Document:

EXHIBIT 10.16

 

SECURITY
AGREEMENT

For value
received, and in consideration of one or more loans, letters of credit or other
financial accommodations extended by JPMorgan Chase Bank, N.A.
or any of its subsidiaries or affiliates (the “Bank”), to Avistar Communications
Corporation, a Delaware corporation (the “Grantor”), the Grantor and
the Bank agree as follows:

1.             Definitions.

“Collateral” means
all personal property of the Grantor whether presently existing or hereafter
created or acquired, and wherever located, including but not limited to:
(i) accounts (including health-care-insurance receivables), chattel paper,
deposit accounts, documents (including negotiable documents), equipment,
general intangibles, goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to
be furnished under a contract of service, and including returns and
repossessions), investment property (including securities and securities
entitlements), letter of credit rights, money, and all of Grantor’s books and
records with respect to any of the foregoing, and the computers and equipment
containing said books and records; (ii) all claims, demands, causes and choses in action in respect of any
of the foregoing and all all accessions and additions thereto; and (iii) any and all cash and non-cash
proceeds and products of any of the foregoing, including without limitation,
any and all proceeds of any insurance, indemnity, instruments, warranty or
guaranty payable to such Grantor from time to time with respect to the
Collateral and any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.

“Default” shall
mean each “Event of Default” (as defined in the Note).

“Liabilities” means
indebtedness, obligations and liabilities of any kind of the Grantor to the
Bank, now or in the future, absolute or contingent, direct or indirect, joint
or several, due or not due, arising by operation of law or otherwise, and costs
and expenses incurred by the Bank in connection with the Collateral, this
Agreement or any Liability Document.

“Liability
Document” means any instrument, agreement or document evidencing or delivered
in connection with the Liabilities (including, without limitation, the Note), as amended from time to
time.

“Loan” shall have
the meaning given such term in the Note.

“Note” means the Revolving Promissory
Note (Libor/Prime) dated as of December 23, 2006 by the Grantor in favor
of the Bank in the maximum principal amount of $10,000,000, as amended from
time to time.

“UCC” means the
Uniform Commercial Code in effect in the State of New York.  Unless the context otherwise requires, all
terms used in this Agreement which are defined in the UCC will have the
meanings stated in the UCC.

2.             Grant
of Security Interest.  As
security for the payment of all the Liabilities, the Grantor pledges, transfers
and assigns to the Bank and grants to the Bank a security interest in and right
of setoff against, the Collateral.

3.             Agreements,
Representations and Warranties of the Grantor and Rights of the Bank.

(a)           The Grantor represents and warrants
that:  the Grantor is the sole owner of the
Collateral and the Collateral is free of all encumbrances except for the
security interest in favor of the Bank created by this Agreement

(b)           The Grantor irrevocably authorizes
the Bank to exercise the rights granted to the Bank herein, at its option, for
its own benefit, either in its own name or in the name of the Grantor, and
appoints the Bank as its attorney-in-fact to take all action permitted under
this Agreement.

(c)           Without the prior written consent of
the Bank, the Grantor agrees not to sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, any Collateral
(other than sales of inventory and any grants of non-exclusive licenses or
similar arrangements for the use of property of the Borrower, in each case in
the ordinary course of business and consistent with past practice), nor will
the Grantor create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, encumbrance, option or any other charge with
respect to any of the Collateral, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this
Agreement or as otherwise provided in any other Liability Document.

(d)           The Grantor will not change
jurisdiction of its incorporation or organization (by migratory merger or
otherwise) except upon 30 days’ prior written notice to the Bank.

(e)           The Bank may, in its name, or in the
name of the Grantor:  (i) execute and
file financing statements under the UCC or any other filings or notices
necessary or desirable to create, perfect or preserve its security interest,
all without notice (except as required by applicable law and not waivable) and
without liability except to account for property actually received by it; (ii)
demand, sue for, collect or receive any money or property at any time payable
or receivable on account of or in exchange for, or make any compromise or
settlement deemed desirable with respect to, any item of the Collateral  (but shall be under no obligation to do so);
(iii) make any notification (to the issuer of any certificate or security,
or otherwise, or take any other action in connection with the perfection or
preservation of its security interest  or
any enforcement of remedies, and retain any documents evidencing the title of
the Grantor to any item of the Collateral; and (iv) issue entitlement orders
with respect to any of the Collateral.

The Grantor agrees
that it will not file or permit to be filed any termination statement with
respect to the Collateral or any financing or like statement with respect to
the Collateral in which the Bank is not named as the sole secured party or otherwise
dispose of, grant any option with respect to, or pledge, or otherwise encumber
the Collateral.  At the request of the
Bank the Grantor agrees to do all other things which the Bank may deem
necessary or advisable in order to perfect and preserve its security interest,
perfection and operational control and to give effect to the rights granted to
the Bank under this Agreement or enable the Bank to comply with any applicable
laws or regulations.  Notwithstanding the
foregoing, the Bank does not assume any duty with respect to the Collateral and
is not required to take any action to collect, preserve or protect its or the
Grantor’s rights in any item of the Collateral. 
The Grantor releases the Bank and agrees to hold the Bank harmless from
any claims, causes of action and demands at any time arising with respect to
this Agreement, the use or disposition of any item of the Collateral or any
action taken or omitted to be taken by the Bank with respect thereto.

4.             Currency Conversion.  For calculation purposes, any currency in which the Collateral is
denominated (the “Collateral Currency”) will be converted into the currency of
the Liabilities (the “Liability Currency”) at the spot rate of exchange for the
purchase of the Liability Currency with the Collateral Currency quoted by the
Bank at such place as the Bank deems appropriate (or, if no such rate is quoted
on any relevant date, estimated by the Bank on the basis of the Bank’s last
quoted spot rate) or another prevailing rate that the Bank deems more appropriate.

5.             Remedies.

On a Default, the Bank will have
the rights and remedies under the UCC and the other rights granted to the Bank
under this Agreement and may exercise its rights without regard to any premium
or penalty from liquidation of any Collateral and without regard to the Grantor’s
basis or holding period for any Collateral.

The Bank may sell in the Borough
of Manhattan, New York City, or elsewhere, in one or more sales or parcels, at
the price as the Bank deems best, for cash or on credit or for other property,
for immediate or future delivery, any item of the Collateral, at any broker’s
board or at public or private sale, in any reasonable manner permissible under
the UCC (except that, to the extent permissible under the UCC, the Grantor waives
any requirements of the UCC) and the Bank or anyone else may be the purchaser
of the Collateral and hold it free from any claim or right including, without
limitation, any equity of redemption of the Grantor, which right the Grantor
expressly waives.

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The Bank may also, in its sole
discretion: (i) convert any part of the Collateral Currency into the Liability
Currency;  (ii) hold any monies or
proceeds representing the Collateral in a cash collateral account in the
Liability Currency or other currency that the Bank reasonably selects; (iii)
invest such monies or proceeds on behalf of the Grantor; and (iv) apply any
portion of the Collateral, first, to all costs and expenses of the Bank,
second, to the payment of interest on the Liabilities and any fees or
commissions to which the Bank may be entitled, third, to the payment of
principal of the Liabilities, whether or not then due, and fourth, to the
Grantor.

The Grantor will pay to the Bank
all expenses (including attorneys’ fees and legal expenses incurred by the Bank
and the allocated costs of its in-house counsel) in connection with the
exercise of any of the Bank’s rights or obligations under this Agreement or the
Liability Documents.  The Grantor will
take any action requested by the Bank to allow it to sell or dispose of the
Collateral.  Notwithstanding that the
Bank may continue to hold Collateral and regardless of the value of the
Collateral, the applicable Liability Party will remain liable for the payment
in full of any unpaid  balance of the
Liabilities.

6.             Jurisdiction.

To
the maximum extent not prohibited by applicable law, the Grantor hereby
irrevocably: (i) submits to the jurisdiction of any New York state or United
States federal court sitting in New York City over any action or proceeding
arising out of this Agreement;(ii) agrees that all claims in respect of such
action or proceeding may be held and determined in such New York state or
federal court;  (iii) agrees that
any action or proceeding brought against the Bank may be brought only in a New
York state or United States federal court sitting in New York county;  (iv)
consents to the service of process in any such action or proceeding in either
of said courts by mailing thereof by the Bank by registered or certified mail,
postage prepaid, to the Grantor at its address specified on the signature page
hereof, or at the Grantor’s most recent mailing address as set forth in the
records of the Bank; and (v) waives any defense on the basis of inconvenient
forum.

The Grantor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit or proceeding in such state.  Nothing herein shall affect the right of the
Bank to serve legal process in any other manner permitted by law or affect the
right of the Bank to bring any action or proceeding against the Grantor or its
property in the courts of any other jurisdiction.

7.             Waiver of Jury Trial.  THE
UNDERSIGNED AND THE BANK EACH WAIVE ANY RIGHT TO JURY TRIAL.

8.             Notices. 
Unless otherwise
agreed in writing, notices may be given to the Bank and the Grantor at their
telecopier numbers (confirmed by telephone to their telephone numbers) or
addresses listed on the signature page of this Agreement, or such other
telecopier (and telephone) number or addresses communicated in writing by
either party to the other.  Notices to
the Bank are effective on receipt.

9.             Miscellaneous.

(a)           This Agreement shall be binding on
the Grantor and its successors and assigns and shall inure to the benefit of
the Bank and its successors and assigns, except that the Grantor may not
delegate any of its obligations hereunder without the prior written consent of
the Bank.

(b)           No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Grantor will be
effective unless it is in writing and signed by the Grantor and the Bank and
will be effective only in that specific instance and for that specific
purpose.  No failure on the part of the
Bank to exercise, and no delay in exercising, any right will operate as a
waiver or preclude any other or further exercise or the exercise of any other
right.

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(c)           The
rights and remedies in this Agreement are cumulative and not exclusive of any
rights and remedies which the Bank may have under law or under other agreements
or arrangements with the Grantor or any Liability Party.

(d)           The
provisions of this Agreement are intended to be severable.  If for any reason any provision of this
Agreement is not valid or enforceable in whole or in part in any jurisdiction,
that provision will, as to that jurisdiction, be ineffective to the extent of
that invalidity or unenforceability without in any manner affecting the
validity or enforceability in any other jurisdiction or the remaining
provisions of this Agreement.

(e)           The
Grantor hereby waives presentment, notice of dishonor and protest of all
instruments included in or evidencing the Liabilities or the Collateral and any
other notices and demands, whether or not relating to those instruments.

(f)            This
Agreement is governed by and construed according to the law of the State of New
York, without regard to the conflict of laws principles, and with the laws of
the United States of America as applicable.

(g)           This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.

The rest
of this page is intentionally blank.

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IN WITNESS WHEREOF, the Grantor has signed this
Agreement as of December 22, 2006.

	
  ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMorgan Chase
  Bank, N.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   J.P. Morgan Trust Company, N.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Nancy A.
  Sheppard

  	
   

  	
   

  
	
   

  	
  Name: Nancy A.
  Sheppard

  	
   

  	
   

  
	
   

  	
  Title:  Managing Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address for notices to the Bank:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  Private Bank Credit

  Attn:  Patricia DeLeo

  345 Park Avenue, Floor 04

  New York, NY 10154-0004

  	
   

  
	
   

  	
   

  
	
  With a courtesy copy to

  	
   

  
	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  Attn:  Nancy A. Sheppard

  560 Mission Street, 12th floor

  San Francisco, CA 94105

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Avistar
  Communications Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Robert J.
  Habig

  	
   

  	
   

  
	
   

  	
  Name: Robert J.
  Habig

  	
   

  	
   

  
	
   

  	
  Title: Chief
  Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address
  for Notices to the Grantor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attn:  Robert Habig

  555 Twin Dolphin Drive

  3rd Floor

  Redwood Shores, CA 94065

  Telecopier:  (650) 610-2505

  Telephone:  (650) 610-2910

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

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  State of

  	
   

  	
    )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    )

  	
  ss.:

  	
   

  
	
  County of

  	
   

  	
    )

  	
   

  	
   

  

 

On the ____ day of
December in the year 2006, before me, the Grantor, personally appeared _____________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity, and that
by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary Public

  

 

	
  State of

  	
   

  	
    )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    )

  	
  ss.:

  	
   

  
	
  County of

  	
   

  	
    )

  	
   

  	
   

  

 

On the ____ day of
December in the year 2006, before me, the Grantor, personally appeared _____________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity, and that
by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary Public

  

 

 6EXHIBIT 10.17

GUARANTY

GUARANTY dated as
of December 23, 2006 made by the undersigned (individually, or if more
than one, collectively, the “Guarantor”) in favor of JPMorgan Chase
Bank, N.A., and/or any of its subsidiaries or affiliates (individually or collectively,
as the context may require, the “Bank”).

PRELIMINARY STATEMENTS:  The Bank has entered, or may
from time to time enter, into agreements or arrangements with Avistar
Communications Corporation, a Delaware corporation (the “Borrower”),
providing for credit extensions or financial accommodation to the Borrower of
any kind whatsoever including, without limitation, the making of loans,
advances or overdrafts, whether or not secured, discount or purchase of notes,
securities or other instruments or property, creation of acceptances, issuance
or confirmation of letters of credit, guaranties or indemnities, entering into
foreign exchange or precious metals contracts or interest rate or currency swap
or protection agreements, entering into any other derivative transactions under
any ISDA Master Agreement or similar agreements between the Bank and the
Borrower, or any other kind of lease, contract or agreement under which the
Borrower may be indebted to the Bank in any manner (all of the foregoing
agreements or arrangements being the “Facilities” and any writing or
record evidencing, supporting, securing, or delivered in connection with a
Facility, including but not limited to this Guaranty, and including as may
subsequently be renewed, extended, amended, 
modified, substituted and/or replaced, being a “Facility Document”).

THEREFORE, in
order to induce the Bank to extend credit or give financial accommodation under
the Facilities, the Guarantor agrees (and if more than one, jointly and
severally agrees) as follows:

Guaranty of Payments.  For value received and in
consideration of the Facilities extended by the Bank the Guarantor
unconditionally and irrevocably guarantees to the Bank (a) performance and
observance of every agreement and condition contained in any Facility Document
to be performed or observed by the Borrower, and (b) payment of all sums now
owing or which may in the future be owing by the Borrower under the Facilities,
when the same are due and payable, whether on demand, at stated maturity, by acceleration
or otherwise, and whether for principal, interest, fees, expenses,
indemnification or otherwise (the “Liabilities”).  The Liabilities include, without limitation,
interest accruing after the commencement of a proceeding under bankruptcy,
insolvency or similar laws of any jurisdiction at the rate or rates provided in
the Facility Documents.

This Guaranty is a guaranty of payment and performance and not of
collection only.  The Bank shall not be
required to exhaust any right or remedy or take any action against the Borrower
or any other person or entity or any collateral.  The Guarantor agrees that, as between the
Guarantor and the Bank, the Liabilities may be declared to be due and payable
for the purposes of this Guaranty notwithstanding any stay, injunction or other
prohibition which may prevent, delay or vitiate any declaration as regards the
Borrower and that in the event of a declaration or attempted declaration, the
Liabilities shall immediately become due and payable by the Guarantor for the
purposes of this Guaranty.

The Guarantor shall pay the Liabilities by the seventh (7th) day on
which commercial banks are not authorized or required to close in New York City
(a “Banking Day”) after the Bank’s demand for payment thereof (or if such demand
is accompanied by notice from the Bank, or the Bank thereafter delivers notice,
that the value of collateral securing the Liabilities is less than the amount
of the Liabilities, on the second (2nd) Banking Day after delivery of such notice) (the “Due
Date”).  Upon the Bank’s making demand
for payment of the Liabilities but prior to the Due Date, the Guarantor shall
have the right (but not the obligation) to execute and deliver to the Bank a
note sale agreement substantially in the form of Exhibit A hereto (the “Loan
Sale Agreement”) together with payment of the “Note Purchase Price” (as defined
therein) in immediately available funds, whereupon the obligations of the
Guarantor hereunder shall terminate (but subject to reinstatement as provided
below).

Guaranty Absolute.  The Guarantor guarantees that
the Liabilities shall be performed and paid strictly in accordance with the
terms of the Facilities.  The liability
of the Guarantor under this Guaranty is absolute and unconditional irrespective
of:  (a) any change in the amount, time,
manner or place

of payment of, or in any other term of, all or any of
the Facility Documents or Liabilities, or any other amendment or waiver of or
any consent to departure from any of the terms of any Facility Document or
Liability; (b) any release or amendment or waiver of, or consent to departure
from, any other guaranty or support document, or any exchange, release or non-perfection
of any collateral, for all or any of the Facility Documents or Liabilities; (c)
any present or future law, regulation or order of any jurisdiction (whether of
right or in fact) or of any agency thereof purporting to reduce, amend,
restructure or otherwise affect any term of any Facility Document or Liability;
(d) without being limited by the foregoing, any lack of validity or
enforceability of any Facility Document or Liability; and (e) any other
defense, setoff or counterclaim whatsoever (in any case, whether based on
contract, tort or any other theory) with respect to the Facility Documents or the
transactions contemplated thereby which might constitute a legal or equitable
defense available to, or discharge of, the Borrower or a guarantor.

Guaranty Irrevocable.  This Guaranty is a continuing
guaranty of all Liabilities now or hereafter existing under the Facilities and
shall remain in full force and effect until payment in full of all Liabilities
and other amounts payable under this Guaranty and until the Facilities are no
longer in effect or, if earlier, when the Guarantor has given the Bank written
notice that this Guaranty has been revoked; provided that any notice
under this Section shall not release the Guarantor from any Liability, absolute
or contingent, existing prior to such notice. 
Such notice shall be effective only after the Bank’s actual receipt of
the notice at its address set forth below, and the Bank shall have had a
reasonable time to act upon such notice at each of its offices or departments
responsible for the Facilities.

Reinstatement.  This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time (i) any payment of
any of the Liabilities is rescinded or must otherwise be returned by the Bank
on the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
all as though the payment had not been made or (ii)  the Loan Sale
Agreement  shall be held invalid or
unenforceable in whole or in any part..

Subrogation.  The Guarantor shall not exercise any rights
against the Borrower which it may acquire by way of subrogation, by any payment
made under this Guaranty or otherwise, until all the Liabilities have been paid
in full and the Facilities are no longer in effect.  If any amount is paid to the Guarantor on
account of subrogation rights under this Guaranty at any time when all the
Liabilities have not been paid in full, the amount shall be held in trust for
the benefit of the Bank and shall be promptly paid to the Bank to be credited
and applied to the Liabilities, whether matured or unmatured or absolute or
contingent, in accordance with the terms of the Facilities.

Subordination.  Without limiting the Bank’s rights under any
other agreement, any liabilities owed by the Borrower to the Guarantor in
connection with any extension of credit or financial accommodation by the
Guarantor to or for the account of the Borrower, including but not limited to
interest accruing at the agreed contract rate after the commencement of a
bankruptcy or similar proceeding, are hereby subordinated to the Liabilities,
and such liabilities of the Borrower to the Guarantor, if the Bank so requests,
shall be collected, enforced and received by the Guarantor as trustee for the
Bank and shall be paid over to the Bank on account of the Liabilities but
without reducing or affecting in any manner the liability of the Guarantor
under the other provisions of this Guaranty.

Representations and Warranties.  The
Guarantor represents and warrants that:

(a)                   this
Guaranty constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms, except as the
enforcement hereof and thereof may be limited by bankruptcy, insolvency, or
other similar laws affecting the enforcement of creditors’ rights generally and
subject to the applicability of general principles of equity;

(b)                   the execution, delivery and
performance by the Guarantor of this Guaranty and all other documents
contemplated hereby or thereby, do not and will not (i) conflict with or
constitute a breach of, or default under, or require any consent under, or
result in the creation of any lien, charge or encumbrance upon the property or
assets of the Guarantor pursuant to any other agreement or instrument (other
than any pledge of or security interest granted in any collateral pursuant to
any Facility Document) to which the Guarantor is a party or is bound or by
which its properties may be bound or affected; or

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(ii) violate any provision of any law, rule,
regulation (including, without limitation, Regulation U of the Federal Reserve
Board), order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Guarantor;

(c)                   no consent,
approval or authorization of, or registration, declaration or filing with, any
governmental authority or other person or entity is required as a condition to
or in connection with the due and valid execution, delivery and performance by
the Guarantor of this Guaranty;

(d)                   there are no
actions, suits, investigations or proceedings pending or threatened at law, in
equity, in arbitration or by or before any other authority involving or
affecting:  (i)  the Guarantor that, if adversely determined,
are likely to have a material adverse effect on the prospects or condition of
the Guarantor; (ii) any material part of the assets or properties of the Guarantor
or any part of the collateral (if any) under any Facility Document; or (iii)
any of the transactions contemplated in this Guaranty.  There are currently no material judgments
entered against the Guarantor and the Guarantor is not in default with respect
to any judgment, writ, injunction, order, decree or consent of any court or
other judicial authority, which default is likely to have or has had a material
adverse effect on the prospects or condition of the Guarantor;

(e)                   in executing
and delivering this Guaranty, the Guarantor has (i) without reliance on the
Bank or any information received from the Bank and based upon such documents
and information it deems appropriate, made an independent investigation of the
transactions contemplated hereby and the Borrower, the Borrower’s business,
assets, operations, prospects and condition, financial or otherwise, and any
circumstances which may bear upon such transactions, the Borrower or the
obligations and risks undertaken herein with respect to the Liabilities; (ii)
adequate means to obtain from the Borrower on a continuing basis information
concerning the Borrower and the Bank has no duty to provide to the Guarantor
any such information; (iii) full and complete access to the Facility Documents
and any other documents executed in connection with the Facility Documents;
(iv) not relied and will not rely upon any representations or warranties of the
Bank not embodied herein or any acts heretofore or hereafter taken by the Bank
(including but not limited to any review by the Bank of the affairs of the
Borrower), and (v) determined that this Guaranty will benefit the Guarantor
directly or indirectly;

(f)                    in the
event that the Guarantor is a partnership, limited liability partnership,
corporation or limited liability company, the Guarantor also represents and
warrants (i) that it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, (ii)
that it has all requisite power and authority to execute, deliver and perform
its obligations under this Guaranty, and (iii) that the execution, delivery and
performance of this Guaranty is in furtherance of its organizational purposes,
and has been presented to and approved by its partners, directors, shareholders
or members, as applicable; and

(g)                   in the event
that the Guarantor is a trust, the Guarantor also represents and warrants that
(i) it is a duly constituted and validly existing trust, (ii) the Guarantor has
delivered to the Bank a true, complete and accurate copy of the agreement
pursuant to which it has been organized and all amendments and modifications
thereto, and (iii) the trustees of the Guarantor signing this Guaranty have the
legal capacity and full power and authority to execute, deliver, and perform
their obligations under, and to bind the Guarantor to perform its obligations
under, this Guaranty, and to execute and deliver any and all documents and
instruments in connection herewith.

Defaults.  Each of the following is an event of default
hereunder:

(a)                   The Guarantor
(i) shall fail to pay when due any of its indebtedness (including,
but not limited to, indebtedness for borrowed money) or any interest or premium
thereon in an aggregate amount of at least five hundred thousand
dollars ($500,000) or (ii) the Guarantor shall default or otherwise fail
to perform any agreement to which the Guarantor is party or by which it is
bound which results in the holder(s) of indebtedness having the right, whether
or not exercised, to accelerate the maturity thereof in an aggregate amount of
at least five hundred thousand dollars ($500,000);

(b)                   (i) the
Guarantor is involved in a proceeding
which may result in a forfeiture of all or a substantial part of the Guarantor’s assets or (ii) a final,
non-appealable judgment is entered against the Guarantor for the payment of in an aggregate amount of at least
two million dollars ($2,000,000);

(c)                   there is, in the opinion of
the Bank, a material adverse change in the business, prospects or financial
condition of the Guarantor;

(d)                   without the prior written
consent of the Bank, the Guarantor incurs
or permits to exist (i) any debt for borrowed money other than debt for
borrowed money owing to the Bank or

 3
 

listed on the Guarantor’s financial statement dated
April 20 2006 (the “Financial Statement”) and any refinancing of such debt
or (ii) other debt to the extent that the
total amount thereof when added together with the total amount of the
Borrower’s guarantees and contingent liabilities referred to in
clause (ii) of the immediately following paragraph (e) is less than
or equal to seven million
dollars ($7,000,000); and

(e)                   the Guarantor guarantees or otherwise becomes contingently liable for
the debts or other obligations of any entity other than (i) any such
guaranty or contingent obligation shown on the Financial Statement  and (ii) guarantees and contingent obligations
incurred after the date of the Financial Statement to the extent that the total
amount thereof when added together with the total amount of debt referred to in
clause (ii) of the immediately preceding paragraph (d) is less than or
equal to seven million
dollars ($7,000,000).

Remedies Generally.  The rights, powers and remedies
granted to the Bank in this Guaranty are cumulative and in addition to any
rights, powers and remedies to which the Bank may be entitled either by
operation of law or in equity or pursuant to any other document or instrument
delivered or from time to time to be delivered to the Bank in connection with
the Facilities.

Setoff.  The Guarantor agrees that, in addition to
(and without limitation of) any right of setoff, banker’s lien or counterclaim
the Bank may otherwise have, the Bank shall be entitled, at its option, to
offset balances (general or special, time or demand, provisional or final) held
by it for the account of the Guarantor at any of the Bank’s offices, in U.S.
dollars or in any other currency, against any amount payable by the Guarantor
under this Guaranty which is not paid when due (regardless of whether such
balances are then due to the Guarantor), in which case it shall promptly notify
the Guarantor thereof; provided that the Bank’s failure to give such
notice shall not affect the validity thereof.

Formalities.  The Guarantor waives presentment, notice of
dishonor, protest, notice of acceptance of this Guaranty or incurrence of any
Liability and to the extent not prohibited by applicable law any other
formality with respect to any of the Liabilities or this Guaranty.

Amendments and Waivers.  No amendment or waiver of any
provision of this Guaranty, nor consent to any departure by the Guarantor
therefrom, shall be effective unless it is in writing and signed by the Bank,
and then the waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. 
No failure on the part of the Bank to exercise, and no delay in
exercising, any right under this Guaranty shall operate as a waiver or preclude
any other or further exercise thereof or the exercise of any other right.

Expenses.  The Guarantor shall reimburse the Bank on
demand for all costs, expenses and charges (including without limitation fees
and charges of external legal counsel for the Bank and costs allocated by its
internal legal department) incurred by the Bank in connection with the
preparation, performance or enforcement of this Guaranty.  The obligations of the Guarantor under this
Section shall survive the termination of this Guaranty.

Assignment.  This Guaranty shall immediately be binding
on, and shall inure to the benefit of the Guarantor, the Bank and their
respective heirs, successors and assigns; provided that the Guarantor
may not assign or transfer its rights or obligations under this Guaranty.

Captions.  The headings and captions in this Guaranty
are for convenience only and shall not affect the interpretation or
construction of this Guaranty.

Governing Law, Waiver of Jury Trial, Etc.  THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES, AND WITH THE LAWS OF THE UNITED STATES OF AMERICA AS
APPLICABLE.  THE GUARANTOR CONSENTS TO
THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED
IN THE CITY OF NEW YORK.  SERVICE OF
PROCESS BY THE BANK IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE
GUARANTOR IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE ADDRESS

 4
 

SPECIFIED BELOW OR AS
OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO TIME.  THE GUARANTOR WAIVES ANY RIGHT THE
GUARANTOR MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES
ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION.  TO THE EXTENT THAT THE GUARANTOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), THE
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS GUARANTY.

Integration; Effectiveness.  This Guaranty alone sets forth the entire
understanding of the Guarantor and the Bank relating to the guarantee of the
Liabilities and constitutes the entire contract between the parties relating to
the subject matter hereof and supersedes any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  This Guaranty shall become effective when it
shall have been executed and delivered by the Guarantor to the Bank.  Delivery of an executed signature page of
this Guaranty by telecopy shall be effective as delivery of a manually executed
signature page of this Guaranty.

The rest of this page is intentionally
blank.

 5
 

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

	
  Address for notices to the Bank:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMorgan Chase
  Bank, N.A.

  	
   

  	
   

  
	
  Private Bank
  Credit

  	
   

  	
   

  
	
  Attn: Patricia DeLeo

  	
   

  	
   

  
	
  345 Park Avenue,
  Floor 04

  	
   

  	
   

  
	
  New York, NY
  10154-0004

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a courtesy
  copy to

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMorgan Chase
  Bank, N.A.

  	
   

  	
   

  
	
  Attn: Nancy A.
  Sheppard

  	
   

  	
   

  
	
  560 Mission
  Street, 12th floor

  	
   

  	
   

  
	
  San Francisco,
  CA 94105

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Gerald J.
  Burnett

  	
   

  	
   

  	
   

  
	
  Gerald
  J. Burnett

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  for notices:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Gerald
  J. Burnett and Marjorie J. Burnett , as Trustee for

  	
   

  	
   

  
	
  The
  Gerald J. Burnett and Marjorie J. Burnett Revocable Trust

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  Gerald J. Burnett, trustee

  	
   

  	
   

  	
   

  
	
  Gerald J.
  Burnett

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  Marjorie J. Burnett, trustee

  	
   

  	
   

  	
   

  
	
  Marjorie J.
  Burnett

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  for notices:

  	
   

  	
   

  

 

 6

Exhibit A

FORM OF NOTE SALE
AGREEMENT

 A-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]