Common use of Covenants and Agreements of Debtor Clause in Contracts

Covenants and Agreements of Debtor. Debtor covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor will: (a) Duly observe and perform each and every term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Give Secured Party ten (10) days prior written notice before changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 hereof. (c) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (e) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of Secured Party in the Collateral. (h) At the request of Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral. (i) Not, without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party thereunder. (j) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ fees and accountants’ fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (k) Upon request of Secured Party, furnish within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoever. (l) Execute and deliver to Secured Party any and all further agreements, instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s security interest in the Collateral or the priority thereof.

Covenants and Agreements of Debtor. Debtor hereby agrees and covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor willthat: (a) Duly observe Debtor will keep the Collateral free from all liens, security interests and perform each encumbrances except for the security interest granted herein or those specifically permitted in writing by the Secured Party or permitted by the Loan Agreement and every term will defend the Collateral against all claims and condition demands of all persons at any and all agreements, instruments and documents relating to time claiming any interest therein. Debtor will not sell or otherwise transfer the Collateral, and diligently protect and enforce its rights under all such agreementsCollateral or any interest therein except inventory in the ordinary course of business or as otherwise provided in the Loan Agreement. (b) Give Debtor will not change its name without giving the Secured Party ten (10) 30 days prior written notice before changing in which it sets forth its new name and the date on which the new name shall first be used. Debtor shall maintain its principal residence or place of business and chief executive office, or moving if the Debtor is an individual with no place of business, its books residence, at the address set forth on Schedule A noted as "Debtor's Address." Debtor shall, at all times, keep the Secured Party accurately informed in writing of each location where the Debtor's assets are kept and of each of its places of business and Debtor shall not remove any records to a another state or change the location other than that set forth in Section 17 hereofor open or close, move or change any existing or new place of business without giving the Secured Party at least thirty (30) days' prior written notice thereof. (c) Not sellDebtor will, leaseat its expense, assignfurnish to the Secured Party upon its demand such further information, transferwill execute and deliver to the Secured Party such financing statements and other agreements, conveyinstruments or documents, pledgeand will do all such acts as the Secured Party may, hypothecateat any time or from time to time, mortgage reasonably request, or further encumber any as may be necessary or appropriate to establish and maintain a valid and enforceable security interest of the Collateral, provided that Debtor may sell Inventory Secured Party in the ordinary course of businessCollateral as provided in the Loan Agreement. (d) Promptly pay Debtor will keep the Collateral (to the extent that it consists of tangible property) at all times insured against risks of loss or otherwise cause damage by fire (including so-called extended coverage), theft and such other casualties as the Secured Party may reasonably require, including collision in the case of any motor vehicle, all in such amounts (but in no event in an amount less than the full insurable value thereof), under such forms of policies, under such terms, for such periods and written by such companies or underwriters as Secured Party may approve, which approval may not be unreasonably withheld, losses in all cases to be discharged any lienpayable first to the Secured Party "as its interest may appear." All policies of insurance shall provide for at least thirty (30) days' prior written notice of cancellation to the Secured Party, charge, security interest and Debtor shall furnish the Secured Party with certificates of such insurance or other encumbrance that may attach evidence satisfactory to the Secured Party as to compliance with the provisions of this paragraph. Debtor hereby irrevocably appoints Secured Party to act (such appointment being coupled with an interest) as attorney-in-fact for Debtor in making, adjusting and settling claims under such policies of insurance or endorsing Debtor's name on any drafts drawn by insurers of the Collateral or any other documents to effect collection. In the event of any loss or damage to any of the Debtor's assets, including the Collateral, Debtor shall give immediate written notice to Secured Party and to Debtor's insurers of such loss or any portion thereof, other than pursuant to this Agreementdamage and shall promptly file proofs of loss with said insurers. (e) Promptly Debtor will notify the Secured Party in writing promptly upon its learning of any attachment event, condition, loss, damage, litigation, administrative proceeding or other legal process levied against any of the Collateral circumstance which may materially and any information received by Debtor relating to adversely affect the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend Debtor will keep the Collateral against all claimsin good order and repair, liensreasonable wear and tear excepted, security interestswill not waste or destroy the Collateral or any part thereof and will not use the Collateral in violation of any applicable statute, demands ordinance or policy of insurance thereon. The Secured Party may examine and other encumbrances of third parties inspect the Collateral, the Debtor's books and records and any documents or instruments relating to the Collateral at any reasonable time claiming or times and, prior to an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunderEvent of Default, upon reasonable notice wherever located. (g) Notify At its option, but without obligation to do so, the Secured Party in may upon and during the event continuance of an Event of Default and with prior notice to Debtor, discharge taxes, liens, security interests or other encumbrances at any occurrence that time levied or placed on the Collateral; may materially place and pay for insurance on the Collateral; may order and pay for the repair, maintenance and preservation of the Collateral; and may pay any fees for filing or adversely affect recording such instruments or documents as may be necessary or desirable to perfect the security interest of granted herein. The Debtor agrees to reimburse the Secured Party in on demand for any reasonable out-of-pocket payment made or expense incurred by the CollateralSecured Party pursuant to the foregoing authorization, and all such payments and expenses shall constitute part of the Obligations. (h) At If any part of the request of Collateral is a fixture, the Debtor will, on demand, use reasonable efforts to furnish the Secured Party with a disclaimer or release signed by all persons having an interest in the real estate or any interest in the Collateral which is prior to the Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral's interest. (i) NotIf any account or other Collateral is ever represented or evidenced by a promissory note, without Debtor will immediately deliver such note to the prior written consent of Secured Party, execute, file or authorize or permit to be filed endorsed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than such manner as Secured Party is named as a secured party thereundermay require. (j) Reimburse At any time or times that an Event of Default has occurred, and is continuing, Secured Party upon demand for may notify any costs account debtors of its security interest in accounts and feescollect all amounts due thereon, including reasonable attorneys’ fees and accountants’ fees and other expensesthe Debtor agrees, incurred in collecting any sums payable by Debtor under any at the request of the Obligations secured herebySecured Party, enforcing to notify in writing all or any term or provision account debtors of this Agreement or otherwise the Secured Party's interest in the collection Collateral in whatever manner Secured Party requests and, if Secured Party so requests, to permit the Secured Party to mail such notices at the Debtor's expense. Until the Secured Party shall otherwise notify the Debtor as provided herein, all proceeds of and collections of Collateral shall be retained by the Debtor and used solely for the ordinary and usual operation of the Debtor's business and as permitted by the Loan Agreement. From and after such notice by the Secured Party to the Debtor, all proceeds of and collections of the Collateral shall be held in trust by the Debtor for the Secured Party and shall not be commingled with the Debtor's other funds or deposited in any bank account of the Debtor and the preparation and enforcement Debtor agrees to deliver to the Secured Party on the dates of any agreement relating theretoreceipt thereof by the Debtor, duly endorsed to the Secured Party or to bearer, or assigned to the Secured Party, as may be appropriate, all proceeds of the Collateral in the identical form received by the Debtor. (k) Upon request the occurrence of an Event of Default and during the continuation thereof, Secured Party may direct account debtors to make payments directly to the Secured Party, furnish within ten (10) days thereafter and to Secured Party or perform all acts the Debtor could take to any proposed assignee of Secured Partycollect on such accounts, a written statement in form satisfactory including, but without limitation, the right to Secured Partynotify postal authorities to change the address for delivery, duly acknowledgedopen mail, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Noteendorse checks, bring collection suits, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoeverrealize upon Collateral securing such accounts. (l) Execute and deliver to Secured Party may from time to time after the occurrence and during the continuance of an Event of Default without demand or notice, apply and set off any deposit accounts of Debtor with Secured Party and any other amounts owing from Secured Party to Debtor, against any and all further agreementsObligations even though such Obligations be unmatured and regardless of the adequacy of security for the Obligations. (m) After the occurrence and during the continuance of an Event of Default, instrumentsDebtor hereby irrevocably constitutes and appoints the Secured Party as the Debtor's true and lawful attorney, with full power of substitution, at the sole cost and expense of the Debtor but for the sole benefit of the Secured Party, to convert the Collateral into cash, including, without limitation, completing the manufacture or documents processing of work in process, and the sale (either public or private) of all or any portion or portions of the Inventory and other Collateral: to enforce collection of the Collateral, either in its own name or in the name of the Debtor, including, without limitation, executing releases, compromising or settling with any account debtors and prosecuting, defending, compromising or releasing any action relating to the Collateral, to receive, open and dispose of all mail addressed to the Debtor and to take therefrom any remittances or proceeds of Collateral in which the Secured Party has a security interest, to notify Post Office authorities to change the address for delivery of mail addressed to the Debtor to such address as the Secured Party shall designate, to endorse the name of the Debtor in favor of the Secured Party upon any and all such further action checks, drafts, money orders, notes, acceptances or other instruments of the same or different nature: to sign and endorse the name of the Debtor on and to receive as Secured Partysecured party any of the Collateral, in its sole discretionany invoices, may deem necessary schedules of Collateral, freight or advisable express receipts, or bills of lading, storage receipts, warehouse receipts, or other documents of title of the same or different nature relating to the Collateral; to sign the name of the Debtor on any notice to the Debtors or on verification of the Collateral, and to sign and file or record on behalf of the Debtor any financing or other statement in order to evidence, effectuate, perfect, protect, maintain, perfect or realize upon protect the Secured Party’s 's security interest in interest. The Secured Party shall not be obliged to do any of the Collateral acts or exercise any of the priority thereofpowers hereinabove authorized, but if the Secured Party elects to do any such act or exercise any such power, it shall not be accountable for more than it actually receives as a result of such exercise of power, and it shall not be responsible to the Debtor except for gross negligence, willful misconduct or bad faith. All powers conferred upon the Secured Party by this Agreement, being coupled with an interest, shall be irrevocable so long as any Obligation of the Debtor to the Secured Party shall remain unpaid.

Covenants and Agreements of Debtor. Debtor hereby agrees and covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor willthat: (a) Duly observe Debtor will keep the Collateral free from all liens, security interests and perform each encumbrances except for the security interest granted herein or those specifically permitted in writing by the Secured Party or permitted by the Loan Agreement and every term will defend the Collateral against all claims and condition demands of all persons at any and all agreements, instruments and documents relating to time claiming any interest therein. Debtor will not sell or otherwise transfer the Collateral, and diligently protect and enforce its rights under all such agreementsCollateral or any interest therein except inventory in the ordinary course of business or as otherwise provided in the Loan Agreement. (b) Give Debtor will not change its name without giving the Secured Party ten (10) 30 days prior written notice before changing in which it sets forth its new name and the date on which the new name shall first be used. Debtor shall maintain its principal residence or place of business and chief executive office, or moving if the Debtor is an individual with no place of business, its books residence, at the address set forth on SCHEDULE A noted as "Debtor's Address." Debtor shall, at all times, keep the Secured Party accurately informed in writing of each location where the Debtor's assets are kept and of each of its places of business and Debtor shall not remove any records to a another state or change the location other than that set forth in Section 17 hereofor open or close, move or change any existing or new place of business without giving the Secured Party at least thirty (30) days' prior written notice thereof. (c) Not sellDebtor will, leaseat its expense, assignfurnish to the Secured Party upon its demand such further information, transferwill execute and deliver to the Secured Party such financing statements and other agreements, conveyinstruments or documents, pledgeand will do all such acts as the Secured Party may, hypothecateat any time or from time to time, mortgage reasonably request, or further encumber any as may be necessary or appropriate to establish and maintain a valid and enforceable security interest of the Collateral, provided that Debtor may sell Inventory Secured Party in the ordinary course of businessCollateral as provided in the Loan Agreement. (d) Promptly pay Debtor will keep the Collateral (to the extent that it consists of tangible property) at all times insured against risks of loss or otherwise cause damage by fire (including so-called extended coverage), theft and such other casualties as the Secured Party may reasonably require, including collision in the case of any motor vehicle, all in such amounts (but in no event in an amount less than the full insurable value thereof), under such forms of policies, under such terms, for such periods and written by such companies or underwriters as Secured Party may approve, which approval may not be unreasonably withheld, losses in all cases to be discharged any lienpayable first to the Secured Party "as its interest may appear." All policies of insurance shall provide for at least thirty (30) days' prior written notice of cancellation to the Secured Party, charge, security interest and Debtor shall furnish the Secured Party with certificates of such insurance or other encumbrance that may attach evidence satisfactory to the Secured Party as to compliance with the provisions of this paragraph. Debtor hereby irrevocably appoints Secured Party to act (such appointment being coupled with an interest) as attorney-in-fact for Debtor in making, adjusting and settling claims under such policies of insurance or endorsing Debtor's name on any drafts drawn by insurers of the Collateral or any other documents to effect collection. In the event of any loss or damage to any of the Debtor's assets, including the Collateral, Debtor shall give immediate written notice to Secured Party and to Debtor's insurers of such loss or any portion thereof, other than pursuant to this Agreementdamage and shall promptly file proofs of loss with said insurers. (e) Promptly Debtor will notify the Secured Party in writing promptly upon its learning of any attachment event, condition, loss, damage, litigation, administrative proceeding or other legal process levied against any of the Collateral circumstance which may materially and any information received by Debtor relating to adversely affect the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend Debtor will keep the Collateral against all claimsin good order and repair, liensreasonable wear and tear excepted, security interestswill not waste or destroy the Collateral or any part thereof and will not use the Collateral in violation of any applicable statute, demands ordinance or policy of insurance thereon. The Secured Party may examine and other encumbrances of third parties inspect the Collateral, the Debtor's books and records and any documents or instruments relating to the Collateral at any reasonable time claiming or times and, prior to an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunderEvent of Default, upon reasonable notice wherever located. (g) Notify At its option, but without obligation to do so, the Secured Party in may upon and during the event continuance of an Event of Default and with prior notice to Debtor, discharge taxes, liens, security interests or other encumbrances at any occurrence that time levied or placed on the Collateral; may materially place and pay for insurance on the Collateral; may order and pay for the repair, maintenance and preservation of the Collateral; and may pay any fees for filing or adversely affect recording such instruments or documents as may be necessary or desirable to perfect the security interest of granted herein. The Debtor agrees to reimburse the Secured Party in on demand for any reasonable out-of-pocket payment made or expense incurred by the CollateralSecured Party pursuant to the foregoing authorization, and all such payments and expenses shall constitute part of the Obligations. (h) At If any part of the request of Collateral is a fixture, the Debtor will, on demand, use reasonable efforts to furnish the Secured Party with a disclaimer or release signed by all persons having an interest in the real estate or any interest in the Collateral which is prior to the Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral's interest. (i) NotIf any account or other Collateral is ever represented or evidenced by a promissory note, without Debtor will immediately deliver such note to the prior written consent of Secured Party, execute, file or authorize or permit to be filed endorsed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than such manner as Secured Party is named as a secured party thereundermay require. (j) Reimburse At any time or times that an Event of Default has occurred, and is continuing, Secured Party upon demand for may notify any costs account debtors of its security interest in accounts and feescollect all amounts due thereon, including reasonable attorneys’ fees and accountants’ fees and other expensesthe Debtor agrees, incurred in collecting any sums payable by Debtor under any at the request of the Obligations secured herebySecured Party, enforcing to notify in writing all or any term or provision account debtors of this Agreement or otherwise the Secured Party's interest in the collection Collateral in whatever manner Secured Party requests and, if Secured Party so requests, to permit the Secured Party to mail such notices at the Debtor's expense. Until the Secured Party shall otherwise notify the Debtor as provided herein, all proceeds of and collections of Collateral shall be retained by the Debtor and used solely for the ordinary and usual operation of the Debtor's business and as permitted by the Loan Agreement. From and after such notice by the Secured Party to the Debtor, all proceeds of and collections of the Collateral shall be held in trust by the Debtor for the Secured Party and shall not be commingled with the Debtor's other funds or deposited in any bank account of the Debtor and the preparation and enforcement Debtor agrees to deliver to the Secured Party on the dates of any agreement relating theretoreceipt thereof by the Debtor, duly endorsed to the Secured Party or to bearer, or assigned to the Secured Party, as may be appropriate, all proceeds of the Collateral in the identical form received by the Debtor. (k) Upon request the occurrence of an Event of Default and during the continuation thereof, Secured Party may direct account debtors to make payments directly to the Secured Party, furnish within ten (10) days thereafter and to Secured Party or perform all acts the Debtor could take to any proposed assignee of Secured Partycollect on such accounts, a written statement in form satisfactory including, but without limitation, the right to Secured Partynotify postal authorities to change the address for delivery, duly acknowledgedopen mail, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Noteendorse checks, bring collection suits, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoeverrealize upon Collateral securing such accounts. (l) Execute and deliver to Secured Party may from time to time after the occurrence and during the continuance of an Event of Default without demand or notice, apply and set off any deposit accounts of Debtor with Secured Party and any other amounts owing from Secured Party to Debtor, against any and all further agreementsObligations even though such Obligations be unmatured and regardless of the adequacy of security for the Obligations. (m) After the occurrence and during the continuance of an Event of Default, instrumentsDebtor hereby irrevocably constitutes and appoints the Secured Party as the Debtor's true and lawful attorney, with full power of substitution, at the sole cost and expense of the Debtor but for the sole benefit of the Secured Party, to convert the Collateral into cash, including, without limitation, completing the manufacture or documents processing of work in process, and the sale (either public or private) of all or any portion or portions of the Inventory and other Collateral: to enforce collection of the Collateral, either in its own name or in the name of the Debtor, including, without limitation, executing releases, compromising or settling with any account debtors and prosecuting, defending, compromising or releasing any action relating to the Collateral, to receive, open and dispose of all mail addressed to the Debtor and to take therefrom any remittances or proceeds of Collateral in which the Secured Party has a security interest, to notify Post Office authorities to change the address for delivery of mail addressed to the Debtor to such address as the Secured Party shall designate, to endorse the name of the Debtor in favor of the Secured Party upon any and all such further action checks, drafts, money orders, notes, acceptances or other instruments of the same or different nature: to sign and endorse the name of the Debtor on and to receive as Secured Partysecured party any of the Collateral, in its sole discretionany invoices, may deem necessary schedules of Collateral, freight or advisable express receipts, or bills of lading, storage receipts, warehouse receipts, or other documents of title of the same or different nature relating to the Collateral; to sign the name of the Debtor on any notice to the Debtors or on verification of the Collateral, and to sign and file or record on behalf of the Debtor any financing or other statement in order to evidence, effectuate, perfect, protect, maintain, perfect or realize upon protect the Secured Party’s 's security interest in interest. The Secured Party shall not be obliged to do any of the Collateral acts or exercise any of the priority thereofpowers hereinabove authorized, but if the Secured Party elects to do any such act or exercise any such power, it shall not be accountable for more than it actually receives as a result of such exercise of power, and it shall not be responsible to the Debtor except for gross negligence, willful misconduct or bad faith. All powers conferred upon the Secured Party by this Agreement, being coupled with an interest, shall be irrevocable so long as any Obligation of the Debtor to the Secured Party shall remain unpaid.

Covenants and Agreements of Debtor. Debtor covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, which consent shall be granted or withheld in Secured Party' sole and absolute discretion, Debtor will: (a) Duly observe and perform each and every material term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of the income and profits therefrom, except where nonpayment does not involve any danger of sale, forfeiture or loss of any of the Collateral or any interest therein. (c) Insure the Collateral with financially sound and reputable insurers against loss or damage by fire, theft, bodily injury and such other casualties, as are usually insured against by companies engaged in the same or similar businesses as Debtor. (d) Keep and maintain at its own cost and expense satisfactory and complete records of the Collateral, including without limitation a record of all payments received and all credits granted with respect to the Collateral and all other dealings in the Collateral. Upon the occurrence of any Event of Default, Debtor will deliver and turn over any such books and records to the Secured Party at any time on demand of the Secured Party. Prior to the occurrence of an Event of Default and upon reasonable written notice of no less than five (5) business days from Secured Party, Debtor shall permit any representative of Secured Party to inspect such books and records and will provide photocopies thereof to Secured Party at Secured Party's expense. Upon reasonable written notice of no less than five (5) business days to Debtor, with the consent of the Debtor, as to the time of entry, which consent shall not be unreasonably withheld, Secured Party shall also have the right to enter into and upon the premises where any of the Equipment or Inventory is located for the purpose of inspecting the same, observing its use and otherwise protecting Secured Party's interests therein. (e) Give Secured Party ten (10) days prior written notice before (i) changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 14 hereof; (ii) changing the location of any Equipment or Inventory, or (iii) changing the location of any other Collateral to a place outside the State of California; and in any such event taking such action as is necessary to cause the security interest in the Collateral to continue to be perfected. (cf) Not change its name, identity or corporate structure in any manner which might make any financing or continuation statement filed in connection with this Agreement misleading within the meaning of Section 9-402 of the Code, unless Debtor shall have taken all action necessary or reasonably requested by Secured Party to amend such financing or continuation statement so that it is not seriously misleading and shall have notified Secured Party of such action. (g) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor Debtor, so long as no Event of Default shall have occurred and be continuing, may sell Inventory in the ordinary course of businessbusiness (i) sell Inventory and goods, (ii) collect and settle Accounts and (iii) dispose of obsolete or non-serviceable Equipment. In addition, Debtor may grant security interests in favor of NDMS Investments, L.P., Devenshire Management Corp. and Xxxx Xxxxxxx. (dh) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (ei) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s ' security interest in the Collateral or the rights and remedies of Secured Party with respect theretothereto as noted in paragraph 5(b) above. (fj) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s ' interest in the Collateral hereunder. (gk) Notify Secured Party in At the event of any occurrence that may materially or adversely affect the security interest written request of Secured Party in the Collateral. (h) At the request of and at Secured Party's expense, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and Code, any other applicable state’s 's Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party Parties and indicating therein the types or describing the Collateral. (il) Not, without the prior written consent of Secured Party, which consent shall not be unreasonably withheld, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party Parties thereunder. (jm) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ ' fees and accountants’ ' fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (kn) Upon request of Secured Party, furnish within ten (10) days thereafter to Take any and all actions reasonably requested in writing by Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the payoff those certain obligations and liabilities set forth in on Schedule 5(c) hereto, if any, including, but not limited to, the Note, and stating that no claims, offsets filing of one or defenses exist with respect to the Note, this Agreement more Uniform Commercial Code termination statements or any of the Loan Documents of any nature whatsoeverother applicable documents. (lo) Execute and deliver to Secured Party any and all further agreements, instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s ' security interest in the Collateral or the priority thereofthereof including, without limitation, any documents required to be filed with the United States Patent and Trademark Office.

Covenants and Agreements of Debtor. The Debtor covenants and agrees with that: 4.1 The Secured Party that may examine and inspect the Collateral at any reasonable time and wherever located. 4.2 Subject to the limitations of this Security Agreement, the Debtor will from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless time to time upon demand furnish to Secured Party shall otherwise consent in writingsuch further information and will execute, Debtor will: (a) Duly observe acknowledge and perform each deliver to Secured Party such financing statements and every term assignments and condition other papers, pay any costs of any searches and all agreements, instruments and documents relating to the Collateralfiling fees, and diligently protect and enforce its rights under will do all such agreements. (b) Give other acts and things as Secured Party ten (10) days prior written notice before changing its principal residence may reasonably request as being necessary or place of business or moving its books appropriate to establish, perfect and records to maintain a location other than that set forth in Section 17 hereof. (c) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (e) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s valid security interest in the Collateral or as security for the rights Obligations. Without limitation of the foregoing, the Debtor will execute and remedies of deliver to Secured Party with respect theretoany document required to acknowledge, register or perfect the security interest granted in any of the Patent rights, technical information, Trademark rights or Copyrights and in any of the Collateral under the Federal Assignment of Claims Act. The Debtor will immediately deliver to the Secured Party all original evidences of Chattel Paper, Instruments, Documents or Securities for which possession is required for perfection of the security interest granted hereunder. (f) Defend 4.3 The Debtor will defend the Collateral against all claims, liens, security interests, claims and demands and of all other encumbrances of third parties persons at any time claiming the same or an interest in the therein. Debtor shall not encumber any Collateral that is adverse to Secured Party’s interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of Secured Party in the Collateral. (h) At the request of Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral. (i) Not, without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than the Secured Party, or sell, assign or transfer the Collateral or any right, title or interest therein. 4.4 If any action or proceeding shall be commenced, other than any action to collect the Obligations, to which action or proceeding the Secured Party is named as made a secured party thereunder. (j) Reimburse and in which it becomes necessary to defend or uphold the Secured Party's security interests hereunder, all costs incurred by the Secured Party upon demand for any costs and fees, the expenses of such litigation (including reasonable attorneys’ counsel fees and accountants’ fees and other expenses, incurred in collecting any sums payable by Debtor under any ) shall be deemed part of the Obligations secured hereby, enforcing any term which the Debtor agrees to pay or provision of this Agreement or otherwise in the collection cause to be paid. 4.5 All records of the Collateral and will be located at the preparation and enforcement Debtor's principal place of business. The Debtor shall not change the location of any agreement relating theretoEquipment or Inventory or the records pertaining to any Collateral unless the Debtor gives Secured Party not less than 14 days prior written notice. (k) Upon request 4.6 The Debtor will have and maintain insurance at its expense at all times in such amounts, in such form, containing such terms and written by such companies as may be reasonably satisfactory to Secured Party and such insurance policy shall contain a Secured Party's loss payable endorsement in favor of Secured Party, furnish within ten (10) days thereafter . All policies of insurance shall be payable to Secured Party and the Debtor, as their interests may appear, and shall provide for thirty (30) days' written notice of cancellation or modification to Secured Party. Secured Party is authorized by the Debtor to act as its attorney in collecting, adjusting, settling or canceling such insurance and endorsing any proposed assignee drafts drawn by insurers. Secured Party may apply any proceeds of insurance received by it to the Obligations, whether due or not. The Debtor will immediately notify Secured Party of any damage to or loss of the Collateral. Not later than the expiration date of each policy of insurance then in effect, the Debtor shall deliver to Secured Party a certificate of insurance certifying as to (i) the extension of such policy or the issuance of a renewal policy therefor, describing the same in reasonable detail satisfactory to Secured Party, a written statement and (ii) the payment in full of the portion of the premium therefor then due and payable (or accompanied by other proof of such payment satisfactory to Secured Party). The Debtor shall be required forthwith to notify Secured Party (by telephone, confirmed in writing) if the Debtor shall determine at any time not to, or at any time be unable to, extend or renew any such policy then in effect. 4.7 The Debtor will use the Collateral for business purposes and not in violation of any statute or ordinance. 4.8 The Debtor will pay promptly when due all (i) registration, issue, maintenance and similar fees to establish and maintain the Collateral, and (ii) taxes and assessments upon the Collateral or upon its use or sale (collectively, the "Taxes"), except for any Taxes which are being contested in good faith and for which adequate reserves under generally accepted accounting principles have been established. 4.9 The Debtor will at all times keep accurate and complete records of the Accounts, Instruments and other Collateral and will deliver such reconciliation reports and other financial information to Secured Party as Secured Party may at any time reasonably request. Secured Party, or any of its Secured Parities, shall have the right to call at the Debtor's place or places of business at reasonable intervals and upon reasonable notice to inspect, audit, make test verifications and otherwise examine and make extracts from the books, records, journals, orders, receipts, correspondence and other data relating to any of the Collateral. 4.10 Upon the occurrence of an Event of Default, the Debtor agrees to stamp all books and records pertaining to Accounts, Instruments and General Intangibles to evidence the Secured Party's security interest therein in form satisfactory to Secured Party immediately upon Secured Party's written demand. 4.11 At its option, duly acknowledgedSecured Party may discharge Taxes, certifying liens or other encumbrances at any time levied against or placed on the Collateral which have not been stayed as to execution and contested with due diligence in appropriate legal proceedings, and Secured Party may pay for insurance on the Collateral and may pay for maintenance and preservation of the Collateral. The Debtor will, upon demand, remit to Secured Party forthwith: 4.11.1 The amount of any such Taxes, assessments, insurance or other expenses which Secured Party shall have been required or elected to pay; and 4.11.2 The amount of any and all out-of-pocket expenses which Secured Party may incur in connection with the principal and interest then owing under the obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or exercise by Secured Party of any of the Loan Documents powers conferred upon it hereunder; and 4.11.3 Interest on any amounts expended under Subsections "4.11.1" and "4.11.2" of any nature whatsoever. (l) Execute and deliver this Section 4.11 from the date of such expenditure to the date of repayment in full to Secured Party at a rate per annum which shall automatically increase and decrease so that at all times such rate shall be the Default Rate. 4.12 The Debtor will notify Secured Party in writing at least thirty (30) days prior to changing its chief executive office or other locations at which it does business or changing its name or conducting business under any name or trade name other than as warranted under Sections 3.3 and all further agreements3.5 hereof, instrumentsin each case specifying the places or names involved. 4.13 The Debtor will use commercially reasonable efforts to obtain the consent of any person, governmental instrumentality or agency, or documents public body or official to the assignment hereunder of any Account, Instrument, Document or General Intangible if such consent may be required by the terms of any contract or statute and take if the such consent is reasonably necessary to support the security interest hereunder. 4.14 Secured Party shall have the right to notify the account debtors obligated on any and or all such further action as of a Debtor's Accounts, Chattel Paper, Instruments, Documents, Securities or General Intangibles to make payment thereof directly to Secured Party, in its sole discretion, and Secured Party may deem necessary or advisable in order take control of all proceeds of any thereof. The form of such notice to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s security interest the account debtors shall be in the Collateral or the priority thereofform of Exhibit 1 annexed hereto.

Covenants and Agreements of Debtor. Debtor hereby covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor willLender as follows: (a) Duly observe Debtor shall do all acts that may be necessary to maintain, preserve, and perform each and every term and condition of any and all agreements, instruments and documents relating to protect the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Give Debtor shall not use or permit any Collateral to be used in violation of any applicable law, rule or regulation, or any provision of this Agreement or any other agreement with Secured Party ten (10) days prior written notice before changing its principal residence related thereto, or place any policy of business or moving its books and records to a location other than that set forth in Section 17 hereofinsurance covering such Collateral. (c) Not sellDebtor shall pay promptly when due all taxes, leaseassessments, assigncharges, transferencumbrances and liens now or hereafter imposed upon or affecting any Collateral or Secured Party's security interest or other lien hereunder (including all property, conveyexcise, pledgeintangible, hypothecateuse, mortgage or further encumber any of sales, stamp and other such taxes), except to the Collateral, provided that Debtor may sell Inventory extent expressly permitted in the ordinary course of businessThird Restated Loan Agreement. (d) Promptly pay Debtor shall appear in and defend any action or otherwise cause to be discharged any lien, charge, security interest or other encumbrance proceeding that may attach adversely affect its title to the Collateral, or any portion thereof, other than pursuant to this Agreement. (e) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of Secured Party 's interests in the Collateral. (he) At Except to the request extent permitted in the Third Restated Loan Agreement, Debtor shall not sell, encumber, lease, rent or otherwise dispose of Secured Partyor transfer any Collateral or any right or interest therein and Debtor shall keep the Collateral free of all levies, execute security interests or other liens, charges or encumbrances. (f) Debtor shall comply in all material respects with all laws, rules and permit regulations (including those governing environmental matters) relating to be filed one or more financing statementsthe possession, operation, storage, maintenance, disposal, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing control of the Collateral. (g) Debtor agrees that such care as Secured Party gives to the safekeeping of its own property of like kind shall constitute reasonable care of such Collateral when it may be in Secured Party's possession. (h) If and to the extent requested by Secured Party, Debtor shall account fully for and promptly deliver to Secured Party, in the form received, all documents, chattel paper, instruments, and agreements constituting Collateral hereunder and all proceeds of the Collateral received, all endorsed to Secured Party or in blank. (i) NotDebtor shall keep accurate, and complete records of the Collateral and shall provide Secured Party with such records and such other reports and information relating to the Collateral as Secured Party may request from time to time. (j) Debtor shall keep, procure, execute, and deliver from time to time any and all, indorsements, notifications, registrations, assignments, financing statements, fixture filings, certificate of title applications, and other writings deemed necessary or appropriate by Secured Party to perfect, maintain, and protect its security interest in or other lien on the Collateral hereunder and the priority thereof, and Debtor shall take such other actions as Secured Party may request to protect the value of the Collateral and of Secured Party's security interest in the Collateral, including, without limitation, obtaining such landlord waivers, mortgagee waivers and other assurances from third parties regarding Secured Party's access to and right to foreclose on or sell the Collateral and right to realize the practical benefits of such foreclosure or sale as Secured Party may request. Unless prohibited by applicable law, Debtor hereby authorizes Secured Party to execute and file any financing statement or fixture filing on Debtor's behalf, and the parties further agree that any carbon, photographic, or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu thereof. (k) Debtor shall reimburse Secured Party upon demand for all costs and expenses, including, without limitation, actual and reasonable attorney's fees and disbursements, Secured Party may now or hereafter incur while exercising or enforcing any right, power, or remedy provided to Secured Party by this Security Agreement or by law, all of which costs and expenses shall constitute part of the Obligations secured hereunder. (l) Debtor shall give Secured Party not less than thirty (30) days prior written notice of any change in Debtor's chief executive office or principal place of business or Debtor's legal name or trade name(s) or style(s) from that set forth in this Agreement. (m) Debtor shall keep its records concerning the Collateral at Debtor's address set forth above or at Debtor's other location(s) (if any) set forth on Schedule 1 attached to this Agreement and shall not remove such records from such location(s) without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party thereunder. (jn) Reimburse Secured Party upon demand Debtor shall keep all Collateral consisting of goods (other than Inventory in transit and mobile goods) at the address for any costs Debtor set forth above or at Debtor's other locations (if any) set forth on Schedule 1 attached to this Agreement, and feesDebtor shall not, including reasonable attorneys’ fees and accountants’ fees and other expenses, incurred in collecting any sums payable by Debtor under any of without the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (k) Upon request prior written approval of Secured Party, furnish within ten remove any Collateral therefrom except for sales of Inventory in the ordinary course of business and the disposition of obsolete or worn-out Equipment in accordance with this Agreement and except for the storage of goods at locations other than those shown above or on Schedule 1 attached hereto if (10i) Debtor gives Secured Party written notice of the new storage location at least thirty (30) days thereafter prior to Secured Party or to any proposed assignee of storing such Collateral at such location, (ii) Secured Party's security interest in such Collateral hereunder is and continues to be duly perfected, a written statement (iii) all documents and other receipts in form satisfactory respect of any Collateral maintained at such premises are promptly delivered to Secured Party, duly acknowledgedand (iv) the owner (and, certifying if requested by Secured Party, any mortgagee) of such premises agrees in writing with Secured Party not to assert any lien in respect of such Collateral and to permit Secured Party to have the amount right to enter upon and use such premises in order to inspect, store, process, assemble or remove the Collateral therefrom after the occurrence of an Event of Default. (o) Debtor shall furnish Secured Party with such information regarding the principal Collateral (and interest then owing under any account debtors thereunder) as Secured Party from time to time may request. (p) Debtor shall keep the obligations Collateral in good condition and liabilities set forth in the Note, repair and stating that no claims, offsets shall not cause or defenses exist with respect to the Note, this Agreement or permit any waste of any of the Loan Documents of any nature whatsoeverCollateral. (lq) Execute Debtor shall insure the Collateral, with Secured Party named as loss payee under all property coverages and deliver as an additional insured under all liability coverages, in form and amount, with insurers, and against risks and liabilities which are satisfactory to Secured Party any in all respects, and Debtor hereby assigns all such policies and all further agreements, instruments, or documents and take any and all such further action as proceeds thereof (including returned premiums) to Secured Party, to secure the Obligations, agrees to deliver them to Secured Party at its request, and agrees that Secured Party may make any claim thereunder, cancel the insurance on default by Debtor, collect and receive payment and indorse any instrument in its sole discretionpayment of loss or return premium or other refund or return, may deem necessary or advisable in order to evidenceand apply such amounts received, effectuate, perfect, protect, maintain, or realize upon at Secured Party’s security interest in 's election, to replacement of the Collateral or to the priority thereofObligations. Debtor shall not use or permit the use of any of the Collateral in any manner which will render inapplicable or invalid any insurance coverage therefor. Debtor shall deliver the originals of all property insurance policies covering the Collateral to Secured Party together with loss payable endorsements thereon in form and substance satisfactory to Secured Party and in the name of Secured Party as loss payee thereunder. Each policy of insurance or each such endorsement shall contain a clause requiring the insurer to give not less than thirty (30) days prior written notice to Secured Party in the event of cancellation of the policy for nonpayment of premium and a clause to the effect that the interests of Secured Party thereunder shall not be impaired or invalidated by any act or neglect of Debtor nor by the occupation of the premises covered thereby for purposes more hazardous than are permitted by said policy. (r) Debtor agrees that all risk of loss of the Collateral shall at all times be and remain upon Debtor irrespective of whether such Collateral is then in Debtor's or Secured Party's possession. (s) Debtor agrees that any of the Collateral consisting of Equipment shall be and remain personal property and shall not, by reason of its attachment or other connection to any real property, either become or be deemed to be a fixture or appurtenance to such real property and shall at all times be deemed severable therefrom. (t) Debtor shall permit Secured Party (or any person designated by Secured Party) from time to time to inspect the Collateral and to inspect, audit and make copies of or extracts from all books and records maintained by or on behalf of Debtor pertaining to the Collateral (including computer records), all at such times and places as Secured Party may request from time to time.

Covenants and Agreements of Debtor. Debtor In addition to all covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full ---------------------------------- agreements of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor will: (a) Duly observe and perform each and every term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Give Secured Party ten (10) days prior written notice before changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 hereof.the other Loan Documents, which are incorporated herein by this reference, Debtor hereby agrees, at no cost or expense to the Agent or any of the Secured Parties: (c6(a) To do all acts that may be necessary to maintain, preserve and protect the Collateral and the priority and perfected nature of the security interest of the Agent for the benefit of the Secured Parties therein; 6(b) With respect to Collateral in possession of a third party, upon the written request of the Agent, to join with the Agent in notifying the third party of the Secured Parties' security interest and obtaining an acknowledgment from the third party that it is holding the Collateral for the benefit of the Secured Parties; 6(c) Upon the written request of the Agent, to cooperate with the Agent in obtaining control agreements in form and substance satisfactory to the Agent with respect to Collateral consisting of deposit accounts, investment property, letter of credit rights, and electronic chattel paper; 6(d) Not sellto create any chattel paper without placing a legend on the chattel paper acceptable to the Agent indicating that the Secured Parties have a security interest in the chattel paper; 6(e) Not to use or permit any Collateral to be used unlawfully or in violation of any provision of this Security Agreement, leaseany other agreement with the Agent and/or the Secured Parties related hereto, assignor any law, transferrule, conveyregulation, pledgeorder, hypothecatewrit, mortgage judgment, injunction, decree or further encumber award binding on Debtor or affecting any of the Collateral or any contractual obligation affecting any of the Collateral; 6(f) To pay promptly when due all taxes, assessments, charges, encumbrances and Liens now or hereafter imposed upon or affecting any Collateral; 6(g) To appear in and defend any action or proceeding which may affect its title to or the Agent's interest on behalf of the Secured Parties in the Collateral; 6(h) Not to surrender or lose possession of (other than to the Agent), sell, encumber, lease, rent, or otherwise dispose of or transfer any Collateral or right or interest therein except as expressly provided that herein and in the other Loan Documents, and to keep the Collateral free of all levies and security interests or other Liens or charges except as permitted by the Credit Agreement; provided, however, that, unless an Event of Default shall have occurred and be continuing, Debtor may sell Inventory may, in the ordinary course of business., sell or lease any Collateral consisting of inventory; (d6(i) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach To account fully for and promptly deliver to the CollateralAgent, in the form received, all documents, chattel paper, instruments and agreements constituting Collateral hereunder and all proceeds of the Collateral received, all endorsed to the Agent or any portion thereofin blank, as requested by the Agent, and until so delivered all such documents, instruments, agreements and proceeds shall be held by Debtor in trust for the Agent for the benefit of the Secured Parties, separate from all other than pursuant to this Agreement.property of Debtor; (e6(j) Promptly notify Secured Party of any attachment or other legal process levied against any To keep separate, accurate and complete records of the Collateral and any to provide the Agent and each of the Secured Parties with such records and such other reports and information received by Debtor relating to the Collateral, Collateral as the Agent or any Secured Party may reasonably request from time to other persons obligated in connection therewith, and time; 6(k) To give the Agent thirty (30) days prior written notice of any threatened change in Debtor's chief place of business, Debtor's state of incorporation or filed claims legal name or proceedings, that might trade name(s) or style(s) referred to in any way affect or impair Secured Party’s security interest in Paragraph 11 below; 6(l) To keep the records concerning the Collateral or at the rights location(s) referred to in Paragraph 11 below and remedies of Secured Party with respect thereto. (fnot to remove such records from such location(s) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of Secured Party in the Collateral. (h) At the request of Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral. (i) Not, without the prior written consent of Secured Party, execute, file or authorize the Agent; 6(m) To keep the Collateral at the location(s) referred to in Paragraph 11 below and not to remove the Collateral from such location(s) without the prior written consent of the Agent; 6(n) To keep the Collateral in good condition and repair and not to cause or permit any waste or unusual or unreasonable depreciation of the Collateral; 6(o) Unless Debtor shall either reasonably and in good faith determine that such Collateral is of negligible economic value to be filed in Debtor or that there is a valid purpose to do otherwise not to: (1) permit any jurisdiction Patent Collateral to lapse or with any governmental authority any financing become abandoned or similar statement relating dedicated to the Collateral, public or any portion thereof, in which any person other than Secured Party is named as a secured party thereunder. otherwise be unenforceable; (j2) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ fees and accountants’ fees and other expenses, incurred in collecting any sums payable by Debtor under fail to continue to use any of the Obligations secured herebyTrademark Collateral in order to maintain all of the Trademark Collateral in full force free from any claim of abandonment for non-use, enforcing any term or provision of this Agreement or otherwise (3) fail to maintain as in the collection past the quality of products and services offered under all of the Trademark Collateral, (4) fail to employ all of the Trademark Collateral and the preparation and enforcement registered with any Federal or state or foreign authority with an appropriate notice of such registration, (5) adopt or use any other Trademark which is confusingly similar or a colorable imitation of any agreement relating thereto. (k) Upon request of Secured Party, furnish within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under Trademark Collateral, (6) use any of the obligations and liabilities set forth in Trademark Collateral registered with any Federal or state or foreign authority except for the Noteuses for which registration or application for registration of all of the Trademark Collateral has been made, and stating that no claims, offsets or defenses exist with respect (7) do or permit any act or knowingly omit to do any act whereby any of the Note, this Agreement Trademark Collateral may lapse or become invalid or unenforceable; (viii) do or permit any act or knowingly omit to do any act whereby any of the Copyright Collateral or any of the Loan Documents Trade Secrets Collateral may lapse or become invalid or unenforceable or placed in the public domain except upon expiration of the end of an unrenewable term of a registration thereof; 6(p) To notify the Agent immediately if it knows, or has reason to know, that any application or registration relating to any material item of the Intellectual Property Collateral may become abandoned or dedicated to the public or placed in the public domain or invalid or unenforceable, or of any nature whatsoever.adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any foreign counterpart thereof or any court) regarding Debtor's ownership of any of the Intellectual Property Collateral, its right to register the same or to keep and maintain and enforce the same; (l6(q) Execute Not to file an application for the registration of any Intellectual Property Collateral with the United States Patent and deliver to Secured Party Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, unless it promptly informs the Agent, and upon request of the Agent, executes and delivers any and all further agreements, instruments, or documents and take any and all such further action papers as Secured Party, in its sole discretion, the Agent may deem necessary or advisable in order reasonably request to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s evidence the Agent's security interest in such Intellectual Property Collateral and the goodwill and general intangibles of Debtor relating thereto or represented thereby; 6(r) With respect to Intellectual Property that is or becomes Collateral hereunder, promptly to execute and deliver to the Agent agreements in the forms of Exhibit A, Exhibit B, Exhibit C and Exhibit D hereto; and --------- ---------- --------- --------- 6(s) With respect to rights of the Agent in Collateral that are or become subject to compliance with the priority Assignment of Claims Act, promptly to deliver to the Agent an agreement in the form of Exhibit E hereto, fully --------- executed and acknowledged on behalf of the United States or appropriate agency or instrumentality thereof.

Covenants and Agreements of Debtor. Debtor covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor will: (a) Duly observe and perform each and every term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Give Secured Party ten (10) days prior written notice before changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 hereof. (c) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (e) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s 's security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s 's interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of Secured Party in the Collateral. (h) At the request of Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s 's Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral. (i) Not, without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party thereunder. (j) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ ' fees and accountants’ ' fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (k) Upon request of Secured Party, furnish within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoever. (l) Execute and deliver to Secured Party any and all further agreements, instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s 's security interest in the Collateral or the priority thereof.

Covenants and Agreements of Debtor. Each Debtor hereby covenants and agrees with the Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor willas follows: (a) Duly observe and perform each and every term and condition of any and all agreements, instruments and documents relating Except to the Collateralextent not required under the Purchase Agreement, each Debtor shall pay promptly when due all taxes, assessments, charges, encumbrances and diligently protect liens now or hereafter imposed upon or affecting any Collateral or Secured Party’s security interest or other lien hereunder (including all property, excise, intangible, use, sales, stamp and enforce its rights under all other such agreementstaxes). (b) Give Each Debtor shall not sell, encumber, lease, rent or otherwise dispose of or transfer any Collateral or any right or interest therein except as expressly permitted by it hereunder or in the Purchase Agreement, and each Debtor shall keep the Collateral free of all levies, security interests or other liens, charges or encumbrances except for Permitted Liens or those approved in writing by Secured Party ten (10) days prior written notice before changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 hereofParty. (c) Not sellExcept to the extent not required under the Purchase Agreement, leaseeach Debtor shall comply in all material respects with all laws, assignrules and regulations (including those governing environmental matters) relating to the possession, transferoperation, conveystorage, pledgemaintenance, hypothecatedisposal, mortgage or further encumber any and control of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach If and to the Collateralextent requested by Secured Party on or after the occurrence and during the continuance of any Event of Default, each Debtor shall account fully for and promptly deliver to Secured Party, in the form received, all documents, chattel paper, instruments, and agreements constituting Collateral hereunder and all proceeds of the Collateral received, all endorsed to Secured Party or in blank. Each Debtor agrees that any portion thereof, other than pursuant to this Agreementand all intercompany loans shall at all times be evidenced by that certain Global Intercompany Promissory Note amongst the Debtors and dated the date hereof. (e) Promptly notify Secured Party of any attachment or other legal process levied against any Each Debtor shall keep records of the Collateral that are accurate and any complete in all material respects and shall provide Secured Party with such records and such other reports and information received by Debtor relating to the CollateralCollateral as Secured Party may reasonably request from time to time. (f) Each Debtor shall keep, or to other persons obligated in connection therewithprocure, execute, and deliver from time to time any and all, indorsements, notifications, registrations, assignments, financing statements, fixture filings, certificate of any threatened title applications, blank transfer powers, and other writings deemed necessary by Secured Party to perfect, maintain, and protect its security interest in or filed claims or proceedingsother lien on the Collateral hereunder and the priority thereof, that might in any way affect or impair and each Debtor shall take such other actions as Secured Party may reasonably request to protect the Secured Party’s security interest in the Collateral, including, without limitation, using commercially reasonable efforts to obtain such landlord waivers, mortgagee waivers and other assurances from third parties regarding Secured Party’s access to and right to foreclose on or sell the Collateral and right to realize the practical benefits of such foreclosure or sale as Secured Party may request, in each case, at Debtors’ expense. Unless prohibited by applicable law, each Debtor hereby authorizes Secured Party to execute and file any financing statement or fixture filing (or the equivalent thereof in any foreign country) on each Debtor’s behalf and without such Debtor’s signature, and the parties further agree that any carbon, photographic, or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu thereof. In addition to and not in limitation of the foregoing, the Secured Party may, at the Debtors’ expense, apply for any registration of this Agreement if registration is necessary to: (i) perfect the security interest granted in favor of the Secured Party; or (ii) to protect the rights and remedies of Secured Party with respect thereto. (f) Defend and the Collateral against all claims, liens, security interests, demands and other encumbrances priority of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of the Secured Party in the Collateral. (g) Debtors shall reimburse Secured Party upon demand for all reasonable documented out-of-pocket costs and expenses, including, without limitation, reasonable documented out-of-pocket attorney’s fees and disbursements, Secured Party may now or hereafter incur while exercising or enforcing any right, power, or remedy provided to Secured Party by this Security Agreement or by law, all of which costs and expenses shall constitute part of the Secured Obligations. (h) At Debtors shall give Secured Party not less than thirty (30) days prior written notice of any change in any Debtor’s chief executive office or principal place of business. (i) Debtors shall give Secured Party not less than thirty (30) days prior written notice of any change to a Debtor’s legal name or its jurisdiction of organization. (j) Each Debtor shall promptly furnish Secured Party with such information regarding the request of Collateral (and any account debtors thereunder) as Secured PartyParty from time to time may request. (k) Each Debtor shall keep the Collateral in good condition and repair, execute ordinary wear and permit to be filed one or more financing statementstear excepted, and amendments thereto, under the California Uniform Commercial Code and shall not cause or permit any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing material waste of any of the Collateral. (il) NotDebtors shall insure the Collateral as required pursuant to the Purchase Agreement and shall cause Secured Party to be named as loss payee under all property coverages and as an additional insured under all liability coverages, and each Debtor hereby assigns all such policies and all proceeds thereof (including returned premiums) to Secured Party, to secure the Secured Obligations, agrees to appropriate insurance certificates and endorsements evidencing such assignment to Secured Party at its request, and agrees that upon the occurrence and during the continuance of any Event of Default, Secured Party may make any claim thereunder, collect and receive payment and indorse any instrument in payment of loss or return premium or other refund or return, and apply such amounts received, at Secured Party’s election, to replacement of the Collateral or to the Secured Obligations. (m) Each Debtor agrees that all risk of loss of the Collateral shall at all times be and remain upon such Debtor irrespective of whether such Collateral is then in such Debtor’s or Secured Party’s possession. (n) Each Debtor shall permit Secured Party (or any person designated by Secured Party) from time to time (but only once per Fiscal Quarter unless an Event of Default then exists) to inspect the Collateral and to inspect, audit and make copies of or extracts from all books and records maintained by or on behalf of each Debtor pertaining to the Collateral (including computer records), all at such reasonable times and places and upon reasonable advance notice (except no such notice shall be required if any Default or Event of Default then exists) as Secured Party may request from time to time. (o) The Debtors shall not establish any new deposit accounts or any securities accounts on or after the date of this Agreement, unless such deposit account or securities account is subject to a deposit account control agreement or a securities account control agreement, as applicable, among the applicable Debtor, the depository bank or securities intermediary, as applicable, and the Secured Party, in form and substance reasonably satisfactory to the Secured Party. (p) No Debtor shall acquire any ownership interest in any real property (other than a leasehold interest) without the prior written consent of the Secured Party. (q) At the end of each Fiscal Quarter during which any Debtor registered or recorded any new Intellectual Property on or after the date hereof (including any Intellectual Property which is the subject of an application for registration or recordation) in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state or territory thereof, or in any other country or any political subdivision thereof, such Debtor will execute an Intellectual Property Security Agreement (or, if applicable, enter into an amendment of an existing Intellectual Property Security Agreement) with respect to such Intellectual Property, in form and substance reasonably satisfactory to the Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person and take all other than Secured Party is named as a secured party thereunder. (j) Reimburse Secured Party upon demand for any costs actions and fees, including reasonable attorneys’ fees and accountants’ fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (k) Upon request of Secured Party, furnish within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoever. (l) Execute execute and deliver to Secured Party all other documents as necessary or appropriate in the reasonably judgment of the Secured Party to create, preserve, perfect and maintain the security interests granted in favor of the Secured Party in such Intellectual Property. Each Debtor shall conduct its business and affairs without knowing infringement of or interference with any Intellectual Property of any other Person in any material respect and shall comply with the terms of any applicable license in respect of such Intellectual Property, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. (r) If any Collateral with a value in excess of $100,000 is at any time in the possession or control of a warehouseman, bailee or any agent or processor of such Debtor and the Secured Party so requests (i) notify such Person in writing of the Secured Party’s security interest therein, and (ii) use commercially reasonable efforts to obtain a Third Party Waiver Agreement. (s) Each Debtor shall, upon obtaining any Commercial Tort Claims by or in favor of such Obligor seeking damages in excess of $50,000 in any individual instance or $100,000 in the aggregate, (i) promptly forward to the Secured Party an updated Schedule 2 listing each such Commercial Tort Claim seeking damages in in excess of $50,000 and all further agreementsCommercial Tort Claims if the damages sought exceed $100,000 in the aggregate, instrumentsand (ii) execute and deliver such statements, or documents and take any notices and do and cause to be done all such further action things as may be reasonably required by the Secured PartyParty or required by law to create, in its sole discretionpreserve, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon perfect and maintain the Secured Party’s security interest in such Commercial Tort Claims set forth on Schedule 2. (t) In addition and not in limitation of the Collateral foregoing covenants, each Debtor agrees that from time to time, at the expense of such Debtor, that it shall promptly execute and deliver all further instruments and documents, and take all further action, that the Secured Party may reasonably request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the priority thereofSecured Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral.

Covenants and Agreements of Debtor. Debtor covenants and agrees with ---------------------------------- Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor will: (a) Duly observe and perform each and every term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Give Secured Party ten (10) days prior written notice before changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 hereof. (c) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (e) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s 's security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s 's interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of Secured Party in the Collateral. (h) At the request of Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s 's Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral. (i) Not, without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party thereunder. (j) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ ' fees and accountants’ ' fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (k) Upon request of Secured Party, furnish within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoever. (l) Execute and deliver to Secured Party any and all further agreements, instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s 's security interest in the Collateral or the priority thereof.

Covenants and Agreements of Debtor. Debtor hereby covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor willLender as follows: (a) Duly observe Debtor shall pay promptly when due all taxes, assessments, charges, encumbrances and perform each and every term and condition of liens now or hereafter imposed upon or affecting any and all agreements, instruments and documents relating to the Collateral, this Agreement or the Note or Secured Party's security interest or other lien hereunder (including all property, excise, intangible, use, sales, stamp and diligently protect and enforce its rights under all other such agreementstaxes). (b) Give Debtor shall not sell, encumber, lease, rent or otherwise dispose of or transfer any Collateral or any right or interest therein except as hereinafter provided, and Debtor shall keep the Collateral free of all levies, security interests or other liens, charges or encumbrances except those granted hereunder to Secured Party ten or those approved in writing by Secured Party. (10c) Debtor shall comply in all material respects with all laws, rules and regulations (including those governing environmental matters) relating to the possession, disposal, and control of the Collateral. (d) If and to the extent requested by Secured Party, Debtor shall account fully for and promptly deliver to Secured Party, in the form received, all documents, chattel paper, instruments, and agreements constituting Collateral hereunder and all proceeds of the Collateral received, all endorsed to Secured Party or in blank. (e) Debtor shall keep accurate, and complete records of the Collateral and shall provide Secured Party with such records and such other reports and information relating to the Collateral as Secured Party may request from time to time. (f) Debtor shall keep, procure, execute, and deliver from time to time any and all, indorsements, notifications, registrations, assignments, financing statements, blank transfer powers, and other writings deemed necessary or appropriate by Secured Party to perfect, maintain, and protect its security interest in or other lien on the Collateral hereunder and the priority thereof, and Debtor shall take such other actions as Secured Party may request to protect the value of the Collateral and of Secured Party's security interest in the Collateral. Without limiting the generality of the immediately preceding sentence, Debtor shall enter into a control agreement in form and substance satisfactory to Secured Party with respect to the Account with Secured Party and Morgan Keegan (the "Control Agreement"). Debtor authorizes Secured Pxxxx xx xxxx entitlement orders to Morgan Keegan with respect to the Collateral without further cxxxxxx xx Xxxxor at any time that an Event of Default (as defined in this Agreement) has occurred and is continuing. Unless prohibited by applicable law, Debtor hereby authorizes Secured Party to execute and file any financing statement on Debtor's behalf and without Debtor's signature, and the parties further agree that any carbon, photographic, or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu thereof. (g) Debtor shall reimburse Secured Party upon demand for all costs and expenses, including, without limitation, actual and reasonable attorney's fees and disbursements, Secured Party may now or hereafter incur while exercising or enforcing any right, power, or remedy provided to Secured Party by this Security Agreement or by law, all of which costs and expenses shall constitute part of the Obligations secured hereunder. (h) Debtor shall give Secured Party not less than thirty (30) days prior written notice before changing its principal of any change in Debtor's primary residence or place of business or moving its books and records to a location other than Debtor's legal name from that set forth in Section 17 hereof. (c) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (ei) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s security interest in the Collateral or the rights and remedies of shall furnish Secured Party with respect thereto. (f) Defend such information regarding the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunder. (g) Notify as Secured Party in the event of any occurrence that from time to time may materially or adversely affect the security interest of Secured Party in the Collateral. (h) At the request of Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral. (i) Not, without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party thereunderrequest. (j) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ fees and accountants’ fees and other expenses, incurred in collecting any sums payable by Debtor under shall not allow any of the Obligations secured hereby, enforcing Collateral to be subject to any term lien or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating theretosecurity interest other than Secured Party's security interest hereunder. (k) Upon request Debtor shall invest any and all cash now or hereafter on deposit in or credited to the Account in the 11-3/4% Senior Subordinated Notes due 2009 issued by Secured Party or in such other Investments as may be expressly approved in writing by Secured Party. Any and all Distributions on any of the Investments shall be paid to Secured Party and applied to the Obligations. Debtor hereby authorizes Secured Party to offset against any of the Obligations any payments now or hereafter due to Debtor with respect to any of the Collateral consisting of Secured Party, furnish within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement 's 11-3/4% Senior Subordinated Notes due 2009 or any extension, renewal, amendment, replacement or refinancing of the Loan Documents of any nature whatsoeversuch notes. (l) Execute Debtor agrees that all risk of loss of the Collateral shall at all times be and deliver to remain upon Debtor irrespective of whether such Collateral is then in Debtor's or Secured Party's possession. (m) Debtor shall permit Secured Party (or any person designated by Secured Party) from time to time to inspect the Collateral and to inspect, audit and make copies of or extracts from all further agreementsbooks and records maintained by or on behalf of Debtor or Morgan Keegan pertaining to the Collateral (including computer xxxxxxx), instruments, or documents xxx at such times and take any and all such further action places as Secured Party, in its sole discretion, Party may deem necessary or advisable in order request from time to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s security interest in the Collateral or the priority thereoftime.

Covenants and Agreements of Debtor. Debtor covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, which consent shall be granted or withheld in Secured Party' sole and absolute discretion, Debtor will: (a) Duly observe and perform each and every material term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of the income and profits therefrom, except where nonpayment does not involve any danger of sale, forfeiture or loss of any of the Collateral or any interest therein. (c) Insure the Collateral with financially sound and reputable insurers against loss or damage by fire, theft, bodily injury and such other casualties, as are usually insured against by companies engaged in the same or similar businesses as Debtor. (d) Keep and maintain at its own cost and expense satisfactory and complete records of the Collateral, including without limitation a record of all payments received and all credits granted with respect to the Collateral and all other dealings in the Collateral. Upon the occurrence of any Event of Default, Debtor will deliver and turn over any such books and records to the Secured Party at any time on demand of the Secured Party. Prior to the occurrence of an Event of Default and upon reasonable written notice of no less than five (5) business days from Secured Party, Debtor shall permit any representative of Secured Party to inspect such books and records and will provide photocopies thereof to Secured Party at Secured Party's expense. Upon reasonable written notice of no less than five (5) business days to Debtor, with the consent of the Debtor, as to the time of entry, which consent shall not be unreasonably withheld, Secured Party shall also have the right to enter into and upon the premises where any of the Equipment or Inventory is located for the purpose of inspecting the same, observing its use and otherwise protecting Secured Party's interests therein. (e) Give Secured Party ten (10) days prior written notice before (i) changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 14 hereof; (ii) changing the location of any Equipment or Inventory, or (iii) changing the location of any other Collateral to a place outside the State of California; and in any such event taking such action as is necessary to cause the security interest in the Collateral to continue to be perfected. (cf) Not change its name, identity or corporate structure in any manner which might make any financing or continuation statement filed in connection with this Agreement misleading within the meaning of Section 9-402 of the Code, unless Debtor shall have taken all action necessary or reasonably requested by Secured Party to amend such financing or continuation statement so that it is not seriously misleading and shall have notified Secured Party of such action. (g) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor Debtor, so long as no Event of Default shall have occurred and be continuing, may sell Inventory in the ordinary course of business.business (i) sell Inventory and goods, (ii) collect and settle Accounts and (iii) dispose of obsolete or non-serviceable Equipment. In addition, Debtor may grant security interests in favor of NDMS Investments, L.P., Devenshire Management Corp. and Alliance Financial Network, Inc. (dh) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (ei) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s ' security interest in the Collateral or the rights and remedies of Secured Party with respect theretothereto as noted in paragraph 5(b) above. (fj) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s ' interest in the Collateral hereunder. (gk) Notify Secured Party in At the event of any occurrence that may materially or adversely affect the security interest written request of Secured Party in the Collateral. (h) At the request of and at Secured Party's expense, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and Code, any other applicable state’s 's Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party Parties and indicating therein the types or describing the Collateral. (il) Not, without the prior written consent of Secured Party, which consent shall not be unreasonably withheld, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party Parties thereunder. (jm) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ ' fees and accountants’ ' fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (kn) Upon request of Secured Party, furnish within ten (10) days thereafter to Take any and all actions reasonably requested in writing by Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the payoff those certain obligations and liabilities set forth in on Schedule 5(c) hereto, if any, including, but not limited to, the Note, and stating that no claims, offsets filing of one or defenses exist with respect to the Note, this Agreement more Uniform Commercial Code termination statements or any of the Loan Documents of any nature whatsoeverother applicable documents. (lo) Execute and deliver to Secured Party any and all further agreements, instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s ' security interest in the Collateral or the priority thereofthereof including, without limitation, any documents required to be filed with the United States Patent and Trademark Office.

Covenants and Agreements of Debtor. Debtor covenants and agrees with ---------------------------------- Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor will: (a) Duly observe and perform each and every term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Give Secured Party ten (10) days prior written notice before changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 hereof. (c) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (e) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s 's security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s 's interest in the Collateral hereunder. (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of Secured Party in the Collateral. (h) At the request of Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral. (i) Not, without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party thereunder. (j) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ fees and accountants’ fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (k) Upon request of Secured Party, furnish within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoever. (l) Execute and deliver to Secured Party any and all further agreements, instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s security interest in the Collateral or the priority thereof.

Covenants and Agreements of Debtor. Debtor hereby agrees and covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor willthat: (a) Duly observe Debtor will keep the Collateral free from all liens, security interests and perform each encumbrances except for the security interest granted herein or those specifically permitted in writing by the Secured Party or permitted by the Loan Agreement and every term will defend the Collateral against all claims and condition demands of all persons at any and all agreements, instruments and documents relating to time claiming any interest therein. Debtor will not sell or otherwise transfer the Collateral, and diligently protect and enforce its rights under all such agreementsCollateral or any interest therein except inventory in the ordinary course of business or as otherwise provided in the Loan Agreement. (b) Give Debtor will not change its name without giving the Secured Party ten (10) 30 days prior written notice before changing in which it sets forth its new name and the date on which the new name shall first be used. Debtor shall maintain its principal residence or place of business and chief executive office, or moving if the Debtor is an individual with no place of business, its books and records to a location other than that residence, at the address set forth in Section 17 hereof.on (c) Not sellDebtor will, leaseat its expense, assignfurnish to the Secured Party upon its demand such further information, transferwill execute and deliver to the Secured Party such financing statements and other agreements, conveyinstruments or documents, pledgeand will do all such acts as the Secured Party may, hypothecateat any time or from time to time, mortgage reasonably request, or further encumber any as may be necessary or appropriate to establish and maintain a valid and enforceable security interest of the Collateral, provided that Debtor may sell Inventory Secured Party in the ordinary course of businessCollateral as provided in the Loan Agreement. (d) Promptly pay Debtor will keep the Collateral (to the extent that it consists of tangible property) at all times insured against risks of loss or otherwise cause damage by fire (including so-called extended coverage), theft and such other casualties as the Secured Party may reasonably require, including collision in the case of any motor vehicle, all in such amounts (but in no event in an amount less than the full insurable value thereof), under such forms of policies, under such terms, for such periods and written by such companies or underwriters as Secured Party may approve, which approval may not be unreasonably withheld, losses in all cases to be discharged any lienpayable first to the Secured Party "as its interest may appear." All policies of insurance shall provide for at least thirty (30) days' prior written notice of cancellation to the Secured Party, charge, security interest and Debtor shall furnish the Secured Party with certificates of such insurance or other encumbrance that may attach evidence satisfactory to the Secured Party as to compliance with the provisions of this paragraph. Debtor hereby irrevocably appoints Secured Party to act (such appointment being coupled with an interest) as attorney-in-fact for Debtor in making, adjusting and settling claims under such policies of insurance or endorsing Debtor's name on any drafts drawn by insurers of the Collateral or any other documents to effect collection. In the event of any loss or damage to any of the Debtor's assets, including the Collateral, Debtor shall give immediate written notice to Secured Party and to Debtor's insurers of such loss or any portion thereof, other than pursuant to this Agreementdamage and shall promptly file proofs of loss with said insurers. (e) Promptly Debtor will notify the Secured Party in writing promptly upon its learning of any attachment event, condition, loss, damage, litigation, administrative proceeding or other legal process levied against any of the Collateral circumstance which may materially and any information received by Debtor relating to adversely affect the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. (f) Defend Debtor will keep the Collateral against all claimsin good order and repair, liensreasonable wear and tear excepted, security interestswill not waste or destroy the Collateral or any part thereof and will not use the Collateral in violation of any applicable statute, demands ordinance or policy of insurance thereon. The Secured Party may examine and other encumbrances of third parties inspect the Collateral, the Debtor's books and records and any documents or instruments relating to the Collateral at any reasonable time claiming or times and, prior to an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunderEvent of Default, upon reasonable notice wherever located. (g) Notify At its option, but without obligation to do so, the Secured Party in may upon and during the event continuance of an Event of Default and with prior notice to Debtor, discharge taxes, liens, security interests or other encumbrances at any occurrence that time levied or placed on the Collateral; may materially place and pay for insurance on the Collateral; may order and pay for the repair, maintenance and preservation of the Collateral; and may pay any fees for filing or adversely affect recording such instruments or documents as may be necessary or desirable to perfect the security interest of granted herein. The Debtor agrees to reimburse the Secured Party in on demand for any reasonable out-of-pocket payment made or expense incurred by the CollateralSecured Party pursuant to the foregoing authorization, and all such payments and expenses shall constitute part of the principal amount of The Revolving Loan. (h) At If any part of the request of Collateral is a fixture, the Debtor will, on demand, use reasonable efforts to furnish the Secured Party with a disclaimer or release signed by all persons having an interest in the real estate or any interest in the Collateral which is prior to the Secured Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party and indicating therein the types or describing the Collateral's interest. (i) NotIf any account or other Collateral is ever represented or evidenced by a promissory note, without Debtor will immediately deliver such note to the prior written consent of Secured Party, execute, file or authorize or permit to be filed endorsed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than such manner as Secured Party is named as a secured party thereundermay require. (j) Reimburse At any time or times that an Event of Default has occurred, and is continuing, Secured Party upon demand for may notify any costs account debtors of its security interest in accounts and feescollect all amounts due thereon, including reasonable attorneys’ fees and accountants’ fees and other expensesthe Debtor agrees, incurred in collecting any sums payable by Debtor under any at the request of the Obligations secured herebySecured Party, enforcing to notify in writing all or any term or provision account debtors of this Agreement or otherwise the Secured Party's interest in the collection Collateral in whatever manner Secured Party requests and, if Secured Party so requests, to permit the Secured Party to mail such notices at the Debtor's expense. Until the Secured Party shall otherwise notify the Debtor as provided herein, all proceeds of and collections of Collateral shall be retained by the Debtor and used solely for the ordinary and usual operation of the Debtor's business and as permitted by the Loan Agreement. From and after such notice by the Secured Party to the Debtor, all proceeds of and collections of the Collateral shall be held in trust by the Debtor for the Secured Party and shall not be commingled with the Debtor's other funds or deposited in any bank account of the Debtor and the preparation and enforcement Debtor agrees to deliver to the Secured Party on the dates of any agreement relating theretoreceipt thereof by the Debtor, duly endorsed to the Secured Party or to bearer, or assigned to the Secured Party, as may be appropriate, all proceeds of the Collateral in the identical form received by the Debtor. (k) Upon request the occurrence of an Event of Default and during the continuation thereof, Secured Party may direct account debtors to make payments directly to the Secured Party, furnish within ten (10) days thereafter and to Secured Party or perform all acts the Debtor could take to any proposed assignee of Secured Partycollect on such accounts, a written statement in form satisfactory including, but without limitation, the right to Secured Partynotify postal authorities to change the address for delivery, duly acknowledgedopen mail, certifying the amount of the principal and interest then owing under the obligations and liabilities set forth in the Noteendorse checks, bring collection suits, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoeverrealize upon Collateral securing such accounts. (l) Execute and deliver to Secured Party may from time to time after the occurrence and during the continuance of an Event of Default without demand or notice, apply and set off any deposit accounts of Debtor with Secured Party and any other amounts owing from Secured Party to Debtor, against any and all further agreementsObligations even though such Obligations be unmatured and regardless of the adequacy of security for the Obligations. (m) After the occurrence and during the continuance of an Event of Default, instrumentsDebtor hereby irrevocably constitutes and appoints the Secured Party as the Debtor's true and lawful attorney, with full power of substitution, at the sole cost and expense of the Debtor but for the sole benefit of the Secured Party, to convert the Collateral into cash, including, without limitation, completing the manufacture or documents processing of work in process, and the sale (either public or private) of all or any portion or portions of the Inventory and other Collateral: to enforce collection of the Collateral, either in its own name or in the name of the Debtor, including, without limitation, executing releases, compromising or settling with any Debtors and prosecuting, defending, compromising or releasing any action relating to the Collateral, to receive, open and dispose of all mail addressed to the Debtor and to take therefrom any remittances or proceeds of Collateral in which the Secured Party has a security interest, to notify Post Office authorities to change the address for delivery of mail addressed to the Debtor to such address as the Secured Party shall designate, to endorse the name of the Debtor in favor of the Secured Party upon any and all such further action checks, drafts, money orders, notes, acceptances or other instruments of the same or different nature: to sign and endorse the name of the Debtor on and to receive as Secured Partysecured party any of the Collateral, in its sole discretionany invoices, may deem necessary or advisable in order to evidenceschedules of Collateral, effectuate, perfect, protect, maintain, or realize upon Secured Party’s security interest in the Collateral or the priority thereof.freight

Covenants and Agreements of Debtor. Debtor covenants and agrees with Secured Party that from the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, which consent shall be granted or withheld in Secured Party' sole and absolute discretion, Debtor will: (a) Duly observe and perform each and every material term and condition of any and all agreements, instruments and documents relating to the Collateral, and diligently protect and enforce its rights under all such agreements. (b) Pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of the income and profits therefrom, except where nonpayment does not involve any danger of sale, forfeiture or loss of any of the Collateral or any interest therein. (c) Insure the Collateral with financially sound and reputable insurers against loss or damage by fire, theft, bodily injury and such other casualties, as are usually insured against by companies engaged in the same or similar businesses as Debtor. (d) Keep and maintain at its own cost and expense satisfactory and complete records of the Collateral, including without limitation a record of all payments received and all credits granted with respect to the Collateral and all other dealings in the Collateral. Upon the occurrence of any Event of Default, Debtor will deliver and turn over any such books and records to the Secured Party at any time on demand of the Secured Party. Prior to the occurrence of an Event of Default and upon reasonable written notice of no less than five (5) business days from Secured Party, Debtor shall permit any representative of Secured Party to inspect such books and records and will provide photocopies thereof to Secured Party at Secured Party's expense. Upon reasonable written notice of no less than five (5) business days to Debtor, with the consent of the Debtor, as to the time of entry, which consent shall not be unreasonably withheld, Secured Party shall also have the right to enter into and upon the premises where any of the Equipment or Inventory is located for the purpose of inspecting the same, observing its use and otherwise protecting Secured Party's interests therein. (e) Give Secured Party ten (10) days prior written notice before (i) changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 14 hereof; (ii) changing the location of any Equipment or Inventory, or (iii) changing the location of any other Collateral to a place outside the State of California; and in any such event taking such action as is necessary to cause the first priority security interest in the Collateral to continue to be perfected. (cf) Not change its name, identity or corporate structure in any manner which might make any financing or continuation statement filed in connection with this Agreement misleading within the meaning of Section 9-402 of the Code, unless Debtor shall have taken all action necessary or reasonably requested by Secured Party to amend such financing or continuation statement so that it is not seriously misleading and shall have notified Secured Party of such action. (g) Not sell, lease, assign, transfer, convey, pledge, hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor Debtor, so long as no Event of Default shall have occurred and be continuing, may sell Inventory in the ordinary course of businessbusiness (i) sell Inventory and goods, (ii) collect and settle Accounts and (iii) dispose of obsolete or non-serviceable Equipment. In addition, Debtor may grant security interests in favor of Devenshire Management Corp., Alliance Financial Network, Inc. and Xxxx Xxxxxxx if such security interests are junior in priority to security interest granted to Debtor. (dh) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any portion thereof, other than pursuant to this Agreement. (ei) Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s ' first priority security interest in the Collateral or the rights and remedies of Secured Party with respect theretothereto as noted in paragraph 5(b) above. (fj) Defend the Collateral against all claims, liens, security interests, demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s ' interest in the Collateral hereunder.. 5 (gk) Notify Secured Party in At the event of any occurrence that may materially or adversely affect the security interest written request of Secured Party in the Collateral. (h) At the request of and at Secured Party's expense, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and Code, any other applicable state’s 's Uniform Commercial Code naming Debtor as debtor and Secured Party as secured party Parties and indicating therein the types or describing the Collateral. (il) Not, without the prior written consent of Secured Party, which consent shall not be unreasonably withheld, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party Parties thereunder. (jm) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ ' fees and accountants’ ' fees and other expenses, incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement relating thereto. (kn) Upon request of Secured Party, furnish within ten (10) days thereafter to Take any and all actions reasonably requested in writing by Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the payoff those certain obligations and liabilities set forth in on Schedule 5(c) hereto, if any, including, but not limited to, the Note, and stating that no claims, offsets filing of one or defenses exist with respect to the Note, this Agreement more Uniform Commercial Code termination statements or any of the Loan Documents of any nature whatsoeverother applicable documents. (lo) Execute and deliver to Secured Party any and all further agreements, instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s ' first priority security interest in the Collateral or the priority thereofthereof including, without limitation, any documents required to be filed with the United States Patent and Trademark Office.