SECURITY AGREEMENT

Exhibit 10.16

SECURITY AGREEMENT

      THIS SECURITY AGREEMENT , dated as of December 19, 2008 (this “ Agreement ”), is entered into by FRANKLIN CREDIT TRUST SERIES I , a Delaware statutory trust (the “ Grantor ”), and is in favor of THE HUNTINGTON NATIONAL BANK (“ Lender ”).

W i t n e s s e t h:

      Whereas, Franklin Credit Holding Corporation (“ Holding ”), Franklin Credit Management Corporation (“ FCMC ”), Franklin Credit Asset Corporation (“ Franklin Asset ”) and certain subsidiaries of Franklin Asset party thereto as borrowers (Franklin Asset and such borrowers collectively referred to as the “ Franklin Loan Parties ”) and Lender have entered into that certain First Amended and Restated Forbearance Agreement and Amendment to Credit Agreements, dated as of even date herewith (as amended, restated, supplemented or otherwise modified from time to time in accordance with the provisions thereof, the “ Franklin Forbearance Agreement ”), pursuant to which Lender has agreed to make and/or maintain Advances and other financial accommodations to and for the benefit of the Franklin Loan Parties, upon the terms and subject to the conditions set forth in the Franklin Forbearance Agreement; and

      Whereas, FCMC, Tribeca Lending Corp. (“ Tribeca ”) and certain subsidiaries of Tribeca party thereto as borrowers (Tribeca and such borrowers collectively referred to as the “ Tribeca Borrowers ”) and Lender have entered into that certain First Amended and Restated Tribeca Forbearance Agreement and Amendment to Credit Agreements, dated as of even date herewith (as amended, restated, supplemented or otherwise modified from time to time in accordance with the provisions thereof, the “ Tribeca Forbearance Agreement ”), pursuant to which Lender has agreed to make and/or maintain Advances and other financial accommodations to and for the benefit of the Tribeca Borrowers, upon the terms and subject to the conditions set forth in the Tribeca Forbearance Agreement; and

      Whereas, the Franklin Loan Parties and the Tribeca Borrowers are collectively referred to as “ Borrowers ” and separately as a “ Borrower”, and the Franklin Forbearance Agreement and the Tribeca Forbearance Agreement are collectively referred to as the “ Forbearance Agreements ” and separately as a “ Forbearance Agreement; ” and

      Whereas , as of even date herewith, the Grantor has executed (i) a certain Guaranty in connection with the Franklin Forbearance Agreement (the “ Franklin Guaranty ”) and (ii) a certain Guaranty in connection with the Tribeca Forbearance Agreement (the “ Tribeca Guaranty, ” and together with the Franklin Guaranty, the “ Guaranties ”) whereby the Grantor guaranteed to Lender the prompt and complete payment and performance by Borrowers of all Secured Obligations; and

      Whereas, the Forbearance Agreements, the Guaranties, each master credit and security agreement, flow warehousing credit and security agreement, term loan and security agreement, warehousing credit and security agreement, loan agreement, credit agreement, forbearance agreement, promissory note, security agreement, certificate, letter of credit reimbursement agreement, pledge agreement, control agreement, joinder agreement, counterpart signature page,

assignment, guaranty, banking services agreement, hedging agreement, cash management agreement, consent agreement, collateral agreement, amendment, modification agreement, instrument and financing statements and other loan documents (as any of the same may be amended, restated, supplemented, modified or replaced from time to time) executed or delivered to Lender by any Loan Party, are collectively referred to as the “ Credit Documents ”); and

      Whereas, pursuant to the respective Credit Documents, Lender has agreed subject to certain conditions precedent, to make and/or maintain loans and other financial accommodations to Borrowers from time to time; and

      Whereas, Lender has required as a condition, among others, of extending credit to Borrowers or of renewing, extending, or forbearing from demanding immediate payment of extensions of credit to Borrowers, that the Grantor enter into this Agreement.

      Now, Therefore, in consideration of the promises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor agrees with Lender as follows:

ARTICLE I Defined Terms

      Section 1.1 Definitions

     (a) Terms used herein that are defined in the UCC have the meanings given to them in the UCC, including the following terms (which are capitalized herein):

     “ Account Debtor ”, “ Accounts ”, “ Chattel Paper ”, “ Commercial Tort Claim ”, “ Commodity Account ”, “ Commodity Intermediary ”, “ Deposit Account ”, “ Documents ”, “ Entitlement Holder ”, “ Entitlement Order ”, “ Equipment ”, “ Financial Asset ”, “ General Intangibles ”, “ Instruments ”, “ Inventory ”, “ Investment Property ”, “ Letter-of-Credit Right ”, “ Proceeds ”, “ Securities Account ”, “ Securities Intermediary ”, “ Security, “ Security Entitlement ”.

     (b) The following terms shall have the following meanings:

     “ Additional Pledged Collateral ” means all shares of, partnership interests in (whether limited or general), and limited liability company interests in, all securities convertible into, and warrants, options and other rights to purchase or otherwise acquire, stock of or interests in, either (i) any Person that, after the date of this Agreement, as a result of any occurrence, becomes a direct Subsidiary of the Grantor or (ii) any issuer of Pledged Stock, any Partnership or any LLC that is acquired by the Grantor after the date hereof; all certificates or other instruments representing any of the foregoing; all Security Entitlements of the Grantor in respect of any of the foregoing; all additional indebtedness from time to time owed to the Grantor by any obligor on the Pledged Notes and the instruments evidencing such indebtedness; and all interest, cash, instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing. Additional Pledged Collateral may be General Intangibles or Investment Property.

     “ Agreement ” means this Security Agreement.

     “ Approved Deposit Account ” means any present or future Deposit Account of the Grantor that (i) is maintained with Lender (or any affiliate thereof) or (ii) is subject to an effective Deposit Account Control Agreement in favor of Lender and maintained with a Deposit Account Bank. “ Approved Deposit Account ” includes all monies on deposit in a Deposit Account and all certificates and instruments, if any, representing or evidencing such Deposit Account.

     “ Approved Securities Intermediary ” means a Securities Intermediary or Commodity Intermediary acceptable to Lender and with respect to which the Grantor has delivered to Lender an executed Control Account Agreement.

     “ Banking Services ” means each and any of the following bank services provided to the Grantor by Lender or any of its affiliates: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

     “ Bankruptcy Code ” means Title 11 of the United States Code (11 USC, § 101 et seq ), as amended from time to time, and any successor statute thereto, including (unless the context requires otherwise) any rules or regulations promulgated thereunder.

     “ Capital Leases ” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

     “ Cash Collateral Account ” means any deposit account over which Lender has sole dominion and control, or by contract agreement with others, established by Lender, in its sole discretion at Lender, and entitled “The Huntington National Bank, as Secured Party for Franklin Management Credit Corporation and/or Tribeca Lending Corp. (Blocked Account)” or such similar title as Lender may approve or require.

     “ Cash Equivalents ” means (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year from the date of acquisition thereof, (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within one (1) year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either S&P or Moody’s, and (iii) certificates of deposit or bankers’ acceptances maturing within one (1) year from the date of acquisition thereof either (A) issued by any bank organized under the laws of the United States or any state thereof which bank has a rating of A or A2, or better, from S&P or Moody’s, or (B) issued by any other bank insured by the Federal Deposit Insurance Corporation, (“ FDIC ”) provided that such certificates of deposit are less than or equal to, in the aggregate, the deposit insurance coverage limit set by the FDIC for single ownership accounts.

     “ Collateral ” has the meaning specified in Section 2.1.

     “ Collection Account ” means any Approved Deposit Account or Control Account in which cash and Cash Equivalents may from time to time be on deposit or held therein as provided in this Agreement .

     “ Contingent Obligations ” means any agreement, undertaking or arrangement by which the Grantor assumes, guaranties, endorses, agrees to provide funding, or otherwise becomes or is contingently liable upon the obligation or liability of any other Loan Party.

     “ Control Account ” means a Securities Account or Commodity Account that is subject of an effective Control Account Agreement and that is maintained by the Grantor with an Approved Securities Intermediary. “ Control Account ” includes all Financial Assets held in a Securities Account or a Commodity Account and all certificates and instruments, if any, representing or evidencing the Financial Assets contained therein.

     “ Control Account Agreement ” means an agreement, in form and substance acceptable to Lender, executed by the relevant Loan Party, Lender and the relevant Approved Securities Intermediary.

     “ Copyright Licenses ” means any written agreement naming the Grantor as licensor or licensee granting any right under any Copyright, including the grant of any right to copy, publicly perform, create derivative works, manufacture, distribute, exploit or sell materials derived from any Copyright.

     “ Copyrights ” means (a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office or in any foreign counterparts thereof, and (b) the right to obtain all renewals thereof.

     “ Credit Documents ” has the meaning specified above in the recitals.

     “ Deposit Account Bank ” means a financial institution selected or approved by Lender and with respect to which the Grantor has delivered to Lender an executed Deposit Account Control Agreement.

     “ Deposit Account Control Agreement ” means an agreement, in form and substance acceptable to Lender, executed by the relevant Loan Party, Lender and the relevant Deposit Account Bank.

     “ Event of Default ” means each of the following: (a) any “Forbearance Default” shall occur under any Forbearance Agreement; (b) the Grantor fails to perform or observe any covenant, agreement or duty contained in this Agreement or any other Loan Document; or (c) any warranty, representation or other statement made or deemed to be made by the Grantor in this Agreement or in any Loan Document is false or misleading in any respect.

     “ Excluded Property ” means Equipment owned by the Grantor that is, and continues to be, subject to a Permitted Lien listed on Schedule 8 attached hereto, if the contract or other agreement pursuant to which such Lien is granted contains an enforceable prohibition on the creation of any Lien on such Equipment in favor of Lender; and (b) equity interests (whether Investment Property or General Intangibles), if the organizational or operating documents pursuant to which such equity interests are issued or governed contain an enforceable prohibition

on the creation of any Lien on such equity interests in favor of Lender; in each case, only to the extent, and for so long as, such prohibition is not removed, terminated or rendered unenforceable or otherwise deemed ineffective by applicable Law; provided, however, that “ Excluded Property ” shall not include (i) the right to receive any payment of money (including, without limitation, general intangibles for money due or to become due); and (ii) any proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions or replacements of any of the foregoing.

     “ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board, the American Institute of Certified Public Accountants and the Financial Accounting Standards Board as in effect from time to time in the United States consistently applied.

     “ Governmental Authority ” means any nation or government, any federal, state, local or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity established to perform any of such functions.

     “ Indebtedness ” means, at any time, (i) all indebtedness, obligations or other liabilities (other than accounts payable arising in the ordinary course of business payable on terms customary in the trade) which in accordance with GAAP should be classified as liabilities on the balance sheet of such Person, including without limitation, (A) for borrowed money or evidenced by debt securities, debentures, acceptances, notes or other similar instruments, and any accrued interest, fees and charges relating thereto, (B) under profit payment agreements or in respect of obligations to redeem, repurchase or exchange any securities or to pay dividends in respect of any stock, (C) with respect to letters of credit, bankers acceptances, interest rate swaps or other contracts, currency agreement or other financial products, (D) to pay the deferred purchase price of property or services, or (E) in respect of Capital Leases; (ii) all indebtedness, obligations or other liabilities secured by a lien on any property, whether or not such indebtedness, obligations or liabilities are assumed by the owner of the same; and (iii) all Contingent Obligations.

     “ Insolvency Proceeding ” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, receivership, assignment for the benefit of creditors, formal or informal moratorium, forbearance, composition, extension generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

     “ Intellectual Property ” means, collectively, all rights, priorities and privileges of the Grantor relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including domain names, Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses and trade secrets, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

     “ Intercompany Note ” means any promissory note evidencing loans made by the Grantor to any of its Subsidiaries or another Loan Party.

     “ Law ” means any law (including common law), constitution, statute, treaty, convention, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority.

     “ Lien ” means any interest in an asset securing an obligation owed to, or a claim by, any Person other than the owner of the asset, whether such interest shall be based on the common law, statute, or contract, whether such interest shall be recorded or perfected, and whether such interest shall be contingent upon the occurrence of some future event or events or the existence of some future circumstance or circumstances, including the lien or security interest arising from any mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment (collateral or otherwise), hypothec, deposit arrangement, security agreement, conditional sale, trust receipt, lease, consignment, or bailment for security purposes, judgment, claim encumbrance or statutory trust and also including reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting real property.

     “ LLC ” means each limited liability company in which the Grantor has an interest, including those set forth on Schedule 2.

     “ LLC Agreement ” means each operating agreement with respect to an LLC, as each agreement has heretofore been, and may hereafter be, amended, restated, supplemented or otherwise modified from time to time.

     “ Loan Documents ” means the Credit Documents, any agreements or documents evidencing or relating to the provision of any Banking Services by Lender for the benefit of a Loan Party, and any other agreement, document, or arrangement (whether now existing or hereafter arising) by and among Lender (or its affiliate) and one or more Loan Party.

     “ Loan Party ” means each of the Grantor, FCMC, Holding, any Subsidiary of Holding that is a signatory to any Loan Document, Tribeca, any Subsidiary of Tribeca that is a signatory to any Loan Document and any other Person who becomes a party to any Loan Document, and their respective successors and assigns.

     “ Master Trust Agreement ” that certain Master Trust Agreement for the Franklin Credit Trusts among FCMC, as a Depositor, Tribeca, as a Depositor, Deutsche Bank National Trust Company, as Certificate Trustee and Deutsche Bank Trust Company Delaware dated as of December 15, 2008, as amended, restated, supplemented or otherwise modified from time to time.

     “ Material Intellectual Property ” means Intellectual Property owned by or licensed to the Grantor and material to the Grantor’s business.

     “ Partnership ” means each partnership or joint venture in which the Grantor has an interest, including those set forth on Schedule 2 .

     “ Partnership Agreement ” means each partnership or joint venture agreement governing a Partnership, as each such agreement has heretofore been, and may hereafter be, amended, restated, supplemented or otherwise modified.

     “ Patents ” means (a) all letters patent of the United States, any other country or any political subdivision thereof and all reissues and extensions thereof, (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof and (c) all rights to obtain any reissues or extensions of the foregoing.

     “ Patent License ” means all agreements, whether written or oral, providing for the grant by or to the Grantor of any right to manufacture, use, import, sell or offer for sale any invention covered in whole or in part by a Patent.

     “ Permitted Contests ” means the right of the Grantor or another Loan Party to contest or protest any Lien (other than any such Lien that secures the Secured Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (i) a reserve with respect to such obligation is established on such Loan Party’s books and records in such amount as is required under GAAP, (ii) any such protest is instituted promptly and prosecuted diligently by the applicable Loan Party in good faith, and (iii) Lender is satisfied in its sole, good faith discretion, that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of a Lender’s Liens.

     “ Permitted Liens ” means (i) any Liens held by Lender or an affiliate of Lender, (ii) Liens for unpaid taxes that either are not yet delinquent, or do not constitute an Event of Default hereunder and are the subject of a Permitted Contest, (iii) Liens set forth on Schedule 8 to the extent of the Indebtedness referenced therein, (iv) the interests of lessors under operating leases, (v) Liens securing purchase money Indebtedness or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness, (vi) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, or laborers, incurred in the ordinary course of the Grantor’s business and not in connection with the borrowing of money, and which Liens either (A) are for sums not yet delinquent, or (B) are the subject of Permitted Contests, (vii) Liens arising from deposits made in connection with obtaining worker’s compensation or other unemployment insurance, (viii) Liens or deposits to secure performance of bids, tenders, or leases incurred in the ordinary course of the Grantor’s business and not in connection with the borrowing of money, (ix) Liens granted as security for surety or appeal bonds in connection with obtaining such bonds in the ordinary course of the Grantor’s business, and (x) Liens resulting from any judgment or award that is not an Event of Default hereunder.

     “ Permitted Purchase Money Indebtedness ” means secured or unsecured purchase money Indebtedness (including obligations under Capital Leases) incurred to finance the acquisition of fixed assets or equipment, if such Indebtedness (i) has a scheduled maturity and is not due on demand, (ii) does not exceed the purchase price of the items being purchased, and (iii) is not secured by any property or assets other than the item or items being purchased.

     “ Person ” means any individual, corporation, firm, enterprise, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company or any other entity of any kind or any government or political subdivision or any agency, department or instrumentality thereof.

     “ Pledged Collateral ” means, collectively, the Pledged Notes, the Pledged Stock, the Pledged Partnership Interests, the Pledged LLC Interests, any other Investment Property of the Grantor, all certificates or other instruments representing any of the foregoing and all Security Entitlements of the Grantor in respect of any of the foregoing. Pledged Collateral may be General Intangibles or Investment Property.

     “ Pledged LLC Interests ” means all right, title and interest of any the Grantor as a member of any LLC and all right, title and interest of the Grantor in, to and under any LLC Agreement to which it is a party.

     “ Pledged Notes ” means all right, title and interest of the Grantor in the Instruments evidencing all Indebtedness owed to the Grantor, including all Indebtedness described on Schedule 2 , issued by the obligors named therein.

     “ Pledged Partnership Interests ” means all right, title and interest of the Grantor as a limited or general partner in all Partnerships and all right, title and interest of the Grantor in, to and under any Partnership Agreements to which it is a party.

     “ Pledged Stock ” means the shares of capital stock owned by the Grantor, including all shares of capital stock listed on Schedule 2 .

     “ Rate Management Transactions ” means any transaction (including an agreement with respect thereto) now existing or hereafter entered into among any Loan Party, Lender or any affiliate of Lender, or any of its subsidiaries or affiliates or their successors, which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.

     “ Secured Obligations ” means (a) any and all indebtedness, obligations, and liabilities now existing or hereafter arising of the Grantor or any other Loan Party to Lender (or any affiliate) or arising under or in connection with or evidenced by (i) the Credit Documents, this Agreement, or any other Loan Document, (ii) any other agreement relating to (A) letters of credit or pursuant to any letter of credit agreements or applications (if any), or pursuant to any agreement or document relating to Banking Services, (B) any agreement in respect of any Rate Management Transaction, (C) any agreement for any electronic transfers, treasury management, cash management services and deposit and disbursement account liability, and (D) any agreement of guaranty, surety or indemnity issued by such Person, (b) any and all indebtedness, obligations, and liabilities, now existing or hereafter arising, whether absolute or contingent and however and whenever created, arising, evidenced or acquired, of the Grantor or any other Loan Party owed to Lender (or any affiliate of Lender), (and in each instance in clauses (a) and (b) above, whether arising before or after the filing of a petition in bankruptcy and including all interest accrued after any such petition date), due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired, and (c) any and all reasonable expenses

and charges, legal or otherwise, suffered or incurred by Lender or any affiliate of Lender in collecting or enforcing any such indebtedness, obligation, and liability or in realizing on or protecting or preserving any security therefore, including, without limitation, the Lien and security interest granted by any Credit Document.

     “ Securities Act ” means the Securities Act of 1933, as amended.

     “ Subsidiary ” of a Person means any corporation, partnership, limited liability company or other entity in which such Person directly or indirectly owns or controls the securities or other ownership interests having ordinary voting power to elect a majority of the board of directors, or appoint managers or other persons performing similar functions.

     “ Trademark License ” means any agreement, whether written or oral, providing for the grant by or to the Grantor of any right to use any Trademark.

     “ Trademarks ” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and, in each case, all goodwill associated therewith, whether now existing or hereafter adopted or acquired, all registrations and recordings thereof and all applications in connection therewith, in each case whether 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, or otherwise, and all common-law rights related thereto, and (b) the right to obtain all renewals thereof.

     “ Trust ” means one or more of the Delaware statutory trusts created pursuant to the Master Trust Agreement.

     “ UCC ” means the Uniform Commercial Code as from time to time in effect in the State of Ohio; provided , however , that, in the event that, by reason of mandatory provisions of Law, any of the attachment, perfection or priority of Lender’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Ohio, the term “ UCC ” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

     “ Vehicles ” means all vehicles covered by a certificate of title law of any state.

      Section 1.2 Certain Other Terms

     (a) In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.”

     (b) The terms “herein,” “hereof,” “hereto” and “hereunder” and similar terms refer to this Agreement as a whole and not to any particular Article, Section, subsection or clause in this Agreement.

     (c) References herein to a Schedule, Article, Section, subsection or clause refer to the appropriate Schedule to, or Article, Section, subsection or clause in this Agreement.

     (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

     (e) Any reference in this Agreement to a Loan Document shall include all appendices, exhibits and schedules thereto, and, unless specifically stated otherwise all amendments, restatements, supplements or other modifications thereto, and as the same may be in effect at any time such reference becomes operative.

     (f) The term “Lender” includes its successors.

     (g) References in this Agreement to any statute shall be to such statute as amended or modified and in effect from time to time.

ARTICLE II Grant of Security Interest

      Section 2.1 Collateral

     For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by the Grantor or in which the Grantor now has or at any time in the future may acquire any right, title or interests, to the extent that any such property relates to assets of Grantor under the Master Trust Agreement, is collectively referred to as the “ Collateral ”:

     all Accounts and all rights to payment of monetary obligations, whether or not earned by performance, for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, or for services rendered or to be rendered, to a government, state, or governmental unit; all Chattel Paper; all Deposit Accounts; any amounts or refunds received from or in connection with any taxing authority; all Documents; all Equipment; all General Intangibles (including, without limitation, all contractual rights arising under any purchase agreement or assignments relating to mortgage loans); all Instruments; all Inventory; all Investment Property; all Letter-of-Credit Rights; all Vehicles; the Commercial Tort Claims described on Schedule 7 and on any supplement thereto received by Lender; all books and records pertaining to the other property described in this Section 2.1 ; all other goods and personal property of the Grantor, whether tangible or intangible and wherever located; all property of the Grantor held by Lender, including all property of every description, in the possession or custody of or in transit to Lender for any purpose, including safekeeping, collection or pledge, for the account of the Grantor or as to which the Grantor may have any right or power; and to the extent not otherwise included, all Proceeds.

      Section 2.2 Grant of Security Interest in Collateral

     The Grantor, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, hereby collaterally assigns, mortgages, pledges and hypothecates to Lender, and grants (whether under the UCC or otherwise) to Lender a lien on and security interest in, and a

collateral assignment of, all of its right, title and interest in, to and under the Collateral of the Grantor; provided , however , that the foregoing grant of security interest shall not include a security interest in any Excluded Property; provided , further , that, if and when any property shall cease to be Excluded Property, Lender shall have, and at all times after the date hereof deemed to have had, a security interest in such property.

      Section 2.3 Cash Collateral Accounts

     Lender may, in its discretion, establish one or more Cash Collateral Accounts with Lender, one or more other Deposit Account Banks and one or more Approved Securities Intermediaries as it in its sole discretion shall determine. Each such account shall be in the name of Lender (but may also have words referring to the Grantor and such account’s purpose). The Grantor agrees that each such Cash Collateral Account shall be under the sole dominion and control of Lender. Lender shall be the sole Entitlement Holder with respect to each Securities Account constituting a Cash Collateral Account and the only Persons authorized to give Entitlement Orders with respect thereto. Neither the Grantor nor any other Loan Party or Person claiming on behalf of or through the Grantor or any other Loan Party shall have any right to demand payment of any funds held in any Cash Collateral Account at any time prior to the termination of all outstanding Letters of Credit and the indefeasible payment in full of all Secured Obligations. During the continuance of any Event of Default, Lender shall apply all funds on deposit in any Cash Collateral Account as Lender may elect.

ARTICLE III Representations and Warranties

     To induce Lender to enter into or maintain the Credit Documents, the Grantor hereby represents and warrants each of the following to Lender:

      Section 3.1 Title; No Other Liens

     Except for the Lien granted to Lender pursuant to this Agreement, the other Loan Documents and Permitted Liens, the Grantor is the record and beneficial owner of the Pledged Collateral pledged by it hereunder constituting Instruments or certificated securities, is the Entitlement Holder of all such Pledged Collateral constituting Investment Property held in a Securities Account and has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any Lien.

      Section 3.2 Perfection and Priority

     The security interest granted pursuant to this Agreement shall constitute a valid and continuing perfected security interest in favor of Lender in the Collateral for which perfection is governed by the UCC or filing with the United States Copyright Office upon (i) the completion of the filings and other actions specified on Schedule 3 which, in the case of all filings and other documents referred to on such schedule, have been delivered to Lender in completed and duly executed form), (ii) the delivery to Lender of all Collateral consisting of Instruments and certificated securities, in each case properly endorsed for transfer to Lender or in blank, (iii) the execution of Control Account Agreements with respect to Investment Property not in certificated form, (iv) the execution of Deposit Account Control Agreements with respect to all Deposit Accounts and (v) all appropriate filings having been made with the United States Copyright

Office. Such security interest shall be prior to all other Liens on the Collateral except for Permitted Liens having priority over Lender’s Lien by operation of law or otherwise, as permitted under this Agreement or any other Loan Documents.

      Section 3.3 Name; Jurisdiction of Organization; Chief Executive Office

     Except as set forth on Schedule 1 , within the five-year period preceding the date hereof, the Grantor has not had, or operated in any jurisdiction, under any trade name, fictitious name or other name other than its legal name, and the Grantor’s jurisdiction of organization, organizational