Document:

EXIBIT
      10.60

    

    Form
      of
      Working Capital Note dated September 24, 2007

     

    
      
        
        

      

      
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    Exhibit
      D

     

    MANARIS
      CORPORATION

    

    FORM
      OF

    

    SENIOR
      SECURED WORKING CAPITAL NOTE

     

    
      	Issue Date: ___________,
              200__	
              $_____________

            

    

     

    FOR
      VALUE RECEIVED, MANARIS
      CORPORATION, a
      Nevada
      corporation (the
      “Company”),
      hereby promises to pay to the order of IMPERIUM MASTER FUND, LTD. or its
      permitted successors or assigns (the “Holder”)
      the
      principal amount of ________________________ Dollars ($___________), together
      with accrued and unpaid interest thereon, on or before [____________] (the
      “Maturity
      Date”).

    

    The
      Company has issued this Senior
      Secured Working Capital Note (this “Note”)
      pursuant
      to a Securities Purchase and Loan Agreement, dated as of September 24, 2007
      (the
“Loan
      Agreement”).
      The
Senior
      Secured Working Capital Notes
      issued
      by the Company pursuant to the Loan Agreement, including this Note, are
      collectively referred to herein as the “Notes”.
      

    

    The
      Company’s obligations under the Notes, including, without limitation, its
      obligation to make payments of interest thereon, are guaranteed by the Company’s
      subsidiaries and secured by the assets and properties of the Company and its
      subsidiaries. The following terms shall apply to this Note:

    

    1. DEFINITIONS.

    

    (a) Defined
      Terms.
      The
      following terms shall apply to this Note:

    

    “Acceleration
      Notice,”
      “Acceleration
      Notice Date”
and
      “Acceleration
      Payment Date”
have
      the respective meanings set forth in Section
      3(a)
      of this
      Note.

    

    “Change
      of Control”
means
      the existence, occurrence or public announcement of, or entering into an
      agreement contemplating, any of the following: (a) the sale, conveyance or
      disposition of more than twenty-five percent (25%) of the assets of the Company,
      (b) the effectuation of a transaction or series of transactions in which more
      than fifty percent (50%) of the voting power of the Company is transferred
      or
      otherwise disposed of; (c) the effectuation of a transaction or series of
      transactions in which any of the voting power of any Company Subsidiary is
      transferred or otherwise disposed to a Person other than the Company or another
      Company Subsidiary; (d) the consolidation, merger or other business combination
      of the Company with or into any other entity, immediately following which the
      prior stockholders of the Company fail to own, directly or indirectly, at least
      seventy-five percent (75%) of the surviving entity; (e) the consolidation,
      merger or other business combination of any Company Subsidiary with or into
      any
      other entity other than the Company or another Company Subsidiary; (f) a
      transaction or series of transactions in which any Person or group acquires
      more
      than fifty percent (50%) of the voting equity of the Company; (g) a transaction
      or series of transactions in which any Person or group (other than the Company
      or a Company Subsidiary) acquires any of the voting equity of a Company
      Subsidiary; and (h) the Continuing Directors do not at any time constitute
      at
      least a majority of the Board of Directors.

    

    
      
        
        

      

      
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    “Continuing
      Director”
means,
      at any date, a member of the Company’s Board of Directors (i) who was a member
      of such board on the Issue Date or (ii) who was nominated or elected by at
      least
      a majority of the directors who were Continuing Directors at the time of such
      nomination or election or whose election to the Company’s Board of Directors was
      recommended or endorsed by at least a majority of the directors who were
      Continuing Directors at the time of such nomination or election or such lesser
      number comprising a majority of a nominating committee if authority for such
      nominations or elections has been delegated to a nominating committee whose
      authority and composition have been approved by at least a majority of the
      directors who were Continuing Directors at the time such committee was
      formed.

    

    “Default
      Interest Rate”
means
      the lower of eighteen (18%) and the maximum rate permitted by applicable law
      or
      by the applicable rules or regulations of any governmental agency or of any
      stock exchange or other self-regulatory organization having jurisdiction over
      the Company or the trading of its securities.

    

    “Event
      of Default”
means
      the occurrence of any of the following events: 

     

    (i) a
      Liquidation Event occurs or is publicly announced;

     

    (ii) the
      Company fails to make any payment of principal on this Note in full as and
      when
      such payment is due, or the Company fails to make any payment of interest on
      this Note in full as and when such payment is due, provided that the Company
      shall not have been able to cure such non-payment within four (4) Business
      Days
      after such due date; 

     

    (iii)
       other
      than a breach described in clause
      (ii)
      above,
      the Company or any Company Subsidiary breaches or provides notice of its intent
      to breach any material term or condition of this Note or any other Transaction
      Document, provided that such breach is not cured within seven (7) Business
      Days
      following written notice thereof from the Holder;

     

    (iv) any
      representation or warranty made by the Company or any Company Subsidiary in
      this
      Note or any other Transaction Document was inaccurate or misleading in any
      material respect as of the date such representation or warranty was made;
      or

     

    
      
        
        

      

      
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    (v) a
      default
      occurs or is declared and is not cured within the applicable grace period (if
      any) with respect to any instrument that evidences Debt of the Company or any
      Company Subsidiary, the effect of which default is to cause, or permit the
      holder or holders of such indebtedness to cause, such indebtedness to become
      due
      prior to its stated maturity solely to the extent that the principal amount
      of
      any such indebtedness exceeds, individually or in the aggregate,
      $1,000,000.

     

    “Interest”
has
      the
      meaning set forth in Section
      2(a)
      of this
      Note.

    

    “Issue
      Date”
means
      the “Issue Date” as set forth on the front page of this Note.

    

    “Liquidation
      Event”
means
      where (i) the Company or any Company Subsidiary shall make a general assignment
      for the benefit of creditors or consent to the appointment of a receiver,
      liquidator, custodian, or similar official of all or substantially all of its
      properties, or any such official is placed in control of such properties, or
      the
      Company or any Company Subsidiary shall commence any action or proceeding or
      take advantage of or file under any federal or state insolvency statute,
      including, without limitation, the United States Bankruptcy Code, seeking to
      have an order for relief entered with respect to it or seeking adjudication
      as a
      bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
      liquidation, dissolution, administration, a voluntary arrangement, or other
      relief with respect to it or its debts; or (ii) there shall be commenced against
      the Company or any Company Subsidiary any action or proceeding of the nature
      referred to in clause
      (i)
      above or
      seeking issuance of a warrant of attachment, execution, distraint, or similar
      process against all or any substantial part of its property, which results
      in
      the entry of an order for relief which remains undismissed, undischarged or
      unbonded for a period of sixty (60) days; or (iii) there is initiated the
      dissolution or other winding up of the Company or
      any
      material Company Subsidiary,
      whether
      voluntary or involuntary and whether or not involving insolvency or bankruptcy
      proceedings; or (iv) there is initiated any assignment for the benefit of
      creditors or any marshalling of the material assets or material liabilities
      of
      the Company
      or any
      Company Subsidiary.

    

    “Make-whole
      Amount”
means
      the Make-whole Per Diem Amount multiplied
      by
      the
      number of days between and including (i) the Acceleration Notice Date or
      Prepayment Date, as the case may be, and (ii) the Maturity Date.

    

    “Make-whole
      Per Diem Amount”
means
      the amount equal to (i) the product of (x) the outstanding principal amount
      of
      this Note and (y) the Make-whole Rate divided
      by
      (ii)
      360.

    

    “Make-whole
      Rate”
means
      the interest rate equal to the difference between [INSERT
      INTEREST RATE OF THIS NOTE]%
      and
      the then current yield rate of 1-year treasury bills on the date of
      determination.

    

    “Maturity
      Date”
has
      the
      meaning set forth in the preamble to this Note.

    

    
      
        
        

      

      
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    “Scheduled
      Interest Payment Date”
means
      [INSERT
      FIRST CALENDAR MONTH FOLLOWING ISSUE DATE]
      1,
      200__ and the first Business Day of each calendar month thereafter until the
      date on which the entire principal amount of this Note is paid in full, whether
      on the Maturity Date or otherwise. 

    

    (b) Terms
      Defined in the Loan Agreement.
      Any
      capitalized term used but not defined herein has the meaning specified in the
      Loan Agreement.

    

    (c) Usage. 
      All
      definitions contained in this Note are equally applicable to the singular and
      plural forms of the terms defined. The words “hereof”, “herein” and “hereunder”
and words of similar import refer to this Note as a whole and not to any
      particular provision of this Note.

    

    2. INTEREST;
      PAYMENT.
      

    

    (a) Interest
      Payments.
      This
      Note shall bear interest on the unpaid principal amount hereof (“Interest”)
      at an
      annual rate equal to [_____] percent ([ ]%), computed on the basis of a 360-day
      year and calculated using the actual number of days elapsed since and including
      the Issue Date or the date on which Interest was most recently paid, as the
      case
      may be, and if not timely paid as provided herein, compounded monthly.
The
      Company shall pay accrued Interest (including default interest (if any)) in
      arrears (i) on each Scheduled Interest Payment Date and (ii) on any
      date
      on which the entire or any portion of the principal amount of this Note is
      paid.
      

    

    (b) Maturity.
      The
      outstanding principal amount of this Note plus all accrued and unpaid Interest
      (including default interest (if any)) hereon, plus all other amounts due
      hereunder, shall be paid in full on the Maturity Date. 

     

    (c) Payment
      in Cash.
      All
      payments on this Note shall be paid in
      cash
      by wire transfer of immediately available funds. 

     

    (d) Default
      Interest.
      Any
      amount of principal, Interest or any other amount that is not paid as and when
      due in accordance with this Note shall bear interest until paid at the Default
      Interest Rate, compounded monthly.

     

    3. EVENT
      OF DEFAULT; ACCELERATION.

     

    In
      the
      event that an Event of Default or a Change of Control occurs, the Holder shall
      have the right, upon written notice to the Company (an “Acceleration
      Notice”),
      to
      (i) accelerate the payment of (x) all unpaid principal amount of this Note,
      plus
      (y) all
      accrued and unpaid Interest (including default interest (if any)) hereon,
plus
      (z) all
      other amounts due hereunder, and (ii) cause the Company to pay all of the
      amounts described in the preceding clause
      (i) plus
      the
      applicable Make-whole Amount in same day funds on the Acceleration Payment
      Date
      (as defined below). The Acceleration Notice shall specify the date on which
      the
      amounts described in the preceding sentence shall be paid (the “Acceleration
      Payment Date”),
      which
      date must be at least four (4) Business Days following the Business Day on
      which
      the Acceleration Notice is delivered to the Company (the “Acceleration
      Notice Date”).

     

    
      
        
        

      

      
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    4. PREPAYMENT
      BY THE COMPANY.

     

    The
      Company may prepay all (but not less than all) of this Note prior to the
      Maturity Date by giving written notice thereof to the Holder, which notice
      shall
      (i) specify the date on which the Company intends to prepay this Note (the
      “Prepayment
      Date”),
      and
      (ii) be
      delivered to the Holder not less than three (3) Business Days prior to the
      Prepayment Date. Any such written notice delivered by the Company shall be
      irrevocable. On the Prepayment Date, the Company shall pay to the Holder the
      sum
      of (w) all unpaid principal amount of this Note, plus
      (x) all
      accrued and unpaid Interest (including default interest (if any)) hereon,
plus
      (y) all
      other amounts due hereunder, plus
      (z) the
      applicable Make-whole Amount in same day funds. 

     

    5. MISCELLANEOUS.

     

    (a) Successors
      and Assigns.
      The
      terms and conditions of this Note
      shall
      inure to the benefit of and be binding upon the respective successors and
      permitted assigns of the Company and the Holder. The Company may not assign
      its
      rights or obligations under this Note
      except
      as specifically required or permitted pursuant to the terms hereof.

    

    (b) Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New York applicable
      to contracts made and to be performed entirely within the State of New
      York.

     

    (c) Notices.
      Any
      notice, demand or request required or permitted to be given by the Company
      or
      the Holder pursuant to the terms of this Note shall be in writing and shall
      be
      deemed delivered (i) when delivered personally or by verifiable facsimile
      transmission, unless such delivery is made on a day that is not a Business
      Day,
      in which case such delivery will be deemed to be made on the next succeeding
      Business Day, (ii) on the next Business Day after timely delivery to an
      overnight courier and (iii) on the Business Day actually received if deposited
      in the U.S. mail (certified or registered mail, return receipt requested,
      postage prepaid), addressed as follows:

    

    If
      to
      the Company:

    

    Manaris
      Corporation

    400
      boul.
      Montpellier

    Montreal,
      Quebec

    Canada
      H4N 2G7

    Attn:
      John Fraser, Chief Executive Officer

    Tel:
      514-904-6030

    Fax:
      514-744-2080

    

    with
      a copy (which
      shall not constitute notice) to:

    

    Sichenzia
      Ross Friedman Ference LLP

    61
      Broadway, 32nd
      Floor

    New
      York,
      New York 10006

    Attn: Darrin
      Ocasio, Esq.

    Tel: 212-930-9700

    Fax: 212-930-9725

    

    
      
        
        

      

      
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    and
      if to
      the Holder, to such address for the Holder as shall be specified appear on
      the
      signature page of the Note Purchase Agreement executed by the Holder, or as
      shall be designated by the Holder in writing to the Company in accordance this
      Section
      5(c).

    

    (d)
       Amendments.
      No (i)
      amendment to this Note or (ii) waiver of any agreement or other obligation
      of
      the Company under this Note may be made or given except pursuant to a written
      instrument executed by the Company and by the holders of a majority of the
      aggregate principal of the Notes then outstanding, it being understood that
      upon
      the satisfaction of the preceding condition, this and each other Note (including
      any Note held by a holder thereof that did not execute the instrument specified
      in the preceding clause) shall be deemed to incorporate any amendment,
      modification, change or waiver effected thereby as of the effective date
      thereof. Any waiver or consent shall be effective only in the specific instance
      and for the specific purpose for which given.

     

    (e) Failure
      to Exercise Rights not Waiver.
      No
      failure or delay on the part of the Holder in the exercise of any power, right
      or privilege hereunder shall operate as a waiver thereof, nor shall any single
      or partial exercise of any such power, right or privilege preclude any other
      or
      further exercise thereof. All rights and remedies of the Holder hereunder are
      cumulative and not exclusive of any rights or remedies otherwise available.
      In
      the event that the Company does not pay any amount under this Note when such
      amount becomes due, the Company shall bear all costs incurred by the Holder
      in
      collecting such amount, including without limitation reasonable legal fees
      and
      expenses. 

     

    (f)
       Transfer
      of Note.
      The
      Holder may sell, transfer or otherwise dispose of all or any part of this Note
      (including without limitation pursuant to a pledge) to any person or entity
      as
      long as such sale, transfer or disposition is made in accordance with the
      applicable provisions of the Loan Agreement. From and after the date of any
      such
      sale, transfer or disposition, the transferee hereof shall be deemed to be
      the
      holder of a Note in the principal amount acquired by such transferee, and the
      Company shall, as promptly as practicable and at the Company’s cost and expense,
      issue and deliver to such transferee a new Note identical in all respects to
      this Note, in the name of such transferee. The Company shall be entitled to
      treat the original Holder as the holder of this entire Note unless and until
      it
      receives written notice of the sale, transfer or disposition
      hereof.

     

    (g)
       Lost
      or Stolen Note.
      Upon
      receipt by the Company of evidence of the loss, theft, destruction or mutilation
      of this Note, and (in the case of loss, theft or destruction) of indemnity
      or
      security reasonably satisfactory to the Company, and upon surrender and
      cancellation of the Note, if mutilated, the Company shall at the Company’s cost
      and expense execute and deliver to the Holder a new Note identical in all
      respects to this Note.

     

    (h) Usury.
      This
      Note
      is subject to the express condition that at no time shall the Company be
      obligated or required to pay interest hereunder at a rate which could subject
      the Holder to either civil or criminal liability as a result of being in excess
      of the maximum interest rate which the Company is permitted by applicable law
      to
      contract or agree to pay.  If by the terms of this Note, the Company is at
      any time required or obligated to pay interest hereunder at a rate in excess
      of
      such maximum rate, the rate of interest under this Note shall be deemed to
      be
      immediately reduced to such maximum rate and the interest payable shall be
      computed at such maximum rate and all prior interest payments in excess of
      such
      maximum rate shall be applied and shall be deemed to have been payments in
      reduction of the principal balance of this Note.  

    

    
      
        
        

      

      
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    (i) Taxes.
      Any and
      all payments of any kind whatsoever by the Company under or in connection with
      this Note or any other Transaction Document shall be made free and clear of
      and
      without deduction for any and all present or future taxes, levies, imposts,
      deductions, charges or withholdings, and all liabilities of any kind whatsoever
      with respect thereto, excluding taxes imposed on the net income of the Holder
      (all such nonexcluded taxes, levies, imposts, deductions, charges withholdings
      and liabilities, collectively or individually, the “Taxes”).
      If
      the Company shall be required to deduct any Taxes from or in respect of any
      sum
      payable under or in connection with any of this Note or any other Transaction
      Document to the Holder, (i) the sum payable shall be increased by the amount
      necessary so that after making all required deductions (including deductions
      applicable to additional sums payable under or in connection with this
Section
      5(i))
      the
      Holder shall receive an amount equal to the sum it would have received had
      no
      such deductions been made, (ii) the Company shall make such deductions and
      (iii)
      the Company shall pay the full amount deducted to and file any required tax
      and
      information return with the relevant Governmental Authority in accordance with
      applicable law.

    

    [Signature
      Page to Follow]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the Company has caused this Note to be signed in its name
      by
      its duly authorized officer on the date first above written.

     

    MANARIS
      CORPORATION

     

     

    By:  

    
      

    

    Name:

    Title:EXIBIT
      10.70

    

    Form
      of
      Security Agreement dated September 24, 2007

     

    
      
        
        

      

      
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    Execution
      Copy

    

    AMENDED
      AND RESTATED

    SECURITY
      AGREEMENT

    

    THIS
      AMENDED AND RESTATED SECURITY
      AGREEMENT, dated as of September 24, 2007 (this “Agreement”),
      is by
      and among MANARIS CORPORATION, a Nevada corporation (the “Company”),
      and
      each of the direct or indirect subsidiaries of the Company
      (whether
      now or hereafter existing, such subsidiaries,
      the
“Subsidiaries”
      and,
      collectively with the Company, the “Debtors”),
      and
      Imperium Advisers, LLC, in its capacity as collateral agent (in such capacity,
      the “Collateral
      Agent”),
      for
      the benefit of Imperium
      Master Fund, Ltd. (“Imperium”
and
      collectively with its permitted successors and assigns, the “Holders”)
      of the
      6% Original Issue Discount Senior Secured Convertible Notes (the “Convertible
      Notes”)
      and
      the Senior Secured Working Capital Notes (the “Working
      Capital Notes”
and,
      collectively with the Convertible Notes, the “Notes”),
      issued by the Company on or after the date hereof pursuant to the Securities
      Purchase and Loan Agreement, dated as of the date hereof (the “Loan
      Agreement”),
      by
      and between the Company and Imperium. Capitalized terms used herein and not
      otherwise defined shall have the respective meanings specified in the Loan
      Agreement. (The Holders, Collateral Agent and their endorsees, transferees
      and
      assigns are sometimes collectively referred to herein as
      the
“Secured
      Parties”).

     

    RECITALS

    

    A. The
      Company, certain Subsidiaries and Imperium are party to a Security Agreement,
      dated as of July 24, 2007 (the “Existing
      Agreement”),
      pursuant to which the Company and such Subsidiaries have granted to the
      Collateral Agent a security interest in their assets to secure the obligations
      of the Company under (i)
      the
      Demand Note, dated as of July 24, 2007, issued by the Company to Imperium and
      having a principal face amount of $2,274,053; (ii) the Demand Note, dated as
      of
      July 27, 2007, issued by the Company to Imperium and having a principal face
      amount of $237,028; (iii) the Demand Note, dated as of August 3, 2007, issued
      by
      the Company to Imperium and having a principal face amount of $385,000; and
      (iv)
      the Demand Note, dated as of August 29, 2007, issued by the Company to Imperium
      and having a principal face amount of $44,340.56 (collectively, the
“Demand
      Notes”).

    

    B. Pursuant
      to the Loan Agreement, the Company (i) will issue to Imperium a 6% Original
      Issue Discount Senior Secured Convertible Note (the “Convertible
      Note”)
      in
      exchange for the Demand Notes, cash and other consideration; and (ii) may sell
      to the Holders one or more Working Capital Notes from time to time to finance
      its working capital needs.

    

    C. It
      is a
      condition precedent to the transactions contemplated by the Loan Agreement
      that
      the parties hereto amend and restate the Existing Agreement as contemplated
      by
      this Agreement.

    

    D. Each
      Debtor that is a Subsidiary will directly or indirectly benefit from the
      extension of credit to the Company represented by the issuance of the Notes
      and
      the other transactions contemplated by the Loan Agreement and the other
      agreements contemplated therein.

    

    
      
        
        

      

      
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    NOW,
      THEREFORE, in consideration of the agreements herein contained and for other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree that the Existing Agreement is hereby
      amended and restated to read in its entirety as follows:

    

    1. DEFINITIONS.

    

    (a) Terms
      Defined in the Uniform Commercial Code.
      Terms
      used herein that are defined in Article 9 of the UCC but not otherwise defined
      in this Agreement (such as “account”,
      “chattel
      paper”,
      “commercial
      tort claim”,
      “deposit
      account”,
      “document”,
      “equipment”,
      “fixtures”,
      “general
      intangibles”,
      “goods”,
      “instruments”,
      “inventory”,
      “investment
      property”,
      “letter-of-credit
      rights”,
      “proceeds”
and
      “supporting
      obligations”)
      shall
      have the respective meanings given such terms in Article 9 of the UCC.

    

    (b) Defined
      Terms.
      The
      following terms shall apply to this Agreement:

    

    “Collateral”
means
      the collateral in which the Secured Parties are granted a security interest
      by
      this Agreement and which shall include all present and after-acquired personal
      property of the Debtors, including the following personal property presently
      owned or hereafter acquired by the Debtors,
      wherever situated, and all additions and accessions thereto and all
      substitutions and replacements thereof, and all proceeds, products and accounts
      thereof, including, without limitation, all proceeds from the sale or transfer
      of the Collateral and of insurance covering the same and of any tort claims
      in
      connection therewith, and all dividends, interest, cash, notes, securities,
      equity interest or other property at any time and from time to time acquired,
      receivable or otherwise distributed in respect of, or in exchange for, any
      or
      all of the Pledged Securities:

    

    (i) All
      goods, including, without limitation, (A) all machinery, equipment, computers,
      motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special
      and
      general tools, fixtures, test and quality control devices and other equipment
      of
      every kind and nature and wherever situated, together with all documents of
      title and documents representing the same, all additions and accessions thereto,
      replacements therefore, all parts therefore, and all substitutes for any of
      the
      foregoing and all other items used and useful in connection with any Debtor’s
      businesses and all improvements thereto; and (B) all inventory;

    

    (ii) All
      contract rights and other general intangibles, including, without limitation,
      all partnership interests, membership interests, stock or other securities,
      rights
      under any of the Organizational Documents, agreements related to the Pledged
      Securities, licenses,
      distribution and other agreements, computer software (whether “off-the-shelf”,
      licensed from any third party or developed by any Debtor), computer software
      development rights, leases, franchises, customer lists, quality control
      procedures, grants and rights, goodwill, trademarks, service marks, trade
      styles, trade names, patents, patent applications, copyrights, Intellectual
      Property and income tax refunds;

    

    
      
        
        

      

      
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    (iii) All
      accounts, together with all instruments, all documents of title representing
      any
      of the foregoing, all rights in any merchandising, goods, equipment, motor
      vehicles and trucks which any of the same may represent, and all right, title,
      security and guaranties with respect to each account, including any right of
      stoppage in transit;

    

    (iv) All
      documents, letter-of-credit rights, instruments and chattel paper;

    

    (v) All
      commercial tort claims;

    

    (vi) All
      deposit accounts and all cash (whether or not deposited in such deposit
      accounts);

    

    (vii) All
      investment property;

    

    (viii) All
      supporting obligations;

    

    (ix) All
      files, records, books of account, business papers and computer programs;
      and

    

    (x) All
      products and proceeds of all of the foregoing Collateral set forth in
clauses
      (i)-(ix)
      above.

     

    “Event
      of Default”
means
      the occurrence of either of the following: (i) an Event of Default (as defined
      in the Notes); or (ii) any provision of this Agreement shall at any time for
      any
      reason be declared to be null and void, or the validity or enforceability
      thereof shall be contested by a Debtor, or a proceeding shall be commenced
      by a
      Debtor, or by any governmental authority having jurisdiction over a Debtor,
      seeking to establish the invalidity or unenforceability thereof, or a Debtor
      shall deny that such Debtor has any liability or obligation purported to be
      created under this Agreement.

    

    “Intellectual
      Property”
means
      the collective reference to all existing rights, priorities and privileges
      relating to intellectual property, whether arising under United States,
      multinational or foreign laws or otherwise, including, without limitation,
      (i)
      all copyrights arising under the laws of the United States, any other country
      or
      any political subdivision thereof, whether registered or unregistered and
      whether published or unpublished, all registrations and recordings thereof,
      and
      all applications in connection therewith; (ii) all letters patent of the United
      States, any other country or any political subdivision thereof, all reissues
      and
      extensions thereof, and all applications for letters patent of the United States
      or any other country and all divisions, continuations and continuations-in-part
      thereof; (iii) all trademarks, trade names, corporate names, company names,
      business names, fictitious business names, trade dress, service marks, logos,
      domain names and other source or business identifiers, and all goodwill
      associated therewith, now
      existing or hereafter adopted or acquired, all
      registrations and recordings thereof, and all applications in connection
      therewith, whether in the United States Patent and Trademark Office or in any
      similar office or agency of the United States, any State thereof or any other
      country or any political subdivision thereof, or otherwise, and all common
      law
      rights related thereto; (iv) all trade secrets arising under the laws of the
      United States, any other country or any political subdivision thereof; (v)
      all
      rights to obtain any reissues, renewals or extensions of the foregoing; (vi)
      all
      licenses for any of the foregoing; and (vii) all causes of action for
      infringement of the foregoing.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    “Majority
      in Interest”
shall
      mean, at any time of determination, the majority in interest (based on
      then-outstanding principal amounts of Notes at the time of such determination)
      of the Secured Parties.

    

    “Necessary
      Endorsement”
shall
      mean undated stock powers endorsed in blank or other proper instruments of
      assignment duly executed and such other instruments or documents as the Secured
      Parties may reasonably request.

     

    “Obligations”
means
      all of the Debtors’ obligations under the Notes, this Agreement and the other
      Transaction Documents, in each case, 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 or the other Transaction Documents;
      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.

     

    “Organizational
      Documents”
means
      with respect to an entity, the documents by which such entity
      was
      organized (such as a certificate of incorporation, certificate of limited
      partnership or articles of organization, and including, without limitation,
      any
      certificates of designation for preferred stock or other forms of preferred
      equity) and which relate to the internal governance of such entity
      (such as
      bylaws, a partnership agreement or an operating, limited liability or members
      agreement).

     

    “Pledged
      Securities”
means
      all investment property and general intangibles respecting ownership and/or
      other equity interests in each Subsidiary, including, without limitation, the
      shares of capital stock and the other equity interests listed on Schedule
      I
      (as the
      same may be modified from time to time pursuant to the terms hereof),
      and
      any
      other shares of capital stock and/or other equity interests of any other direct
      or indirect subsidiary of any Debtor obtained in the future,
      in each
      case, all certificates representing such shares and/or equity interests and,
      in
      each case, all rights, options, warrants, stock, other securities and/or equity
      interests that may hereafter be received, receivable or distributed in respect
      of, or exchanged for, any of the foregoing, and all rights arising under or
      in
      connection with the foregoing, including, but not limited to, all dividends,
      interest and cash.

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    “UCC”
means
      the Uniform Commercial Code of the State of New York and or any other applicable
      laws of the United States, Canada or any state, province or other political
      subdivision thereof, which has jurisdiction with respect to all, or any portion
      of, the Collateral or this Agreement, from time to time. It is the intent of
      the
      parties that defined terms in the UCC should be construed in their broadest
      sense so that the term “Collateral”
will
      be
      construed in its broadest sense. Accordingly, if there are, from time to time,
      changes to defined terms in the UCC that broaden the definitions, they are
      incorporated herein and if existing definitions in the UCC are broader than
      the
      amended definitions, the existing ones shall be controlling. 

    

    (c) Terms
      Defined in the Loan Agreement.
      Any
      capitalized term used but not defined herein has the meaning specified in the
      Loan Agreement.

    

    (d) Usage.
      All
      definitions contained in this Agreement are equally applicable to the singular
      and plural forms of the terms defined. The words “hereof”, “herein” and
“hereunder” and words of similar import refer to this Agreement as a whole and
      not to any particular provision of this Agreement.

    

    2. GUARANTY;
      GRANT OF SECURITY INTEREST.
      

    

    2.1 Guaranty.
      Each of
      the Debtors (other than Avensys, Inc.) hereby guarantees that the Obligations
      of
      the other Debtors will be paid or otherwise satisfied in full strictly in
      accordance with the terms of the Transaction Documents. Avensys Inc. hereby
      guarantees that the Obligations of the Debtors (other than the Company) will
      be
      paid or otherwise satisfied in full strictly in accordance with the terms of
      the
      Transaction Documents to the extent permitted by applicable law. The liability
      of each Debtor is absolute and unconditional and such Debtor hereby waives
      any
      defense it may have in connection therewith. This guaranty is a guaranty of
      payment, and not merely of collection.

    

    2.2 Security
      Interest.
      As an
      inducement for the Secured Parties to extend the loans as evidenced by the
      Notes
      and (i) in the case of the Debtors (other than Avensys Inc.), to secure the
      complete and timely payment, performance and discharge in full, as the case
      may
      be, of all of the Obligations or (ii) in the case of Avensys Inc., to secure
      the
      complete and timely payment, performance and discharge in full of its
      obligations under the Guaranty provided for in Section
      2.1
      above,
each
      Debtor
      hereby unconditionally and irrevocably pledges, grants and hypothecates to
      the
Collateral
      Agent, for the benefit of each Secured Party pari
      passu with
      each
      of the other Secured
      Parties,
      a
      continuing security interest in and to, a lien upon and a right of set-off
      against all of their respective right, title and interest of whatsoever kind
      and
      nature in and to, the Collateral (the “Security
      Interest”).
      The
      Security Interest granted hereunder is a first priority lien and security
      interest except with respect to the Permitted Liens. Notwithstanding the
      foregoing, nothing herein shall be deemed to constitute an assignment of any
      asset which, in the event of an assignment, becomes void by operation of
      applicable law or the assignment of which is otherwise prohibited by applicable
      law (in each case to the extent that such applicable law is not overridden
      by
      Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law);
      provided,
      however,
      that to
      the extent permitted by applicable law, this Agreement shall create a valid
      security interest in such asset and, to the extent permitted by applicable
      law,
      this Agreement shall create a valid security interest in the proceeds of such
      asset.

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    

    3. DELIVERY
      OF CERTAIN COLLATERAL.
      

    

    Contemporaneously
      or prior to the execution of this Agreement, each Debtor shall deliver or cause
      to be delivered to the Collateral
      Agent, for the benefit of the Secured
      Parties (a) any and all certificates and other instruments representing or
      evidencing the Pledged Securities; and (b) any and all certificates and other
      instruments or documents representing any of the other Collateral, in each
      case,
      together with all Necessary Endorsements. The Debtors are, contemporaneously
      with the execution hereof, delivering to the Collateral
      Agent, for the benefit of the Secured
      Parties, or have previously delivered to
      the
      Secured Parties,
      a true
      and correct copy of each Organizational Document governing any of the Pledged
      Securities.

    

    
      
        4.
          REPRESENTATIONS,
          WARRANTIES, COVENANTS AND AGREEMENTS OF THE DEBTORS.
          

      

    

    

    Except
      as
      set forth in the Schedules provided as part of, and incorporated into, this
      Agreement, each Debtor represents and warrants to, and covenants and agrees
      with, the Collateral
      Agent, for the benefit of the Secured
      Parties,
      as
      follows:

    

    4.1 Good
      Standing; Due Authorization; Enforceability.

    

    (a) Each
      Debtor is duly organized and in good standing in the jurisdiction of its
      formation. Each Debtor shall at all times preserve and keep in full force and
      effect its valid existence and good standing and any rights and franchises
      material to its business. 

    

    (b) Each
      Debtor
      has the requisite corporate,
      partnership, limited liability company or other power
      and
      authority to enter into this Agreement and otherwise to carry out its
      obligations hereunder. The execution, delivery and performance by each
      Debtor
      of this Agreement and the filings contemplated therein have been duly authorized
      by all necessary action on the part of such
      Debtor
      and no further action is required by such
      Debtor.
      This Agreement has been duly executed and delivered by each
      Debtor.

    

    (c) This
      Agreement constitutes the legal, valid and binding obligation of each
      Debtor,
      enforceable against each
      Debtor
      in accordance with its terms except as such enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization and similar laws of general
      application relating to or affecting the rights and remedies of creditors and
      by
      general principles of equity. 

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    4.2 No
      Conflicts. 
      The
      execution, delivery and performance of this Agreement by the Debtors do not
      (i)
      violate any of the provisions of any Organizational Documents of any
      Debtor
      or any judgment, decree, order or award of any court, governmental body or
      arbitrator or any applicable law, rule or regulation applicable to any
      Debtor;
      or (ii) conflict with, or constitute a default (or an event that 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 (with or without
      notice, lapse of time or both) of, any agreement, credit facility, debt or
      other
      instrument (evidencing any Debtor’s debt or otherwise) or other understanding to
      which any
      Debtor
      is a party or by which any property or asset of any
      Debtor
      is bound or affected. No consent (including, without limitation, from
      stockholders or creditors of any
      Debtor)
      is required for any
      Debtor
      to enter into and perform its obligations hereunder.

     

    4.3 Debtor
      Information; Validity, Perfection and Maintenance of Security
      Interests.

    

    (a) All
      of
      the information set forth on Schedule
      II,
      including, without limitation, each Debtor’s name, jurisdiction of organization
      and location of Collateral, are true, correct and complete in all respects.
      No
      Debtor shall change its name, type of organization, jurisdiction of
      organization, organizational identification number (if it has one), legal or
      corporate structure, or identity, or add any new fictitious name unless it
      provides at least thirty (30) days’ prior written notice to the Secured Parties
      of such change and, at the time of such written notification, such Debtor
      provides any financing statements or fixture filings necessary to perfect and
      continue perfected the perfected Security Interest granted and evidenced by
      this
      Agreement. 

    

    (b) This
      Agreement creates in favor of the Secured Parties a valid security interest
      in
      the Collateral, securing the payment and performance of the Obligations. With
      respect to each Debtor that is organized in the United States, upon filing
      of
      UCC-1 financing statements with the secretary of state’s office of the state in
      which such Debtor is organized (collectively,
      the “Financing
      Statements”),
      and
      payment of the applicable filing fees, all security interests created hereunder
      in any Collateral owned by such Debtor which may be perfected by filing UCC-1
      financing statements shall have been duly perfected. No
      consent of any third parties and no authorization, approval or other action
      by,
      and no notice to or filing with, any governmental authority or regulatory body
      is required for (i) the execution, delivery and performance of this Agreement;
      (ii) the creation or perfection of the Security Interests created hereunder
      in
      the Collateral; or (iii) the enforcement of the rights of the Secured Parties
      hereunder.

    

    (c) Each
      Debtor
      hereby authorizes the Secured Parties, or any of them, to file the Financing
      Statements and any other financing statements or other similar filings under
      the
      UCC with respect to the Security Interest with the proper filing and recording
      agencies in any jurisdiction deemed proper by them. The Debtors shall, at the
      Debtors’ sole cost and expense, promptly execute and/or deliver to the Secured
      Parties such further deeds, mortgages, assignments, security agreements,
      financing statements or other instruments, documents, certificates and
      assurances and take such further action as the Secured Parties may from time
      to
      time request and may in their sole discretion deem necessary to perfect, protect
      or enforce its security interest in the Collateral including, without
      limitation, if applicable, the execution and delivery of a separate security
      agreement with respect to the Debtors’ Intellectual Property in which the
      Secured Parties have been granted a security interest hereunder, substantially
      in a form acceptable to the Secured Parties.

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (d) The
      Debtors shall at all times maintain the liens and Security Interest provided
      for
      hereunder as valid and perfected liens and security interests in the Collateral
      in favor of the Secured Parties until this Agreement and the Security Interest
      hereunder shall be terminated pursuant to Section
      13.
      The
      Debtors hereby agree to defend the same against the claims of any and all
      persons and entities. The Debtors shall obtain and furnish to the Secured
      Parties from time to time, upon demand, such releases and/or subordinations
      of
      claims and liens which may be required to maintain the priority of the Security
      Interest hereunder.

    

    4.4 Collateral.

    

    (a) The
      Debtors are the sole owner of the Collateral (except for non-exclusive licenses
      granted by any Debtor in the ordinary course of business), free and clear of
      any
      Liens (other than Permitted Liens), and are fully authorized to grant the
      Security Interest. There has been no adverse decision to any
      Debtor’s
      claim of ownership rights in or exclusive rights to use the Collateral in any
      jurisdiction or to any
      Debtor’s
      right to keep and maintain such Collateral in full force and effect, and there
      is no proceeding involving said rights pending or, to the best knowledge of
      any
      Debtor,
      threatened before any court, judicial body, administrative or regulatory agency,
      arbitrator or other governmental authority.

    

    (b) The
      Debtors shall keep and preserve their equipment, inventory and other tangible
      Collateral in good condition, repair and order. Each Debtor shall take all
      steps
      reasonably necessary to diligently pursue and seek to preserve, enforce and
      collect any rights, claims, causes of action and accounts receivable in respect
      of the Collateral.

    

    (c) Each
      Debtor
      shall at all times maintain its tangible Collateral at the locations set forth
      under its name on Schedule
      II
      and may
      not relocate such Collateral unless it delivers to the Secured Parties at least
      thirty (30) days prior to such relocation (i) written notice of such relocation
      and the new location thereof (which must be within the United States); and
      (ii)
      evidence that appropriate financing statements under the UCC and other necessary
      documents have been filed and recorded and other steps have been taken to
      perfect the Security Interest to create in favor of the Secured Parties a valid,
      perfected and continuing perfected first priority lien in the Collateral. The
      Debtors shall not transfer, pledge, hypothecate, encumber, license, sell or
      otherwise dispose of any of the Collateral (except for non-exclusive licenses
      granted by a Debtor in its ordinary course of business and sales of inventory
      by
      such Debtor in its ordinary course of business) without the prior written
      consent of a Majority in Interest. The Debtors shall not operate or locate
      any
      such Collateral (or cause to be operated or located) in any area excluded from
      insurance coverage. 

    

    (d) Except
      as
      set forth on Schedule 5.22 of the Loan Agreement, there is not on file in any
      governmental or regulatory authority, agency or recording office an effective
      financing statement, security agreement, license or transfer or any notice
      of
      any of the foregoing (other than those that will be filed in favor of the
      Secured Parties pursuant to this Agreement) covering or affecting any of the
      Collateral. So long as this Agreement shall be in effect, the Debtors shall
      not
      execute and shall not knowingly permit to be on file in any such office or
      agency any such financing statement or other document or instrument (except
      to
      the extent filed or recorded in favor of the Secured Parties pursuant to the
      terms of this Agreement). 

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    (e) The
      capital stock and other equity interests listed on Schedule
      I
      represent all of the capital stock and other equity interests of the Company
      Subsidiaries (as defined in the Loan Agreement), and represent all capital
      stock
      and other equity interests owned, directly or indirectly, by the Debtors. All
      of
      the Pledged Securities are validly issued, fully paid and nonassessable, and
      the
      Debtors are the legal and beneficial owner of the Pledged Securities, free
      and
      clear of any lien, security interest or other encumbrance except for the
      security interests created by this Agreement. The
      ownership and other equity interests in partnerships and limited liability
      companies (if any)
      included
      in the Pledged Securities
      (the
“Pledged
      Interests”)
      by
      their express terms do not provide that they are securities governed by Article
      8 of the UCC and are not held in a securities account or by any financial
      intermediary. Each Debtor shall vote the Pledged Securities to comply with
      the
      covenants and agreements set forth herein and the other Transaction
      Documents.

    

    (f) Each
      Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the
      Secured Parties promptly, in sufficient detail, of any substantial change in
      the
      Collateral, and of the occurrence of any event which would have a material
      adverse effect on the value of the Collateral or on the Secured Parties’
security interest therein. Each Debtor shall permit the Secured Parties and
      their representatives and agents to inspect the Collateral at any time, and
      to
      make copies of records pertaining to the Collateral as may be requested by
      a
      Secured Party from time to time.

    

    (g) All
      information heretofore, herein or hereafter supplied to the Secured Parties
      by
      or on behalf of the Debtors with respect to the Collateral is accurate and
      complete in all material respects as of the date furnished.

     

    4.5 Insurance.
      Each
      Debtor shall maintain with financially sound and reputable insurers, insurance
      with respect to the Collateral against loss or damage of the kinds and in the
      amounts customarily insured against by entities of established reputation having
      similar properties similarly situated and otherwise as is prudent for entities
      engaged in similar businesses but in any event sufficient to cover the full
      replacement cost thereof. Each Debtor shall cause each insurance policy issued
      in connection herewith to provide, and the insurer issuing such policy to
      certify to the Secured Parties that (a) the Secured Parties will be named as
      lender loss payee and additional insured under each such insurance policy;
      (b)
      if such insurance be proposed to be cancelled or materially changed for any
      reason whatsoever, such insurer will promptly notify the Secured Parties and
      such cancellation or change shall not be effective as to the Secured Parties
      for
      at least thirty (30) days after receipt by the Secured Parties of such notice,
      unless the effect of such change is to extend or increase coverage under the
      policy; and (c) the Secured Parties will have the right (but no obligation)
      at
      its election to remedy any default in the payment of premiums within thirty
      (30)
      days of notice from the insurer of such default. If no Event of Default (as
      defined in the Notes) exists and if the proceeds arising out of any claim or
      series of related claims do not exceed $200,000, loss payments in each instance
      will be applied by the applicable Debtor
      to
      the repair and/or replacement of property with respect to which the loss was
      incurred to the extent reasonably feasible, and any loss payments or the balance
      thereof remaining, to the extent not so applied, shall be payable to the
      applicable Debtor; provided,
      however,
      that
      payments received by any Debtor after an Event of Default occurs and is
      continuing or in excess of $200,000 for any occurrence or series of related
      occurrences shall be paid to the Secured Parties, on a pari
      passu
      basis
      with each of the other Secured Parties, and, if received by such Debtor, shall
      be held in trust for and immediately paid over to the Secured Parties unless
      otherwise directed in writing by the Secured Parties. Copies of such policies
      or
      the related certificates, in each case, naming the Secured Parties as lender
      loss payee and additional insured shall be delivered to the Secured Parties
      at
      least annually and at the time any new policy of insurance is
      issued.

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    4.6 Additional
      Debtors.
      If a
      Debtor creates or acquires any new Subsidiary, then such Debtor shall cause
      such
      new Subsidiary to become party to this Agreement for all purposes of this
      Agreement by executing and delivering an Assumption Agreement in the form of
      Annex A hereto.

    

    5. EFFECT
      OF PLEDGE ON CERTAIN RIGHTS.

    

    If
      any of
      the Collateral subject to this Agreement consists of nonvoting equity or
      ownership interests (regardless of class, designation, preference or rights)
      that may be converted into voting equity or ownership interests upon the
      occurrence of certain events (including, without limitation, upon the transfer
      of all or any of the other stock or assets of the issuer), it is agreed that
      the
      pledge of such equity or ownership interests pursuant to this Agreement or
      the
      enforcement of any of the Secured Parties’ rights hereunder shall not be deemed
      to be the type of event which would trigger such conversion rights
      notwithstanding any provisions in the Organizational Documents or agreements
      to
      which the Debtors or any of the Collateral is subject or to which the Debtors
      are party.

    

    6. DUTY
      TO HOLD IN TRUST.
      

    

    6.1 Cash
      and Payment Obligations.
      Upon
      the occurrence of an Event of Default and at any time thereafter, each Debtor
      shall, upon receipt of any revenue, income, dividend, interest or other sums
      subject to the Security Interest, whether payable pursuant to the Notes or
      otherwise, or of any check, draft, note, trade acceptance or other instrument
      evidencing an obligation to pay any such sum, hold the same in trust for and
      on
      behalf of and for the benefit of the Secured Parties, and shall forthwith
      endorse and transfer any such sums or instruments, or both (to the extent
      permitted by law), to the Collateral Agent for distribution to the Secured
      Parties, pro
      rata
      in
      proportion to their initial purchases of Notes for application to the
      satisfaction of the Obligations (and if any Note is not outstanding,
pro
      rata
      in
      proportion to the initial purchases of the remaining Notes).

    

    6.2 Securities
      and Other Assets.
      If a
      Debtor shall become entitled to receive or shall receive any securities or
      other
      property (including, without limitation, shares of Pledged Securities or
      instruments representing Pledged Securities acquired after the date hereof,
      or
      any options, warrants, rights or other similar property or certificates
      representing a dividend, or any distribution in connection with any
      recapitalization, reclassification or increase or reduction of capital, or
      issued in connection with any reorganization of any of its direct or indirect
      subsidiaries) in respect of the Pledged Securities (whether as an addition
      to,
      in substitution of, or in exchange for, such Pledged Securities or otherwise),
      such Debtor agrees to (i) accept the same as the agent of the Secured Parties;
      (ii) hold the same in trust on behalf of and for the benefit of the Secured
      Parties; and (iii) deliver any and all certificates or instruments evidencing
      the same to the Collateral Agent, for the benefit of the Secured Parties, on
      or
      before the close of business on the fifth business day following the receipt
      thereof by such Debtor, in the exact form received together with the Necessary
      Endorsements, to be held by the Collateral Agent subject to the terms of this
      Agreement as Collateral.

    

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    7. RIGHTS
      AND REMEDIES UPON DEFAULT.

    

    7.1 Scope
      of Rights and Remedies.
      Upon
      the occurrence of any Event of Default and at any time thereafter, the
      Collateral Agent, for the benefit of the Secured Parties, acting through any
      agent appointed by it for such purpose, shall have the right to exercise all
      of
      the remedies conferred hereunder and under the Notes, and the Collateral Agent,
      for the benefit of the Secured Parties, shall have all the rights and remedies
      of a secured party under the UCC. Without limitation, the Collateral Agent
      shall
      have the following rights and powers:

    

    (a) The
      Collateral Agent shall have the right to take possession of the Collateral
      and,
      for that purpose, enter, with the aid and assistance of any person, any premises
      where the Collateral, or any part thereof, is or may be placed and remove the
      same, and the Debtors shall assemble the Collateral and make it available to
      the
      Collateral Agent at places which the Collateral Agent shall reasonably select,
      whether at the Debtors’ premises or elsewhere, and make available to the
      Collateral Agent, without rent, all of the Debtors’ premises and facilities for
      the purpose of the Collateral Agent taking possession of, removing or putting
      the Collateral in saleable or disposable form.

    

    (b) Upon
      reasonable notice to the Debtors by the Collateral Agent, all rights of the
      Debtors to exercise the voting and other consensual rights which it would
      otherwise be entitled to exercise and all rights of the Debtors to receive
      the
      dividends and interest which it would otherwise be authorized to receive and
      retain, shall cease. Upon such reasonable notice, the Collateral Agent shall
      have the right to receive any interest, cash dividends or other payments on
      the
      Collateral and, at the option of the Collateral Agent, to exercise in the
      Collateral Agent’s discretion all voting rights pertaining thereto. Without
      limiting the generality of the foregoing, the Collateral Agent shall have the
      right (but not the obligation) to exercise all rights with respect to the
      Collateral as if it were the sole and absolute owner thereof, including, without
      limitation, to vote and/or to exchange, at its sole discretion, any or all
      of
      the Collateral in connection with a merger, reorganization, consolidation,
      recapitalization or other readjustment concerning or involving the Collateral
      or
      a Debtor or any of its direct or indirect subsidiaries.

    

    (c) The
      Collateral Agent shall have the right to operate the business of the Debtors
      using the Collateral and shall have the right to assign, sell, lease or
      otherwise dispose of and deliver all or any part of the Collateral, at public
      or
      private sale or otherwise, either with or without special conditions or
      stipulations, for cash or on credit or for future delivery, in such parcel
      or
      parcels and at such time or times and at such place or places, and upon such
      terms and conditions as the Collateral Agent may deem commercially reasonable,
      all without (except as shall be required by applicable statute and cannot be
      waived) advertisement or demand upon or notice to the Debtors or right of
      redemption of the Debtors, which are hereby expressly waived. Upon each such
      sale, lease, assignment or other transfer of Collateral, the Collateral
      Agent
      may,
      unless prohibited by applicable law which cannot be waived, purchase all or
      any
      part of the Collateral being sold, free from and discharged of all trusts,
      claims, right of redemption and equities of any
      Debtor,
      which are hereby waived and released.

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (d) The
      Collateral Agent
      shall
      have the right (but not the obligation) to notify any account debtors and any
      obligors under instruments or accounts to make payments directly to the
      Collateral Agent
      and to
      enforce the Debtors’ rights against such account debtors and
      obligors.

    

    (e) The
      Collateral
      Agent
      may (but
      is not obligated to) direct any financial intermediary or any other person
      or
      entity holding any investment property to transfer the same to the Collateral
      Agent
      or its
      designee.

    

    (f) The
      Collateral
      Agent
      may (but
      is not obligated to) transfer any or all Intellectual Property registered in
      the
      name of any
      Debtor
      at the United States Patent and Trademark Office and/or Copyright Office into
      the name of the Collateral
      Agent
      or any
      designee or any purchaser of any Collateral.

     

    7.2 Disposition
      of Collateral.
      The
Collateral
      Agent
      may
      comply with any applicable law in connection with a disposition of Collateral
      and such compliance will not be considered to adversely affect the commercial
      reasonableness of any sale of the Collateral. The Collateral
      Agent
      may sell
      the Collateral without giving any warranties and may specifically disclaim
      such
      warranties. If the Collateral
      Agent
      sells
      any of the Collateral on credit, the Debtors will only be credited with payments
      actually made by the purchaser. In addition, each Debtor waives any and all
      rights that it may have to a judicial hearing in advance of the enforcement
      of
      any of the Collateral
      Agent’s rights and remedies hereunder, including, without limitation, its right
      following an Event of Default to take immediate possession of the Collateral
      and
      to exercise its rights and remedies with respect thereto.

    

    7.3 License
      to Use Intellectual Property.
      For the
      purpose of enabling the
      Collateral
      Agent to further exercise rights and remedies under this Section
      7
      or
      elsewhere provided by agreement or applicable law, each Debtor hereby grants
      to
      the Collateral
      Agent
      an
      irrevocable, nonexclusive license (exercisable without payment of royalty or
      other compensation to such Debtor) to use, license or sublicense following
      an
      Event of Default, any Intellectual Property now owned or hereafter acquired
      by
      such Debtor, and wherever the same may be located, and including in such license
      access to all media in which any of the licensed items may be recorded or stored
      and to all computer software and programs used for the compilation or printout
      thereof.

     

    8. APPLICATIONS
      OF PROCEEDS.
      

    

    The
      proceeds of any such sale, lease or other disposition of the Collateral
      hereunder shall be applied first, to the expenses of retaking, holding, storing,
      processing and preparing for sale, selling and the like (including, without
      limitation, any taxes, fees and other costs incurred in connection therewith)
      of
      the Collateral, to the reasonable attorneys’ fees and expenses incurred by the
      Collateral Agent and Secured Parties in enforcing their rights hereunder and
      in
      connection with collecting, storing and disposing of the Collateral, and then
      to
      satisfaction of the Obligations pro
      rata
      among
      the Secured Parties (based on then-outstanding principal amounts of Notes at
      the
      time of any such determination), and to the payment of any other amounts
      required by applicable law, after which the Secured Parties shall pay to the
      Debtors any surplus proceeds. If, upon the sale, license or other disposition
      of
      the Collateral, the proceeds thereof are insufficient to pay all amounts to
      which the Secured Parties are legally entitled, the Debtors will be liable
      for
      the deficiency, together with interest thereon, at an interest rate equal to
      the
      lower of eighteen percent (18%) and the maximum rate permitted by applicable
      law
      (the “Default
      Rate”),
      and
      the reasonable fees of any attorneys employed by the Collateral Agent and the
      Secured Parties to collect such deficiency. To the extent permitted by
      applicable law, each Debtor waives all claims, damages and demands against
      the
      Collateral Agent and the Secured Parties arising out of the repossession,
      removal, retention or sale of the Collateral, unless due solely to the gross
      negligence or willful misconduct of the Collateral Agent or the Secured Parties
      as determined by a final judgment (not subject to further appeal) of a court
      of
      competent jurisdiction.

    

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    9. SECURITIES
      LAW PROVISION.
      

    

    Each
      Debtor recognizes that the Collateral
      Agent
      may be
      limited in its ability to effect a sale to the public of all or part of the
      Pledged Securities by reason of certain prohibitions in the Securities Act
      of
      1933, as amended, or other federal or state securities laws (collectively,
      the
“Securities
      Laws”),
      and
      may be compelled to resort to one or more sales to a restricted group of
      purchasers who may be required to agree to acquire the Pledged Securities for
      their own account, for investment and not with a view to the distribution or
      resale thereof. Each Debtor agrees that sales so made may be at prices and
      on
      terms less favorable than if the Pledged Securities were sold to the public,
      and
      that the Secured Parties have no obligation to delay the sale of any Pledged
      Securities for the period of time necessary to register the Pledged Securities
      for sale to the public under the Securities Laws. Each Debtor shall cooperate
      with the Collateral
      Agent
      in its
      attempt to satisfy any requirements under the Securities Laws (including,
      without limitation, registration thereunder if requested by the Collateral
      Agent) applicable to the sale of the Pledged Securities by the Collateral
      Agent.

     

    10. COSTS
      AND EXPENSES.
      

    

    Each
      Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses
      incurred in connection with any filing required hereunder, including, without
      limitation, any financing statements pursuant to the UCC, continuation
      statements, partial releases and/or termination statements related thereto
      or
      any expenses of any searches reasonably required by the Secured Parties, which
      in aggregate shall not exceed $2,000. The Debtors shall also pay all other
      claims and charges which in the reasonable opinion of the Secured Parties might
      prejudice, imperil or otherwise affect the Collateral or the Security Interest
      therein. The Debtors will also, upon demand, pay to the Collateral
      Agent, for the benefit of the Secured
      Parties,
      the
      amount of any and all reasonable expenses, including the reasonable fees and
      expenses of its counsel and of any experts and agents, which the Secured Parties
      may incur in connection with (i) the enforcement of this Agreement; (ii) the
      custody or preservation of, or the sale of, collection from, or other
      realization upon, any of the Collateral; or (iii) the exercise or enforcement
      of
      any of the rights of the Secured Parties under the Notes or this Agreement.
      Until so paid, any fees payable hereunder shall be added to the principal amount
      of the Notes and shall bear interest in accordance with the terms of the
      Notes.

    

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    11. RESPONSIBILITY
      FOR COLLATERAL.

    

    The
      Debtors assume all liabilities and responsibility in connection with all
      Collateral, and the Obligations shall in no way be affected or diminished by
      reason of the loss, destruction, damage or theft of any of the Collateral or
      its
      unavailability for any reason. The Collateral
      Agent
      agrees
      to act in accordance with commercially reasonable standards and the UCC. Without
      limiting the generality of the foregoing, (a) no Secured Party (i) has any
      duty
      (either before or after an Event of Default) to collect any amounts in respect
      of the Collateral or to preserve any rights relating to the Collateral, or
      (ii)
      has any obligation to clean-up or otherwise prepare the Collateral for sale;
      and
      (b) each Debtor shall remain obligated and liable under each contract or
      agreement included in the Collateral to be observed or performed by such Debtor
      thereunder. No Secured Party shall have any obligation or liability under any
      such contract or agreement by reason of or arising out of this Agreement or
      the
      receipt by any Secured Party of any payment relating to any of the Collateral,
      nor shall any Secured Party be obligated in any manner to perform any of the
      obligations of any Debtor under or pursuant to any such contract or agreement,
      to make inquiry as to the nature or sufficiency of any payment received by
      any
      Secured Party in respect of the Collateral or as to the sufficiency of any
      performance by any party under any such contract or agreement, to present or
      file any claim, to take any action to enforce any performance or to collect
      the
      payment of any amounts which may have been assigned to any Secured Party or
      to
      which it may be entitled at any time or times.

    

    12.  SECURITY
      INTEREST ABSOLUTE.

    

    All
      rights of the Collateral
      Agent and the Secured
      Parties and all obligations of the Debtors hereunder, shall be absolute and
      unconditional, irrespective of: (a) any lack of validity or enforceability
      of
      this Agreement, the Notes or any agreement entered into in connection with
      the
      foregoing, or any portion hereof or thereof; (b) any change in the time, manner
      or place of payment or performance of, or in any other term of, all or any
      of
      the Obligations, or any other amendment or waiver of or any consent to any
      departure from the Notes or any other agreement entered into in connection
      with
      the foregoing; (c) any exchange, release or nonperfection of any of the
      Collateral, or any release or amendment or waiver of or consent to departure
      from any other collateral for, or any guaranty, or any other security, for
      all
      or any of the Obligations; (d) any action by
      any
      of
      the
      Secured Parties to obtain, adjust, settle and cancel in its sole discretion
      any
      insurance claims or matters made or arising in connection with the Collateral;
      or (e) any other circumstance which might otherwise constitute any legal or
      equitable defense available to a
      Debtor,
      or a discharge of all or any part of the Security Interest granted hereby.
      Until
      the Obligations shall have been paid and performed in full, the rights of the
      Secured Parties shall continue even if the Obligations are barred for any
      reason, including, without limitation, the running of the statute of limitations
      or bankruptcy. Each Debtor expressly waives presentment, protest, notice of
      protest, demand, notice of nonpayment and demand for performance. In the event
      that at any time any transfer of any Collateral or any payment received by
      the
Collateral
      Agent for the benefit of any Secured
      Party
      hereunder shall be deemed by final order of a court of competent jurisdiction
      to
      have been a voidable preference or fraudulent conveyance under the bankruptcy
      or
      insolvency laws of the United States, or shall be deemed to be otherwise due
      to
      any party other than the Secured Parties, then, in any such event, each Debtor’s
      obligations hereunder shall survive cancellation of this Agreement, and shall
      not be discharged or satisfied by any prior payment thereof and/or cancellation
      of this Agreement, but shall remain a valid and binding obligation enforceable
      in accordance with the terms and provisions hereof. Each Debtor waives all
      right
      to require any
      Secured
Party
      to
      proceed against any other person or entity
      or
to
      apply
      any Collateral which the
      Collateral Agent or any
      Secured
      Parties may hold at any time, or to marshal assets, or to pursue any other
      remedy. Each Debtor waives any defense arising by reason of the application
      of
      the statute of limitations to any obligation secured hereby.

    

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    13. TERM
      OF AGREEMENT.
      

    

    This
      Agreement and the Security Interest shall terminate on the date on which all
      payments under the Notes have been indefeasibly paid in full; provided,
      however,
      that
      all indemnities of the Debtors contained in this Agreement shall survive and
      remain operative and in full force and effect regardless of the termination
      of
      this Agreement.

    

    14.
       POWER
      OF ATTORNEY.

    

    Each
      Debtor
      authorizes the Collateral
      Agent,
      and
      does hereby make, constitute and appoint the Collateral Agent
      and
its
      officers, agents, successors or assigns with full power of substitution, as
      such
      Debtor’s
      true and lawful attorney-in-fact, with power, in the name of the various Secured
      Parties or such
      Debtor,
      to, after the occurrence and during the continuance of an Event of Default,
      (i)
      endorse any note, 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 Collateral that may come into possession of the Secured Parties;
      (ii) 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 debtors, assignments, verifications and notices in connection
      with accounts, and other documents relating to the Collateral; (iii) pay or
      discharge taxes, liens, security interests or other encumbrances at any time
      levied or placed on or threatened against the Collateral; (iv) demand, collect,
      receipt for, compromise, settle and sue for monies due in respect of the
      Collateral; (v) transfer any Intellectual Property or provide licenses
      respecting any Intellectual Property; and (vi) generally, at the option of
      the
Collateral
      Agent,
      and at
      the expense of the Debtors, at any time, or from time to time, execute and
      deliver any and all documents and instruments and do all acts and things which
      the Collateral
      Agent deems
      necessary to protect, preserve and realize upon the Collateral and the Security
      Interest granted therein in order to effect the intent of this Agreement and
      the
      Notes all as fully and effectually as the Debtors might or could do. Each Debtor
      hereby ratifies all that said attorney shall lawfully do or cause to be done
      by
      virtue of the foregoing sentence. 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. The
      designation set forth herein shall be deemed to amend and supersede any
      inconsistent provision in the Organizational Documents or other documents or
      agreements to which any
      Debtor
      or any of the Pledged Securities is subject or to which any
      Debtor
      is a party. Without
      limiting the generality of the foregoing, after the occurrence and during the
      continuance of an Event of Default, the
      Collateral Agent
      is
      specifically authorized to execute and file any applications for or instruments
      of transfer and assignment of any patents, trademarks, copyrights or other
      Intellectual Property with the United States Patent and Trademark Office and
      the
      United States Copyright Office. 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. 

    

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    15.  OTHER
      SECURITY.
      

    

    To
      the
      extent that the Obligations are now or hereafter secured by property other
      than
      the Collateral or by the guarantee, endorsement or property of any other person,
      firm, corporation or other entity, then the Collateral
      Agent
      shall
      have the right, in its sole discretion, to pursue, relinquish, subordinate,
      modify or take any other action with respect thereto, without in any way
      modifying or affecting any of the Secured Parties’ rights and remedies
      hereunder.

    

    16. COLLATERAL
      AGENT.
      

    

    16.1 Appointment,
      Resignation and Removal.
      The
      Secured Parties hereby appoint Imperium Advisers, LLC to act as the Collateral
      Agent for purposes of exercising any and all rights and remedies of the Secured
      Parties hereunder. Any
      person or entity serving as the Collateral Agent may resign as Collateral Agent
      hereunder at any time by giving written notice thereof to each Secured Party,
      and such resignation shall become effective upon the effectiveness of the
      appointment of a successor agent in accordance with Section
      16.2.
      Any
      person or entity serving as Collateral Agent may be removed at any time or
      from
      time to time by the affirmative vote of a Majority in Interest.

     

    16.2 Successor
      Agent.
      Upon
      the
      resignation or removal of a Collateral Agent, a successor agent may be appointed
      by the Secured Parties by a Majority in Interest, and such appointment shall
      become effective upon such successor agent accepting such appointment in
      writing. If no successor agent shall have been so appointed by the Secured
      Parties within thirty (30) days after receipt of a resignation notice from
      the
      Collateral Agent, then the Collateral Agent shall have the right to appoint
      a
      successor agent in its sole and absolute discretion, and such successor agent
      shall commence serving as the Collateral Agent hereunder upon such successor
      agent’s acceptance of such appointment in writing. 

    

    16.3 Exculpation;
      Limitation and Delegation of Duties.
      Neither
      the Collateral Agent nor any of its directors, officers, partners, agents,
      representatives, advisors or employees (collectively, the “Collateral
      Agent Parties”)
      shall
      be liable to any Secured Party for any action taken or omitted to be taken
      by
      any of them hereunder, except for their own gross negligence or willful
      misconduct.
      None of
      Collateral Agent Parties shall be responsible for, or have any duty to ascertain
      the veracity, performance or satisfaction of, any representation, warranty,
      covenant, agreement or condition made or contained in this Agreement or any
      other Transaction Document. The
      Collateral Agent may undertake any of its duties as Collateral Agent hereunder
      by or through employees, agents and attorneys-in-fact and shall not be liable
      to
      any Secured Party for the negligence or misconduct of any such agents or
      attorneys-in-fact selected in good faith by the Collateral Agent. 

     

    16.4 Indemnification
      by Secured Parties.
      The
      Secured Parties hereby indemnify each of the Collateral Agent Parties for
      any losses, obligations, damages, penalties, actions, judgments, suits, costs,
      expenses, disbursements and other liabilities of any kind and nature whatsoever
      which may be imposed on, incurred by or asserted against the Collateral Agent
      in
      any way relating to or arising out of the Collateral Agent’s performance of its
      obligations under this Agreement, except for (i) those costs that are actually
      reimbursed by the Debtors under this Agreement; and (ii) liabilities directly
      attributable to the gross negligence or willful misconduct of any Collateral
      Agent Party.
      The
      payment of any indemnification obligation hereunder
      shall be
      made by each Secured Party on a pro
      rata
      basis,
      based on the principal amount of the Notes then owned by such Secured Party
      as
      compared to the aggregate principal amount of the Notes then outstanding.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    17. INDEMNIFICATION.

    

    The
      Debtors shall jointly and severally indemnify, reimburse and hold harmless
      the
      Collateral Agent and each of the Secured Parties and their respective partners,
      members, shareholders, officers, directors, employees and agents (collectively,
      “Indemnitees”)
      from
      and against any and all losses, claims, liabilities, damages, penalties, suits,
      costs and expenses, of any kind or nature, (including fees relating to the
      cost
      of investigating and defending any of the foregoing) imposed on, incurred by
      or
      asserted against such Indemnitee in any way related to or arising from or
      alleged to arise from this Agreement or the Collateral, except any such losses,
      claims, liabilities, damages, penalties, suits, costs and expenses which result
      from the gross negligence or willful misconduct of the Indemnitee as determined
      by a final, nonappealable decision of a court of competent jurisdiction. This
      indemnification provision is in addition to, and not in limitation of, any
      other
      indemnification provision in the Notes, the Loan Agreement or any other
      Transaction Document.

    

    18. MISCELLANEOUS.

    

      18.1 Severability.
      In the
      event that any provision of this Agreement becomes or is declared by a court
      of
      competent jurisdiction to be illegal, unenforceable or void, this Agreement
      shall continue in full force and effect without said provision; provided,
      however
      that in
      such case the parties shall negotiate in good faith to replace such provision
      with a new provision which is not illegal, unenforceable or void, as long as
      such new provision does not materially change the economic benefits of this
      Agreement to the parties.

    

    18.2 Successors
      and Assigns.
      The
      terms and conditions of this Agreement shall inure to the benefit of and be
      binding upon the respective successors and permitted assigns of the parties.
      Nothing in this Agreement, express or implied, is intended to confer upon any
      party other than the parties hereto or their respective successors and permitted
      assigns any rights, remedies, obligations or liabilities under or by reason
      of
      this Agreement, except as expressly provided in this Agreement. A Secured Party
      may assign its rights hereunder in connection with any private sale or transfer
      of its Notes in accordance with the terms thereof and of the other Transaction
      Documents, as long as, as a condition precedent to such transfer, the transferee
      executes an acknowledgment agreeing to be bound by the applicable provisions
      of
      this Agreement, in which case the term “Secured Party” shall be deemed to refer
      to such transferee as though such transferee were an original signatory hereto.
      No Debtor may assign its rights or obligations under this
      Agreement.

    

    18.3 Injunctive
      Relief.
      Each
      Debtor acknowledges and agrees that a breach by it of its obligations hereunder
      will cause irreparable harm to each Secured Party and that the remedy or
      remedies at law for any such breach will be inadequate and agrees, in the event
      of any such breach, in addition to all other available remedies, such Secured
      Party shall be entitled to an injunction restraining any breach and requiring
      immediate and specific performance of such obligations without the necessity
      of
      showing economic loss or the posting of any bond.

    

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    18.4 Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by and construed under the laws of the State of
      New
      York applicable to contracts made and to be performed entirely within the State
      of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
      of the state and federal courts sitting in the City and County of New York
      for
      the adjudication of any dispute hereunder or in connection herewith or with
      any
      transaction contemplated hereby and hereby irrevocably waives, and agrees not
      to
      assert in any suit, action or proceeding, any claim that it is not personally
      subject to the jurisdiction of any such court, that such suit, action or
      proceeding is brought in an inconvenient forum or that the venue of such suit,
      action or proceeding is improper. Each party hereby irrevocably waives personal
      service of process and consents to process being served in any such suit, action
      or proceeding by mailing a copy thereof to such party at the address in effect
      for notices to it under this Agreement and agrees that such service shall
      constitute good and sufficient service of process and notice thereof. Nothing
      contained herein shall be deemed to limit in any way any right to serve process
      in any manner permitted by law.

    

    18.5 Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, and all of which together shall constitute one and the
      same
      instrument. This Agreement may be executed and delivered by facsimile
      transmission.

    

    18.6 Headings.
      The
      headings used in this Agreement are used for convenience only and are not to
      be
      considered in construing or interpreting this Agreement. 

    

    18.7 Notices.
      Any
      notice, demand or request required or permitted to be given by the Debtor,
      Collateral Agent or a Secured Party pursuant to the terms of this Agreement
      shall be in writing and shall be deemed delivered (i) when delivered personally
      or by verifiable facsimile transmission, unless such delivery is made on a
      day
      that is not a Business Day, in which case such delivery will be deemed to be
      made on the next succeeding Business Day; (ii) on the next Business Day after
      timely delivery to an overnight courier; and (iii) on the Business Day actually
      received if deposited in the U.S. mail (certified or registered mail, return
      receipt requested, postage prepaid), addressed as follows:

    

    If
      to
      any Debtor:

     

    c/o Manaris
      Corporation

    400
      boul.
      Montpellier

    Montreal,
      Quebec

    Canada
      H4N 2G7

    Attn:
       John
      Fraser, Chief Executive Officer

    Tel:
       514-904-6030

    Fax:
       514-744-2080

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    With
      a copy (which
      shall not constitute notice) to:

    

    Sichenzia
      Ross Friedman Ference LLP

    61
      Broadway, 32nd
      Floor

    New
      York,
      New York 10006

    Attn: Darrin
      Ocasio, Esq.

    Tel: 212-930-9700

    Fax: 212-930-9725

    

    If
      to
      the Collateral Agent:

    

    Imperium
      Advisers, LLC

    153
      East
      53rd Street, 29th
      Floor

    New
      York,
      NY 10022

    Attn: Maurice
      Hryshko, Esq.

    Tel:
       (212)
      433-1360

    Fax: (212)
      433-1361

     

    and
      if to
      any Secured
      Party,
      to such
      address for such party as shall appear on the signature page of the Loan
      Agreement executed by such party, or as shall be designated by such party in
      writing to the other parties hereto in accordance with this Section
      18.7. 

     

    18.8 Entire
      Agreement; Amendments.
      This
      Agreement and the other Transaction Documents constitute the entire agreement
      between the parties with regard to the subject matter hereof and thereof,
      superseding all prior agreements or understandings, whether written or oral,
      between or among the parties. No (i) amendment to this Agreement or (ii) waiver
      of any agreement or other obligation of a Debtor under this Agreement may be
      made or given except pursuant to a written instrument executed by the Debtors,
      the Collateral Agent and a Majority in Interest of the Secured Parties. Any
      waiver or consent shall be effective only in the specific instance and for
      the
      specific purpose for which given.

    

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
      Security
      Agreement to be duly executed on the day and year first above
      written. 

     

    
      	 	 	 
	 	MANARIS
              CORPORATION,
              AS DEBTOR
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              John G. Fraser

              Chief Executive
                Officer

            

    

    
    

     

    
      	 	 	 
	 	C-CHIP
              TECHNOLOGIES CORPORATION (NORTH AMERICA), AS DEBTOR
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              Name: 

              
                

              

              Title:

              
                

              

            

    

    
    

     

    
      	 	 	 
	 	AVENSYS,
              INC., AS
              DEBTOR
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name: 

              
                

              

              Title:

              
                

              

            

    

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
      Security Agreement to be duly executed on the day and year first above
      written.

     

    
      	 	 	 
	 	IMPERIUM
              ADVISERS,
              LLC, AS COLLATERAL AGENT
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              Maurice Hryshko, Esq.

              General Counsel

            

    

     

    
      	 	 	 
	 	IMPERIUM
              MASTER
              FUND, LTD., AS SECURED PARTY
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              Maurice Hryshko, Esq.

              General Counsel

            

    

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    DISCLOSURE
      SCHEDULES 

    TO
      THE 

    AMENDED
      AND RESTATED SECURITY AGREEMENT

    Dated
      as of 

    September
      21, 2007

    By
      and Among

    MANARIS
      CORPORATION and each of its Subsidiaries, and 

    Imperium
      Advisers, LLC, in its capacity as collateral agent,

    for
      the benefit of the Holders of the 6% Original Issue Discount Senior Secured
      Convertible 

    Notes
      and the Senior Secured Working Capital Notes

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    INTRODUCTION

    

    Reference
      is made to the Amended and Restated Security Agreement entered into and dated
      as
      of September 21, 2007 (the “Agreement”), by and among Manaris Corporation, a
      Nevada corporation (the “Company”), each Subsidiary of the Company, and Imperium
      Advisers, LLC in its capacity as collateral agent, for the benefit of the
      Holders of the 6% Original Issue Discount Senior Secured Convertible Notes
      and
      the Senior Secured Working Capital Notes (the “Secured Parties”). Capitalized
      terms used herein shall have the respective meanings ascribed to such terms
      in
      the Agreement.

    

    The
      Disclosure Schedules are qualified in their entirety by reference to specific
      provisions in the Agreement, and are provided as part of, and incorporated
      into,
      the Agreement. Except as and to the extent provided in the Agreement, the
      Disclosure Schedules are not intended to constitute, and shall not be construed
      as constituting, representations or warranties of the Company or any of their
      respective Affiliates.

    

    Headings
      have been inserted on the sections of the Disclosure Schedules for convenience
      of reference only and shall not have the effect of amending or changing the
      express description of the sections as set forth in the Agreement.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    SCHEDULE
      I

    

    PLEDGED
      SECURITIES

    

    
      	
              Issuer

            	 	
              Shares/Interests
                Pledged

            
	
              C-CHIP
                Corporation

            	 	
              One
                hundred percent (100%) of the issued and outstanding capital stock
                of such
                entity

            
	 	 	 
	
              Avensys,
                Inc.

            	 	
              One
                hundred percent (100%) of the issued and outstanding capital stock
                of such
                entity

            

    

    

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    SCHEDULE
      II

    

    DEBTOR
      INFORMATION

    

      
        	
                Name
                  of the Debtor:

              	 	
                Manaris
                  Corporation

              
	
                Jurisdiction
                  of Organization:

              	 	
                Nevada

              
	 	 	 
	
                Organizational
                  Identification Number:

              	 	
                980471285

              
	 	 	 
	
                Trade
                  names and other names used by the Debtor during the past five (5)
                  years:

              	 	
                Keystone
                  Mines Limited (June 26, 2000 - date of incorporation)

                 

                C-Chip
                  Technologies Corporation (January 7, 2003)

                 

                Manaris
                  Corporation (July 18, 2005)

              
	 	 	 
	
                Principal
                  Place of Business:

              	 	
                Montreal,
                  Quebec, Canada

              
	 	 	 
	
                Location
                  of Collateral:

              	 	
                Montreal,
                  Quebec, Canada 

              
	 	 	 
	
                Name
                  of the Debtor:

              	 	
                C-CHIP
                  Corporation

              
	 	 	 
	
                Jurisdiction
                  of Organization:

              	 	
                Incorporated
                  under the laws of Canada.

              
	 	 	 
	
                Organizational
                  Identification Number:

              	 	
                854816634

              
	 	 	 
	
                Trade
                  names and other names used by the Debtor during the past five (5)
                  years:

              	 	
                None

              
	 	 	 
	
                Principal
                  Place of Business:

              	 	
                Montreal,
                  Quebec, Canada

              
	 	 	 
	
                Location
                  of Collateral:

              	 	
                Montreal,
                  Quebec, Canada 

              
	 	 	 
	
                Name
                  of the Debtor:

              	 	
                Avensys
                  Inc.

              
	 	 	 
	
                Jurisdiction
                  of Organization:

              	 	
                Incorporated
                  under the laws of the Province of Quebec

              
	 	 	 
	
                Organizational
                  Identification Number:

              	 	 
	 	 	 
	
                Trade
                  names and other names used by the Debtor during the past five (5)
                  years:

              	 	
                None

              
	 	 	 
	
                Principal
                  Place of Business:

              	 	
                Montreal,
                  Quebec, Canada

              
	 	 	 
	
                Location
                  of Collateral:

              	 	
                Montreal,
                  Quebec, Canada 

              

      

    

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    ANNEX
      A

    

    ASSUMPTION
      AGREEMENT, dated as of the __ day of ________, 20__, made by __________________,
      a __________ corporation (the “Additional
      Debtor”),
      in
      favor of the Collateral Agent and Secured Parties pursuant to the Security
      Agreement referred to below. All capitalized terms not defined herein shall
      have
      the meaning ascribed to them in the Security Agreement.

    

    WITNESSETH:

    

    WHEREAS,
      Manaris Corporation and its subsidiaries entered into an Amended and Restated
      Security Agreement, dated as of September 21, 2007 (as further amended,
      supplemented or otherwise modified from time to time, the “Security
      Agreement”)
      in
      favor of the Collateral Agent and Secured Parties;

    

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

    

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

    

    NOW,
      THEREFORE, IT IS AGREED:

    

    1. Assumption.
      By
      executing and delivering this Assumption Agreement, the Additional Debtor hereby
      becomes a party to the Security Agreement as a Debtor thereunder with the same
      force and effect as if originally named therein as a Debtor and, without
      limiting the generality of the foregoing, hereby expressly assumes all
      obligations and liabilities of a Debtor thereunder. The Additional Debtor hereby
      represents and warrants that each of the representations and warranties
      contained in Section
      4
      of the
      Security Agreement is true and correct on and as the date hereof as to such
      Additional Debtor (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 APPLICABLE TO CONTRACTS MADE
      AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	[ADDITIONAL
              DEBTOR]
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              Name: 

              
                

              

              Title:

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