Document:

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           EXHIBIT 10(z) TO FRONTSTEP, INC. ANNUAL REPORT ON FORM 10-K

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                    PLEDGE AND SECURITY AGREEMENT (DOMESTIC)
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                  PLEDGE AND SECURITY AGREEMENT dated July 17, 2001 (this
"AGREEMENT"), made by Frontstep, Inc., an Ohio corporation (the "PARENT"), and
Frontstep Solutions Group, Inc., an Ohio corporation ("SOLUTIONS" and, together
with the Parent, individually a "PLEDGOR" and collectively the "PLEDGORS"), in
favor of Foothill Capital Corporation, as agent for the Lenders party to the
Loan Agreement referred to below (in such capacity, the "Agent").

                                   WITNESSETH:
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                  WHEREAS, the Pledgors, brightwhite solutions, inc., Frontstep
Canada, Inc. (together with the Pledgors, the "BORROWERS"), the lenders from
time to time party thereto (the "LENDERS") and the Agent, are parties to a Loan
and Security Agreement, dated as of July 17, 2001 (such Agreement, as amended,
restated or otherwise modified from time to time, being hereinafter referred to
as the "LOAN AGREEMENT");

                  WHEREAS, pursuant to the Loan Agreement, the Lenders have
agreed to make loans (each a "LOAN" and collectively the "LOANS") to the
Borrowers in an aggregate principal amount at any one time outstanding not to
exceed the Maximum Revolver Amount (as defined in the Loan Agreement);

                  WHEREAS, it is a condition precedent to the making of any Loan
pursuant to the Loan Agreement that each Pledgor shall have executed and
delivered to the Agent a pledge and security agreement providing for the pledge
to the Agent for the benefit of the Lenders of, and the grant to the Agent for
the benefit of the Lenders of a security interest in, certain indebtedness from
time to time owing to any Pledgor and certain of the outstanding shares of
capital stock from time to time owned by each Pledgor of each Subsidiary and
other corporation now or hereafter existing and in which such Pledgor has any
interest at any time;

                  WHEREAS, the Pledgors are mutually dependent on each other in
the conduct of their respective businesses as an integrated operation, with the
credit needed from time to time by each Pledgor often being provided through
financing obtained by the other Pledgor and the ability to obtain such financing
being dependent on the successful operations of all of the Pledgors as a whole;
and

                  WHEREAS, each Pledgor has determined that the execution,
delivery and performance of this Agreement directly benefits, and are in the
best interest of such Pledgor;

                  NOW, THEREFORE, in consideration of the premises and the
agreements herein and in order to induce the Lenders to make and maintain the
Loans pursuant to the Loan Agreement, the Pledgors hereby jointly and severally
agree with the Agent as follows:

                  SECTION 1. DEFINITIONS. All terms used in this Agreement which
are defined in the Loan Agreement or in Article 8 or Article 9 of the Uniform
Commercial Code (the

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"CODE") currently in effect in the State of New York and which are not otherwise
defined herein shall have the same meanings herein as set forth therein.

                  SECTION 2. PLEDGE AND GRANT OF SECURITY INTEREST. As
collateral security for all of the Obligations (as defined in Section 3 hereof),
each Pledgor hereby pledges and assigns to the Agent, and grants to the Agent
for the benefit of the Lenders a continuing security interest in, the following
(the "PLEDGED COLLATERAL"):

                  (a) the indebtedness described in Schedule I hereto and all
indebtedness from time to time required to be pledged to the Agent pursuant to
the terms of the Loan Agreement (the "PLEDGED DEBT"), the promissory notes and
other instruments evidencing the Pledged Debt and all interest, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Debt;

                  (b) the shares of stock and other equity interests described
in Schedule II hereto (the "PLEDGED SHARES") whether or not evidenced or
represented by any stock certificate, certificated security or other instrument,
issued by the corporations, limited partnerships and limited liability companies
described in such Schedule II (the "EXISTING SUBSIDIARIES"), the certificates
(if any) representing the Pledged Shares, all options and other rights,
contractual or otherwise, in respect thereof and all dividends, distributions,
cash, instruments, investment property and other property (including but not
limited to, any stock dividend and any distribution in connection with a stock
split) from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;

                  (c) the shares of stock, partnership interests, member
interests and other equity interests and all other shares of stock, partnership
interests, member interests and other equity interests now or hereafter owned by
any Pledgor and issued by any Subsidiary of a Pledgor that is organized under
the laws of any state of the United States of America and by any other
corporation, partnership, limited liability company, trust or any other Person
organized under the laws of any state of the United States of America (together
with the Existing Subsidiaries, collectively, the "ISSUERS"), whether or not
evidenced or represented by any stock certificate, certificated security or
other instrument and whether now or hereafter owned by a Pledgor (together with
the Pledged Shares, collectively, the "PLEDGED SECURITIES"), the certificates
(if any) representing the Pledged Securities, shares or other interests, all
options and other rights, contractual or otherwise, in respect thereof and all
dividends, distributions, cash, instruments, investment property and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Securities and such
other shares and interests;

                  (d) all additional shares of stock or other equity interests,
from time to time acquired by any Pledgor, of any Issuer, the certificates (if
any) representing such additional shares, all options and other rights,
contractual or otherwise, in respect thereof and all dividends, distributions,
cash, instruments, investment property and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such additional shares;

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                  (e) all security entitlements of any Pledgor in any and all of
the foregoing; and

                  (f) all proceeds of any and all of the foregoing;

in each case, whether now owned or hereafter acquired by any Pledgor and
howsoever its interest therein may arise or appear (whether by ownership,
security interest, claim or otherwise).

                  SECTION 3. SECURITY FOR OBLIGATIONS. The security interest
created hereby in the Pledged Collateral constitutes continuing collateral
security for all of the following obligations, whether now existing or hereafter
incurred (the "OBLIGATIONS"):

                  (a) the prompt payment by each Pledgor, as and when due and
payable (by scheduled maturity, required prepayment, acceleration, demand or
otherwise), of all amounts from time to time owing by it in respect of the Loan
Agreement and the other Loan Documents, including, without limitation, principal
of and interest on the Loans (including, without limitation, all interest that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of any Pledgor, whether or not
the payment of such interest is unenforceable or is not allowable due to the
existence of such case, proceeding or other action), all fees, commissions,
expense reimbursements, indemnifications and all other amounts due or to become
due under any Loan Document; and

                  (b) the due performance and observance by each Pledgor of all
of its other obligations from time to time existing in respect of the Loan
Agreement and all other Loan Documents.

                  SECTION 4. DELIVERY OF THE PLEDGED COLLATERAL.

                  (a) (i) All promissory notes currently evidencing the Pledged
Debt and all certificates currently representing the Pledged Securities shall be
delivered to the Agent on or prior to the execution and delivery of this
Agreement. All other promissory notes, certificates and instruments constituting
Pledged Collateral from time to time or required to be pledged to the Agent
pursuant to the terms of this Agreement or the Loan Agreement (the "ADDITIONAL
COLLATERAL") shall be delivered to the Agent promptly upon the receipt thereof
by or on behalf of a Pledgor. All such promissory notes, certificates and
instruments shall be held by or on behalf of the Agent pursuant hereto and shall
be delivered in suitable form for transfer by delivery or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Agent. If any Pledged Collateral
consists of uncertificated securities, the relevant Pledgor shall cause the
Agent (or its designated custodian or nominee) to become the registered holder
thereof, or cause each issuer of such securities to agree that it will comply
with instructions originated by the Agent with respect to such securities
without further consent by such Pledgor. If any Pledged Collateral consists of
security entitlements, the relevant Pledgor shall transfer such security
entitlements to the Agent (or its custodian, nominee or other designee ), or
cause the applicable securities intermediary to agree that it will comply with
entitlement orders by the Agent without further consent by such Pledgor.

                           (ii)  Within 5 Business Days of the receipt by a
Pledgor of any Additional Collateral, a Pledge Amendment, duly executed by such
Pledgor, in substantially the form of

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Schedule III hereto (a "PLEDGE AMENDMENT") shall be delivered to the Agent, in
respect of the Additional Collateral which must be pledged pursuant to this
Agreement and the Loan Agreement, which Pledge Amendment shall from and after
delivery thereof constitute part of Schedules I or II hereto, as the case may
be. Each Pledgor hereby authorizes the Agent to attach each Pledge Amendment to
this Agreement and agrees that all promissory notes, certificates or instruments
listed on any Pledge Amendment delivered to the Agent shall for all purposes
hereunder constitute Pledged Collateral and such Pledgor shall be deemed upon
delivery thereof to have made the representations and warranties set forth in
Section 5 with respect to such Additional Collateral.

                  (b) If any Pledgor shall receive, by virtue of its being or
having been an owner of any Pledged Collateral, any (i) stock certificate
(including, without limitation, any certificate representing a stock dividend or
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off), promissory note or other instrument, (ii)
option or right, whether as an addition to, substitution for, or in exchange
for, any Pledged Collateral, or otherwise, (iii) dividends payable in cash
(except such dividends permitted to be retained by a Pledgor pursuant to Section
7 hereof) or in securities or other property or (iv) dividends or other
distributions in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in
surplus, such Pledgor shall receive such stock certificate, promissory note,
instrument, option, right, payment or distribution in trust for the benefit of
the Agent, shall segregate it from such Pledgor's other property and shall
deliver it forthwith to the Agent in the exact form received, with any necessary
indorsement and/or appropriate stock powers duly executed in blank, to be held
by the Agent for the benefit of the Lenders as Pledged Collateral and as further
collateral security for the Obligations.

                  SECTION 5. REPRESENTATIONS AND WARRANTIES. Each Pledgor
jointly and severally represents and warrants as follows:

                  (a) The Pledged Securities have been duly authorized and
validly issued, are fully paid and nonassessable and, except as noted in
Schedule II hereto, constitute 100% of the issued shares of capital stock of the
applicable Issuer as of the date hereof. All other shares of stock constituting
Pledged Collateral will be, when issued, duly authorized and validly issued,
fully paid and nonassessable.

                  (b) The promissory notes currently evidencing the Pledged Debt
have been, and all other promissory notes from time to time evidencing Pledged
Debt, when executed and delivered, will have been, duly authorized, executed and
delivered by the respective makers thereof, and all such promissory notes are or
will be, as the case may be, legal, valid and binding obligations of such
makers, enforceable against such makers in accordance with their respective
terms, except as may be limited by equitable principles or by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws.

                  (c) The Pledgors are and will be at all times the legal and
beneficial owners of the Pledged Collateral free and clear of any Lien, security
interest, option or other charge or encumbrance except for the security interest
created by this Agreement and other Permitted Liens.

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                  (d) The exercise by the Agent of any of its rights and
remedies hereunder will not contravene any law or any contractual restriction
binding on or affecting any Pledgor or any of its properties and will not result
in or require the creation of any Lien, security interest or other charge or
encumbrance upon or with respect to any of its properties other than pursuant to
this Agreement.

                  (e) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required to be obtained
or made for (i) the due execution, delivery and performance by any Pledgor of
this Agreement, (ii) the grant by any Pledgor, or the perfection, of the
security interest purported to be created hereby in the Pledged Collateral or
(iii) the exercise by the Agent of any of its rights and remedies hereunder,
except as may be required in connection with any sale of any Pledged Collateral
by laws affecting the offering and sale of securities generally.

                  (f) This Agreement creates a valid security interest in favor
of the Agent in the Pledged Collateral, as security for the Obligations. The
Agent's having possession of the promissory notes evidencing the Pledged Debt,
the certificates representing the Pledged Securities and all other certificates,
instruments and cash constituting Pledged Collateral from time to time results
in the perfection of such security interest. Such security interest is, or in
the case of Pledged Collateral constituting certificates, instruments and/or
cash in which the Pledgor obtains rights after the date hereof, will be, a
perfected, first priority security interest. All action necessary or desirable
to perfect and protect such security interest has been duly taken, except for
the Agent's having possession of certificates, instruments and cash constituting
Pledged Collateral after the date hereof.

                  SECTION 6. COVENANTS AS TO THE PLEDGED COLLATERAL. So long as
any of the Obligations shall remain outstanding or any Commitment shall have not
been terminated, each Pledgor will, unless the Agent shall otherwise consent in
writing:

                  (a) keep adequate records concerning the Pledged Collateral
and permit the Agent or any agents or representatives thereof from time to time
as permitted by the Loan Agreement to examine and make copies of and abstracts
from such records;

                  (b) at its expense, promptly deliver to the Agent a copy of
each material notice or other material communication received by it in respect
of the Pledged Collateral;

                  (c) at its expense, defend the Agent's right, title and
security interest in and to the Pledged Collateral against the claims of any
Person;

                  (d) at its expense, at any time and from time to time,
promptly execute and deliver all further instruments and documents and take all
further action that may be reasonably necessary or desirable or that the Agent
may reasonably request in order to (i) perfect and protect the security interest
purported to be created hereby, (ii) enable the Agent to exercise and enforce
its rights and remedies hereunder in respect of the Pledged Collateral or (iii)
otherwise effect the purposes of this Agreement, including, without limitation,
delivering to the Agent irrevocable proxies in respect of the Pledged
Collateral;

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                  (e) not sell, assign (by operation of law or otherwise),
exchange or otherwise dispose of any Pledged Collateral or any interest therein
except as permitted by Section 7(a)(i) hereof and by the Loan Agreement;

                  (f) not create or suffer to exist any Lien, security interest
or other charge or encumbrance upon or with respect to any Pledged Collateral
except for the security interest created hereby or other Permitted Liens;

                  (g) not make or consent to any amendment or other modification
or waiver with respect to any Pledged Collateral or enter into any agreement or
permit to exist any restriction with respect to any Pledged Collateral except
pursuant to or as otherwise permitted under the Loan Documents;

                  (h) except as otherwise permitted under the Loan Agreement,
not permit the issuance by any Subsidiary of (i) any additional shares of any
class of capital stock of any Issuer that is a Subsidiary, (ii) any securities
convertible voluntarily by the holder thereof or automatically upon the
occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such shares of capital stock or (iii) any warrants, options, contracts
or other commitments entitling any Person to purchase or otherwise acquire any
such shares of capital stock; and

                  (i) not take or fail to take any action which would in any
manner impair the enforceability of the Agent's security interest in any Pledged
Collateral.

                  SECTION 7. VOTING RIGHTS, DIVIDENDS, ETC. IN RESPECT OF THE
PLEDGED COLLATERAL.

                  (a) So long as no Event of Default shall have occurred and be
continuing:

                      (i) the Pledgors may exercise any and all voting and other
consensual rights pertaining to any Pledged Collateral for any purpose not
inconsistent with the terms of this Agreement, the Loan Agreement or the other
Loan Documents; PROVIDED, HOWEVER, that (A) no Pledgor will exercise or refrain
from exercising any such right, as the case may be, if the Agent gives a Pledgor
notice that, in the Agent's reasonable judgment, such action is reasonably
likely to have a Material Adverse Effect unless the Parent's Board of Directors
has authorized such right and (B) each Pledgor will give the Agent at least 5
Business Days' notice of the manner in which it intends to exercise, or the
reasons for refraining from exercising, any such right which is reasonably
likely to have a Material Adverse Effect;

                      (ii) the Pledgors may receive and retain any and all
dividends, interest or other distributions paid in respect of the Pledged
Collateral to the extent permitted by the Loan Agreement; PROVIDED, HOWEVER,
that any and all (A) dividends and interest paid or payable other than in cash
in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable in cash in respect of any
Pledged Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in surplus, and (C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral, together with any
dividend, distribution or interest

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payment which at the time of such dividend, distribution or interest payment was
not permitted by the Loan Agreement shall be, and shall forthwith be delivered
to the Agent to hold as, Pledged Collateral and shall, if received by a Pledgor,
be received in trust for the benefit of the Agent, shall be segregated from the
other property or funds of such Pledgor, and shall be forthwith delivered to the
Agent in the exact form received with any necessary indorsement and/or
appropriate stock powers duly executed in blank, to be held by the Agent as
Pledged Collateral and as further collateral security for the Obligations; and

                      (iii) the Agent will execute and deliver (or cause to be
executed and delivered) to a Pledgor all such proxies and other instruments as
such Pledgor may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and other rights which it is entitled to exercise pursuant
to paragraph (i) of this Section 7(a) and to receive the dividends which it is
authorized to receive and retain pursuant to paragraph (ii) of this Section
7(a).

                  (b) Upon the occurrence and during the continuance of an Event
of Default:

                      (i) all rights of the Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to paragraph (i) of subsection (a) of this Section 7, and to receive
the dividends and interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (ii) of subsection (a) of this Section
7, shall cease, and all such rights shall thereupon become vested in the Agent
which shall thereupon have the sole right to exercise such voting and other
consensual rights and to receive and hold as Pledged Collateral such dividends
and interest payments;

                      (ii) the Agent is authorized to notify each debtor with
respect to the Pledged Debt to make payment directly to the Agent and may
collect any and all monies due or to become due to any Pledgor in respect of the
Pledged Debt and each Pledgor hereby authorizes each such debtor to make such
payment directly to the Agent without any duty of inquiry;

                      (iii) without limiting the generality of the foregoing,
the Agent may at its option exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any of the
Pledged Collateral as if it were the absolute owner thereof, including, without
limitation, the right to exchange, in its discretion, any and all of the Pledged
Collateral upon the merger, consolidation, reorganization, recapitalization or
other adjustment of any Issuer, or upon the exercise by any Issuer of any right,
privilege or option pertaining to any Pledged Collateral, and, in connection
therewith, to deposit and deliver any and all of the Pledged Collateral with any
committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine; and

                      (iv) all dividends, distributions, interest and other
payments which are received by any Pledgor contrary to the provisions of
paragraph (i) of this Section 7(b) shall be received in trust for the benefit of
the Agent, shall be segregated from other funds of such Pledgor, and shall be
forthwith paid over to the Agent as Pledged Collateral in the exact form
received with any necessary indorsement and/or appropriate stock powers duly
executed in blank, to be held by the Agent as Pledged Collateral and as further
collateral security for the Obligations.

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                  SECTION 8. ADDITIONAL PROVISIONS CONCERNING THE PLEDGED
COLLATERAL.

                  (a) Each Pledgor hereby authorizes the Agent to file, without
the signature of any Pledgor where permitted by law, one or more financing or
continuation statements, and amendments thereto, relating to the Pledged
Collateral.

                  (b) Each Pledgor hereby irrevocably appoints the Agent as its
attorney-in-fact and proxy, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor or otherwise, from time to time in the
Agent's discretion after the occurrence and during the continuance of an Event
of Default, to take any action and to execute any instrument which the Agent may
deem reasonably necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of such Pledgor under Section 7(a) hereof),
including, without limitation, to receive, indorse and collect all instruments
made payable to the Pledgor representing any dividend, interest payment or other
distribution in respect of any Pledged Collateral and to give full discharge for
the same. This power is coupled with an interest and is irrevocable until all of
the Obligations are paid in full after all Commitments have been terminated.

                  (c) If any Pledgor fails to perform any agreement or
obligation contained herein, the Agent itself may perform, or cause performance
of, such agreement or obligation, and the expenses of the Agent incurred in
connection therewith shall be jointly and severally payable by the Pledgors
pursuant to Section 10 hereof and shall be secured by the Pledged Collateral.

                  (d) Other than the exercise of reasonable care to assure the
safe custody of the Pledged Collateral while held hereunder, the Agent shall
have no duty or liability to preserve rights pertaining thereto and shall be
relieved of all responsibility for the Pledged Collateral upon surrendering it
or tendering surrender of it to the Pledgor. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it being
understood that the Agent shall not have responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relating to any Pledged Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters, or (ii) taking any necessary
steps to preserve rights against any parties with respect to any Pledged
Collateral.

                  (e) The powers conferred on the Agent hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Agent shall have no duty as to any Pledged Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Pledged Collateral.

                  (f) The Agent may at any time in its discretion after the
occurrence and during the continuance of an Event of Default (i) without notice
to any Pledgor, transfer or register in the name of the Agent or any of its
nominees any or all of the Pledged Collateral, subject only to the revocable
rights of the Pledgors under Section 7(a) hereof, and (ii) exchange

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certificates or instruments constituting Pledged Collateral for certificates or
instruments of smaller or larger denominations.

                  SECTION 9. REMEDIES UPON DEFAULT. If any Event of Default
shall have occurred and be continuing:

                  (a) The Agent may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party on
default under the Code then in effect in the State of New York; and without
limiting the generality of the foregoing and without notice except as specified
below, sell the Pledged Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Agent may deem commercially
reasonable. Each Pledgor agrees that, to the extent notice of sale shall be
required by law, at least 10 days' notice to such Pledgor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been given. The
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.

                  (b) Each Pledgor recognizes that it may be impracticable to
effect a public sale of all or any part of the Pledged Securities or any other
securities constituting Pledged Collateral and that the Agent may, therefore,
determine to make one or more private sales of any such securities to a
restricted group of purchasers who will be obligated to agree, among other
things, to acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable to the
seller than the prices and other terms which might have been obtained at a
public sale and, notwithstanding the foregoing, agrees that such private sales
shall be deemed to have been made in a commercially reasonable manner and that
the Agent shall have no obligation to delay sale of any such securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933, as amended
(the "SECURITIES ACT"). Each Pledgor further acknowledges and agrees that any
offer to sell such securities which has been (i) publicly advertised on a bona
fide basis in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such an offer may
be so advertised without prior registration under the Securities Act) or (ii)
made privately in the manner described above to not less than fifteen BONA FIDE
offerees shall be deemed to involve a "public disposition" for the purposes of
Section 9-610 of the Code (or any successor or similar, applicable statutory
provision) as then in effect in the State of New York, notwithstanding that such
sale may not constitute a "public offering" under the Securities Act, and that
the Agent may, in such event, bid for the purchase of such securities.

                  (c) Any cash held by the Agent as Pledged Collateral and all
cash proceeds received by the Agent in respect of any sale of, collection from,
or other realization upon, all or any part of the Pledged Collateral may, in the
discretion of the Agent, be held by the Agent as collateral for, and/or then or
at any time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 10 hereof) in whole or in part by the Agent against,
all

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or any part of the Obligations in accordance with Section 2.4(b) of the Loan
Agreement. Any surplus of such cash or cash proceeds held by the Agent and
remaining after payment in full of all of the Obligations after all Commitments
have been terminated shall be paid over to the Pledgors or to such Person as may
be lawfully entitled to receive such surplus.

                  (d) In the event that the proceeds of any such sale,
collection or realization are insufficient to pay all amounts to which the Agent
and the Lenders are legally entitled, the Pledgors shall be jointly and
severally liable for the deficiency, together with interest thereon at the
highest rate specified in the Loan Agreement for interest on overdue principal
thereof or such other rate as shall be fixed by applicable law, together with
the costs of collection and the reasonable fees, costs and expenses of any
attorneys employed by the Agent to collect such deficiency.

                  SECTION 10. INDEMNITY AND EXPENSES.

                  (a) Each Pledgor jointly and severally agrees to indemnify and
hold the Agent harmless from and against any and all claims, damages, losses,
liabilities, obligations, penalties, reasonable costs and expenses (including,
without limitation, reasonable legal fees and disbursements of the Agent's
counsel) to the extent that they arise out of or otherwise result from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting solely and directly from the Agent's
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.

                  (b) The Pledgors jointly and severally agree that upon demand
the Pledgors will pay to the Agent the amount of any and all reasonable
out-of-pocket costs and expenses, including the reasonable fees and
disbursements of the Agent's counsel and of any experts and agents, which the
Agent may incur in connection with (i) the preparation, negotiation, execution,
delivery, recordation, administration, amendment, waiver or other modification
or termination of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
the Agent hereunder, or (iv) the failure by any Pledgor to perform or observe
any of the provisions hereof.

                  SECTION 11. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied or delivered, if
to a Pledgor or to the Agent, to such Person at its address specified in the
Loan Agreement; or as to any such Person at such other address as shall be
designated by such Person in a written notice to such other Persons complying as
to delivery with the terms of this Section 11. All such notices and other
communications shall be effective (i) if sent by certified mail, return receipt
requested, when received or 3 Business Days after mailing, whichever first
occurs, (ii) if telecopied, when transmitted and confirmation is received, if
transmitted on a Business Day and, if not, on the next Business Day or (iii) if
delivered, upon delivery, if delivered on a Business Day and, if not, on the
next Business Day.

                                      -10-
<PAGE>   12

                  SECTION 12. MISCELLANEOUS.

                  (a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by each Pledgor and the Agent, and
no waiver of any provision of this Agreement, and no consent to any departure by
any Pledgor therefrom, shall be effective unless it is in writing and signed by
the Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

                  (b) No failure on the part of the Agent to exercise, and no
delay in exercising, any right hereunder or under any other Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the Agent or any Lender provided herein
and in the other Loan Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights of the Agent
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agent to exercise any of its rights under any
other Loan Document against such party or against any other Person, including
but not limited to, any Pledgor.

                  (c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.

                  (d) This Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) remain in full force and effect until
the payment in full or release of the Obligations after all Commitments have
been terminated and (ii) be binding on each Pledgor and its successors and
assigns and shall inure, together with all rights and remedies of the Agent and
the Lenders hereunder, to the benefit of the Agent and the Lenders and their
respective successors, transferees and assigns. Without limiting the generality
of clause (ii) of the immediately preceding sentence, the Agent and the Lenders
may assign or otherwise transfer their rights and obligations under this
Agreement and any other Loan Document to any other Person in accordance with
Section 14.1 of the Loan Agreement, and such other Person shall thereupon become
vested with all of the benefits in respect thereof granted to the Agent and the
Lenders herein or otherwise. Upon any such assignment or transfer, all
references in this Agreement to the Agent or any Lender shall mean the assignee
of the Agent or such Lender. None of the rights or obligations of the Pledgor
hereunder may be assigned or otherwise transferred without the prior written
consent of the Agent, and any such assignment or transfer shall be null and
void.

                  (e) Upon the satisfaction in full of the Obligations after the
all Commitments have been terminated, (i) this Agreement and the security
interests created hereby shall terminate and all rights to the Pledged
Collateral shall revert to the Pledgors, and (ii) the Agent will, upon the
Pledgors' request and at the Pledgors' expense, (A) return to the Pledgors such
of the Pledged Collateral as shall not have been sold or otherwise disposed of
or applied pursuant to the terms hereof, and (B) execute and deliver to the
Pledgors, without recourse, representation or warranty, such documents as the
Pledgors shall reasonably request to evidence such termination.

                                      -11-
<PAGE>   13

                  (f) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except as required by
mandatory provisions of law and except to the extent that the validity and
perfection or the perfection and the effect of perfection or non-perfection of
the security interest created hereby, or remedies hereunder, in respect of any
particular Pledged Collateral are governed by the law of a jurisdiction other
than the State of New York.

                  (g) This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.

                  (h) The Agent may, in its sole and absolute discretion,
enforce the provisions hereof against any of the Pledgors and shall not be
required to proceed against all Pledgors jointly or seek payment from the
Pledgors ratably. In addition, the Agent may, in its sole and absolute
discretion, select the Pledged Collateral of any one or more of the Pledgors for
sale or application to the Obligations, without regard to the ownership of such
Pledged Collateral, and shall not be required to make such selection ratably
from the Pledged Collateral owned by all of the Pledgors. The release or
discharge of any Pledgor by the Agent shall not release or discharge any other
Pledgor from the obligations of such Person hereunder.

                  SECTION 13. SUBMISSION TO JURISDICTION; WAIVERS. Each Pledgor
hereby irrevocably and unconditionally:

                  (a) Submits for itself and its property in any action, suit or
proceeding relating to this Pledge Agreement or any other Loan Document to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts thereof;

                  (b) Agrees that any such action, suit or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action, suit or proceeding in any such court or
that such action, suit or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

                  (c) Irrevocably consents to the service of any and all process
in any such action, suit or proceeding by the mailing of copies of such process
by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such Pledgor, at its address set forth in Section 11 hereof
or at such other address of which the Agent shall have been notified pursuant
thereto;

                  (d) To the extent that such Pledgor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, such Pledgor hereby irrevocably waives such immunity in respect of its
obligations under this Agreement;

                                      -12-
<PAGE>   14

                  (e) Agrees that nothing herein shall affect the right of the
Agent to effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and

                  (f) Waives any right it may have to claim or recover in any
legal action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.

                  SECTION 14. JURY TRIAL WAIVER. EACH PLEDGOR AND THE AGENT (BY
ITS ACCEPTANCE OF THIS AGREEMENT) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING
THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY AMENDMENT, MODIFICATION OR OTHER
DOCUMENT NOW OR HEREAFTER DELIVERED IN CONNECTION WITH ANY OF THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                      -13-
<PAGE>   15

                  IN WITNESS WHEREOF, each Pledgor has caused this Agreement to
be executed and delivered by its officer thereunto duly authorized, as of the
date first above written.

                                 Frontstep, Inc.

                                 By: /s/ Daniel P. Buettin
                                     --------------------------------------
                                      Name:  Daniel P. Buettin
                                      Title:  Vice President & CFO

                                 Frontstep Solutions Group, Inc.

                                 By: Daniel P. Buettin
                                     --------------------------------------
                                      Name:   Daniel P. Buettin
                                      Title:   Vice President & CFO

ACCEPTED AND AGREED:

FOOTHILL CAPITAL CORPORATION,
as Agent

By:  Katy J. Brooks
     ------------------------------
      Name:  Katy J. Brooks
      Title:  V.P.

<PAGE>   16

                   SCHEDULE I TO PLEDGE AND SECURITY AGREEMENT

                                  PLEDGED DEBT

  Name of Maker                 Description           Original Principal  Amount
------------------  --------------------------------- --------------------------

Stephen A. Yount   Promissory Note dated February 15,         $100,000
                   1997 issued to Symix Systems, Inc.

<PAGE>   17

                                 PROMISSORY NOTE
                                 ---------------
$100,000.00                                                      Columbus, Ohio

FOR VALUE RECEIVED, the undersigned, Stephen A. Yount ("Debtor"), an individual
residing in Franklin County, Ohio, promises to pay to the order of Symix
Systems, Inc., an Ohio corporation ("Symix"), or its successor(s) and assign(s)
(Symix and such successor(s) and assign(s) being hereinafter referred to
collectively and individually as "Payee"), at its corporate offices located at
2800 Corporate Exchange Drive, Columbus, Ohio 43231, or at such other address or
place as the holder hereof from time to time may designate in writing, the
principal amount of ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000.00),
together with interest thereon and payable as stated herein. Interest shall
accrue on the unpaid principal balance evidenced hereby at a rate of five
percent (5%) per annum.

Subject to the terms and conditions hereof, the total principal amount hereof,
plus accrued interest due hereunder, shall be due and payable on October 1, 2000
(the "Due Date"). The principal amount due hereunder shall be reduced on a
cumulative basis in accordance with the schedule set forth below after each
fiscal year of Symix specified in such schedule in the event Employee meets or
exceeds seventy-five percent (75%) of the annual sales quota for new license
revenue for Symix products assigned to him by Symix for such fiscal year:

        PRINCIPAL AMOUNT                             SYMIX FISCAL YEAR
      REDUCED CUMULATIVELY BY                          ENDED JUNE 30
     -------------------------                       --------------------
            $12,500.00                                     1997
            $25,000.00                                     1998
            $37,500.00                                     1999
            $50,000.00                                     2000

The principal amount due hereunder shall be reduced to Fifty Thousand and
00/Dollars ($50,000.00) immediately in the event that Debtor's employment with
Symix and all subsidiaries of Symix is terminated by Symix and/or such
subsidiaries. In addition, the accrued interest due on this Promissory Note
shall be reduced proportionately and shall be determined based upon the actual
principal amount due on this Promissory Note at the time that the indebtedness
evidenced hereby becomes due and payable.

This Promissory Note may be prepaid, in whole or in part, at any time without
premium or penalty. All payments received by Payee hereunder shall be (a) in
lawful money of the United States, and (b) credited as of the time received in
cash or when finally collected by Payee. Subject to the terms hereof, in the
event of (i) the termination of Debtor's employment with Symix and all
subsidiaries of Symix, for any reason, or (ii) the sale of Debtor's primary
residence located at 7762 Fenway, New Albany, Ohio, or (iii) any default in the
payment of any amount due hereunder when due and payable or the performance of
any agreements or covenants to be performed by Debtor hereunder, then the whole
or any part of the unpaid indebtedness evidenced hereby and due hereunder shall
immediately become due and payable without notice or demand therefor, the same
being expressly waived by Debtor, at the option of Payee; except that if Debtor
voluntarily terminates his employment with Symix and all subsidiaries of Symix
prior to the Due Date, then the unpaid indebtedness evidenced hereby shall
become due 120 days after such voluntary termination. A failure of Payee or any
subsequent holder hereof to insist upon strict compliance with the terms hereof
or to assert any right hereunder shall not be a waiver of any default and shall
not be deemed to constitute a modification of the terms hereof or to establish
any claim or defense. No delay or omission on the part of Payee or any
subsequent holder hereof in exercising any right hereunder shall operate as a
waiver of such right or of any other right under this Promissory Note. A waiver
by Payee on any one occasion shall not be construed as a bar to or a waiver of
any such right and/or remedy on any future occasion

Payment of the indebtedness evidenced hereby is secured by a Mortgage executed
on even date herewith encumbering real Property in the County of Franklin, State
of Ohio.

<PAGE>   18

Debtor, for himself and all persons now or hereafter liable, primarily or
secondarily, for the payment of the indebtedness evidence hereby or any part
thereof, hereby expressly waives notice of default, notice of intent to
accelerate, notice of acceleration, presentment for payment, notice of dishonor,
protest and notice of protest, and Debtor agrees that the time for payment or
payments of any part of the indebtedness evidenced hereby may be extended
without releasing or otherwise affecting his or their liability hereunder.

Debtor, for himself and all other persons now or hereafter liable hereunder,
primarily or secondarily, hereby agrees that the local laws of the State of
Ohio, without regards to principles of conflict of laws, shall govern his and/or
their rights and duties hereunder and the construction and effect hereof.
However, if any provision hereof is or becomes invalid or unenforceable under
any law of mandatory application, it is the express intent of Debtor, Payee and
all persons primarily or secondarily liable hereunder that such provision will
be deemed severed and omitted herefrom, the remaining portions hereof to remain
in full force and effect as written.

IN WITNESS WHEREOF, Debtor has executed this Promissory Note to be effective as
of the 15th day of February, 1997.

                                          /s/ Stephen A. Yount
                                              -------------------------------
                                              STEPHEN A. YOUNT

<PAGE>   19

                                     ALLONGE

                  This allonge is attached to that certain Promissory Note dated
February 15, 1997 made by Stephen A. Yount, an individual residing in Franklin
County, Ohio, payable to the order of Symix Systems, Inc. (now known as
Frontstep, Inc.).

                  Pay to the order of _______________________________, without
recourse or warranty.

Dated: _______________ ____, ________

                                         FRONTSTEP, INC.
                                         By:     /s/Daniel P. Buettin
                                             ---------------------------
                                         Name:    Daniel P. Buettin
                                         Title:   Vice President & CFO

<PAGE>   20

                  SCHEDULE II TO PLEDGE AND SECURITY AGREEMENT

                                 Pledged Shares
                                 --------------
<TABLE>
<CAPTION>
                                            Record         Number of               Number of                   Certificate
         Name of Issuer                     Owner         Shares Pledged      Shares Outstanding     Class       No.(s)
         --------------                     -----         --------------      ------------------     -----       ------
<S>                                 <C>                  <C>                      <C>              <C>          <C>
Frontstep Solutions Group, Inc.        Frontstep, Inc.          101                      101          Common        4

Frontstep distribution.com, inc.       Frontstep, Inc.          200                      200          Common        2

  brightwhite solutions, inc.        Frontstep Solutions        144                      150          Common        2
                                         Group, Inc.
</TABLE>

<PAGE>   21

                                  SCHEDULE III

                                       TO

                          PLEDGE AND SECURITY AGREEMENT

                                PLEDGE AMENDMENT
                                ----------------

                  This Pledge Amendment, dated ___________________________, is
delivered pursuant to Section 4 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement, dated as of _______, 2001, made by Frontstep, Inc. and
Frontstep Solutions Group, Inc., each an Ohio corporation, in favor of Foothill
Capital Corporation, as Agent for the Lenders party to the Loan Agreement
referred to in the Pledge Agreement, as it may heretofore have been or hereafter
may be amended or otherwise modified or supplemented from time to time and that
the promissory notes or shares listed on this Pledge Amendment shall be and
become part of the Pledged Collateral referred to in said Pledge Agreement and
shall secure all of the Obligations referred to in said Pledge Agreement.

<TABLE>
<CAPTION>
                                  Pledged Debt
                                  ------------
             Name of Maker                            Description                     Original Principal Amount
             -------------                            -----------                     -------------------------
<S>                                                 <C>                             <C>

</TABLE>

<TABLE>
<CAPTION>
                                 Pledged Shares
                                 --------------
        Name of Issuer               Number of Shares                   Class                  Certificate No(s)
        --------------               ----------------                   -----                  -----------------
<S>                                 <C>                                <C>                    <C>

</TABLE>

                                    [PLEDGOR]

                                    By:   ___________________________
                                          Name:
                                          Title:<PAGE>   1
         EXHIBIT 10(a)(a) TO FRONTSTEP, INC. ANNUAL REPORT ON FORM 10-K
<PAGE>   2

                          COPYRIGHT SECURITY AGREEMENT
                          ----------------------------

                  THIS COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as
of July 17, 2001 is made by FRONTSTEP, INC., an Ohio corporation, FRONTSTEP
SOLUTIONS GROUP, INC., an Ohio corporation, and BRIGHTWHITE SOLUTIONS, INC., an
Ohio corporation (each a "Debtor" and collectively, jointly and severally, the
"Debtors"), in favor of FOOTHILL CAPITAL CORPORATION, a California corporation,
as agent for the Lenders referred to below (the "Secured Party").

                                    RECITALS
                                    --------

                  A. The Debtors, Frontstep Canada, Inc., the financial
institutions party thereto from time to time (the "Lenders") and the Secured
Party have entered into that certain Loan and Security Agreement, dated as of
July 17, 2001 (as amended, restated, modified, renewed or extended from time to
time, the "Loan Agreement"), pursuant to which the Lenders have agreed (among
other things) to make loans to the Debtors in an aggregate principal amount at
any one time outstanding not to exceed the Maximum Revolver Amount (as defined
in the Loan Agreement), and pursuant to which the Debtors have granted to the
Secured Party for the benefit of the Lenders security interests in (among other
things) all or substantially all of the general intangibles of the Debtors.

                  B. Each Debtor has granted to Secured Party for the benefit of
the Lenders, a continuing first priority security interest in (among other
things) all general intangibles of such Debtor in order to secure the Debtors'
obligations under each of the Loan Documents.

                  C. Pursuant to the Loan Agreement and as one of the conditions
to the obligations of the Secured Party and the Lenders under the Loan
Agreement, the Debtors have agreed to execute and deliver this Agreement to the
Secured Party for filing with the United States Copyright Office and with any
other relevant recording systems in any domestic or foreign jurisdiction, and as
further evidence of and to effectuate Secured Party's existing security
interests in the Copyright Collateral (as hereinafter defined).

                                   ASSIGNMENT
                                   ----------

                  NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which is hereby acknowledged, each Debtor hereby agrees in favor of
Secured Party as follows:

                  1. DEFINITIONS; INTERPRETATION.

                     (a) CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:

                  "COPYRIGHT COLLATERAL" has the meaning set forth in SECTION 2
(a).

                  "COPYRIGHT RIGHTS" has the meaning set forth in SECTION
2(a)(i).

<PAGE>   3

                  "COPYRIGHTS" has the meaning set forth in SECTION 2.

                  "LIEN" means any pledge, security interest, assignment, charge
or encumbrance, lien (statutory or other), or other preferential arrangement
(including any agreement to give any security interest).

                  "PROPRIETARY RIGHTS" has the meaning set forth in SECTION
2(a)(ii).

                  "REGISTRATIONS" has the meaning set forth in SECTION 2(a)(i).

                  "SECURED OBLIGATIONS" means, with respect to each Debtor, all
liabilities, Obligations, and undertakings owing by such Debtor to Secured Party
and the Lenders of any kind or description arising out of or outstanding under,
advanced or issued pursuant to, or evidenced by, the Loan Agreement, the other
Loan Documents, or this Agreement, irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
voluntary or involuntary, whether now existing or hereafter arising, and
including all interest (including interest that accrues after the filing of a
case under the Bankruptcy Code) and any and all costs, fees (including attorneys
fees), and expenses which the Debtor is required to pay pursuant to any of the
foregoing, by law, or otherwise.

                  "UCC" means the Uniform Commercial Code, as in effect from
time to time in the State of New --- York.

                  "UNITED STATES" and "U.S." each mean the United States of
America.

                           (b)      TERMS DEFINED IN UCC.  Where applicable and
except as otherwise defined herein, terms used in this Agreement shall have the
meanings ascribed to them in the UCC.

                           (c)      INTERPRETATION.  In this Agreement, except
to the extent the context otherwise requires:

                                    (i)     Any reference to a Section or a
Schedule is a reference to a section hereof, or a schedule hereto, respectively,
and to a subsection or a clause is, unless otherwise stated, a reference to a
subsection or a clause of the Section or subsection in which the reference
appears.

                                    (ii)    The words "hereof," "here,"
"hereunder," and the like mean and refer to this Agreement as a whole and not
merely to the section, subsection, paragraph or clause in which the respective
word appears.

                                    (iii)   The meaning of defined terms shall
be equally applicable to both the singular and plural forms of the terms
defined.

                                    (iv)    The words "including," "includes"
and "include" shall be deemed to be followed by the words "without limitation."

                                      -2-
<PAGE>   4

                                    (v)     References to agreements and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, supplements, refinancings, renewals, extensions, and other
modifications thereto and thereof.

                                    (vi)    References to statutes or
regulations are to be construed as including all statutory and regulatory
provisions consolidating, amending or replacing the statute or regulation
referenced.

                                    (vii)   Any captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement.

                                    (viii)  Capitalized words not otherwise
defined herein shall have the respective meanings ascribed to them in the Loan
Agreement.

                                    (ix)    In the event of a direct conflict
between the terms and provisions of this Agreement and the Loan Agreement, it is
the intention of the parties hereto that both such documents shall be read
together and construed, to the fullest extent possible, to be in concert with
each other. In the event of any actual, irreconcilable conflict that cannot be
resolved as aforesaid, the terms and provisions of the Loan Agreement shall
control and govern; PROVIDED, HOWEVER, that (A) the inclusion herein of
additional obligations on the part of the Debtors and supplemental rights and
remedies in favor of Secured Party, in each case in respect of the Copyright
Collateral, shall not be deemed a conflict with the Loan Agreement and (B) the
exclusion of any property from the Copyright Collateral pursuant to Section 2(b)
hereof shall be deemed to be an exclusion of such property from the Collateral
under the Loan Agreement.

                  2.       SECURITY INTEREST.

                           (a)      ASSIGNMENT AND GRANT OF SECURITY.  Each
Debtor, as security for the payment and performance of the Debtors' Secured
Obligations, hereby grants, assigns, transfers and conveys to Secured Party for
the benefit of the Lenders a continuing first priority security interest in all
of such Debtor's right, title and interest in, to and under the following
property, whether now existing or hereafter acquired or arising or in which such
Debtor now has or hereafter acquires or develops an interest and wherever the
same may be located (the "Copyright Collateral"):

                                    (i)     all copyrights, rights, titles and
interests in and to published and unpublished original and derivative works of
authorship, whether registered or unregistered, including without limitation,
all software (whether or not considered to be a "good" rather than an intangible
and including the source code version thereof) that such Debtor owns or uses in
its business or will in the future adopt and so use, including without
limitation the Software, and all copyrights in any original or derivative works
of authorship and all works protectable by copyright that are presently, or in
the future may be, owned, created, acquired or used (whether pursuant to a
license or otherwise) by such Debtor, in whole or in part (collectively, the
"Copyrights"), all Copyright registrations and applications for Copyright
registration that have been heretofore or may hereafter be issued thereon or
applied for in the United States or throughout the Universe, including renewal
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office (the

                                      -3-
<PAGE>   5

"Registrations"), all common law and other rights in and to the Copyrights
throughout the Universe, including all Copyright licenses (collectively, the
"Copyright Rights"), and all renewals, extensions, restorations and reversions
thereof, throughout the Universe, including all proceeds thereof (such as, by
way of example and not by limitation, license royalties and proceeds of
infringement suits), the right (but not the obligation) to renew, extend and
restore such Copyrights, Registrations and Copyright Rights and to register
works protectable by Copyright and the right (but not the obligation) to sue or
bring proceedings in the name of such Debtor or in the name of Secured Party for
past, present and future infringements or violations of the Copyrights,
registrations and Copyright Rights, and recover damages for past, present and
future infringements or violations thereof, and all rights corresponding thereto
throughout the Universe, including:

                                           (A)      all of such Debtor's right,
title and interest in and to all Copyrights or rights or interests in Copyrights
registered or recorded in the United States Copyright Office, including the
Registrations listed on SCHEDULE A attached hereto, as the same may be amended
or supplemented pursuant hereto from time to time;

                                           (B)      all of such Debtor's right,
title and interest in and to all Copyrights relating to the works set forth on
SCHEDULE B attached hereto, including without limitation all Registrations
therefor, as the same may be amended or supplemented from time to time,
including in connection with an Amendment to Copyright Security Agreement;

                                           (C)      all of such Debtor's right,
title and interest in and to all renewals and extensions of any such Copyrights,
including renewals or extensions of the Registrations listed on Schedule A
attached hereto, that may be secured under the law now or hereafter in force and
effect;

                                           (D)      all of such Debtor's right,
title and interest to make and exploit all derivative works based on or adopted
from all works covered by any of the Copyright Collateral; and

                                           (E)      all of such Debtor's right,
title and interest pursuant to or under licensing or other contracts in favor of
Debtor pertaining to copyrights and works protectable by copyright presently or
in the future owned or used by third parties;

                                    (ii)    all inventions, designs, patents,
patent applications, registrations, trade secrets, proprietary rights, corporate
or other business records, source codes, object codes, data bases and all other
intangible personal property at any time used in connection with the businesses
of such Debtor (referred to herein as "Proprietary Rights");

                                    (iii)   all rights and interests pursuant
to or under licensing or other contracts in favor of Debtor pertaining to
Copyrights and works protectable by Copyright presently or in the future owned
or used by third parties;

                                    (iv)    all general intangibles (as defined
in the UCC) and all intangible intellectual or other similar property of such
Debtor of any kind or nature, whether now owned or hereafter acquired or
developed, associated with or arising out of any of the

                                      -4-
<PAGE>   6

Copyrights, Registrations, Copyright Rights or Proprietary Rights and not
otherwise described above; and

                                    (v)     all proceeds of any and all of the
foregoing Copyright Collateral (including license royalties, rights to payment,
accounts receivable and proceeds of infringement suits) and, to the extent not
otherwise included, all payments under insurance (whether or not Secured Party
is the loss payee thereof) or any indemnity, warranty or guaranty payable by
reason of loss or damage to or otherwise with respect to the foregoing Copyright
Collateral. For purposes of this Agreement, the term "proceeds" includes
whatever is receivable or received when Copyright Collateral or proceeds are
sold, licensed, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes, without limitation, all
rights to payment, including returned premiums, with respect to any insurance
relating thereto.

                           (b)      CERTAIN EXCLUSIONS FROM GRANT OF SECURITY
INTEREST. Anything in this Agreement and the other Loan Documents to the
contrary notwithstanding, the foregoing grant, assignment, transfer, and
conveyance of a security interest shall not extend to, and the term "Copyright
Collateral" shall not include, any item of Copyright Collateral described in
Section 2(a) above that is now or hereafter held by any Debtor as licensee or
otherwise, solely in the event and to the extent that and only for the times
that: (i) as the proximate result of the foregoing grant, assignment, transfer,
or conveyance of a security interest, such Debtor's rights in or with respect to
such item of Copyright Collateral would be forfeited or would become void,
voidable, terminable, or revocable pursuant to the restrictions in the
underlying license or other agreement that governs such item of Copyright
Collateral; and (ii) any such restriction shall be effective and enforceable
under applicable law, including Section 9-408 of the Code; PROVIDED, HOWEVER,
that the foregoing grant, assignment, transfer, and conveyance of security
interest shall extend to, and the term "Copyright Collateral" shall include, (y)
any and all proceeds of such item of Copyright Collateral to the extent that the
assignment or encumbering of such proceeds is not so restricted, and (z) upon
any such licensor or other applicable party's consent with respect to any such
otherwise excluded item of Copyright Collateral being obtained, thereafter such
item of Copyright Collateral as well as any proceeds thereof that might
theretofore have been excluded from such grant, assignment, transfer, and
conveyance of a security interest and the term Copyright Collateral.

                           (c)      CONTINUING SECURITY INTEREST.  Debtor agrees
that this Agreement shall create a continuing security interest in the Copyright
Collateral which shall remain in effect until terminated in accordance with
Section 17 hereof.

                           (d)      INCORPORATION INTO LOAN AGREEMENT.  This
Agreement shall be fully incorporated into the Loan Agreement and all
understandings, agreements and provisions contained in the Loan Agreement shall
be fully incorporated into this Agreement. Without limiting the foregoing, the
Copyright Collateral described in this Agreement shall constitute part of the
Collateral in the Loan Agreement.

                           (e)      PERMITTED LICENSING.  Anything in the Loan
Agreement or this Agreement to the contrary notwithstanding, Debtor may license
to any other Person the Copyright Collateral on an exclusive or non-exclusive
basis (subject to the security interest of

                                      -5-
<PAGE>   7

the Secured Party in such Collateral) in the ordinary course of business
consistent with past practice.

                  3.       REPRESENTATIONS AND WARRANTIES.  Each Debtor jointly
and severally represents and warrants to Secured Party and for the benefit of
Secured Party the following:

                           (a)      TRUE AND COMPLETE LIST.  Set forth in
SCHEDULE A is a true and complete list, as of the date of this Agreement, of all
Registrations in the United States Copyright Office and applications for
Registrations in the United States Copyright Office owned by the Debtors, in
whole or in part; SCHEDULE B attached hereto includes a true and complete list
of all versions of the Syteline Software and, on and after the 30th day
following the Closing Date, all other Marketed Software, including all prior
versions of Software for which any version of the Marketed Software constitutes
a derivative work under U.S. copyright law, and the dates of creation for each
such version, as such Schedule B is modified from time to time pursuant to
Section 4(a) hereof.

                           (b)      POWERS.  Each Debtor has full power,
authority and legal right to pledge and to grant to Secured Party a continuing
first priority security interest in all right, title, and interest of such
Debtor in and to the Copyright Collateral pursuant to this Agreement, and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person except as
already obtained;

                           (c)      VALIDITY.  Each of the Registrations of
each Debtor referred to in SCHEDULE A is valid, subsisting and enforceable, and
such Debtor has properly complied in all material respects with all applicable
statutory and regulatory requirements, including all notice requirements, in
connection with each of such Registrations, and, except as disclosed in the
litigation schedule or annex to the Loan Agreement, to the best of each Debtor's
knowledge, no claim has been made that the use of any of such Copyrights does or
may infringe or otherwise violate the rights of any third Person;

                           (d)      TITLE.  Each Debtor has rights in and good
title to the Copyright Collateral shown on the schedules hereto as being owned
by it, is the sole and exclusive owner of the entire and unencumbered right,
title and interest in and to such Copyright Collateral, free and clear of any
Liens (other than Liens in favor of Secured Party and other than the rights of
the licensor of a license made by such licensor to such Debtor as licensee, or
the rights of other licensees under non-exclusive licenses of the same subject
matter if such Debtor's license of such subject matter is a non-exclusive
license). For any Copyright Collateral for which a Debtor is either a licensor
or a licensee pursuant to a license or licensing agreement regarding such
Copyright Collateral, each such license or licensing agreement is in full force
and effect, such Debtor is not in default of any of its obligations thereunder
and, other than the parties to such licenses or licensing agreements, no other
Person has any rights in or to any of such Copyright Collateral;

                           (e)      NO VIOLATION.  The execution, delivery and
performance by each Debtor of this Agreement do not violate any provision of law
or the articles of incorporation or by-laws of such Debtor or result in a breach
of or constitute a material default under any

                                      -6-
<PAGE>   8

contract, obligation, indenture or other instrument to which any Debtor is a
party or by which such Debtor may be bound;

                           (f)      AUTHORIZATION.  This Agreement has been
duly authorized, executed and delivered, and constitutes, a legal, valid and
binding agreement of each Debtor, enforceable in accordance with its terms; and

                           (g)      SECRECY.  Each Debtor has taken and will
continue to take all reasonable steps to protect the secrecy of all trade
secrets relating to any of its unpublished Copyright Collateral and its
Proprietary Rights.

                  4.       COVENANTS.  Each Debtor covenants that so long as
this Agreement shall be in effect, such Debtor shall:

                           (a)      FURTHER ACTS.  On a continuing basis,
make, execute, acknowledge and deliver, and file and record in the proper filing
and recording places (including, without limitation, the United States Copyright
Office, all such instruments and documents, including appropriate financing and
continuation statements and security agreements, and take all such action as
Secured Party deems in its Permitted Discretion necessary or advisable or as may
be requested by Secured Party to carry out the intent and purposes of this
Agreement, or for assuring, confirming or protecting the grant or perfection of
the security interest granted or purported to be granted hereby, to ensure such
Debtor's compliance with this Agreement or to enable Secured Party to exercise
and enforce its rights and remedies hereunder with respect to the Copyright
Collateral, provided that in no event shall any Debtor be required to register
any Copyright Collateral other than as provided in Section 6 hereof and in
accordance with the applicable provisions of the Loan Agreement. Without
limiting the generality of the foregoing sentence, each Debtor:

                                    (i)     authorizes Secured Party, in its
Permitted Discretion, to modify this Agreement without first obtaining the
Debtor's approval of or signature to such modification by amending SCHEDULE A
and/or SCHEDULE B hereof to include a reference to any right, title or interest
in any existing Copyright, Registration, Copyright Right or Proprietary Rights
or any Copyright, Registration, Copyright Right or Proprietary Rights acquired
or developed by such Debtor after the execution hereof, or to delete any
reference to any right, title or interest in any Copyright, Registration,
Copyright Right or Proprietary Rights in which such Debtor no longer has or
claims any right, title or interest, provided that Secured Party has requested
that such Debtor so modify this Agreement and Debtor fails to do so within ten
(10) days of Secured Party's request; and

                                    (ii)    hereby authorizes Secured Party, in
its Permitted Discretion, to file one or more financing or continuation
statements, and after ten (10) days prior notice to such Debtor, amendments
thereto, relative to all or any portion of the Copyright Collateral without the
signature of such Debtor where permitted by law;

                           (b)      COMPLIANCE WITH LAW.  Comply, in all
material respects, with all applicable statutory and regulatory requirements in
connection with any and all of the Copyright Collateral that is the subject of
the Registrations and give such notice of Copyright, prosecute

                                      -7-
<PAGE>   9

such material claims, and do all other acts and take all other measures which
may be reasonably necessary or desirable to preserve, protect and maintain such
Copyright Collateral and all of such Debtor's rights therein, including
diligently prosecute any material Copyright application pending as of the date
of this Agreement or thereafter;

                           (c)      COMPLIANCE WITH AGREEMENT.  Comply with
each of the terms and provisions of this Agreement, and not enter into any
agreement (for example, a license agreement) which is inconsistent with the
obligations of such Debtor under this Agreement without Secured Party's prior
written consent; and

                           (d)      LIEN PROTECTION.  Not permit, without
the prior written consent of Secured Party, the inclusion in any contract to
which such Debtor becomes a party, any provision that could or might impair or
prevent the creation of a security interest in favor of Secured Party in such
Debtor's rights and interest in any property included within the definitions of
the Copyrights, Registrations and Copyright Rights acquired under such
contracts.

                  5. NEW COPYRIGHTS; REGISTRATIONS AND COPYRIGHT RIGHTS. If any
Debtor shall obtain rights to or develop any new works protectable by Copyright,
or become entitled to the benefit of any Copyright Rights, Registrations,
application for Registrations or Proprietary Rights not described on the
schedules hereto, or any renewals or extension of any Copyright, Copyright
Rights, Registrations or Proprietary Rights, the provisions of this Agreement
shall automatically apply thereto. Each Debtor shall give Secured Party written
notice, in accordance with the applicable provisions of the Loan Agreement, (a)
of any such work or such rights of material value to such Debtor or the
operation of its businesses and (b) any such Registration, applications for
Registration or renewal or extension of any Copyright. Concurrently with its
filing of an application for any Registration for any Copyright, such Debtor
shall execute and deliver an amendment to this Agreement in the form of SCHEDULE
C attached hereto (or, at the election of Secured Party, a new Copyright
Security Agreement substantially in the form of this Agreement and otherwise in
form and substance satisfactory to the Secured Party), pursuant to which such
Debtor shall grant and reaffirm its grant of a security interest to the extent
of its interest in such Registration as provided herein to Secured Party, and
such Debtor shall cause such agreement to be recorded in the offices and
jurisdictions indicated by Secured Party and promptly shall provide proof of
such recordations to Secured Party.

                  6.  COPYRIGHT REGISTRATION. RENEWAL AND LITIGATION.

                           (a)      REGISTRATION.  Each Debtor shall have the
duty diligently to make any application for Registration, in accordance with the
applicable provisions of the Loan Agreement, on any existing or future
unregistered but Copyrightable works that are used in or are related to any
Marketed Software and to do any and all acts which are reasonably necessary or
desirable to preserve, renew and maintain all rights in all Copyrights,
Registrations, Copyright Rights and Proprietary Rights. Any expenses incurred in
connection therewith shall be borne solely by the Debtors. Except as otherwise
permitted in the Loan Agreement or this Section 6(a), the Debtors shall not do
any act or omit to do any act whereby any of the Copyright Collateral may become
abandoned or fall into the public domain or fail to renew any Copyright,
Registration or Copyright Right owned by the Debtor without the prior written
consent of Secured Party.

                                       -8-
<PAGE>   10

                           (b)      PROTECTION. Except as provided in Section 8
and notwithstanding Section 2(a)(i), each Debtor shall have the right and
obligation to commence and diligently prosecute in its own name, as real party
in interest, for its own benefit and at its own expense, such suits, proceedings
or other actions for infringement or other damage as are reasonably necessary to
protect the Copyright Collateral or any of such Debtor's rights therein. Each
Debtor shall provide to Secured Party any information with respect thereto
requested by Secured Party. Secured Party shall provide at such Debtor's expense
all necessary cooperation in connection with any such suit, proceeding or action
including joining as a nominal party if Secured Party shall have been satisfied
that it is not incurring any risk of liability because of such joinder. Each
Debtor shall provide at its expense representation acceptable to Secured Party
for the common interest of such Debtor and Secured Party with respect to such
proceedings.

                           (c)      NOTICE. Each Debtor shall, promptly upon
its becoming aware thereof, notify Secured Party in writing of the institution
of, or any material adverse determination in, any proceeding, application, suit
or action of any kind described in Section 6(a) or 6(b), or regarding such
Debtor's claim of ownership in any of the Copyrights, Registrations, Copyright
Rights or Proprietary Rights, its right to register the same, or its right to
keep and maintain such registration, whether before the United States Copyright
Office or any United States or foreign court or governmental agency, including
(x) any petition under the Bankruptcy Code filed by or against any licensor of
any of the Copyrights as to which such Debtor is a licensee, and (y) any other
claims asserted in a judicial, administrative or other proceeding concerning the
Copyrights. Each Debtor shall provide promptly to Secured Party any information
with respect thereto requested from time to time by Secured Party.

                  7. EVENTS OF DEFAULT. The occurrence of any "Event of
Default" under the Loan Agreement or any other Loan Document shall constitute an
Event of Default hereunder.

                  8. REMEDIES. Following the occurrence and during the
continuation of an Event of Default, Secured Party shall have all rights and
remedies available to it under the Loan Agreement and the other Loan Documents
and applicable law (which rights and remedies are cumulative) with respect to
its security interests in any of the Copyright Collateral or any other
collateral. Each Debtor agrees that such rights and remedies include the right
of Secured Party as a secured party to sell or otherwise dispose of its
collateral after the occurrence and during the continuance of a default,
pursuant to UCC Section 9-610. Each Debtor agrees that Secured Party shall at
all times have such royalty free licenses, to the extent permitted by law, for
any Copyright, Copyright Rights, Proprietary Right and any other Copyright
Collateral that is reasonably necessary to permit the exercise of any of Secured
Party's rights or remedies after the occurrence of (and during the continuance
of) an Event of Default with respect to (among other things) any asset of such
Debtor in which Secured Party has a security interest, including Secured Party's
rights to sell or license general intangibles, inventory, tooling or packaging
which is acquired by such Debtor (or its successors, permitted assignees, or
trustee in bankruptcy). In addition to, and without limiting any of the
foregoing, upon the occurrence and during the continuance of an Event of
Default, Secured Party shall have the right but shall in no way be obligated to
bring suit, or to take such other action as Secured Party deems necessary or
advisable, in the name of any Debtor or Secured Party, to enforce or protect any
Copyright, Registration, Copyright Right or Proprietary Right, and any license
thereunder, in which event each Debtor shall, at the request of Secured Party,
do any and all lawful acts and execute any

                                      -9-
<PAGE>   11

and all documents required by Secured Party in aid of such enforcement. To the
extent that Secured Party shall elect not to bring suit to enforce any
Copyright, Registration, Copyright Rights, Proprietary Right, or any license
thereunder, each Debtor agrees to use all reasonable measures and its diligent
efforts, whether by action, suit, proceeding or otherwise, to prevent the
infringement, misappropriation or violation thereof by others and for that
purpose agrees diligently to maintain any action, suit or proceeding against any
Person necessary to prevent such infringement; misappropriation or violation.

                  9. AUTHORIZATION. If any Debtor fails to comply with any of
its obligations hereunder, Secured Party may do so in such Debtor's name or in
Secured Party's name, but at the Debtor's expense, and each Debtor hereby agrees
to reimburse Secured Party in full upon demand for all reasonable expenses,
including reasonable attorney's fees, incurred by Secured Party in protecting,
defending, maintaining, registering or recording any of the Copyright Collateral
or any right, title or interest of such Debtor or Secured Party therein. Each
Debtor hereby appoints Secured Party, and authorizes, directs and empowers
Secured Party to make, constitute and appoint any officer or agent of Secured
Party as Secured Party may select, in its exclusive discretion, as the true and
lawful attorney-in-fact of the Debtor, with the power, (a) if such Debtor
refuses or fails to do so within ten (10) days of the delivery of written notice
of such request to such Debtor by Agent, to execute in the name of such Debtor
any financing statement or other similar instrument, any supplement or amendment
to this Agreement, or any supplemental Copyright Security Agreement, in each
case, described in Sections 4(a) or 5 hereof, and do such other acts on such
Debtor's behalf, that Secured Party may deem necessary or advisable to
accomplish the purposes of this clause (a), and (b) upon and after the
occurrence and continuation of any Event of Default, (i) to endorse such
Debtor's name on all applications, documents, papers and instruments necessary
for Secured Party to use any of the Copyright Collateral, (ii) to assert or
retain any rights under any license agreement for any of the Copyright
Collateral, including any rights of such Debtor arising under Section 365(n) of
the Bankruptcy Code, (iii) to grant or issue any exclusive or nonexclusive
license under any of the Copyright Collateral to anyone else, or as may be
necessary for Secured Party to assign, pledge, convey or otherwise transfer
title in or dispose of any of the Copyright Collateral or any other Collateral
to anyone else and (iv) do such other acts on such Debtor's behalf, that Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement. Each Debtor hereby ratifies all that such attorney shall lawfully do
or cause to be done by virtue hereof. This power of attorney is coupled with an
interest and is irrevocable until termination of this Agreement.

                  10. NOTICES.  All notices and other communications
hereunder to or from Secured Party and any Debtor shall be in writing and shall
be mailed, sent or delivered in accordance with the Loan Agreement.

                  11. GOVERNING LAW AND VENUE: JURY TRIAL WAIVER. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE ASSIGNMENT
AND SECURITY INTERESTS HEREUNDER IN RESPECT OF ANY PROPERTY ARE GOVERNED BY
FEDERAL LAW, IN WHICH CASE SUCH CHOICE OF NEW YORK LAW SHALL NOT BE DEEMED TO
DEPRIVE SECURED PARTY OF SUCH RIGHTS AND REMEDIES AS MAY BE AVAILABLE UNDER
FEDERAL LAW. THE PARTIES

                                      -10-
<PAGE>   12

AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT
SHALL BE TRIED AND LITIGATED ONLY IN THE STATE OF NEW YORK; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PLEDGED COLLATERAL MAY BE BROUGHT,
AT SECURED PARTY'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PLEDGED
COLLATERAL MAY BE FOUND OR WHERE IT IS NECESSARY TO BRING SUIT IN ORDER TO
OBTAIN SUBJECT MATTER JURISDICTION. THE DEBTOR AND SECURED PARTY WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE OT THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.

                  THE DEBTORS AND SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. THE DEBTORS AND SECURED PARTY REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

                  12. ENTIRE AGREEMENT: AMENDMENT. This Agreement, together with
the Schedules hereto, and the Loan Agreement contain the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior
drafts and communications relating to such subject matter. Neither this
Agreement nor any provision hereof may be modified, amended or waived except by
the written agreement of the parties, as provided in the Loan Agreement.
Notwithstanding the foregoing, Secured Party may re-execute this Agreement,
modify, amend or supplement the Schedules hereto or execute a supplemental
Copyright Security Agreement, as provided herein, and the terms of any such
modification, amendment, supplement or supplemental Copyright Security Agreement
shall be deemed to be incorporated herein by this reference.

                  13. SEVERABILITY. If one or more provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect in any
jurisdiction or with respect to any party, such invalidity, illegality or
unenforceability in such jurisdiction or with respect to such party shall, to
the fullest extent permitted by applicable law, not invalidate or render illegal
or unenforceable any such provision in any other jurisdiction or with respect to
any other party, or any other provisions of this Agreement.

                  14. COUNTERPARTS.  This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.

                                      -11-
<PAGE>   13

                  15. LOAN AGREEMENT. Each Debtor acknowledges that the rights
and remedies of Secured Party with respect to the secured interest in the
Copyright Collateral granted hereby are more fully set forth in the Loan
Agreement, and the other Loan Documents and all such rights and remedies are
cumulative.

                  16. NO INCONSISTENT REQUIREMENTS. Each Debtor acknowledges
that this Agreement and the other Loan Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
each Debtor agrees that all such covenants, terms and provisions are cumulative
and all shall be performed and satisfied in accordance with their respective
terms.

                  17. TERMINATION. Upon the indefeasible payment in full of the
Secured Obligations, including the cash collateralization, expiration, or
cancellation of all Secured Obligations, if any, consisting of letters of
credit, and the full and final termination of any commitment to extend any
financial accommodations under the Loan Agreement, this Agreement shall
terminate and Secured Party shall execute and deliver such documents and
instruments and take such further action reasonably requested by the Debtors,
all without representation or warranty and at the Debtors' expense, as shall be
necessary to evidence termination of the security interests granted by the
Debtors to Secured Party hereunder.

         [The remainder of this page has been intentionally left blank]

                                      -12-
<PAGE>   14

                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.

                            FRONTSTEP GROUP, INC.
                            FRONTSTEP SOLUTIONS GROUP, INC.
                            BRIGHTWHITE SOLUTIONS, INC.,
                            each an Ohio corporation

                            By: /s/ Daniel P. Buettin
                               -----------------------
                                Name: Daniel P. Buettin
                                Title:  Vice President & Chief Financial
                                        Officer

                            FOOTHILL CAPITAL CORPORATION,
                            a California corporation

                            By: /s/ Katy J. Brooks
                                ----------------------
                                Name: Katy J. Brooks
                                Title:  V.P.

                                     -13-
<PAGE>   15

STATE OF OHIO                         )
                                      ) ss
COUNTY OF Franklin                    )

                  On July 12, 2001, before me, Mark K. Chidester, Notary Public,
personally appeared Daniel P. Buettin, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity(ies)
upon behalf of which the person(s) acted, executed the instrument.

                  WITNESS my hand and official seal.

                                 /s/ Mary K. Chidester
                                   ---------------------------------------
                                    Signature

                                     [SEAL]

STATE OF CALIFORNIA                   )
                                      ) ss
COUNTY OF Los Angeles                 )

                  On July 12, 2001, before me, Suzanne Witkowsky, Notary Public,
personally appeared Katy Brooks, personally known to me to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity(ies) upon behalf of which the person(s) acted, executed the instrument.

                  WITNESS my hand and official seal.

                                /s/ Suzanne Witkowsky
                                   --------------------------------------------
                                   Signature

                                     [SEAL]

                                      -14-
<PAGE>   16

                                   SCHEDULE A
                          COPYRIGHT REGISTRATIONS (US)
<TABLE>
<CAPTION>

------------------------------------------------------------------------ ------------------------------------
                                 TITLE                                           REGISTRATION NUMBER
------------------------------------------------------------------------ ------------------------------------
<S>                                                                      <C>
Mongoose                                                                          TX4892002
------------------------------------------------------------------------ ------------------------------------
SYMIX manufacturing and accounting control system:  software; SYMIX               TX3321575
------------------------------------------------------------------------ ------------------------------------
SYMIX Manufacturing and Accounting Control System:  Software; SYMIX               TX 3-059-578
------------------------------------------------------------------------ ------------------------------------
Syman Source Code                                                                 TX 2-123-578
------------------------------------------------------------------------ ------------------------------------
Syman source code                                                                 TX3059889
------------------------------------------------------------------------ ------------------------------------
AweSim!                                                                           TX4539251
------------------------------------------------------------------------ ------------------------------------
MAPICS XZ finite capacity planning and schedule (FCPS) product                    TX4322234
training workshop:  version 2.2.
------------------------------------------------------------------------ ------------------------------------
SLAMsystem V4.5 OS/2                                                              TX3994757
------------------------------------------------------------------------ ------------------------------------
Packaging line simulation system, V2.0                                            TX4042474
------------------------------------------------------------------------ ------------------------------------
SLAMsystem Version 4.5 MS DOS                                                     TX4008988
------------------------------------------------------------------------ ------------------------------------
Factor:  AIM modeling reference:  version 5.3                                     TX3658472
------------------------------------------------------------------------ ------------------------------------
Factor.                                                                           TX3607077
------------------------------------------------------------------------ ------------------------------------
Factor/Aim:  Version 5.1 / Beth Ann Reed, author                                  TX3510044
------------------------------------------------------------------------ ------------------------------------
Slamsystem, version 2.0
------------------------------------------------------------------------ ------------------------------------
Factory-in-the-computer                                                           TXU532780
------------------------------------------------------------------------ ------------------------------------
Packaging line simulation system                                                  TX3017155
------------------------------------------------------------------------ ------------------------------------
SLAMSYSTEM V.3.0                                                                  TX2972489
------------------------------------------------------------------------ ------------------------------------
TESS:  The Extended simulation support system/Charles R. Standridge,              TX2629676
A. Alan B. Pritsker -- 7/18/1989
------------------------------------------------------------------------ ------------------------------------
TESS V.4.0                                                                        TX2835171
------------------------------------------------------------------------ ------------------------------------
SlamSystem:  total simulation project support                                     TX2809649
------------------------------------------------------------------------ ------------------------------------
SLAM II/material handling extension:  V.2/11 -                                    TX2679475
------------------------------------------------------------------------ ------------------------------------
MAP/1:3.1                                                                         TX2679474
------------------------------------------------------------------------ ------------------------------------
Map/1:  manufacturing analysis program using simulation/Laurie J.                 TX2635394
Rolston, Robin J. Miller
------------------------------------------------------------------------ ------------------------------------
Introduction to simulation and Slam II/A. Alan B. Pritsker                        TX2629675
------------------------------------------------------------------------ ------------------------------------
Tess 3.1                                                                          TX2623026
------------------------------------------------------------------------ ------------------------------------
Factor                                                                            TX2621991
                                                                                  TX 3-141-758
                                                                                  TXu 306-456
------------------------------------------------------------------------ ------------------------------------
Simchart                                                                          TX 715-669
------------------------------------------------------------------------ ------------------------------------
The Simchart User's Manual                                                        TX 715-668
------------------------------------------------------------------------ ------------------------------------
Simchart Installation/Operations Guide                                            TX 860-758
------------------------------------------------------------------------ ------------------------------------
Modeling & Analysis Using Q-Gert Networks.  2nd Edition                           TX 255-677
------------------------------------------------------------------------ ------------------------------------
Resources in Q-Gert:  The Next Chapter                                            TX 14-894
------------------------------------------------------------------------ ------------------------------------
The Q-Gert Analysis Program                                                       TX 260-050
------------------------------------------------------------------------ ------------------------------------
Modeling & Analysis Using Q-Gert Networks                                         A 891-429
------------------------------------------------------------------------ ------------------------------------
The Q-Gert User's Manual                                                          A 547-069
------------------------------------------------------------------------ ------------------------------------
Technical Reference Manual For The SLAM Simulation Program                        TX 519-723
------------------------------------------------------------------------ ------------------------------------
Introduction To Simulation & SLAM                                                 TX 179-361
------------------------------------------------------------------------ ------------------------------------
Aid Installation/Operations Guide                                                 TX 860-755
------------------------------------------------------------------------ ------------------------------------
Aid-Fitting Distributions To Observations:  A Graphical Approach                  TX 715-667
------------------------------------------------------------------------ ------------------------------------
Improved SDL Database Management Capabilities                                     TX 860-757
------------------------------------------------------------------------ ------------------------------------
SDL Installation/Operations Guide                                                 TX 860-754
------------------------------------------------------------------------ ------------------------------------
The Simulation Data Language                                                      TX 538-886
------------------------------------------------------------------------ ------------------------------------
</TABLE>
<PAGE>   17

<TABLE>
<CAPTION>

------------------------------------------------------------------------ ------------------------------------
                                 TITLE                                           REGISTRATION NUMBER
------------------------------------------------------------------------ ------------------------------------
<S>                                                                      <C>
The Simulation Data Language I(SDL/I) Language Reference Manual                   TX 538-432
------------------------------------------------------------------------ ------------------------------------
SLAM II                                                                           TX 716-749
------------------------------------------------------------------------ ------------------------------------
SLAM II, v. 2.0                                                                   TX 1-680-967
------------------------------------------------------------------------ ------------------------------------
SLAM II Installation/Operations Guide                                             TX 860-756
------------------------------------------------------------------------ ------------------------------------
SLAM II:  Enhanced Simulation Capabilities                                        TX 716-750
------------------------------------------------------------------------ ------------------------------------
VR 90*                                                                            TXu 890-082
                                                                                  TXu 824-684
                                                                                  TXu 786-701
------------------------------------------------------------------------ ------------------------------------
VR-10E*                                                                           TXu 861-253
------------------------------------------------------------------------ ------------------------------------
VR-BIZ*                                                                           TXu 861-252
------------------------------------------------------------------------ ------------------------------------
Distribution Architects Visible Results:  VR Alert*                               TXu 861-251
------------------------------------------------------------------------ ------------------------------------
Distribution Architects Visible Results:  VR-EC*                                  TXu 861-250
------------------------------------------------------------------------ ------------------------------------
MDS, Version 8.1*                                                                 TXu 786-701
------------------------------------------------------------------------ ------------------------------------
MDS-90119*                                                                        TXu 786-700
------------------------------------------------------------------------ ------------------------------------
Symix Manufacturing and Accounting Control System Computer Software,
v2.7
------------------------------------------------------------------------ ------------------------------------
Symix Manufacturing and Accounting Control System Computer Software,
v3.0
------------------------------------------------------------------------ ------------------------------------
Symix Manufacturing and Accounting Control System Computer Software,
v4.0
------------------------------------------------------------------------ ------------------------------------
SyteLine Enterprise Resource Planning System, v2.0
------------------------------------------------------------------------ ------------------------------------
SyteLine Enterprise Resource Planning System, v3.0
------------------------------------------------------------------------ ------------------------------------
SyteLine Enterprise Resource Planning System, v3.5
------------------------------------------------------------------------ ------------------------------------
SyteLine Enterprise Resource Planning System, v4.0
------------------------------------------------------------------------ ------------------------------------
SyteLine Enterprise Resource Planning System, v4.5
------------------------------------------------------------------------ ------------------------------------
SyteLine Enterprise Resource Planning System, v5.0
------------------------------------------------------------------------ ------------------------------------
SyteLine Enterprise Resource Planning System, v6.0
------------------------------------------------------------------------ ------------------------------------
</TABLE>

Copyright proprietor is Frontstep, Inc. for all works above except those
identified with an asterisk (*). For works identified with an asterisk (*),
copyright proprietor is Frontstep Solutions Group, Inc.

Applications for Registration submitted to counsel for Secured Party:

- Symix Manufacturing and Accounting Control System Computer Software, v.2.7 -
Symix Manufacturing and Accounting Control System Computer Software, v.3.0 -
Symix Manufacturing and Accounting Control System Computer Software, v.4.0 -
SyteLine Enterprise Resource Planning System, v2.0 - SyteLine Enterprise
Resource Planning System, v3.0 - SyteLine Enterprise Resource Planning System,
v3.5 - SyteLine Enterprise Resource Planning System, v4.0 - SyteLine Enterprise
Resource Planning System, v4.5 - SyteLine Enterprise Resource Planning System,
v5.0 - SyteLine Enterprise Resource Planning System, v6.0

Copyright proprietor is Frontstep, Inc.

                                      -2-
<PAGE>   18

                                   SCHEDULE B
                       TO THE COPYRIGHT SECURITY AGREEMENT
                                  JULY 12, 2001
<TABLE>
<CAPTION>
------------------------------------------------------- -----------------------------------------------------
                 Works of Authorship                                      Publication Date
------------------------------------------------------- -----------------------------------------------------
<S>                                                     <C>
SYMIX/SYTELINE
------------------------------------------------------- -----------------------------------------------------
SYMAN                                                   9/30/85
------------------------------------------------------- -----------------------------------------------------
SYMIX 2.6                                               4/26/91
------------------------------------------------------- -----------------------------------------------------
SYMIX 2.7                                               8/15/92
------------------------------------------------------- -----------------------------------------------------
SYMIX 3.0                                               3/01/94
------------------------------------------------------- -----------------------------------------------------
SYMIX 4.0 (a/k/a SYMIX 4.1)                             11/01/94 (new name used after 12/12/97)
------------------------------------------------------- -----------------------------------------------------
SyteLine 2.0                                            3/15/96
------------------------------------------------------- -----------------------------------------------------
SyteLine 3.0                                            9/30/97
------------------------------------------------------- -----------------------------------------------------
SyteLine 3.5                                            5/05/98
------------------------------------------------------- -----------------------------------------------------
SyteLine 4.0                                            12/14/98
------------------------------------------------------- -----------------------------------------------------
SYTELINE 4.5                                            8/09/99
------------------------------------------------------- -----------------------------------------------------
SYTELINE 5.0                                            3/31/00
------------------------------------------------------- -----------------------------------------------------
SYTELINE 6.0                                            3/20/01
------------------------------------------------------- -----------------------------------------------------

FRONTOFFICE
------------------------------------------------------- -----------------------------------------------------
FRONTOFFICE 5.0
------------------------------------------------------- -----------------------------------------------------
FRONTOFFICE 4.5
------------------------------------------------------- -----------------------------------------------------
FRONTOFFICE 4.0
------------------------------------------------------- -----------------------------------------------------
FRONTOFFICE 3.0
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
DISTRIBUTION
------------------------------------------------------- -----------------------------------------------------
SYTEDISTRIBUTION 9.2
------------------------------------------------------- -----------------------------------------------------
SYTEDISTRIBUTION 9.1
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
APS
------------------------------------------------------- -----------------------------------------------------
APS 4.6
------------------------------------------------------- -----------------------------------------------------
APS 4.5
------------------------------------------------------- -----------------------------------------------------
APS 4.1
------------------------------------------------------- -----------------------------------------------------
APS 3.5
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
AIM
------------------------------------------------------- -----------------------------------------------------
AIM 9.0
------------------------------------------------------- -----------------------------------------------------
AIM 8.1
------------------------------------------------------- -----------------------------------------------------
AIM 8.0
------------------------------------------------------- -----------------------------------------------------
AIM 7.0
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
FACTOR (WINDOWS)
------------------------------------------------------- -----------------------------------------------------
FACTOR 8.1
------------------------------------------------------- -----------------------------------------------------
Factor 8.0
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
SUPPLY CHAIN
------------------------------------------------------- -----------------------------------------------------
SC 3.0
------------------------------------------------------- -----------------------------------------------------
SC 2.0
------------------------------------------------------- -----------------------------------------------------
SC 1.0
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
AWESIM
------------------------------------------------------- -----------------------------------------------------
AWESIM 3.0
------------------------------------------------------- -----------------------------------------------------
</TABLE>
<PAGE>   19
<TABLE>
<CAPTION>
------------------------------------------------------- -----------------------------------------------------
                 Works of Authorship                                      Publication Date
------------------------------------------------------- -----------------------------------------------------
<S>                                                     <C>
------------------------------------------------------- -----------------------------------------------------
TEAM BUILDER
------------------------------------------------------- -----------------------------------------------------
TEAMBUILDER 2.0
------------------------------------------------------- -----------------------------------------------------
TEAMBUILDER 4.0
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
ECRM
------------------------------------------------------- -----------------------------------------------------
ECRM 5.0
------------------------------------------------------- -----------------------------------------------------
ECRM 5.1
------------------------------------------------------- -----------------------------------------------------
ECRM 5.2
------------------------------------------------------- -----------------------------------------------------
ECRM 5.3
------------------------------------------------------- -----------------------------------------------------
ECRM 5.4
------------------------------------------------------- -----------------------------------------------------

------------------------------------------------------- -----------------------------------------------------
PROJECTS (A/K/A SINGLE SOURCE SYSTEMS PROJECTS
EXTENSION)
------------------------------------------------------- -----------------------------------------------------
for Symix v. 4.0
------------------------------------------------------- -----------------------------------------------------
for Symix v. 4.1
------------------------------------------------------- -----------------------------------------------------
for Symix v. 3.5
------------------------------------------------------- -----------------------------------------------------
for SyteLine v. 4.0
------------------------------------------------------- -----------------------------------------------------
for SyteLine v. 4.5
------------------------------------------------------- -----------------------------------------------------
</TABLE>

         Copyright proprietor is Frontstep, Inc. for all listed works.
         Works listed in BOLD are Marketed Software as of the date hereof.
         This Schedule lists all prior versions of the Symix/SyteLine product
         line, together with all versions of works (that is, the Projects
         module) as to which the Symix/SyteLine product line constitutes a
         derivative work.
         For Marketed Software which is not the Symix/SyteLine product line,
         this Schedule lists some but not necessarily all prior versions, and
         some but not necessarily all works as to which such non-Symix/SyteLine
         works constitute derivative works.

                                      -2-
<PAGE>   20

                                   SCHEDULE C

                                    AMENDMENT

                                       TO

                          COPYRIGHT SECURITY AGREEMENT

                  This Amendment (the "AMENDMENT"), dated as of________ ___,
200__ (the "Amendment Effective Date") to the Copyright Security Agreement,
dated as of July __, 2001 (the "AGREEMENT"), among FOOTHILL CAPITAL CORPORATION,
a California corporation (the "SECURED PARTY") and FRONTSTEP, INC., an Ohio
corporation, FRONTSTEP SOLUTIONS GROUP, INC., an Ohio corporation, and
BRIGHTWHITE SOLUTIONS, INC., an Ohio corporation (each a "DEBTOR" and
collectively, jointly and severally, the "DEBTORS").

                  WHEREAS the Secured Party and the Debtors desire to amend
certain terms of the Agreement (a true copy of which is attached as Exhibit 1
hereto). Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Secured Party and Debtors
hereby agree as follows:

                  1. DEFINITIONS. All capitalized terms used herein and not
otherwise defined herein are used herein as defined in the Agreement.

                  2. AMENDMENT TO SCHEDULE A. SCHEDULE A to the Agreement is
hereby amended to add the works identified on ANNEX I attached hereto
(collectively, the "ANNEX I WORKS"). All Agreement terms and provisions
(including without limitation all conditions, representations, warranties,
covenants and other agreements) shall apply to the Annex I Works as if such
works had been included on Schedule A as of July ___, 2001. Without limiting the
foregoing provisions, as of the date hereof, the term "Copyright Collateral"
shall include without limitation the works set forth in Annex I hereto.

                  3. GRANT OF SECURITY INTEREST. Each Debtor, as security for
the payment and performance of its Secured Obligations, hereby grants, assigns,
transfers and conveys to the Secured Party for the benefit of the Lenders a
continuing first priority security interest in all of its right, title and
interest in, to and under the Copyright Collateral, including without limitation
Copyright Collateral in or otherwise concerning the Annex I Works.

                  4. REPRESENTATIONS AND WARRANTIES. Each Debtor jointly and
severally represents and warrants to the Secured Party as follows:

                           (a)      TRUE AND COMPLETE LIST.  Set forth in
SCHEDULE A as amended by Annex I is a true and complete list, as of the date of
this Amendment, of (i) all works registered with the United States Copyright
Office in which any of the Debtors

<PAGE>   21

own Copyright Collateral and (ii) all works for which are pending applications
for registration with the United States Copyright Office in which any of the
Debtors own Copyright Collateral.

                           (b)      VALIDITY.  Each of the Registrations owned
by Debtors identified in SCHEDULE A as amended by Annex I, and all other
Copyright Collateral owned and otherwise claimed by any Debtor (including rights
relating to works identified on Annex I hereto) is valid, subsisting and
enforceable. Each Debtor has properly complied in all material respects with all
applicable statutory and regulatory requirements, including all notice
requirements, in connection with the Copyright Collateral, and, except as
disclosed in the litigation schedule or annex to the Loan Agreement, no claim
has been made that use (or other exploitation) of any Debtor's rights in and to
the Copyright Collateral does or may infringe or otherwise violate the rights of
any third Person.

                           (c)      TITLE.  Each Debtor has rights in and good
title to the Copyright Collateral owned or otherwise claimed by such Debtor
(including rights relating to works identified on SCHEDULE A as amended by Annex
I) and is the sole and exclusive owner of the entire and unencumbered right,
title and interest in and to such Copyright Collateral, free and clear of any
Liens (other than Liens in favor of the Secured Party and other than the rights
of the licensor of a license made by such licensor to a Debtor as licensee, or
the rights of other licensees under non-exclusive licenses of the same subject
matter if a Debtor's license of such subject matter is a non-exclusive license).
For any Copyright Collateral for which a Debtor is either a licensor or a
licensee pursuant to a license or licensing agreement regarding such Copyright
Collateral, each such license or licensing agreement is in full force and
effect, such Debtor is not in default of any of its obligations thereunder and,
other than the parties to such licenses or licensing agreements, no other Person
has any rights in or to any of such Copyright Collateral.

                           (d)      NO VIOLATION.  The execution, delivery and
performance by each Debtor of this Amendment do not violate any provision of law
or the articles of incorporation or by-laws of such Debtor or result in a breach
of or constitute a material default under any contract, obligation, indenture or
other instrument to which such Debtor is a party or by which such Debtor may be
bound.

                           (e)      AUTHORIZATION.  This Agreement has been
duly authorized, executed and delivered, and constitutes, a legal, valid and
binding agreement of each Debtor, enforceable in accordance with its terms; and

                           (f)      SECRECY.  Each Debtor has taken and will
continue to take all reasonable steps to protect the secrecy of all trade
secrets relating to any of its Copyright Collateral.

                  5. CONTINUED EFFECTIVENESS OF AGREEMENT. Each Debtor hereby
(i) confirms and agrees that each Loan Document to which it is a party is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects except

                                      -2-
<PAGE>   22

that on and after the Amendment Effective Date of this Amendment all references
in any such Loan Document to "the Agreement", "thereto", "thereof", "thereunder"
or words of like import referring to the Agreement shall mean the Agreement as
amended by this Amendment, and (ii) confirms and agrees that to the extent that
any such Loan Document purports to assign or pledge to the Secured Party, or to
grant to the Secured Party a Lien on any collateral as security for the
Obligations of the Debtors from time to time existing in respect of the
Agreement and the Loan Documents, such pledge, assignment and/or grant of a Lien
is hereby ratified and confirmed in all respects.

                  6.       MISCELLANEOUS.

                           (a)      This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.

                           (b)      Section and paragraph headings herein are
included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.

                           (c)      This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York, applicable to
agreements made and wholly performed therein.

                           (d)      The Debtors will pay on demand all
reasonable out-of-pocket costs and expenses of the Secured Party in connection
with the preparation, execution and delivery of this Amendment, including,
without limitation, the reasonable fees, disbursements and other charges of
Schulte Roth & Zabel LLP, counsel to the Secured Party.

                                      -3-

<PAGE>   23

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.

                                FRONTSTEP GROUP, INC.
                                FRONTSTEP SOLUTIONS GROUP, INC.
                                BRIGHTWHITE SOLUTIONS, INC.,
                                each an Ohio corporation

                                By:
                                   --------------------------------------------
                                Name:
                                     ------------------------------------------
                                Title:
                                      -----------------------------------------

                                FOOTHILL CAPITAL CORPORATION

                                By:
                                   --------------------------------------------
                                Name:
                                     ------------------------------------------
                                Title:
                                      -----------------------------------------

                                      -4-

<PAGE>   24

STATE OF                              )
                                      ) ss
COUNTY OF                             )

                  On ________ __ 2001, before me, ____________________________,
Notary Public, personally appeared ________________________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity(ies) upon behalf of which the person(s) acted, executed the instrument.

                  WITNESS my hand and official seal.

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

                                     [SEAL]

STATE OF                              )
                                      ) ss
COUNTY OF                             )

                  On _________ __, 2001, before me, ____________________, Notary
Public, personally appeared ________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity(ies) upon behalf of which the person(s) acted, executed the instrument.

                  WITNESS my hand and official seal.

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

                                     [SEAL]

                                      -5-

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