Document:

<PAGE>
                                                                   EXHIBIT 10.34

                                                       GRANTEE: EDWARD L. PIERCE

                              BINDVIEW CORPORATION

                           RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this "AGREEMENT") is made between BindView
Corporation, a Texas corporation (the "COMPANY"),1 and the "GRANTEE" identified
above. Unless otherwise indicated, all references to Sections are to Sections in
this Agreement. This Agreement is effective as of the execution date set forth
on the signature page of this Agreement.

1.     BACKGROUND. The Grantee is being hired for a senior executive position
       with the Company in which he will have substantial responsibility for the
       management and growth of the Company and its affiliates. The Company
       considers it to be in the best interests of the Company and its
       shareholders to provide the Grantee with additional stock-based
       incentives, thereby encouraging the Grantee to continue in the employ of
       the Company and/or its affiliates.

2.     DEFINITIONS. For purposes of this Agreement, the following terms have the
       meanings set forth below.

2.1    BINDVIEW COMPANY means BindView and its affiliates. For purposes of this
       Agreement, (i) an affiliate of a Person is defined as any other Person
       that controls or is controlled by or is under common control with that
       Person, and (ii) control is defined as the direct or indirect ownership
       of at least fifty percent (50%) of the equity or beneficial interest in
       such Person or the right to vote for or appoint a majority of the board
       of directors or other governing body of such Person.

2.2    EMPLOYMENT AGREEMENT means the First Amended and Restated Employment
       Agreement being contemporaneously entered into by the Grantee and the
       Company.

2.3    FAIR MARKET VALUE has the meaning set forth in the Plan.

2.4    IMMEDIATE FAMILY MEMBER has the meaning set forth in the Plan.

2.5    PERSON means a natural person, corporation, partnership, or other legal
       entity, or a joint venture of two or more of the foregoing.

2.6    PLAN means the Company's incentive stock plan identified in Schedule 1.

2.7    PROMISSORY NOTE means the promissory note contemporaneously executed by
       the Grantee and delivered to the Company in payment of the Purchase
       Price.

2.8    PURCHASE PRICE means the purchase price at which the Grantee is
       purchasing the Shares as set forth in Schedule 1.

2.9    REPURCHASE PERIOD and REPURCHASE RIGHT - see Section 6.

-------------------

(1) "BindView Corporation" is a registered assumed name of BindView Development
    Corporation.

<PAGE>
                                                       GRANTEE: EDWARD L. PIERCE

2.10   RESTRICTED STOCK has the meaning set forth in the Plan.

2.11   SCHEDULE 1 and SCHEDULE 2 mean, respectively, Schedule 1 and Schedule 2
       set forth at the end of this Agreement above the parties' signatures.

2.12   SHARES means the shares of Restricted Stock, no par value per share,
       granted to the Grantee pursuant to this Agreement as set forth in
       Schedule 1.

2.13   STOCK has the meaning set forth in the Plan.

2.14   TERMINATION DATE means the date on which the Grantee is no longer
       employed by any BindView Company. (The fact that the Grantee ceases to be
       employed by one BindView Company will not cause a Terminate Date to occur
       if the Grantee is immediately thereafter employed by another BindView
       Company.)

3.     RESTRICTED STOCK AWARD. The Company hereby awards and delivers, and the
       Grantee hereby accepts, the Shares, in consideration of (i) the provision
       of services to the Company by the Grantee, and (ii) the payment by the
       Grantee of the Purchase Price. The Purchase Price shall be payable by
       execution and delivery by the Grantee of the Promissory Note. Such award
       is made by the Company and accepted by the Grantee pursuant to, and
       subject to the terms and conditions of, the Plan. The Grantee
       acknowledges that he has received a copy of the Plan.

4.     VESTING. Provided that the Purchaser remains continuously employed by the
       Company or another BindView Company, the Shares shall vest in accordance
       with Schedule 1.

5.     RESTRICTIONS ON TRANSFERS OF SHARES.

5.1    Unvested Shares may not be sold, transferred, assigned, pledged, or
       otherwise disposed of or encumbered, by operation of law or otherwise,
       except as expressly provided otherwise in the Plan.

5.2    In addition, no Shares may be sold, etc., even though vested, unless the
       Executive has paid the Company certain installments of principal and
       interest under the Promissory Note, as set forth in Schedule 2.

5.3    The Plan shall control in the event of the Purchaser's death or
       Disability, or termination of the Purchaser's employment for any reason.

6.     REPURCHASE OF SHARES.

6.1    During the 60-day period following the Termination Date (the "REPURCHASE
       PERIOD"), the Company shall have a "REPURCHASE RIGHT" consisting of the
       right and obligation to repurchase all of the unvested Shares, if any, at
       the Purchase Price, from (i) the Grantee, or (ii) any Immediate Family
       Member (if any) to whom any such unvested Shares have been transferred
       per Section 6.2 of the Plan.

RESTRICTED STOCK AGREEMENT 12/31/2001                                     PAGE 2

<PAGE>
                                                     GRANTEE: EDWARD L. PIERCE

6.2    The repurchase price will be paid in cash at a time set by the Company
       within thirty (30) days after the end of the Repurchase Period, provided
       that the Grantee or Immediate Family Member has executed the transfer
       documents required under applicable law.

6.3    If the Grantee or Immediate Family Member fails to execute the required
       transfer documents, then the Shares represented by such transfer
       documents shall be deemed to have been repurchased upon (a) the payment
       by the Company of the repurchase price to the Grantee or the Immediate
       Family Member, as applicable, or (b) notice to the Grantee or the
       Immediate Family Member, as applicable, that the Company is holding the
       repurchase price for the account of the Grantee or the Immediate Family
       Member. Upon such payment or notice, the Grantee and the Immediate Family
       member will have no further rights in or to such Shares.

7.     CERTAIN TAX CONSIDERATIONS.

7.1    The Grantee shall make arrangements reasonably satisfactory to the
       Company to satisfy any applicable federal, state or local withholding tax
       obligations arising with respect to the Shares. If the Grantee fails to
       satisfy any such obligations in a time and manner reasonably satisfactory
       to the Company, then the Company may withhold all required amounts from
       any compensation or other amounts which the Company is obligated to pay
       under the Employment Agreement or any other agreement between the Grantee
       and the Company.

7.2    The Grantee acknowledges that (a) the Grantee has been informed of the
       availability of making an election in accordance with Section 83(b) of
       the Internal Revenue Code of 1986, as amended; (b) such election must be
       filed with the Internal Revenue Service within a certain period of time;
       (c) the Grantee is solely responsible for making such election; and (d)
       under Section 4.6 of the Plan as in effect on the Grant Date, the Grantee
       may not make such election without written approval of the Compensation
       Committee of the Company's Board of Directors.

8.     EFFECT OF AGREEMENT ON OTHER RIGHTS.

8.1    This Agreement shall not diminish or enhance other rights which the
       Grantee (or his estate, survivors or heirs) may have under any other
       contract, employee benefit plan or policy of the Company except as
       expressly provided in this Agreement.

8.2    Nothing in this Agreement shall be deemed (i) to constitute an employment
       contract, express or implied, nor (ii) to impose any obligation on the
       Company or any affiliate thereof to employ the Grantee at all or on any
       particular terms, nor (iii) to amend any other agreement between the
       Grantee and the Company or any affiliate thereof; nor (iv) to impose any
       obligation on the Grantee to work for the Company or any affiliate
       thereof, nor (v) to limit the right of the Company to terminate the
       Grantee's employment for any reason, with or without cause, nor (vi) to
       limit the Grantee's right to resign from employment.

9.     ARBITRATION. Any dispute arising out of or relating to this Agreement or
       its validity, enforceability, or breach will be arbitrated in accordance
       with the arbitration provisions of the Employment Agreement.

RESTRICTED STOCK AGREEMENT 12/31/2001                                     PAGE 3

<PAGE>
                                                       GRANTEE: EDWARD L. PIERCE

10.    OTHER PROVISIONS. The section of the Employment Agreement entitled "Other
       Provisions" is hereby incorporated by reference into this Agreement.

RESTRICTED STOCK AGREEMENT 12/31/2001                                     PAGE 4

<PAGE>
                                                       GRANTEE: EDWARD L. PIERCE

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
                                                   SCHEDULE 1
------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                     <C>
Plan                              BindView Development Corporation
                                  Omnibus Incentive Plan
------------------------------------------------------------------------------------------------------------------
Grant Date                        December 31, 2001
------------------------------------------------------------------------------------------------------------------
Purchase Price                    Fair Market Value on the Grant Date
                                  ($1.97 per Share)
------------------------------------------------------------------------------------------------------------------
Number of Shares                  400,000
------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                VESTING SCHEDULE
                                              (four-year vesting):
------------------------------------------------------------------------------------------------------------------
             EVENT                            DATE                                  NO. OF SHARES VESTED
------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                     <C>
Vesting Start Date:               Grant Date                              None
------------------------------------------------------------------------------------------------------------------
First Vesting Date                April 30, 2001                          one-fourth (1/4) of the full
                                                                          number of Shares
------------------------------------------------------------------------------------------------------------------
Subsequent vesting dates          each three (3) months                   an additional one-sixteenth (1/16) of
                                  after the First Vesting                 the full number of Shares, until vested
                                  Date                                    as to 100% of the Shares
------------------------------------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
                                                  SCHEDULE 2
------------------------------------------------------------------------------------------------------------------
(Based on principal amount of $788,000.00 at 3% per annum, simple interest paid quarterly)
------------------------------------------------------------------------------------------------------------------
        Date        Principal     Principal Amount    Interest Due         Total Payment               Remaining
                   Portion Due          Due                                                            Balance
------------------------------------------------------------------------------------------------------------------
<S>                <C>             <C>                <C>                  <C>                        <C>
     12/31/2001           N/A              $0.00            $0.00                $0.00                 $788,000.00
------------------------------------------------------------------------------------------------------------------
      4/30/2002           1/4        $197,000.00        $7,880.00          $204,880.00                 $591,000.00
------------------------------------------------------------------------------------------------------------------
      7/31/2002          1/16         $49,250.00        $4,432.50           $53,682.50                 $541,750.00
------------------------------------------------------------------------------------------------------------------
     10/31/2002          1/16         $49,250.00        $4,063.13           $53,313.13                 $492,500.00
------------------------------------------------------------------------------------------------------------------
      1/31/2003          1/16         $49,250.00        $3,693.75           $52,943.75                 $443,250.00
------------------------------------------------------------------------------------------------------------------
      4/30/2003          1/16         $49,250.00        $3,324.38           $52,574.38                 $394,000.00
------------------------------------------------------------------------------------------------------------------
      7/31/2003          1/16         $49,250.00        $2,955.00           $52,205.00                 $344,750.00
------------------------------------------------------------------------------------------------------------------
     10/31/2003          1/16         $49,250.00        $2,585.63           $51,835.63                 $295,500.00
------------------------------------------------------------------------------------------------------------------
      1/31/2004          1/16         $49,250.00        $2,216.25           $51,466.25                 $246,250.00
------------------------------------------------------------------------------------------------------------------
      4/30/2004          1/16         $49,250.00        $1,846.88           $51,096.88                 $197,000.00
------------------------------------------------------------------------------------------------------------------
      7/31/2004          1/16         $49,250.00        $1,477.50           $50,727.50                 $147,750.00
------------------------------------------------------------------------------------------------------------------
     10/31/2004          1/16         $49,250.00        $1,108.13           $50,358.13                  $98,500.00
------------------------------------------------------------------------------------------------------------------
      1/31/2005          1/16         $49,250.00          $738.75           $49,988.75                  $49,250.00
------------------------------------------------------------------------------------------------------------------
      4/30/2005          1/16         $49,250.00          $369.38           $49,619.38                       $0.00
------------------------------------------------------------------------------------------------------------------
</Table>

THIS AGREEMENT CONTAINS PROVISIONS REQUIRING BINDING ARBITRATION OF DISPUTES,
WHICH HAVE THE EFFECT OF WAIVING EACH PARTY'S RIGHT TO A JURY TRIAL. By signing
this Agreement, the Grantee acknowledges that the Grantee (1) has read and
understood the entire Agreement; (2) has received a copy of it

RESTRICTED STOCK AGREEMENT 12/31/2001                                     PAGE 5

<PAGE>
                                                       GRANTEE: EDWARD L. PIERCE

(3) has had the opportunity to ask questions and consult counsel or other
advisors about its terms; and (4) agrees to be bound by it.

Executed to be effective December 31, 2001.

BINDVIEW CORPORATION, BY:                              GRANTEE:

---------------------------                            ------------------------
Eric J. Pulaski, Chairman,                             Edward L.  Pierce
President, and Chief
Executive Officer

RESTRICTED STOCK AGREEMENT 12/31/2001                                     PAGE 6<PAGE>
                                                                   EXHIBIT 10.35

                               SECURITY AGREEMENT

                                                               December 31, 2001

I. Parties, Collateral, and Obligations

         EDWARD L. PIERCE (hereinafter called "Debtor"), residing at 13919
Taylorcrest, Houston, Texas 77079, for valuable considerations, receipt of which
is hereby acknowledged, hereby grants to BINDVIEW DEVELOPMENT CORPORATION, a
Texas corporation (hereinafter called "Secured Party"), whose address is a 5151
San Felipe, Suite 2500, Houston, Texas 77056, a security interest in the
following property:

                  (i) all shares of capital stock of BindView Development
         Corporation, a Texas corporation ("BVEW"), now owned or hereafter
         acquired by Debtor (including, but not limited to, all shares of BVEW
         capital stock acquired by Debtor with the proceeds of the Note (as
         hereinafter defined) and all shares of BVEW capital stock acquired by
         Debtor upon the exercise of any stock options granted by BVEW to
         Debtor); (ii) all of Debtor's rights and interests in and under that
         certain Restricted Stock Agreement dated December 31, 2001, between
         BVEW and Debtor; and (iii) all of Debtor's rights and interests,
         whether now existing or hereafter acquired or arising, to acquire any
         share of capital stock of BVEW (including, but not limited to, any
         rights of Debtor under any future stock option agreements, stock option
         plans and stock incentive or compensation plans or agreements);

together with all proceeds, monies, income, investment property, revenues,
royalties, funds and benefits attributable or accruing to said property, which
Debtor is or may hereafter become entitled to receive on account of said
property, including, but not by way of limitation, all interest, premium,
redemption proceeds and other principal payments and all dividends and other
distributions on or with respect to capital stock whether payable in cash, stock
or other property and all subscription and other rights. In the event that
Debtor shall receive any of the foregoing, Debtor shall receive and hold the
same in trust for Secured Party and shall not commingle the same with other
monies or property, and Debtor shall promptly and immediately deliver same to
Secured Party. All property in which Secured Party is herein granted a security
interest is hereinafter called the "Collateral."

         The security interest granted herein secures the payment of all
liabilities, indebtedness, and obligations of Debtor to Secured Party
(hereinafter called the "Obligations") arising under and evidenced by a
promissory note of even date herewith (hereafter called the "Note") executed by
Debtor in the principal amount of $788,000.00, payable to the order of Secured
Party, and including costs and expenses and attorney's fees and legal expenses,
all in accordance with the terms of the Note and this Security Agreement, and
all renewals, extensions and rearrangements of the above Obligations. Unless
otherwise agreed, all of the Obligations shall be payable at the offices of
Secured Party in Houston, Harris County, Texas.

II. Warranties, Covenants and Agreements of the Debtor

         Debtor hereby warrants, covenants and agrees that:

<PAGE>

       (1) Except for the security interest granted hereby and the restrictions
on transfer set forth in the Restricted Stock Agreement, Debtor is the owner and
holder of all the Collateral free from any adverse claim, security interest,
encumbrance, lien, charge or any other right, title, or interest of any person
other than Secured Party; Debtor has full power and lawful authority to sell,
transfer and assign the Collateral to Secured Party and to grant to the Secured
Party a first, prior and valid security interest therein as herein provided; the
execution and delivery and the performance hereof are not in contravention of
any indenture, agreement or undertaking to which the Debtor is a party or by
which the Debtor is bound.

       (2) (a) Debtor has not heretofore signed any financing statement or
security agreement which covers any of the Collateral, and no such financing
statement or security agreement is now on file in any public office.

              (b) As long as any amount remains unpaid on any of the
Obligations, (i) Debtor will not enter into or execute any security agreement or
any financing statement which covers any of the Collateral other than those
security agreements and financing statements in favor of Secured Party
hereunder, and further (ii) there will not be on file in any public office any
financing statement or statements (or any documents or papers filed as such)
which covers any of the Collateral other than financing statements in favor of
Secured Party hereunder.

              (c) Debtor authorizes Secured Party to file, in jurisdictions
where this authorization will be given effect, a financing statement signed only
by Secured Party covering the Collateral. At the request of Secured Party,
Debtor will join Secured Party in executing such documents as Secured Party may
determine, from time to time, to be necessary or desirable under provisions of
the Uniform Commercial Code; without limiting the generality of the foregoing,
Debtor agrees to join Secured Party, at Secured Party's request, in executing
one or more financing statements in form satisfactory to Secured Party, and
Debtor will pay the cost of filing or recording the same, or of filing or
recording this Security Agreement, in all public offices at any time and from
time to time, whenever filing or recording of any such financing statement or of
this Security Agreement is deemed by Secured Party to be necessary or desirable.
In connection with the foregoing, it is agreed and understood between the
parties hereto (and Secured Party is hereby authorized to carry out and
implement the following agreements and understandings and Debtor hereby agrees
to pay the cost thereof) that Secured Party may, at any time or times, file as a
financing statement any counterpart, copy, or reproduction of this Security
Agreement signed by Debtor if Secured Party shall elect so to file, and it is
also agreed and understood that Secured Party may, if deemed necessary or
desirable, file (or sign and file) as a financing statement any carbon copy of,
or photographic or other reproduction of, this Security Agreement or of any
financing statement executed in connection with this Security Agreement.

       (3) Debtor will not sell or offer to sell or otherwise transfer or
encumber the Collateral or any interest therein without the written consent of
Secured Party; and Debtor will keep the Collateral free from any adverse, lien,
security interest, encumbrance, charges or claim.

       (4) Except as specifically otherwise permitted or provided herein, if, at
any time, the Debtor holds or has possession of the Collateral or any part
thereof, or of any other

                                                     ---------------------------
                                      -2-                        ELP
                                                     Initials for Identification

<PAGE>

goods, documents or instruments now or at any time constituting a part of the
Collateral subject to this Security Agreement, then the same shall remain in
Debtor's possession and control at all times at Debtor's risk of loss, and, if
in Debtor's possession, are now kept, and at all times shall be kept, at the
address given in the blank below:

or if left blank at the address first shown for Debtor at the beginning of this
Security Agreement; and in any event Debtor will promptly notify Secured Party
of any change in any of such addresses and of any new addresses where the
Collateral or any such goods, documents or instruments are or may be kept and of
any other change in the above-identified location of all or any part of the
Collateral, and Debtor will not move or remove the Collateral or such goods,
documents, or instruments, or any part thereof, from the addresses and places
described and specified above without the prior written consent of Secured
Party.

       (5) All information supplied and statements made by Debtor in any
financial, credit or accounting statement or application for credit made or
delivered to Secured Party by or on behalf of Debtor prior to, contemporaneously
with or subsequent to the execution of this Security Agreement are and shall be
true, correct, complete, valid and genuine.

       (6) Debtor will, upon the execution of this Security Agreement by Debtor,
deliver, or cause to be delivered, to Secured Party the instruments, securities,
documents, and chattel paper subject to this Security Agreement; furthermore, if
any instruments, securities, chattel paper, money or monies, or documents are,
at any time or times, included in the Collateral, whether as proceeds or
otherwise, Debtor will promptly deliver the same to Secured Party upon the
receipt thereof by Debtor, and in any event promptly upon demand therefor by
Secured Party.

III. Events of Default

       Debtor shall be in default under this Security Agreement upon the
happening of any of the following events or conditions (each an "Event of
Default"):

       (1) Default in the payment when due of the principal of, or interest on,
the Note or of any other of the Obligations;

       (2) Default in the performance of any agreement or obligation of Debtor
to the holder of the Obligations;

       (3) Any warranty, representation or statement made in this Security
Agreement or made or furnished to Secured Party by or on behalf of Debtor in
connection with this Security Agreement or to induce Secured Party to make any
loan to Debtor proves to have been false in any material respect when made or
furnished; or any financial statement of Debtor or of any endorser, guarantor or
surety on any of the Obligations which has been or may be furnished to Secured
Party by or on behalf of Debtor or such guarantor, endorser or surety shall
prove to be false in any materially detrimental respect;

                                                     ---------------------------
                                      -3-                        ELP
                                                     Initials for Identification

<PAGE>

       (4) The levy of any attachment, execution, or other process against
Debtor or any of the Collateral;

       (5) Death, insolvency or business failure of Debtor, or the commission of
any act of bankruptcy by, or the appointment of receiver or other legal
representative for any part of the property of, assignment for the benefit of
creditors by, or the commencement of any proceedings under any bankruptcy or
insolvency law by or against, Debtor;

       (6) Failure or refusal of Debtor to perform or observe any of the
covenants, duties or agreements herein imposed upon or agreed to be performed or
observed by Debtor;

       (7) The occurrence of any "Event of Default" as such term is defined in
the Note.

IV. Remedies

       (1) In the event of the default in the payment of any of the Obligations
or any principal, interest or other amount payable thereunder, when due, or upon
the happening of any of the Events of Default specified above, and at any time
thereafter, at the option of the holder thereof, any or all of the Obligations
shall become immediately due and payable without presentment or demand or any
notice to the Debtor or any other person obligated thereon and Secured Party
shall have and may exercise with reference to the Collateral and Obligations any
or all of the rights and remedies of a secured party under the Uniform
Commercial Code as adopted and as amended in the State of Texas, and as
otherwise granted herein or under any other law or under any other agreement
executed by Debtor, including, without limitation, the right and power to sell,
at public or private sale or sales, or otherwise dispose of or utilize the
Collateral and any part or parts thereof in any manner authorized or permitted
under said Uniform Commercial Code after default by a debtor, and to apply the
proceeds thereof toward payment of any costs and expenses and attorney's fees
and legal expenses thereby incurred by Secured Party and toward payment of the
Obligations in such order or manner as Secured Party may elect. To the extent
permitted by law, Debtor expressly waives any notice of sale or other
disposition of the Collateral and any other rights or remedies of Debtor or
formalities prescribed by law relative to sale or disposition of the Collateral
or exercise of any other right or remedy of Secured Party existing after default
hereunder; and to the extent any such notice is required and cannot be waived,
Debtor agrees that if such notice is mailed, postage prepaid, to Debtor either
at the street address first shown hereinabove or at the mailing address, if any,
shown for Debtor at the beginning of this Security Agreement at least five days
before the time of the sale or disposition, such notice shall be deemed
reasonable and shall fully satisfy any requirement for giving of notice.

       (2) Secured Party is expressly granted the right, at its option, to
transfer at any time to itself or to its nominee the Collateral, or any part
thereof, and to receive the monies, income, proceeds or benefits attributable or
accruing thereto and to hold the same as security for the Obligations or to
apply the same on the principal and interest or other amounts owing on any of
the Obligations, whether or not then due, in such order or manner as Secured
Party may elect.

                                                     ---------------------------
                                      -4-                        ELP
                                                     Initials for Identification

<PAGE>

Secured Party is further expressly granted the rights, exercisable at its option
at any time, whether before or after default, to take control of any proceeds,
payments, monies, income, collections or benefits and to notify account debtors,
lessees, obligors on any instruments or other obligors to make all payments
directly to Secured Party on any and all accounts, leases, instruments, or
obligations, constituting, at any time or from time to time, a part of the
Collateral and to make payment directly to Secured Party of all such income,
monies, proceeds or other benefits; and Debtor will, upon request of Secured
Party, so notify all such account debtors, lessees or obligors.

       (3) All recitals in any instrument of assignment or any other instrument
executed by Secured Party incident to sale, transfer, assignment or other
disposition or utilization of the Collateral or any part thereof hereunder shall
be full proof of the matters stated therein and no other proof shall be
requisite to establish full legal propriety of the sale or other action taken by
Secured Party or of any fact, condition or thing incident thereto and all
prerequisites of such sale or other action or of any fact, condition or thing
incident thereto shall be presumed conclusively to have been performed or to
have occurred.

       (4) All rights to marshalling of assets of Debtor, including any such
right with respect to the Collateral, are hereby waived by Debtor.

       (5) The right of Secured Party to take possession or control of the
Collateral upon the happening of any of the events or conditions constituting a
default may be exercised without resort to any court proceeding or judicial
process whatever and without any hearing whatever thereon; and, in this
connection, DEBTOR EXPRESSLY WAIVES ANY CONSTITUTIONAL RIGHTS OF DEBTOR WITH
REGARD TO NOTICE, ANY JUDICIAL PROCESS OR ANY HEARING PRIOR TO THE EXERCISE OF
THE RIGHT OF SECURED PARTY TO TAKE POSSESSION OR CONTROL OF THE COLLATERAL UPON
THE HAPPENING OF ANY OF THE EVENTS OR CONDITIONS CONSTITUTING A DEFAULT.

V. General

       (1) Secured Party may, at its option, whether or not the Obligations are
due, demand, sue for, collect or make any compromise or settlement it deems
desirable with reference to the Collateral. Secured Party shall not be obligated
to take any steps necessary to preserve any rights in the Collateral against
other parties, which Debtor hereby assumes to do.

       (2) This Security Agreement shall not be construed as relieving Debtor
from full personal liability on the Obligations and any and all future and other
indebtedness secured hereby and for any deficiency thereon.

       (3) If maturity of the Obligations shall be accelerated for any reason,
the full amount of any interest then unearned which has been collected
theretofore by or for Secured Party shall thereupon be credited against the
Obligations. Notwithstanding any other provision in this Security Agreement or
in the Obligations or any of them, Debtor shall never be liable for

                                                     ---------------------------
                                      -5-                        ELP
                                                     Initials for Identification

<PAGE>

unearned interest on the Obligations, or on any of them, and shall further never
be required to pay interest on the Obligations, or on any of them, at a rate in
excess of the maximum percentage rate authorized and allowed by applicable law.
The intent of the parties being to conform and comply fully with all laws
concerning usury applicable hereto or to the Obligations or any part thereof,
any agreement concerning interest in any of the foregoing shall be subject to
reduction to the amount allowed under the applicable laws with respect to usury,
as now or hereafter construed by the courts with jurisdiction thereof, and any
interest collected in excess of the amount authorized and permitted by such laws
shall be refunded to the person paying the same, or credited against the
Obligations.

       (4) No delay or omission on the part of Secured Party in exercising any
right hereunder shall operate as a waiver of any such right or any other right.
A waiver on any one or more occasions shall not be construed as a bar to or
waiver of any right or remedy on any future occasion.

       (5) The execution and delivery of this Security Agreement in no manner
shall impair or affect any other security (by endorsement or otherwise) for the
payment of the Obligations and no security taken hereafter as security for
payment of any part or all of the Obligations shall impair in any manner or
affect this Security Agreement, all such present and future additional security
to be considered as cumulative security. Any of the Collateral may be released
from this Security Agreement without altering, varying or diminishing in any way
the force, effect, lien, security interest, or charge of this Security Agreement
as to the Collateral not expressly released, and this Security Agreement shall
continue as a first lien, security interest and charge on all of the Collateral
not expressly released until all sums and indebtedness secured hereby have been
paid in full. Any future assignment or attempted assignment or transfer of the
interest of Debtor in and to any of the Collateral shall not deprive Secured
Party of the right to sell or otherwise dispose of or utilize all of the
Collateral as above provided or necessitate the sale or disposition thereof in
parcels or in severalty.

       (6) Any notice or demand to Debtor hereunder or in connection herewith
may be given and shall conclusively be deemed and considered to have been given
and received upon the deposit thereof, in writing, in the United States mails,
duly stamped and addressed to Debtor either at the street address first shown
hereinabove or at the mailing address, if any, given for Debtor at the beginning
of this Security Agreement; but actual notice, however given or received, shall
always be effective.

       (7) All rights of Secured Party hereunder shall inure to the benefit of
its successors and assigns; and all obligations of Debtor shall bind his heirs,
executors, or administrators, and his or its successors or assigns. If there be
more than one Debtor, their obligations hereunder shall be joint and several.

       (8) Each term used in this Security Agreement, unless the context
otherwise requires, and in all events subject to any express definitions set
forth in this Security Agreement, shall be deemed to have the same meaning
herein as that given each such term under the Uniform Commercial Code, as
adopted and as amended in the State of Texas.

                                                     ---------------------------
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                                                     Initials for Identification

<PAGE>

       (9) As used in this Security Agreement and when required by the context,
each number (singular and plural) shall include all numbers, and each gender
shall include all genders; and unless the context otherwise requires, the word
"person" shall include "corporation, firm or association."

       (10) The law governing this secured transaction shall be that of the
State of Texas existing as of the date hereof; provided, that if any additional
rights or remedies are granted by the law of Texas to secured parties or to
persons similarly situated to Secured Party, then Secured Party shall also have
and may exercise any such additional rights or remedies. Signed in multiple
original counterparts and delivered on the day and year first above written.

                                       ----------------------------------------
                                                  Edward L. Pierce

       The undersigned is the spouse of Debtor and in such capacity executes the
Security Agreement for the purpose of binding any and all rights (including
spousal rights and community property rights) that she may have in the
Collateral.

                                       ----------------------------------------
                                       Signature

                                       ----------------------------------------
                                       Printed name

                                       ----------------------------------------

                                                     ---------------------------
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                                                     Initials for Identification

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