Borrower, or Subsidiary, has granted a similar Lien
on such assets in favor of the Senior Agent or the Senior Lenders.

      Section 3. Enforcement.

      3.1 Exercise of Remedies.

            (a) So long as the Discharge of First Priority Lien Obligations has
not occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against any Borrower of any Subsidiary of a Borrower, (i) the
Trustee and the Noteholders will not exercise or seek to exercise any rights or
remedies (including setoff) with respect to any Common Collateral, institute any
action or proceeding with respect to such rights or remedies, including, without
limitation, any action of foreclosure, contest, protest or object to any
foreclosure proceeding or action brought by the Senior Agent or any Senior
Lender, or any other exercise by any such party, of any rights and remedies
relating to the Common Collateral under the Senior Lender Documents or
otherwise, or object to the forbearance by the Senior Lenders from bringing or
pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the Common Collateral and (ii) the Senior Agent
and the Senior Lenders shall have the exclusive right to enforce rights,
exercise remedies (including, without limitation, setoff and the right to credit
bid their debt) and make determinations regarding release, disposition, or
restrictions with respect to the Common Collateral without any consultation with
or the consent of the Trustee or any Noteholder (and the Trustee and Noteholders
shall be deemed to have consented to any such enforcement, exercise or
determination); provided, however, (A) that in any Insolvency or Liquidation
Proceeding commenced by or against a Borrower or any Subsidiary of a Borrower,
the Trustee may file a claim or statement of interest with respect to the
Obligations, and (B) the Trustee may take any action not adverse to the Liens on
the Common Collateral securing the Senior Lender Claims in order to preserve or
protect its rights in the Common Collateral. In exercising rights and remedies
with respect to the Common Collateral, the Senior Agent and the Senior Lenders
may enforce the provisions of the Senior Lender Documents and exercise remedies
thereunder, all in such order and in such manner as they may determine in the
exercise of their sole discretion. Such exercise and enforcement shall include,
without limitation, the rights of an agent appointed by them to sell or
otherwise dispose of Common Collateral upon foreclosure, to incur expenses in
connection with such sale or disposition, and to exercise all the rights and
remedies of a

                                       5
<PAGE>
secured lender under the Uniform Commercial Code of any applicable jurisdiction
and of a secured creditor under bankruptcy or similar laws of any applicable
jurisdiction. The Trustee and the Noteholders waive any rights they may have to
require the Senior Agent or Senior Lenders to marshall assets.

            (b) The Trustee, on behalf of itself and the Noteholders, agrees
that it will not take or receive any Common Collateral or any proceeds of Common
Collateral in connection with the exercise of any right or remedy (including
setoff) with respect to any Common Collateral, unless and until the Discharge of
First Priority Lien Obligations has occurred. Without limiting the generality of
the foregoing, unless and until the Discharge of First Priority Lien Obligations
has occurred, except as expressly provided in the proviso in Section 3.1(a) (ii)
above, the sole right of the Trustee and the Noteholders with respect to the
Common Collateral is to hold a Lien on the Common Collateral pursuant to the
Noteholder Documents for the period and to the extent granted therein and to
receive a share of the proceeds thereof, if any, after the Discharge of First
Priority Lien Obligations has occurred.

            (c) Subject to the proviso in Section 3.1(a) (ii) above, (a) the
Trustee, for itself or on behalf of the Noteholders, agrees that the Trustee and
the Noteholders will not take any action that would hinder any exercise of
remedies undertaken by the Senior Agent under the Senior Loan Documents,
including any sale, lease, exchange, transfer or other disposition of the Common
Collateral, whether by foreclosure or otherwise, and (b) the Trustee, for itself
and on behalf of the Noteholders, hereby waives any and all rights it or the
Noteholders may have as a junior lien creditor or otherwise to object to the
manner in which the Senior Agent or the Senior Lenders seek to enforce or
collect the First Priority Lien Obligations or the Liens granted in any of the
Senior Lender Collateral.

      3.2 Cooperation. Subject to the proviso in Section 3.1(a)(ii) above, the
Trustee, on behalf of itself and the Noteholders, agrees that, unless and until
the Discharge of First Priority Lien Obligations has occurred, it will not
commence, or join with any Person (other than the Senior Lenders and the Senior
Agent upon the request thereof) in commencing any enforcement, collection,
execution, levy or foreclosure action or proceeding with respect to any Lien
held by it under any of the Noteholder Documents or otherwise.

      Section 4. Payments.

      4.1 Application of Proceeds. As long as the Discharge of First Priority
Lien Obligations has not occurred, the cash proceeds of Common Collateral
received in connection with the sale of, or collection on, such Common
Collateral upon the exercise of remedies, shall be applied by the Senior Agent
to the First Priority Lien Obligations in such order as specified in the Senior
Facility until Discharge of First Priority Lien Obligations has occurred. Upon
Discharge of the First Priority Lien Obligations, the Senior Agent shall deliver
to the Trustee any proceeds of Common Collateral held by it in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct or as may otherwise be required by applicable
law.

                                       6
<PAGE>
      4.2 Payments Over. Any Common Collateral or proceeds thereof received by
the Trustee or any Noteholder in connection with the exercise of any right or
remedy (including setoff) relating to the Common Collateral in contravention of
this Agreement shall be segregated and held in trust and forthwith paid over to
the Senior Agent for the benefit of the Senior Lenders in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The Senior Agent is hereby authorized to make
any such endorsements as agent for the Trustee or any such Noteholder. This
authorization is coupled with an interest and is irrevocable.

      Section 5. Other Agreements.

      5.1 Releases.

            (a) If in connection with:

                  (i) the exercise of the Senior Agent's rights or remedies in
            respect of the Common Collateral provided for in Section 3.1,
            including any sale, lease, exchange, transfer or other disposition
            of such Common Collateral;

                  (ii) any sale, lease, exchange, transfer or other disposition
            of Common Collateral permitted under the terms of the Senior
            Facility (whether or not an event of default under, and as defined
            therein, has occurred and is continuing); or

                  (iii) any agreement between the Senior Agent and the Borrowers
            to release the Senior Agent's Lien on any portion of the Common
            Collateral, which release is not otherwise prohibited by the terms
            of the Noteholder Documents;

the Senior Agent, for itself or on behalf of any of the Senior Lenders, releases
any of its Liens on any part of the Common Collateral, the Liens, if any, of the
Trustee, for itself or for the benefit of the Noteholders, on such Common
Collateral shall be automatically, unconditionally and simultaneously released
and the Trustee, for itself or on behalf of any such Noteholder, promptly shall
execute and deliver to the Senior Agent or the Borrowers such termination
statements, releases and other documents as the Senior Agent or the Borrowers
may request to effectively confirm such release provided, however, that if an
Event of Default (as defined in the Indenture) exists as of the date of
Discharge of First Priority Lien Obligations, the Liens, if any, of the Trustee,
for itself or for the benefit of the Noteholders, on such Common Collateral
shall not be released until such Event of Default and all other Events of
Default shall have been cured or otherwise waived except to the extent such
Common Collateral was disposed of in order to repay the First Priority Lien
Obligations.

            (b) The Trustee, for itself and on behalf of the Noteholders, hereby
irrevocably constitutes and appoints the Senior Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Trustee or such holder or in
the Senior Agent's own name, from time to time in the Senior Agent's discretion,
for the purpose of carrying out the terms of this Section 5.1, to take any and

                                       7
<PAGE>
all appropriate action and to execute and file or record any and all documents
and instruments which may be necessary or desirable to accomplish the purposes
of this Section 5.1, including, without limitation, any termination statements,
endorsements or other instruments or transfer or release.

      5.2 Insurance. Unless and until the Discharge of First Priority Lien
Obligations has occurred, the Senior Agent and the Senior Lenders shall have the
sole and exclusive right, subject to the rights of the Borrowers under the
Senior Lender Documents, to adjust settlement for any insurance policy covering
the Common Collateral in the event of any loss thereunder and to approve any
award granted in any condemnation or similar proceeding affecting the Common
Collateral. Unless and until the Discharge of First Priority Lien Obligations
has occurred, all proceeds of any such policy and any such award if in respect
to the Common Collateral shall be paid to the Senior Agent for the benefit of
the Senior Lenders to the extent required under the Senior Facility and
thereafter to the Trustee for the benefit of the Noteholders to the extent
required under the applicable Noteholder Documents and then to the owner of the
subject property or as a court of competent jurisdiction may otherwise direct or
as may otherwise be required by applicable law. If the Trustee or any Noteholder
shall, at any time, receive any proceeds of any such insurance policy or any
such award in contravention of this Agreement, it shall pay such proceeds over
to the Senior Agent in accordance with the terms of Section 4.2.

      5.3 Amendments to Noteholder Collateral Documents.

            (a) Without the prior written consent of the Senior Agent and the
Required Lenders, no Noteholder Collateral Document may be amended, supplemented
or otherwise modified or entered into to the extent such amendment, supplement
or modification, or the terms of any new Noteholder Collateral Document, would
be inconsistent with any of the terms of the Senior Lender Documents.

            (b) In the event the Senior Agent or the Senior Lenders enter into
any amendment, waiver or consent in respect of any of the Senior Lender
Collateral Documents for the purpose of adding to, or deleting from, or waiving
or consenting to any departures from any provisions of, any Senior Lender
Collateral Document or changing in any manner the rights of the Senior Agent,
the Senior Lenders, or the Borrowers thereunder, then such amendment, waiver or
consent shall apply automatically to any comparable provision of the Comparable
Noteholder Collateral Document without the consent of the Trustee or the
Noteholders and without any action by the Trustee, the Noteholders or the
Borrowers; provided, however, (A) that no such amendment, waiver or consent
shall have the effect of removing assets subject to the Lien of the Noteholder
Collateral Documents, except to the extent that a release of such Lien is
permitted by Section 5.1 and (B) notice of such amendment, waiver or consent
shall have been given to the Trustee.

      5.4 Rights As Unsecured Creditors. Notwithstanding anything to the
contrary in this Agreement, and subject to Article IV of the Indenture, the
Trustee and the Noteholders may exercise rights and remedies as an unsecured
creditor against the Borrowers and their Subsidiaries in accordance with the
terms of the Noteholder Documents and applicable law. Nothing in this Agreement
shall prohibit the receipt by the Trustee or any Noteholders of the

                                       8
<PAGE>
required payments of interest and principal so long as such receipt is permitted
by Article IV of the Indenture and is not the direct or indirect result of the
exercise by the Trustee or any Noteholder of rights or remedies as a secured
creditor or enforcement of any Lien held by any of them in contravention of this
Agreement. In the event the Trustee or any Noteholder becomes a judgment lien
creditor in respect of Common Collateral as a result of its enforcement of its
rights as an unsecured creditor, such judgment lien shall be subordinated to the
Liens securing First Priority Lien Obligations on the same basis as the other
Liens securing the Obligations are so subordinated to such First Priority Lien
Obligations under this Agreement. Nothing in this Agreement modifies any rights
or remedies (x) the Senior Agent or the Senior Lenders may have with respect to
the Senior Lender Collateral or (y) except as expressly set forth herein, the
Trustee or the Noteholder may have with respect to the Noteholder Collateral.
The provisions of this Agreement are in addition to, and not in derogation of,
Article IV of the Indenture.

      5.5 Bailee for Perfection.

            (a) The Senior Agent agrees to hold the Collateral that is part of
the Common Collateral in its possession or control (or in the possession or
control of its agents or bailees) as bailee for the Trustee and any assignee
solely for the purpose of perfecting the security interest granted in such
Collateral pursuant to the Noteholder Security Agreement, subject to the terms
and conditions of this Section 5.5.

            (b) Until the Discharge of First Priority Lien Obligations has
occurred, the Senior Agent shall be entitled to deal with the Collateral in its
possession or control in accordance with the terms of the Senior Lender
Collateral Documents as if no bailee arrangement with the Trustee existed. The
rights of the Trustee shall at all times be subject to the terms of this
Agreement and to the Senior Agent's rights under the Senior Lender Documents.

            (c) The Senior Agent shall have no obligation whatsoever to the
Trustee or any Noteholder to assure that the Collateral in its possession or
control is genuine or owned by the Borrowers or one of their Subsidiaries or to
preserve rights or benefits of any Person except as expressly set forth in this
Section 5.5. The duties or responsibilities of the Senior Agent under this
Section 5.5 shall be limited solely to holding the Collateral in its possession
or control as bailee for the Trustee for purposes of perfecting the Lien held by
the Trustee.

            (d) The Senior Agent shall not have by reason of the Noteholder
Security Agreement or this Agreement or any other document a fiduciary
relationship in respect of the Trustee or any Noteholder.

            (e) Upon the Discharge of First Priority Lien Obligations, the
Senior Agent shall deliver to the Trustee the Collateral in its possession or
control together with any necessary endorsements (or otherwise allow the Trustee
to obtain control of such Collateral) or as a court of competent jurisdiction
may otherwise direct or as may otherwise be required by applicable law.

      Section 6. Insolvency or Liquidation Proceedings.

                                       9
<PAGE>
      6.1 Financing Issues. If any Borrower or any Subsidiary of a Borrower
shall be subject to any Insolvency or Liquidation Proceeding and the Senior
Agent shall desire to permit the use of cash collateral or to permit such
Borrower or Subsidiary to obtain financing under section 363 or section 364 of
the Bankruptcy Code ("DIP Financing"), then the Trustee, on behalf of itself and
the Noteholders, agrees that it will raise no objection to such use or DIP
Financing and will not request adequate protection or any other relief in
connection therewith (except to the extent permitted by Section 6.3) and, to the
extent the Liens securing the First Priority Lien Obligations are subordinated
or pari passu with such DIP Financing, will subordinate its Liens in the Common
Collateral to such DIP Financing (and all obligations relating thereto) on the
same basis as the other Liens securing the Obligations are so subordinated to
First Priority Lien Obligations under this Agreement.

      6.2 Relief from the Automatic Stay. Until the Discharge of First Priority
Lien Obligations has occurred, the Trustee, on behalf of itself and the
Noteholders, agrees that none of them shall seek relief from the automatic stay
or any other stay in any Insolvency or Liquidation Proceeding in respect of the
Common Collateral, without the prior written consent of the Senior Agent and the
Required Lenders.

      6.3 Adequate Protection. The Trustee, on behalf of itself and the
Noteholders, agrees that none of them shall contest (or support any other Person
contesting) (a) any request by the Senior Agent or the Senior Lenders for
adequate protection or (b) any objection by the Senior Agent or the Senior
Lenders to any motion, relief, action or proceeding based on the Senior Agent or
the Senior Lenders claiming a lack of adequate protection. Notwithstanding the
foregoing contained in this Section 6.3, in any Insolvency or Liquidation
Proceeding, (i) if the Senior Lenders (or any subset thereof) are granted
adequate protection in the form of additional collateral in connection with any
DIP Financing or use of its cash collateral under section 363 or section 364 of
the Bankruptcy Code, then the Trustee, on behalf of itself or any of the
Noteholders, may seek or request adequate protection in the form of a
replacement Lien on such additional collateral, which Lien is subordinated to
the Liens securing the First Priority Lien Obligations and such DIP Financing
(and all obligations relating thereto) on the same basis as the other Liens
securing the Obligations are so subordinated to the First Priority Lien
Obligations under this Agreement, and (ii) in the event the Trustee, on behalf
of itself and the Noteholders, seeks or requests adequate protection and such
adequate protection is granted in the form of additional collateral, then the
Trustee, on behalf of itself or any of the Noteholders, agrees that the Senior
Agent shall also be granted a senior Lien on such additional collateral as
security for the First Priority Lien Obligations and any such DIP Financing and
that any Lien on such additional collateral securing the Obligations shall be
subordinated to the Liens on such collateral securing the First Priority Lien
Obligations and any such DIP Financing (and all obligations relating thereto)
and any other Liens granted to the Senior Lenders as adequate protection on the
same basis as the other Liens securing the Obligations are so subordinated to
such First Priority Lien Obligations under this Agreement.

      6.4 No Waiver. Nothing contained herein shall prohibit or in any way limit
the Senior Agent or any Senior Lender from objecting in any Insolvency or
Liquidation Proceeding or otherwise to any action taken by the Trustee or any of
the Noteholders, including, without limitation, the seeking by the Trustee or
any Noteholder of adequate protection or the asserting

                                       10
<PAGE>
by the Trustee or any Noteholder of any of its rights and remedies under the
Noteholder Documents or otherwise.

      6.5 Preference Issues. If any Senior Lender is required in any Insolvency
or Liquidation Proceeding or otherwise to turn over or otherwise pay to the
estate of a Borrower or any Subsidiary of a Borrower any amount (a "Recovery"),
then the First Priority Lien Obligations shall be reinstated to the extent of
such Recovery and the Senior Lenders shall be entitled to a Discharge of First
Priority Lien Obligations with respect to all such recovered amounts. If this
Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto from such date of reinstatement.

      Section 7. Reliance; Waivers; etc.

      7.1 Reliance. (a) The consent by the Senior Lenders to the execution and
delivery of the Noteholder Documents and the grant to the Trustee on behalf of
the Noteholders of a Lien on the Common Collateral and all loans and other
extensions of credit made or deemed made on and after the date hereof by the
Senior Lenders to the Borrowers shall be deemed to have been given and made in
reliance upon this Agreement.

            (b) The Senior Agent, on behalf of itself and the Senior Lenders,
acknowledges that it and the Senior Lenders have, independently and without
reliance on the Trustee or any Noteholder, and based on documents and
information deemed by them appropriate, made their own credit analysis and
decision to enter into this Agreement and the transactions contemplated hereby
and by the Senior Lender Documents and they will continue to make their own
credit decision in taking or not taking any action under the Senior Lender
Documents or this Agreement.

      7.2 No Warranties or Liability. (a) The Trustee, on behalf of itself and
Noteholders, acknowledges and agrees that each of the Senior Agent and the
Senior Lenders have made no express or implied representation or warranty,
including, without limitation, with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the Senior
Lender Documents. The Senior Lenders will be entitled to manage and supervise
their respective loans and extensions of credit to the Borrowers in accordance
with law and as they may otherwise, in their sole discretion, deem appropriate,
and the Senior Lenders may manage their loans and extensions of credit without
regard to any rights or interests that the Trustee or any of the Noteholders
have in the Common Collateral or otherwise, except as otherwise provided in this
Agreement. Neither the Senior Agent nor any Senior Lender shall have any duty to
the Trustee or any of the Noteholders to act or refrain from acting in a manner
which allows, or results in, the occurrence or continuance of an event of
default or default under any agreements with the Borrowers (including, without
limitation, the Noteholder Documents), regardless of any knowledge thereof which
they may have or be charged with.

            (b) The Senior Agent, on behalf of itself and the Senior Lenders,
acknowledges and agrees that each of the Trustee and the Noteholders have made
no express or

                                       11
<PAGE>
implied representation or warranty, including, without limitation, with respect
to the execution, validity, legality, completeness, collectibility or
enforceability of any of the Noteholder Documents.

      7.3 No Waiver of Lien Priorities.

            (a) No right of the Senior Lenders, the Senior Agent or any of them
to enforce any provision of this Agreement shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Borrowers
or by any act or failure to act by any Senior Lender or the Senior Agent, or by
any noncompliance by any Person with the terms, provisions and covenants of this
Agreement, any of the Senior Lender Documents or any of the Noteholder
Documents, regardless of any knowledge thereof which the Senior Agent or the
Senior Lenders, or any of them, may have or be otherwise charged with;

            (b) Without in any way limiting the generality of the foregoing
paragraph (but subject to the rights of the Borrowers under the Senior Lender
Documents), the Senior Lenders, the Senior Agent and any of them, may, at any
time and from time to time, without the consent of, or notice to, the Trustee or
any Noteholder, without incurring any liabilities to the Trustee or any
Noteholder and without impairing or releasing the lien priorities and other
benefits provided in this Agreement (even if any right of subrogation or other
right or remedy of the Trustee or any Noteholder is affected, impaired or
extinguished thereby) do any one or more of the following:

                  (i) change the manner, place or terms of payment or change or
            extend the time of payment of, or renew, exchange, amend, increase
            or alter, the terms of the Senior Lender Documents or any Lien in
            any Senior Lender Collateral or guaranty thereof or any liability of
            the Borrowers, or any liability incurred directly or indirectly in
            respect thereof (including, without limitation, any increase in or
            extension of the First Priority Lien Obligations, without any
            restriction as to the amount, tenor or terms of any such increase or
            extension) or otherwise amend, renew, exchange, extend, modify or
            supplement in any manner any Liens held by the Senior Lenders, the
            First Priority Lien Obligations or any of the Senior Lender
            Documents;

                  (ii) sell, exchange, release, surrender, realize upon, enforce
            or otherwise deal with in any manner and in any order any part of
            the Senior Lender Collateral or any liability of the Borrowers or
            their Subsidiaries to the Senior Lenders or the Senior Agent, or any
            liability incurred directly or indirectly in respect thereof;

                  (iii) settle or compromise any First Priority Lien Obligations
            or any other liability of the Borrowers or their Subsidiaries or any
            security therefor or any liability incurred directly or indirectly
            in respect thereof and apply any sums by whomsoever paid and however
            realized to any liability (including, without limitation, the First
            Priority Lien Obligations) in any manner or order; and

                                       12
<PAGE>
                  (iv) exercise or delay in or refrain from exercising any right
            or remedy against the Borrowers or their Subsidiaries or any
            security or any other Person, elect any remedy and otherwise deal
            freely with the Borrowers or their Subsidiaries and the Senior
            Lender Collateral and any security and any guarantor or any
            liability of the Borrowers or any guarantor to the Senior Lenders or
            any liability incurred directly or indirectly in respect thereof;

            (c) The Trustee, on behalf of itself and the Noteholders, also
agrees that the Senior Lenders and the Senior Agent shall have no liability to
the Trustee or any Noteholder, and the Trustee, on behalf of itself and the
Noteholders, hereby waives any claim against any Senior Lender or the Senior
Agent, arising out of any and all actions which the Senior Lenders or the Senior
Agent may take or permit or omit to take with respect to: (i) the Senior Lender
Documents, (ii) the collection of the First Priority Lien Obligations, or (iii)
the foreclosure upon, or sale, liquidation or other disposition of, the Senior
Lender Collateral. The Trustee, on behalf of itself and the Noteholders, agrees
that the Senior Lenders and the Senior Agent have no duty to them in respect of
the maintenance or preservation of the Senior Lender Collateral, the First
Priority Lien Obligations or otherwise; and

            (d) The Trustee, on behalf of itself and the Noteholders, agrees not
to assert and hereby waives, to the fullest extent permitted by law, any right
to demand, request, plead or otherwise assert or otherwise claim the benefit of,
any marshalling, appraisal, valuation or other similar right that may otherwise
be available under applicable law or any other similar rights a junior secured
creditor may have under applicable law.

      7.4 Obligations Unconditional. All rights, interests, agreements and
obligations of the Senior Agent and the Senior Lenders and the Trustee and the
Noteholders, respectively, hereunder shall remain in full force and effect
irrespective of:

            (a) any lack of validity or enforceability of the Senior Lender
Documents or any Noteholder Documents;

            (b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the First Priority Lien Obligations or
Obligations, or any amendment or waiver or other modification, including,
without limitation, any increase in the amount thereof, whether by course of
conduct or otherwise, of the terms of the Senior Facility or any other Senior
Lender Document or of the terms of the Indenture or any other Noteholder
Document;

            (c) any exchange of any security interest in any Common Collateral
or any other collateral, or any amendment, waiver or other modification, whether
in writing or by course of conduct or otherwise, of all or any of the First
Priority Lien Obligations or Obligations or any guarantee thereof;

            (d) the commencement of any Insolvency or Liquidation Proceeding in
respect of a Borrower or any Subsidiary of a Borrower; or

                                       13
<PAGE>
            (e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, any Borrower or any Subsidiary of a
Borrower in respect of the First Priority Lien Obligations, or of the Trustee or
any Noteholder in respect of this Agreement.

      Section 8. Miscellaneous.

      8.1 Conflicts. In the event of any conflict between the provisions of this
Agreement and the provisions of the Senior Lender Documents or the Noteholder
Documents, the provisions of this Agreement shall govern.

      8.2 Continuing Nature of this Agreement. This Agreement shall continue to
be effective until the Discharge of First Priority Lien Obligations shall have
occurred. This is a continuing agreement of lien subordination and the Senior
Lenders may continue, at any time and without notice to the Trustee or any
Noteholder, to extend credit and other financial accommodations and lend monies
to or for the benefit of the Borrowers constituting First Priority Lien
Obligations on the faith hereof. The Trustee, on behalf of itself and the
Noteholders, hereby waives any right it may have under applicable law to revoke
this Agreement or any of the provisions of this Agreement. The terms of this
Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding.

      8.3 Amendments; Waivers. No amendment, modification or waiver of any of
the provisions of this Agreement by the Trustee or the Senior Agent shall be
deemed to be made unless the same shall be in writing signed on behalf of the
party making the same or its authorized agent and each waiver, if any, shall be
a waiver only with respect to the specific instance involved and shall in no way
impair the rights of the parties making such waiver or the obligations of the
other parties to such party in any other respect or at any other time. The
Borrowers shall not have any right to amend, modify or waive any provision of
this Agreement without the consent of the Trustee or the Senior Agent, as
applicable, nor shall any consent or signed writing be required of any of them
to effect any amendment, modification or waiver of any provision of this
Agreement, except that no amendment, modification or waiver affecting any
obligation or right of the Borrowers hereunder shall be made without the consent
of the Borrowers.

      8.4 Information Concerning Financial Condition of the Borrower and its
Subsidiaries. The Senior Agent and the Senior Lenders shall be responsible for
keeping themselves informed of (a) the financial condition of the Borrowers and
their Subsidiaries and all endorsers and/or guarantors of the Obligations or the
First Priority Lien Obligations and (b) all other circumstances bearing upon the
risk of nonpayment of the Obligations or the First Priority Lien Obligations.
The Senior Agent and the Senior Lenders shall have no duty to advise the Trustee
or any Noteholder of information known to it or them regarding such condition or
any such circumstances or otherwise. In the event the Senior Agent or any of the
Senior Lenders, in its or their sole discretion, undertakes at any time or from
time to time to provide any such information to the Trustee or any Noteholder,
it or they shall be under no obligation (x) to provide any additional
information or to provide any such information on any subsequent occasion, (y)
to undertake any investigation or (z) to disclose any information which,
pursuant to accepted or reasonable commercial finance practices, such party
wishes to maintain confidential.

                                       14
<PAGE>
      8.5 Subrogation. The Trustee, on behalf of itself and the Noteholders,
hereby waives any rights of subrogation it may acquire as a result of any
payment hereunder until the Discharge of First Priority Lien Obligations has
occurred.

      8.6 Application of Payments. All payments received by the Senior Agent or
the Senior Lenders may be applied, reversed and reapplied, in whole or in part,
to such part of the First Priority Lien Obligations as the Senior Agent or the
Senior Lenders, in their sole discretion, deem appropriate.

      8.7 Consent to Jurisdiction; Waivers. The parties hereto consent to the
jurisdiction of any state or federal court located in New York, New York, and
consent that all service of process may be made by registered mail directed to
such party as provided in Section 8.8 below for such party. The parties hereto
waive any objection to any action instituted hereunder based on forum non
conveniens, and any objection to the venue of any action instituted hereunder.
Each of the parties hereto waives any right it may have to trial by jury in
respect of any litigation based on, or arising out of, under or in connection
with this Agreement, or any course of conduct, course of dealing, verbal or
written statement or action of any party hereto.

      8.8 Notices. All notices to the Noteholders and the Senior Lenders
permitted or required under this Agreement may be sent to the Trustee and the
Senior Agent, respectively. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telecopied, electronically mailed or
sent by courier service or U.S. mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a telecopy or
electronic mail or four Business Days after deposit in the U.S. mail (registered
or certified, with postage prepaid and properly addressed). For the purposes
hereof, the addresses of the parties hereto shall be as set forth below each
party's name on the signature pages hereto, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties.

      8.9 Further Assurances. The Trustee, on behalf of itself and the
Noteholders, agrees that it shall take such further action and shall execute and
deliver to the Senior Agent and the Senior Lenders such additional documents and
instruments (in recordable form, if requested) as the Senior Agent or the Senior
Lenders may reasonably request to effectuate the terms of and the lien
priorities contemplated by this Agreement.

      8.10 Governing Law. This Agreement has been delivered and accepted at and
shall be deemed to have been made at Los Angeles, California and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of California.

      8.11 Binding on Successors and Assigns. This Agreement shall be binding
upon the Senior Agent, the Senior Lenders, the Trustee, the Noteholders, the
Borrowers and their respective permitted successors and assigns.

                                       15
<PAGE>
      8.12 Specific Performance. The Senior Agent may demand specific
performance of this Agreement. The Trustee, on behalf of itself and the
Noteholders hereby irrevocably waives any defense based on the adequacy of a
remedy at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by the Senior Agent.

      8.13 Section Titles; Time Periods. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of this Agreement. In the computation of time
periods, unless otherwise specified, the word "from" means "from and including"
and each of the words "to" and "until" means "to but excluding" and the word
"through" means "to and including".

      8.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document.

      8.15 Authorization. By its signature, each Person executing this Agreement
on behalf of a party hereto represents and warrants to the other parties hereto
that it is duly authorized to execute this Agreement.

      8.16 No Third Party Beneficiaries. This Agreement and the rights and
benefits hereof shall inure to the benefit of the Senior Agent and the Senior
Lenders and their respective successors and assigns and, to the extent
applicable, the Borrowers, the Trustee, and the Noteholders and their respective
permitted successors and assigns. No other Person, shall have or be entitled to
assert rights or benefits hereunder.

      8.17 Effectiveness. This Agreement shall become effective when executed
and delivered by the parties hereto. This Agreement shall be effective both
before and after the commencement of any Insolvency or Liquidation Proceeding.
All references to the Borrowers shall include any Borrower as debtor and
debtor-in-possession and any receiver or trustee for a Borrower in any
Insolvency or Liquidation Proceeding.

      8.18 Trustee. The Trustee shall not be deemed to owe any fiduciary duty to
the Senior Agent or the Senior Lenders. With respect to the Senior Lenders and
the Senior Agent, the Trustee undertakes to perform or to observe only those
covenants and obligations specifically set forth in this Agreement and no
implied covenants or obligations shall be read into this Agreement against the
Trustee. The Trustee hereby disclaims any representation or warranty to the
Senior Agent or Senior Lenders concerning the perfection of the liens and
security interests granted hereunder or in the value of any of the Collateral.
The Senior Agent agrees that it will give the Trustee prompt notice of the
occurrence of the Discharge of the First Priority Lien Obligations, provided,
however, the failure to give such notice will not impair any rights of the
Senior Agent hereunder or the duties and obligations of the Trustee hereunder.
Notwithstanding the provisions of Section 8.8, any notice to the Trustee will be
effective only upon receipt.

                                       16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

                                        Senior Agent:

                                        CONGRESS FINANCIAL CORPORATION
                                        (WESTERN), as Senior Agent

                                        By:     /s/ D. B. Laughton
                                                --------------------------------
                                        Name:   D. B. Laughton
                                        Title:  Senior Vice President

                                        Address:
                                        251 South Lake Avenue
                                        Suite 900
                                        Pasadena, CA 91101
                                        Attn: Portfolio Manager

                                        Trustee:

                                        BNY WESTERN TRUST COMPANY, as
                                        Collateral Agent

                                        By:     /s/ Daren M. DiNicola
                                                --------------------------------
                                        Name:   Daren M. DiNicola
                                        Title:  V.P. & Bus. Group Mgr.

                                       17
<PAGE>
                                        Address:
                                        700 S. Flower Street - Suite 500
                                        Los Angeles, CA  90017
                                        Attention: Corporate Trust
                                           Administration
                                        Fax:  213-630-6298

                                        ROCKFORD CORPORATION

                                        By:     /s/ James M. Thomson
                                                --------------------------------
                                        Name:   James M. Thomson
                                        Title:  Chief Financial Officer

                                        Address:
                                        600 South Rockford Drive
                                        Tempe, Arizona 85281
                                        Telephone: (480) 967-3565
                                        Facsimile: (480) 966-3639

                                        AUDIO INNOVATIONS, INC.

                                        By:     /s/ James M. Thomson
                                                --------------------------------
                                        Name:   James M. Thomson
                                        Title:  Chief Financial Officer

                                        Address:
                                        Rockford Corporation
                                        600 S. Rockford Drive
                                        Tempe, AZ  85281
                                        Attn: James M. Thomson

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