Legal Security Package Agreement

LEGAL SECURITY PACKAGE AGREEMENT

This Security Package Agreement ("Agreement") is made and entered into as of by and between Secured Party Name: with principal address at (the "Secured Party"), and Debtor Name: with principal address at (the "Debtor").

RECITALS

WHEREAS, the Debtor is indebted to the Secured Party pursuant to certain obligations described herein and in related documents, including but not limited to the Promissory Note, Credit Agreement and other instruments evidencing indebtedness (collectively, the "Secured Obligations");

WHEREAS, the Debtor desires to grant, and the Secured Party desires to accept, a security interest in the Collateral (as defined below) to secure the prompt payment and performance of the Secured Obligations; and

WHEREAS, the parties intend that the security interests, guarantees and other documents delivered contemporaneously with this Agreement constitute a coordinated security package to create, perfect and preserve the Secured Party's rights and remedies with respect to the Collateral.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 "Collateral" means all property, rights and interests of the Debtor described in Section 2 and in Schedule A attached hereto, including proceeds and accessions. Schedule A description:

1.2 "Financing Statements" means any and all UCC-1 financing statements, continuation statements and similar filings and recordings reasonably necessary to perfect and maintain perfection of the security interests granted hereunder.

2. GRANT OF SECURITY INTEREST

2.1 Grant. The Debtor hereby grants to the Secured Party a continuing security interest in, lien on and right of set-off against all right, title and interest of the Debtor in and to the Collateral, whether now owned or hereafter acquired, to secure the full and punctual payment and performance of the Secured Obligations.

2.2 Included Categories. The Collateral expressly includes (select all categories included):

Inventory Equipment, Fixtures and Tangible Personal Property Accounts and Receivables General Intangibles, Intellectual Property and Licenses Deposit Accounts and Cash Proceeds and Products of the Above

3. REPRESENTATIONS AND WARRANTIES

The Debtor represents and warrants to the Secured Party that, as of the Effective Date and continuing until the Secured Obligations are paid in full: (a) the Debtor is duly organized and in good standing under applicable law and has full power and authority to enter into, deliver and perform this Agreement; (b) this Agreement constitutes the legal, valid and binding obligation of the Debtor enforceable in accordance with its terms, subject to applicable bankruptcy and similar laws; and (c) the Debtor has good and marketable title to the Collateral free and clear of any lien, charge or encumbrance except as disclosed in Schedule A.

4. COVENANTS

4.1 Preservation of Collateral. The Debtor shall at all times preserve, protect and maintain the Collateral and shall not sell, assign, convey or otherwise dispose of the Collateral except in the ordinary course of business or with the prior written consent of the Secured Party.

4.2 Perfection. The Debtor shall execute and deliver to the Secured Party such financing statements, control agreements, consents, filings and other instruments as the Secured Party may reasonably request to create, perfect, maintain or enforce the security interests granted herein, and shall cooperate in all actions reasonably necessary to obtain and preserve the priority of such security interests.

5. PERFECTION; PRIORITY; FILING

5.1 The Secured Party may file any Financing Statements or other notices or recordations required to protect and perfect the security interests created by this Agreement. The Debtor authorizes the Secured Party to file Financing Statements which may describe the Collateral as "all assets" or in such other manner as the Secured Party reasonably determines appropriate.

5.2 Priority. Unless otherwise agreed in writing, the security interests granted hereunder shall be senior to any subsequently granted interests in the Collateral and shall have the priority provided by applicable law.

6. DEFAULT; REMEDIES

6.1 Events of Default. An Event of Default shall occur upon (a) failure to pay any amount when due under the Secured Obligations; (b) breach of any representation, warranty or covenant contained in this Agreement; (c) insolvency, commencement of bankruptcy, reorganization or similar proceeding with respect to the Debtor; or (d) any material adverse change in the Debtor's financial condition that materially impairs the Secured Party's security.

6.2 Remedies. Upon the occurrence and during the continuance of an Event of Default, the Secured Party may, to the fullest extent permitted by law, exercise all rights and remedies of a secured party, including taking possession of the Collateral, selling, leasing or otherwise disposing of the Collateral, applying proceeds to the Secured Obligations, and pursuing any other remedy provided by this Agreement or applicable law. The Secured Party shall be entitled to recover all costs and expenses, including attorneys' fees, incurred in enforcing its rights hereunder.

7. INDEMNIFICATION; EXPENSES

The Debtor shall indemnify and hold harmless the Secured Party from and against any and all losses, liabilities, claims, damages and reasonable expenses (including reasonable attorneys' fees) arising out of or in connection with a breach by the Debtor of this Agreement or any action taken by the Secured Party to perfect, preserve or enforce its security interests, except to the extent such losses arise from the Secured Party's gross negligence or willful misconduct.

8. NOTICES

All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be delivered to the parties at their respective addresses below (or to such other address as a party may specify by notice to the other). Notices shall be deemed given when delivered personally, sent by confirmed facsimile, by nationally recognized overnight courier, or three days after mailing by certified mail, return receipt requested.

9. AMENDMENT; WAIVER

No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom enforcement is sought. The failure of either party to exercise any right hereunder shall not constitute a waiver of such right.

10. ASSIGNMENT

This Agreement and the rights of the Secured Party hereunder may be assigned or transferred by the Secured Party, in whole or in part, without the consent of the Debtor. The Debtor may not assign its rights or obligations under this Agreement without the prior written consent of the Secured Party.

11. GOVERNING LAW; VENUE

This Agreement shall be governed by and construed in accordance with the laws of the state specified below, without regard to conflict of laws principles. The parties consent to the exclusive jurisdiction and venue of the state and federal courts located in that state for any dispute arising out of this Agreement.

12. ENTIRE AGREEMENT; SEVERABILITY

This Agreement, together with the documents executed in connection herewith, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

13. COUNTERPARTS; EXECUTION

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, and all of which taken together shall constitute one and the same instrument. Signatures transmitted by facsimile or electronic image shall be effective as originals.

14. MISCELLANEOUS

The obligations and security interests created by this Agreement shall survive the termination of the underlying credit facilities to the extent necessary to secure any obligations incurred prior to such termination. Headings are for convenience only and shall not affect interpretation.

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