Body Central S-1 IPO registration

Exhibit 10.21

SECURITY AGREEMENT

This SECURITY AGREEMENT (this “Agreement”) dated as of October 1, 2006, made by each of the Borrowers and each of the Guarantors referred to below (each such Person is sometimes referred to herein as a “Grantor” and, collectively, the “Grantors”) and each person who becomes a Grantor hereto pursuant to a joinder substantially in the form attached hereto as Exhibit B, in favor of Dymas Funding Company, LLC, in its capacity as the Administrative Agent on behalf of the Lenders party to the Financing Agreement referred to below.

W I T N E S S E T H:

WHEREAS, Body Central Acquisition Corp., a Delaware corporation (“Parent” and together with each other Person who becomes a borrower under the Financing Agreement referred to below, the “Borrowers”), each subsidiary of the Parent listed as a “Guarantor” on the signature pages thereto, the financial institutions from time to time party thereto as “Lenders”, and the Administrative Agent are parties to a Financing Agreement, dated as of October 1, 2006 (such agreement, as amended, restated, supplemented or otherwise modified from time to time, being hereinafter referred to as the “Financing Agreement”), pursuant to which the Lenders have agreed to make Loans and other financial accommodations set forth therein available to the Borrower;

WHEREAS, it is a condition precedent to the Lenders making any Loan or other financial accommodation to the Borrower pursuant to the Financing Agreement, that each Grantor shall have executed and delivered to the Administrative Agent a security agreement providing for the grant to the Administrative Agent for the benefit of the Lenders of a security interest in all personal property of such Grantor;

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

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

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Lenders to make and maintain the Loans pursuant to the Financing Agreement, each Grantor hereby jointly and severally agrees with the Administrative Agent, for the benefit of the Lenders, as follows:

SECTION 1.Definitions.

(a)Reference is hereby made to the Financing Agreement for a statement of the terms thereof.  All terms used in this Agreement and the recitals hereto which are defined in the Financing Agreement or in Article 9 of the Uniform Commercial Code (the “Code”) as in effect from time to time in the State of New York and which are not otherwise defined herein shall have the same meanings herein as set forth therein.

(b)The following terms shall have the respective meanings provided for in the Code: “Accounts”, “Account Debtor”, “Cash Proceeds”, “Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”, “Commodity Contracts”, “Deposit Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter of Credit”, “Letter-of-Credit Rights”, Noncash Proceeds”, “Payment Intangibles”, “Proceeds”, “Promissory Notes”, “Record”, “Security Account”, “Software”, “Supporting Obligations” and “Tangible Chattel Paper”.

(c)As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

“Control” means the manner in which “control” is achieved under the Code with respect to a particular item of Collateral.

“Copyright Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for the grant of any right to use or sell any works covered by any copyright (including, without limitation, all Copyright Licenses set forth in Schedule II hereto).

“Copyrights” means (i) all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of authorship fixed in any tangible medium of expression, acquired or used by any Grantor (including, without limitation, all copyrights described in Schedule II hereto), (ii) all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other country or any political subdivision thereof), (iii) all reissues, divisions, continuations, continuations in part and extensions or renewals thereof, (iv) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including damages or payments for past, present or future infringements of any of the foregoing and (v) the right to sue for past, present or future infringements of any of the foregoing.

“Excluded Deposit Accounts” means all deposit accounts of each Grantor other than Specified Deposit Accounts, all of which deposit accounts are listed as such on Schedule IV hereto.

“Intellectual Property” means the Copyrights, Trademarks and Patents.

“Licenses” means the Copyright Licenses, the Trademark Licenses and the Patent Licenses.

“Patent Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses set forth in Schedule II hereto).

“Patents” means (i) all domestic and foreign letters patent (and the inventions and improvements described and claimed therein), design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other General Intangibles of like nature,

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now existing or hereafter.  acquired (including, without limitation, all domestic and foreign letters patent (and the inventions and improvements described and claimed therein), design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how and formulae described in Schedule II hereto), (ii) all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision thereof), (iii) all reissues, divisions, continuations, continuations in part and extensions or renewals thereof, (iv) all income, royalties, damages and payments now and/or hereafter due and payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing and (v) the right to sue for past, present and future infringements of any of the foregoing.

“Specified Deposit Account” shall mean one or more deposit accounts described as such on Schedule IV hereto, all of which deposit accounts are subject to a control agreement in form and substance reasonably satisfactory to the Administrative Agent

“Trademark Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such trademark licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter owned by any Grantor and now or hereafter covered by such licenses (including, without limitation, all Trademark Licenses described in Schedule II hereto).

“Trademarks” means (i) all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, corporate names, company names, business names, fictitious business names, internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles of like nature, now or hereafter owned, adopted, acquired or used by any Grantor (including, without limitation, all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, Internet domain names, trade styles, designs, logos and other source or business identifiers described in Schedule II hereto), (ii) all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof), (iii) all reissues, extensions or renewals thereof, together with all goodwill of the business symbolized by such marks and all customer lists, formulae and other Records of any Grantor relating to the distribution of products and services in connection with which any of such marks are used, (iv) all income, royalties, damages and payments now and/or hereafter due and payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing and (v) the right to sue for past, present and future infringements of any of the foregoing.

SECTION 2.Grant of Security Interest.  As collateral security for the payment, performance and observance of all of the Obligations (as defined in Section 3 hereof), each Grantor hereby pledges and assigns to the Administrative Agent, and grants to the Administrative Agent for the benefit of the Lenders and other holders of Obligations a continuing security interest in, right of setoff against and an assignment to the Administrative Agent of, all personal property and rights to personal property of such Grantor, in each case wherever located and whether now or hereafter

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existing and whether now owned or hereafter acquired fired, of every kind and description, tangible or intangible, including, without limitation, the following (all being referred to as the “Collateral”):

(a)all Accounts;

(b)all Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel Paper);

(c)the Commercial Tort Claims specified on Schedule VI hereto;

(d)all Deposit Accounts, all cash, and all other property from time to time deposited therein and the monies and property in the possession or under the control of the Administrative Agent or any Lender or any affiliate, representative, agent or correspondent of the Administrative Agent or any Lender;

(e)all Documents;

(f)all Equipment;

(g)all Fixtures;

(h)all General Intangibles (including, without limitation, all Payment Intangibles);

(i)all Goods;

(j)all Instruments (including, without limitation, Promissory Notes);

(k)all Inventory;

(l)all Investment Property;

(m)all Copyrights, Patents and Trademarks, and all Licenses;

(n)all Letter-of-Credit Rights;

(o)all Software;

(p)all Supporting Obligations;

(q)all other tangible and intangible personal property of such Grantor (whether or not subject to the Code), including, without limitation, all bank and other accounts and all cash and all investments therein, all Proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements of and to any of the property of such Grantor described in the preceding clauses of this Section 2 (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by such Grantor in respect of any of the items listed above), and all books, correspondence, files and other Records, including, without limitation, all tapes, desks, cards, Software, data and computer programs in the possession or under the control of such Grantor or any other Person from time to time acting for such Grantor that at any time evidence or contain information relating to any of the property described in

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the preceding clauses of this Section 2 or are otherwise necessary or helpful in the collection or realization thereof; and

(r)all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;

in each case howsoever such Grantor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).

SECTION 3.Security for Obligations.  The security interest created hereby in the Collateral constitutes continuing collateral security for the payment, performance and observance of all of the Obligations, including, but not limited to the following, whether now existing or hereafter incurred:

(a)the prompt payment by each Grantor, as and when due and payable (by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Financing Agreement and/or the other Loan Documents, whether now existing or hereafter created or arising under the Financing Agreement and/or the other Loan Documents and all renewals, extensions, restructurings, refinancings or increases related to such amounts, including, without limitation, (i) principal of and interest on the Loans (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of any Grantor, whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding), (ii) in the case of a Guarantor, all amounts from time to time owing by such Grantor in respect of its guaranty made pursuant to Article 10 of the Financing Agreement or under any other Guaranty to which it is a party, including all obligations guaranteed by such Grantor, (iii) all fees, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any Loan Document and (iv) all other “Obligations” (as defined in the Financing Agreement); and

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

SECTION 4.Representations and Warranties.  Each Grantor jointly and severally represents and warrants as follows (in each case, after giving pro forma effect to the Body Shop Acquisition and the effectiveness of the Closing Date Joinder Agreement):

(a)There is no pending or, to the best knowledge of any Grantor, threatened action, suit, proceeding or claim affecting any Grantor or to which any of the properties of any Grantor is subject, before any Governmental Authority or any arbitrator, or any order, judgment or award by any Governmental Authority or arbitrator, that may adversely affect the grant by any Grantor, or the perfection, of the security interest purported to be created hereby in the Collateral, or the exercise by the Administrative Agent of any of its rights or remedies hereunder.

(b)All Equipment, Fixtures, Goods and Inventory now existing is, as of the date hereof, located at the addresses specified therefor in Schedule III hereto (and none of such locations are leased by such Grantor as lessee except as designated on Schedule III hereto).  Each Grantor’s chief place of business and chief executive office, the place where such Grantor keeps its Records concerning Accounts and all originals of all Chattel Paper are located at the addresses specified therefor in Schedule III hereto.  None of the Accounts is evidenced by Promissory Notes or other

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Instruments except for Promissory Notes evidencing aggregate indebtedness of not more than $250,000.  Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of each Deposit Account, Securities Account and Commodities Account of each Grantor, together with the name and address of each institution at which each such Account is maintained, the account number for each such Account and a description of the purpose of each such Account.  Set forth in Schedule I hereto is a complete and correct list of each trade name used by each Grantor and the name of, and each trade name used by, each person from which such Grantor has acquired any substantial part of the Collateral.

(c)Each Grantor has delivered to the Administrative Agent complete and correct copies of each License described in Schedule II hereto, including all schedules and exhibits thereto, which represents all of the Licenses existing on the date of this Agreement.  Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter thereof, and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or the rights of any Grantor or any of its affiliates in respect thereof.  Each License now existing is, and each other License will be, the legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance with its terms.  No default thereunder by any such party exists, nor does any defense, offset, deduction or counterclaim exist thereunder in favor of any such party.

(d)The Grantors own and control, or otherwise possesses adequate rights to use, all Trademarks, Patents and Copyrights, which are the only trademarks, patents, copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae and rights of publicity necessary to conduct its business in substantially the same manner as conducted as of the date hereof.  Schedule II hereto sets forth a true and complete list of all Intellectual Property and Licenses owned or used by each Grantor as of the date hereof.  All such Intellectual Property is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and has not been abandoned in whole or in part.  Except as set forth in Schedule II, no such Intellectual Property is the subject of any licensing or franchising agreement.  No Grantor has any knowledge of any conflict with the rights of others to any Intellectual Property and, to the best knowledge of each Grantor, no Grantor is now infringing or in conflict with any such rights of others in any material respect, and to the best knowledge of each Grantor, no other Person is now infringing or in conflict in any material respect with any such properties, assets and rights owned or used by any Grantor.  No Grantor has received any notice that it is violating or has violated the trademarks, patents, copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights of publicity or other intellectual property rights of any third party.

(e)The Grantors are and will be at all times the sole and exclusive owners of, or otherwise have and will have adequate rights in, the Collateral free and clear of any Lien except for (i) the Lien created by this Agreement and (ii) the Permitted Liens.  No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office except (A) such as may have been filed in favor of the Administrative Agent relating to this Agreement and (B) such as may have been filed to perfect or protect any security interests or Liens permitted by the Financing Agreement.  Except as disclosed on Schedule III hereto, none of the Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.  No other Person has Control of the Collateral.

(f)The exercise by the Administrative Agent of any of its rights and remedies hereunder and in accordance herewith will not contravene any law or any contractual restriction

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binding on or otherwise affecting any Grantor or any of its properties and will not result in or require the creation of any Lien upon or with respect to any of its properties.

(g)No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other regulatory body, or any other Person, is required for (i) the grant by any Grantor, or the perfection, of the security interest purported to be created hereby in the Collateral or (ii) the exercise by the Administrative Agent of any of its rights and remedies hereunder, except (A) for the filing under the Uniform Commercial Code as in effect in the applicable jurisdiction of the financing statements described in Schedule V hereto, all of which financing statements have been duly filed and are in full force and effect, (B) with respect to the perfection of the security interest created hereby in the United States Intellectual Property, for the recording of the appropriate Assignment for Security, substantially in the form of Exhibit A hereto in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, (C) with respect to the perfection of the security interest created hereby in foreign Intellectual Property and Licenses, for registrations and filings in jurisdictions located outside of the United States and covering rights in such jurisdictions relating to the Intellectual Property and Licenses, and (D) with respect to the perfection of the security interest created hereby in Titled Collateral (as defined herein), for the submission of an appropriate application requesting that the Lien of the Administrative Agent be noted on the certificate of title or ownership, completed and authenticated by the applicable Grantor, together with the certificate of title, with respect to such Titled Collateral, to the appropriate state agency.

(h)This Agreement creates in favor of the Administrative Agent a legal, valid and enforceable security interest in the Collateral, as security for the Obligations.The Administrative Agent’s having possession of all cash constituting Collateral from time to time and Control of all Collateral where Control is the sole means of perfection, the recording of the appropriate Assignment for Security executed pursuant hereto in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, the submission of an appropriate application requesting that the Lien of the Administrative Agent be noted on the certificate of title or ownership, completed and authenticated by the applicable Grantor, together with the certificate of title or ownership, with respect to any Titled Collateral, to the applicable state agency, and the filing of the financing statements described in Schedule V hereto and, with respect to the Intellectual Property hereafter existing and not covered by an appropriate Assignment for Security, the recording in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, of appropriate instruments of assignment, result in the perfection of such security interests.  Such security interests are, or in the case of Collateral in which any Grantor obtains rights after the date hereof, will be, perfected, first priority security interests, subject only to the Permitted Liens and the recording of such instruments of assignment, and the Administrative Agent shall be entitled to all of the rights, priorities and benefits afforded by the Code or other applicable law as enacted in any jurisdiction which relates to perfected security interests.  Such recordings and filings and all other action necessary or desirable to perfect and protect such security interest have been (or simultaneously with the closing of the transactions contemplated by the Financing Agreement will be) duly taken and, with respect to Collateral obtained after the date hereof, will be taken.

(i)No Grantor holds any Commercial Tort Claims or is aware of any such pending claims, except for such claims described in Schedule VI.

(j)No Grantor holds Chattel Paper in the ordinary course of its business.

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(k)All Inventory is of good and merchantable quality, free from any defects, such Inventory is not subject to any licensing, patent, trademark, trade name or copyright agreement with any Person that restricts any Grantor’s ability, to manufacture and/or sell the Inventory.  The completion and manufacturing process of such Inventory by a Person other than the applicable Grantor would be permitted under any contract to which such Grantor is a party or to which the Inventory is subject.  None of the Inventory of any Grantor has been or will be produced in violation of any provision of the Fair Labor Standards Act of 1938, as amended, or in violation of any other law.

(l)All information heretofore, herein or hereafter supplied to the Administrative Agent by or on behalf of any Grantor with respect to the Collateral is and will be accurate and complete in all material respects.

SECTION 5.Covenants as to the Collateral.  So long as any of the Obligations shall remain outstanding and all Commitments shall not have expired or terminated, unless the Administrative Agent shall otherwise consent in writing:

(a)Further Assurances.  Each Grantor will at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that may be reasonably necessary or that the Administrative Agent may reasonably request in order to (i) perfect and protect the security interest purported to be created hereby; (ii) enable the Administrative Agent to exercise and enforce its rights and remedies hereunder in respect of the Collateral; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking conspicuously all Chattel Paper and each License and, at the request of the Administrative Agent, each of its Records pertaining to the Collateral with a legend, in faun and substance satisfactory to the Administrative Agent, indicating that such Chattel Paper, License or Collateral is subject to the security interest created hereby, (B) if any Account shall be evidenced by Promissory Notes or other Instruments or Chattel Paper, in an aggregate face amount exceeding $250,000, delivering and pledging to the Administrative Agent hereunder such Promissory Notes, Instruments or Chattel Paper, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory to the Administrative Agent, (C) executing and filing (to the extent, if any, that such Grantor’s signature is required thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary or desirable or that the Administrative Agent may reasonably request in order to perfect and preserve the security interest purported to be created hereby, (D) furnishing to the Administrative Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail, (E) if any Collateral with a fair market value in excess of $250,000 shall be in the possession of a third party, notifying such Person of the Administrative Agent’s security interest created hereby and obtaining a written acknowledgment from such Person that such Person holds possession of the Collateral for the benefit of the Administrative Agent, which such written acknowledgement shall be in form and substance reasonably satisfactory to the Administrative Agent, (F) if at any time after the date hereof, any Grantor acquires or holds any Commercial Tort Claim, immediately notifying the Administrative Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim and granting to the Administrative Agent a security interest therein and in the proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form and substance satisfactory to the Administrative Agent, (G) upon the acquisition after the date hereof by any Grantor of any Titled Collateral (other than an item of Equipment that is subject to a purchase money security interest permitted by Section 7.02(a) of the

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Financing Agreement), causing the Administrative Agent to be listed as the lienholder on such certificate of title or ownership and delivering evidence of the same to the Administrative Agent in accordance with the Financing Agreement and (H) taking all actions required by any earlier versions of the Uniform Commercial Code or by other law, as applicable, in any relevant Uniform Commercial Code jurisdiction, or by other law as applicable in any foreign jurisdiction.

(b)Location of Equipment, Fixtures, Goods and Inventory.  Each Grantor will keep all Equipment, Fixtures, Goods and Inventory (other than used Equipment and Inventory sold in the ordinary course of business in accordance with Section 5(g) hereof) at the locations specified therefor in Section 4(g) hereof or, upon not less than thirty (30) days’ prior written notice to the Administrative Agent accompanied by new Schedules III and V hereto indicating each new location of such Collateral, at such other locations in the continental United States as the Grantors may elect, provided that (i) all action has been taken to grant to the Administrative Agent a perfected, first priority security interest in such Collateral (subject only to Permitted Liens), and (ii) the Administrative Agent’s rights in such Collateral, including, without limitation, the existence, perfection and priority of the security interest created hereby in such Collateral, are not adversely affected thereby.  No collateral shall at any time be in the possession or control of any warehouseman, bailee or any of Grantors’ agents or processors without the Administrative Agent’s prior written consent and unless the Administrative Agent, if the Administrative Agent has so requested, has received warehouse receipts or bailee lien waivers satisfactory to the Administrative Agent prior to the commencement of such possession or control.  Each Grantor shall, upon the request of the Administrative Agent, notify any such warehouseman, bailee, agent or processor of the security interests granted pursuant to this Agreement, shall instruct such Person to hold all such Collateral for the Administrative Agent’s account subject to the Administrative Agent’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral with a fair market value in excess of $250,000 for the Administrative Agent’s benefit.

(c)Condition of Equipment.  Each Grantor will maintain or cause the Equipment to be maintained and preserved in good condition, repair and working order as when acquired and in accordance with any manufacturer’s manual, ordinary wear and tear excepted, and will forthwith, or in the case of any loss or damage to any Equipment as quickly as practicable after the occurrence thereof, make or cause to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable, consistent with past practice, or which the Administrative Agent may reasonably request to such end.  Each Grantor will promptly furnish to the Administrative Agent a statement describing in reasonable detail any loss or damage in excess of $250,000 to any Equipment.

(d)Taxes, Etc.  Each Grantor jointly and severally agrees to pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Collateral, except to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside for the payment thereof.

(e)Insurance.  Each Grantor will, at its own expense, maintain insurance in accordance with the requirements of the Financing Agreement.

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(f)Provisions Concerning the Accounts and the Licenses.

(i)Each Grantor will (A) give the Administrative Agent at least 30 days’ prior written notice of any change in such Grantor’s name, identity or organizational structure, (B) maintain its jurisdiction of incorporation as set forth in Section 4(b) hereto, (C) immediately notify the Administrative Agent upon obtaining an organizational identification number, if on the date hereof such Grantor did not have such identification number, and (D) keep adequate records concerning the Accounts and Chattel Paper and permit representatives of the Administrative Agent pursuant to the terms of the Financing Agreement to inspect and make abstracts from such Records and Chattel Paper.

(ii)Each Grantor will, except as otherwise provided in this subsection (f), continue to collect, at its own expense, all amounts due or to become due under the Accounts.  In connection with such collections, each Grantor may (and, upon the occurrence and during the continuance of an Event of Default, at the Administrative Agent’s direction, will) take such action as such Grantor or the Administrative Agent may deem necessary or advisable to enforce collection or performance of the Accounts; provided, however, that the Administrative Agent shall have the right at any time, upon the occurrence and during the continuance of an Event of Default, to notify the Account Debtors or obligors under any Accounts of the assignment of such Accounts to the Administrative Agent and to direct such Account Debtors or obligors to make payment of all amounts due or to become due to such Grantor thereunder, or otherwise render performance, directly to the Administrative Agent or its designated agent and, upon such notification and at the expense of such Grantor and to the extent permitted by law, to enforce collection of any such Accounts and to adjust, settle or compromise the amount or payment thereof, or exercise the rights of such Grantor with respect to the obligation of the Account Debtor to make payment or otherwise render performance to such Grantor and with respect to any property that secures the obligations of the Account Debtor or any other Person obligated on the Collateral, in the same manner and to the same extent as such Grantor might have done.  After receipt by any Grantor of a notice from the Administrative Agent that the Administrative Agent has notified, intends to notify, or has enforced or intends to enforce a Grantor’s rights against the Account Debtors or obligors under any Accounts as referred to in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including Instruments) received by such Grantor in respect of the Accounts shall be received in trust for the benefit of the Administrative Agent hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Administrative Agent in the same form as so received (with any necessary endorsement) to be held as cash collateral and either (i) credited to the Loan Account so long as no Event of Default shall have occurred and be continuing or (ii) if an Event of Default shall have occurred and be continuing, applied as specified in Section 7(b) hereof.  No Grantor will adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account Debtor or obligor thereof or allow any credit or discount thereon (other than credits and discounts allowed in the ordinary course of business and in amounts consistent with past practices) without the prior written consent of the Administrative Agent.  In addition, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may (in its sole and absolute discretion) direct any or all of the banks and financial institutions with which any Grantor either maintains a Deposit Account or a lockbox or deposits the proceeds of any Accounts to send immediately to the Administrative Agent by wire transfer (to such account as the Administrative Agent shall specify, or in such other manner as the Administrative Agent shall direct) all or a portion of such securities, cash, investments and other items held by such institution.  Any such securities, cash, investments and other items so received by the Administrative Agent shall (in

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the sole and absolute discretion of the Administrative Agent) be held as additional Collateral for the Obligations or distributed in accordance with Section 7 hereof.

(iii)Upon the occurrence and during the continuance of any breach or default under any License referred to in Schedule II hereto by any party thereto other than a Grantor which, singly or in the aggregate with all other then existing such breaches and defaults, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (A) the relevant Grantor will, promptly after obtaining knowledge thereof, give the Administrative Agent written notice of the nature and duration thereof, specifying what action, if any, it has taken and proposes to take with respect thereto, (B) no Grantor will, without the prior written consent of the Administrative Agent, declare or waive any such breach or default or affirmatively consent to the cure thereof or exercise any of its remedies in respect thereof, and (C) each Grantor will, upon written instructions from the Administrative Agent and at such Grantor’s expense, take such action as the Administrative Agent may deem necessary or advisable in respect thereof.

(iv)Each Grantor will, at its expense, promptly deliver to the Administrative Agent a copy of each notice or other communication received by it by which any other party to any License referred to in Schedule II hereto purports to exercise any of its rights or affect any of its obligations thereunder which, singly or in the aggregate with all other such notices or other communications, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, together with a copy of any reply by such Grantor thereto.

(v)In the ordinary course of its business and consistent with past practices, each Grantor will promptly and diligently exercise each right which it may have under each License (other than any right of termination) and will duly perform and observe in all respects all of its obligations under each License and will take all action necessary to maintain the Licenses in full force and effect.  No Grantor will, without the prior written consent of the Administrative Agent, cancel, terminate, amend or otherwise modify in any respect, or waive any provision of, any License referred to in Schedule II hereto which, singly or in the aggregate with all other modifications, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

(g)Transfers and Other Liens.

(i)Except to the extent expressly permitted by Section 7.02(c)(ii) of the Financing Agreement, no Grantor will sell, assign (by operation of law or otherwise), lease, license, exchange or otherwise transfer or dispose of any of the Collateral.

(ii)Except to the extent expressly permitted by Section 7.02(a) of the Financing Agreement, no Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral.

(h)Intellectual Property.

(i)If applicable, each Grantor has duly executed and delivered the applicable Assignment for Security in the form attached hereto as Exhibit A.  Each Grantor (either itself or through licensees) will, and will cause each licensee thereof to, take all action necessary to maintain all of the Intellectual Property in full force and effect, including, without limitation, using the proper statutory notices and markings and using the Trademarks on each applicable trademark class of goods in order to so maintain the Trademarks in full force free from any claim of

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abandonment for non-use, and no Grantor will (nor permit any licensee thereof to) do any act or knowingly omit to do any act whereby any Intellectual Property may become invalidated; provided, however, that so long as no Event of Default has occurred and is continuing, no Grantor shall have an obligation to use or to maintain any Intellectual Property (A) that relates solely to any product or work, that has been, or is in the process of being, discontinued, abandoned or terminated, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual Property that may be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property is subject to the Lien created by this Agreement or (C) that is substantially the same as another Intellectual Property that is in full force, so long the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such other Intellectual Property is subject to the Lien and security interest created by this Agreement.  Each Grantor will cause to be taken all necessary steps in any proceeding before the United States Patent and Trademark Office and the United States Copyright Office or any similar office or agency in any other country or political subdivision thereof to maintain each registration of the Intellectual Property (other than the Intellectual Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and payment of maintenance fees, filing fees, taxes or other governmental fees.  If any Intellectual Property is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the Grantors shall (x) upon learning of such infringement, misappropriation, dilution or other violation, promptly notify the Administrative Agent and (y) to the extent the Grantors shall deem appropriate under the circumstances or as the Administrative Agent shall reasonably request, promptly sue for infringement, misappropriation, dilution or other violation, seek injunctive relief where appropriate and recover any and all damages for such infringement, misappropriation, dilution or other violation, or take such other actions as the Grantors shall deem appropriate under the circumstances or as the Administrative Agent shall reasonably request to protect such Intellectual Property.  Each Grantor shall furnish to the Administrative Agent from time to time (but, unless an Event of Default has occurred and is continuing, no more frequently than quarterly) statements and schedules further identifying and describing the Intellectual Property and Licenses and such other reports in connection with the Intellectual Property and Licenses as the Administrative Agent may reasonably request, all in reasonable detail and promptly upon request of the Administrative Agent, following receipt by the Administrative Agent of any such statements, schedules or reports, the Grantors shall modify this Agreement by amending Schedule II hereto to include any Intellectual Property or License, as the case may be, which becomes part of the Collateral under this Agreement and shall execute and authenticate such documents and do such acts as shall be necessary or, in the judgment of the Administrative Agent, desirable to subject such Intellectual Property and Licenses to the Lien and security interest created by this Agreement.  Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may abandon or otherwise permit any Intellectual Property to become invalid without the prior written consent of the Administrative Agent, and if any Intellectual Property is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the Grantors will take such action as the Administrative Agent shall deem appropriate under the circumstances in its sole and absolute discretion to protect such Intellectual Property.

(ii)In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for the registration of any Trademark or Copyright or the issuance of any Patent with the United States Patent and Trademark Office or the United States

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Copyright Office, as applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof unless it gives the Administrative Agent written notice thereof within five (5) days before or after such filing.  Upon request of the Administrative Agent, each Grantor shall execute, authenticate and deliver any and all assignments, agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence the Administrative Agent’s security interest hereunder in such Intellectual Property and the General Intangibles of such Grantor relating thereto or represented thereby, and each Grantor hereby appoints the Administrative Agent its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable until the termination of all Commitments, the repayment of all of the Obligations in full and the termination of each of the Loan Documents.

(i)Deposit, Commodities and Securities Accounts.

(i)On or prior to the date hereof, each Grantor shall cause each bank and other financial institution with which such Grantor maintains any Specified Deposit Account to execute and deliver to the Administrative Agent a control agreement, in form and substance reasonably satisfactory to the Administrative Agent, duly executed by such Grantor and such bank or financial institution, or enter into other arrangements in form and substance satisfactory to the Administrative Agent, pursuant to which such institution shall irrevocably agree, inter alia, that (i) it will comply at any time with the instructions originated by the Administrative Agent to such bank or financial institution directing the disposition of cash, Commodity Contracts, securities, Investment Property and other items from time to time credited to such account, without further consent of such Grantor, which instructions the Administrative Agent will not give to such bank or other financial institution in the absence of the occurrence and continuance of an Event of Default, (ii) all cash, Commodity Contracts, securities, Investment Property and other items of such Grantor deposited with such institution shall be subject to a perfected, first priority security interest in favor of the Administrative Agent, (iii) any right of set off, banker’s Lien or other similar Lien, security interest or encumbrance shall be fully waived as against the Administrative Agent, and (iv) upon receipt of written notice from the Administrative Agent during the continuance of an Event of Default, such bank or financial institution shall immediately send to the Administrative Agent by wire transfer (to such account as the Administrative Agent shall specify, or in such other manner as the Administrative Agent shall direct) all such cash, the value of any Commodity Contracts, securities, Investment Property and other items held by it.  Without five (5) Business Days’ prior written notice to the Administrative Agent, no Grantor shall make or maintain any Deposit Account, Commodity Account or Securities Account except for the accounts set forth in Schedule IV hereto or an update thereof; provided, however, that a Grantor may establish and maintain additional Excluded Deposit Accounts so long as such Grantor provides written notice of such account or an update to Schedule IV hereto to the Administrative Agent within five (5) days of opening such account and a Grantor may establish and maintain additional Specified Deposit Accounts so long as such additional Specified Deposit Accounts are subject to a control agreement as provided above.  The provisions of this paragraph 5(i) shall not apply to (A) Deposit Accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of a Grantor’s salaried employees; provided, that the funds on deposit in such Deposit Accounts shall at no time exceed the actual payroll, payroll taxes and other employee wage and benefit payments then owing by such Grantor, or (B) account number                                in the name of Rinzi Air, L.L.C.  maintained with Wachovia Bank, N.A.; provided, that the funds on deposit in such account shall at no time exceed the actual amounts due and owing by such Grantor in connection with the usage of the interest in a Piaggio Avanti P-180 aircraft owned as of the Closing Date by Rinzi Air, L.L.C.

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(ii)Each Deposit Account maintained by each Grantor shall either be a Specified Deposit Account, subject to a control agreement as provided above, or shall be an Excluded Deposit Account, in which case, all funds in each Excluded Deposit Account shall be deposited at least weekly into a Specified Deposit Account; provided that (A) the balance of the funds maintained in any Excluded Deposit Account shall not exceed (x) $50,000, at any time during the period commencing November 15 through and including May 15 of any calendar year, and (y) $20,000, at any other time, and (B) the aggregate balance of the funds maintained in all Excluded Deposit Accounts shall not exceed (x) $3,000,000, at any time during the period commencing November 15 through and including May 15 of any calendar year, and (y) $2,000,000, at any other time.

(iii)Each Grantor shall direct all Account Debtors to pay all Accounts and other proceeds of Collateral directly to either a Specified Deposit Account or an Excluded Deposit Account.  In addition, Each Grantor shall take all such actions as Administrative Agent in good faith deems necessary or appropriate to ensure that at all times on and after the date hereof all cash payments constituting proceeds of Collateral in the identical form in which such payment was made, whether by cash or check, are sent directly to either a Specified Deposit Account or an Excluded Deposit Account.

(iv)Without in any way limiting the immediately preceding clause (i), upon request by the Administrative Agent, each Grantor shall establish lock-box or blocked accounts (collectively, “Blocked Accounts”) in such Grantor’s name with such banks as are acceptable to the Administrative Agent (“Collecting Banks”), subject to irrevocable instructions in a form specified by the Administrative Agent, to which the obligors of all Accounts shall, after the occurrence and during the continuance of an Event of Default, directly remit all payments on Accounts and in which such Grantor will immediately deposit all cash payments for Inventory or other cash payments constituting proceeds of Collateral in the identical form in which such payment was made, whether by cash or check.  In addition, the Administrative Agent, for the benefit of the Administrative Agent and Lenders, may, after the occurrence and during the continuance of an Event of Default, establish one or more depository accounts at each Collecting Bank or at a centrally located bank in the name of the Administrative Agent or such Grantor as customer (collectively, the “Depository Account”).  From and after receipt by any Collecting Bank of written notice from the.  Administrative Agent to such Collecting Bank that an Event of Default has occurred and is continuing, all amounts held or deposited in the Blocked Accounts held by such Collecting Bank shall be transferred to the Depository Account.  Subject to the foregoing, each Grantor hereby agrees that all payments received by the Administrative Agent or any Lender whether by cash, check, wire transfer or any other instrument, made to such Blocked Accounts or otherwise received by the Administrative Agent or any Lender and whether on the Accounts or as Proceeds of other Collateral or otherwise will be the sole and exclusive property of Lenders.  Each Grantor, and any of its Affiliates, employees, agents and other Persons acting for or in concert with such Grantor shall, acting as trustee for the Administrative Agent and Lenders, receive, as the sole and exclusive property of Lenders, any moneys, checks, notes, drafts or other payments relating to and/or constituting proceeds of Accounts or other Collateral which come into the possession or under the control of such Grantor or any Affiliates, employees, agent, or other Persons acting for or in concert with such Grantor, and immediately upon receipt thereof, such Grantor or such Persons shall deposit the same or cause the same to be deposited in kind, in a Blocked Account.

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(j)Titled Collateral.

(i)Each Grantor shall (a) cause all Collateral now owned or hereafter acquired by any Grantor, which under applicable law are required to be registered, to be properly registered in the name of such Grantor, (b) cause all Collateral now owned or hereafter acquired by any Grantor, the ownership of which under applicable law, is evidenced by a certificate of title or ownership (referred to herein as “Titled Collateral”), to be properly titled in the name of such Grantor, with the Administrative Agent’s Lien noted thereon and (c) deliver to the Administrative Agent (or its custodian) originals of all such certificates of title or ownership for such Titled Collateral.

(ii)Upon the acquisition after the date hereof by any Grantor of any Titled Collateral (other than an item of Equipment to be acquired that is subject to a purchase money security interest permitted by Section 7.02(a) of the Financing Agreement), such Grantor shall deliver to the Administrative Agent in accordance with the Financing Agreement, originals of the certificates of title or ownership for such Titled Collateral, together with the manufacturer’s statement of origin, and an application duly executed by the appropriate Grantor to evidence the Administrative Agent’s Lien thereon.

(iii)Each Grantor hereby appoints the Administrative Agent as its attorney-in-fact, effective the date hereof and terminating upon the termination of this Agreement, for the purpose of, after the occurrence and during the continuance of an Event of Default, (A) executing on behalf of such Grantor title or ownership applications for filing with appropriate state agencies to enable Titled Collateral to be retitled and the Administrative Agent listed as lienholder thereof, (B) filing such applications with such state agencies, and (C) executing such other documents and instruments on behalf of, and taking such other action in the name of, such Grantor as the Administrative Agent may deem necessary or advisable to accomplish the purposes hereof (including, without limitation, for the purpose of creating in favor of the Administrative Agent a perfected Lien on such Titled Collateral and exercising the rights and remedies of the Administrative Agent hereunder).  This appointment as attorney-in-fact is coupled with an interest and is irrevocable until all of the Obligations are paid in full after all Commitments have been terminated.

(iv)With respect to motor vehicles, any certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by odometer statements for each motor vehicle covered thereby.

(v)So long as no Event of Default shall have occurred and be continuing, upon the request of any Grantor, the Administrative Agent shall execute and deliver to such Grantor such instruments as such Grantor shall reasonably request to remove the notation of the Administrative Agent as lienholder on any certificate of title for any Titled Collateral; provided that any such instruments shall be delivered, and the release effective, only upon receipt by the Administrative Agent of a certificate from such Grantor, stating that such Titled Collateral, the Lien on which is to be released, is to be sold or has suffered a casualty loss (with title thereto passing to the casualty insurance company therefor in settlement of the claim for such loss), the amount that such Grantor will receive as sale proceeds or insurance proceeds and whether or not such sale proceeds or insurance proceeds are required by Section 2.05 of the Financing Agreement to be paid to the Administrative Agent to be applied to the Obligations and, to the extent required by Section 2.05 of the Financing Agreement, any proceeds of such sale or casualty loss shall be paid to the Administrative Agent hereunder to be applied to the Obligations then outstanding.

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(k)Control.  Each Grantor hereby agrees to take any or all action that may be necessary or desirable or that the Administrative Agent may reasonably request in order for the Administrative Agent to obtain Control in accordance with Sections 9-104, 9-105, 9-106 and 9-107 of the Code with respect to the following Collateral: (i) Deposit Accounts, (ii) Electronic Chattel Paper, (ii) Investment Property and (iii) Letter-of-Credit Rights, in each case if form and substance acceptable to the Administrative Agent.

(l)Inspection and Reporting.  Each Grantor shall permit the Administrative Agent, or any agents or representatives thereof or such professionals or other Persons as the Administrative Agent may designate (i) to examine and make copies of and abstracts from such Grantor’s records and books of account, (ii) to visit and inspect its properties, (iii) to verify materials, leases, notes, Accounts, Inventory and other assets of such Grantor from time to time, (iii) to conduct audits, physical counts, appraisals and/or valuations, Phase I and Phase II Environmental Site Assessments or examinations at the locations of such Grantor and (iv) to discuss such Grantor’s affairs, finances and accounts with any of its directors, officers, managerial employees, independent accountants or any of its other representatives, in each case as provided in the Financing Agreement.

(m)Corporate or Name Change.  Each Grantor will give the Administrative Agent at least thirty (30) days prior written notice of any change in such Grantor’s name, identity, mailing address, jurisdiction of organization or corporate structure.  With respect to any such change, the applicable Grantor will promptly execute and deliver such instruments, documents and notices and take such actions, as the Administrative Agent deems necessary or desirable to create, perfect and protect the security interests of the Administrative Agent in the Collateral.

(n)Instruments.  Each Grantor will deliver to the Administrative Agent all Instruments, to the extent the aggregate face amount thereof exceeds $250,000, duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Administrative Agent.  Each Grantor will also deliver to the Administrative Agent all security agreements securing any Instruments and execute Uniform Commercial Code financing statement amendments assigning to the Administrative Agent any Uniform Commercial Code financing statements filed by such Grantor in connection with such security agreements.

(o)Chattel Paper.  Each Grantor will deliver to the Administrative Agent all Tangible Chattel Paper, to the extent the aggregate face amount thereof exceeds $250,000, duly endorsed and accompanied by duly executed instruments of- transfer or assignment, all in form and substance satisfactory to the Administrative Agent.  Each Grantor will also deliver to the Administrative Agent all security agreements securing any Chattel Paper and execute Uniform Commercial Code financing statement amendments assigning to the Administrative Agent any Uniform Commercial Code financing statements filed by such Grantor in connection with such security agreements.  Each Grantor will mark conspicuously all Chattel Paper with a legend, in form and substance satisfactory to the Administrative Agent, indicating that such Chattel Paper is subject to the security interests granted pursuant to this Agreement.

(p)Letters of Credit.  Each Grantor will deliver to the Administrative Agent all Letters of Credit, to the extent the aggregate face amount thereof exceeds $250,000, duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Administrative Agent.  Each Grantor will also deliver to the Administrative Agent all security agreements securing any Letters of Credit and execute Uniform Commercial Code

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financing statement amendments assigning to the Administrative Agent any Uniform Commercial Code financing statements filed by such Grantor in connection with such security agreements.

(q)General Intangibles.  Each Grantor shall use commercially reasonable efforts to obtain any consents, waivers or agreements necessary to enable the Administrative Agent to exercise remedies hereunder and under the other Loan Documents with respect to any of such Grantor’s rights under any General Intangibles, including such Grantor’s rights as a licensee of Software.

(r)Credit Card Receivables.  All proceeds of credit card receivables shall be deposited into a Specified Deposit Account.  No Grantor shall, nor shall any Grantor permit any of its Subsidiaries to, enter into or amend or modify any credit card processing agreement or similar agreements or documentation to which it is a party which requires the counterparties thereto to deliver proceeds of credit card receivables to deposit accounts other than a Specified Deposit Account.

(s)Collateral Description.  Each Grantor will furnish to the Administrative Agent, from time to time upon request, statements and schedules further identifying, updating, and describing the Collateral and such other information, reports and evidence concerning the Collateral (and in particular the Accounts) as the Administrative Agent may reasonably request, all in reasonable detail.

(t)Use of Collateral.  No Grantor will use or permit any Collateral to be used unlawfully or in violation of any provision of applicable law, or any policy of insurance covering any of the Collateral.

(u)Records of Collateral.  Each Grantor shall keep full and accurate books and records relating to its respective portion of the Collateral and shall stamp or otherwise mark such books and records in such manner as the Administrative Agent may reasonably request indicating that the Collateral is subject to the security interests granted to the Administrative Agent under this Agreement.

(v)Federal Claims.  Each Grantor shall notify the Administrative Agent of any Collateral which constitutes a claim against the United States government or any instrumentality or agency thereof, the assignment of which claim is restricted by federal law.  Upon the request of the Administrative Agent, each Grantor shall take such steps as may be necessary to comply with any applicable federal assignment of claims laws and other comparable laws.

SECTION 6.Additional Provisions Concerning the Collateral.

(a)Each Grantor hereby (i) authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relating to the Collateral and (ii) ratifies such authorization to the extent that the Administrative Agent has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof.  A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

(b)Each Grantor hereby irrevocably appoints the Administrative Agent as its attorney-in-fact and proxy, with full authority in the place and stead of such Grantor and in the name

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of such Grantor or otherwise, after the occurrence and during the continuance of an Event of Default, in the Administrative Agent’s discretion, to take any action and to execute any instrument which the Administrative Agent may deem necessary or advisable to accomplish the purposes of this Agreement (subject to the rights of a Grantor under Section 5 hereof), including, without limitation, (i) to obtain and adjust insurance required to be paid to the Administrative Agent pursuant to Section 5(e) hereof, (ii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse, and collect any drafts or other Instruments, Documents and Chattel Paper in connection with clause (i) or (ii) above, (iv) to file any claims or take any action or institute any proceedings which the Administrative Agent may deem necessary or desirable for the collection of, or to preserve the value of, any Collateral or otherwise to enforce the rights of the Administrative Agent and the Lenders with respect to any Collateral, (v) to execute assignments, licenses and other documents to enforce the rights of the Administrative Agent and the Lenders with respect to any Collateral, (vi) to pay- or discharge taxes or Liens levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the Administrative Agent in its sole discretion, and such payments made by the Administrative Agent to become obligations of such Grantor to the Administrative Agent, due and payable immediately without demand, (vii) to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, assignments, verifications and notices in connection with Accounts, Chattel Paper and other documents relating to the Collateral and (viii) generally to take any act required of such Grantor by Section 5 and to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and to do, at the Administrative Agent’s option and such Grantor’s expense, at any time or from time to time, all acts and things that the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral.  This power is coupled with an interest and is irrevocable until all of the Obligations are paid in full after all Commitments have been terminated.

(c)For the purpose of enabling the Administrative Agent to exercise rights and remedies hereunder, at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies in accordance with the provisions of the Financing Agreement and this Agreement, and for no other purpose, each Grantor hereby grants to the Administrative Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, assign, license or sublicense any Intellectual Property now owned or hereafter acquired by any Grantor, wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof.  Notwithstanding anything contained herein to the contrary, but subject to the provisions of the Financing Agreement that limit the right of a Grantor to dispose of its property and Section 5(h) hereof, so long as no Event of Default shall have occurred and be continuing, each Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of its business.  In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing, the Administrative Agent shall from time to time, upon the request of a Grantor, execute and deliver any instruments, certificates or other documents, in the form so requested, which such Grantor shall have certified are appropriate (in such Grantor’s judgment) to allow it to take any action permitted above (including relinquishment of the license provided pursuant to this clause (c) as to any Intellectual Property).  Further, upon the payment in full of all of the Obligations after the cancellation or termination of the Commitments, the Administrative Agent (subject to Section 10(e) hereof) shall release and reassign to the Grantors all of the

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Administrative Agent’s right, title and interest in and to the Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever.  The exercise of rights and remedies hereunder by the Administrative Agent shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by any Grantor in accordance with the second sentence of this clause (c).  Each Grantor hereby releases the Administrative Agent from any claims, causes of action and demands at any time arising out of or with respect to any actions taken or omitted to be taken by the Administrative Agent under the powers of attorney granted herein other than actions taken or omitted to be taken through the Administrative Agent’s gross negligence or willful misconduct, as determined by a final determination of a court of competent jurisdiction.

(d)If any Grantor fails to perform any agreement contained herein, the Administrative Agent may itself perform, or cause performance of, such agreement or obligation, in the name of such Grantor or the Administrative Agent, and the expenses of the Administrative Agent incurred in connection therewith shall be jointly and severally payable by the Grantors pursuant to Section 8 hereof and shall be secured by the Collateral.

(e)The powers conferred on the Administrative Agent hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.  Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Administrative Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.  The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property.  The Administrative Agent shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Administrative Agent in good faith.

(f)Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with respect to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Administrative Agent of any of its rights hereunder shall not release any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Administrative Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other Collateral, nor shall the Administrative Agent be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

SECTION 7.Remedies Upon Default.  If any Event of Default shall have occurred and be continuing:

(a)The Administrative Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer into the Administrative Agent’s name or into the name of its nominee or nominees (to the extent the Administrative Agent has not theretofore done so) and thereafter receive, for the benefit of the Administrative Agent, all payments made thereon, give all consents, waivers

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and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Administrative Agent forthwith, assemble all or part of the Collateral as directed by the Administrative Agent and make it available to the Administrative Agent at a place or places to be designated by the Administrative Agent that is reasonably convenient to both parties (in which event such Grantor shall, at its own expense, forthwith cause the same to be moved to the place or places so designated by the Administrative Agent and thereby delivered to the Administrative Agent, store and keep any Collateral so delivered to the Administrative Agent at such place or places pending further action by the Administrative Agent, and, while Collateral shall be so stored and kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain the Collateral in good condition), and the Administrative Agent may enter into and occupy any premises owned or leased by any Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate the Administrative Agent’s rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation, (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Administrative Agent may deem commercially reasonable and/or (B) lease, license or otherwise dispose of the Collateral or any part thereof upon such terms as the Administrative Agent may deem commercially reasonable, and (iv) withdraw all cash in the Depository Accounts and apply such monies in payment of the Obligations.  Each Grantor agrees that, to the extent notice of sale or any other disposition of the Collateral shall be required by law, at least ten (10) days’ notice to a Grantor of the time and place of any public sale or the time after which any private sale or other disposition of the Collateral is to be made shall constitute reasonable notification.  The Administrative Agent shall not be obligated to make any sale or other disposition of Collateral regardless of notice of sale having been given.  The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  Each Grantor hereby waives any claims against the Administrative Agent and the Lenders arising by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Administrative Agent accepts the first offer received and does not offer the Collateral to more than one offeree, and waives all rights that such Grantor may have to require that all or any part of the Collateral be marshalled upon any sale (public or private) thereof.  Each Grantor hereby acknowledges that (i) any such sale of the Collateral by the Administrative Agent shall be made without warranty, (ii) the Administrative Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, (iii) the Administrative Agent may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness), if permitted by law, for the purchase, lease, license or other disposition of the Collateral or any portion thereof for the account of the Administrative Agent (on behalf of Lenders) and (iv) such actions set forth in clauses (i), (ii) and (iii) above shall not adversely effect the commercial reasonableness of any such sale of the Collateral.  In addition to the foregoing, (i) upon written notice to any Grantor from the Administrative Agent, each Grantor shall cease any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose described in such notice; (ii) the Administrative Agent may, at any time and from time to time, upon 10 days’ prior notice to any Grantor, license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property, throughout the universe for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its sole discretion determine; and (iii) the

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Administrative Agent may, at any time, pursuant to the authority granted in Section 6 hereof (such authority being effective upon the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of a Grantor, one or more instruments of assignment of the Intellectual Property (or any application or registration thereof), in form suitable for filing, recording or registration in any country.

(b)Any cash held by the Administrative Agent as Collateral and all Cash Proceeds received by the Administrative Agent in respect of any sale of or collection from, or other realization upon, all or any part of the Collateral may, in the discretion of the Administrative Agent, be held by the Administrative Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Administrative Agent pursuant to Section 8 hereof) in whole or in part by the Administrative Agent against, all or any part of the Obligations in such order as the Administrative Agent shall elect, consistent with the provisions of the Financing Agreement.  Any surplus of such cash or Cash Proceeds held by the Administrative Agent and remaining after payment in full of all of the Obligations after all Commitments have been terminated shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

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

(d)Each Grantor hereby acknowledges that if the Administrative Agent complies with any applicable state, provincial, or federal law requirements in connection with a disposition of the Collateral, such compliance will not adversely effect the commercial reasonableness of any sale or other disposition of the Collateral.

(e)The Administrative Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the Administrative Agent’s rights hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising.  To the extent that any Grantor lawfully may, such Grantor hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Administrative Agent’s rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

(f)The Administrative Agent or its agents or attorneys shall have the right without notice or demand or legal process (unless the same shall be required by applicable law), personally, or by agents or attorneys, (i) to enter upon, occupy and use any premises owned or leased by any Grantor or where the Collateral is located (or is believed to be located) until the Obligations are paid in full without any obligation to pay rent to such Grantor, to render the Collateral useable or

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saleable and to remove the Collateral or any part thereof therefrom to the premises of the Administrative Agent or any agent of the Administrative Agent for such time as the Administrative Agent may desire in order to effectively collect or liquidate the Collateral and use in connection with such removal any and all services, supplies and other facilities of such Grantor; (ii) to take possession of such Grantor’s original books and records, to obtain access to such Grantor’s data processing equipment, computer hardware and Software relating to the Collateral and to use all of the foregoing and the information contained therein in any manner the Administrative Agent deems appropriate; and (iii) to notify postal authorities to change the address for delivery of such Grantor’s mail to an address designated by the Administrative Agent and to receive, open and dispose of all mail addressed to such Grantor.

(g)Each Grantor hereby irrevocably authorizes and empowers the Administrative Agent, without limiting any other authorizations or empowerments contained in any of the other Loan Documents, to assert, either directly or on behalf of each Grantor, any claims any Grantor may have, from time to time, against any other party to any of the agreements to which such Grantor is a party or to otherwise exercise any right or remedy of such Grantor under any such agreements (including, without limitation, the right to enforce directly against any party to any such agreement all of such Grantor’s rights thereunder, to make all demands and give all notices and to make all requests required or permitted to be made by such Grantor thereunder).

SECTION 8.Indemnity and Expenses.

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

(b)The Grantors will upon demand pay to the Administrative Agent the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Administrative Agent and of any experts and agents (including, without limitation, any collateral trustee which may act as agent of the Administrative Agent), which the Administrative Agent may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights of the Administrative Agent hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof If any Grantor fails to promptly pay any portion of the above costs, fees and expenses when due or to perform any other obligation of such Grantor under this Agreement, the Administrative Agent or any other Lender may, at its option, but shall not be required to, pay or perform the same and charge such Grantor’s account for all fees, costs and expenses incurred therefor, and each Grantor agrees to reimburse the Administrative Agent or such Lender therefor on demand All sums so paid or incurred by the Administrative Agent or any other Lender for any of the foregoing, any and all other sums for which any Grantor may become liable hereunder and all fees, costs and expenses (including reasonable attorneys’ fees, legal expenses and court costs) incurred by the Administrative Agent or any other Lender in enforcing or protecting the security interests granted to the Administrative Agent

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pursuant to this Agreement or any of their rights or remedies under this Agreement shall be payable on demand, shall constitute Obligations, shall bear interest until paid at the highest rate provided in the Financing Agreement and shall be secured by the Collateral.

SECTION 9.Notices, Etc.  All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt requested), telecopied or delivered, if to a Grantor, to it at its chief executive office set forth in Schedule III hereto and if to the Administrative Agent to it, at its address specified in the Financing Agreement; or as to any such Person, at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 9.  All such notices and other communications shall be effective (i) if sent by certified mail, return receipt requested, when received or three days after deposited in the mails, whichever occurs first, (ii) if telecopied, when transmitted and confirmation is received, or (iii) if delivered, upon delivery.

SECTION 10.Grantors Remain Liable.  Anything herein to the contrary notwithstanding: (a) each Grantor shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed; (b) the exercise by the Administrative Agent of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral; (c) neither the Administrative Agent nor any Lender shall have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement, nor shall the Administrative Agent nor any Lender be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder; and (d) neither the Administrative Agent nor any Lender shall have any liability in contract or tort for any Grantor’s acts or omissions.

SECTION 11.Miscellaneous.

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

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

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

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

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

(f)THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(g)ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

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(h)EACH OF THE GRANTORS AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) THE ADMINISTRATIVE AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

(i)Each Grantor irrevocably consents to the service of process of any of the aforesaid courts in any such action, suit or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address provided herein, such service to become effective 10 days after such mailing.

(j)Nothing contained herein shall affect the right of the Administrative Agent to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against any Grantor or any property of any Grantor in any other jurisdiction.

(k)Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

(l)For the avoidance of doubt, the parties hereto hereby acknowledge and agree that all Schedules delivered hereunder and all other factual information, if any, disclosed herein has been prepared on a pro forma basis after giving effect to the Body Shop Acquisition and the Closing Date Joinder Agreement.

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

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

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

(p)Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Section 5 hereof will cause irreparable injury to the Administrative Agent and that the Administrative Agent has no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent to seek and obtain specific

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performance of other obligations of any Grantor contained in this Agreement, that the covenants of each Grantor contained in Section 6 hereof shall be specifically enforceable against each Grantor.

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

BORROWER:
BODY CENTRAL ACQUISITION CORP.
By:	/s/ Carlo A. von Schroeter
	Carlo A. von Schroeder
	President

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