**Exhibit 10.03****SECURITY AGREEMENT**(Guarantor)     This SECURITY AGREEMENT, dated as of July 5, 2007, is entered into between MATRIXX ORAL CARE,LLC, a Delaware limited liability company (“Guarantor”), and COMERICA BANK, a Michiganbanking corporation (“Bank”), with reference to the following facts:**R E C I T A L S**     A. Matrixx Initiatives, Inc., a Delaware corporation (“Parent”), and Zicam, LLC, anArizona limited liability company (“Zicam”) (Parent and Zicam are sometimes collectivelyreferred to herein as “Borrowers” and individually as a “Borrower”), and ComericaBank, a Michigan banking corporation (“*Bank*”), have previously entered into that certain Amendedand Restated Credit Agreement, dated as of September 27, 2005, that certain Amendment Number One toAmended and Restated Credit Agreement and Waiver, dated as of March 6, 2006, and that certainAmendment Number Two to Amended and Restated Credit Agreement, dated as of June 27, 2007 (as thesame may be further amended, restated, supplemented or otherwise modified from time to time, the“Loan Agreement”);     B. Guarantor has executed that certain Continuing Guaranty, dated as of even date herewith (asthe same may be amended, restated, supplemented or otherwise modified from time to time, the“Guaranty”), pursuant to which Guarantor guarantees the full payment and performance of allobligations owing to Bank by Borrowers under the Loan Agreement and the Loan Documents, as definedin the Loan Agreement; and     C. Guarantor acknowledges that pursuant to the terms of the Loan Agreement, in order to induceBank to make Loans to Borrower, Guarantor is required to enter into this Security Agreementgranting to Bank a first priority security interest in the Collateral to secure prompt payment andperformance of the Guarantor’s obligations owing to Bank under the Guaranty and the other SecuredObligations.**A G R E E M E N T**     NOW, THEREFORE, in consideration of the mutual promises, covenants, conditions,representations, and warranties hereinafter set forth, and for other good and valuableconsideration, the parties hereto agree as follows:     1. Definitions. All initially capitalized terms used but not defined herein shallhave the meanings ascribed thereto in the Loan Agreement. In addition, as used herein, thefollowing terms shall have the following meanings:          “Account Debtor” means any Person who is or who may become obligated with respect to,or on account of, an Account, Chattel Paper or General Intangible.
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          “Accounts” means any and all of Guarantor’s presently existing and hereafter arisingaccounts (including health-care-insurance receivables, contract rights, and all other formsof monetary obligations owing to Guarantor, and all credit insurance, guaranties, or securitytherefor), irrespective of whether earned by performance.          “Bank Expenses” has the meaning of “Expenses” under the Loan Agreement and also meansany and all costs or expenses required to be paid by Guarantor under this Security Agreement whichare paid or advanced by Bank; all costs and expenses of Bank, including its attorneys’ fees andexpenses (including attorneys’ fees incurred pursuant to proceedings arising under the BankruptcyCode), incurred or expended to correct any default or enforce any provision of this SecurityAgreement, or in gaining possession of, maintaining, handling, preserving, storing, shipping,selling, preparing for sale, or advertising to sell the Collateral, irrespective of whether a saleis consummated; and all costs and expenses of suit incurred or expended by Bank, including itsattorneys’ fees and expenses (including attorneys’ fees incurred pursuant to proceedings arisingunder the Bankruptcy Code) in enforcing or defending this Security Agreement, irrespective ofwhether suit is brought.          “Chattel Paper” means all of Guarantor’s presently existing and hereafter acquired orcreated chattel paper (including tangible chattel paper and intangible chattel paper).          “Code” means the Arizona Uniform Commercial Code, as amended or supplemented from timeto time. Any and all terms used in this Security Agreement which are defined in the Code shall beconstrued and defined in accordance with the meaning and definition ascribed to such terms underthe Code, unless otherwise defined herein.          “Collateral” means the following, collectively: any and all of the Accounts, ChattelPaper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Instruments, Inventory,Investment Property, General Intangibles, Letter of Credit Rights, Negotiable Collateral,Supporting Obligations, and Guarantor’s Books, in each case whether now existing or hereafteracquired or created, any money or other assets of Guarantor that now or hereafter come into thepossession, custody, or control of Bank and any Proceeds or products of any of the foregoing, orany portion thereof.          “Collateral Access Agreement” means a landlord waiver, mortgagee waiver, baileeletter, or acknowledgement agreement of any warehouseman, processor, lessor, consignee, or otherPerson in possession of, having a Lien upon, or having rights or interests in the Equipment orInventory, in each case, in form and substance satisfactory to Bank.          “Commercial Tort Claims” means all of Guarantor’s presently existing and hereafteracquired commercial tort claims.          “Deposit Account” means any demand, time, savings, passbook or similar account now orhereafter maintained by or for the benefit of Guarantor with an organization that is engaged in thebusiness of banking including a bank, savings bank, savings and loan association, credit union andtrust companies, and all funds and amounts therein, whether or not restricted or designated for aparticular purpose.
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          “Documents” means any and all documents and documents of title (as such terms aredefined in the Code), including documents of title, bills of lading, dock warrants, dock receipts,warehouse receipts and other documents of Guarantor, whether or not negotiable, andincludes all other documents which purport to be issued by a bailee or agent and purport tocover goods in any bailee’s or agent’s possession which are either identified or are fungibleportions of an identified mass, including such documents of title made available to Guarantor forthe purpose of ultimate sale or exchange of goods or for the purpose of loading, unloading,storing, shipping, transshipping, manufacturing, processing or otherwise dealing with goods in amanner preliminary to their sale or exchange, in each case whether now existing or hereafteracquired.          “Equipment” means any and all of Guarantor’s presently existing and hereafter acquiredequipment, wherever located, including machinery, furniture, furnishings, fixtures, computer andother electronic data processing equipment and other office equipment and supplies, computerprograms and related data processing software, spare parts, tools, motors, automobiles, trucks,tractors and other motor vehicles, rolling stock, jigs, and other goods (other than Inventory, farmproducts, and consumer goods), including software embedded in such goods, together with any and allparts, improvements, additions, attachments, replacements, accessories, and substitutions theretoor therefor, and all other rights of Guarantor relating thereto, whether in the possession andcontrol of Guarantor, or in the possession and control of a third party for the account ofGuarantor.          “FEIN” means Federal Employer Identification Number.          “General Intangibles” means any and all of Guarantor’s presently existing andhereafter acquired or arising general intangibles and any other intangible personal property ofevery kind and description, including:          (a) contracts and contract rights, noncompetition covenants, licensing and distributionagreements, indemnity agreements, guaranties, insurance policies, franchise agreements and leaseagreements;          (b) uncertificated certificates of deposit, and interests in any joint ventures, partnershipsor limited liability companies;          (c) choses in action and causes of action (whether legal or equitable, whether in contract ortort or otherwise, and however arising);          (d) licenses, approvals, permits or any other authorizations issued by any GovernmentalAuthority;          (e) Intellectual Property Collateral;          (f) computer software, magnetic media, electronic data processing files, systems and programs;          (g) rights of stoppage in transit, replevin and reclamation, rebates or credits of every kindand nature to which Guarantor may be entitled;
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          (h) purchase orders, customer lists, subscriber lists and goodwill;          (i) monies due or recoverable from pension funds, refunds and claims for tax or other refundsagainst any Governmental Authority;          (j) payment intangibles; and          (k) other contractual, equitable and legal rights of whatever kind and nature.          “Guarantor” has the meaning set forth in the preamble to this Security Agreement.          “Guarantor’s Books” means any and all presently existing and hereafter acquired orcreated books and records of Guarantor, including all records (including maintenance and warrantyrecords), ledgers, computer programs, disc or tape files, printouts, runs, and other computerprepared information indicating, summarizing, or evidencing the Collateral.          “Guaranty” has the meaning set forth in recital B hereto.          “Instruments” means any and all negotiable instruments, and every other writing whichevidences a right to the payment of a monetary obligation, in each case whether now existing orhereafter acquired.          “Intellectual Property Collateral” means the following Assets owned or held byGuarantor or in which Guarantor otherwise has any interest, now existing or hereafter acquired orarising:          (a) all patents and patent applications, domestic or foreign, all licenses relating to any ofthe foregoing and all income and royalties with respect to any licenses, all rights to sue forpast, present or future infringement thereof, all rights arising therefrom and pertaining theretoand all reissues, divisions, continuations, renewals, extensions and continuations in-part thereof;          (b) all copyrights and applications for copyright, domestic or foreign, together with theunderlying works of authorship (including titles), whether or not the underlying works ofauthorship have been published and whether said copyrights are statutory or arise under the commonlaw, and all other rights and works of authorship, all rights, claims and demands in any wayrelating to any such copyrights or works, including royalties and rights to sue for past, presentor future infringement, and all rights of renewal and extension of copyright;          (c) all state (including common law), federal and foreign trademarks, service marks and tradenames, and applications for registration of such trademarks, service marks and trade names, alllicenses relating to any of the foregoing and all income and royalties with respect to anylicenses, whether registered or unregistered and wherever registered, all rights to sue for past,present or future infringement or unconsented use thereof, all rights arising therefrom andpertaining thereto and all reissues, extensions and renewals thereof;
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          (d) all trade secrets, confidential information, customer lists, license rights, advertisingmaterials, operating manuals, methods, processes, know-how, sales literature, sales and operatingplans, drawings, specifications, blue prints, descriptions, inventions, name plates and catalogs;and          (e) the entire goodwill of or associated with the businesses now or hereafter conducted byGuarantor connected with and symbolized by any of the aforementioned properties and assets; and          (f) Intellectual Property Collateral shall include, without limitation, rights and interestspursuant to licensing or other contracts in favor of Guarantor pertaining to patents, trademarks,copyrights and other intellectual property presently or in the future owned or used by thirdPersons.          “Inventory” means any and all of Guarantor’s presently existing and hereafter acquiredgoods (including software embedded in such goods) of every kind and description (including goods intransit) which are held for sale or lease, or to be furnished under a contract of service or whichhave been so leased or furnished, or other disposition, wherever located, including those held fordisplay or demonstration or out on lease or consignment or are raw materials, work in process,finished materials, or materials used or consumed, or to be used or consumed, in Guarantor’sbusiness, and the resulting product or mass, and all repossessed, returned, rejected, reclaimed andreplevied goods, together with all materials, parts, supplies, packing and shipping materials usedor usable in connection with the manufacture, packing, shipping, advertising, selling or furnishingof such goods; and all other items hereafter acquired by Guarantor by way of substitution,replacement, return, repossession or otherwise, and all additions and accessions thereto, and anyDocument representing or relating to any of the foregoing at any time.          “Investment Property” means any and all of Guarantor’s presently existing andhereafter acquired investment property.          “Letter of Credit Rights” means any and all of Guarantor’s presently existing andhereafter acquired letter of credit rights.          “Negotiable Collateral” means any and all of Guarantor’s presently existing andhereafter acquired or arising letters of credit, letter of credit rights, advises of credit,certificates of deposit, notes, drafts, money, Instruments, Documents and tangible Chattel Paper.          “Proceeds” means whatever is receivable or received from or upon the sale, lease,license, collection, use, exchange or other disposition, whether voluntary or involuntary, of anyCollateral, including “proceeds” as defined in the Code, any and all proceeds of any insurance,indemnity, warranty or guaranty payable to or for the account of Guarantor from time to time withrespect to any of the Collateral, any and all payments (in any form whatsoever) made or due andpayable to Guarantor from time to time in connection with any requisition, confiscation,condemnation, seizure or forfeiture of all or any part of the Collateral by any GovernmentalAuthority (or any Person acting under color of Governmental Authority), any and all other
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amountsfrom time to time paid or payable under or in connection with any of the Collateral or for or onaccount of any damage or injury to or conversion of any Collateral by any Person, any and all othertangible or intangible property received upon the sale or disposition of Collateral, and allproceeds of proceeds.          “Rights to Payment” means all Accounts and any and all rights and claims to thepayment or receipt of money or other forms of consideration of any kind in, to and under allelectronic Chattel Paper, General Intangibles, Letter of Credit Rights, Negotiable Collateral andProceeds thereof.          “Secured Obligations” shall have the meaning of “Guaranteed Obligations” under theGuaranty and shall also mean any and all debts, liabilities, obligations, or undertakings owing byGuarantor to Bank arising under, advanced pursuant to, or evidenced by this Security Agreement,whether direct or indirect, absolute or contingent, matured or unmatured, due or to become due,voluntary or involuntary, whether now existing or hereafter arising, and including all interest notpaid when due and all Expenses which Guarantors are required to pay or reimburse pursuant to thisSecurity Agreement, the Guaranty, the other Loan Documents or by law.          “Security Agreement” shall mean this Security Agreement, as amended or restated fromtime to time.          “Supporting Obligations” has the meaning given to such term in the Code.     2. Construction. Unless the context of this Security Agreement clearly requiresotherwise, references to the plural include the singular, references to the singular include theplural, the part includes the whole, “including” is not limiting, and “or” has the inclusivemeaning represented by the phrase “and/or.” References in this Security Agreement to“determination” by Bank include reasonable estimates (absent manifest error) by Bank, as applicable(in the case of quantitative determinations) and reasonable beliefs (absent manifest error) byBank, as applicable (in the case of qualitative determinations). The words “hereof,” “herein,”“hereby,” “hereunder,” and similar terms in this Security Agreement refer to this SecurityAgreement as a whole and not to any particular provision of this Security Agreement. Article,section, subsection, exhibit, and schedule references are to this Security Agreement unlessotherwise specified.     3. Creation of Security Interest. Guarantor hereby grants to Bank a continuingsecurity interest in all presently existing and hereafter acquired or arising Collateral in orderto secure the prompt payment and performance of all of the Secured Obligations. Guarantoracknowledges and affirms that such security interest in the Collateral has attached to allCollateral without further act on the part of Bank, Lenders or Guarantor.     4. Further Assurances.          4.1 Guarantor shall execute and deliver to Bank concurrently with Guarantor’s execution ofthis Security Agreement, and from time to time at the request of Bank, and Guarantor herebyauthorizes Bank to file, all financing statements, continuation financing
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statements, fixturefilings, security agreements, chattel mortgages, assignments, and all other documents that Bank mayrequest, in form satisfactory to Bank, to perfect and maintain perfected Bank’s security interestsin the Collateral, and in order to consummate fully all of the transactions contemplated by thisSecurity Agreement, Guaranty and the Loan Agreement. Guarantor hereby irrevocably makes,constitutes, and appoints Bank (and Bank’s officers,employees, or agents) as Guarantor’s true and lawful attorney with power to sign the name ofGuarantor on any of the above-described documents or on any other similar documents which need tobe executed, recorded, or filed, and to do any and all things necessary in the name and on behalfof Guarantor in order to perfect, or continue the perfection of, Bank’s security interests in theCollateral. Guarantor agrees that neither Bank, nor any of its designees or attorneys-in-fact,will be liable for any act of commission or omission, or for any error of judgment or mistake offact or law with respect to the exercise of the power of attorney granted under this Section 4.1,other than as a result of its or their gross negligence or wilful misconduct. **THE POWER OFATTORNEY GRANTED UNDER THIS SECTION 4.1 IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTILALL OF THE SECURED OBLIGATIONS HAVE BEEN INDEFEASIBLY PAID IN FULL, THE GUARANTY TERMINATED, ANDALL GUARANTOR’S DUTIES HEREUNDER AND THEREUNDER HAVE BEEN DISCHARGED IN FULL.**          4.2 Without limiting the generality of the foregoing Section 4.1 or any of the provisions ofthe Loan Agreement, Guarantor will: (i) at the request of Bank, mark conspicuously all of itsrecords pertaining to the Collateral with a legend, in form and substance satisfactory to Bank,indicating that the Collateral is subject to the security interest granted hereby; (ii) immediatelymark all Chattel Paper with a conspicuous legend indicating Bank’s security interest therein andotherwise in form and substance satisfactory to Bank; and (iii) upon demand of Bank, allowinspection of Collateral by Bank or Persons designated by Bank at any time during normal businesshours.          4.3 With respect to the Negotiable Collateral (other than drafts received in the ordinarycourse of business so long as no Event of Default is continuing), Guarantor shall, immediately uponrequest by Bank, endorse (where appropriate) and assign the Negotiable Collateral over to Bank, anddeliver to Bank actual physical possession of the Negotiable Collateral to Bank together with anyinstruments of transfer or assignment, all in form and substance satisfactory to Bank, in order tofully perfect the security interest therein of Bank.          4.4 In the event that any Collateral is in the possession of a third party, Guarantor shalljoin with Bank in notifying such third party of Bank’s security interest and obtaining anacknowledgement from such third party that it is holding such Collateral for the benefit of Bank.          4.5 Guarantor shall use its commercially reasonable efforts in obtaining a control agreementin form and substance satisfactory to Bank with respect to all Deposit Accounts, electronic ChattelPaper, Investment Property, and Letter of Credit Rights.          4.6 Guarantor shall promptly notify Bank of any Commercial Tort Claims it may bring againstany Person, including the name and address of each defendant, a summary of
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the facts, an estimateof Guarantor’s damages, copies of any complaint or demand letter submitted by Guarantor, and suchother information as Bank may request, and in connection therewith, at Bank’s request, Guarantorand Bank shall enter into an amendment to this Security Agreement granting a security interest toBank in each such Commercial Tort Claim to secure the Secured Obligations.     5. Representations and Warranties. In order to induce Bank to enter into the LoanAgreement and/or to make Loans to Borrowers or issue any Letters of Credit, in addition to therepresentations and warranties of Guarantor set forth in the Guaranty which are incorporated hereinby this reference, Guarantor represents and warrants to Bank that on the Closing Date andthereafter on the date of each and every Borrowing or issuance of a Letter of Credit:          5.1 Legal Name; State of Organization; Location of Chief Executive Office and Collateral;FEIN. Guarantor’s exact legal name, state of incorporation, FEIN and charter or organizationalidentification number is accurately set forth in Schedule 1. Guarantor’s chief executiveoffice is located at the address set forth in Schedule 1, and all other locations whereGuarantor conducts business or Collateral is kept are set forth in Schedule 1.          5.2 Locations of Guarantor’s Books. All locations where Guarantor’s Books are kept,including all equipment necessary for accessing Guarantor’s Books and the names and addresses ofall service bureaus, computer or data processing companies and other Persons keeping Guarantor’sBooks or collecting Rights to Payment for Guarantor, are set forth in Schedule 1.          5.3 Trade Names and Trade Styles. All trade names and trade styles under whichGuarantor presently conducts its business operations are set forth in Schedule 1, and,except as set forth in Schedule 1, Guarantor has not, at any time during the preceding fiveyears: (i) been known as or used any other corporate, trade or fictitious name; (ii) changed itsname; (iii) been the surviving or resulting corporation in a merger or consolidation; or (iv)acquired through asset purchase or otherwise any business of any Person.          5.4 Ownership of Collateral. Guarantor has rights in power to transfer theCollateral, and Guarantor’s title to the Collateral is free from all Liens and restrictions otherthan Permitted Liens.          5.5 Enforceability; Priority of Security Interest. (i) This Security Agreementcreates a security interest which is enforceable against the Collateral in which Guarantor now hasrights and will create a security interest which is enforceable against the Collateral in whichGuarantor hereafter acquires rights at the time Guarantor acquires any such rights, and (ii) Bankhas a perfected security interest (to the fullest extent perfection can be obtained by filing,notification to third parties, possession or control) and a first priority security interest in theCollateral in which Guarantor now has rights (subject only to Permitted Liens), and will have aperfected and first priority security interest (to the fullest extent perfection can be obtained byfiling, notification to third parties, possession or control) in the Collateral in which Guarantorhereafter acquires rights at the time Guarantor acquires any such rights (subject only to PermittedLiens), in each case securing the payment and performance of the Guaranteed Obligations.
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          5.6 Other Financing Statements. Other than financing statements in favor of Bank andfinancing statements filed in connection with Permitted Liens, no effective financing statementnaming Guarantor as debtor, assignor, grantor, mortgagor, pledgor or the like and covering all orany part of the Collateral is on file in any filing or recording office in any jurisdiction.          5.7 Rights to Payment.               (a) the Rights to Payment represent valid, binding and enforceable obligations of the AccountDebtors or other Persons obligated thereon, representing undisputed, bona fide transactionscompleted in accordance with the terms and provisions contained in any documents related thereto,and are and will be genuine, free from Liens, adverse claims, counterclaims, setoffs, defaults,disputes, defenses, retainages, holdbacks and conditions precedent of any kind of character, exceptto the extent reflected by Guarantor’s reserves for uncollectible Rights to Payment;               (b) to Guarantor’s knowledge, all Account Debtors and other obligors on the Rights to Paymentare Solvent and generally paying their debts as they come due;               (c) all Rights to Payment comply with all applicable laws concerning form, content and mannerof preparation and execution, including where applicable any federal and state consumer creditlaws;               (d) Guarantor has not assigned any of its rights under the Rights to Payment other than toBank pursuant to this Security Agreement;               (e) all statements made, all unpaid balances and all other information in Guarantor’s Booksand other documentation relating to the Rights to Payment are true and correct and in all respectswhat they purport to be; and               (f) Guarantor has no knowledge of any fact or circumstance which would impair the validity orcollectibility of any of the Rights to Payment.          5.8 Inventory. No Inventory is stored with any bailee, warehouseman or similar Personor on any premises leased to Guarantor, nor has any Inventory been consigned to Guarantor orconsigned by Guarantor to any Person or is held by Guarantor for any Person under any “bill andhold” or other arrangement.          5.9 Intellectual Property.               (a) except as set forth in Schedule 1, Guarantor (directly or through any Subsidiary)does not own, possess or use under any licensing arrangement any patents, copyrights, trademarks,service marks or trade names, nor is there currently pending before any Governmental Authority anyapplication for registration of any patent, copyright, trademark, service mark or trade name;
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               (b) all patents, copyrights, trademarks, service marks and trade names are subsisting and havenot been adjudged invalid or unenforceable in whole or in part;               (c) all maintenance fees required to be paid on account of any patents have been timely paidfor maintaining such patents in force, and, to the best of Guarantor’s knowledge, each of thepatents is valid and enforceable and Guarantor has notified Bank in writing of all prior art(including public uses and sales) of which it is aware;               (d) to the best of Guarantor’s knowledge after due inquiry, no infringement or unauthorizeduse presently is being made of any Intellectual Property Collateral by any Person;               (e) Guarantor is the sole and exclusive owner of the Intellectual Property Collateral and thepast, present and contemplated future use of such Intellectual Property Collateral by Guarantor hasnot, does not and will not infringe or violate any right, privilege or license agreement of or withany other Person; and               (f) Guarantor owns, has material rights under, is a party to, or an assignee of a party to allmaterial licenses, patents, patent applications, copyrights, service marks, trademarks, trademarkapplications, trade names and all other intellectual property Collateral necessary to continue toconduct its business as heretofore conducted.          5.10 Equipment.               (a) none of the Equipment or other Collateral is affixed to real property, except Collateralwith respect to which Guarantor has supplied Bank with all information and documentation necessaryto make all fixture filings required to perfect and protect the priority of Bank’s securityinterest in all such Collateral which may be fixtures, as against all Persons having an interest inthe premises to which such property may be affixed; and               (b) none of the Equipment is leased from or to any Person, except as set forth in Schedule1.          5.11 Deposit Accounts. The names and addresses of all financial institutions at whichGuarantor maintains its Deposit Accounts, and the account numbers and account names of such DepositAccounts, are set forth in Schedule 1.          5.12 Investment Property. All Investment Property is set forth and described inSchedule 1, and all financial institutions or financial intermediaries holding or inpossession of such Investment Property are set forth in Schedule 1.          5.13 Commercial Tort Claims. All of Guarantor’s Commercial Tort Claims that it hasbrought against any Person, including the name and address of each defendant, a summary of thefacts, and an estimate of such Guarantor’s damages, are set forth in Schedule 1.     6. Covenants. In addition to the covenants of Guarantor set forth in the Guarantywhich are incorporated herein by this reference, Guarantor agrees that from the Closing Date and
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thereafter until the payment, performance and satisfaction in full of the Guaranteed Obligations,and all of Bank’s and Lenders’ obligations under the Loan Agreement to Borrowers have beenterminated and no Letters of Credit are outstanding:          6.1 Defense of Collateral. Guarantor shall appear in and defend any action, suit orproceeding which may affect its title to or right or interest in, or Bank’s or Lenders’ right orinterest in, the Collateral.          6.2 Preservation of Collateral. Guarantor shall do and perform all commerciallyreasonable acts that may be necessary and appropriate to maintain, preserve and protect theCollateral.          6.3 Compliance with Laws, Etc. Guarantor shall comply with all laws, regulations andordinances, and all policies of insurance, relating to the possession, operation, maintenance andcontrol of the Collateral.          6.4 Location of Guarantor’s Books and Chief Executive Office. Guarantor shall: (i)keep all Guarantor’s Books at the locations set forth in Schedule 1; and (ii) maintain thelocation of Guarantor’s chief executive office or principal place of business at the location setforth in Schedule 1; provided, however, that Guarantor may amend Schedule 1 so longas (i) such amendment occurs by written notice to Bank not less than 30 days prior to the date onwhich the location of Guarantor’s Books or Guarantor’s chief executive office or principal place ofbusiness is changed, and (ii) at the time of such written notification, Guarantor executes anddelivers any financing statement amendments or fixture filing amendments necessary to perfect orcontinue perfected Bank’s security interests in the Collateral and also obtains for Bank such dulyexecuted Collateral Access Agreement as Bank shall require with respect to such new location.          6.5 Location of Collateral. Guarantor shall keep the Inventory and Equipment only atthe locations identified on Schedule 1; provided, however, that Guarantor may amendSchedule 1 so long as (i) such amendment occurs by written notice to Bank not less than 30 daysprior to the date on which the Inventory or Equipment is moved to such new location, (ii) such newlocation is within the continental United States, and (iii) at the time of such writtennotification, Guarantor executes and delivers any financing statements or fixture filings necessaryto perfect and continue perfected Bank’s security interests in such Assets and also obtains forBank such duly executed Collateral Access Agreement as Bank shall require with respect to such newlocation.          6.6 Change in Name, Trade Name, Trade Style or FEIN. Guarantor shall not change itsname, trade names, trade styles or FEIN, or add any new trade names or trade styles from thoselisted on Schedule 1; provided, however, that Guarantor may amend Schedule 1 solong as (i) such amendment occurs by written notice to Bank not less than 30 days prior to the dateon which such new name, trade name, trade style or FEIN becomes effective, and (ii) at the time ofsuch written notification, Guarantor executes and delivers any financing statement amendments orfixture filing amendments necessary to continue perfected Bank’s security interests in theCollateral.
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          6.7 Sate of Incorporation or Formation. Guarantor shall not change the state of itsincorporation or formation.          6.8 Maintenance of Records. Guarantor shall keep separate, accurate and completeGuarantor’s Books, disclosing Bank’s security interest hereunder.          6.9 Disposition of Collateral. Guarantor shall not surrender or lose possession of(other than to Bank), sell, lease, rent, or otherwise dispose of or transfer any of the Collateralor any right or interest therein other than the sale of Inventory in the ordinary course ofbusiness.          6.10 Liens. Guarantor shall keep the Collateral free of all Liens except PermittedLiens.          6.11 Leased Premises. At Bank’s request, Guarantor shall obtain from each Person fromwhom Guarantor leases any premises at which any Collateral is at any time present, such CollateralAccess Agreements as Bank may require.          6.12 Rights to Payment. Guarantor shall:               (a) perform and observe all terms and provisions of the Rights to Payment and all obligationsto be performed or observed by it in connection therewith and maintain the Rights to Payment infull force and effect;               (b) enforce all Rights to Payment strictly in accordance with their terms, and take all suchaction to such end as may be from time to time reasonably requested by Bank;               (c) if, to the knowledge of Guarantor, any dispute, setoff, claim, counterclaim or defenseshall exist or shall be asserted or threatened with respect to a Right to Payment (whether with oragainst Guarantor or otherwise), disclose such fact fully to Bank in Guarantor’s Books relating tosuch Account or other Right to Payment and in connection with any report furnished by Guarantor toBank relating to such Right to Payment;               (d) furnish to Bank such information and reports regarding the Rights to Payment as Bank mayrequest, and upon request of Bank make such demands and requests for information and reports asGuarantor is entitled to make in respect of the Rights to Payment; and               (e) upon the occurrence of any Event of Default, establish such lockbox or similararrangements for the payment of the Rights to Payment as Bank shall require.          6.13 Inventory. Guarantor shall:               (a) at such times as Bank shall request, prepare and deliver to Bank periodic reportspertaining to the Inventory, in form and substance satisfactory to Bank;               (b) upon the request of Bank, take a physical listing of the Inventory and promptly deliver acopy of such physical listing to Bank; *provided*that unless an Event of
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Default exists, Bank shallnot request such a physical listing of the Inventory more frequently than once per calendar year;               (c) not store any Inventory with a bailee, warehouseman or similar Person or on premisesleased to Guarantor without obtaining for Bank such Collateral Access Agreements as Bank shallrequire; and               (d) not dispose of any Inventory on a bill-and-hold, guaranteed sale, sale and return, sale onapproval, consignment or similar basis, nor acquire any Inventory from any Person on any suchbasis, without in each case giving Bank prior written notice thereof.          6.14 Equipment. Guarantor shall, upon Bank’s request, deliver to Bank a report ofeach item of Equipment, in form and substance satisfactory to Bank.          6.15 Intellectual Property Collateral. Guarantor shall:               (a) not enter into any agreement (including any license or royalty agreement) pertaining toany Intellectual Property Collateral without in each case giving Bank prior notice thereof;               (b) not allow or suffer any Intellectual Property Collateral to become abandoned, nor anyregistration thereof to be terminated, forfeited, expired or dedicated to the public;               (c) promptly give Bank notice of any rights Guarantor may obtain to any new patentableinventions, trademarks, servicemarks, copyrightable works or other new Intellectual PropertyCollateral, prior to the filing of any application for registration thereof; and               (d) diligently prosecute all applications for patents, copyrights and trademarks, and file andprosecute any and all continuations, continuations-in-part, applications for reissue, applicationsfor certificate of correction and like matters as shall be reasonable and appropriate in accordancewith prudent business practice, and promptly and timely pay any and all maintenance, license,registration and other fees, taxes and expenses incurred in connection with any IntellectualProperty Collateral.     7. Collection of Rights to Payment. Bank shall have the right at any time (i) tonotify the Account Debtors to make payments directly to Bank or a lockbox account as set forth inclause (iii) of this Section 7, (ii) to enforce the Guarantor’s rights against the Account Debtors,and (iii) to require that all payments made by Account Debtors be deposited directly into a lockboxaccount as Bank may specify, pursuant to a lockbox agreement in form and substance satisfactory toBank, with a lockbox servicing Bank acceptable to Bank.     8. Events of Default. The occurrence of any Event of Default under the Loan Agreementshall constitute an event of default (“Event of Default”) under this Security Agreement.
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     9. Rights and Remedies.          9.1 During the continuance of an Event of Default, Bank, without notice or demand, may do anyone or more of the following, all of which are authorized by Guarantor:               (a) Settle or adjust disputes and claims directly with Account Debtors for amounts and uponterms which Bank considers advisable, and in such cases, Bank will credit the Secured Obligationswith only the net amounts received by Bank in payment of suchdisputed Accounts after deducting all Bank Expenses incurred or expended in connectiontherewith;               (b) Cause Guarantor to hold all returned Inventory in trust for Bank segregate all returnedInventory from all other property of Guarantor or in Guarantor’s possession and conspicuously labelsaid returned Inventory as the property of Bank;               (c) Without notice to or demand upon Guarantor, Borrowers or any other guarantor, make suchpayments and do such acts as Bank considers necessary or reasonable to protect its securityinterests in the Collateral. Guarantor agrees to assemble the Collateral if Bank so requires, andto make the Collateral available to Bank as Bank may designate. Guarantor authorizes Bank to enterthe premises where the Collateral is located, to take and maintain possession of the Collateral, orany part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or Lien thatin Bank’s determination appears to conflict with its security interests and to pay all expensesincurred in connection therewith. With respect to any of Guarantor’s owned or leased premises,Guarantor hereby grants Bank a license to enter into possession of such premises and to occupy thesame, without charge, for up to 120 days in order to exercise any of Bank’s rights or remediesprovided herein, at law, in equity, or otherwise;               (d) Without notice to Guarantor (such notice being expressly waived), and without constitutinga retention of any collateral in satisfaction of an obligation (within the meaning of Section47-9505 of the Code), set off and apply to the Secured Obligations any and all (i) balances andDeposit Accounts of Guarantor held by Bank, or (ii) indebtedness at any time owing to or for thecredit or the account of Guarantor held by Bank;               (e) Hold, as cash collateral, any and all balances and Deposit Accounts of Guarantor held byBank, to secure the full and final repayment of all of the Secured Obligations;               (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise forsale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted alicense or other right to use, without charge, Guarantor’s labels, patents, copyrights, rights ofuse of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, orany property of a similar nature, as it pertains to the Collateral, in completing production of,advertising for sale, and selling any Collateral and Guarantor’s rights under all licenses and allfranchise agreements shall inure to Bank’s benefit;
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               (g) Sell the Collateral at either a public or private sale, or both, by way of one or morecontracts or transactions, for cash or on terms, in such manner and at such places (includingGuarantor’s premises) as Bank determines is commercially reasonable. Bank shall have no obligationto clean-up or otherwise prepare the Collateral for sale. It is not necessary that the Collateralbe present at any such sale;               (h) Bank shall give notice of the disposition of the Collateral as follows:               (i) Bank shall give Guarantor and each holder of a security interest in the Collateral who hasfiled with Bank a written request for notice, a notice in writing of the time and place of publicsale, or, if the sale is a private sale or some other disposition other than a public sale is to bemade of the Collateral, then the time on or after which the private sale or other disposition is tobe made;                    (i) The notice shall be personally delivered or mailed, postage prepaid, to Guarantor asprovided in Section 15 of the Guaranty, at least ten (10) days before the date fixed forthe sale, or at least ten (10) days before the date on or after which the private sale or otherdisposition is to be made; no notice needs to be given prior to the disposition of any portion ofthe Collateral that is perishable or threatens to decline speedily in value or that is of a typecustomarily sold on a recognized market. Notice to Persons other than Guarantor claiming aninterest in the Collateral shall be sent to such addresses as they have furnished to Bank;                    (ii) If the sale is to be a public sale, Bank also shall give notice of the time and place bypublishing a notice one time at least ten (10) days before the date of the sale in a newspaper ofgeneral circulation in the county in which the sale is to be held;                    (iii) Bank may credit bid and purchase at any public sale; and               (j) Any deficiency that exists after disposition of the Collateral as provided above will bepaid immediately by Guarantor. Any excess will be returned, without interest and subject to therights of third Persons, by Bank to Guarantor.          9.2 Bank shall have no obligation to attempt to satisfy the Secured Obligations by collectingthem from any third Person which may be liable for them or any portion thereof, and Bank mayrelease, modify or waive any collateral provided by any other Person as security for the SecuredObligations or any portion thereof, all without affecting Bank’s rights against Guarantor.Guarantor waives any right it may have to require Bank to pursue any third Person for any of theSecured Obligations.          9.3 Bank may comply with any applicable state or federal law requirements in connection with adisposition of the Collateral, and Bank’s compliance therewith will not be considered to adverselyaffect the commercial reasonableness of any sale of the Collateral.          9.4 Bank may sell the Collateral without giving any warranties as to the Collateral. Bank mayspecifically disclaim any warranties of title or the like. This procedure will
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not be consideredto adversely affect the commercial reasonableness of any sale of the Collateral.          9.5 If Bank sells any of the Collateral upon credit, Guarantor will be credited only withpayments actually made by the purchaser, received by Bank and applied to the indebtedness of thepurchaser. In the event that the purchaser fails to pay for the Collateral, Bank may resell theCollateral and Guarantor will be credited with the proceeds of such sale.          9.6 Bank shall be under no obligation to marshal any assets in favor of Guarantors, or againstor in payment of the Secured Obligations or any other obligation owed to Secured Party by Debtor orany other Person.          9.7 Upon the exercise by Bank of any power, right, privilege, or remedy pursuant to thisSecurity Agreement which requires any consent, approval, registration, qualification, orauthorization of any Governmental Authority, Guarantor agrees to execute and deliver, or will causethe execution and delivery of, all applications, certificates, instruments, assignments, and otherdocuments and papers that Bank or any purchaser of the Collateral may be required to obtain forsuch governmental consent, approval, registration, qualification, or authorization.          9.8 Guarantor and each Borrower each hereby irrevocably stipulate and agree that Bank has theright under this Security Agreement, upon the occurrence of an Event of Default, to seek theappointment of a receiver, trustee, or similar official over Guarantor to effect the transactionscontemplated by this Security Agreement, including without limitation, to seek from the appropriatelicensing authority an involuntary transfer of the Licenses (as defined in the Loan Agreement) inconnection with Bank’s foreclosure or enforcement proceedings, and that Bank is entitled to seeksuch relief. Guarantor and each Borrower each hereby irrevocably agree not to object to suchappointment on any grounds.          9.9 The rights and remedies of Bank under this Security Agreement, the Guaranty and the otherLoan Documents, and all other agreements contemplated hereby and thereby shall be cumulative. Bankshall have all other rights and remedies not inconsistent herewith as provided under the Code, bylaw, or in equity. No exercise by Bank of any one right or remedy shall be deemed an election ofremedies, and no waiver by Bank of any default on Guarantor’s part shall be deemed a continuingwaiver of any further defaults. No delay by Bank shall constitute a waiver, election oracquiescence with respect to any right or remedy.     10. Bank Not Liable. So long as Bank complies with the obligations, if any, imposedby the Code, Bank shall not otherwise be liable or responsible in any way or manner for: (a) thesafekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner orfashion or from any cause; (c) any diminution in the value thereof; or (d) any act or default ofany carrier, warehouseman, bailee, forwarding agency, or other person whomsoever, Guarantor bearsthe risk of loss or damage of the Collateral.     11. Indefeasible Payment. The Secured Obligations shall not be consideredindefeasibly paid for purposes of this Security Agreement unless and until all payments to Bank
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areno longer subject to any right on the part of any Person, including Guarantor, Guarantor as adebtor in possession, or any trustee (whether appointed under the Bankruptcy Code or otherwise) ofGuarantor or Guarantor’s Assets to invalidate or set aside such payments or to seek to recoup theamount of such payments or any portion thereof, or to declare same to be fraudulent orpreferential. In the event that, for any reason, any portion of such payments to Bank is set asideor restored, whether voluntarily or involuntarily, after the making thereof, then the obligationintended to be satisfied thereby shall be revived and continued in full force and effect as if saidpayment or payments had not been made.     12. Notices. All notices or demands by any party hereto to the other party andrelating to this Security Agreement shall be made in the manner and to the addresses set forth inSection 15 of the Guaranty.     13. General Provisions.          13.1 Successors and Assigns. This Security Agreement shall bind and inure to thebenefit of the respective successors and assigns of Guarantor and Bank; provided, however, thatGuarantor may not assign this Security Agreement nor delegate any of its duties hereunder withoutBank’s prior written consent and any prohibited assignment or delegation shall be absolutely void.No consent by Bank to an assignment by Guarantor shall release Guarantor from the SecuredObligations. Bank reserves its right to sell, assign, transfer, negotiate, or grant participationsin all or any part of, or any interest in, the rights and benefits hereunder pursuant to and inaccordance with the provisions of the Loan Agreement. In connection therewith, Bank may discloseall documents and information which Bank now or hereafter may have relating to Guarantor,Guarantor’s business, or the Collateral to any such prospective or actual Transferee, subject tothe terms of Section 10.5(e) of the Loan Agreement.          13.2 Exhibits and Schedules. All of the exhibits and schedules attached hereto shallbe deemed incorporated by reference.          13.3 No Presumption Against Any Party. Neither this Security Agreement nor anyuncertainty or ambiguity herein shall be construed or resolved against Bank, Lenders or Guarantor,whether under any rule of construction or otherwise. On the contrary, this Security Agreement hasbeen reviewed by each of the parties and their counsel and shall be construed and interpretedaccording to the ordinary meaning of the words used so as to accomplish fairly the purposes andintentions of all parties hereto.          13.4 Amendments and Waivers. Any provision of this Security Agreement, the Guarantyor any of the Loan Documents to which Guarantor is a party may be amended or waived if, but onlyif, such amendment or waiver is in writing and is signed by the party asserted to be bound thereby,and then such amendment or waiver shall be effective only in the specific instance and specificpurpose for which given.          13.5 Counterparts; Integration; Effectiveness. This Security Agreement may be signedin any number of counterparts, each of which shall be an original, with the same effect as if thesignatures thereto and hereto were upon the same instrument. This Security Agreement
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constitutesthe entire agreement and understanding among the parties hereto and supersedes any and all prioragreements and understandings, oral or written, relating to the subject matter hereof. ThisSecurity Agreement shall become effective when executed by each of the parties hereto and deliveredto Bank.          13.6 Severability. The provisions of this Security Agreement are severable. Theinvalidity, in whole or in part, of any provision of this Security Agreement shall not affect thevalidity or enforceability of any other of its provisions. If one or more provisions hereof shallbe declared invalid or unenforceable, the remaining provisions shall remain in full force andeffect and shall be construed in the broadest possible manner to effectuate the purposes hereof.     14. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.          (a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TOTHE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION,INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO ANDTHERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETOSHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THESTATE OF ARIZONA, WITHOUT REGARD FOR PRINCIPLES OF CONFLICTS OF LAWS.          (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THISAGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERALCOURTS LOCATED IN THE COUNTY OF MARICOPA, STATE OF ARIZONA, *PROVIDED, HOWEVER*, THAT ANY SUITSEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT BANK’S OPTION, INTHE COURTS OF ANY JURISDICTION WHERE BANK ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OROTHER PROPERTY MAY BE FOUND. EACH GUARANTOR AND BANK WAIVE, TO THE EXTENT PERMITTED UNDERAPPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF *FORUM NON CONVENIENS*OR TO OBJECTTO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS *SECTION 14*.          (c) EACH GUARANTOR AND BANK HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIMOR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS OR ANYOF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACHOF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH GUARANTOR AND BANK REPRESENTTHAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTSFOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
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LITIGATION, A COPY OF THIS AGREEMENTMAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.*[remainder of this page intentionally left blank]*
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     IN WITNESS WHEREOF, the parties have executed this Security Agreement as of the date first setforth above.       Guarantor: MATRIXX ORAL CARE, LLC           By:      Name:  William Hemelt    Title: Manager         Bank: COMERICA BANK           By:             Name: William J. Kirschner    Title: Vice President         Borrowers For Purposes ofSection 9.8 Only: MATRIXX INITIATIVES, INC.           By:             Name: William Hemelt    Title: Executive Vice President and CFO           ZICAM, LLC           By:             Name: William Hemelt    Title: Manager  Security Agreement (Guarantor)
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SCHEDULE 1   Section 5.1 Legal Name, State of Organization FEIN and Charter Identification Number   Section 5.1 Location of Chief Executive Office and Collateral   Section 5.2 Locations of Guarantor’s Books   Section 5.3 Trade Names or Trade Styles   Section 5.9 Intellectual Property   Section 5.10 Equipment Leases   Section 5.11 Deposit Accounts   Section 5.12 Investment Property   Section 5.13 Commercial Tort ClaimsSchedule 1