SECURITY AGREEMENT AND
FINANCING STATEMENT

 
THIS SECURITY AGREEMENT AND FINANCING STATEMENT is made this 20th day of August,
2001, between TRANSCAP TRADE FINANCE, an Illinois general partnership (the
"SECURED PARTY"), and DESTINATION SOFTWARE, INC., a New Jersey corporation (the
"DEBTOR"), as follows:
 
BACKGROUND:
 
A.
On this date, the Secured Party and Debtor entered into a Master Purchase Order
Assignment Agreement (the "Assignment Agreement").

 
B.
It is a condition to Secured Party's performance of its obligations under the
Assignment Agreement that the Debtor execute and deliver this Agreement to
secure performance and payment of the "Liabilities" (as hereinafter defined).

 
THEREFORE, in consideration of the agreements described in this Agreement and
the Assignment Agreement, the parties agree as follows:
 
1. Definitions. In this Agreement, the following frequently used terms are
defined as set forth in this paragraph 1:
 
(a) Each term used in this Agreement which is defined in the Assignment
Agreement will have the same meaning herein as that ascribed to it in the
Assignment Agreement.
 
(b) The "LIABILITIES" are all payments and other obligations from time to time
due or owing to the Secured Party by the Debtor under the Assignment Agreement,
this Agreement and any agreement referred to in the Assignment Agreement or this
Agreement.
 
(c) The "PRIMARY COLLATERAL" means those assets of the Debtor set forth on
Exhibit "A" attached to and made part of this Agreement, whether now or
hereafter existing or acquired, together with all the proceeds thereof and
Debtor's interests therein.
 
(d) The "COMMON COLLATERAL" are those assets of Debtor set forth on Exhibit "B"
attached to and made part of this Agreement, whether now or hereafter existing
or acquired, together with all the proceeds thereof and Debtor's interests
therein which from time to time are also pledged to a Senior Lender and as to
which the Secured Party shall maintain a subordinated security interest. If no
Senior Lender is involved in the subject transaction, Exhibit "B" shall be
excluded from this Agreement and the Primary Collateral and Common Collateral
shall refer to the same assets.
 
(e) The "COLLATERAL" means the Primary Collateral and the Common Collateral and
the Secured Party's security interest in the Collateral is referred to as the
"LIEN".

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(f) The "SENIOR LIEN" is the security interest in the Common Collateral
maintained by a Senior Lender (if any).
 
(g) The "LOCATIONS" are Debtor's facilities set forth at the end of this
Agreement at which all or a portion of the Collateral will be located.
 
2. Grant of Security Interest. As security for the performance and payment of
the Liabilities, the Debtor hereby assigns, grants, conveys, mortgages,
hypothecates, pledges, and sets over to the Secured Party a continuing first
priority security interest for the use and benefit of the Secured Party in the
Primary Collateral; and a security interest for the use and benefit of the
Secured Party in the Common Collateral which is subordinate only to the Senior
Lien, if any.
 
3. Representations and Warranties. The Debtor represents, warrants, and agrees
that: (i) except with respect to the Senior Lien, no financing statement or
other lien notice covering any portion of the Collateral is on file in any
public office; (ii) the Debtor is and at all times will be the lawful owner of
all Collateral, free of all liens and claims whatsoever except the Senior Lien
and the Lien; (iii) the Debtor has full power and authority to execute this
Agreement and to perform the Debtor's obligations hereunder, and to subject the
Collateral to the Lien; (iv) all information with respect to Collateral set
forth in any schedule, certificate or other writing at any time heretofore, and
all other written information heretofore or hereafter furnished by the Debtor to
the Secured Party is and will be true and correct in all respects as of the date
furnished; (v) the Locations include the address at which any portion of the
Collateral is located and Debtor will immediately notify Secured Party of any
other location at which any portion of the Collateral is hereafter located; and
(vi) there is no litigation or regulatory complaint against the Debtor or
affecting or relating to the Collateral or any portion thereof which is pending
or threatened as of this date other than as set forth on Exhibit "E" of the
Assignment Agreement.
 
4. Certificates, Schedules and Reports. The Debtor will from time to time, as
the Secured Party may request, deliver to the Secured Party such schedules and
such certificates and reports respecting the Collateral to such extent as the
Secured Party may reasonably request. Any such schedule, certificate or report
shall be executed by an authorized officer of the Debtor and shall be in such
form and detail as the Secured Party may specify. The Debtor shall immediately
notify the Secured Party of the occurrence of any event causing a material loss
or depreciation in the value of any item of Collateral, and the amount of such
loss or depreciation.

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5. Agreements of the Debtor. The Debtor (i) will, upon request of the Secured
Party, execute such financing statements and other documents (and pay the cost
of filing or recording the same), and do such other acts and things as Secured
Party may from time to time reasonably request to establish and maintain valid
perfected security interests in the Collateral; (ii) will keep all items of
Collateral at the Locations; (iii) will keep its records concerning all items of
Collateral at the Locations, which records will be of such character as will
enable Secured Party to determine at any time the status thereof; (iv) will
furnish the Secured Party such information concerning the Debtor and the
Collateral as the Secured Party may from time to time reasonably request; (v)
will permit the Secured Party or its designees, at all times, to inspect the
Collateral, and to inspect, audit and make copies of and extracts from all
records and all other papers in the possession of the Debtor, and will, upon
request of the Secured Party, deliver to the Secured Party all of such records
and papers that pertain to the Collateral; (vi) will, upon request of the
Secured Party, stamp on its records concerning the Collateral (and/or enter in
its computer records concerning the Collateral) a notation, in form reasonably
satisfactory to the Secured Party, of the security interests of the Secured
Party hereunder; (vii) except as consented to in writing by the Secured Party,
will not sell, lease, assign or create or permit to exist any lien on or
security interest in any item of Collateral to or in favor of anyone other than
the Secured Party and the Senior Lender(s); (viii) will at all times keep all
items of Collateral insured against loss, damage, theft and other risks, in such
amounts, by such companies, under such policies and in such form as may be
required pursuant to the Assignment Agreement, which policies shall contain a
so-called lender's loss payable (or comparable) clause, whereby a denial of
payment based on policy conditions will not prevent recovery by Secured Party,
and such policies or certificates thereof shall be deposited with the Secured
Party; (ix) furnish to the Secured Party no less than thirty (30) days prior to
the occurrence of any change in the Locations or in Debtor's name, notice in
writing of such change; and (x) will reimburse the Secured Party for all
expenses, including reasonable attorneys' fees and legal expenses incurred by
the Secured Party in seeking to collect or enforce any rights under this
Agreement or the Assignment Agreement.
 
6. Remedies. Whenever Debtor shall fail to perform any obligation in the manner
and at the time required by the Assignment Agreement or this Agreement, or
whenever the Debtor or any of them shall breach or default on a covenant made by
any Debtor pursuant to the Assignment Agreement or this Agreement (collectively
an "event of default"), the Secured Party may exercise any rights and remedies
available to it under the Assignment Agreement and applicable law. The Debtor
and each of them agrees, upon the occurrence of an event of default and during
the continuance thereof, if requested by the Secured Party, to assemble, at the
Debtor's expense, all or any part of the Collateral at a place designated by the
Secured Party. Without limiting the foregoing, upon an event of default the
Secured Party may, to the fullest extent permitted by applicable law, without
notice, advertisement, hearing or process of law of any kind, (i) enter upon any
premises where any of the Collateral may be located and take possession of and
remove such Collateral, (ii) sell any or all of the Collateral, free of all
rights and claims of the Debtor therein and thereto, at any public or private
sale, and (iii) bid for and purchase any or all of the Collateral at any such
sale. The Debtor and each of them hereby expressly waives, to the fullest extent
permitted by applicable law, any and all notices, advertisements, hearings or
process of law in connection with the exercise by the Secured Party of any of
its rights and remedies upon an event of default. Any notification of the
intended disposition of any of the Collateral required by law shall be deemed
reasonably and properly given if given at least ten (10) days before such
disposition. Any proceeds of any disposition by the Secured Party of any of the
Collateral will be applied by the Secured Party.
 
First, to the payment of the Secured Party's reasonable out-of-pocket expenses
in connection with the Collateral or this Agreement and enforcement of the
Secured Party's rights with respect thereto or hereunder, including reasonable
attorney's fees and legal expenses;
 
Second, toward the payment or satisfaction of the Liabilities in full; and
 
Third, any surplus to be paid to the Debtor, its successors and assigns, or as a
court of competent jurisdiction may direct.

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7. Relationship with Senior Lender. If a Senior Lender is involved in the
instant transaction, the Secured Party and each Senior Lender have entered into
a Subordination Agreement of even date herewith which defines and sets forth the
respective rights and interests of the Secured Party and each Senior Lender in
connection with the Collateral.
 
8. Miscellaneous. (a) The Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action for that purpose as the Debtor requests in
writing, but failure of the Secured Party to comply with any such request shall
not of itself be deemed a failure to exercise reasonable care, and no failure of
the Secured Party to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Debtor, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral.
 
(b) All notices required or permitted pursuant to this Agreement shall be in
writing and either personally delivered, sent by facsimile transmission
(provided evidence of transmission is maintained and the original of the
transmittal notice is sent by U.S. mail), or Federal Express or similar
overnight delivery service, to the Secured Party at its address set forth at the
end of this Agreement and to the Debtor at any one of the Locations. Notices
given in the manner prescribed herein shall be deemed given on the date sent or
transmitted (as the case may be). Either party may change its notice address by
notice to the other party in the manner prescribed herein.
 
(c) No delay on the part of the Secured Party in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
the Secured Party of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.
 
(d) No amendment to, modification or waiver of, or consent with respect to, any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed and delivered by the Secured Party, and then any
such amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
 
(e) All obligations of the Debtor and all rights, powers and remedies of the
Secured Party expressed herein are in addition to all other rights, powers and
remedies possessed by Secured Party, including, without limitation, those
provided by applicable law or in any other written instrument or agreement
relating to any of the Liabilities or security therefor.
 
(f) The Agreement shall in all respects be a continuing agreement and shall
remain in full force and effect until final payment in full of all the
Liabilities.
 
(g) THIS AGREEMENT HAS BEEN DELIVERED AT CHICAGO, ILLINOIS, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS,
SUBJECT, HOWEVER, TO THE UNIFORM COMMERCIAL CODE OF ANY APPLICABLE JURISDICTION.
WHENEVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH
MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT  IF ANY PROVISION
OF THIS AGREEMENT SHALL BE HELD INVALID, ILLEGAL OR UNENFORCEABLE UNDER
APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH
INVALIDITY, ILLEGALITY OR UNENFORCEABILITY, WITHOUT INVALIDATING THE REMAINDER
OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.

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(h) THE DEBTOR IRREVOCABLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN
DIVISION, OR ANY COURT OF THE STATE OF ILLINOIS LOCATED IN COOK COUNTY, AND
WAIVES ANY AND ALL OBJECTIONS TO JURISDICTION OR VENUE THAT ANY SUCH PARTY MAY
HAVE UNDER THE LAWS OF THE STATE OF ILLINOIS OR OTHERWISE IN THOSE COURTS IN ANY
SUCH SUIT, ACTION, OR PROCEEDING. FURTHER, TO THE EXTENT PERMITTED BY LAW,
SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
THE DEBTOR MAY BE MADE _BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS FOR NOTICE AS PROVIDED IN THIS AGREEMENT.
 
(i) DEBTOR AND SECURED PARTY ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT, ANY OTHER AGREEMENT RELATED HERETO OR WITH
RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WOULD BE BASED UPON
DIFFICULT AND COMPLEX ISSUES, AND THEREFORE, THE PARTIES AGREE THAT ANY COURT
PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
 
(j) This Agreement shall be binding upon, and shall inure to the benefit of, the
Secured Party and the Debtor and their respective successors and assigns.
 
(k) At the option of the Secured Party, this Agreement, or a carbon,
photographic or other reproduction of this Agreement or of any Uniform
Commercial Code financing statement covering the Collateral or any portion
thereof, shall be sufficient as a Uniform Commercial Code financing statement
and may be filed as such.
 
(l) This Agreement is the Security Agreement referred to in the Assignment
Agreement.
 
(m) In the case of any irreconcilable conflict between the provisions of this
Agreement and the Assignment Agreement, the provisions of the Assignment
Agreement shall control.
 
(n) If more than one person or entity is included as a Debtor hereunder, each of
Debtor's obligations, covenants, warranties, and representations hereunder is
joint, several and mutually binding on each such party.

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(o) This Agreement may be executed in one or more counterparts, each of which
taken together shall constitute one and the same instrument, admissible into
evidence. Delivery of an executed counterpart of this Agreement by facsimile
shall be equally as effective as delivery of a manually executed counterpart of
this Agreement. Any party delivering an executed counterpart of this Agreement
by facsimile shall also deliver a manually executed counterpart of this
Agreement, but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.
 
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IN WITNESS WHEREOF, this Agreement has been duly signed at Northbrook, Illinois
on the day and year first above written.
 
SECURED PARTY:
 
TRANSCAP TRADE FINANCE
   
By:
/s/ Michael Sear

Address:  
900 N. Skokie Blvd.
 
Northbrook, LL 60062
   

DEBTOR:
 
DESTINATION SOFTWARE, INC.
   
By:
/s/ Susan Kain
Title:
President
   
LOCATIONS:
                        

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EXHIBIT "A"

PRIMARY COLLATERAL
 
The "Collateral" with respect to which Secured Party's first priority security
interest applies shall be (i) all merchandise, inventory and goods and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping "Materials" and "Products" pursuant to "Accepted Purchase Orders", as
such terms are defined in a certain Master Purchase Order Purchase Agreement
dated August 20,2001 between Secured Party and Debtor, and all products and
proceeds of whatever sort now or hereafter owned by Debtor and related thereto;
(ii) all accounts receivable, credit card receivables, payment intangibles,
contract rights and other customer obligations for the payment of money arising
out of the Debtor's sale, lease, or license of any tangible or intangible
property or the rendering of services pursuant to "Accepted Purchase Orders" now
or hereafter existing; and (iii) all proceeds and products of the foregoing.
 
Debtor's facility at which the Collateral is located
is:_______________________________________________________
_____________________________________________________.

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EXHIBIT "B"
COMMON COLLATERAL
 
The "Collateral" with respect to which Secured Party's subordinated lien applies
shall be (i) all merchandise, inventory and goods and all additions,
substitutions and replacements thereof, wherever located, together with all
goods, supplies, incidentals, packaging materials, labels, materials and any
other items used or usable in manufacturing, processing, packaging or shipping
same, in all stages of production, and all products and proceeds of whatever
sort, including specifically all "inventory" as such term is defined in the
Code, now or hereafter owned by Debtor; (ii) all machinery and equipment, now or
hereafter owned by Debtor, including, but not limited to, all machinery,
equipment, furnishings, movable trade fixtures and vehicles now or hereafter
owned by Debtor and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, spare
and replacement parts, related computer software, maintenance and repair
supplies and manuals, instructional manuals, warranties, and equipment and
accessories installed thereon or affixed thereto; (iii) all accounts receivable,
credit card receivables, payment intangibles, contract rights and other customer
obligations for the payment of money arising out of the Debtor's sale, lease, or
license of any tangible or intangible property or the rendering of services, now
existing or hereafter arising; (iv) all trademarks, copyrights, patents,
contract rights, investment property, rights to payment evidenced by tangible or
electronic chattel paper, instruments, and all general intangible assets of
Debtor now or hereafter existing; and (v) all proceeds and products of the
foregoing, except such assets of the Debtor as are described on Exhibit "A".
 
Debtor's facility at which the Collateral is located is:
_______________________________________________________
_____________________________________________________.
 
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