EXECUTION COPY

SECURITY AGREEMENT
 
THIS SECURITY AGREEMENT (as amended, restated, supplemented or otherwise
modified from time to time, this “Agreement”) dated as of November 20, 2008
among GOTO COLLEGE HOLDINGS INC., a Delaware corporation (the “Goto College”),
EMBARK CORP., a Delaware corporation (“Embark”), EMBARK ONLINE, INC., a Delaware
corporation (“Embark Online”), IEMPOWER, INC., a Delaware corporation
(“iempower”), MRU ORIGINATIONS, INC., a Delaware corporation (“MRU
Originations”), MRU UNIVERSAL GUARANTY AGENCY, INC., a Delaware corporation
(“MRU Universal”, together with Goto College, Embark, Embark Online, iempower,
MRU Originations and each other Person who becomes a party to this Agreement by
execution of a joinder in the form of Exhibit A attached hereto, is hereinafter
sometimes referred to individually as a “Debtor” and, collectively, as the
“Debtors”) and VIKING ASSET MANAGEMENT, LLC, a California limited liability
company, in its capacity as Collateral Agent (as set forth in Section 5.11
hereof, together with its successors and assigns in such capacity, the “Secured
Party”) for the benefit of itself and each of the Buyers (as hereinafter
defined).
 
W I T N E S S E T H:
 
WHEREAS, on October 19, 2007, Longview Marquis Master Fund, L.P., a British
Virgin Islands limited partnership (including as successor to The Longview Fund,
L.P., a California limited partnership, under the Purchase Agreement (as defined
below), “Marquis”; Marquis, together with its successors and assigns and each
other holder of a Note (as defined below) and their respective successors and
assigns, individually and collectively, the “Buyers”) purchased from MRU
Holdings, Inc., a Delaware corporation (the “Company”), those certain senior
secured notes, each dated October 19, 2007, in an original aggregate principal
amount of $11,200,000 (such notes, together with any promissory notes or other
securities issued in exchange or substitution therefor or replacement thereof,
and as any of the same may be amended, supplemented, restated or modified and in
effect from time to time, the “Notes”);
 
WHEREAS, the Notes were acquired by Buyers and Buyers made certain financial
accommodations to the Company pursuant to a Securities Purchase Agreement dated
as of October 19, 2007 among the Company and the Buyers (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
“Purchase Agreement”);

WHEREAS, Company, Debtors, Buyers and Secured Party have entered into that
certain Third Amendment of even date herewith (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Third Amendment”), pursuant to which the Company and the Buyers have agreed
to amend certain provisions of the Purchase Agreement;

 
 

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WHEREAS, each Debtor from time to time party hereto is a direct or indirect
subsidiary of the Company and, as such, will derive substantial benefit and
advantage from the continued financial accommodations to the Company set forth
in the Purchase Agreement and the Notes, and it will be to each such Debtor’s
direct interest and economic benefit to assist the Company in continuing to
procure said financial accommodations from Buyers;
 
WHEREAS, each Debtor guaranteed the Liabilities (as hereinafter defined) of the
Company pursuant to the terms of that certain Guaranty dated as of October 19,
2007 (as the same may be amended, restated, supplemented or otherwise modified
and in effect from time to time, the “Guaranty”) by each such Debtor in favor of
Secured Party (on its behalf and on behalf of the Buyers); and
 
WHEREAS, to induce the Buyers to continue to make financial accommodations to
the Company under the Purchase Agreement and to enter into the Third Amendment,
each Debtor has agreed to pledge and grant a security interest in all of its
right, title and interest in and to the Collateral (as hereinafter defined) as
security for its Liabilities for the benefit of the Secured Party, the Buyers
and their respective successors and assigns.
 
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
 
Section 1. Definitions. Capitalized terms used herein without definition and
defined in the Purchase Agreement are used herein as defined therein. In
addition, as used herein:
 
“Accounts” means any “account,” as such term is defined in the Uniform
Commercial Code, and, in any event, shall include, without limitation,
“supporting obligations” as defined in the Uniform Commercial Code.
 
“As-extracted Collateral” means any “as-extracted collateral,” as such term is
defined in the Uniform Commercial Code.
 
“Chattel Paper” means any “chattel paper,” as such term is defined in the
Uniform Commercial Code.
 
“Collateral” has the meaning ascribed thereto in Section 3 hereof.
 
“Commercial Tort Claims” means “commercial tort claims”, as such term is defined
in the Uniform Commercial Code.
 
“Contracts” means all contracts, undertakings, or other agreements (other than
rights evidenced by Chattel Paper, Documents or Instruments) in or under which a
Debtor may now or hereafter have any right, title or interest, including,
without limitation, with respect to an Account, any agreement relating to the
terms of payment or the terms of performance thereof.
 

 
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“Copyrights” means any copyrights, rights and interests in copyrights, works
protectable by copyrights, copyright registrations and copyright applications,
including, without limitation, the copyright registrations and applications
listed on Schedule III attached hereto (if any), and all renewals of any of the
foregoing, all income, royalties, damages and payments now and hereafter due
and/or payable under 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 the right to sue for past, present and future
infringements of any of the foregoing. 
 
“Deposit Accounts” means all “deposit accounts” as such term is defined in the
Uniform Commercial Code, now or hereafter held in the name of a Debtor.
 
“Documents” means any “documents,” as such term is defined in the Uniform
Commercial Code, and shall include, without limitation, all documents of title
(as defined in the Uniform Commercial Code), bills of lading or other receipts
evidencing or representing Inventory or Equipment.
 
“Equipment” means any “equipment,” as such term is defined in the Uniform
Commercial Code and, in any event, shall include, Motor Vehicles.
 
“Event of Default” has the meaning set forth in the Notes.
 
“General Intangibles” means any “general intangibles,” as such term is defined
in the Uniform Commercial Code, and, in any event, shall include, without
limitation, all right, title and interest in or under any Contract, models,
drawings, materials and records, claims, literary rights, goodwill, rights of
performance, Copyrights, Trademarks, Patents, warranties, rights under insurance
policies and rights of indemnification.
 
“Goods” means any “goods”, as such term is defined in the Uniform Commercial
Code, including, without limitation, fixtures and embedded Software to the
extent included in “goods” as defined in the Uniform Commercial Code.
 
“Governmental Authority” means the government of the United States of America or
any other nation, or any political subdivision thereof, whether state or local,
or any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administration powers or functions of or pertaining to government over any
Debtor or any of its Subsidiaries, or any of their respective properties, assets
or undertakings.
 
“Instruments” means any “instrument,” as such term is defined in the Uniform
Commercial Code, and shall include, without limitation, promissory notes,
drafts, bills of exchange, trade acceptances, letters of credit, letter of
credit rights (as defined in the Uniform Commercial Code), and Chattel Paper.
 

 
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“Inventory” means any “inventory,” as such term is defined in the Uniform
Commercial Code.
 
“Investment Property” means any “investment property”, as such term is defined
in the Uniform Commercial Code.
 
“Liabilities” means all obligations, liabilities and indebtedness of every
nature of Debtors from time to time owed or owing under or in respect of this
Agreement, the Guaranty and any of the other Security Documents, as the case may
be, including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now and/or from time to time hereafter owing, due or payable whether before or
after the filing of a bankruptcy, insolvency or similar proceeding under
applicable federal, state, foreign or other law and whether or not an allowed
claim in any such proceeding.
 
“Lien” has the meaning set forth in the Purchase Agreement.
 
“Motor Vehicles” means motor vehicles, tractors, trailers and other like
property, whether or not the title thereto is governed by a certificate of title
or ownership.
 
“Patents” means any patents and patent applications, including, without
limitation, the inventions and improvements described and claimed therein, all
patentable inventions and those patents and patent applications listed on
Schedule IV attached hereto (if any), and the reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any of the
foregoing, and all income, royalties, damages and payments now or hereafter due
and/or payable under 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 the right to sue for past, present and future
infringements of any of the foregoing.
 
“Permitted Lien” has the meaning set forth in the Purchase Agreement.
 
“Proceeds” means “proceeds,” as such term is defined in the Uniform Commercial
Code and, in any event, includes, without limitation, (a) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental body, authority, bureau or agency (or any person acting under color
of governmental authority), and (c) any and all other amounts from time to time
paid or payable under, in respect of or in connection with any of the
Collateral.
 

 
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“Representative” means any Person acting as agent, representative or trustee on
behalf of the Secured Party from time to time.
 
“Requisite Buyers” means buyers having more than 66.67% of the sum of the
aggregate outstanding principal balance of the Notes.
 
“Software” means all “software” as such term is defined in the Uniform
Commercial Code, now owned or hereafter acquired by a Debtor, other than
software embedded in any category of Goods, including, without limitation, all
computer programs and all supporting information provided in connection with a
transaction related to any program.
 
“Trademarks” means any trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos,
other business identifiers, prints and labels on which any of the foregoing have
appeared or appear, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, the
trademarks and applications listed in Schedule V attached hereto (if any) and
renewals thereof, and all income, royalties, damages and payments now or
hereafter due and/or payable under 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 the right to sue for past, present and
future infringements of any of the foregoing.
 
“Uniform Commercial Code” means the Uniform Commercial Code as in effect from
time to time in the State of New York; provided, that to the extent that the
Uniform Commercial Code is used to define any term herein and such term is
defined differently in different Articles or Divisions of the Uniform Commercial
Code, the definition of such term contained in Article or Division 9 shall
govern.
 
Section 2. Representations, Warranties and Covenants of Debtors. Each Debtor
represents and warrants to, and covenants with, the Secured Party as follows:
 
(a) Such Debtor has rights in and the power to transfer the Collateral in which
it purports to grant a security interest pursuant to Section 3 hereof (subject,
with respect to after acquired Collateral, to such Debtor acquiring the same)
and no Lien other than Permitted Liens and, until the actions described in
Section 5(c) of the Third Amendment are taken, those Liens on Embark’s
Trademarks as recorded with the United States Patent and Trademark Office on the
date hereof exists or will exist upon such Collateral at any time.
 
(b) This Agreement is effective to create in favor of Secured Party a valid
security interest in and Lien upon all of such Debtor’s right, title and
interest in and to the Collateral, and upon (i) the filing of appropriate
Uniform Commercial Code financing statements in the jurisdictions listed on
Schedule I attached hereto, and (ii) each Deposit Account being subject to an
Account Control Agreement (as hereinafter defined) between the applicable Debtor
and depository institution and the Secured Party on behalf of the Buyers, such
security interest will be a duly perfected first priority security interest in
all of the Collateral (other than Instruments not constituting Chattel Paper
and, until the actions described in Section 5(c) of the Third Amendment are
taken, the Trademarks owned by Embark on the date hereof), and upon delivery of
the Instruments to the Secured Party or its Representative, duly endorsed by
such Debtor or accompanied by appropriate instruments of transfer duly executed
by such Debtor, the security interest in the Instruments will be duly perfected.
After the actions described in Section 5(c) of the Third Amendment are taken,
the security interest in such Trademarks owned by Embark on the date hereof will
be a duly perfected first priority security interest in such Trademarks.
 

 
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(c) All of the Equipment, Inventory and Goods owned by such Debtor is located at
the places as specified on Schedule I attached hereto. Except as disclosed on
Schedule I, none of the Collateral is in the possession of any bailee,
warehousemen, processor or consignee. Schedule I discloses such Debtor’s name as
of the date hereof as it appears in official filings in the state or province,
as applicable, of its incorporation, formation or organization, the type of
entity of such Debtor (including corporation, partnership, limited partnership
or limited liability company), organizational identification number issued by
such Debtor’s state of incorporation, formation or organization (or a statement
that no such number has been issued), such Debtor’s state or province, as
applicable, of incorporation, formation or organization and the chief place of
business, chief executive officer and the office where such Debtor keeps its
books and records and the states in which such Debtor conducts its business.
Such Debtor has only one state or province, as applicable, of incorporation,
formation or organization. Such Debtor does not do business and has not done
business during the past five (5) years under any trade name or fictitious
business name except as disclosed on Schedule II attached hereto.
 
(d) No Copyrights, Patents or Trademarks listed on Schedules III, IV and V,
respectively, if any, have been adjudged invalid or unenforceable or have been
canceled, in whole or in part, or are not presently subsisting. Each of such
Copyrights, Patents and Trademarks (if any) is valid and enforceable. Such
Debtor is the sole and exclusive owner of the entire and unencumbered right,
title and interest in and to each of such Copyrights, Patents and Trademarks,
identified on Schedules III, IV and V, as applicable, as being owned by such
Debtor, except with respect to the Trademarks owned by Embark on the date
hereof, free and clear of any liens, charges and encumbrances, including without
limitation licenses, shop rights and covenants by such Debtor not to sue third
persons. After the actions described in Section 5(c) of the Third Amendment are
taken, the Trademarks owned by Embark on the date hereof shall be free and clear
of any liens, charges and encumbrances, including without limitation licenses,
shop rights and covenants by such Debtor not to sue third persons. Such Debtor
has adopted, used and is currently using, or has a current bona fide intention
to use, all of such Trademarks and Copyrights, if any. Such Debtor has no notice
of any suits or actions commenced or threatened with reference to the
Copyrights, Patents or Trademarks owned by it.
 

 
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(e) Each Debtor agrees to deliver to the Secured Party an updated Schedule I,
II, III, IV and/or V within five (5) Business Days of any change thereto.
 
(f) All depositary and other accounts including, without limitation, Deposit
Accounts, securities accounts, brokerage accounts and other similar accounts,
maintained by each Debtor are described on Schedule VI hereto, which description
includes for each such account the name of the Debtor maintaining such account,
the name, address and telephone and telecopy numbers of the financial
institution at which such account is maintained, the account number and the
account officer, if any, of such account. No Debtor shall open any new Deposit
Accounts, securities accounts, brokerage accounts or other accounts unless such
Debtor shall have given Secured Party five (5) Business Days’ prior written
notice of its intention to open any such new accounts. Each Debtor shall deliver
to Secured Party a revised version of Schedule VI showing any changes thereto
within five (5) Business Days of any such change. Each Debtor hereby authorizes
the financial institutions at which such Debtor maintains an account to provide
Secured Party with such information with respect to such account as Secured
Party from time to time reasonably may request, and each Debtor hereby consents
to such information being provided to Secured Party. In addition, all of such
Debtor’s depositary, security, brokerage and other accounts including, without
limitation, Deposit Accounts shall be subject to the provisions of Section 4.5
hereof.
 
(g) Such Debtor does not own any Commercial Tort Claim except for those
disclosed on Schedule VII hereto (if any).
 
(h) Such Debtor does not have any interest in real property except as disclosed
on Schedule VIII (if any). Each Debtor shall deliver to Secured Party a revised
version of Schedule VIII showing any changes thereto within ten (10) Business
Days of any such change. Except as otherwise agreed to by Secured Party, all
such interests in real property are subject to a mortgage or deed of trust (in
form and substance satisfactory to Secured Party) in favor of Secured Party
(hereinafter, a “Mortgage”).
 
(i) All Equipment (including, without limitation, Motor Vehicles) owned by a
Debtor and subject to a certificate of title or ownership statute is described
on Schedule IX hereto.

Section 3. Collateral. As collateral security for the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) of the
Liabilities, each Debtor hereby pledges and grants to the Secured Party, for the
benefit of itself and the Buyers, a Lien on and security interest in and to all
of such Debtor’s right, title and interest in the following properties and
assets of such Debtor, whether now owned by such Debtor or hereafter acquired
and whether now existing or hereafter coming into existence and wherever located
(all being collectively referred to herein as “Collateral”):
 

 
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(a) all Instruments, together with all payments thereon or thereunder:
 
(b) all Accounts;
 
(c) all Inventory;
 
(d) all General Intangibles (including payment intangibles (as defined in the
Uniform Commercial Code) and Software);
 
(e) all Equipment;
 
(f) all Documents;
 
(g) all Contracts;
 
(h)  all Goods;
 
(i) all Investment Property;
 
(j) all Deposit Accounts, including, without limitation, the balance from time
to time in all bank accounts maintained by such Debtor (other than any Deposit
Account held by Embark and Embark Online on the date hereof);
 
(k) all Commercial Tort Claims specified on Schedule VII;
 
(l) all As-extracted Collateral;
 
(m) all Trademarks, Patents and Copyrights;
 
(n) all books and records pertaining to the other Collateral; and
 
(o) all other tangible and intangible property of such Debtor, including,
without limitation, all interests in real property, Proceeds, tort claims,
products, accessions, rents, profits, income, benefits, substitutions, additions
and replacements of and to any of the property of such Debtor described in the
preceding clauses of this Section 3 (including, without limitation, any proceeds
of insurance thereon, insurance claims and all rights, claims and benefits
against any Person relating thereto), other rights to payments not otherwise
included in the foregoing, and all books, correspondence, files, records,
invoices and other papers, including without limitation all tapes, cards,
computer runs, computer programs, computer files and other papers, documents and
records in the possession or under the control of such Debtor, any computer
bureau or service company from time to time acting for such Debtor.
 

 
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Section 4. Covenants; Remedies. In furtherance of the grant of the pledge and
security interest pursuant to Section 3 hereof, each Debtor hereby agrees with
the Secured Party as follows:
 
4.1. Delivery and Other Perfection; Maintenance, etc.
 
(a) Delivery of Instruments, Documents, Etc. Each Debtor shall deliver and
pledge to the Secured Party or its Representative any and all Instruments,
negotiable Documents, Chattel Paper and certificated securities (accompanied by
stock powers executed in blank, which stock powers may be filled in and
completed at any time upon the occurrence of any Event of Default) duly endorsed
and/or accompanied by such instruments of assignment and transfer executed by
such Debtor in such form and substance as the Secured Party or its
Representative may request; provided, that so long as no Event of Default shall
have occurred and be continuing, each Debtor may retain for collection in the
ordinary course of business any Instruments, negotiable Documents and Chattel
Paper received by such Debtor in the ordinary course of business, and the
Secured Party or its Representative shall, promptly upon request of a Debtor,
make appropriate arrangements for making any other Instruments, negotiable
Documents and Chattel Paper pledged by such Debtor available to such Debtor for
purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate by the Secured Party or its
Representative, against trust receipt or like document). If a Debtor retains
possession of any Chattel Paper, negotiable Documents or Instruments pursuant to
the terms hereof, such Chattel Paper, negotiable Documents and Instruments shall
be marked with the following legend: “This writing and the obligations evidenced
or secured hereby are subject to the security interest of Viking Asset
Management, LLC, in its capacity as collateral agent for the benefit of the
Buyers, as secured party.”
 
(b) Other Documents and Actions. Each Debtor shall give, execute, deliver, file
and/or record any financing statement, registration, notice, instrument,
document, agreement, Mortgage or other papers that may be necessary or desirable
(in the reasonable judgment of the Secured Party or its Representative) to
create, preserve, perfect or validate the security interest granted pursuant
hereto (or any security interest or mortgage contemplated or required hereunder,
including with respect to Section 2(h) of this Agreement) or to enable the
Secured Party or its Representative to exercise and enforce the rights of the
Secured Party hereunder with respect to such pledge and security interest,
provided that notices to account debtors in respect of any Accounts or
Instruments shall be subject to the provisions of clause (e) below.
Notwithstanding the foregoing each Debtor hereby irrevocably authorizes the
Secured Party at any time and from time to time to file in any filing office in
any jurisdiction any Uniform Commercial Code initial financing statements (and
other similar filings or registrations under other applicable laws and
regulations pertaining to the creation, attachment, or perfection of security
interests) and amendments thereto that (a) indicate the Collateral (i) as all
assets of such Debtor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the Uniform Commercial Code of the State of New York or such jurisdiction, or
(ii) as being of an equal or lesser scope or with greater detail, and (b)
contain any other information required by part 5 of Article 9 of the Uniform
Commercial Code of the State of New York or any other State for the sufficiency
or filing office acceptance of any financing statement or amendment, including
(i) whether such Debtor is an organization, the type of organization and any
organization identification number issued to such Debtor, and (ii) in the case
of a financing statement filed as a fixture filing or indicating Collateral as
As-extracted Collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Each Debtor agrees to furnish any such
information to the Secured Party promptly upon request. Each Debtor also
ratifies its authorization for the Secured Party to have filed in any
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof.
 

 
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(c) Books and Records. Each Debtor shall maintain at its own cost and expense
complete and accurate books and records of the Collateral, including, without
limitation, a record of all payments received and all credits granted with
respect to the Collateral and all other dealings with the Collateral. Upon the
occurrence and during the continuation of any Event of Default, each Debtor
shall deliver and turn over any such books and records (or true and correct
copies thereof) to the Secured Party or its Representative at any time on
demand. Each Debtor shall permit any Representative of the Secured Party to
inspect such books and records at any time during reasonable business hours and
will provide photocopies thereof at such Debtor’s expense to the Secured Party
upon request of the Secured Party.
 
(d) Motor Vehicles. Each Debtor shall, promptly upon acquiring same, cause the
Secured Party to be listed as the lienholder on each certificate of title or
ownership covering any items of Equipment, including Motor Vehicles, having a
value in excess of $50,000 in the aggregate for all such items of Equipment of
the Debtor, or otherwise comply with the certificate of title or ownership laws
of the relevant jurisdiction issuing such certificate of title or ownership in
order to properly evidence and perfect Secured Party’s security interest in the
assets represented by such certificate of title or ownership.
 
(e) Notice to Account Debtors; Verification. (i) Upon the occurrence and during
the continuance of any Event of Default (or if any rights of set-off (other than
set-offs against an Account arising under the Contract giving rise to the same
Account) or contra accounts may be asserted), upon request of the Secured Party
or its Representative, each Debtor shall promptly notify (and each Debtor hereby
authorizes the Secured Party and its Representative so to notify) each account
debtor in respect of any Accounts or Instruments or other Persons obligated on
the Collateral that such Collateral has been assigned to the Secured Party
hereunder, and that any payments due or to become due in respect of such
Collateral are to be made directly to the Secured Party, and (ii) the Secured
Party and its Representative shall have the right at any time or times to make
direct verification with the account debtors or other Persons obligated on any
and all of the Accounts or other Collateral.
 

 
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(f) Intellectual Property. Each Debtor represents and warrants that the
Copyrights, Patents and Trademarks listed on Schedules III, IV and V,
respectively (if any), constitute all of the registered Copyrights and all of
the Patents and Trademarks now owned by such Debtor. If such Debtor shall (i)
obtain rights to any new patentable inventions, any registered Copyrights or any
Patents or Trademarks, or (ii) become entitled to the benefit of any registered
Copyrights or any Patents or Trademarks or any improvement on any Patent, the
provisions of this Agreement above shall automatically apply thereto and such
Debtor shall give to Secured Party prompt written notice thereof. Each Debtor
hereby authorizes Secured Party to modify this Agreement by amending Schedules
III, IV and V, as applicable, to include any such registered Copyrights or any
such Patents and Trademarks. Each Debtor shall have the duty (i) to prosecute
diligently any patent, trademark, or service mark applications pending as of the
date hereof or hereafter, (ii) to make application on unpatented but patentable
inventions and on trademarks, copyrights and service marks, as appropriate,
(iii) to preserve and maintain all rights in the Copyrights, Patents and
Trademarks, to the extent material to the operations of the business of such
Debtor and (iv) to ensure that the Copyrights, Patents and Trademarks are and
remain enforceable, to the extent material to the operations of the business of
such Debtor. Any expenses incurred in connection with such Debtor’s obligations
under this Section 4.1(f) shall be borne by such Debtor. Except for any such
items that a Debtor reasonably believes (using prudent industry customs and
practices) are no longer necessary for the on-going operations of its business,
no Debtor shall abandon any right to file a patent, trademark or service mark
application, or abandon any pending patent, trademark or service mark
application or any other Copyright, Patent or Trademark without the written
consent of Secured Party, which consent shall not be unreasonably withheld.
 
(g) Further Identification of Collateral. Each Debtor will, when and as often as
requested by the Secured Party or its Representative, furnish to the Secured
Party or such Representative, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Secured Party or its Representative may reasonably request,
all in reasonable detail.
 
(h) Investment Property. Each Debtor will take any and all actions required or
requested by the Secured Party, from time to time, to (i) cause the Secured
Party to obtain exclusive control of any Investment Property owned by such
Debtor in a manner acceptable to the Secured Party and (ii) obtain from any
issuers of Investment Property and such other Persons, for the benefit of the
Secured Party, written confirmation of the Secured Party’s control over such
Investment Property. For purposes of this Section 4.1(h), the Secured Party
shall have exclusive control of Investment Property if (i) such Investment
Property consists of certificated securities and a Debtor delivers such
certificated securities to the Secured Party (with appropriate endorsements if
such certificated securities are in registered form); (ii) such Investment
Property consists of uncertificated securities and either (x) a Debtor delivers
such uncertificated securities to the Secured Party or (y) the issuer thereof
agrees, pursuant to documentation in form and substance satisfactory to the
Secured Party, that it will comply with instructions originated by the Secured
Party without further consent by such Debtor, and (iii) such Investment Property
consists of security entitlements and either (x) the Secured Party becomes the
entitlement holder thereof or (y) the appropriate securities intermediary
agrees, pursuant to the documentation in form and substance satisfactory to the
Secured Party, that it will comply with entitlement orders originated by the
Secured Party without further consent by any Debtor.
 

 
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(i)
Reserved.

 
(j) Commercial Tort Claims. Each Debtor shall promptly notify Secured Party of
any Commercial Tort Claim acquired by it that concerns a claim in excess of
$50,000 and unless otherwise consented to by Secured Party, such Debtor shall
enter into a supplement to this Agreement granting to Secured Party a Lien on
and security interest in such Commercial Tort Claim.
 
4.2 Other Liens. Debtors will not create, permit or suffer to exist, and will
defend the Collateral against and take such other action as is necessary to
remove, any Lien on the Collateral except Permitted Liens, and will defend the
right, title and interest of the Secured Party in and to the Collateral and in
and to all Proceeds thereof against the claims and demands of all Persons
whatsoever.
 
4.3 Preservation of Rights. Whether or not any Event of Default has occurred or
is continuing, the Secured Party and its Representative may, but shall not be
required to, take any steps the Secured Party or its Representative deems
necessary or appropriate to preserve any Collateral or any rights against third
parties to any of the Collateral, including obtaining insurance for the
Collateral at any time when such Debtor has failed to do so, and Debtors shall
promptly pay, or reimburse the Secured Party for, all expenses incurred in
connection therewith.
 
4.4 Formation of Subsidiaries; Name Change; Location; Bailees.
 
(a) No Debtor shall form or acquire any subsidiary unless (i) such Debtor
pledges all of the stock or equity interest of such subsidiary to the Secured
Party pursuant to a pledge agreement in form and substance acceptable to Secured
Party, (ii) such subsidiary becomes a party to this Agreement and all other
applicable Security Documents and (iii) the formation or acquisition of such
Subsidiary is not prohibited by the terms of the Transaction Documents.
 
(b)  No Debtor shall (i) reincorporate or reorganize itself under the laws of
any jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the date hereof without the prior written consent of Secured
Party, or (ii) otherwise change its name, identity or corporate structure. Each
Debtor will notify Secured Party promptly in writing prior to any such change in
the proposed use by such Debtor of any tradename or fictitious business name
other than any such name set forth on Schedule II attached hereto. 
 

 
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(c) Except for the sale of Inventory in the ordinary course of business and
other sales of assets expressly permitted by the terms of the Purchase
Agreement, each Debtor will keep the Collateral at the locations specified in
Schedule I. Each Debtor will give Secured Party thirty (30) day’s prior written
notice of any change in such Debtor’s chief place of business or of any new
location for any of the Collateral.
 
(d) If any Collateral is at any time in the possession or control of any
warehousemen, bailee, consignee or processor, such Debtor shall, upon the
request of Secured Party or its Representative, notify such warehousemen,
bailee, consignee or processor of the Lien and security interest created hereby
and shall instruct such Person to hold all such Collateral for Secured Party’s
account subject to Secured Party’s instructions.
 
(e) Each Debtor acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing
statement without the prior written consent of Secured Party and agrees that it
will not do so without the prior written consent of Secured Party, subject to
such Debtor’s rights under Section 9-509(d)(2) to the Uniform Commercial Code.
 
(f) No Debtor shall enter into any Contract that restricts or prohibits the
grant to Secured Party of a security interest in Accounts, Chattel Paper,
Instruments or payment intangibles or the proceeds of the foregoing.
 
4.5 Bank Accounts and Securities Accounts.
 
(a) On or prior to the date hereof, the Secured Party and each Debtor (other
than Embark and Embark Online), as applicable, shall enter into an account
control agreement or securities account control agreement, as applicable, (each
an “Account Control Agreement”), in a form specified by the Secured Party, with
each financial institution with which such Debtor maintains from time to time
any Deposit Accounts (general or special), securities accounts, brokerage
accounts or other similar accounts, which financial institutions are set forth
on Schedule VI attached hereto. Pursuant to the Account Control Agreements and
pursuant hereto, each such Debtor grants and shall grant to the Secured Party a
continuing lien upon, and security interest in, all such accounts and all funds
at any time paid, deposited, credited or held in such accounts (whether for
collection, provisionally or otherwise) or otherwise in the possession of such
financial institutions, and each such financial institution shall act as the
Secured Party’s agent in connection therewith. Following the date hereof, no
Debtor shall establish any Deposit Account, securities account, brokerage
account or other similar account with any financial institution unless prior
thereto, the Secured Party and such Debtor shall have entered into an Account
Control Agreement with such financial institution which purports to cover such
account. Each Debtor shall deposit and keep on deposit all of its funds into a
Deposit Account (other than the Deposit Accounts held in the name of Embark and
Embark Online on the date hereof) which is subject to an Account Control
Agreement.
 

 
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(b) On or prior to the date hereof, Embark and Embark Online shall deliver to
Secured Party a fully executed original copy of written instruction to each
financial institution with which such Debtor maintains any Deposit Accounts
(general or special), securities accounts, brokerage accounts or other similar
accounts substantially in the form attached hereto as Exhibit B directing such
financial institution to provide Secured Party with duplicate copies of all bank
statements which are sent to such Debtor (until such time as such financial
institution receives contrary direction from Secured Party) and such other
information with respect to such Deposit Accounts or other accounts as Secured
Party may from time to time reasonably request. Secured Party may deliver such
written instruction to such financial institutions at any time as it deems
appropriate in its sole and absolute discretion. After the date hereof, at the
sole expense of Debtors, Borrower shall take such further actions as are
necessary, or the Secured Party or its Representative may reasonably require, to
cause such financial institution to provide Secured Party with duplicate copies
of all bank statements which are sent to such Debtor (until such time as such
financial institution receives contrary direction from Secured Party) and such
other information with respect to such Deposit Account or other accounts as
Secured Party may from time to time reasonably request.
 
(c) Neither Embark nor Embark Online will at any time grant any Lien other than
Permitted Liens to any Person other than Secured Party in any Deposit Accounts
(general or special), securities accounts, brokerage accounts or other similar
accounts held by such Debtors.
 
(d) Upon the Secured Party’s request following the occurrence and during the
continuance of an Event of Default, each Debtor (other than Embark and Embark
Online) shall establish lock-box or blocked accounts (collectively, “Blocked
Accounts”) in such Debtor’s name with such banks as are reasonably acceptable to
the Secured Party (“Collecting Banks”), subject to irrevocable instructions in a
form reasonably acceptable to the Secured Party, to which the obligors of all
Accounts shall directly remit all payments on Accounts and in which such Debtor
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 Secured Party may establish
one or more depository accounts at each Collecting Bank or at a centrally
located bank (collectively, the “Depository Account”). All amounts held or
deposited in the Blocked Accounts held by such Collecting Bank shall be
transferred to the Depository Account without any further notice or action
required by Secured Party. Subject to the foregoing, each Debtor hereby agrees
that all payments received by the Secured Party whether by cash, check, wire
transfer or any other instrument, made to such Blocked Accounts or otherwise
received by the Secured Party and whether in respect of the Accounts or as
proceeds of other Collateral or otherwise will be the sole and exclusive
property of the Secured Party. Each Debtor (other than Embark and Embark
Online), and any of its Affiliates, employees, agents and other Persons acting
for or in concert with such Debtor shall, acting as trustee for the Secured
Party, receive, as the sole and exclusive property of the Secured Party, any
moneys, checks, notes, drafts or other payments relating to and/or proceeds of
Accounts or other Collateral which come into the possession or under the control
of such Debtor or any Affiliates, employees, agent or other Persons acting for
or in concert with such Debtor, and immediately upon receipt thereof, such
Debtor or Persons shall deposit the same or cause the same to be deposited in
kind, in a Blocked Account.
 

 
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4.6 Events of Default, Etc. During the period during which an Event of Default
shall have occurred and be continuing:
 
(a) each Debtor shall, at the request of the Secured Party or its
Representative, assemble the Collateral and make it available to Secured Party
or its Representative at a place or places designated by the Secured Party or
its Representative which are reasonably convenient to Secured Party or its
Representative, as applicable, and such Debtor;
 
(b) the Secured Party or its Representative may make any reasonable compromise
or settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or otherwise
modify the terms of, any of the Collateral;
 
(c) the Secured Party shall have all of the rights and remedies with respect to
the Collateral of a secured party under the Uniform Commercial Code (whether or
not said Uniform Commercial Code is in effect in the jurisdiction where the
rights and remedies are asserted) and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted, including, without
limitation, the right, to the maximum extent permitted by law, to: (i) exercise
all voting, consensual and other powers of ownership pertaining to the
Collateral as if the Secured Party were the sole and absolute owner thereof (and
each Debtor agrees to take all such action as may be appropriate to give effect
to such right) and (ii) to the appointment of a receiver or receivers for all or
any part of the Collateral or business of a Debtor, whether such receivership be
incident to a proposed sale or sales of such Collateral or otherwise and without
regard to the value of the Collateral or the solvency of any person or persons
liable for the payment of the Liabilities secured by such Collateral. Each
Debtor hereby consents to the appointment of such receiver or receivers, waives
any and all defenses to such appointment and agrees that such appointment shall
in no manner impair, prejudice or otherwise affect the rights of Secured Party
under this Agreement. Each Debtor hereby expressly waives notice of a hearing
for appointment of a receiver and the necessity for bond or an accounting by the
receiver;
 

 
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(d) the Secured Party or its Representative in their discretion may, in the name
of the Secured Party or in the name of a Debtor or otherwise, demand, sue for,
collect or receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, but shall be under no
obligation to do so;
 
(e) the Secured Party or its Representative may take immediate possession and
occupancy of any premises (other than the headquarters of the Company) owned,
used or leased by a Debtor and exercise all other rights and remedies which may
be available to the Secured Party;
 
(f) the Secured Party may, upon reasonable notice (such reasonable notice to be
determined by Secured Party in its sole and absolute discretion) to Debtors of
the time and place, with respect to the Collateral or any part thereof which
shall then be or shall thereafter come into the possession, custody or control
of the Secured Party or its Representative, sell, lease, license, assign or
otherwise dispose of all or any part of such Collateral, at such place or places
as the Secured Party deems best, and for cash or for credit or for future
delivery (without thereby assuming any credit risk), at public or private sale,
without demand of performance or notice of intention to effect any such
disposition or of the time or place thereof (except such notice as is required
above or by applicable statute and cannot be waived), and the Secured Party or
anyone else may be the purchaser, lessee, licensee, assignee or recipient of any
or all of the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale) and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any right or equity
of redemption (statutory or otherwise), of Debtors, any such demand, notice and
right or equity being hereby expressly waived and released. The Secured Party
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
sale may be so adjourned; and
 
(g) the rights, remedies and powers conferred by this Section 4.6 are in
addition to, and not in substitution for, any other rights, remedies or powers
that the Secured Party may have under any Transaction Document, at law, in
equity or by or under the Uniform Commercial Code or any other statute or
agreement. The Secured Party may proceed by way of any action, suit or other
proceeding at law or in equity and no right, remedy or power of the Secured
Party will be exclusive of or dependent on any other. The Secured Party may
exercise any of its rights, remedies or powers separately or in combination and
at any time.
 
The proceeds of each collection, sale or other disposition under this Section
4.6 shall be applied in accordance with Section 4.9 hereof.
 

 
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4.7 Deficiency. If the proceeds of sale, collection or other realization of or
upon the Collateral are insufficient to cover the costs and expenses of such
realization and the payment in full of the Liabilities, Debtors shall remain
liable for any deficiency.
 
4.8 Private Sale. Each Debtor recognizes that the Secured Party may be unable to
effect a public sale of any or all of the Collateral consisting of securities by
reason of certain prohibitions contained in the Securities Act of 1933, as
amended (the “Act”), and applicable state securities laws, but may be compelled
to resort to one or more private sales thereof to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. Each Debtor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Secured Party shall be under no
obligation to delay a sale of any of the Collateral to permit a Debtor to
register such Collateral for public sale under the Act, or under applicable
state securities laws, even if Debtors would agree to do so. The Secured Party
shall not incur any liability as a result of the sale of any such Collateral, or
any part thereof, at any private sale provided for in this Agreement conducted
in a commercially reasonable manner, and each Debtor hereby waives any claims
against the Secured Party arising by reason of the fact that the price at which
the Collateral may have been sold at such 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 Liabilities, even if the Secured Party accepts the first offer
received and does not offer the Collateral to more than one offeree.
 
Each Debtor further agrees to do or cause to be done all such other acts and
things as may be necessary to make such sale or sales of any portion or all of
any such Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or awards of
any and all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at such Debtor’s
expense, provided that Debtors shall be under no obligation to take any action
to enable any or all of such Collateral to be registered under the provisions of
the Act. Each Debtor further agrees that a breach of any of the covenants
contained in this Section 4.8 will cause irreparable injury to the Secured
Party, that the Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, agrees that each and every covenant contained in
this Section 4.8 shall be specifically enforceable against Debtors, and each
Debtor hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing.
 
4.9 Application of Proceeds. The proceeds of any collection, sale or other
realization of all or any part of the Collateral, and any other cash at the time
held by the Secured Party under this Agreement, shall be applied in the manner
set forth in the Notes (or, if not so set forth, in a manner acceptable to, and
at the election of, the Secured Party).
 

 
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4.10 Attorney-in-Fact. Each Debtor hereby irrevocably constitutes and appoints
the Secured Party, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Debtor and in the name of such Debtor or in its own name, from
time to time in the discretion of the Secured Party, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute and deliver any and all documents and instruments which may be necessary
or desirable to perfect or protect any security interest granted hereunder or to
maintain the perfection or priority of any security interest granted hereunder,
and, without limiting the generality of the foregoing, hereby gives the Secured
Party the power and right, on behalf of such Debtor, without notice to or assent
by such Debtor, to do the following upon the occurrence and during the
continuation of any Event of Default:
 
(a) to take any and all appropriate action and to execute and deliver any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement;
 
(b) to ask, demand, collect, receive and give acquittance and receipts for any
and all moneys due and to become due under any Collateral and, in the name of
such Debtor or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other Instruments for the
payment of moneys due under any Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Secured Party for the purpose of collecting any and all such
moneys due under any Collateral whenever payable and to file any claim or to
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Secured Party for the purpose of collecting any and
all such moneys due under any Collateral whenever payable;
 
(c) to pay or discharge charges or liens levied or placed on or threatened
against the Collateral, to effect any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor;
 
(d) to direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due, and to become due thereunder, directly
to the Secured Party or as the Secured Party shall direct, and to receive
payment of and receipt for any and all moneys, claims and other amounts due, and
to become due at any time, in respect of or arising out of any Collateral;
 
(e) to sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other Documents
constituting or relating to the Collateral;
 
(f) to commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or any
part thereof and to enforce any other right in respect of any Collateral;
 

 
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(g) to defend any suit, action or proceeding brought against a Debtor with
respect to any Collateral;
 
(h) to settle, compromise or adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or releases as the
Secured Party may deem appropriate;
 
(i) to the extent that a Debtor’s authorization given in Section 4.1(b) of this
Agreement is not sufficient to file such financing statements with respect to
this Agreement, with or without such Debtor’s signature, or to file a photocopy
of this Agreement in substitution for a financing statement, as the Secured
Party may deem appropriate and to execute in such Debtor’s name such financing
statements and amendments thereto and continuation statements which may require
such Debtor’s signature; and
 
(j) generally 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
Secured Party were the absolute owners thereof for all purposes, and to do, at
the Secured Party’s option and at such Debtor’s expense, at any time, or from
time to time, all acts and things which the Secured Party reasonably deems
necessary to protect, preserve or realize upon the Collateral and the Secured
Party’s lien therein, in order to effect the intent of this Agreement, all as
fully and effectively as such Debtor might do.
 
Each Debtor hereby ratifies, to the extent permitted by law, all that such
attorneys lawfully do or cause to be done by virtue hereof. The power of
attorney granted hereunder is a power coupled with an interest and shall be
irrevocable until the Liabilities are indefeasibly paid in full in cash and this
Agreement is terminated in accordance with Section 4.12 hereof.
 
Each Debtor also authorizes the Secured Party, at any time from and after the
occurrence and during the continuation of any Event of Default, (x) to
communicate in its own name with any party to any Contract with regard to the
assignment of the right, title and interest of such Debtor in and under the
Contracts hereunder and other matters relating thereto and (y) to execute, in
connection with any sale of Collateral provided for in Section 4.6 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
 
4.11 Perfection. Prior to or concurrently with the execution and delivery of
this Agreement, each Debtor shall:
 
(a) file such financing statements, assignments for security and other documents
in such offices as may be necessary or as the Secured Party or the
Representative may request to perfect the security interests granted by Section
3 of this Agreement; and
 
(b) at Secured Party’s request, deliver to the Secured Party or its
Representative the originals of all Instruments together with, in the case of
Instruments constituting promissory notes, allonges attached thereto showing
such promissory notes to be payable to the order of a blank payee.
 

 
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4.12 Termination. This Agreement and the Liens and security interests granted
hereunder shall not terminate until the termination of the Notes and the full
and complete performance and indefeasible satisfaction of all the Liabilities
(including, without limitation, the indefeasible payment in full in cash of all
such Liabilities) and with respect to which claims have been asserted by
Collateral Agent and/or Buyers, whereupon the Secured Party shall forthwith
cause to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral to or
on the order of Debtors. The Secured Party shall also execute and deliver to
Debtors upon such termination and at Debtors’ expense such Uniform Commercial
Code termination statements, certificates for terminating the liens on the Motor
Vehicles (if any) and such other documentation (including such documentation to
effect the termination of the right of Secured Party to receive information
related to the accounts of Debtors pursuant to Section 4.5(b) hereof) as shall
be reasonably requested by Debtors to effect the termination and release of the
Liens and security interests in favor of the Secured Party affecting the
Collateral .
 
4.13 Further Assurances. At any time and from time to time, upon the written
request of the Secured Party or its Representative, and at the sole expense of
Debtors, Debtors will promptly and duly execute and deliver any and all such
further instruments, documents and agreements and take such further actions as
are necessary or the Secured Party or its Representative may reasonably require
in order for the Secured Party to obtain the full benefits of this Agreement and
of the rights and powers herein granted in favor of the Secured Party,
including, without limitation, using Debtors’ best efforts to secure all
consents and approvals necessary or appropriate for the assignment to the
Secured Party of any Collateral held by Debtors or in which a Debtor has any
rights not heretofore assigned, the filing of any financing or continuation
statements under the Uniform Commercial Code with respect to the liens and
security interests granted hereby, transferring Collateral to the Secured
Party’s possession (if a security interest in such Collateral can be perfected
by possession), placing the interest of the Secured Party as lienholder on the
certificate of title of any Motor Vehicle and obtaining waivers of liens from
landlords and mortgagees. Each Debtor also hereby authorizes the Secured Party
and its Representative to file any such financing or continuation statement
without the signature of such Debtor to the extent permitted by applicable law.
 
4.14 Limitation on Duty of Secured Party. The powers conferred on the Secured
Party under this Agreement are solely to protect the Secured Party’s interest on
behalf of itself and the Buyers in the Collateral and shall not impose any duty
upon it to exercise any such powers. The Secured Party shall be accountable only
for amounts that it actually receives as a result of the exercise of such powers
and neither the Secured Party nor its Representative nor any of their respective
officers, directors, employees or agents shall be responsible to Debtors for any
act or failure to act, except for willful misconduct. Without limiting the
foregoing, the Secured Party and any Representative shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
their possession if such Collateral is accorded treatment substantially
equivalent to that which the relevant Secured Party or any Representative, in
its individual capacity, accords its own property consisting of the type of
Collateral involved, it being understood and agreed that neither the Secured
Party nor any Representative shall have any responsibility for taking any
necessary steps (other than steps taken in accordance with the standard of care
set forth above) to preserve rights against any Person with respect to any
Collateral.
 

 
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Also without limiting the generality of the foregoing, neither the Secured Party
nor any Representative shall have any obligation or liability under any Contract
or license by reason of or arising out of this Agreement or the granting to the
Secured Party of a security interest therein or assignment thereof or the
receipt by the Secured Party or any Representative of any payment relating to
any Contract or license pursuant hereto, nor shall the Secured Party or any
Representative be required or obligated in any manner to perform or fulfill any
of the obligations of Debtors under or pursuant to any Contract or license, or
to make any payment, or to make any inquiry as to the nature or the sufficiency
of any payment received by it or the sufficiency of any performance by any party
under any Contract or license, or to present or file any claim, or to take any
action to collect or enforce any performance or the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
 
Section 5. Miscellaneous.
 
5.1 No Waiver. No failure on the part of the Secured Party or any of its
Representatives to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Secured Party or
any of its Representatives of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.
 
5.2 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York
 
5.3 Notices. All notices, approvals, requests, demands and other communications
hereunder shall be delivered or made in the manner set forth in, and shall be
effective in accordance with the terms of, the Purchase Agreement; provided,
that, to the extent any such communication (i) is being made or sent to a
Debtor, such communication shall be effective as to such Debtor if made or sent
to the Company in accordance with the foregoing or (ii) is being made or sent to
Collateral Agent, such communication shall be made to Collateral Agent at the
address set forth below Collateral Agent’s signature hereto. Debtors and
Collateral Agent may change their respective notice addresses by written notice
given to each other party five (5) days prior to the effectiveness of such
change.
 

 
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5.4 Amendments, Etc. The terms of this Agreement may be waived, altered or
amended only by an instrument in writing duly executed by the Debtor sought to
be charged or benefited thereby and the Secured Party. Any such amendment or
waiver shall be binding upon the Secured Party and the Debtor sought to be
charged or benefited thereby and their respective successors and assigns.
 
5.5 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of each of the parties
hereto, provided, that no Debtor shall assign or transfer its rights hereunder
without the prior written consent of the Secured Party. Secured Party, in its
capacity as collateral agent, may assign its rights hereunder without the
consent of Debtors, in which event such assignee shall be deemed to be Secured
Party hereunder with respect to such assigned rights.
 
5.6 Counterparts; Headings. This Agreement may be authenticated in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may authenticate this Agreement by
signing any such counterpart. This Agreement may be authenticated by manual
signature or facsimile, .pdf or similar electronic signature, all of which shall
be equally valid. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.
 
5.7 Severability. If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Secured Party and its
Representative in order to carry out the intentions of the parties hereto as
nearly as may be possible and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
 
5.8 SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS. (A) EACH
DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK, BOROUGH
OF MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND EACH DEBTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF SECURED PARTY
TO BRING PROCEEDINGS AGAINST ANY DEBTOR IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY A DEBTOR AGAINST SECURED PARTY, ANY BUYER OR ANY
AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT
ONLY IN A COURT IN NEW YORK, NEW YORK (AND SECURED PARTY AND BUYERS HEREBY
SUBMIT TO THE JURISDICTION OF SUCH COURT). EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH ACTION OR PROCEEDING BY MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS
FOR NOTICES TO IT IN ACCORDANCE WITH SECTION 5.3 OF THIS AGREEMENT AND AGREES
THAT SUCH NOTICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND
NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY
RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
 

 
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5.9 WAIVER OF RIGHT TO TRIAL BY JURY. EACH DEBTOR AND SECURED PARTY EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH DEBTOR AND SECURED
PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
 
5.10 Joint and Several. The obligations, covenants and agreements of Debtors
hereunder shall be the joint and several obligations, covenants and agreements
of each Debtor, whether or not specifically stated herein.
 
5.11 Collateral Agent and Buyer Indemnification.
 
(a) Each Buyer hereby irrevocably appoints and authorizes the Secured Party to
act as collateral agent (the “Collateral Agent”) on its behalf under this
Agreement and to enter into each of the instruments, documents and agreements,
including any pledge agreement, guaranty, financing statements, mortgage,
Account Control Agreement or any other Security Documents (the “Financing
Documents”), to which Secured Party is a party (including in its capacity as
Collateral Agent) on such Buyer’s behalf and to take such actions as Collateral
Agent on such Buyer’s behalf and to exercise such powers under the Financing
Documents as are delegated to Collateral Agent or Secured Party (as applicable)
by the terms thereof, together with all such powers as are reasonably incidental
thereto. The Collateral Agent shall take such action under this Agreement and/or
any other Transaction Documents as the Collateral Agent shall reasonably be
directed by the Requisite Buyers in accordance with the terms of the Transaction
Documents. Secured Party is authorized and empowered to amend, modify, or waive
any provisions of this Agreement or the other Financing Documents only with the
consent of the Requisite Buyers.
 

 
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(b) Whether or not the transactions contemplated hereby shall be consummated,
upon demand therefor the Buyers shall indemnify the Collateral Agent (to the
extent not reimbursed by or on behalf of the Company and without limiting the
obligation of the Company to do so), ratably from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind whatsoever, including, for
purposes of clarification, all Taxes, which may at any time (including at any
time following the payment in full of the Notes and the termination or
resignation of the Collateral Agent) be imposed on, incurred by or asserted
against the Collateral Agent in any way relating to or arising out of this
Agreement, any other Financing Document or any document contemplated hereby or
referred to herein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Collateral Agent under or in connection with any
of the foregoing; provided, however, that no Buyer shall be liable for the
payment to the Collateral Agent of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Collateral Agent’s gross negligence or
willful misconduct. In addition, each Buyer shall reimburse the Collateral Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including attorney costs) incurred by the Collateral Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Transaction Document, or any document contemplated hereby or referred
to herein to the extent that the Collateral Agent is not reimbursed for such
expenses by or on behalf of the Company. Without limiting the generality of the
foregoing, if any Governmental Authority of any jurisdiction asserts a claim
that the Collateral Agent did not properly withhold tax from amounts paid to or
for the account of any Buyer (because the appropriate form was not delivered,
was not properly executed, or because such Buyer failed to notify the Collateral
Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Buyer
shall indemnify the Collateral Agent fully for all amounts paid, directly or
indirectly, by the Collateral Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Collateral Agent under this Section 5.11(b), together with all
related costs and expenses (including attorney costs). The obligation of the
Buyers in this Section 5.11(b) shall survive the payment of all Liabilities
hereunder.
 

 
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(c) The Collateral Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default or any event that with the giving of notice
or passage of time would constitute an Event of Default unless the Collateral
Agent shall have received written notice from a Buyer describing such Event of
Default or event that with the giving of notice or passage of time would
constitute an Event of Default and stating that such notice is a “notice of
default”. Upon the occurrence and continuance of an Event of Default, or an
event that with the giving of notice or passage of time would constitute an
Event of Default, the Collateral Agent shall take such action under this
Agreement and/or any other Transaction Documents with respect to such Event of
Default or event that with the giving of notice or passage of time would
constitute an Event of Default as Collateral Agent shall reasonably be directed
by the Requisite Buyers in accordance with the terms of the Transaction
Documents, provided that unless and until the Collateral Agent shall have
received such directions, the Collateral Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect of such
Event of Default or event that with the giving of notice or passage of time
would constitute an Event of Default or as the Collateral Agent shall deem
advisable in the best interests of the Buyers. In taking such action or
refraining from taking such action without specific direction from the Requisite
Buyers, the Collateral Agent shall use the same degree of care and skill as a
prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.
 
(d) Nothing in this Section 5.11 shall be deemed to limit or otherwise affect
the rights of Secured Party or Buyers to exercise any remedy provided in this
Agreement or any other Transaction Document.
 
(e) The Collateral Agent may resign from the performance of all of its functions
and duties hereunder and/or under the other Financing Documents at any time by
giving thirty (30) Business Days prior written notice to the Buyers. Such
resignation shall take effect upon the appointment of a successor Collateral
Agent pursuant to clause (f) below or as otherwise provided below.
 
(f) Upon (i) the Buyers’ receipt of a notice of resignation by the Collateral
Agent in accordance with clause (e) above, or (ii) written notice by the
Requisite Buyers to Collateral Agent of the Requisite Buyers’ election to remove
the existing Collateral Agent and appoint a successor Collateral Agent, the
Requisite Buyers shall have the right to appoint a successor Collateral Agent.
Upon the acceptance of a successor's appointment as Collateral Agent hereunder
and notice of such acceptance to the retiring Collateral Agent, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Collateral Agent, the retiring
Collateral Agent's resignation shall become immediately effective and the
retiring Collateral Agent shall be discharged from all of its duties and
obligations hereunder and under the other Financing Documents (if such
resignation was not already effective and such duties and obligations not
already discharged, as provided below in this paragraph). If no such successor
shall have been so appointed by Requisite Buyers and shall have accepted such
appointment within thirty (30) days after the retiring Collateral Agent gives
notice of its resignation or the Requisite Buyers give notice of their election
to replace the retiring Collateral Agent, then the retiring Collateral Agent
may, on behalf of the Buyers (but without any obligation) appoint a successor
Collateral Agent without the consent of any Buyer. From and following the
expiration of such thirty (30) day period, Collateral Agent shall have the
exclusive right without any Person's consent, upon one (1) Business Days' notice
to the Buyers, to make its resignation or removal effective immediately. From
and following the effectiveness of such notice, (i) the retiring Collateral
Agent shall be discharged from its duties and obligations hereunder and under
the other Financing Documents and (ii) all actions, payments, communications and
determinations provided to be made by, to or through Collateral Agent shall
instead be made by or to each Buyer directly, until such time as Requisite
Buyers appoint a Collateral Agent as provided for above in this paragraph. The
provisions of this Agreement shall continue in effect for the benefit of any
retiring Collateral Agent and its sub-agents after the effectiveness of its
resignation or removal hereunder and under the other Financing Documents in
respect of any actions taken or omitted to be taken by any of them while the
retiring Collateral Agent was acting or was continuing to act as Collateral
Agent.
 

 
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5.12 No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
 
5.13 Entire Agreement. This Agreement supersedes all other prior oral or written
agreements between each Debtor, Secured Party, the Buyers and their affiliates
and persons acting on their behalf with respect to the matters discussed herein,
and this Agreement and the Transaction Documents and instruments referenced
herein and therein contain the entire understanding of the parties with respect
to the matters covered herein and therein.
 
- Remainder of Page Intentionally Left Blank; Signature Page Follows -
 

 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed and delivered as of the day and year first above written.
 
DEBTORS:
 
GOTO COLLEGE HOLDINGS INC., a Delaware corporation
 
By: /s/ Vishal Garg
Name: Vishal Garg
Title: President
FEIN:
 
EMBARK CORP., a Delaware corporation
 
By: /s/ Vishal Garg
Name: Vishal Garg
Title: Chief Executive Officer
FEIN:

EMBARK ONLINE, INC., a Delaware corporation
 
By: /s/ Vishal Garg
Name: Vishal Garg
Title: Chief Executive Officer
FEIN:

IEMPOWER, INC., a Delaware corporation
 
By: /s/ Vishal Garg
Name: Vishal Garg
Title: President
FEIN:

MRU ORIGINATIONS, INC., a Delaware corporation
 
By: /s/ Vishal Garg
Name: Vishal Garg
Title: President
FEIN:

 
 

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MRU UNIVERSAL GUARANTY AGENCY, INC., a Delaware corporation
 
By: By: /s/ Vishal Garg
Name: Vishal Garg
Title: President
FEIN:

 

 
 

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SECURED PARTY:
 
VIKING ASSET MANAGEMENT, LLC, a California limited liability company, in its
capacity as Collateral Agent for the Buyers
 
By: /s/ S. Michael Rudolph
Name: S. Michael Rudolph
Title: CFO - Investment Adviser
 
 
Notice Address:
 
Viking Asset Management, LLC
600 Montgomery Street, 44th Floor
San Francisco, California 94111
Attention: Michael Rudolph
Telecopy: (415) 981-5301
 
- and -
 
Summerline Asset Management, LLC
70 West Red Oak Lane, 4th Floor
White Plains, New York 10604
Attention: Robert J. Brantman
Telecopy: (914) 697-4767

 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed and delivered as of the day and year first above written.

BUYERS:
 
Solely for the purposes of Section 5.11
 
LONGVIEW MARQUIS MASTER FUND, L.P., as Buyer
 
By: Viking Asset Management, LLC
Its: Investment Advisor
 
 
By: /s/ S. Michael Rudolph
Name: S. Michael Rudolph
Title:   Chief Financial Officer

 
 

 
 

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EXHIBIT A

Form of Joinder
Joinder to Security Agreement

The undersigned, ______________________________, hereby joins in the execution
of that certain Security Agreement dated as of November 20, 2008 (as amended,
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”) by GOTO COLLEGE HOLDINGS INC., a Delaware corporation, EMBARK CORP.,
a Delaware corporation, EMBARK ONLINE, INC., a Delaware corporation, IEMPOWER,
INC., a Delaware corporation, MRU ORIGINATIONS, INC., a Delaware corporation,
MRU UNIVERSAL GUARANTY AGENCY, INC., a Delaware corporation, the Buyers (as
defined therein), and each other Person that becomes a Debtor or a Buyer
thereunder after the date thereof and hereof and pursuant to the terms thereof,
to and in favor of Viking Asset Management, LLC, in its capacity as Collateral
Agent for the Buyers. By executing this Joinder, the undersigned hereby agrees
that it is a Debtor thereunder and agrees to be bound by all of the terms and
provisions of the Security Agreement.

The undersigned represents and warrants to Secured Party that:

(a) all of the Equipment, Inventory and Goods owned by such Debtor is located at
the places as specified on Schedule I and such Debtor conducts business in the
jurisdiction set forth on Schedule I;

(b) except as disclosed on Schedule I, none of such Collateral is in the
possession of any bailee, warehousemen, processor or consignee;

(c) the chief place of business, chief executive office and the office where
such Debtor keeps its books and records are located at the place specified on
Schedule I;

(d) such Debtor (including any Person acquired by such Debtor) does not do
business or has not done business during the past five years under any tradename
or fictitious business name, except as disclosed on Schedule II;

(e) all Copyrights, Patents and Trademarks owned or licensed by the undersigned
are listed in Schedules III, IV and V, respectively;

(f) all Deposit Accounts, securities accounts, brokerage accounts and other
similar accounts maintained by such Debtor, and the financial institutions at
which such accounts are maintained, are listed on Schedule VI;

(g) all Commercial Tort Claims of such Debtor are listed on Schedule VII;

 
 

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(h) all interests in real property held by such Debtor are listed on
Schedule VIII;

(i) all Equipment (including Motor Vehicles) owned by such debtor are listed on
Schedule IX; and

(j) all other representations and warranties made by the Debtors in the Security
Agreement are true, complete and correct in all respects as of the date hereof.

________________, a _____ corporation

By:______________________________
Title:___________________________
FEIN:____________________________

 
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EXHIBIT B

Form of Direction to Financial Institutions

[Insert address of applicable Bank]

 
Re:
Account No. [________] (the “Account”)

To Whom It May Concern:

The undersigned, as the holder of the Account, hereby irrevocably authorizes and
directs you to, without further action or consent by the undersigned and
notwithstanding any subsequent objection or contrary direction you may receive
from the undersigned, provide Summerline Asset Management, LLC, a Delaware
limited liability company, as collateral agent (the “Collateral Agent”), at 70
West Red Oak Lane, 4th Floor, White Plains, New York 10604, Attention: Robert J.
Brantman, or such other address as the Collateral Agent may from time to time
specify in writing to you, with duplicate copies of all bank statements which
are sent to the undersigned (until such time as you receive contrary direction
from the Collateral Agent) and such other information with respect to the
Account as the Collateral Agent may from time to time reasonably request.

The undersigned hereby consents to such information being provided to the
Collateral Agent.

Yours truly,

[EMBARK CORP., a Delaware corporation][EMBARK ONLINE, INC., a Delaware
corporation]

_______________________

By: _______________________
Its: _______________________

 
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