Document:

c51356_ex10-3.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

PLEDGE AND SECURITY AGREEMENT

          PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated November 15, 2007, made by and among
Fearless International, Inc. (the “Company”) and the holders of Company’s common stock signatory hereto (collectively, the “Pledgors”) in favor of Feldman Weinstein & Smith LLP (the “Agent”) and each of the holders of the Company’s Secured
Promissory Notes due, unless required earlier pursuant to the terms therein, March 15, 2008 (collectively, the “Pledgees”). 

W I T N E S S E T H:

          WHEREAS, Pledgees have agreed, severally and not jointly, to lend to the Company, and the Company has agreed to borrow from the Pledgees, up to an aggregate of
$600,000 pursuant to the terms and conditions set forth in Secured Promissory Notes of the Company (the “Notes”); 

          WHEREAS, pursuant to the provisions of the Notes, and as a condition to the obligation of the Pledgees to lend thereunder, the Pledgors, as principals, employees and
shareholders of the Company, have agreed to make the pledge contemplated by this Agreement in order to induce Pledgees to perform their obligations under the Notes; 

           WHEREAS, as a condition to the obligation of the Pledgees to lend pursuant to the Notes, the Company agrees to undertake such action
contemplated by this Agreement in order to induce Pledgees to perform their obligations under the Notes; 

          WHEREAS, Pledgors own the shares of common stock of the Company (the “Common Stock”), set forth
opposite the Pledgors’ names on Schedule A attached hereto; 

          WHEREAS, terms used but not otherwise defined in this Agreement that are defined in Article 9 of the Uniform Commercial Code in effect in the State of New York at that
time (whether or not the UCC applies to the affected Pledged Collateral) (the “UCC”) shall have the meanings ascribed to them in the UCC; and 

          NOW, THEREFORE, in consideration of the premises, covenants and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows: 

Pledge and Security Interest. Each Pledgor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Pledgees, and grants to the Pledgees a continuing first priority security
interest in, a first lien upon and a right of set-off against, all of its respective rights, titles and interests of whatsoever kind and nature in (the “Security Interest”), and to
secure the 

complete and timely payment, performance and discharge in
full, as the case may be, of all of the obligations pursuant to the Notes, the
following (collectively, the “Pledged Collateral”):
the shares of Common Stock owned by such Pledgor and set forth on Schedule
A attached hereto (the “Pledged
Shares”), and all dividends, cash, instruments
and other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Pledged Shares; and all proceeds
of any and all of the foregoing Pledged Collateral, in whatever form (including,
without limitation, proceeds that constitute property of the types described
above).

  Security for Obligations.
    This Agreement secures the payment and performance of the following obligations
    (collectively, the “Obligations”):
    all present and future indebtedness, obligations, covenants, duties and liabilities
    of any kind or nature of the Company to the Pledgees now existing or hereafter
    arising under or in connection with this Agreement or the Notes (collectively,
  the “Transaction Documents”). 

  Delivery of Pledged Collateral.
    On or before November 23, 2007, all certificates representing or evidencing
    the Pledged Shares, in suitable form for transfer by delivery, or accompanied
    by instruments of transfer or assignment duly executed in blank, are being
    deposited with and delivered to the Agent, as collateral agent for the Pledgees.
    The Agent shall have the right, at any time after the occurrence of an Event
    of Default (as hereinafter defined)(unless waived in writing by the Pledgees),
    without notice to the Pledgor, to transfer to or to register in the name
    of the Pledgees or their nominees any or all of the Pledged Collateral. In
    addition, the Agent shall have the right at any time after the occurrence
    of an Event of Default (unless waived in writing by the Pledgees), to exchange
    certificates or instruments representing or evidencing Pledged Collateral
  for certificates or instruments of smaller or larger denominations.

  Representations and Warranties.
        Each Pledgor, severally and not jointly with the other Pledgors, represents
        and warrants as follows: Such Pledgor is the legal, record and beneficial
    owner of the Pledged Collateral owned by such Pledgor, free and clear of any
    lien, security interest, restriction, option or other charge or encumbrance
    (collectively, “Liens”).
        The pledge of the Pledged Collateral and the grant of the Security Interest
        pursuant to this Agreement creates a valid and perfected first priority
    security interest in the Pledged Collateral, securing payment and performance
    of the Obligations. Except for the filing of financing statements pursuant
    to the UCC with the proper filing and recording agencies in the jurisdictions
    indicated on Schedule B,
    attached hereto, no consent of any other person or entity and no authorization,
    approval, or other action by, and no notice to or filing with, any governmental
    authority or regulatory body is required (i) for the pledge by the Pledgor
    of the Pledged Collateral pursuant to this Agreement or for the execution,
    delivery or performance of this Agreement by the Pledgor, (ii) for the perfection
    or maintenance of the security interest created hereby, or (iii) for the exercise
    by the Agent of the voting or other rights provided for in this Agreement or
    the remedies in respect of the Pledged Collateral pursuant to this Agreement
    (except as may be required in connection with any disposition of any portion
    of the Pledged Collateral by laws affecting the offering and sale of securities
    generally). There are no conditions precedent to the effectiveness of this
    Agreement that have not been satisfied or waived. Effective on the date of
    execution of this Agreement, such Pledgor hereby authorizes the Agent to file
    one or more financing statements under the UCC with respect to the Security
    Interest with 

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the proper filing and recording agencies in the jurisdictions
indicated on Schedule B attached
hereto, and in such other jurisdictions as may be requested by the Pledgees.
Such Pledgor will not transfer, pledge, hypothecate, sell or otherwise dispose
of any of the Pledged Collateral without the prior written consent of the Pledgees.
Such Pledgor shall promptly execute and deliver to the Pledgees such further
assignments, security agreements, financing statements or other instruments,
documents, certificates and assurances and take such further action as the Pledgees
may from time to time request and may in its sole discretion deem necessary to
perfect, protect or enforce its security interest in the Pledged Collateral.
All information heretofore, herein or hereafter supplied to the Pledgees by or
on behalf of such Pledgor with respect to the Pledged Collateral is accurate
and complete in all material respects as of the date furnished.

  Further Assurances. Each
  Pledgor, severally and not jointly with the other Pledgors, agrees that at any
  time and from time to time, at the expense of such Pledgor, the Pledgor shall
  promptly execute and deliver all further instruments and documents, and take
  all further action, that may be necessary or desirable, or that the Agent and/or
  the Pledgees may reasonably request, in order to perfect and protect any security
  interest granted or purported to be granted hereby or to enable the Agent and/or
  Pledgees to exercise and enforce their rights and remedies hereunder with respect
  to any Pledged Collateral. The Company agrees that at any time and from time
  to time, at the expense of the Company, the Company shall promptly execute and
  deliver all further instruments and documents, and take all further action, that
  may be necessary or desirable, or that the Pledgees may reasonably request. 

  Voting Rights; Dividends; Etc.

  So long as no Event of Default shall have occurred (unless such Event of Default is waived in  writing by the Pledgees):  Each Pledgor shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Pledged Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement; provided, however, that such Pledgor shall not exercise or refrain from exercising any such right if, in the reasonable judgment of such Pledgees, such action would have a material adverse effect on the Security Interest or the rights and remedies of the Pledgees hereunder; provided, further, that such Pledgor shall give the Pledgees at least ten (10) days’ prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right.  Each Pledgor shall be entitled to receive and retain any and all cash dividends and interest paid in respect of such Pledgor’s Pledged Collateral.  Upon and after the occurrence of any Event of Default (unless such Event of Default is waived in writing by the Pledgees):  All rights of each Pledgor to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) and to receive the dividends and interest payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall cease, and all such rights shall thereupon become vested in the Agent who shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights and to receive and hold as Pledged Collateral such dividends and interest payments.  

All dividends and interest payments which
    are received by the Pledgors contrary to the provisions of paragraph (i)
    of this Section 6(b) shall be received in trust for the benefit of the

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Pledgees, shall be segregated from other funds of the applicable
Pledgor and shall be forthwith paid over to the Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement). 

  Transfers and Other Liens; Additional Shares.
  During the term of this Agreement, the Pledgor agrees that it shall not (i) sell,
  assign (by operation of law or otherwise) or otherwise dispose of, or grant any
  option with respect to, any of the Pledged Collateral, or (ii) create or permit
  to exist any Lien upon or with respect to any of the Pledged Collateral, except
  for the security interest granted pursuant to this Agreement.

  Agent Appointed Attorney-in-Fact. 

     (a) Effective only upon an Event of Default
      (unless such Event of Default is waived in writing by the Pledgees), the
      Pledgors hereby appoints the Agent as the Pledgors’ attorney-in-fact, with full authority in the place and stead of, and  in the name of, the Pledgors or otherwise, from time to time in the Agent’s discretion to  take any action and to execute any instrument which the Agent may deem necessary or  desirable to accomplish the purposes of this Agreement, including, without limitation, to  receive, endorse and collect all instruments made payable to the Pledgors representing  any dividend, interest payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same.

      (b) Each Pledgor,
    severally and not jointly, authorizes the Agent, and do hereby make, constitute
    and appoint the Agent and its respective officers, agents, successors or
    assigns with full power of substitution, as the Pledgors’ true and lawful  attorney-in-fact, with power, in the name of the Pledgees or the Pledgors, to, after the  occurrence and during the continuance of an Event of Default, (i) endorse any checks,  drafts, money orders or other instruments of payment (including payments payable under  or in respect of any policy of insurance) in respect of the Pledged Collateral that may  come into possession of the Pledgees; (ii) to sign and endorse any financing statement  pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or  warehouse receipts, drafts against Pledgors, assignments, verifications and notices in  connection with accounts, and other documents relating to the Pledged Collateral; (iii) to  pay or discharge taxes, liens, security interests or other encumbrances at any time levied  or placed on or threatened against the Pledged Collateral; (iv) to demand, collect, receipt  for, compromise, settle and sue for monies due in respect of the Pledged Collateral; (v)  generally, to do, at the option of the Pledgees, and at the expense of the Pledgors,  severally and jointly, at any time, or from time to time, all acts and things which the  Pledgees deem necessary to protect, preserve and realize upon the Pledged Collateral and  the Security Interest granted herein in order to effect the intent of this Agreement all as  fully and effectually as the Pledgors might or could do; and (vi) in the event of the  bankruptcy of such Pledgor, to appoint a receiver or equivalent person to marshall such  Pledgor’s assets, and such Pledgor hereby ratifies all that said attorney shall lawfully do  or cause to be done by virtue hereof. This power of attorney is coupled with an interest  and shall be irrevocable for the term of this Agreement and thereafter as long as any of  the Obligations shall be outstanding.  

     (c) Each Pledgor
    hereby irrevocably appoints the Agent as such Pledgor’s  attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor, from time to time in the Agent’s
          discretion, to file in its sole discretion, 

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of one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of such Pledgor
where permitted by law.

  Pledgee May Perform. If any
  Pledgor fails to perform any agreement contained herein, the Agent and/or Pledgees
  may itself perform, or cause performance of, such agreement, and the expenses
  of the Agent and/or Pledgees incurred in connection therewith shall be payable
  by such Pledgor under Section 14 hereof. 

  The Agent’s Duties. The duties and rights of the Agent are as set forth on Annex A attached  hereto and incorporated herein by reference. Any fees of the Agent for its services hereunder  shall be paid by the Company. The powers conferred on the Agent hereunder are solely to  protect the interests of the Pledgee in the Pledged Collateral and shall not impose any duty upon  the Agent to exercise any such powers. Except for the safe custody of any Pledged Collateral in  its possession and the accounting for moneys actually received it hereunder, neither the Agent  nor Pledgee shall have any duty as to any Pledged Collateral, as to ascertaining or taking action  with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any  Pledged Collateral, whether or not such party has or is to have knowledge of such matters, or as  to the taking of any necessary steps to preserve rights against any parties or any other rights  pertaining to any Pledged Collateral. The Agent and Pledgee shall be deemed to have exercised  reasonable care in the custody and preservation of any Pledged Collateral in its possession if  such Pledged Collateral is accorded treatment substantially equal to that which such party  accords its own property. 

  Event of Default. The occurrence of any of the following events shall constitute an event of  default under this Agreement (each, an “Event of Default”):  The failure of any Pledgor to observe, perform or comply with any act, duty, covenant,  agreement or obligation under this Agreement, which is not cured within ten business days  following written notice by Agent to such Pledgor;  If any of the representation or warranty of any Pledgor set forth in this Agreement shall be  breached or shall be untrue or incorrect in any material respect, and is not cured within ten  business days following written notice by Agent to such Pledgor; The filing of any financing statement with regard to any of the Pledged Collateral other than  pursuant to this Agreement, or the attachment of any additional Lien to any portion of the  Pledged Collateral in favor of any Person other than the Pledgees; or  If any event of default (and expiration of any cure period) shall occur (unless such event of  default is waived in writing by the Pledgees) under any of the other Transaction Documents. 

  Cross-Default; Cross-Collateralization. The Pledgors acknowledges and agrees that any default  under the terms of this Agreement shall constitute a default by the Company under the Notes, and that any event of default (following expiration of any applicable cure period) under the Notes shall constitute a default under this Agreement. 

Remedies upon Event of Default. Upon and after the occurrence of any Event of Default: The Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to the Agent (including, without limitation, the vesting in the Agent pursuant to Section 6(b)(i) of the sole right to exercise voting rights pertaining to the Pledged Collateral, including, without limitation,
voting rights with respect to the sale of assets of the issuer of such Pledged Collateral), all the rights and remedies of a secured party on default under the UCC, and may also, without notice except as specified below

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and subject to the applicable securities laws, sell the Pledged
Collateral or any part thereof at public or private sale, at any exchange, broker’s
board or at any of the Agent’s offices or  elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Agent may deem commercially
reasonable. Each Pledgor agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days’ notice to such Pledgor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Agent shall not be obligated to make
any sale of Pledged Collateral regardless of notice of sale having been given.
The Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Pledgor acknowledges
and agrees that the Pledged Collateral consisting of the Pledged Shares, and/or
any other shares of common stock of the Company, is of a type customarily sold
on a recognized market, and accordingly that no notice of the sale thereof need
be given. In addition, Agent may transfer all of the Pledged Collateral to Pledgees,
who may hold all of such Pledged Collateral as payment in full of the Obligations

Any cash held by the Agent or the Pledgees
    as Pledged Collateral and all cash proceeds received by the Agent or the
    Pledgees in respect of any sale of, collection from, or other realization
    upon all or any part of the Pledged Collateral may, in the discretion of
    the Agent or the Pledgees, be held as collateral for, and/or then or at any
    time thereafter be applied (after payment of any amounts payable pursuant
    to Section 14) in whole or in part against, all or any part of the Obligations.
  Any surplus of such cash or cash proceeds held by the Agent or the Pledgees
    and remaining after payment in full of all the Obligations shall be paid
    over to the Pledgors, pro-rata, or to whomsoever may be lawfully entitled
    to receive such surplus.

  Expenses. The Pledgors
  and the Company, severally and jointly, shall upon demand pay to the Agent
  and/or the Pledgees the amount of any and all reasonable expenses, including
  reasonable attorneys’ fees and expenses and the reasonable fees and expenses
  of any experts and agents, which the Agent and/or Pledgees may incur in connection
  with (a) the administration of this Agreement, (b) the custody or preservation
  of, or the sale of, collection from, or other realization upon, any of the
  Pledged Collateral, (c) the exercise or enforcement of any of the rights of
  the Agent and/or Pledgees hereunder or (d) the failure by any Pledgor to perform
  or observe any of the provisions hereof.

  Continuing Security Interest; Termination.
    This Agreement shall create a continuing security interest in the Pledged Collateral
    and shall remain in full force and effect until the indefeasible payment in
    full of the Obligations. Upon the indefeasible payment in full of the Obligations,
    the security interest granted hereby shall terminate and all rights to the
    Pledged Collateral shall revert to the Pledgors. Upon any such termination,
    the Agent shall, at such Pledgors’ expense,  return, pro-rata, to the
    Pledgors such of the Pledged Collateral as shall not have been sold or otherwise
    applied pursuant to the terms hereof and execute and deliver to such Pledgors
    such documents as such Pledgors shall reasonably request to evidence such termination. 

  Governing Law; Terms. For the convenience of the Agent, this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to  principles of conflict of laws. Each Pledgor agrees to submit to the in personam jurisdiction of
       the state and federal courts situated within the City of New York, State of New York with regard  to any controversy arising out of or relating to this Agreement. Unless otherwise defined herein,  terms defined in Article 9 of the UCC are used herein as therein defined. 

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Notice. All notices and other communications hereunder shall be in writing and shall be deemed  to have been received when delivered personally (which shall include, without limitation, via  express overnight courier) or if mailed, three (3) business days after having been mailed by  registered or certified mail, return receipt requested, postage prepaid, to the addresses of the  parties as set forth on the signature pages attached hereto. 

Waivers. 

  Waivers. Each Pledgor waives
    any right to require the Pledgees to (i) proceed against any person, (ii) proceed
    against any other collateral under any other agreement, (iii) pursue any other
    remedy, or (iv) make presentment, demand, dishonor, notice of dishonor, acceleration
    and/or notice of non-payment. 

  Waiver of Defense.
    No course of dealing between the Pledgors and the Pledgees, nor any failure
    to exercise nor any delay in exercising on the part of the Agent or Pledgees,
    any right, power, or privilege under this Agreement or under any of the other
    Transaction Documents shall operate as a waiver. No single or partial exercise
    of any right, power, or privilege under this Agreement or under any of the
    other Transaction Documents shall preclude any other or further exercise
    of such right, power, or privilege or the exercise of any other right, power,
  or privilege.

  Rights Are Cumulative.
    All rights and remedies of the Agent and the Pledgees with respect to the Pledged
    Collateral, whether established by this Agreement, the other Transaction Documents
    or by law, shall be cumulative and may be exercised concurrently or in any
  order. 

  Indemnity.
    Each Pledgor, jointly and severally, agrees to indemnify and hold harmless
    the Agent, the Pledgees and their respective heirs, successors and assigns
    against and from all liabilities, losses and costs (including, without limitation,
    reasonable attorneys’ fees) arising out  of or relating to the taking
    or the failure to take action in respect of any transaction effected under
    this Agreement or in connection with the lien provided for herein, including,
    without limitation, any and all excise, sales or other taxes which may be
    payable or determined to be payable with respect to any of the Pledged Collateral,
    except to the extent resulting from their gross negligence or intentional
    misconduct. The liabilities of the Pledgors under this Section 20 shall survive
  the termination of this Agreement. 

  Severability. The provisions
    of this Agreement are severable. If any provision of this Agreement is held
    invalid or unenforceable in whole or in part in any jurisdiction, then such
    invalidity or unenforceability shall affect only such provision, or part thereof,
    in such jurisdiction, and shall not in any manner affect such provision or
    part thereof in any other jurisdiction, or any other provision of this Agreement
  in any jurisdiction.  

  Counterparts.
    This Agreement may be executed in several counterparts, each of which shall
    be considered an original, but all of which together shall constitute one
  and the same instrument. 

  Amendments; Entire Agreement.
    This Agreement is subject to modification only by a writing signed by the parties.
    To the extent any provision of this Agreement conflicts with any provision
    of the Notes, the provision giving Pledgees greater rights or remedies shall
    govern, it being understood that the purpose of this Agreement is to add to,
    and not detract from, the rights granted to Pledgees under the Notes. This
    Agreement and the other Transaction Documents constitute the entire agreement
  of the parties with respect to the subject matter of this Agreement.

  Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the  parties hereto and their respective heirs, executors, legal representatives, successors and assigns; 

  provided, however, that no Pledgor may, without the prior written consent of the Pledgees,  assign or delegate any rights, powers, duties or obligations hereunder, and any such purported  assignment or delegation without such consent shall be null and void. 

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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

8

           IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written. 

	 	 	PLEDGORS:
	 	 	 
	 

		 
		 

	
	 

		 
		
Jeffrey Binder
	
	
Address for Notice:
		 
		 

	
	 	 	 
	 	 	 
	 	 	 
	 

		 
		
THE COMPANY:
	
	 	 	 
	 

		 
		
FEARLESS INTERNATIONAL, INC.
	
	 	 	 
	 	 	 
	 

		 
		
By:
		 
	 

		 
		
Name:
	
	 

		 
		
Title:
	

AGENT:

FELDMAN WEINSTEIN & SMITH LLP

 

	
By:  
		 
	 
	
Name:
	
	 
	
Title:
	

 

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Address for Notice:

Robert Charron

Feldman Weinstein & Smith LLP  

The Graybar Building  

420 Lexington Avenue  

New York, New York 10170-0002 

Direct: (212) 931-8704 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 

SIGNATURE PAGE FOR PLEDGEES FOLLOWS] 

 

 

 

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[PLEDGEE SIGNATURE PAGES TO FRLE PLEDGE AND SECURITY AGREEMENT]

Name of Pledgee: _________________________________

Signature of Authorized Signatory of Pledgee: ____________________________

 Name of Authorized Signatory: ________________________________

 Title of Authorized Signatory:
_______________________________

 E-mail Address of Authorized Signatory:
  _______________________

 

 

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SCHEDULE A 

Pledged Shares 

___________ shares of Fearless International, Inc. certificated
as follows: 

	
Pledgor:
		 
		
Number of Shares:
		 
		
Certificate Number:
	
	 

		 
		
Jeffrey Binder
		 
		 

	

 

 

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SCHEDULE B

 

 

 

 

 

 

13c51356_ex10-4.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

SUBSIDIARY GUARANTEE

     SUBSIDIARY GUARANTEE, dated as of November 15, 2007 (this “Guarantee”), made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the “Guarantors”), in favor of the Secured Parties signatory (the “Secured
Parties”) to that certain Loan and Security Agreement, dated as of the date hereof, between Fearless International, Inc. (the “Company”), the
Guarantors and the Secured Parties.

W I T N E S S E T H:

     WHEREAS, pursuant to that certain Loan and Security Agreement, dated as of the date hereof, by and between the Company and the Secured Parties (the “Security
Agreement”), the Company has agreed to sell and issue to the Secured Parties, and the Secured Parties have agreed to purchase from the Company the Company’s Secured Promissory Notes, due March 15, 2008 or such
earlier date as required therein (the “Notes”), subject to the terms and conditions set forth therein; and 

      WHEREAS, each Guarantor will directly benefit from the extension of credit to the Company represented by the issuance of the Notes; and

      NOW, THEREFORE, in consideration of the premises and to induce the Secured Parties to enter into the Security Agreement and to carry out the transactions contemplated thereby, each Guarantor hereby agrees with the Secured Parties
as follows: 

     1.      Definitions. Unless otherwise defined herein, terms defined in the Security Agreement and used herein shall
have the meanings given to them in the Security Agreement. The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural
forms of such terms.  The following terms shall have the following meanings: 

     “Guarantee” means
this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise
modified from time to time. 

      “Obligations” means,
  in addition to all other costs and expenses of collection incurred by Secured
  Parties in enforcing any of such  Obligations and/or this Guarantee, all of the
  liabilities and obligations (primary, secondary, direct, contingent, sole, joint
  or several) due or to become due, or that are now or may be hereafter contracted
  or acquired, or owing to, of any Debtor  to the Secured Parties, including, without
  limitation, all obligations under this Agreement, the Notes, this Guarantee and
  any other instruments, agreements or other documents executed and/or delivered
  in connection herewith or therewith, in each  case,

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whether now or hereafter existing, voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or  extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from any of the
Secured  Parties as a preference, fraudulent transfer or otherwise as such obligations
may be amended, supplemented, converted, extended or modified from time to time.
Without limiting the generality of the foregoing, the term “Obligations” shall
 include, without limitation: (i) principal of, and interest on the Notes and
the loans extended pursuant thereto; (ii) any and all other fees, indemnities,
costs, obligations and liabilities of the Debtors from time to time under or
in connection  with this Agreement, the Notes, the Guarantee and any other instruments,
agreements or other documents executed and/or delivered in connection herewith
or therewith; and (iii) all amounts (including but not limited to post-petition
interest) in  respect of the foregoing that would be payable but for the fact
that the obligations to pay such amounts are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
any Debtor.

     2.      Guarantee. 

     (a)      Guarantee. 

     (i)      The
    Guarantors hereby, jointly and severally, unconditionally and irrevocably,
    guarantee to the Secured Parties and their respective  successors, indorsees,
    transferees and assigns, the prompt and complete payment and performance
    by the Company when due (whether at the stated maturity, by acceleration
    or otherwise) of the Obligations.

     (ii)      Anything
    herein or in any other Transaction Document to the contrary notwithstanding,
    the maximum liability of each Guarantor hereunder  and under the other Transaction
    Documents shall in no event exceed the amount which can be guaranteed by
    such Guarantor under applicable federal and state laws, including laws relating
    to the insolvency of debtors, fraudulent conveyance or transfer  or laws
    affecting the rights of creditors generally (after giving effect to the right
    of contribution established in Section 2(b)).

     (iii)      Each
    Guarantor agrees that the Obligations may at any time and from time to time
    exceed the amount of the liability of such Guarantor  hereunder without impairing
    the guarantee contained in this Section 2 or affecting the rights and remedies
of the Secured Parties hereunder. 

     (iv)      The
    guarantee contained in this Section 2 shall remain in full force and effect
    until all the Obligations and the obligations of each

2

Guarantor under the guarantee contained in this Section 2
shall have been satisfied by payment in full.

     (v)      No
  payment made by the Company, any of the Guarantors, any other guarantor or
    any other Person or received or collected by the Secured Parties from the
    Company, any of the Guarantors, any other guarantor or any other Person by
    virtue of any action or proceeding or any set-off or appropriation or application
    at any time or from time to time in reduction of or in payment of the Obligations
    shall be deemed to modify, reduce, release or otherwise affect the liability
    of any Guarantor hereunder which shall, notwithstanding any such payment
    (other than any payment made by such Guarantor in respect of the Obligations
    or any payment received or collected from such Guarantor in respect of the
    Obligations), remain liable for the Obligations up to the maximum liability
of such Guarantor hereunder until the Obligations are paid in full. 

     (vi)      Notwithstanding
    anything to the contrary in this Agreement, with respect to any defaulted
    non-monetary Obligations the specific  performance of which by the Guarantors
    is not reasonably possible (e.g. the issuance of the Company’s Common
    Stock), the Guarantors shall only be liable for making the Secured Parties
    whole on a monetary basis for the Company’s failure to
perform such Obligations in accordance with the Transaction Documents.

     (b)      Right
  of Contribution. Each Guarantor hereby agrees
  that to the extent that a Guarantor shall have paid more than its proportionate
  share of any payment made hereunder, such Guarantor shall be entitled to seek
  and receive contribution from and against any other Guarantor hereunder which
  has not paid its proportionate share of such payment. Each Guarantor’s
  right of contribution shall be subject to the terms and conditions of Section
  2(c). The provisions of this Section 2(b) shall in no respect limit the obligations
  and liabilities of any Guarantor to the Secured Parties, and each Guarantor
  shall remain liable to the Secured Parties for the full amount guaranteed by
  such Guarantor hereunder. 

     (c)      No
  Subrogation.  Notwithstanding any payment made
  by any Guarantor hereunder or any set-off or application  of funds of any Guarantor
  by the Secured Parties, no Guarantor shall be entitled to be subrogated to
  any of the rights of the Secured Parties against the Company or any other Guarantor
  or any collateral security or guarantee or right of offset held  by the Secured
  Parties for the payment of the Obligations, nor shall any Guarantor seek or
  be entitled to seek any contribution or reimbursement from the Company or any
  other Guarantor in respect of payments made by such Guarantor hereunder, until
   all amounts owing to the Secured Parties by the Company on account of the
  Obligations are paid in full. If any amount shall be paid to any Guarantor
  on account of such subrogation rights at any time when all of the Obligations
  shall not have been  paid in full, such amount shall be held by such Guarantor
  in trust for the Secured Parties,

3

segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Secured Parties
in the exact form received by such Guarantor (duly indorsed by such Guarantor
to the Secured  Parties, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Secured Parties may determine. 

     (d)      Amendments,
  Etc. With Respect to the Obligations. Each Guarantor
  shall remain obligated hereunder  notwithstanding that, without any reservation
  of rights against any Guarantor and without notice to or further assent by
  any Guarantor, any demand for payment of any of the Obligations made by the
  Secured Parties may be rescinded by the Secured Parties and any of the Obligations
  continued, and the Obligations, or the liability of any other Person upon or
  for any part thereof, or any collateral security or guarantee therefor or right
  of offset with respect thereto, may, from time to time, in whole or in part,
  be renewed, extended, amended, modified, accelerated, compromised, waived,
  surrendered or released by the Secured Parties, and the Security Agreement
  and the other Transaction Documents and any other documents executed and delivered
  in connection therewith may be amended, modified, supplemented or terminated,
  in whole or in part, as the Secured Parties may deem advisable from time to
  time, and any collateral security, guarantee or right of offset at any time
  held by the Secured Parties for the payment of the Obligations may be sold,
  exchanged, waived, surrendered or released. The Secured Parties shall have
  no obligation to protect, secure, perfect or insure any Lien at any time held
  by them as security for the Obligations or for the guarantee contained in this
  Section 2 or any property subject thereto.

     (e)      Guarantee
  Absolute and Unconditional. Each Guarantor waives
  any and all notice of the creation, renewal,  extension or accrual of any of
  the Obligations and notice of or proof of reliance by the Secured Parties upon
  the guarantee contained in this Section 2 or acceptance of the guarantee contained
  in this Section 2; the Obligations, and any of them,  shall conclusively be
  deemed to have been created, contracted or incurred, or renewed, extended,
  amended or waived, in reliance upon the guarantee contained in this Section
  2; and all dealings between the Company and any of the Guarantors, on the
  one hand, and the Secured Parties, on the other hand, likewise shall be conclusively
  presumed to have been had or consummated in reliance upon the guarantee contained
  in this Section 2. Each Guarantor waives to the extent permitted by law diligence,
   presentment, protest, demand for payment and notice of default or nonpayment
  to or upon the Company or any of the Guarantors with respect to the Obligations.
  Each Guarantor understands and agrees that the guarantee contained in this
  Section 2 shall  be construed as a continuing, absolute and unconditional guarantee
  of payment without regard to (a) the validity or enforceability of the Security
  Agreement or any other Transaction Document, any of the Obligations or any
  other collateral security  therefor or guarantee or right of offset with respect
  thereto at any time or from time to time held by the Secured Parties, (b) any
  defense, set-off or counterclaim (other than a defense of payment or performance

4

or fraud or misconduct by Secured Parties) which may at any
time be available to or be asserted by the Company or any other Person against
the Secured Parties, or (c) any other circumstance whatsoever (with or without
notice to or  knowledge of the Company or such Guarantor) which constitutes,
or might be construed to constitute, an equitable or legal discharge of the Company
for the Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in  bankruptcy or in any other instance. When making any demand hereunder
or otherwise pursuing its rights and remedies hereunder against any Guarantor,
the Secured Parties may, but shall be under no obligation to, make a similar
demand on or otherwise  pursue such rights and remedies as they may have against
the Company, any other Guarantor or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the  Secured Parties to make any such demand, to
pursue such other rights or remedies or to collect any payments from the Company,
any other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any  such right of offset, or any release
of the Company, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not  impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Secured Parties against any Guarantor. For the purposes hereof, “demand” shall
include the commencement and continuance of any legal  proceedings. 

     (f)      Reinstatement.
  The guarantee contained in this Section 2 shall continue to be effective, or
  be reinstated,  as the case may be, if at any time payment, or any part thereof,
  of any of the Obligations is rescinded or must otherwise be restored or returned
  by the Secured Parties upon the insolvency, bankruptcy, dissolution, liquidation
  or reorganization of  the Company or any Guarantor, or upon or as a result
    of the appointment of a receiver, intervenor or conservator of, or trustee
    or similar officer for, the Company or any Guarantor or any substantial part
    of its property, or otherwise, all as though such payments had not been made. 

     (g)      Payments.
    Each Guarantor hereby guarantees that payments hereunder will be paid to
    the Secured Parties  without set-off or counterclaim in U.S. dollars at the
    address set forth or referred to in the Security Agreement. 

     3.      Representations and Warranties. Each Guarantor hereby makes the following representations and warranties to
Secured Parties as of the date hereof: 

     (a)      Organization and Qualification. The Guarantor is a corporation, duly incorporated, validly existing and in
good standing under the laws of the applicable jurisdiction set forth on Schedule 1, with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Guarantor has no
subsidiaries other than those identified as such on the Disclosure Schedules to the Security Agreement. The

5

Guarantor is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary,
except  where the failure to be so qualified or in good standing, as the case
may be, could not, individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of any of this Guaranty in any material
respect, (y) have a  material adverse effect on the results of operations, assets,
prospects, or financial condition of the Guarantor or (z) adversely impair in
any material respect the Guarantor’s ability to perform fully on a timely
basis its obligations under  this Guaranty (a “Material
Adverse Effect”). 

     (b)      Authorization;
  Enforcement.  The Guarantor has the requisite
  corporate power and authority to enter into and to consummate the transactions
  contemplated by this Guaranty, and otherwise to carry out its obligations hereunder.
  The execution and delivery of this Guaranty by the Guarantor and the consummation
  by it of the transactions contemplated hereby have been duly authorized by
  all requisite corporate action on the part of the Guarantor. This Guaranty
  has been duly executed and delivered by the Guarantor and constitutes the valid
  and binding obligation of the Guarantor enforceable against the Guarantor in
  accordance with its terms, except as such enforceability may be limited by
  applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
  or similar laws relating to, or affecting generally the enforcement of, creditors’ rights
  and remedies or by other equitable principles of general application. 

     (c)      No
  Conflicts. The execution, delivery and performance
  of this Guaranty by the Guarantor and the  consummation by the Guarantor of
  the transactions contemplated thereby do not and will not (i) conflict with
  or violate any provision of its Certificate of Incorporation or By-laws or
  (ii) conflict with, constitute a default (or an event which with  notice or
  lapse of time or both would become a default) under, or give to others any
  rights of termination, amendment, acceleration or cancellation of, any agreement,
  indenture or instrument to which the Guarantor is a party, or (iii) result
  in a  violation of any law, rule, regulation, order, judgment, injunction,
  decree or other restriction of any court or governmental authority to which
  the Guarantor is subject (including Federal and state securities laws and regulations),
  or by which any  material property or asset of the Guarantor is bound or affected,
  except in the case of each of clauses (ii) and (iii), such conflicts, defaults,
  terminations, amendments, accelerations, cancellations and violations as could
  not, individually or in  the aggregate, have or result in a Material Adverse
  Effect. The business of the Guarantor is not being conducted in violation of
  any law, ordinance or regulation of any governmental authority, except for
  violations which, individually or in the  aggregate, do not have a Material
  Adverse Effect. 

     (d)      Consents
  and Approvals. The Guarantor is not required
  to obtain any consent, waiver, authorization or  order of, or make any filing
  or registration

6

with, any court or other federal, state, local, foreign or
other governmental authority or other person in connection with the execution,
delivery and performance by the Guarantor of this Guaranty. 

     (e)      Security
  Agreement. The representations and warranties
  of the Company set forth in the Security Agreement as they relate to such Guarantor,
  each of which is hereby incorporated herein by reference, are true and correct
  as of each time such representations are deemed to be made pursuant to such
  Security Agreement, and the Secured Parties shall be entitled to rely on each
  of them as if they were fully set forth herein, provided that each reference
  in each such representation and warranty to the Company’s knowledge shall,
  for the purposes of this Section 3, be deemed to be a reference to such Guarantor’s
  knowledge.

     (f)      Foreign
  Law.  Each Guarantor has consulted with appropriate
  foreign legal counsel with respect to any of  the above representations for
  which non-U.S. law is applicable. Such foreign counsel have advised each applicable
  Guarantor that such counsel knows of no reason why any of the above representations
  would not be true and accurate. Such foreign  counsel were provided with copies
  of this Subsidiary Guarantee and the Transaction Documents prior to rendering
  their advice.

     4.      Covenants.

     (a)      Each
Guarantor covenants and agrees with the Secured Parties that, from and after
the date of this Guarantee until the Obligations shall  have been paid in full,
such Guarantor shall take, and/or shall refrain from taking, as the case may
be, each commercially reasonable action that is necessary to be taken or not
taken, as the case may be, so that no Event of Default is caused by the  failure
to take such action or to refrain from taking such action by such Guarantor.

     (b)      Each
Guarantor will not directly or indirectly on or after the date of this Guarantee: 

     i.      enter
  into, create, incur, assume or suffer to exist any indebtedness for borrowed
  money of any kind, including but not limited to, a  guarantee, on or with respect
  to any of its property or assets now owned or hereafter acquired or any interest
  therein or any income or profits therefrom; 

     ii.      enter
  into, create, incur, assume or suffer to exist any liens of any kind, on or
  with respect to any of its property or assets now owned or hereafter acquired
  or any interest therein or any income or profits therefrom; 

7

     iii.      amend
its certificate of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder hereunder; 

      iv.      repay,
  repurchase or offer to repay, repurchase or otherwise acquire more than a de
  minimis number of shares of its securities or debt  obligations;

     v.      pay
  cash dividends on any equity securities of the Company; 

     vi.      enter
  into any transaction with any Affiliate of the Guarantor which would be required
  to be disclosed in any public filing of the Company  with the Commission, unless
  such transaction is made on an arm’s-length basis and expressly approved
  by a majority of the disinterested directors of the Company (even if less than
  a quorum otherwise required for board approval); or 

     vii.      enter
  into any agreement with respect to any of the foregoing. 

     5.      Miscellaneous. 

     (a)      Amendments
in Writing. None of the terms or provisions of
this Guarantee may be waived, amended,  supplemented or otherwise modified except
in writing by the Secured Parties. 

     (b)      Notices.
  All notices, requests and demands to or upon the Secured Parties or any Guarantor
  hereunder shall  be effected in the manner provided for in the Security Agreement. 

     (c)      No
  Waiver By Course Of Conduct; Cumulative Remedies.
  The Secured Parties shall not by any act (except by a  written instrument pursuant
  to Section 5(a)), delay, indulgence, omission or otherwise be deemed to have
  waived any right or remedy hereunder or to have acquiesced in any default under
  the Transaction Documents or Event of Default. No failure to  exercise, nor
  any delay in exercising, on the part of the Secured Parties, any right, power
  or privilege hereunder shall operate as a waiver thereof. No single or partial
  exercise of any right, power or privilege hereunder shall preclude any other
   or further exercise thereof or the exercise of any other right, power or privilege.
  A waiver by the Secured Parties of any right or remedy hereunder on any one
  occasion shall not be construed as a bar to any right or remedy which the Secured
  Parties  would otherwise have on any future occasion. The rights and remedies
  herein provided are cumulative, may be exercised singly or concurrently and
  are not exclusive of any other rights or remedies provided by law. 

8

     (d)      Enforcement
Expenses; Indemnification. 

     (i)      Each
  Guarantor agrees to pay, or reimburse the Secured Parties for, all its costs
  and expenses incurred in collecting against such  Guarantor under the guarantee
  contained in Section 2 or otherwise enforcing or preserving any rights under
  this Guarantee and the other Transaction Documents to which such Guarantor
    is a party, including, without limitation, the reasonable fees and disbursements
  of counsel to the Secured Parties. 

     (ii)      Each
  Guarantor agrees to pay, and to save the Secured Parties harmless from, any
  and all liabilities with respect to, or resulting from  any delay in paying,
  any and all stamp, excise, sales or other taxes which may be payable or determined
  to be payable in connection with any of the transactions contemplated by this
  Guarantee. 

     (iii)      Each
  Guarantor agrees to pay, and to save the Secured Parties harmless from, any
  and all liabilities, obligations, losses, damages,  penalties, actions, judgments,
  suits, costs, expenses or disbursements of any kind or nature whatsoever with
  respect to the execution, delivery, enforcement, performance and administration
  of this Guarantee to the extent the Company would be  required to do so pursuant
  to the Security Agreement. 

     (iv)      The
  agreements in this Section shall survive repayment of the Obligations and all
  other amounts payable under the Security Agreement and  the other Transaction
  Documents.

     (e)      Successor
  and Assigns. This Guarantee shall be binding
  upon the successors and assigns of each Guarantor  and shall inure to the benefit
  of the Secured Parties and their respective successors and assigns; provided
  that no Guarantor may assign, transfer or delegate any of its rights or obligations
  under this Guarantee without the prior written consent of  the Secured Parties. 

     (f)      Set-Off.
  Each Guarantor hereby irrevocably authorizes the Secured Parties at any time
  and from time to  time while an Event of Default under any of the Transaction
  Documents shall have occurred and be continuing, without notice to such Guarantor
  or any other Guarantor, any such notice being expressly waived by each Guarantor,
  to set-off and  appropriate and apply any and all deposits, credits, indebtedness
  or claims, in any currency, in each case whether direct or indirect, absolute
  or contingent, matured or unmatured, at any time held or owing by the Secured
  Parties to or for the  credit or the account of such Guarantor, or any part
  thereof in such amounts as the Secured Parties may elect, against and on account
  of the obligations and liabilities of such Guarantor to the Secured Parties
  hereunder and claims of every nature  and description of the Secured Parties
  against such Guarantor, in any currency, whether arising hereunder, under the

9

Security Agreement, any other Transaction Document or otherwise,
as the Secured Parties may elect, whether or not the Secured Parties have made
any demand for payment and although such obligations, liabilities and claims
may be  contingent or unmatured. The Secured Parties shall notify such Guarantor
promptly of any such set-off and the application made by the Secured Parties
of the proceeds thereof, provided that the failure to give such notice shall
not affect the  validity of such set-off and application. The rights of the Secured
Parties under this Section are in addition to other rights and remedies(including,
without limitation, other rights of set-off) which the Secured Parties may have. 

     (g)      Counterparts.
  This Guarantee may be executed by one or more of the parties to this Guarantee
  on any number  of separate counterparts (including by telecopy), and all of
    said counterparts taken together shall be deemed to constitute one and the
    same instrument.

     (h)      Severability.
    Any provision of this Guarantee which is prohibited or unenforceable in any
    jurisdiction  shall, as to such jurisdiction, be ineffective to the extent
    of such prohibition or unenforceability without invalidating the remaining
    provisions hereof, and any such prohibition or unenforceability in any jurisdiction
    shall not invalidate or  render unenforceable such provision in any other
    jurisdiction.

     (i)      Section
    Headings. The Section headings used in this
    Guarantee are for convenience of reference only and  are not to affect the
    construction hereof or be taken into consideration in the interpretation
    hereof. 

     (j)      Integration.
    This Guarantee and the other Transaction Documents represent the agreement
    of the Guarantors  and the Secured Parties with respect to the subject matter
    hereof and thereof, and there are no promises, undertakings, representations
    or warranties by the Secured Parties relative to subject matter hereof and
    thereof not expressly set forth or  referred to herein or in the other Transaction
    Documents. 

     (k)      Governing
    Law. THIS GUARANTEE SHALL BE GOVERNED BY, AND
    CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE  LAW OF THE STATE OF NEW
    YORK WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS.

     (l)      Submission
    to Jurisdictional; Waiver. Each Guarantor hereby
    irrevocably and unconditionally: 

     (i)      submits
    for itself and its property in any legal action or proceeding relating to
    this Guarantee and the other Transaction Documents to  which it is a party,
    or for recognition and enforcement of any judgment in respect thereof, to
    the non-exclusive general jurisdiction of the Courts of the State of New
    York, located in New York County, New

10

York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;

     (ii)      consents
  that any such action or proceeding may be brought in such courts and waives
    any objection that it may now or hereafter have to the venue of any such
    action or proceeding in any such court or that such action or proceeding
    was brought in an inconvenient court and agrees not to plead or claim the
    same;

     (iii)      agrees
    that service of process in any such action or proceeding may be effected
    by mailing a copy thereof by registered or certified mail  (or any substantially
    similar form of mail), postage prepaid, to such Guarantor at its address
    referred to in the Security Agreement or at such other address of which the
    Secured Parties shall have been notified pursuant thereto; 

     (iv)      agrees
    that nothing herein shall affect the right to effect service of process in
    any other manner permitted by law or shall limit the  right to sue in any
    other jurisdiction; and

     (v)      waives,
    to the maximum extent not prohibited by law, any right it may have to claim
    or recover in any legal action or proceeding referred  to in this Section
    any special, exemplary, punitive or consequential damages.

(m)      Acknowledgements.
      Each Guarantor hereby acknowledges that: 

     (i)      it
      has been advised by counsel in the negotiation, execution and delivery
      of this Guarantee and the other Transaction Documents to which it  is a
      party;

     (ii)      the
      Secured Parties have no fiduciary relationship with or duty to any Guarantor
      arising out of or in connection with this Guarantee or  any of the other
      Transaction Documents, and the relationship between the Guarantors, on
      the one hand, and the Secured Parties, on the other hand, in connection
      herewith or therewith is solely that of debtor and creditor; and

     (iii)      no
      joint venture is created hereby or by the other Transaction Documents or
      otherwise exists by virtue of the transactions contemplated  hereby among
      the Guarantors and the Secured Parties.

     (n)      Additional
      Guarantors.  The Company shall cause each
      of its subsidiaries formed or acquired on or  subsequent to the date hereof
      to become a 

11

Guarantor for all purposes of this Guarantee by executing
and delivering an Assumption Agreement in the form of Annex 1 hereto. 

     (o)      Release
  of Guarantors. Subject to Section 2.6, each Guarantor
  will be released from all liability  hereunder concurrently with the repayment
  in full of all amounts owed under the Security Agreement, the Notes and the
  other Transaction Documents.

     (p)      Seniority.
  The Obligations of each of the Guarantors hereunder rank senior in priority
  to any other  Indebtedness (as defined in the Security Agreement) of such Guarantor.

     (q)      Waiver
  of Jury Trial. EACH GUARANTOR AND, BY
  ACCEPTANCE OF THE BENEFITS HEREOF,  THE SECURED PARTIES, HEREBY IRREVOCABLY
  AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
  TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN. 

****************

 

 

12

     IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written. 

	 	
FEARLESS YACHTS LLC, a Missouri Limited Liability Corporation	
	 	 	 

	
	 	By:  	
  

	 	 	
           Name:
	
	 	 	
           Title:
	

 

13

SCHEDULE 1 

GUARANTORS

     The following are the names, notice addresses and jurisdiction of organization of each Guarantor. 

	 

		 
		 

		 
		
COMPANY
		 

	
	 

		 
		
JURISDICTION OF
		 
		
OWNED BY
		 

	
	 

		 
		
INCORPORATION
		 
		
PERCENTAGE
		 

	
	 

		 
		
-------------
		 
		
----------
		 

	
	 

	
	
Fearless Yachts LLC
		 
		
Missouri
		 
		
100%
		 
	
	
----------
		 
		 

		 
		 

		 

	

 

 

14

Annex 1 to 

SUBSIDIARY GUARANTEE 

ASSUMPTION AGREEMENT, dated as of ____ __, ______
made by
______________________________, a
______________
corporation (the “Additional
Guarantor”), in favor of the Secured Parties pursuant to the Security Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in
such Security Agreement.

W I T N E S S E T H :

     WHEREAS, [COMPANY], a [___________
corporation (the “Company”)
and the Secured Parties have entered into a Securities Security Agreement, dated
as of [________
___, 2007 (as amended, supplemented or otherwise modified from time to time,
the “Security Agreement”);

     WHEREAS, in connection with
the Security Agreement, the Company and its Subsidiaries (other than the Additional
Guarantor) have entered into the Subsidiary Guarantee, dated as of [______________
____, 2007 (as amended, supplemented or otherwise modified from time to time,
the “Guarantee”) in favor of the Secured Parties;

     WHEREAS, the Security Agreement requires the Additional Guarantor to become a party to the Guarantee; and 

     WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee; 

NOW, THEREFORE, IT IS AGREED:

     1.      Guarantee. By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in
Section 5(n) of the Guarantee, hereby becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 1 to the Guarantee. The Additional Guarantor hereby represents and warrants
that each of the representations and warranties contained in Section 3 of the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after giving effect to this Assumption Agreement) as if made on and as of such
date. 

     2.      Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK. 

15

     IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written. 

	 	
      [ADDITIONALGUARANTOR]	
	 	 	 

	
	 	By:  	 

	 	
      Name:	
	 	
      Title:	

16

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