Document:

Exhibit 10.1

 

SECURITY AGREEMENT

 

This
SECURITY AGREEMENT, dated as of April 29, 2009 (this “Agreement”), is among
Enable Holdings, Inc., a Delaware corporation (the “Company”), all of the
Subsidiaries of the Company (such subsidiaries, the “Guarantors “ and together
with the Company, the “Debtors”) and the holders of the Company’s 12% Senior
Secured Debentures due October 29, 2011 and issued in the original aggregate
Principal Amount of up to $7,500,000 (collectively, the “Debentures”) signatory
hereto, their endorsees, transferees and assigns (collectively, the “Secured
Parties”).

 

WITNESSETH:

 

WHEREAS,
pursuant to the Subscription Agreement (as defined in the Debentures), the
Secured Parties have severally agreed to extend the loans to the Company
evidenced by the Debentures;

 

WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”)
attached hereto as Exhibit B, the Guarantors have jointly and severally agreed
to guarantee and act as surety for payment of such Debentures; and

 

WHEREAS,
in order to induce the Secured Parties to extend the loans evidenced by the
Debentures, the Debtors have agreed to execute and deliver to the Secured
Parties (or their agent as provided in section 16 herof) this Agreement and to
grant the Secured Parties, pari passu with
each other Secured Party a security interest in substantially all of the assets
of the Debtors to secure the prompt payment, performance and discharge in full
of all of the Company’s obligations under the Debentures and the Guarantors’
obligations under the Guarantee.

 

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 hereby agree as follows:

 

1.             Certain
Definitions. As used in this Agreement, the following terms shall
have the meanings set forth in this Section 1. 
Terms used but not otherwise defined in this Agreement that are defined
in Article 9 of the UCC (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.

 

(a)           “Collateral” “Collateral”
means the collateral in which the Secured Parties are granted a security
interest by this Agreement and which shall include the following personal
property of the Debtors, whether presently owned or existing or hereafter
acquired or coming into existence, 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 (as defined below):

 

(a)           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, other than
inventory purchased in the past or to be purchased in the future, through
purchase order financing and proceeds derived from such inventory arranged by
Cari Bloom Management, Inc., in which event Cari Bloom Management, Inc. shall
be deemed to have a prior lien and security interests, and credit facilities
established by the Company with third parties for the future purchase of
inventory and the proceeds derived from such inventory, shall be deemed to have
a prior lien and security interest provided that any security interest or lien
granted to such provider is limited to inventory purchased under the credit
facility;

 

(b)           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, and income tax
refunds;

 

(c)           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;

 

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

 

(e)           All commercial tort
claims;

 

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

 

(g)           All investment
property;

 

(h)           All supporting
obligations;

 

 

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

 

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

 

Without limiting the
generality of the foregoing, the “Collateral” shall include all investment
property and general intangibles respecting ownership and/or other equity
interests in each Guarantor, including, without limitation, the shares of
capital stock and the other equity interests listed on Schedule H hereto (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, and, 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 Pledged Securities, including,
but not limited to, all dividends, interest and cash.

 

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.

 

(b)           “Collateral Agent” shall mean the
person or persons appointed as collateral agent by the Secured Parties pursuant
to the Collateral agent Agreement of even date herewith, and which Collateral
Agent initially appointed shall be David Dent.

 

(c)   “Intellectual Property”
means the collective reference to all 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, including, without limitation, all
registrations, recordings and applications in the United States Copyright
Office, (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.

 

(d)   “Majority in Interest”
means, at any time of determination, the majority in interest (based on
then-outstanding Principal Amounts of Debentures at the time of such
determination) of the Secured Parties.

 

(e)   “Necessary Endorsement”
means 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.

 

(f)    “Obligations” means
all of the liabilities and obligations (primary, secondary, direct, contingent,
sole, joint or several) due or to become due, or that are now or may be
hereafter contracted or acquired, or owing to, of any Debtor to the Secured
Parties, including, without limitation, all obligations under this Agreement,
the Debentures, the Guarantee and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith, 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
Debentures 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 Debentures, the
Guarantee and any other instruments, agreements or other documents executed
and/or delivered in connection herewith or therewith; and (iii) all amounts
(including but not limited to post-petition interest) in respect of the
foregoing that would be payable but for the fact that the obligations to pay
such amounts are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Debtor.

 

(g)   “Organizational Documents”
means with respect to any Debtor, the documents by which such Debtor 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 Debtor (such as bylaws, a
partnership agreement or an operating, limited liability or members agreement).

 

(h)   “Pledged Interests”
shall have the meaning ascribed to such term in Section 4(j).

 

(i)    “Pledged Securities”
shall have the meaning ascribed to such term in Section 4(i).

 

(j)    “UCC” means the
Uniform Commercial Code of the State of Illinois and or any other applicable
law of any state or states 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 Party 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.

 

2.             Grant of
Security Interest in Collateral. As an inducement for the Secured
Parties to extend the loans as evidenced by the Debentures and to secure the
complete and timely payment, performance and discharge in full, as the case may
be, of all of the Obligations, each Debtor hereby unconditionally and
irrevocably pledges, grants and hypothecates to the Secured Parties a 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 (a “Security Interest” and, collectively, the “Security
Interests”).

 

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 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 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. Throughout the term of this Agreement,
so long as no Event of Default is incurred and continuing, the Debtors shall
have the right to vote the Pledged Securities in all matters presented to the
stockholders of the Pledge Securities for vote thereon, except in a manner
inconsistent with the terms of this Agreement or detrimental to the interests
of the Secured Parties. The Secured Parties shall hold the Pledged Securities
in the form in which the same are delivered herewith, unless there shall occur
an Event of Default. To the extent that the Secured Parties shall not
previously have taken, acquired, sold, transferred, disposed of or otherwise
realized value on the Pledged Securities in accordance with this Agreement, on
the date on which the Obligations have been indefeasibly discharged or
satisfied in full, any remaining security interest in the Pledged Securities
shall automatically terminate, cease to exist and be released, and the Secured 

 

 

Parties shall forthwith
return any remaining Pledged Securities to the Company and irrevocably release
such Pledge Securities.

 

4.             Representations,
Warranties, Covenants and Agreements of the Debtors. Except as set
forth under the corresponding section of the disclosure schedules delivered to
the Secured Parties concurrently herewith (the “Disclosure Schedules”), which Disclosure
Schedules shall be deemed a part hereof, each Debtor represents and warrants
to, and covenants and agrees with, the Secured Parties as follows:

 

(a)           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 by each Debtor. 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.

 

(b)           The Debtors have no
place of business or offices where their respective books of account and
records are kept (other than temporarily at the offices of its attorneys or
accountants) or places where Collateral is stored or located, except as set
forth on Schedule A attached hereto. Except as specifically set forth on
Schedule A, each Debtor is the record owner of the real property where such
Collateral is located, and there exist no mortgages or other liens on any such
real property except for Permitted Liens (as defined in the Debentures).  Except as disclosed on Schedule B, none of
such Collateral is in the possession of any consignee, bailee, warehouseman,
agent or processor.

 

(c)           Except for Permitted
Liens (as defined in the Debentures), 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, security interests,
encumbrances, rights or claims, and are fully authorized to grant the Security
Interests. Except as set forth on Schedule C attached hereto, 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. Other than with respect to Permitted liens, 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 other 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).

 

(d)           No written claim has
been received that any Collateral or any Debtor’s use of any Collateral
violates the rights of any third party. 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.

 

(e)           Each Debtor shall at
all times maintain its books of account and records relating to the Collateral
at its principal place of business and its Collateral at the locations set
forth on Schedule A attached hereto and may not relocate such books of account
and records or tangible Collateral unless it delivers to the Secured Parties at
least 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 Interests to create in favor of the Secured Parties a
valid, perfected and continuing perfected first priority lien in the
Collateral.

 

(f)            This Agreement
creates in favor of the Secured Parties a valid security interest in the
Collateral, subject only to Permitted Liens (as defined in the Debentures)
securing the payment and performance of the Obligations. Upon making the
filings described in the immediately following paragraph, all security
interests created hereunder in any Collateral which may be perfected by filing
Uniform Commercial Code financing statements shall have been duly
perfected.  Except for the filing of the
Uniform Commercial Code financing statements referred to in the immediately
following paragraph, the recordation of the Intellectual Property Security
Agreement (as defined in Section 4(p) hereof) with respect to copyrights and
copyright applications in the United States Copyright Office referred to in
paragraph (m), the execution and delivery of deposit account control agreements
satisfying the requirements of Section 9-104(a)(2) of the UCC with respect to
each deposit account of the Debtors, and the delivery of the certificates and
other instruments provided in Section 3, no action is necessary to create,
perfect or protect the security interests created hereunder. Without limiting
the generality of the foregoing, except for the filing of said financing
statements, the recordation of said Intellectual Property Security Agreement,
and the execution and delivery of said deposit account control agreements, 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.

 

(g)           Each Debtor hereby
authorizes the Secured Parties or the Collateral Agent to file one or more
financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper
by it.

 

(h)           The execution,
delivery and performance of this Agreement by the Debtors does 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. If any, all required consents (including,
without limitation, from stockholders or creditors of any Debtor) necessary for
any Debtor to enter into and perform its obligations hereunder have been
obtained.

 

(i)            The capital stock
and other equity interests listed on Schedule H hereto (the “Pledged Securities”)
represent all of the capital stock and other equity interests of the
Guarantors, and represent all capital stock and other equity interests owned,
directly or indirectly, by the Company. All of the Pledged Securities are
validly issued, fully paid and nonassessable, and the Company is 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 and other Permitted Liens (as defined in the
Debentures).

 

(j)            The ownership and
other equity interests in partnerships and limited liability companies (if any)
included in the Collateral (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.

 

(k)           Except for Permitted
Liens (as defined in the Debentures), each Debtor shall at all times maintain
the liens and Security Interests provided for hereunder as valid and perfected
first priority 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 14 hereof. Each Debtor hereby agrees to
defend the same against the claims of any and all persons and entities. Each
Debtor shall safeguard and protect all Collateral for the account of the
Secured Parties. At the request of the Secured Parties, each Debtor will sign
and deliver to the Secured Parties at any time or from time to time one or more
financing statements pursuant to the UCC in form reasonably satisfactory to the
Secured Parties and will pay the cost of filing the same in all public offices
wherever filing is, or is deemed by the Secured Parties to be, necessary or
desirable to effect the rights and obligations provided for herein. Without
limiting the generality of the foregoing, each Debtor shall pay all fees, taxes
and other amounts necessary to maintain the Collateral and the Security
Interests hereunder, and each Debtor 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
Interests hereunder.

 

(l)            No Debtor will
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 a Debtor in its
ordinary course of business) without the prior written consent of a Majority in
Interest.

 

(m)          Each Debtor shall
keep and preserve its equipment, inventory and other tangible Collateral in
good condition, repair and order and shall not operate or locate any such
Collateral (or cause to be operated or located) in any area excluded from
insurance coverage.

 

(n)           Each Debtor shall
maintain with financially sound and reputable insurers, insurance with respect
to the Collateral, including Collateral hereafter acquired, 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 in
such amounts as are customarily carried under similar circumstances by other
such entities 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 Debentures) exists and if the proceeds arising out of any
claim or series of related claims do not exceed $50,000, 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 $50,000 for any occurrence or
series of related occurrences shall be paid to the Secured Parties and, if
received by such Debtor, shall be held in trust for the Secured Parties 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.

 

(o)           Each Debtor shall,
within ten (10) days of obtaining knowledge thereof, advise the Secured Parties
promptly, in sufficient detail, of any material adverse 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.

 

(p)           Each Debtor shall
promptly execute and 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 the Secured
Parties’ security interest in the Collateral including, without limitation, if
applicable, the execution and delivery of a separate security agreement with
respect to each Debtor’s Intellectual Property (“Intellectual Property Security
Agreement”) in which the Secured Parties have been granted a security interest
hereunder, substantially in a form reasonably acceptable to the Secured
Parties, which Intellectual Property Security Agreement, other than as stated
therein, shall be subject to all of the terms and conditions hereof.

 

(q)           Each Debtor shall
permit the Secured Parties and their representatives and agents to inspect the
Collateral during normal business hours and upon reasonable prior notice, and
to make copies of records pertaining to the Collateral as may be reasonably
requested by the Secured Parties from time to time.

 

(r)            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.

 

(s)           Each Debtor shall
promptly notify the Secured Parties or the Collateral Agent in sufficient
detail upon becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other information
received by such Debtor that may materially affect the value of the Collateral,
the Security Interest or the rights and remedies of the Secured Parties
hereunder.

 

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

 

(u)           The Debtors shall at
all times preserve and keep in full force and effect their respective valid
existence and good standing and any rights and franchises material to its
business.

 

(v)           No Debtor will
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 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 the perfection
of the Security Interests granted and evidenced by this Agreement.

 

(w)          Except in the
ordinary course of business, no Debtor may consign any of its inventory or sell
any of its inventory on bill and hold, sale or return, sale on approval, or
other conditional terms of sale without the consent of the Secured Parties,
which shall not be unreasonably withheld.

 

 

(x)            No Debtor may
relocate its chief executive office to a new location without providing 30 days
prior written notification thereof to the Secured Parties or the Collateral
Agent and so long as, at the time of such written notification, such Debtor
provides any financing statements or fixture filings necessary to perfect and
continue the perfection of the Security Interests granted and evidenced by this
Agreement.

 

(y)           Each Debtor was
organized and remains organized solely under the laws of the state set forth
next to such Debtor’s name in Schedule D attached hereto, which Schedule D sets
forth each Debtor’s organizational identification number or, if any Debtor does
not have one, states that one does not exist.

 

(z)            (i) The actual name
of each Debtor is the name set forth in Schedule D attached hereto; (ii) no
Debtor has any trade names except as set forth on Schedule E attached hereto; (iii)
no Debtor has used any name other than that stated in the preamble hereto or as
set forth on Schedule E for the preceding five years; and (iv) no entity has
merged into any Debtor or been acquired by any Debtor within the past five
years except as set forth on Schedule E.

 

(aa)         At any time and from
time to time that any Collateral consists of instruments, certificated
securities or other items that require or permit possession by the secured
party to perfect the security interest created hereby, the applicable Debtor
shall deliver such Collateral to the Secured Parties.

 

(bb)         Each Debtor, in its
capacity as issuer, hereby agrees to comply with any and all orders and
instructions of the Secured Parties regarding the Pledged Interests consistent
with the terms of this Agreement without the further consent of any Debtor as
contemplated by Section 8-106 (or any successor section) of the UCC. Further,
each Debtor agrees that it shall not enter into a similar agreement (or one
that would confer “control” within the meaning of Article 8 of the UCC) with
any other person or entity.

 

(cc)         Each Debtor shall
cause all tangible chattel paper constituting Collateral to be delivered to the
Secured Parties, or, if such delivery is not possible, then to cause such
tangible chattel paper to contain a legend noting that it is subject to the
security interest created by this Agreement. To the extent that any Collateral
consists of electronic chattel paper, the applicable Debtor shall cause the
underlying chattel paper to be “marked” within the meaning of Section 9-105 of
the UCC (or successor section thereto).

 

(dd)         If there is any
investment property or deposit account included as Collateral that can be
perfected by “control” through an account control agreement, the applicable
Debtor shall cause such an account control agreement, in form and substance in
each case satisfactory to the Secured Parties, to be entered into and delivered
to the Secured Parties.

 

 

(ee)         To the extent that
any Collateral consists of letter-of-credit rights, the applicable Debtor shall
cause the issuer of each underlying letter of credit to consent to an
assignment of the proceeds thereof to the Secured Party.

 

(ff)           To the extent that
any Collateral is in the possession of any third party, the applicable Debtor
shall join with the Secured Parties in notifying such third party of the
Secured Parties’ security interest in such Collateral and shall use its best
efforts to obtain an acknowledgement and agreement from such third party with
respect to the Collateral, in form and substance reasonably satisfactory to the
Secured Parties.

 

(gg)         If any Debtor shall
at any time hold or acquire a commercial tort claim, such Debtor shall promptly
notify the Secured Parties in a writing signed by such Debtor of the
particulars thereof and grant to the Secured Parties in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the
Secured Parties.

 

(hh)         Each Debtor shall
immediately provide written notice to the Secured Parties of any and all
accounts which arise out of contracts with any governmental authority and, to
the extent necessary to perfect or continue the perfected status of the
Security Interests in such accounts and proceeds thereof, shall execute and
deliver to the Secured Parties an assignment of claims for such accounts and
cooperate with the Secured Parties in taking any other steps required, in its
judgment, under the Federal Assignment of Claims Act or any similar federal,
state or local statute or rule to perfect or continue the perfected status
of the Security Interests in such accounts and proceeds thereof.

 

(ii)           Each Debtor shall
cause each subsidiary of such Debtor to immediately become a party hereto (an “Additional
Debtor”), by executing and delivering an Additional Debtor Joinder in
substantially the form of Annex A attached hereto and comply with the
provisions hereof applicable to the Debtors. Concurrent therewith, the
Additional Debtor shall deliver replacement schedules for, or supplements to
all other Schedules to (or referred to in) this Agreement, as applicable, which
replacement schedules shall supersede, or supplements shall modify, the
Schedules then in effect. The Additional Debtor shall also deliver such
opinions of counsel, authorizing resolutions, good standing certificates,
incumbency certificates, organizational documents, financing statements and
other information and documentation as the Secured Parties may reasonably
request. Upon delivery of the foregoing to the Secured Parties, the Additional
Debtor shall be and become a party to this Agreement with the same rights and
obligations as the Debtors, for all purposes hereof as fully and to the same
extent as if it were an original signatory hereto and shall be deemed to have
made the representations, warranties and covenants set forth herein as of the
date of execution and delivery of such Additional Debtor Joinder, and all
references herein to the “Debtors” shall be deemed to include each Additional
Debtor.

 

(jj)           Each Debtor shall
vote the Pledged Securities to comply with the covenants and agreements set
forth herein.

 

 

(kk)         Each Debtor shall
register the pledge of the applicable Pledged Securities on the books of such
Debtor. Each Debtor shall notify each issuer of Pledged Securities to register
the pledge of the applicable Pledged Securities in the name of the Secured
Parties on the books of such issuer. Further, except with respect to
certificated securities delivered to the Secured Parties, the applicable Debtor
shall deliver to the Secured Parties an acknowledgement of pledge (which, where
appropriate, shall comply with the requirements of the relevant UCC with
respect to perfection by registration) signed by the issuer of the applicable
Pledged Securities, which acknowledgement shall confirm that: (a) it has
registered the pledge on its books and records; and (b) at any time
directed by the Secured Parties during the continuation of an Event of Default,
such issuer will transfer the record ownership of such Pledged Securities into
the name of any designee of the Secured Parties, will take such steps as may be
necessary to effect the transfer, and will comply with all other instructions
of the Secured Parties regarding such Pledged Securities without the further
consent of the applicable Debtor.

 

(ll)           In the event that,
upon an occurrence of an Event of Default, the Secured Parties shall sell all
or any of the Pledged Securities to another party or parties (herein called the
“Transferee”) or shall purchase or retain all or any of the Pledged Securities,
each Debtor shall, to the extent applicable: (i) deliver to Secured
Parties or the Transferee, as the case may be, the articles of incorporation,
bylaws, minute books, stock certificate books, corporate seals, deeds, leases,
indentures, agreements, evidences of indebtedness, books of account, financial
records and all other Organizational Documents and records of the Debtors and
their direct and indirect subsidiaries; (ii) use its best efforts to
obtain resignations of the persons then serving as officers and directors of
the Debtors and their direct and indirect subsidiaries, if so requested; and (iii) use
its best efforts to obtain any approvals that are required by any governmental
or regulatory body in order to permit the sale of the Pledged Securities to the
Transferee or the purchase or retention of the Pledged Securities by the
Secured Parties and allow the Transferee or the Secured Parties to continue the
business of the Debtors and their direct and indirect subsidiaries.

 

(mm)       Without limiting the
generality of the other obligations of the Debtors hereunder, each Debtor shall
promptly (i) cause to be registered at the United States Copyright Office
all of its material copyrights, (ii) cause the security interest
contemplated hereby with respect to all Intellectual Property registered at the
United States Copyright Office or United States Patent and Trademark Office to
be duly recorded at the applicable office, and (iii) give the Secured
Parties notice whenever it acquires (whether absolutely or by license) or
creates any additional material Intellectual Property.

 

(nn)         Each Debtor will from
time to time, at the joint and several expense of the Debtors, promptly execute
and deliver all such further instruments and documents, and take all such
further action as may be necessary or desirable, or as the Secured Parties may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Secured Parties to
exercise and enforce 

 

 

their
rights and remedies hereunder and with respect to any Collateral or to
otherwise carry out the purposes of this Agreement.

 

(oo)         Schedule F attached
hereto lists all of the patents, patent applications, trademarks, trademark
applications, registered copyrights, and domain names owned by any of the
Debtors as of the date hereof. Schedule F lists all material licenses in favor
of any Debtor for the use of any patents, trademarks, copyrights and domain
names as of the date hereof. All material patents and trademarks of the Debtors
have been duly recorded at the United States Patent and Trademark Office and
all material copyrights of the Debtors have been duly recorded at the United
States Copyright Office.

 

(pp)         Except as set forth
on Schedule G attached hereto, none of the account debtors or other persons or
entities obligated on any of the Collateral is a governmental authority covered
by the Federal Assignment of Claims Act or any similar federal, state or local
statute or rule in respect of such Collateral.

 

(qq)         Each Debtor agrees
that the Collateral Agent has been appointed by the Secured Parties to act on
their behalf with respect to the rights granted to the Secured Parties under
this Agreement.

 

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
Party’s 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 any Debtor is subject or to
which any Debtor is party.

 

6.             Defaults.
The following events shall be “Events of Default”:

 

(a)           The occurrence of an
Event of Default (as defined in the Debentures) under the Debentures;

 

(b)           Any representation
or warranty of any Debtor in this Agreement shall prove to have been incorrect
in any material respect when made;

 

(c)           The failure by any
Debtor to observe or perform any of its obligations hereunder for ten (10) days
after delivery to such Debtor of notice of such failure by or on behalf of a
Secured; or

 

(d)           If 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 

 

 

any
Debtor, or a proceeding shall be commenced by any Debtor, or by any
governmental authority having jurisdiction over any Debtor, seeking to
establish the invalidity or unenforceability thereof, or any Debtor shall deny
that any Debtor has any liability or obligation purported to be created under
this Agreement.

 

7.             Duty To Hold
In Trust.

 

(a)           Upon the occurrence
of any 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 Interests, whether payable pursuant to the Debentures 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 the Secured
Parties and shall forthwith endorse and transfer any such sums or instruments,
or both, to the Secured Parties, pro-rata in proportion to their respective
then-currently outstanding Principal Amount of Debentures for application to
the satisfaction of the Obligations (and if any Debenture is not outstanding,
pro-rata in proportion to the initial purchases of the remaining Debentures).

 

(b)           If any 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 such Debtor or 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) to deliver any and all certificates or
instruments evidencing the same to 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 Secured Parties subject to the terms of this Agreement as
Collateral.

 

8.             Rights and
Remedies Upon Default.

 

(a)           Upon the occurrence
of any Event of Default and at any time thereafter, the Secured Parties, acting
through the Collateral Agent , shall have the right to exercise all of the
remedies conferred hereunder and under the Debentures, and the Secured Parties
shall have all the rights and remedies of a secured party under the UCC.
Subject to the terms and conditions of the Intercreditor Agreement dated as of April 29,
2009 by and among the Debtors, certain prior lenders to the Debtors and the
Secured Parties. In addition, the Secured Parties have appointed the Collateral
Agent to act on their behalf and in their stead, as set forth under the
Collateral Agent Agreement of even date herewith.   Without limitation, the Secured Parties,
acting by and through the Collateral Agent, shall have the following rights and
powers:

 

 

(i)            The Secured Parties 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 each Debtor shall
assemble the Collateral and make it available to the Secured Parties at places
which the Secured Parties shall reasonably select, whether at such Debtor’s
premises or elsewhere, and make available to the Secured Parties, without rent,
all of such Debtor’s respective premises and facilities for the purpose of the
Secured Parties taking possession of, removing or putting the Collateral in
saleable or disposable form.

 

(ii)           (ii) Upon notice to the Debtors
by the Secured Parties, all rights of each Debtor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise and
all rights of each Debtor to receive the dividends and interest which it would
otherwise be authorized to receive and retain, shall cease. Upon such notice,
the Secured Parties shall have the right to receive any interest, cash
dividends or other payments on the Collateral and, at the option of the Secured
Parties, to exercise in such Secured Party’s discretion all voting rights
pertaining thereto. Without limiting the generality of the foregoing, the
Secured Parties shall have the right (but not the obligation) to exercise all
rights with respect to the Collateral as 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 any Debtor or any of its direct or
indirect subsidiaries.

 

(iii)          The Secured Parties shall have the
right to operate the business of each Debtor 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 Secured Parties
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 any Debtor or right of redemption of a Debtor, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer of Collateral,
the Secured Parties, 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.

 

(iv)          The Secured Parties 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 Secured Parties,
and to enforce the Debtors’ rights against such account debtors and obligors.

 

 

(v)           The Secured Parties, 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 Secured Parties, or
its designee.

 

(vi)          The Secured Parties 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 Secured Parties or any designee or any purchaser of
any Collateral.

 

(b)           The Secured Parties
shall comply with any applicable law in connection with a disposition of
Collateral and such compliance will not be considered adversely to affect the
commercial reasonableness of any sale of the Collateral. The Secured Parties
may sell the Collateral without giving any warranties and may specifically
disclaim such warranties. If the Secured Parties sell 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 Secured
Parties’ 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.

 

(c)           For the purpose of
enabling the Secured Parties to further exercise rights and remedies under this
Section 8 or elsewhere provided by agreement or applicable law, each
Debtor hereby grants to the Secured Parties, for the benefit of the Secured
Parties, 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.

 

9.             Applications
of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral hereunder or from payments made on account of any
insurance policy insuring any portion of the Collateral 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 in enforcing the Secured Parties’ 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 Debentures 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 applicable
Debtor 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 the rate of 24% per annum or
the lesser amount permitted by applicable law (the “Default Rate”), and the
reasonable fees of any attorneys employed by the Secured Parties to collect
such 

 

 

deficiency. To the extent
permitted by applicable law, each Debtor waives all claims, damages and demands
against 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 Secured Parties as determined by a final judgment (not
subject to further appeal) of a court of competent jurisdiction.

 

10.           Securities Law Provision.  Each Debtor recognizes that the Secured
Parties 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 Secured Parties in its
attempt to satisfy any requirements under the Securities Laws (including,
without limitation, registration thereunder if requested by Secured Parties)
applicable to the sale of the Pledged Securities by the Secured Parties.

 

11.           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. The
Debtors shall also pay all other claims and charges which in the reasonable
opinion of the Secured Parties is reasonably likely to prejudice, imperil or
otherwise affect the Collateral or the Security Interests therein. The Debtors
will also, upon demand, pay to 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 the creation, perfection, protection, satisfaction, foreclosure,
collection or enforcement of the Security Interest and the preparation,
administration, continuance, amendment or enforcement of this Agreement and pay
to 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
Debentures. Until so paid, any fees payable hereunder shall be added to the
Principal Amount of the Debentures and shall bear interest at the Default Rate.

 

12.           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. 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 the Secured Parties or to which any
Secured Party may be entitled at any time or times.

 

13.           Security Interests
Absolute. All rights of 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 Debentures 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
Debentures 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 guarantee, or any other security, for all
or any of the Obligations; (d) any action by 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 Interests 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 Secured Parties 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 the Secured Parties to proceed against any other person or
entity or to apply any Collateral which the 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.

 

Notwithstanding the terms of this Section 13 and this Agreement
generally, the Secured Parties have agreed to certain limitations on their
rights as secured parties under that certain Intercreditor Agreement dated as
of April 29, 2009 by and among the Debtors, certain prior lenders to the
Debtors and the Secured Parties.

 

14.           Term of Agreement.
This Agreement and the Security Interests shall terminate on the date on which
all payments under the Debentures have been indefeasibly paid in full or
otherwise satisfied in full and all other Obligations have been paid,
discharged or satisfied in full; provided, however, that all indemnities of the
Debtors contained in this Agreement (including, without limitation, Annex B
hereto) shall survive and remain operative and in full force and effect
regardless of the termination of this Agreement. Upon the termination of this
Agreement, the Secured Parties shall immediately return to the Company any
Collateral that has been delivered to the Secured Parties pursuant to this
Agreement.

 

15.           Further Assurances.
On a continuing basis, each Debtor will make, execute, acknowledge, deliver,
file and record, as the case may be, with the proper filing and recording
agencies in any jurisdiction, including, without limitation, the jurisdictions
indicated on Schedule C attached hereto, all such instruments, and take all
such action as may reasonably be deemed necessary or advisable, or as
reasonably requested by the Secured Party, to perfect the Security Interests granted
hereunder and otherwise to carry out the intent and purposes of this Agreement,
or for assuring and confirming to the Secured Party the grant or perfection of
a perfected security interest in all the Collateral under the UCC.

 

16.           Appointment of Collateral
Agent by Secured Parties. 
Each of the Secured Parties acknowlegdes and agrees that the Collateral
Agent has been appointed pursuant to the Collateral Agent Agreement to serve in
their stead and on their behalf with respect to (i) the delivery or receipt
of any notices pursuant to this Agreement and (ii) exercise the rights of
the Secured Parties hereunder.

 

17.           Notices. All
notices, requests, demands and other communications hereunder shall be subject
to the notice provision of the Intercreditor Agreement and Collateral agent
Agreement.

 

18.           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 Secured Party 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 Party’ rights and remedies hereunder.

 

 

19.           Miscellaneous.

 

(a)           No course of dealing between the
Debtors and the Secured Parties, nor any failure to exercise, nor any delay in
exercising, on the part of the Secured Parties, any right, power or privilege
hereunder or under the Debentures shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of
any other right, power or privilege.

 

(b)           All of the rights and remedies of the
Secured Parties with respect to the Collateral, whether established hereby or
by the Debentures or by any other agreements, instruments or documents or by
law shall be cumulative and may be exercised singly or concurrently.

 

(c)           This Agreement, together with the
exhibits and schedules hereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into this Agreement and the exhibits and
schedules hereto’ provided, however, the Intercreditor Agreement and the
Collateral Agent Agreement shall remain in full force and effect and in the
event of a conflict between this Agreement and the Intercreditor Agreement, the
Intercreditor Agreement shall control. No provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Debtors and the Secured Parties or,
in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought.

 

(d)           If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their commercially reasonable efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

(e)           No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.

 

(f)            This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. The Company and the Guarantors may not assign this Agreement or any
rights or obligations hereunder without the prior written

 

 

consent of each Secured
Party (other than by merger). Any Secured Party may assign any or all of its
rights under this Agreement to any Person (as defined in the Purchase
Agreement) to whom such Secured Party assigns or transfers any Obligations,
provided such transferee agrees in writing to be bound, with respect to the
transferred Obligations, by the provisions of this Agreement that apply to the “Secured
Parties.”

 

(g)           Each party shall take such further
action and execute and deliver such further documents as may be necessary or
appropriate in order to carry out the provisions and purposes of this
Agreement.

 

(h)           All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of  Illinois, without regard
to the principles of conflicts of law thereof. Each Debtor agrees that all
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and the Debentures (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of Chicago.
Each Debtor hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of Chicago for the adjudication of
any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such proceeding is improper. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
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. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If any party shall commence a proceeding to enforce any provisions of
this Agreement, then the prevailing party in such proceeding shall be
reimbursed by the other party for its reasonable attorney’s fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such proceeding.

 

(i)            This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.

 

(j)            All Debtors shall jointly and
severally be liable for the obligations of each Debtor to the Secured Parties
hereunder.

 

 

(k)           Each Debtor shall indemnify,
reimburse and hold harmless the Secured Parties and their respective partners,
members, shareholders, officers, directors, employees and agents (and any other
persons with other titles that have similar functions) (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 Debentures,
the Purchase Agreement (as such term is defined in the Debentures) or any other
agreement, instrument or other document executed or delivered in connection
herewith or therewith.

 

(l)            Nothing in this Agreement shall be
construed to subject any Secured Party to liability as a partner in any Debtor
or any of its direct or indirect subsidiaries that is a partnership or as a
member in any Debtor or any of its direct or indirect subsidiaries that is a
limited liability company, nor any Secured Party be deemed to have assumed any
obligations under any partnership agreement or limited liability company
agreement, as applicable, of any such Debtor or any if its direct or indirect
subsidiaries or otherwise, unless and until any such Secured Party exercises
its right to be substituted for such Debtor as a partner or member, as applicable,
pursuant hereto.

 

(m)          To the extent that the grant of the
security interest in the Collateral and the enforcement of the terms hereof
require the consent, approval or action of any partner or member, as
applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or
compliance with any provisions of any of the Organizational Documents, the
Debtors hereby grant such consent and approval and waive any such noncompliance
with the terms of said documents.

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Security Agreement to be duly executed by their
respective authorized signatories as of the date first indicated above.

 

	
  ENABLE
  HOLDINGS, INC.  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Jeffrey D. Hoffman 

  	
   

  	
   

  
	
   

  	
   

  	
  Title:
  CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  UBID,
  INC.  

  	
   

  	
  REDTAG
  LIVE, INC.  

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DIBU
  TRADING CORP.  

  	
   

  	
  REDTAG,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ENABLE
  PAYMENT SYSTEMS, INC.

  	
   

  	
  USAAS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

 

[SIGNATURE PAGE OF HOLDERS TO ENABLE SECURITY AGREEMENT]

 

	
  Name of Investing Entity:

  	
   

  	
   

  
	
   

  
	
  Signature of Authorized
  Signatory of Investing entity:

  	
   

  	
   

  
	
   

  
	
  Name of Authorized
  Signatory:

  	
   

  	
   

  
	
   

  
	
  Title of Authorized
  Signatory:

  	
   

  	
   

  
									

 

 

ANNEX A

to

SECURITY

AGREEMENT

 

FORM OF ADDITIONAL DEBTOR JOINDER

 

Security Agreement dated as
of April 29, 2009 made by Enable Holdings, Inc., a Delaware
corporation (the “Company”) and its subsidiaries party thereto from time to
time, as Debtors to and in favor of the Secured Party identified therein (the “Security
Agreement”)

 

Reference
is made to the Security Agreement as defined above; capitalized terms used
herein and not otherwise defined herein shall have the meanings given to such
terms in, or by reference in, the Security Agreement.

 

The undersigned hereby
agrees that upon delivery of this Additional Debtor Joinder to the Secured
Parties referred to above, the undersigned shall (a) be an Additional
Debtor under the Security Agreement, (b) have all the rights and
obligations of the Debtors under the Security Agreement as fully and to the
same extent as if the undersigned was an original signatory thereto and (c) be
deemed to have made the representations and warranties set forth therein as of
the date of execution and delivery of this Additional Debtor Joinder. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS
TO THE SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET
FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF
JURY TRIAL PROVISIONS SET FORTH THEREIN.

 

Attached
hereto are supplemental and/or replacement Schedules to the Security Agreement,
as applicable.

 

An
executed copy of this Joinder shall be delivered to the Secured Parties, and
the Secured Parties may rely on the matters set forth herein on or after the
date hereof. This Joinder shall not be modified, amended or terminated without
the prior written consent of the Secured Parties.

 

 

IN
WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in the
name and on behalf of the undersigned.

 

	
  [Name
  of Additional Debtor]

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  

 

 

Schedule A

 

Principle Executive Offices and Location of
Collateral

 

Principle
Executive Offices

8725
W. Higgins Ave. Ste. 9th Floor

Chicago,
IL 60631

 

Primary
Leased Warehouse Space

1835
Ferry Road

Naperville,
IL 60656

 

Recoupit

273
Mulberry Drive

Bldg
6 Unit 4

Mechanicsburg,
PA 17050

 

Dealtree

16901
Jamboree Road

Irvine,
CA 92606

 

 

Schedule B

 

Consignee, Bailee, Warehouseman, Agent or Processor

 

None.

 

 

Schedule C

 

Financing statements, Security Agreements,
Licenses or Transfers

 

See Attached UCC Lien Search Results

 

 

Schedule D

 

Name, Address and Jurisdiction of Incorporation
for Each Debtor

 

1.               Enable Holdings, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

2.               uBid, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

3.               RedTag, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

4.               Dibu Trading Corp.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

5.               Enable Payment Systems, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

6.               uSaas, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

7.               RedTag Live, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

 

Schedule E

 

List of Trade Names

 

ubid.com

Dibu
Trading Company

RedTag.com

RedTag
Live

Commerce
Innovations

 

 

Schedule F

 

Intellectual Property

 

Trademarks

 

a.             Trademark:            UBID THE MARKETPLACE YOU CAN TRUST;
Registration No. 3065399; Goods and Services Int’l Class 035. US 100
101 102. G & S: On-Line Trading Services in Which the Seller Posts
Products to be Auctioned and Bidding is Done Via the Internet; On-Line Retail
Store Services Featuring Consumer Electronics, Computer Products, and
Multimedia Entertainment Products; First Use: September 24, 2004.  Registration Date: March 7, 2006;

 

b.             Trademark:            UBID.COM THE BRAND NAME MARKETPLACE;
Registration No. 3048683; Goods and Services Int’l Class 035. US 100
101 102. G & S: On-Line Trading Services in Which the Seller Posts
Products to be Auctioned and Bidding is Done Via the Internet; On-Line Retail
Store Services Featuring Consumer Electronics, Computer Products, and
Multimedia Entertainment Products; First Use: November 30, 2003.  Registration Date: January 24, 2006;

 

c.             Trademark:            UBID.COM; Registration No. 2991806;
Goods and Services Int’l Class 035. US 100 101 102. G & S:
On-Line Trading Services in Which the Seller Posts Products to be Auctioned and
Bidding is Done Via the Internet; On-Line Retail Store Services Featuring
Consumer Electronics, Computer Products, and Multimedia Entertainment Products;
First Use: November 30, 2003. 
Registration Date: September 6, 2005;

 

d.             Trademark:            UBID.COM; International Registration
No. 0960560; Goods and Services Int’l Class 035. US 100 101 102. G &
S: Online trading services in which the seller posts products to be auctioned
and bidding is done via the internet; online retail store services featuring
consumer electronics, computer-related products, home appliances, home
improvement, automotive, sports and recreational, multimedia entertainment,
toys, jewelry, fragrances, skin care, cosmetics, purses, hand bags, wallets,
sunglasses, hats, tools, art, furniture, storage, organization, pet supplies,
crafts, food and wine, gardening and planting supplies, and lawn and garden
decor; First Use: January 1, 1997. 
Registration Date: September 6, 2005;

 

e.             Trademark:            UBID; Registration No. 2519050;
Goods and Services Int’l Class 035. US 100 101 102. G & S:
Disseminating advertising matter for others via electronic communications
networks and promoting the goods and services of others through banner
advertisements and through the electronic promotion of and auctioning of the
goods and services of others online via the global computer network; electronic
retailing services by auction and other means, namely, online retail store and
auction services in the fields of computer-related, electronic, home appliance,
home improvement, automotive, sports and recreational products, offered via the
global computer network; First Use: May 1, 1998.  Registration Date: December 18, 2001;
and

 

 

f.              Trademark:            UBID; Registration No. 2229515;
Goods and Services US 002 005 022 023 029 037 038 050.  G & S: [catalogs for
computer-related products, namely, hardware, software, peripherals,
accessories, supplies, books and instructional materials]; IC 035. US 100 101
102. G & S: disseminating advertising for others and promoting the
goods and services of others through the distribution of printed publications
and via on-line telecommunications networks; telephone shop-at-home services,
mail-order catalog services, [retail store services] and electronic retailing
services via global computer network, all in the field of computer-related
products, namely, hardware, software, peripherals, accessories, supplies, books
and instructional materials; First Use: May 1, 1998. Registration Date: March 2,
1999;

 

 

Schedule G

 

Account Debtors

 

None.

 

 

SCHEDULE H

 

Pledged Securities

 

None.

 

 

EXHIBIT A

to

SECURITY

AGREEMENT

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

THIS
INTELLECTUAL PROPERTY SECURITY AGREEMENT is dated as of April 29, 2009
between Enable Holdings, Inc. a Delaware corporation (the “Company”), all
of the Subsidiaries of the Company (such subsidiaries, the “Guarantors” and
together with the Company, the “Debtors”), and the holders of the Company’s 12%
Secured Debentures due October 29, 2011 and issued in the original
aggregate Principal Amount of up to $7,500,000 (collectively, the “Debentures”),
their endorsees, transferees and assigns (collectively, the “Secured Parties”).

 

RECITALS

 

WHEREAS,
the Secured Parties have agreed to purchase the from the Company its Debentures
pursuant to that certain Subscription Agreement dated as of April 29, 2009
between the Company and the Secured Parties signatory thereto (the “Purchase
Agreement”), but only upon the condition, among others, that the Debtors shall
grant to the Secured Parties a security interest in certain Intellectual
Property including copyrights, trademarks and patents to secure the obligations
of the Debtors under the Debentures. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to them in that certain
Security Agreement dated as of April 29, 2009 among the Company, the
Guarantors and the Secured Parties (the “Security Agreement”)

 

NOW,
THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound, as collateral security for the
prompt and complete payment when due of its obligations under the Debentures,
Grantor hereby represents, warrants, covenants and agrees as follows:

 

AGREEMENT

 

1.             To secure its
obligations under the Debentures, the Company and each Debtor grants and
pledges to the Secured Parties a security interest in all of the right, title
and interest in, to and under its current and future Copyrights, Patents and
Trademarks (including without limitation those copyright, patent and trademark
registrations and applications listed on Schedules A, B and C hereto), and
including without limitation all proceed thereof (such as, by way of example
but not by way of limitation, license royalties and proceeds of infringement
suits), the right to sue for past, present and future infringements, all rights
corresponding thereto throughout the world and all re-issues, divisions
continuations, renewals, extensions and continuations-in-part thereof.

 

 

2.             This security
interest is granted in conjunction with the security interest granted to the
Secured Party under the Security Agreement dated as of the date hereof. The
rights and remedies of the Secured Party with respect to the security interest
granted hereby are in addition to those set forth in the Debenture, the
Security Agreement and the other Transaction Documents, and those which are now
or hereafter available to the Secured Party as a matter of law or equity. Each
right, power and remedy of the Secured Party provided for herein or in the
Debenture or any of the Transaction Documents, or now or hereafter existing at
law or in equity shall be cumulative and concurrent and shall be in addition to
every right, power or remedy provided for herein and the exercise by the
Secured Party of any one or more of the rights, powers or remedies provided for
in this Intellectual Property Security Agreement, the Debentures or any of the
other Transaction Documents, or now or hereafter existing at law or in equity,
shall not preclude the simultaneous or later exercise by any person, including
the Secured Party, of any or all other rights, powers or remedies.

 

3.             This Intellectual
Property Security Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

 

In
Witness Whereof, the parties have caused this Intellectual Property Security Agreement
to be duly executed by its officers thereunto duly authorized as of the first
date written above.

 

	
  ENABLE
  HOLDINGS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Jeffrey D. Hoffman 

  	
   

  	
   

  
	
   

  	
   

  	
  Title:
  CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  UBID,
  INC.  

  	
   

  	
  REDTAG
  LIVE, INC.  

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DIBU
  TRADING CORP.  

  	
   

  	
  REDTAG,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ENABLE
  PAYMENT SYSTEMS, INC.

  	
   

  	
  USAAS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  

 

[SIGNATURE PAGE OF SECURED PARTIES TO ENABLE INTELLECTUAL

PROPERTY SECURITY AGREEMENT FOLLOWS]

 

 

[SIGNATURE PAGE OF SECURED PARTIES TO ENABLE INTELLECTUAL PROPERTY
SECURITY AGREEMENT]

 

	
  Name of Investing Entity:

  	
   

  	
   

  
	
   

  
	
  Signature of Authorized
  Signatory of Investing entity:

  	
   

  	
   

  
	
   

  
	
  Name of Authorized
  Signatory:

  	
   

  	
   

  
	
   

  
	
  Title of Authorized
  Signatory:

  	
   

  	
   

  
									

 

 

Exhibit A

to

Intellectual Property Security Agreement

 

Copyrights

 

None.

 

 

Exhibit B

to

Intellectual
Property Security Agreement

 

Trademarks

 

b.             Trademark:            UBID THE MARKETPLACE YOU CAN TRUST;
Registration No. 3065399; Goods and Services Int’l Class 035. US 100
101 102. G & S: On-Line Trading Services in Which the Seller Posts Products
to be Auctioned and Bidding is Done Via the Internet; On-Line Retail Store
Services Featuring Consumer Electronics, Computer Products, and Multimedia
Entertainment Products; First Use: September 24, 2004.  Registration Date: March 7, 2006;

 

b.             Trademark:            UBID.COM THE BRAND NAME MARKETPLACE;
Registration No. 3048683; Goods and Services Int’l Class 035. US 100
101 102. G & S: On-Line Trading Services in Which the Seller Posts
Products to be Auctioned and Bidding is Done Via the Internet; On-Line Retail
Store Services Featuring Consumer Electronics, Computer Products, and
Multimedia Entertainment Products; First Use: November 30, 2003.  Registration Date: January 24, 2006;

 

c.             Trademark:            UBID.COM; Registration No. 2991806;
Goods and Services Int’l Class 035. US 100 101 102. G & S:
On-Line Trading Services in Which the Seller Posts Products to be Auctioned and
Bidding is Done Via the Internet; On-Line Retail Store Services Featuring
Consumer Electronics, Computer Products, and Multimedia Entertainment Products;
First Use: November 30, 2003. 
Registration Date: September 6, 2005;

 

d.             Trademark:            UBID.COM; International Registration
No. 0960560; Goods and Services Int’l Class 035. US 100 101 102. G &
S: Online trading services in which the seller posts products to be auctioned
and bidding is done via the internet; online retail store services featuring
consumer electronics, computer-related products, home appliances, home
improvement, automotive, sports and recreational, multimedia entertainment,
toys, jewelry, fragrances, skin care, cosmetics, purses, hand bags, wallets,
sunglasses, hats, tools, art, furniture, storage, organization, pet supplies,
crafts, food and wine, gardening and planting supplies, and lawn and garden
decor; First Use: January 1, 1997. 
Registration Date: September 6, 2005;

 

e.             Trademark:            UBID; Registration No. 2519050;
Goods and Services Int’l Class 035. US 100 101 102. G & S:
Disseminating advertising matter for others via electronic communications
networks and promoting the goods and services of others through banner
advertisements and through the electronic promotion of and auctioning of the
goods and services of others online via the global computer network; electronic
retailing services by auction and other means, namely, online retail store and
auction services in the fields of computer-related, electronic, home appliance,
home 

 

 

improvement, automotive, sports and recreational products, offered via
the global computer network; First Use: May 1, 1998.  Registration Date: December 18, 2001;
and

 

f.              Trademark:            UBID; Registration No. 2229515;
Goods and Services US 002 005 022 023 029 037 038 050.  G & S: [catalogs for
computer-related products, namely, hardware, software, peripherals,
accessories, supplies, books and instructional materials]; IC 035. US 100 101
102. G & S: disseminating advertising for others and promoting the
goods and services of others through the distribution of printed publications
and via on-line telecommunications networks; telephone shop-at-home services,
mail-order catalog services, [retail store services] and electronic retailing
services via global computer network, all in the field of computer-related
products, namely, hardware, software, peripherals, accessories, supplies, books
and instructional materials; First Use: May 1, 1998. Registration Date: March 2,
1999;

 

Website
Addresses

 

	
  Domain Name

  	
   

  	
  Registration

  Date

  	
   

  	
  Expiry Date

  
	
  auxpal.com

  	
   

  	
  10/4/2000

  	
   

  	
  10/4/2010

  
	
  barebelly.net

  	
   

  	
  1/31/2007

  	
   

  	
  1/31/2009

  
	
  bearbelly.net

  	
   

  	
  1/31/2007

  	
   

  	
  1/31/2009

  
	
  bearbellypool.com

  	
   

  	
  1/31/2007

  	
   

  	
  1/31/2009

  
	
  bearbellypool.net

  	
   

  	
  1/31/2007

  	
   

  	
  1/31/2009

  
	
  bidville.com

  	
   

  	
  12/7/1999

  	
   

  	
  12/7/2012

  
	
  bidville.org

  	
   

  	
  7/28/2006

  	
   

  	
  7/28/2009

  
	
  certifiedcentral.com

  	
   

  	
  12/7/2004

  	
   

  	
  12/7/2008

  
	
  choosehp.com

  	
   

  	
  1/30/2002

  	
   

  	
  1/30/2009

  
	
  dibutrading.com

  	
   

  	
  7/6/2006

  	
   

  	
  7/6/2010

  
	
  dibutradingcorporation.com

  	
   

  	
  9/3/2008

  	
   

  	
  9/3/2010

  
	
  dibutradingcorporation.net

  	
   

  	
  9/3/2008

  	
   

  	
  9/3/2010

  
	
  dibutradingcorporation.org

  	
   

  	
  9/3/2008

  	
   

  	
  9/3/2010

  
	
  dibutrading.net

  	
   

  	
  7/6/2006

  	
   

  	
  7/6/2010

  
	
  dibutrading.org

  	
   

  	
  7/6/2006

  	
   

  	
  7/6/2010

  
	
  dibutrading.us

  	
   

  	
  7/6/2006

  	
   

  	
  7/5/2011

  
	
  dockdoor1.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  dockdoor1.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  dockdoor1.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  dockdoor1.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  enableholdings.biz

  	
   

  	
  4/14/2008

  	
   

  	
  4/13/2012

  

 

 

	
  enableholdings.com

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdingsinc.biz

  	
   

  	
  4/14/2008

  	
   

  	
  4/13/2012

  
	
  enableholdingsinc.com

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdingsinc.info

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdingsinc.mobi

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdingsinc.name

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdingsinc.net

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdingsinc.org

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdings.info

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdings.mobi

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdings.name

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdings.net

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  enableholdings.org

  	
   

  	
  4/14/2008

  	
   

  	
  4/14/2012

  
	
  excess4less.net

  	
   

  	
  3/24/2008

  	
   

  	
  3/24/2010

  
	
  excess4less.org

  	
   

  	
  3/24/2008

  	
   

  	
  3/24/2010

  
	
  feedbacksite.com

  	
   

  	
  11/29/1999

  	
   

  	
  11/29/2012

  
	
  inflightshopper.com

  	
   

  	
  1/21/2005

  	
   

  	
  1/21/2009

  
	
  inflightshopper.net

  	
   

  	
  1/21/2005

  	
   

  	
  1/21/2009

  
	
  isell-ubid.biz

  	
   

  	
  8/3/2006

  	
   

  	
  8/2/2009

  
	
  isellubid.biz

  	
   

  	
  8/3/2006

  	
   

  	
  8/2/2009

  
	
  isell-ubid.com

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isellubid.com

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isell-ubid.info

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isellubid.info

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isell-ubid.net

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isellubid.net

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isell-ubid.org

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isellubid.org

  	
   

  	
  8/3/2006

  	
   

  	
  8/3/2009

  
	
  isell-ubid.us

  	
   

  	
  8/3/2006

  	
   

  	
  8/2/2009

  
	
  isellubid.us

  	
   

  	
  8/3/2006

  	
   

  	
  8/2/2009

  
	
  liquidationteam.biz

  	
   

  	
  2/13/2008

  	
   

  	
  2/13/2009

  
	
  liquidationteam.net

  	
   

  	
  2/13/2008

  	
   

  	
  2/13/2009

  
	
  liquidationteam.us

  	
   

  	
  2/13/2008

  	
   

  	
  2/13/2009

  
	
  myinstock.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  myinstock.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  

 

 

	
  myinstock.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  myinstock.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  myubid.com

  	
   

  	
  7/21/2005

  	
   

  	
  7/21/2009

  
	
  myubid.co.uk

  	
   

  	
  4/26/2006

  	
   

  	
  4/26/2010

  
	
  myxslist.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  myxslist.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  myxslist.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  myxslist.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  netcntrl.net

  	
   

  	
  3/28/2002

  	
   

  	
  3/28/2010

  
	
  onhandlist.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  onhandlist.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  onhandlist.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  onhandlist.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  onhandxs.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  onhandxs.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  onhandxs.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  onhandxs.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  privateap.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  privateap.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  privateap.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  privateap.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  privateasp.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  privateasp.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  privateasp.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  privateasp.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  privateauctionservices.biz

  	
   

  	
  6/30/2008

  	
   

  	
  6/30/2010

  
	
  privateauctionservices.com

  	
   

  	
  6/30/2008

  	
   

  	
  6/30/2010

  
	
  PSREDTAG.COM

  	
   

  	
  9/12/2002

  	
   

  	
  9/12/2010

  
	
  REDTAGASIA.COM

  	
   

  	
  5/31/2000

  	
   

  	
  5/31/2009

  
	
  REDTAGBIZ.BIZ

  	
   

  	
  11/16/2001

  	
   

  	
  11/16/2008

  
	
  REDTAGBIZWORLD.COM

  	
   

  	
  5/31/2000

  	
   

  	
  5/31/2009

  
	
  REDTAGCHINA.COM

  	
   

  	
  7/17/2000

  	
   

  	
  7/17/2010

  
	
  REDTAG.com

  	
   

  	
  12/4/1996

  	
   

  	
  12/4/2008

  
	
  REDTAGHONGKONG.COM

  	
   

  	
  7/17/2000

  	
   

  	
  7/17/2010

  
	
  REDTAGJAPAN.BIZ

  	
   

  	
  11/16/2001

  	
   

  	
  11/16/2008

  

 

 

	
  REDTAGJAPAN.com

  	
   

  	
  7/17/2000

  	
   

  	
  7/17/2010

  
	
  REDTAGKOREA.COM

  	
   

  	
  7/17/2000

  	
   

  	
  7/17/2010

  
	
  redtaglive.biz

  	
   

  	
  6/20/2008

  	
   

  	
  6/20/2010

  
	
  redtaglive.com

  	
   

  	
  6/20/2008

  	
   

  	
  6/20/2010

  
	
  redtaglive.info

  	
   

  	
  6/20/2008

  	
   

  	
  6/20/2010

  
	
  redtaglive.mobi

  	
   

  	
  6/20/2008

  	
   

  	
  6/20/2010

  
	
  redtaglive.net

  	
   

  	
  6/20/2008

  	
   

  	
  6/20/2010

  
	
  redtaglive.org

  	
   

  	
  6/20/2008

  	
   

  	
  6/20/2010

  
	
  redtaglive.us

  	
   

  	
  6/20/2008

  	
   

  	
  6/20/2010

  
	
  REDTAGOUTLET.COM

  	
   

  	
  9/13/1998

  	
   

  	
  11/22/2008

  
	
  REDTAGSINGAPORE.COM

  	
   

  	
  7/17/2000

  	
   

  	
  7/17/2010

  
	
  REDTAGTAIWAN.COM

  	
   

  	
  7/17/2000

  	
   

  	
  7/17/2010

  
	
  REDTAGWORLD.BIZ

  	
   

  	
  11/16/2001

  	
   

  	
  11/16/2008

  
	
  REDTAGWORLD.com

  	
   

  	
  5/31/2000

  	
   

  	
  5/31/2009

  
	
  securecommerce.mobi

  	
   

  	
  7/10/2008

  	
   

  	
  7/10/2010

  
	
  securecommercesolutions.biz

  	
   

  	
  7/10/2008

  	
   

  	
  7/10/2010

  
	
  securecommercesolutions.co.uk

  	
   

  	
  7/10/2008

  	
   

  	
  7/10/2010

  
	
  securecommercesolutions.info

  	
   

  	
  7/10/2008

  	
   

  	
  7/10/2010

  
	
  securecommercesolutions.mobi

  	
   

  	
  7/11/2008

  	
   

  	
  7/11/2010

  
	
  securecommercesolutions.net

  	
   

  	
  7/10/2008

  	
   

  	
  7/10/2010

  
	
  securecommercesolutions.org

  	
   

  	
  7/10/2008

  	
   

  	
  7/10/2010

  
	
  serviceap.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  serviceap.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  serviceap.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  serviceap.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  serviceasp.com

  	
   

  	
  7/2/2008

  	
   

  	
  7/2/2010

  
	
  serviceasp.co.uk

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  serviceasp.net

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  serviceasp.org

  	
   

  	
  8/5/2008

  	
   

  	
  8/5/2010

  
	
  theliquidationteam.biz

  	
   

  	
  2/13/2008

  	
   

  	
  2/13/2009

  
	
  theliquidationteam.us

  	
   

  	
  2/13/2008

  	
   

  	
  2/13/2009

  
	
  theubid.com

  	
   

  	
  12/6/2007

  	
   

  	
  12/6/2009

  
	
  ubidafterdark.com

  	
   

  	
  6/25/2007

  	
   

  	
  6/25/2010

  
	
  ubidauctions.com

  	
   

  	
  9/10/2004

  	
   

  	
  9/10/2010

  
	
  ubidautoauction.com

  	
   

  	
  3/3/2004

  	
   

  	
  3/3/2010

  

 

 

	
  ubidauto.com

  	
   

  	
  7/27/2006

  	
   

  	
  7/27/2009

  
	
  ubidautos.com

  	
   

  	
  3/18/2005

  	
   

  	
  3/18/2010

  
	
  ubidautos.net

  	
   

  	
  7/31/2007

  	
   

  	
  7/31/2009

  
	
  ubidautos.org

  	
   

  	
  5/18/2005

  	
   

  	
  5/18/2010

  
	
  ubidb2b.com

  	
   

  	
  11/22/2007

  	
   

  	
  11/22/2009

  
	
  ubidbargains.com

  	
   

  	
  9/10/2004

  	
   

  	
  9/10/2010

  
	
  ubid.be

  	
   

  	
  8/15/2005

  	
   

  	
  8/31/2009

  
	
  ubidbuysell.com

  	
   

  	
  8/23/2007

  	
   

  	
  8/23/2009

  
	
  ubidcars.com

  	
   

  	
  7/27/2006

  	
   

  	
  7/27/2011

  
	
  ubidchina.com

  	
   

  	
  2/22/2008

  	
   

  	
  2/22/2010

  
	
  ubid.com

  	
   

  	
  11/27/1996

  	
   

  	
  1/13/2010

  
	
  ubid.com.br

  	
   

  	
  7/22/2005

  	
   

  	
  7/22/2010

  
	
  ubid.com.sg

  	
   

  	
  6/7/2005

  	
   

  	
  6/7/2009

  
	
  ubid.co.uk

  	
   

  	
  2/28/2003

  	
   

  	
  2/28/2009

  
	
  ubidders.com

  	
   

  	
  8/31/2006

  	
   

  	
  8/31/2009

  
	
  ubidders.net

  	
   

  	
  9/6/2006

  	
   

  	
  9/6/2010

  
	
  ubidders.org

  	
   

  	
  9/6/2006

  	
   

  	
  9/6/2009

  
	
  ubiddomainnames.com

  	
   

  	
  9/11/2004

  	
   

  	
  9/11/2010

  
	
  ubiddomains.com

  	
   

  	
  9/11/2004

  	
   

  	
  9/11/2010

  
	
  ubiddy.com

  	
   

  	
  1/15/2008

  	
   

  	
  1/15/2010

  
	
  ubidelectronics.com

  	
   

  	
  11/4/2002

  	
   

  	
  11/4/2009

  
	
  ubidfree.com

  	
   

  	
  5/4/2004

  	
   

  	
  5/4/2009

  
	
  ubid-it.com

  	
   

  	
  4/19/1999

  	
   

  	
  4/19/2009

  
	
  ubidit.net

  	
   

  	
  1/20/2008

  	
   

  	
  1/20/2010

  
	
  ubidlive.net

  	
   

  	
  12/2/2004

  	
   

  	
  12/2/2008

  
	
  ubidlive.org

  	
   

  	
  12/2/2004

  	
   

  	
  12/2/2009

  
	
  ubid.mobi

  	
   

  	
  6/12/2006

  	
   

  	
  6/12/2010

  
	
  ubidmotors.com

  	
   

  	
  11/27/2004

  	
   

  	
  11/27/2008

  
	
  ubidmotors.net

  	
   

  	
  7/31/2007

  	
   

  	
  7/31/2009

  
	
  ubidmotors.org

  	
   

  	
  5/18/2005

  	
   

  	
  5/18/2010

  
	
  ubidms.com

  	
   

  	
  1/10/2008

  	
   

  	
  1/10/2010

  
	
  ubid.net

  	
   

  	
  4/14/1999

  	
   

  	
  4/14/2010

  
	
  ubid.org

  	
   

  	
  4/9/1999

  	
   

  	
  4/9/2009

  
	
  ubidsafe.com

  	
   

  	
  3/22/2007

  	
   

  	
  3/22/2010

  
	
  ubid.sg

  	
   

  	
  6/7/2005

  	
   

  	
  6/7/2009

  

 

 

	
  ubidshopper.com

  	
   

  	
  4/26/2006

  	
   

  	
  4/26/2010

  
	
  ubidshopper.net

  	
   

  	
  4/26/2006

  	
   

  	
  4/26/2010

  
	
  ubidshopper.org

  	
   

  	
  4/26/2006

  	
   

  	
  4/26/2009

  
	
  ubidstore.com

  	
   

  	
  2/3/2000

  	
   

  	
  2/3/2009

  
	
  ubidsuperstore.com

  	
   

  	
  10/30/2002

  	
   

  	
  10/30/2009

  
	
  ubidtravel.com

  	
   

  	
  1/20/2005

  	
   

  	
  1/20/2009

  
	
  ubidtravel.net

  	
   

  	
  11/21/2003

  	
   

  	
  11/21/2008

  
	
  ubidtravel.org

  	
   

  	
  10/16/2006

  	
   

  	
  10/16/2009

  
	
  ubid.tv

  	
   

  	
  9/9/2005

  	
   

  	
  9/9/2010

  
	
  ubidtv.com

  	
   

  	
  9/9/2005

  	
   

  	
  9/9/2010

  
	
  ubidtv.org

  	
   

  	
  9/9/2005

  	
   

  	
  9/9/2009

  
	
  ubidugive.com

  	
   

  	
  8/22/2005

  	
   

  	
  8/22/2009

  
	
  ubidugive.net

  	
   

  	
  8/22/2005

  	
   

  	
  8/22/2009

  
	
  ubidugive.org

  	
   

  	
  8/22/2005

  	
   

  	
  8/22/2009

  
	
  ubiduk.com

  	
   

  	
  12/21/2007

  	
   

  	
  12/21/2009

  
	
  weknowaguy.org

  	
   

  	
  3/24/2008

  	
   

  	
  3/24/2010

  
	
  wwubid.com

  	
   

  	
  4/14/2007

  	
   

  	
  4/14/2009

  
	
  www-ubid.com

  	
   

  	
  9/17/2006

  	
   

  	
  9/17/2009

  
	
  youbidcars.com

  	
   

  	
  8/12/2006

  	
   

  	
  8/12/2011

  
	
  youbid.com

  	
   

  	
  11/27/1996

  	
   

  	
  11/26/2008

  
	
  youbidfree.com

  	
   

  	
  8/14/2005

  	
   

  	
  8/14/2010

  

 

 

Exhibit C

to

Intellectual
Property Security Agreement

 

Trademarks

 

None.

 

 

EXHIBIT B

 

SUBSIDIARY GUARANTEE

 

SUBSIDIARY
GUARANTEE, dated as of April 29, 2009 (this “Guarantee”), made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Guarantors”), in favor of the purchasers
signatory (together with their permitted assigns, the “Purchasers”) to that
certain Subscription Agreement, dated as of the date hereof, between Enable
Holdings, Inc. a Delaware corporation (the “Company”) and the Purchasers.

 

WITNESSETH:

 

WHEREAS,
pursuant to that certain Subscription Agreement, dated as of the date hereof,
by and between the Company and the Purchasers (the “Purchase Agreement”), the
Company has agreed to sell and issue to the Purchasers, and the Purchasers have
agreed to purchase from the Company the Debentures, subject to the terms and
conditions set forth therein; and

 

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

 

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

 

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

 

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

 

“Obligations” means,
in addition to all other costs and expenses of collection incurred by
Purchasers in enforcing any of such Obligations and/or this Guarantee, all of
the liabilities and obligations (primary, secondary, direct, contingent, sole,
joint or several) due or to become due, or that are now or may be hereafter
contracted or acquired, or owing to, of the Company or any Guarantor to the
Purchasers, including, without limitation, all obligations under this
Guarantee, the Debentures and any other 

 

 

instruments, agreements or
other documents executed and/or delivered in connection herewith or therewith,
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 Purchasers 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 Debentures and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities,
costs, obligations and liabilities of the Company or any Guarantor from time to
time under or in connection with this Guarantee, the Debentures and any other
instruments, agreements or other documents executed and/or delivered in
connection herewith or therewith; and (iii) all amounts (including but not
limited to post-petition interest) in respect of the foregoing that would be
payable but for the fact that the obligations to pay such amounts are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company or any Guarantor.

 

2.  Guarantee.

 

(a)  Guarantee.

 

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

 

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

 

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

 

(iv)  The guarantee
contained in this Section 2 shall remain in full force and effect until
all the Obligations and the obligations of each Guarantor under the guarantee
contained in this Section 2 shall have been paid in full or otherwise
fully satisfied and discharged.

 

 

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

 

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

 

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

 

(c)  No Subrogation.  Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Purchasers, no Guarantor shall be entitled to be subrogated to any of the
rights of the Purchasers against the Company or any other Guarantor or any
collateral security or guarantee or right of offset held by the Purchasers for
the payment of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Company or any other Guarantor
in respect of payments made by such Guarantor hereunder, until all amounts
owing to the Purchasers by the Company on account of the Obligations are
indefeasibly paid in full. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such Guarantor
in trust for the Purchasers, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the
Purchasers in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Purchasers, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Purchasers may
determine.

 

(d)  Amendments, Etc.
With Respect to the Obligations. Each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any 

 

 

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

 

(e)  Guarantee
Absolute and Unconditional. Each Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of
or proof of reliance by the Purchasers upon the guarantee contained in this Section 2
or acceptance of the guarantee contained in this Section 2; the
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Company and any of the Guarantors, on the one hand, and the
Purchasers, on the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives to the extent permitted by law diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Company or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment and performance without regard to (a) the validity or
enforceability of the Purchase Agreement or any other Transaction Document, any
of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Purchasers, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance or fraud by Purchasers) which may at any time
be available to or be asserted by the Company or any other Person against the
Purchasers, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Company or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Company for the Obligations, or of such Guarantor under the guarantee contained
in this Section 2, in bankruptcy or in any other instance. When making any
demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Purchasers may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as they
may have against the Company, any other Guarantor or any other Person or
against any collateral security or guarantee for the Obligations or any right
of offset with respect thereto, and any failure by the Purchasers to make any
such demand, to pursue such other rights or remedies or to collect any payments
from the 

 

 

Company, any other Guarantor
or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the Company,
any other Guarantor or any other Person or any such collateral security,
guarantee or right of offset, shall not relieve any Guarantor of any obligation
or liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Purchasers
against any Guarantor. For the purposes hereof, “demand” shall include the
commencement and continuance of any legal proceedings.

 

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

 

(g)  Payments.
Each Guarantor hereby guarantees that payments hereunder will be paid to the
Purchasers without set-off or counterclaim in U.S. dollars at the address set
forth or referred to in the Signature Pages to the Subscription Agreements
to which they are a party.

 

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

 

(a)  Organization
and Qualification. The Guarantor is a corporation, duly incorporated,
validly existing and in good standing under the laws of the applicable
jurisdiction set forth on Schedule 1, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. The Guarantor has no subsidiaries other than those
identified as such on the Disclosure Schedules to the Purchase Agreement. The
Guarantor is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, (x) adversely affect the legality,
validity or enforceability of any of this Guaranty in any material respect, (y) have
a material adverse effect on the results of operations, assets, prospects, or
financial condition of the Guarantor or (z) adversely impair in any
material respect the Guarantor’s ability to perform fully on a timely basis its
obligations under this Guaranty (a “Material Adverse Effect”).

 

(b)  Authorization;
Enforcement.  The Guarantor has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by this Guaranty, and otherwise to carry out its
obligations hereunder. The execution and delivery of this Guaranty by the
Guarantor and the consummation by it of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the 

 

 

part of the Guarantor. This
Guaranty has been duly executed and delivered by the Guarantor and constitutes
the valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general
application.

 

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

 

(d)  Consents and
Approvals. The Guarantor is not required to obtain any consent, waiver,
authorization or order of, or make any filing or registration with, any court
or other federal, state, local, foreign or other governmental authority or
other person in connection with the execution, delivery and performance by the
Guarantor of this Guaranty.

 

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

 

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

 

 

4. Covenants.

 

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

 

(b)  So long as any of
the Obligations are outstanding, unless Purchasers holding at least 75% of the aggregate Principal
Amount of the then outstanding Debentures shall otherwise consent in writing,
each Guarantor will not directly or indirectly on or after the date of this
Guarantee:

 

i.  other than Permitted Indebtedness (as defined
in the Debentures), enter into, create, incur, assume or suffer to exist any
indebtedness for borrowed money of any kind, including but not limited to, a
guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

ii.  other than Permitted Liens (as defined in the
Debentures), enter into, create, incur, assume or suffer to exist any liens of
any kind, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

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

 

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

 

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

 

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

 

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

 

5. Miscellaneous.

 

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

 

 

(b)  Notices.
All notices, requests and demands to or upon the Purchasers or any Guarantor
hereunder shall be effected in the manner provided for in the Purchase
Agreement, provided that any such notice, request or demand to or upon any Guarantor
shall be addressed to such Guarantor at its notice address set forth on
Schedule 5(b).

 

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

 

(d) Enforcement
Expenses; Indemnification.

 

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

 

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

 

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

 

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

 

(e)  Successor and
Assigns. This Guarantee shall be binding upon the successors and assigns of
each Guarantor and shall inure to the benefit of the Purchasers and their
respective successors and assigns; provided that no Guarantor may assign,
transfer or

 

 

delegate any of its rights
or obligations under this Guarantee without the prior written consent of the
Purchasers.

 

(f)  Set-Off.
Each Guarantor hereby irrevocably authorizes the Purchasers at any time and
from time to time while an Event of Default under any of the Transaction
Documents shall have occurred and be continuing, without notice to such
Guarantor or any other Guarantor, any such notice being expressly waived by
each Guarantor, to set-off and appropriate and apply any and all deposits,
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Purchasers to or for the credit or the account of such Guarantor,
or any part thereof in such amounts as the Purchasers may elect, against and on
account of the obligations and liabilities of such Guarantor to the Purchasers
hereunder and claims of every nature and description of the Purchasers against
such Guarantor, in any currency, whether arising hereunder, under the Purchase
Agreement, any other Transaction Document or otherwise, as the Purchasers may
elect, whether or not the Purchasers have made any demand for payment and
although such obligations, liabilities and claims may be contingent or unmatured.
The Purchasers shall notify such Guarantor promptly of any such set-off and the
application made by the Purchasers of the proceeds thereof, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Purchasers under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Purchasers may have.

 

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

 

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

 

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

 

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

 

(k)  Governing Laws.
All questions concerning the construction, validity, enforcement and
interpretation of this Guarantee shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois, without
regard to the principles 

 

 

of conflicts of law
thereof.  Each of the Company and the
Guarantors agree that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Guarantee
(whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of Chicago. Each of the Company and the Guarantors hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of Chicago for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Guarantee 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.  Each party hereto hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial
by jury in any legal proceeding arising out of or relating to this Guarantee or
the transactions contemplated hereby.

 

(l)  Acknowledgements.  Each Guarantor hereby acknowledges that:

 

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

 

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

 

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

 

(m)  Additional
Guarantors.  The Company shall cause
each of its subsidiaries formed or acquired on or subsequent to the date hereof
to become a Guarantor for all purposes of this Guarantee by executing and
delivering an Assumption Agreement in the form of Annex 1 hereto.

 

(n)  Release of
Guarantors. Each Guarantor will be released from all liability hereunder
concurrently with the indefeasible repayment in full of all amounts owed under
the Purchase Agreement, the Debentures and the other Transaction Documents.

 

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

 

 

(p) WAIVER OF JURY
TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE
PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.

 

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

(Signature Pages Follow)

 

 

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

 

	
  UBID,
  INC.  

  	
   

  	
  REDTAG
  LIVE, INC.  

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DIBU
  TRADING CORP.  

  	
   

  	
  REDTAG,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ENABLE
  PAYMENT SYSTEMS, INC.

  	
   

  	
  USAAS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  

 

 

Annex 1 to

SUBSIDIARY GUARANTEE

 

ASSUMPTION AGREEMENT, dated
as of
                    ,
200   made by
                        ,
a
                  
corporation (the “Additional Guarantor”), in favor of the Purchasers pursuant
to the Purchase Agreement referred to below. All capitalized terms not defined
herein shall have the meaning ascribed to them in such Purchase Agreement.

 

WITNESSETH :

 

WHEREAS,
Enable Holdings, Inc., a Delaware corporation (the “Company”) and the
Purchasers have entered into a Subscription Agreement, dated as of April       ,
2009 (as amended, supplemented or otherwise modified from time to time, the “Purchase
Agreement”);

 

WHEREAS,
the Subsidiaries of the Company (other than the Additional Guarantor) have
entered into the Subsidiary Guarantee, dated as of April             ,
2009 (as amended, supplemented or otherwise modified from time to time, the “Guarantee”)
in favor of the Purchasers;

 

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

 

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

 

NOW, THEREFORE, IT IS AGREED:

 

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

 

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

 

 

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

 

 

	
  [NAME
  OF ADDITIONAL GUARANTOR]

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

 

SCHEDULE 1

GUARANTORS

 

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

 

1.               uBid, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

2.               RedTag, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

3.               Dibu Trading Corp.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

4.               Enable Payment Systems, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

5.               uSaas, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware Corporation

 

6.               RedTag Live, Inc.

8725 W. Higgins Road 9th Floor

Chicago, IL 60631

Delaware CorporationExhibit
10.1

 

SMURFIT-STONE CONTAINER CORPORATION

2009 MANAGEMENT INCENTIVE PLAN

(Effective April 28, 2009)

 

ARTICLE I

PURPOSE OF THE PLAN

 

The Smurfit-Stone Container Corporation 2009 Management Incentive Plan
(the “Plan”) is hereby established by the Compensation Committee of
Smurfit-Stone Container Corporation, effective as of April 28, 2009.  The Plan is designed to drive the Company’s
financial performance to meet or exceed the Company’s short-term financial and
operational goals by providing Employees with annual, semi-annual and, with
respect to the Tier 4 Employees identified in Section 4.3, quarterly
performance-based incentive payments for the attainment of those short-term
goals.  Payments under the Plan are
intended to be exempt from section 409A of the Internal Revenue Code of 1986,
as amended, as “short-term deferrals” within the meaning of Treasury Regulation
section 1.409A-1(b)(4).  The Plan shall
not create any contractual right of any individual to any Award prior to the
payment of such award.

 

ARTICLE II

DEFINITIONS

 

For
purposes of this Plan, the following terms, when capitalized, shall have the
meanings set forth below:

 

Section 2.1.   “Annual MIP Award” means the
cash incentive bonus awarded to an Employee under the Plan after the end of the
Plan Year, which bonus is subject to the Company Achievement of the Annual
Performance Target and/or any other objective criteria established by the
Committee.

 

Section 2.2.   “Annual Performance Target”
means the Company’s financial and/or operational goals for the Plan Year, as
established by the Committee.

 

Section 2.3.   “Award” means an Annual MIP
Award and/or a Semi-annual MIP Award, as the case may be.

 

Section 2.4.   “Base Pay” means, for
purposes of the Semi-annual MIP Award, the Employee’s base salary in effect on
the last day of the Performance Period, and in the case of the Annual MIP
Award, the Employee’s base salary in effect on the last day of the Plan
Year.  Base Pay does not include any
bonuses, incentive pay or other supplemental pay or benefits, in each case, as
determined by the Committee.

 

Section 2.5.   “Cause” shall mean: (a) the
refusal or continued failure by the Employee to perform substantially all his
or her duties with the Company (other than any failure resulting from
incapacity due to physical or mental illness) after the Company provides the
Employee a demand for substantial performance identifying in reasonable detail
the manner in which the Employee has not substantially performed his or her
duties; (b) a plea of guilty or nolo contendere by the Employee, or
conviction of the Employee, for a felony; or (c) the determination by the
Committee in its sole discretion that the Employee has engaged in: (1) 

 

 

illegal conduct or gross misconduct in
connection with the Employee’s job duties or the business of the Company; (2) a
material breach of any written policy of the Company; (3) fraud or
material dishonesty in connection with the business of the Company; or (4) any
violation of a statutory or common law duty of loyalty to the Company.

 

Section 2.6.   “Change in Control” means the
occurrence of any one or more of the following:

 

(a)   The “beneficial ownership” of securities representing more than
20% of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the “Company
Voting Securities”) is accumulated, held or acquired by a Person (as defined in
Section 3(a)(9) of the Exchange Act, as modified, and used in
Sections 13(d) and 14(d) thereof) other than the Company, any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company, any corporation owned, directly or indirectly, by the Company’s
stockholders in substantially the same proportions as their ownership of stock
of the Company; provided, however, that any acquisition from the Company or any
acquisition pursuant to a transaction that complies with clauses (i), (ii) and
(iii) of subparagraph (c) of this definition will not be a Change in
Control under this subparagraph (a), and provided further that immediately
prior to such accumulation, holding or acquisition, such person was not a
direct or indirect beneficial owner of 20% or more of the Company Voting
Securities; or

 

(b)   Individuals who, as of January 1, 2009, constitute the Board
of Directors (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that an individual becoming a
director subsequent to that date whose election, or nomination for election by
the Company’s stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board will be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

 

(c)   Consummation by the Company of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets or stock of another entity
(a “Business Combination”), in each case, unless immediately following such
Business Combination: (i) more than 60% of the combined voting power of
then outstanding voting securities entitled to vote generally in the election
of directors of (A) the corporation resulting from such Business
Combination (the “Surviving Corporation”), or (B) if applicable, a
corporation that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries (the “Parent Corporation”), is represented, directly or
indirectly, by Company Voting Securities outstanding immediately prior to such
Business Combination (or, if applicable, is represented by shares into which
such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Company Voting Securities; (ii) no
person (excluding any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Business Combination) 

 

2

 

beneficially owns, directly or indirectly, 20% or more of
the combined voting power of the then outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) except to the extent that such
ownership of the Company existed prior to the Business Combination; and (iii) at
least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
were members of the incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination;

 

(d)   Approval by the Company’s stockholders of a complete liquidation
or dissolution of the Company;

 

(e)   The consummation of a reorganization under the U.S. Bankruptcy
Code; or

 

(f)    The consummation of a complete liquidation or dissolution of the
Company under the U.S. Bankruptcy Code.

 

However, in no event will a Change in Control be deemed to
have occurred, with respect to an Employee’s Award, if the Employee is part of
a purchasing group that consummates the Change in Control transaction.  An Employee will be deemed “part of a
purchasing group” for purposes of the preceding sentence if the Employee is an
equity participant in the purchasing company or group (except: (i) passive
ownership of less than 2% of the stock of the purchasing company; or (ii) ownership
of equity participation in the purchasing company or group that is otherwise
not significant, as determined prior to the Change in Control by a majority of
the non-employee continuing directors).

 

Section 2.7.   “Committee” means the
Compensation Committee of the Company, or any successor thereto or delegate
thereof with the authority to act on behalf of the Committee with respect to
this Plan.

 

Section 2.8.   “Company” means the
Smurfit-Stone Container Corporation and includes any successor thereto,
including pursuant to a plan of reorganization under the U.S. Bankruptcy Code.

 

Section 2.9.   “Company Achievement” means (a) the
percentage of the Annual Performance Target achieved by the Company in the Plan
Year or (b) the percentage of the Semi-annual Performance Target achieved
by the Company in a Performance Period, as the case may be, and, in each case,
as determined by the Committee.

 

Section 2.10. “Disability”
means an individual’s
long-term disability as defined under the long-term disability plan of the
Company that covers that individual; or if the individual is not covered by
such a long-term disability plan, an individual’s disability as defined for
purposes of eligibility for a disability award under the Social Security Act.

 

Section 2.11. “Employee”
means an individual who is (a) a regular part-time or full-time employee
of the Company or one
of its subsidiaries or affiliates, other than an individual
classified by his or her Company as a contractor or intern, and (b) designated
by the Committee as eligible to participate in the Plan.

 

3

 

Section 2.12. “Good Reason” shall mean, in the case of
an Employee who is designated as a Tier 1 Employee in the individual’s
Incentive Statement for the Plan Year (“Tier 1 Employee”), the occurrence of any of the following
without the Employee’s express written consent: (i) any reduction in
either the Employee’s Base Pay or Target Incentive under this Plan as set forth
in the Incentive Statement provided to the Employee; (ii) the Company’s
failure to maintain retirement, health and welfare benefits plans, and
compensation plans under which the Employee is eligible to receive benefits
substantially similar in value in the aggregate to the benefits the Employee
was eligible to receive under the retirement plans, health and welfare benefits
plans, and compensation plans maintained by the Company as in effect on January 1,
2009; (iii) the Company’s requiring the Employee to be based anywhere more
than fifty (50) miles from where the Employee’s principal place of employment
was located as of January 1, 2009; (iv) a change in the duties or
reporting responsibilities of the Employee that is inconsistent in any
substantial adverse respect with such Employee’s position, duties or
responsibilities as in effect on January 1, 2009; and (v) failure by
the Company to obtain an agreement to assume all of the obligations of the
Company hereunder upon a Change in Control pursuant to Section 2.6(a)-(c) from
any entity that is or will be the successor entity to the Company (including
pursuant to any merger, consolidation or sale of all or substantially all of
the assets of the Company).

 

Section 2.13. “Incentive
Statement” means a letter or other writing (including in
electronic format) provided by the Company to an Employee that sets forth the
Annual and/or Semi-annual MIP Awards that an Employee may earn under the Plan
(or otherwise describes an Employee’s eligibility to participate in the Plan),
that also may describe the performance metrics applicable to an Employee and
any and all other objective performance criteria applicable to such Employee,
in each case as established by the Committee.

 

Section 2.14. “Payment Date” means the date on which an
Award is paid to an Employee.

 

Section 2.15. “Performance Period” means (i) January 1
through June 30, 2009, (ii) July 1 through December 31,
2009, or (iii) with respect to the Tier 4 Employees identified in Section 4.3,
each calendar quarter in 2009, as the case may be.

 

Section 2.16. “Plan Year” means the one year
period commencing on January 1, 2009, and ending on December 31,
2009.

 

Section 2.17. “Retirement” means an Employee’s voluntary
termination of employment with the Company pursuant to the retirement plan(s) applicable
to such Employee.

 

Section 2.18. “Semi-annual MIP Award” means the cash
incentive bonus awarded to an Employee under the Plan after the end of each
Performance Period, which bonus is subject to the Company Achievement of the
applicable Semi-annual Performance Target and/or any other objective criteria
established by the Committee.

 

Section 2.19. “Semi-annual Performance Target” means the Company’s
financial and/or operational goals for the Performance Period of January 1
through June 30, 2009, or July 1 through December 31, 2009, as
the case may be, as established by the Committee.

 

4

 

Section 2.20. “Target Incentive” means the
percentage of an Employee’s Base Pay, as determined by the Committee based on
the Employee’s position and as reflected in the Employee’s Incentive Statement,
that he or she will receive in the Plan Year if Company Achievement of each of
the Annual and Semi-annual Performance Targets (and of any other objective
performance criteria established by the Committee) is equal to 100%.

 

ARTICLE III

AWARD ELIGIBILITY

 

Section 3.1.   Eligibility.

 

(a)   Subject to Section 3.2, an individual
shall be eligible to receive a Semi-annual MIP Award for a Performance Period
if he or she:

 

(1)                    (i) with respect to the
Performance Period ending June 30, 2009, was employed on or before March 31, or (ii) with
respect to the Performance Period ending December 31, 2009, was employed
on or before September 30, 2009;

 

(2)                    was designated as an
eligible Employee for the Performance Period; and

 

(3)                    is an Employee on the last
day of, or dies during, the Performance Period,

 

in
all cases as determined by the Committee. 
A Semi-annual MIP Award may be prorated, at the sole discretion of the
Committee, to the extent the individual has not been employed as an Employee
for the entirety of such Performance Period.

 

(b)   Subject to Section 3.2, an individual
shall be eligible to receive an Annual MIP Award for the Plan Year only if he
or she:

 

(1)                    was employed on or before September 30, 2009;

 

(2)                    was designated as an
eligible Employee for the Plan Year; and

 

(3)                    is an Employee on the last
day of, or dies during, the Plan Year,

 

in
all cases as determined by the Committee. 
The Annual MIP Award may be prorated, at the sole discretion of the
Committee, to the extent the individual has not been employed as an Employee
for the entirety of each Performance Period in the Plan Year.

 

(c)   In the event an Employee transfers into or
otherwise assumes another position that participates in the Plan, the Committee
retains the sole discretion to determine what adjustments, if any, will be made
to the Employee’s Target Incentive.

 

(d)   The Committee retains the discretion to
reduce or eliminate an Award for any Employee whose performance does not
consistently meet expectations.

 

Section 3.2.   Ineligibility / Termination
of Employment.

 

(a)   Notwithstanding anything herein to the contrary, if,
prior to the last day of a Performance Period (in the case of a Semi-annual MIP
Award), the employment of an Employee is terminated (1) by the Company
without Cause (including due to a reduction in force), (2) by reason of
death, Disability, or Retirement, or (3) in the case of a Tier 1 Employee,
voluntarily by the Employee for Good Reason, such Employee shall be eligible to
receive a Semi-annual MIP 

 

5

 

Award for such
Performance Period that shall be prorated both on the basis of the full
calendar months worked therein during which such Employee shall have been
employed by the Company and based on the Company’s actual performance during
such Performance Period; provided, however, that such Employee shall not be
eligible to receive such a prorated Semi-annual MIP Award unless he or she was employed as
an Employee for at least three full calendar months within such Performance
Period and, with
respect to the Performance Period ending June 30, 2009, was employed as an
Employee on or after April 28, 2009; provided, further, that
such an Employee will not be eligible to receive any payment (prorated or
otherwise) based on (i) the Annual MIP Award or (ii) any amount that
is attributable to Company Achievement that exceeds a Semi-annual Performance
Target, including but not limited to the Surplus Award (as defined in Section 5.1).

 

(b)   Notwithstanding anything herein to the contrary,
except as otherwise determined by the Committee, if, prior to the date on which
the payment of an Award is made, an Employee (i) is terminated by the
Company for Cause, (ii) in the case of a Tier 1 Employee, voluntarily
quits or resigns without Good Reason, or (iii) in the case of a an
Employee who is designated as a Tier 2, Tier 3 or Tier 4/ESIP Employee in the
individual’s Incentive Statement for the Plan Year (respectively, “Tier 2,” “Tier
3,” or “Tier 4/ESIP Employee”), voluntarily quits or resigns for any reason,
such Employee shall not be eligible to receive any additional unpaid amounts
under the Plan (even if such termination occurs subsequent to the last day of a
Performance Period and/or Plan Year), including any unpaid Surplus Award.

 

(c)   Notwithstanding anything herein to the contrary, if a
material “Event of Default” (as defined in the Amended and
Restated Credit Agreement dated as of February 25, 2009, as amended, or “DIP
Credit Agreement,” to which the Company is a party) has occurred and is continuing at the time any Awards
would otherwise be payable under this Plan, the Company shall not pay, and an
Employee shall not have any right, title or interest in or to, any such Awards unless and until such
Event of Default is cured.

 

ARTICLE IV

CALCULATION OF AWARD

 

Section 4.1.   Performance Targets.  The Committee shall establish Annual and
Semi-annual Performance Targets for the Plan Year.  Each of the Annual and Semi-annual
Performance Targets shall include a threshold level of performance below which
no Award payment shall be made, levels of performance at which specified
percentages of the target Award shall be paid, and a maximum level of
performance above which no additional Award shall be paid.

 

Section 4.2.   Semi-annual Cycle.  The Plan will operate on a semi-annual cycle,
such that the Company’s Annual Performance Target will be apportioned into two
Semi-Annual Performance Targets, one for each Performance Period in the Plan
Year.  An Employee is eligible to receive
a Semi-annual MIP Award after the end of each Performance Period subject to the
Company Achievement of the Semi-annual Performance Targets and any other
applicable objective performance criteria established by the Committee.  An Employee is eligible to receive 

 

6

 

an Annual MIP Award after the end of the Plan
Year subject to the Company Achievement of the Annual Performance Target and
any other applicable objective performance criteria established by the
Committee.

 

Section 4.3.   Special Rules Applicable
to Certain Tier 4 Employees.

 

(a)  Certain Tier 4 Employees (“ESIP B Employees”)
shall receive performance targets  based on key performance indicators by plant or
area.  For all such ESIP B Employees, the Plan will operate on a
quarterly cycle.  The Committee shall establish
for these ESIP B Employees an Annual Performance Target (whether based on the
performance indicators for their respective plants and/or areas), which will be
apportioned into four quarterly Performance Targets, one for each calendar
quarter in the Plan Year.  These ESIP B
Employees are eligible to receive a quarterly MIP Award after the end of each
calendar quarter subject to the achievement of the applicable quarterly
Performance Target and any other applicable objective performance criteria
established by the Committee.

 

(b)  Payment of
quarterly MIP Awards to these ESIP B Employees for each calendar quarter, less
withholding taxes and other applicable withholdings, shall be made not later
than 45 days following the last day of the calendar quarter to which such Award
relates.

 

(c)  To the extent
not inconsistent with the foregoing, these ESIP B Employees and the provision
of their MIP Awards shall be subject to each of the provisions set forth in the
Plan; provided, however, that the Plan provisions as applied to the these ESIP
B Employees and to their MIP Awards shall be read by substituting the term “quarterly”
for “Semi-annual,” and, notwithstanding anything herein to the contrary, these
ESIP B Employees shall not be eligible to receive an Annual MIP Award.

 

Section 4.4.   Awards.  The Company shall provide an Incentive
Statement to each Employee as soon as practicable after April 22,
2009.  The Incentive Statement shall
explain the Annual and Semi-annual MIP Awards that the Employee is eligible to
earn throughout the Plan Year (or shall otherwise describe such Employee’s
eligibility to participate in the Plan) and shall describe the Annual and
Semi-annual Performance Targets applicable throughout the Plan Year as well as
any other objective performance criteria applicable to the individual Employee,
as established by the Committee.  Subject
to the requirements of Sections 3.1 and 3.2 above, payment of a Semi-annual MIP
Award shall be made only if and to the extent that a pre-determined threshold
percentage of the Semi-annual Performance Targets with respect to such
Performance Period is attained, and all other objective performance criteria
applicable to the Employee have been met. 
Similarly, subject to the requirements of Sections 3.1 and 3.2 above,
payment of an Annual MIP Award shall be made only if and to the extent that a
pre-determined threshold percentage of the Annual Performance Target is
attained, and all other objective performance criteria applicable to the
Employee have been met.  Unless otherwise
provided in an Employee’s Incentive Statement, the actual amount of the Annual
and/or Semi-annual MIP Awards payable to an Employee under the Plan shall be
determined as a percentage of the Employee’s Target Incentive, which percentage
shall vary depending upon the extent to which the Annual and/or Semi-annual
Performance Targets have been attained and all other objective performance
criteria applicable have been met.

 

7

 

Section 4.5.   Emergence from Bankruptcy /
Liquidation.  In the
event that during the Plan Year the United States Bankruptcy Court for the
District of Delaware presiding over In re: Smurfit-Stone Container Corp.,
Case No. 09-10235 (BLS), confirms a plan of reorganization for the Company
pursuant to Section 2.6(e) and the Company fails to assume the Plan
following or in connection with the confirmation of such a plan of
reorganization, or the Company consummates a liquidation pursuant to Section 2.6(d) or
(f), then each Employee shall receive a Semi-annual MIP Award for the
Performance Period in which the plan of reorganization is confirmed or the
liquidation is consummated and an Annual MIP Award, which Awards shall be (i) prorated
on the basis of the full calendar months during which such Employee shall have
been employed by the Company during such Performance Period and the Plan Year
and (ii) based on the Company’s actual performance measured as a
percentage of the Company’s financial/operational targets through the date of
reorganization or liquidation.

 

ARTICLE V

PAYMENT OF AWARDS

 

Section 5.1.   Time of Payment.  Payment of the Semi-annual MIP Award for the
Performance Period ending June 30, 2009, less withholding taxes and other
applicable withholdings, shall be made not later than 45 days after June 30.  Payment of the Semi-annual MIP Award for
Performance Period ending December 31, 2009, and the Annual MIP Award,
less withholding taxes and other applicable withholdings, shall be made within
a reasonable period after the end of the Plan Year, but in no event later than March 15,
2010.  Notwithstanding any of the
foregoing, any portion of the Semi-annual MIP Award for the Performance Period
ending June 30, 2009, that is attributable to and payable for Company
Achievement that exceeds the Semi-annual Performance Target for that
Performance Period (“Surplus Award”) shall be paid with the Semi-annual MIP
Award for the Performance Period ending December 31, 2009, and the Annual
Award.

 

Section 5.2.   Form of Payment.  Awards shall be paid in the form of a lump
sum cash payment.

 

ARTICLE
VI

ADMINISTRATION

 

Section 6.1.   The Plan shall be
administered by the Committee, which shall have full power and authority to
interpret, construe and administer the Plan in accordance with the provisions
set forth herein, including without limitation the authority to: (i) select
the Employees to whom Awards may from time to time be granted hereunder; (ii) determine
the terms and conditions of each Award, consistent with the terms of the Plan;
and (iii) determine the Award formula for every Employee in each
Performance Period, including adjusting or eliminating Awards, subject to the
Company Achievement and the Company’s satisfaction of any and all other
objective performance criteria established by the Committee.  In this connection, the Committee may
delegate to any corporation, committee or individual(s), regardless of whether
any such individuals are employees of the Company, the duty to act for the
Committee hereunder.

 

8

 

Section 6.2.   Decisions of the Committee
shall be final, conclusive and binding on all persons or entities, including
the Company and any Employee.  A majority
of the members of the Committee may determine its actions.

 

Section 6.3.   No officer or employee of
the Company shall be liable to any person for any action taken or omitted in
connection with the interpretation and administration of the Plan unless
attributable to his or her own willful misconduct or lack of good faith.

 

Section 6.4.   The expenses of
administering the Plan shall be paid by the Company and shall not be charged
against the Plan.

 

ARTICLE
VII

MISCELLANEOUS

 

Section 7.1.   Successors.  All
obligations of the Company under the Plan will be binding on any successor to
the Company, whether the existence of the successor results from a Change in
Control as described in Section 2.6(a) (relating to the accumulation
of Company Voting Securities), Section 2.6(b) (relating to a
reconstitution of the Board), Section 2.6(c) (relating to a merger,
consolidation, or sale of the Company’s assets), or otherwise; provided,
however, that following or in connection with any Change in Control pursuant to Section 2.6(e) (relating
to the consummation of a reorganization under the U.S. Bankruptcy Code), if the
Company fails to assume the Plan, then it shall payout any Awards subject to Section 4.5,
and after such payouts the Plan and all of the Company’s obligations hereunder
shall terminate; provided, further, that following any Change in Control pursuant to Section 2.6(d) or
(f) (relating to the consummation of a complete liquidation or dissolution
of the Company pursuant to stockholder approval or under the Bankruptcy Code)
and the payout of any Awards subject to Section 4.5, the Plan and all of the Company’s
obligations hereunder shall terminate.

 

Section 7.2.   Nontransferability.  No Award
payable hereunder, nor any right to receive any future Award hereunder, may be
assigned, alienated, sold, transferred, anticipated, pledged, encumbered, or
subjected to any charge or legal process, and if any such attempt is made, or a
person eligible for any Award hereunder becomes bankrupt, the Award under the
Plan which would otherwise be payable with respect to such person may be
terminated by the Committee which, in its sole discretion, may cause the same
to be held or applied for the benefit of one or more of the dependents of such
person or make any other disposition of such Award that it deems appropriate.

 

Section 7.3.   Beneficiary Designation.  Each Employee
may, from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any Award under the Plan is to be paid in
case the Employee should die before receiving any or all of his or her
Award.  Each beneficiary designation will
revoke all prior designations by the same Employee with respect to this Plan,
must be in a form prescribed by the Committee, and must be made during the
Employee’s lifetime.  If the Employee’s
designated beneficiary predeceases the Employee or no beneficiary has been
designated, any Award remaining unpaid at the Employee’s death may, in the sole
discretion of the Committee, (i) be paid to the Employee’s estate or to
one or more of the dependents of the Employee or (ii) be disposed of in
any other 

 

9

 

manner that the Committee deems appropriate.

 

Section 7.4.   Claim to Awards and
Employment Rights.  Nothing in
this Plan shall require the Company to segregate or set aside any funds or
other property for purposes of paying all or any portion of an Award
hereunder.  No person shall have any
right, title or interest in or to any Award hereunder (or any portion of such
award, including but not limited to any Surplus Award) prior to the actual
payment thereof, nor to any property of the Company.  Eligibility for an Award in one year or
Performance Period does not entitle an individual to be eligible for an Award
in any other year or Performance Period. 
Neither the adoption of the Plan nor the continued operation thereof
shall confer upon any Employee any right to continue in the employ of the
Company or shall in any way affect the right and power of the Company to
dismiss or otherwise terminate the employment of any Employee at any time for
any reason, with or without cause.

 

Section 7.5.   Income Tax
Withholding/Rights of Offset.  The Company shall have the right to deduct
and withhold from all Awards all federal, state and local taxes as may be
required by law.  In addition to the
foregoing, the Company shall have the right to set off against the amount of
any Award which would otherwise be payable hereunder, the amount of any debt,
judgment, claim, expense or other obligation owed at such time by the Employee
to the Company, as permitted by law.

 

Section 7.6.   Effective Date
of Plan.  The Plan shall take effect on April 28,
2009.

 

Section 7.7.   Termination of Plan.  The
Plan may be terminated at any time and for any reason by the Committee.  However, subject to the requirements Sections
4.5 and 7.1, upon the Court’s confirmation of a plan of reorganization, if the
Company fails to assume the Plan following or in connection
with the confirmation of such a plan of reorganization, the Plan and all of the Company’s
obligations hereunder shall terminate.

 

Section 7.8.   Severability.  If any provision of the Plan is held illegal
or invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as if
the illegal or invalid provision had not been included.

 

Section 7.9.   Governing Law.  All questions pertaining to the construction,
validity and effect of the Plan shall be determined in accordance with the laws
of the State of Delaware.

 

IN WITNESS WHEREOF, the
Compensation Committee of Smurfit-Stone Container Corporation has caused this
instrument to be executed by its duly authorized member on this 28th day of April, 2009.

 

	
   

  	
  SMURFIT-STONE CONTAINER
  CORPORATION COMPENSATION COMMITTEE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William D. Smithburg

  
	
   

  	
   

  

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}]]