Document:

ex10_12.htm

    EXECUTION
VERSION

     

    SECURITY
AGREEMENT

     

    THIS
SECURITY AGREEMENT (as
amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”) dated as of
June 23, 2008 among OPTIONS
MEDIA GROUP HOLDINGS, INC., a Delaware corporation (the “Company”), OPTIONS ACQUISITION SUB, INC.
(“Options”,
together with Company, and each other Person who becomes a party to this
Agreement by execution of a joinder in the form of Exhibit A attached
hereto, is hereinafter sometimes referred to individually as a “Debtor” and, collectively, as
the “Debtors”), and
CUSTOMER ACQUISITION NETWORK
HOLDINGS, INC., a Delaware corporation (together with its successors and
assigns, the “Secured
Party”).

     

    W I T N E
S S E T H:

     

    WHEREAS, on the date hereof, pursuant
to that certain merger agreement by and among the Debtors and Options
Acquisition Corp., dated June 23, 2008 (the “Merger Agreement”), whereby
the Company acquired Options.  Pursuant to the terms of the Merger
Agreement, the Company issued, and the Secured Party acquired that certain
senior secured promissory note in the principal amount of $1,000,000.00 (such note, together
with any promissory notes or other securities issued in exchange or substitution
therefor or replacement thereof, and as any of the same may be amended,
supplemented, restated or modified and in effect from time to time, the “Note”);

     

    WHEREAS,
each Debtor (other than the Company) from time to time party hereto is a direct
or indirect subsidiary of the Company and, as such, will derive substantial
benefit and advantage from the financial accommodations to the Company set forth
in the Note, and it will be in each such Debtor’s direct interest and economic
benefit to assist the Company in procuring said financial accommodations from
the Secured Party; and

     

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

     

    Section
1.  Definitions.

     

    “Accounts” means any “account,”
as such term is defined in the Uniform Commercial Code, and, in any event, shall
include, without limitation, “supporting obligations” as defined in the Uniform
Commercial Code.

     

    “As-extracted Collateral” means
any “as-extracted collateral,” as such term is defined in the Uniform Commercial
Code.

     

    “Capital Lease Obligation”
means, as to any Person, any obligation that is required to be classified and
accounted for as a capital lease on a balance sheet of such Person prepared in
accordance with GAAP, and the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with GAAP.

     

    “Chattel Paper” means any
“chattel paper,” as such term is defined in the Uniform Commercial Code,
including electronic chattel paper.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Collateral” shall have the
meaning ascribed thereto in Section 3
hereof.

     

    “Commercial Tort Claims” means
“commercial tort claims”, as such term is defined in the Uniform Commercial
Code.

     

    “Contracts” means all
contracts, undertakings, or other agreements (other than rights evidenced by
Chattel Paper, Documents or Instruments) in or under which a Debtor may now or
hereafter have any right, title or interest, including, without limitation, with
respect to an Account, any agreement relating to the terms of payment or the
terms of performance thereof.

     

    “Copyrights” means any
copyrights, rights and interests in copyrights, works protectable by copyrights,
copyright registrations and copyright applications, including, without
limitation, the copyright registrations and applications listed on Schedule III attached
hereto (if any), and all renewals of any of the foregoing, all income,
royalties, damages and payments now and hereafter due and/or payable under or
with respect to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing and
the right to sue for past, present and future infringements of any of the
foregoing.

     

    “Deposit Accounts” means all
“deposit accounts” as such term is defined in the Uniform Commercial Code, now
or hereafter held in the name of a Debtor.

     

    “Documents” means any
“documents,” as such term is defined in the Uniform Commercial Code, and shall
include, without limitation, all documents of title (as defined in the Uniform
Commercial Code), bills of lading or other receipts evidencing or representing
Inventory or Equipment.

     

    “Equipment” means any
“equipment,” as such term is defined in the Uniform Commercial Code and, in any
event, shall include, Motor Vehicles.

     

    “Event of Default” shall have
the meaning set forth in the Note.

     

    “Excluded Property” means any
Contract, agreement, or Instrument entered into by any Debtor that by its terms
prohibits or requires the consent of any Peron other than the Company and its
Affiliates which has not been obtained as a condition to the creation by such
Debtor of a Lien on any right, title, or interest in such Contract, agreement,
or Instrument  to the extent, and for so long as, such prohibition is
not terminated or rendered unenforceable or otherwise deemed ineffective by the
Uniform Commercial Code, including, without limitation, Sections 9-406, 9-407,
9-408, or 9-409 thereof, or any successor provision or provisions or other
applicable law.

     

    “GAAP” means U.S. generally
accepted accounting principles.

     

    “General Intangibles” means any
“general intangibles,” as such term is defined in the Uniform Commercial Code,
and, in any event, shall include, without limitation, all right, title and
interest in or under any Contract, models, drawings, materials and records,
claims, literary rights, goodwill, rights of performance, Copyrights,
Trademarks, Patents, warranties, rights under insurance policies and rights of
indemnification.

     

    
      
        
        

      

      
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    “Goods” means any “goods”, as
such term is defined in the Uniform Commercial Code, including, without
limitation, fixtures and embedded Software to the extent included in “goods” as
defined in the Uniform Commercial Code.

     

    “Governmental Authority” means
the government of the United States of America or any other nation, or any
political subdivision thereof, whether state or local, or any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administration powers or
functions of or pertaining to government over any Debtor or any of its
Subsidiaries, or any of their respective properties, assets or
undertakings.

     

    “Instruments” means any
“instrument,” as such term is defined in the Uniform Commercial Code, and shall
include, without limitation, promissory notes, drafts, bills of exchange, trade
acceptances, letters of credit, letter of credit rights (as defined in the
Uniform Commercial Code), and Chattel Paper.

     

    “Inventory” means any
“inventory,” as such term is defined in the Uniform Commercial
Code.

     

    “Investment Property” means any
“investment property”, as such term is defined in the Uniform Commercial
Code.

     

    “Liabilities” shall mean all
obligations, liabilities and indebtedness of every nature of Debtors from time
to time owed or owing under or in respect of this Agreement, the Note, any of
the other Security Documents and any of the other transaction documents, as the
case may be, including, without limitation, the principal amount of all debts,
claims and indebtedness, accrued and unpaid interest and all fees, costs and
expenses, whether primary, secondary, direct, contingent, fixed or otherwise,
heretofore, now and/or from time to time hereafter owing, due or payable whether
before or after the filing of a bankruptcy, insolvency or similar proceeding
under applicable federal, state, foreign or other law and whether or not an
allowed claim in any such proceeding.

     

    “Lien” shall mean with respect
to any asset or property, any mortgage, lien, pledge, hypothecation, charge,
security interest, encumbrance or adverse claim of any kind and any restrictive
covenant, condition, restriction or exception of any kind that has the practical
effect of creating a mortgage, lien, pledge, hypothecation, charge, security
interest, encumbrance or adverse claim of any kind (including any of the
foregoing created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor with respect to a
Capital Lease Obligation, or any financing lease having substantially the same
economic effect as any of the foregoing).

     

    “Motor Vehicles” shall mean
motor vehicles, tractors, trailers and other like property, whether or not the
title thereto is governed by a certificate of title or ownership.

     

    “Patents” means any patents and
patent applications, including, without limitation, the inventions and
improvements described and claimed therein, all patentable inventions and those
patents and patent applications listed on Schedule IV
attached hereto (if any), and the reissues, divisions, continuations, renewals,
extensions and continuations-in-part of any of the foregoing, and all income,
royalties, damages and payments now or hereafter due and/or payable under or
with respect to any of the foregoing, including, without limitation, damages and
payments for past, present and 

     

    
      
        
        

      

      
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future infringements of any of the foregoing and the right to sue for past,
present and future infringements of any of the foregoing.

     

    “Permitted Lien” shall
mean:

     

    (i)           Liens
created by this Agreement;

     

    (ii)           Liens
for taxes or other governmental charges not at the time due and payable, or
which are being contested in good faith by appropriate proceedings diligently
prosecuted, so long as foreclosure, distraint, sale or other similar proceedings
have not been initiated, and in each case for which the Company and its
Subsidiaries maintain adequate reserves in accordance with GAAP in respect of
such taxes and charges;

     

    (iii)           Liens
arising in the ordinary course of business in favor of carriers, warehousemen,
mechanics and materialmen, or other similar Liens imposed by law, which remain
payable without penalty or which are being contested in good faith by
appropriate proceedings diligently prosecuted, which proceedings have the effect
of preventing the forfeiture or sale of the property subject thereto, and in
each case for which adequate reserves in accordance with GAAP are being
maintained;

     

    (iv)           Liens
arising in the ordinary course of business in connection with worker’s
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA);

     

    (v)           Attachments,
appeal bonds (and cash collateral securing such bonds), judgments and other
similar Liens, for sums not exceeding $250,000 in the aggregate for the Company
and its Subsidiaries, arising in connection with court proceedings, provided that the
execution or other enforcement of such Liens is effectively stayed;

     

    (vi)           Easements,
rights of way, restrictions, minor defects or irregularities in title and other
similar Liens arising in the ordinary course of business and not materially
detracting from the value of the property subject thereto and not interfering in
any material respect with the ordinary conduct of the business of the Company or
any of its Subsidiaries;

     

    (vii)           Liens
arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies and burdening
only deposit accounts or other funds maintained with a creditor depository
institution, provided that no such
deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board of Governors of the U.S. Federal Reserve
System and that no such deposit account is intended by the Company or any of its
Subsidiaries to provide collateral to the depository institution;
and

     

    (viii)           Liens
securing Capital Lease Obligations, provided that such Liens attach only to the
fixed assets financed by such Capital Lease Obligations and such Liens attach
concurrently with, or within ninety (90) days, after the acquisition
thereof.

     

    “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, a Governmental Authority or any
other legal entity.

     

    
      
        
        

      

      
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    “Proceeds” means “proceeds,” as
such term is defined in the Uniform Commercial Code and, in any event, includes,
without limitation, (a) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable with respect to any of the Collateral, (b) any and
all payments (in any form whatsoever) made or due and payable from time to time
in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), and (c) any and all other amounts from time to time paid or payable
under, in respect of or in connection with any of the Collateral.

     

    “Representative” means any
Person acting as agent, representative or trustee on behalf of the Secured Party
from time to time.

     

     “Software” means all “software”
as such term is defined in the Uniform Commercial Code, now owned or hereafter
acquired by a Debtor, other than software embedded in any category of Goods,
including, without limitation, all computer programs and all supporting
information provided in connection with a transaction related to any
program.

     

    “Trademarks” means any
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, the trademarks and
applications listed in Schedule V attached
hereto (if any) and renewals thereof, and all income, royalties, damages and
payments now or hereafter due and/or payable under or with respect to any of the
foregoing, including, without limitation, damages and payments for past, present
and future infringements of any of the foregoing and the right to sue for past,
present and future infringements of any of the foregoing.

     

    “Uniform Commercial Code” shall
mean the Uniform Commercial Code as in effect from time to time in the State of
New York; provided, that to the extent that the Uniform Commercial Code is used
to define any term herein and such term is defined differently in different
Articles or Divisions of the Uniform Commercial Code, the definition of such
term contained in Article or Division 9 shall govern; provided, that, if, by
mandatory provisions of applicable laws, any or all of the attachment,
perfection, or priority of Secured Party’s security interest in Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term “Uniform Commercial Code” means
the Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions hereof relating to such attachment,
perfection, or priority and for purposes of definitions related to such
provisions..

     

    Section
2.  Representations, Warranties
and Covenants of Debtors.  Each Debtor represents and warrants
to, and covenants with, the Secured Party as follows:

     

    (a)           Such
Debtor has rights in and the power to transfer the Collateral in which it
purports to grant a security interest pursuant to Section 3 hereof
(subject, with respect to after acquired Collateral, to such Debtor acquiring
the same) and no Lien other than Permitted Liens exists or will exist upon such
Collateral at any time.

     

    
      
        
        

      

      
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    (b)           This
Agreement is effective to create in favor of Secured Party a valid security
interest in and Lien upon all of such Debtor’s right, title and interest in and
to the Collateral, and upon (i) (A) the filing of appropriate Uniform Commercial
Code financing statements in the jurisdictions listed on Schedule I attached
hereto, and (B) each Deposit Account being subject to an Account Control
Agreement (as hereinafter defined) between the applicable Debtor and depository
institution and the Secured Party, such security interest will be a duly
perfected first priority security interest in all of the Collateral (other than
Instruments not constituting Chattel Paper), and (ii) upon delivery of the
Instruments to the Secured Party or its Representative, duly endorsed by such
Debtor or accompanied by appropriate instruments of transfer duly executed by
such Debtor, the security interest in the Instruments will be duly
perfected.

     

    (c)           All
of the Equipment, Inventory and Goods owned by such Debtor is located at the
places as specified on Schedule I attached
hereto.  Except as disclosed on Schedule I, none of
the Collateral is in the possession of any bailee, warehousemen, processor or
consignee.  Schedule I discloses
such Debtor’s name as of the date hereof as it appears in official filings in
the state or province, as applicable, of its incorporation, formation or
organization, the type of entity of such Debtor (including corporation,
partnership, limited partnership or limited liability company), organizational
identification number issued by such Debtor’s state of incorporation, formation
or organization (or a statement that no such number has been issued), such
Debtor’s state or province, as applicable, of incorporation, formation or
organization and the chief place of business, chief executive officer and the
office where such Debtor keeps its books and records and the states in which
such Debtor conducts its business.  Such Debtor has only one state or
province, as applicable, of incorporation, formation or organization. Such
Debtor does not do business and has not done business during the past five (5)
years under any trade name or fictitious business name except as disclosed on
Schedule II
attached hereto.

     

    (d)           No
Copyrights, Patents or Trademarks listed on Schedules III, IV and
V, respectively, if any, have been adjudged invalid or unenforceable or
have been canceled, in whole or in part, or are not presently
subsisting.  Each of such Copyrights, Patents and Trademarks (if any)
is valid and enforceable.  Such Debtor is the sole and exclusive owner
of the entire and unencumbered right, title and interest in and to each of such
Copyrights, Patents and Trademarks, identified on Schedules III, IV and
V, as applicable, as being owned by such Debtor, free and clear of any
liens, charges and encumbrances, including without limitation licenses, shop
rights and covenants by such Debtor not to sue third persons.  Such
Debtor has adopted, used and is currently using, or has a current bona fide
intention to use, all of such Trademarks and Copyrights.  Such Debtor
has no notice of any suits or actions commenced or threatened with reference to
the Copyrights, Patents or Trademarks owned by it.

     

    (e)           Each
Debtor agrees to deliver to the Secured Party an updated Schedule I, II, III, IV
and/or V within five (5) Business Days of any change
thereto.

     

    (f)           All
depositary and other accounts including, without limitation, Deposit Accounts,
securities accounts, brokerage accounts and other similar accounts, maintained
by each Debtor are described on Schedule VI hereto,
which description includes for each such account the name of the Debtor
maintaining such account, the name, address and telephone and telecopy numbers
of the financial institution at which such account is maintained, the account
number and the account officer, if any, of such account.  No

     

    
      
        
        

      

      
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    Debtor
shall open any new Deposit Accounts, securities accounts, brokerage accounts or
other accounts unless such Debtor shall have given Secured Party ten (10)
Business Days’ prior written notice of its intention to open any such new
accounts.  Each Debtor shall deliver to Secured Party a revised
version of Schedule
VI showing any changes thereto within five (5) Business Days of any such
change.  Each Debtor hereby authorizes the financial institutions at
which such Debtor maintains an account to provide Secured Party or its
Representative with such information with respect to such account as Secured
Party or its Representative from time to time reasonably may request, and each
Debtor hereby consents to such information being provided to Secured Party and
its Representative.  In addition, all of such Debtor’s depositary,
security, brokerage and other accounts including, without limitation, Deposit
Accounts shall be subject to the provisions of Section 4.5
hereof.

     

    (g)           Such
Debtor does not own any Commercial Tort Claim except for those disclosed on
Schedule VII
hereto (if any).

     

    (h)           Such
Debtor does not have any interest in real property except as disclosed on Schedule
VIII  (if any).  Each Debtor shall deliver to Secured
Party a revised version of Schedule VIII showing
any changes thereto within ten (10) Business Days of any such
change.  Except as otherwise agreed to by Secured Party, all such
interests in real property are subject to a mortgage or deed of trust (in form
and substance satisfactory to Secured Party) in favor of Secured Party
(hereinafter, a “Mortgage”).

     

    (i)           All
Equipment (including, without limitation, Motor Vehicles) owned by a Debtor and
subject to a certificate of title or ownership statute is described on Schedule IX
hereto.

    

    (j)           The
Company has no direct or indirect subsidiaries other than Options.

    

    Section
3.  Collateral.  As
collateral security for the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the Liabilities, each Debtor hereby
pledges and grants to the Secured Party, for the benefit of itself a Lien on and
security interest in and to all of such Debtor’s right, title and interest in
the personal property and assets of such Debtor, whether now owned by such
Debtor or hereafter acquired and whether now existing or hereafter coming into
existence and wherever located (all being collectively referred to herein as
“Collateral”),
including, without limitation:

     

    (a)           all
Instruments, together with all payments thereon or thereunder:

     

    (b)           all
Accounts;

     

    (c)           all
Inventory;

     

    (d)           all
General Intangibles (including payment intangibles (as defined in the Uniform
Commercial Code) and Software);

     

    (e)           all
Equipment;

     

    (f)           all
Documents;

     

    (g)           all
Contracts;

     

    
      
        
        

      

      
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    (h)           all
Goods;

     

    (i)           all
Investment Property;

     

    (j)           all
Deposit Accounts, including, without limitation, the balance from time to time
in all bank accounts maintained by such Debtor;

     

    (k)           all
Commercial Tort Claims specified on Schedule
VII;

     

    (l)           all
As-extracted Collateral;

     

    (m)           all
Trademarks, Patents and Copyrights; and

     

    (n)           all
other tangible and intangible property of such Debtor, including, without
limitation, all interests in real property, Proceeds, tort claims, products,
accessions, rents, profits, income, benefits, substitutions, additions and
replacements of and to any of the property of such Debtor described in the
preceding clauses of this Section 3 (including,
without limitation, any proceeds of insurance thereon, insurance claims and all
rights, claims and benefits against any Person relating thereto), other rights
to payments not otherwise included in the foregoing, and all books,
correspondence, files, records, invoices and other papers, including without
limitation all tapes, cards, computer runs, computer programs, computer files
and other papers, documents and records in the possession or under the control
of such Debtor, any computer bureau or service company from time to time acting
for such Debtor;

     

    provided,
however, that the Collateral shall not include any Excluded
Property.

     

    Section
4.  Covenants;
Remedies.  In furtherance of the grant of the pledge and
security interest pursuant to Section 3 hereof,
each Debtor hereby agrees with the Secured Party as follows:

     

    4.1.  Delivery and Other
Perfection; Maintenance, etc.

     

    (a)           Delivery of Instruments,
Documents, Etc.  Each Debtor shall deliver and pledge to the
Secured Party or its Representative any and all Instruments, negotiable
Documents, Chattel Paper and certificated securities not maintained in a
securities account (accompanied by stock powers executed in blank) duly endorsed
and/or accompanied by such instruments of assignment and transfer executed by
such Debtor in such form and substance as the Secured Party or its
Representative may request; provided, that so
long as no Event of Default shall have occurred and be continuing, each Debtor
may retain for collection in the ordinary course of business any Instruments,
negotiable Documents and Chattel Paper received by such Debtor in the ordinary
course of business, and the Secured Party or its Representative shall, promptly
upon request of a Debtor, make appropriate arrangements for making any other
Instruments, negotiable Documents and Chattel Paper pledged by such Debtor
available to such Debtor for purposes of presentation, collection or renewal
(any such arrangement to be effected, to the extent deemed appropriate by the
Secured Party or its Representative, against trust receipt or like document). If
a Debtor retains possession of any Chattel Paper, negotiable Documents or
Instruments pursuant to the terms hereof, such Chattel Paper, negotiable
Documents and Instruments shall be marked with the following legend: “This
writing and 

     

    
      
        
        

      

      
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    the
obligations evidenced or secured hereby are subject to the security interest of
Customer Acquisition Network Holdings, Inc.”

     

    (b)           Other Documents and
Actions.  Each Debtor shall give, execute, deliver, file and/or
record any financing statement, registration, notice, instrument, document,
agreement, Mortgage or other papers that may be necessary or desirable (in the
reasonable judgment of the Secured Party or its Representative) to create,
preserve, perfect or validate the security interest granted pursuant hereto (or
any security interest or Mortgage contemplated or required hereunder, including
with respect to Section 2(h) of this
Agreement) or to enable the Secured Party or its Representative to exercise and
enforce the rights of the Secured Party hereunder with respect to such pledge
and security interest, provided that notices
to account debtors in respect of any Accounts or Instruments shall be subject to
the provisions of clause (e) below.  Notwithstanding the foregoing
each Debtor hereby irrevocably authorizes the Secured Party at any time and from
time to time to file in any filing office in any jurisdiction any Uniform
Commercial Code initial financing statements (and other similar filings or
registrations under other applicable laws and regulations pertaining to the
creation, attachment, or perfection of security interests) and amendments
thereto that (a) indicate the Collateral (i) as all assets of such Debtor or
words of similar effect, regardless of whether any particular asset comprised in
the Collateral falls within the scope of Article 9 of the Uniform Commercial
Code of the State of New York or such jurisdiction, or (ii) as being of an equal
or lesser scope or with greater detail, and (b) contain any other information
required by part 5 of Article 9 of the Uniform Commercial Code of the State of
New York or any other State for the sufficiency or filing office acceptance of
any financing statement or amendment, including (i) whether such Debtor is an
organization, the type of organization and any organization identification
number issued to such Debtor, and (ii) in the case of a financing statement
filed as a fixture filing or indicating Collateral as As-extracted Collateral or
timber to be cut, a sufficient description of real property to which the
Collateral relates.  Each Debtor agrees to furnish any such
information to the Secured Party promptly upon request.  Each Debtor
also ratifies its authorization for the Secured Party to have filed in any
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof.

     

    (c)           Books and
Records.  Each Debtor (or the Company on behalf of a Debtor)
shall maintain at its own cost and expense complete and accurate books and
records of the Collateral, including, without limitation, a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings with the Collateral.  Upon the occurrence and during
the continuation of any Event of Default, each Debtor shall deliver and turn
over any such books and records (or true and correct copies thereof) to the
Secured Party or its Representative at any time on demand.  Each
Debtor shall permit any Representative of the Secured Party to inspect such
books and records upon reasonable advance notice, at any time during reasonable
business hours and will provide photocopies thereof at such Debtor’s expense to
the Secured Party upon request of the Secured Party; provided, that, after the
occurrence of an Event of Default, Debtors shall permit any Representative of
the Secured Party to inspect such books and records at any time with or without
prior notice.

     

    (d)           Motor
Vehicles.  Each Debtor shall, promptly upon acquiring same,
cause the Secured Party to be listed as the lienholder on each certificate of
title or ownership covering any items of Equipment, including Motor Vehicles,
having a value in excess of $50,000 in the aggregate for all such items of
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      otherwise
comply with the certificate of title or ownership laws of the relevant
jurisdiction issuing such certificate of title or ownership in order to properly
evidence and perfect Secured Party’s security interest in the assets represented
by such certificate of title or ownership.

    

     

    (e)           Notice to Account Debtors;
Verification.  (i) Upon the occurrence and during the
continuance of any Event of Default (or if any rights of set-off (other than
set-offs against an Account arising under the Contract giving rise to the same
Account) or contra accounts may be asserted), upon request of the Secured Party
or its Representative, each Debtor shall promptly notify (and each Debtor hereby
authorizes the Secured Party and its Representative so to notify) each account
debtor in respect of any Accounts or Instruments or other Persons obligated on
the Collateral that such Collateral has been assigned to the Secured Party
hereunder, and that any payments due or to become due in respect of such
Collateral are to be made directly to the Secured Party, and (ii) the Secured
Party and its Representative shall have the right at any time or times to make
direct verification with the account debtors or other Persons obligated on any
and all of the Accounts or other Collateral.

     

    (f)           Intellectual
Property.  Each Debtor represents and warrants that the
Copyrights, Patents and Trademarks listed on Schedules III, IV and
V, respectively (if any), constitute all of the registered Copyrights and
all of the Patents and Trademarks now owned by such Debtor.  If such
Debtor shall (i) obtain rights to any new patentable inventions, any registered
Copyrights or any Patents or Trademarks, or (ii) become entitled to the benefit
of any registered Copyrights or any Patents or Trademarks or any improvement on
any Patent, the provisions of this Agreement above shall automatically apply
thereto and such Debtor shall give to Secured Party prompt written notice
thereof.  Each Debtor hereby authorizes Secured Party to modify this
Agreement by amending Schedules III, IV and
V, as applicable, to include any such registered Copyrights or any such
Patents and Trademarks.  Each Debtor shall have the duty (i) to
prosecute diligently any patent, trademark, or service mark applications pending
as of the date hereof or hereafter, (ii) to make application on unpatented but
patentable inventions and on trademarks, copyrights and service marks, as
appropriate, (iii) to preserve and maintain all rights in the Copyrights,
Patents and Trademarks, to the extent material to the operations of the business
of such Debtor and (iv) to ensure that the Copyrights, Patents and Trademarks
are and remain enforceable, to the extent material to the operations of the
business of such Debtor.  Any expenses incurred in connection with
such Debtor’s obligations under this Section 4.1(f) shall
be borne by such Debtor.  Except for any such items that a Debtor
reasonably believes (using prudent industry customs and practices) are no longer
necessary for the on-going operations of its business, no Debtor shall abandon
any right to file a patent, trademark or service mark application, or abandon
any pending patent, trademark or service mark application or any other
Copyright, Patent or Trademark without the written consent of Secured Party,
which consent shall not be unreasonably withheld.

     

    (g)           Further Identification of
Collateral.  Each Debtor will, when and as often as reasonably
requested by the Secured Party or its Representative, furnish to the Secured
Party or such Representative, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Secured Party or its Representative may reasonably request,
all in reasonable detail.

     

    
      
        
        

      

      
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    (h)           Investment
Property.  Each Debtor will take any and all actions required
or requested by the Secured Party, from time to time, to (i) cause the Secured
Party to obtain exclusive control of any Investment Property owned by such
Debtor in a manner acceptable to the Secured Party and (ii) obtain from any
issuers of Investment Property and such other Persons, for the benefit of the
Secured Party, written confirmation of the Secured Party’s control over such
Investment Property.  For purposes of this Section 4.1(h), the
Secured Party shall have exclusive control of Investment Property if (i) such
Investment Property consists of certificated securities and a Debtor delivers
such certificated securities to the Secured Party (with appropriate endorsements
if such certificated securities are in registered form); (ii) such Investment
Property consists of uncertificated securities and either (x) a Debtor delivers
such uncertificated securities to the Secured Party or (y) the issuer thereof
agrees, pursuant to documentation in form and substance satisfactory to the
Secured Party, that it will comply with instructions originated by the Secured
Party without further consent by such Debtor, and (iii) such Investment Property
consists of security entitlements and either (x) the Secured Party becomes the
entitlement holder thereof or (y) the appropriate securities intermediary
agrees, pursuant to the documentation in form and substance satisfactory to the
Secured Party, that it will comply with entitlement orders originated by the
Secured Party without further consent by any Debtor.

    
      (i)      
Reserved.

    

    
    

     

    (j)           Commercial Tort
Claims.  Each Debtor shall promptly notify Secured Party of any
Commercial Tort Claim acquired by it that concerns a claim in excess of $50,000
and unless otherwise consented to by Secured Party, such Debtor shall enter into
a supplement to this Agreement granting to Secured Party a Lien on and security
interest in such Commercial Tort Claim.

     

    4.2  Other
Liens.  Debtors will not create, permit or suffer to exist, and
will defend the Collateral against and take such other action as is necessary to
remove, any Lien on the Collateral except Permitted Liens, and will defend the
right, title and interest of the Secured Party in and to the Collateral and in
and to all Proceeds thereof against the claims and demands of all Persons
whatsoever.

     

    4.3  Preservation of
Rights.  Whether or not any Event of Default has occurred or is
continuing, the Secured Party and its Representative may, but shall not be
required to, take any steps the Secured Party or its Representative deems
necessary or appropriate to preserve any Collateral or any rights against third
parties to any of the Collateral, including obtaining insurance for the
Collateral at any time when such Debtor has failed to do so, and Debtors shall
promptly pay, or reimburse the Secured Party for, all expenses incurred in
connection therewith.

     

    
      
        
        

      

      
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    4.4  Formation of Subsidiaries;
Name Change; Location; Bailees.

     

    (a)           No
Debtor shall form or acquire any subsidiary unless (i) such Debtor pledges all
of the stock of such subsidiary to the Secured Party (in the case of Company,
pursuant to the existing pledge agreement by Company in favor of the Secured
Party or, with respect to a Debtor other than Company, pursuant to a pledge
agreement in form and substance acceptable to Secured Party), (ii) such
subsidiary becomes a party to this Agreement and all other applicable Security
Documents and (iii) the formation or acquisition of such Subsidiary is not
prohibited by the terms of the transaction documents.

     

    (b)           No
Debtor shall (i) reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the date hereof without the prior written consent of Secured
Party, (ii) change its legal name without notifying the Secured Party in writing
at least 10 days in advance of such change, or (iii) otherwise change its
identity or corporate structure without the prior written consent of Secured
Party.  Each Debtor will notify Secured Party promptly in writing at
least ten (10) days prior to any such change described in the immediately prior
sentence or in the proposed use by such Debtor of any tradename or fictitious
business name other than any such name set forth on Schedule II attached
hereto.

     

    (c)           Except
for the sale of Inventory in the ordinary course of business, each Debtor will
keep the Collateral at the locations specified in Schedule
I.  Each Debtor will give Secured Party thirty (30) day’s prior
written notice of any change in such Debtor’s chief place of business or of any
new location for any of the Collateral.

     

    (d)           If
any Collateral is at any time in the possession or control of any warehousemen,
bailee, consignee or processor, such Debtor shall, upon the request of Secured
Party or its Representative, notify such warehousemen, bailee, consignee or
processor of the Lien and security interest created hereby and shall instruct
such Person to hold all such Collateral for Secured Party’s account subject to
Secured Party’s instructions.

     

    (e)           Each
Debtor acknowledges that until this Agreement has been terminated in accordance
with Section 4.12 below, it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement
without the prior written consent of Secured Party and agrees that it will not
do so without the prior written consent of Secured Party, subject to such
Debtor’s rights under Section 9-509(d)(2) to the Uniform Commercial
Code.

     

    (f)           No
Debtor shall enter into any Contract that restricts or prohibits the grant to
Secured Party of a security interest in Accounts, Chattel Paper, Instruments or
payment intangibles or the proceeds of the foregoing.

     

    4.5           Bank Accounts and Securities
Accounts.

     

    (a)           On
or prior to the date hereof, the Secured Party and each Debtor, as applicable,
shall enter into an account control agreement or securities account control
agreement, as applicable, which agreement shall be in form and substance
reasonably satisfactory to the Secured Party (each, an “Account Control Agreement”),
with each financial institution with which such Debtor maintains from time to
time any Deposit 

     

    
      
        
        

      

      
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    Accounts
(general or special), securities accounts, brokerage accounts or other similar
accounts, which financial institutions are set forth on Schedule VI attached
hereto.  Pursuant to the Account Control Agreements and pursuant
hereto, each such Debtor grants and shall grant to the Secured Party a
continuing lien upon, and security interest in, all such accounts and all funds
at any time paid, deposited, credited or held in such accounts (whether for
collection, provisionally or otherwise) or otherwise in the possession of such
financial institutions, and each such financial institution shall act as the
Secured Party’s agent in connection therewith.  Following the Closing
Date, no Debtor shall establish any new Deposit Account, securities account,
brokerage account or other similar account with any financial institution unless
prior thereto, the Secured Party and such Debtor shall have entered into an
Account Control Agreement with such financial institution which purports to
cover such account.  Each Debtor shall deposit and keep on deposit all
of its funds into a Deposit Account which is subject to an Account Control
Agreement.

     

    (b)           Upon
the Secured Party’s request following the occurrence and during the continuance
of an Event of Default, each Debtor shall establish lock-box or blocked accounts
(collectively, “Blocked
Accounts”) in such Debtor’s name with such banks as are reasonably
acceptable to the Secured Party (“Collecting Banks”), subject to
irrevocable instructions in a form reasonably acceptable to the Secured Party,
to which the obligors of all Accounts shall directly remit all payments on
Accounts and in which such Debtor will immediately deposit all cash payments for
Inventory or other cash payments constituting proceeds of Collateral in the
identical form in which such payment was made, whether by cash or
check.  In addition, the Secured Party may establish one or more
depository accounts at each Collecting Bank or at a centrally located bank
(collectively, the “Depository
Account”).  All amounts held or deposited in the Blocked
Accounts held by such Collecting Bank shall be transferred to the Depository
Account without any further notice or action required by Secured
Party.  Subject to the foregoing, each Debtor hereby agrees that all
payments received by the Secured Party whether by cash, check, wire transfer or
any other instrument, made to such Blocked Accounts or otherwise received by the
Secured Party and whether in respect of the Accounts or as proceeds of other
Collateral or otherwise will be the sole and exclusive property of the Secured
Party.  Each Debtor, and any of its Affiliates, employees, agents and
other Persons acting for or in concert with such Debtor shall, acting as trustee
for the Secured Party, receive, as the sole and exclusive property of the
Secured Party, any moneys, checks, notes, drafts or other payments relating to
and/or proceeds of Accounts or other Collateral which come into the possession
or under the control of such Debtor or any Affiliates, employees, agent or other
Persons acting for or in concert with such Debtor, and immediately upon receipt
thereof, such Debtor or Persons shall deposit the same or cause the same to be
deposited in kind, in a Blocked Account.

     

    4.6  Events of Default,
Etc.  During the period during which an Event of Default shall
have occurred and be continuing:

     

    (a)           each
Debtor shall, at the request of the Secured Party or its Representative,
assemble the Collateral and make it available to Secured Party or its
Representative at a place or places designated by the Secured Party or its
Representative which are reasonably convenient to Secured Party or its
Representative, as applicable, and such Debtor;

     

    
      
        
        

      

      
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    (b)           the
Secured Party or its Representative may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may extend
the time of payment, arrange for payment in installments, or otherwise modify
the terms of, any of the Collateral;

     

    (c)           the
Secured Party shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether or not
said Uniform Commercial Code is in effect in the jurisdiction where the rights
and remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to: (i) exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if the
Secured Party were the sole and absolute owner thereof (and each Debtor agrees
to take all such action as may be appropriate to give effect to such right) and
(ii) to the appointment of a receiver or receivers for all or any part of the
Collateral or business of a Debtor, whether such receivership be incident to a
proposed sale or sales of such Collateral or otherwise and without regard to the
value of the Collateral or the solvency of any person or persons liable for the
payment of the Liabilities secured by such Collateral.  Each Debtor
hereby consents to the appointment of such receiver or receivers, waives any and
all defenses to such appointment and agrees that such appointment shall in no
manner impair, prejudice or otherwise affect the rights of Secured Party under
this Agreement.  Each Debtor hereby expressly waives notice of a
hearing for appointment of a receiver and the necessity for bond or an
accounting by the receiver;

     

    (d)           the
Secured Party or its Representative in their discretion may, in the name of the
Secured Party or in the name of a Debtor or otherwise, demand, sue for, collect
or receive any money or property at any time payable or receivable on account of
or in exchange for any of the Collateral, but shall be under no obligation to do
so;

     

    (e)  the
Secured Party or its Representative may take immediate possession and occupancy
of any premises owned, used or leased by a Debtor (subject to the terms of any
lease relating thereto) and exercise all other rights and remedies which may be
available to the Secured Party;

     

    (f)           the
Secured Party may, upon reasonable notice (such reasonable notice to be
determined by Secured Party in its sole and absolute discretion) to Debtors of
the time and place, with respect to the Collateral or any part thereof which
shall then be or shall thereafter come into the possession, custody or control
of the Secured Party or its Representative, sell, lease, license, assign or
otherwise dispose of all or any part of such Collateral, at such place or places
as the Secured Party deems best, and for cash or for credit or for future
delivery (without thereby assuming any credit risk), at public or private sale,
without demand of performance or notice of intention to effect any such
disposition or of the time or place thereof (except such notice as is required
above or by applicable statute and cannot be waived), and the Secured Party or
anyone else may be the purchaser, lessee, licensee, assignee or recipient of any
or all of the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale) and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any right or equity
of redemption (statutory or otherwise), of Debtors, any such demand, notice and
right or equity being hereby expressly waived and released.  The
Secured Party may, without notice or publication, adjourn any public or private
sale or 

     

    
      
        
        

      

      
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    cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
sale may be so adjourned; and

     

    (g)           the
rights, remedies and powers conferred by this Section 4.6 are in addition to,
and not in substitution for, any other rights, remedies or powers that the
Secured Party may have under any transaction document, at law, in equity or by
or under the Uniform Commercial Code or any other statute or
agreement.  The Secured Party may proceed by way of any action, suit
or other proceeding at law or in equity and no right, remedy or power of the
Secured Party will be exclusive of or dependent on any other.  The
Secured Party may exercise any of its rights, remedies or powers separately or
in combination and at any time.

     

    The
proceeds of each collection, sale or other disposition under this Section 4.6 shall be
applied in accordance with Section 4.9
hereof.

     

    4.7  Deficiency.  If
the proceeds of sale, collection or other realization of or upon the Collateral
are insufficient to cover the costs and expenses of such realization and the
payment in full of the Liabilities, Debtors shall remain liable for any
deficiency.

     

    4.8  Private
Sale.  Each Debtor recognizes that the Secured Party may be
unable to effect a public sale of any or all of the Collateral consisting of
securities by reason of certain prohibitions contained in the Securities Act of
1933, as amended (the “Act”), and applicable state
securities laws, but may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire such Collateral for their own account for investment
and not with a view to the distribution or resale thereof.  Each
Debtor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable
manner.  The Secured Party shall be under no obligation to delay a
sale of any of the Collateral to permit a Debtor to register such Collateral for
public sale under the Act, or under applicable state securities laws, even if
Debtors would agree to do so.  The Secured Party shall not incur any
liability as a result of the sale of any such Collateral, or any part thereof,
at any private sale provided for in this Agreement conducted in a commercially
reasonable manner, and each Debtor hereby waives any claims against the Secured
Party arising by reason of the fact that the price at which the Collateral may
have been sold at such a private sale was less than the price which might have
been obtained at a public sale or was less than the aggregate amount of the
Liabilities, even if the Secured Party accepts the first offer received and does
not offer the Collateral to more than one offeree.

     

    Each
Debtor further agrees to do or cause to be done all such other acts and things
as may be necessary to make such sale or sales of any portion or all of any such
Collateral valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales, all at such Debtor’s expense,
provided that
Debtors shall be under no obligation to take any action to enable any or all of
such Collateral to be registered under the provisions of the
Act.  Each Debtor further agrees that a breach of any of the covenants
contained in this Section 4.8 will
cause irreparable injury to the Secured Party, that the Secured Party has no
adequate remedy at law in respect of such breach and, as a consequence, agrees
that each and every covenant contained in this Section 4.8 shall be
specifically enforceable against Debtors, and each Debtor hereby waives and
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    any
defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred and is continuing.

     

    4.9  Application of
Proceeds.  The proceeds of any collection, sale or other
realization of all or any part of the Collateral, and any other cash at the time
held by the Secured Party under this Agreement, shall be applied in the manner
set forth in the Note (or, if not so set forth, in a manner acceptable to, and
at the election of, the Secured Party).

     

    4.10  Attorney-in-Fact.  Each
Debtor hereby irrevocably constitutes and appoints the Secured Party, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Debtor and in the
name of such Debtor or in its own name, from time to time in the discretion of
the Secured Party, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to perfect or
protect any security interest granted hereunder or to maintain the perfection or
priority of any security interest granted hereunder, and, without limiting the
generality of the foregoing, hereby gives the Secured Party the power and right,
on behalf of such Debtor, without notice to or assent by such Debtor, to do the
following upon the occurrence and during the continuation of any Event of
Default:

     

    (a)           to
take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement;

     

    (b)           to
ask, demand, collect, receive and give acquittance and receipts for any and all
moneys due and to become due under any Collateral and, in the name of such
Debtor or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other Instruments for the
payment of moneys due under any Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Secured Party for the purpose of collecting any and all such
moneys due under any Collateral whenever payable and to file any claim or to
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Secured Party for the purpose of collecting any and
all such moneys due under any Collateral whenever payable;

     

    (c)           to
pay or discharge charges or liens levied or placed on or threatened against the
Collateral, to effect any insurance called for by the terms of this Agreement
and to pay all or any part of the premiums therefor;

     

    (d)           to
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due, and to become due thereunder, directly to the
Secured Party or as the Secured Party shall direct, and to receive payment of
and receipt for any and all moneys, claims and other amounts due, and to become
due at any time, in respect of or arising out of any Collateral;

     

    (e)           to
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other Documents
constituting or relating to the Collateral;

     

    
      
        
        

      

      
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    (f)           to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of any
Collateral;

     

    (g)           to
defend any suit, action or proceeding brought against a Debtor with respect to
any Collateral;

     

    (h)           to
settle, compromise or adjust any suit, action or proceeding described above and,
in connection therewith, to give such discharges or releases as the Secured
Party may deem appropriate;

     

    (i)           to
the extent that a Debtor’s authorization given in Section 4.1(b) of
this Agreement is not sufficient to file such financing statements with respect
to this Agreement, with or without such Debtor’s signature, or to file a
photocopy of this Agreement in substitution for a financing statement, as the
Secured Party may deem appropriate and to execute in such Debtor’s name such
financing statements and amendments thereto and continuation statements which
may require such Debtor’s signature; and

     

    (j)           generally
to sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Secured Party
were the absolute owners thereof for all purposes, and to do, at the Secured
Party’s option and at such Debtor’s expense, at any time, or from time to time,
all acts and things which the Secured Party reasonably deems necessary to
protect, preserve or realize upon the Collateral and the Secured Party’s lien
therein, in order to effect the intent of this Agreement, all as fully and
effectively as such Debtor might do.

     

    Each
Debtor hereby ratifies, to the extent permitted by law, all that such attorneys
lawfully do or cause to be done by virtue hereof.  The power of
attorney granted hereunder is a power coupled with an interest and shall be
irrevocable until the Liabilities are indefeasibly paid in full in cash and this
Agreement is terminated in accordance with Section 4.12
hereof.

     

    Each
Debtor also authorizes the Secured Party, at any time from and after the
occurrence and during the continuation of any Event of Default, (x) to
communicate in its own name with any party to any Contract with regard to the
assignment of the right, title and interest of such Debtor in and under the
Contracts hereunder and other matters relating thereto and (y) to execute, in
connection with any sale of Collateral provided for in Section 4.6 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

     

    4.11  Perfection.  Prior
to or concurrently with the execution and delivery of this Agreement, each
Debtor shall:

     

    (a)           file
such financing statements, assignments for security and other documents in such
offices as may be necessary or as the Secured Party or the Representative may
request to perfect the security interests granted by Section 3 of this
Agreement; and

     

    (b)           at
Secured Party’s request, deliver to the Secured Party or its Representative the
originals of all Instruments together with, in the case of Instruments
constituting promissory notes, allonges attached thereto showing such promissory
notes to be payable to the order of a blank payee.

     

    
      
        
        

      

      
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    4.12  Termination.  This
Agreement and the Liens and security interests granted hereunder shall not
terminate until the termination of the Note and the full and complete
performance and indefeasible satisfaction of all the Liabilities (i) in respect
of the Note (including, without limitation, the indefeasible payment in full in
cash of all such Liabilities) and (ii) with respect to which claims have been
asserted by the Secured Party, whereupon the Secured Party shall forthwith cause
to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral to or
on the order of Debtors, at which time this Agreement and Liens granted pursuant
hereto shall automatically terminate.  The Secured Party shall also
execute and deliver to Debtors upon such termination and at Debtors’ expense
such Uniform Commercial Code termination statements, certificates for
terminating the liens on the Motor Vehicles (if any) and such other
documentation as shall be reasonably requested by Debtors to effect the
termination and release of the Liens and security interests in favor of the
Secured Party affecting the Collateral.

     

    4.13  Further
Assurances.  At any time and from time to time, upon the
written request of the Secured Party or its Representative, and at the sole
expense of Debtors, Debtors will promptly and duly execute and deliver any and
all such further instruments, documents and agreements and take such further
actions as are necessary or the Secured Party or its Representative may
reasonably require in order for the Secured Party to obtain the full benefits of
this Agreement and of the rights and powers herein granted in favor of the
Secured Party, including, without limitation, using Debtors’ commercially
reasonable efforts to secure all consents and approvals necessary or appropriate
for the assignment to the Secured Party of any Collateral held by Debtors or in
which a Debtor has any rights not heretofore assigned, the filing of any
financing or continuation statements under the Uniform Commercial Code with
respect to the liens and security interests granted hereby, transferring
Collateral to the Secured Party’s possession (if a security interest in such
Collateral can be perfected by possession), placing the interest of the Secured
Party as lienholder on the certificate of title of any Motor Vehicle and
obtaining waivers of liens from landlords and mortgagees.  Each Debtor
also hereby authorizes the Secured Party and its Representative to file any such
financing or continuation statement without the signature of such Debtor to the
extent permitted by applicable law.

     

    4.14  Limitation on Duty of
Secured Party.  The powers conferred on the Secured Party under
this Agreement are solely to protect the Secured Party’s interest in the
Collateral and shall not impose any duty upon it to exercise any such
powers.  The Secured Party shall be accountable only for amounts that
it actually receives as a result of the exercise of such powers and neither the
Secured Party nor its Representative nor any of their respective officers,
directors, employees or agents shall be responsible to Debtors for any act or
failure to act, except for willful misconduct.  Without limiting the
foregoing, the Secured Party and any Representative shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
their possession if such Collateral is accorded treatment substantially
equivalent to that which the relevant Secured Party or any Representative, in
its individual capacity, accords its own property consisting of the type of
Collateral involved, it being understood and agreed that neither the Secured
Party nor any Representative shall have any responsibility for taking any
necessary steps (other than steps taken in accordance with the standard of care
set forth above) to preserve rights against any Person with respect to any
Collateral.

     

    Also
without limiting the generality of the foregoing, neither the Secured Party nor
any Representative shall have any obligation or liability under any Contract or
license by reason of or arising out of this Agreement or the granting to the
Secured Party of a security interest therein or assignment thereof or the
receipt by the Secured Party or any Representative of any payment relating to
any Contract or license pursuant hereto, nor shall the Secured Party or any

     

    
      
        
        

      

      
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    Representative
be required or obligated in any manner to perform or fulfill any of the
obligations of Debtors under or pursuant to any Contract or license, or to make
any payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any Contract or license, or to present or file any claim, or to take any action
to collect or enforce any performance or the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or
times.

     

    Section
5.  Miscellaneous.

     

    5.1  No
Waiver.  No failure on the part of the Secured Party or any of
its Representatives to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Secured Party or
any of its Representatives of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.  The rights and remedies hereunder provided are cumulative and
may be exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.

     

    5.2  Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York

     

    5.3  Notices.  From
the date of this Agreement until the first date following the date on which the
Note is not outstanding and this Agreement has terminated, the Company shall and
shall cause each of its Subsidiaries to notify the Secured Party in writing (A)
at least 10 days in advance of any change in such Person’s legal name and (B)
within 10 days of the change of the use of any trade name, assumed name,
fictitious name or division name not previously disclosed to the Secured Party
in writing.  All of the foregoing notices also shall be provided by
the Company or the applicable Subsidiary to each Secured Party in
writing.

     

    5.4  Amendments,
Etc.  The terms of this Agreement may be waived, altered or
amended only by an instrument in writing duly executed by the Debtor sought to
be charged or benefited thereby and the Secured Party.  Any such
amendment or waiver shall be binding upon the Secured Party and the Debtor
sought to be charged or benefited thereby and their respective successors and
assigns.

     

    5.5  Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of each of the parties hereto,
provided, that
no Debtor shall assign or transfer its rights hereunder without the prior
written consent of the Secured Party.  Secured Party may assign its
rights hereunder without the consent of Debtors, in which event such assignee
shall be deemed to be Secured Party hereunder with respect to such assigned
rights.

     

    5.6  Counterparts;
Headings.  This Agreement may be authenticated in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may authenticate this Agreement by
signing any such counterpart.  This Agreement may be authenticated by
manual signature or facsimile, .pdf or similar electronic signature, all of
which shall be equally valid. The headings in this Agreement are for convenience
of reference only and shall not alter or otherwise affect the meaning
hereof.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    5.7  Severability.  If
any provision hereof is invalid and unenforceable in any jurisdiction, then, to
the fullest extent permitted by law, (a) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Secured Party and its Representative in order to carry
out the intentions of the parties hereto as nearly as may be possible and (b)
the invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.

     

    5.8  SUBMISSION TO JURISDICTION;
WAIVER OF VENUE; SERVICE OF PROCESS.  (A)  EACH
DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT AND EACH DEBTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE
RIGHT OF SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY DEBTOR IN THE COURTS OF
ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY A DEBTOR AGAINST
SECURED PARTY, ANY BUYER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTION WITH
THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK (AND
SECURED PARTY HEREBY SUBMITS TO THE JURISDICTION OF SUCH COURT).  EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS
TO PROCESS BEING SERVED IN ANY SUCH ACTION OR PROCEEDING BY MAILING A COPY
THEREOF TO SUCH PARTY AT THE ADDRESS FOR NOTICES TO IT IN ACCORDANCE WITH SECTION 5.3
OF  THIS AGREEMENT AND AGREES THAT SUCH NOTICE 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.

     

    5.9  WAIVER OF RIGHT TO TRIAL BY
JURY.  EACH DEBTOR AND SECURED PARTY EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.   EACH DEBTOR AND
SECURED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION  OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    5.10           Joint and
Several.  The obligations, covenants and agreements of Debtors
hereunder, except their several grant of Liens and security interests under
Section 3 hereof, shall be the joint and several obligations, covenants and
agreements of each Debtor, whether or not specifically stated
herein.

     

    5.11           No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

     

    5.12           Entire
Agreement.  This Agreement supersedes all other prior oral or
written agreements between each Debtor, Secured Party and its affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the transaction documents and instruments referenced herein
and therein contain the entire understanding of the parties with respect to the
matters covered herein and therein.

     

    -
Remainder of Page Intentionally Left Blank; Signature Page Follows
-

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed and delivered as of the day and year first above
written.

    
    

     

    
      	 	
              DEBTORS:

            
	 	 
	 	
              OPTIONS MEDIA GROUP HOLDINGS,
      INC.,

            
	 	a Delaware
      corporation
	 	 
	 	By: /s/Scott Frohman
	 	Name: Scott
      Frohman
	 	Title:   Chief
      Executive Officer
	 	
              FEIN:

            

    

     

    
      	 	
              OPTIONS ACQUISITION SUB,
      INC.,

            
	 	
              a
      Delaware corporation

            
	 	 
	 	By:  /s/Scott Frohman
	 	Name: Scott
      Frohman
	 	Title:   Chief
      Executive Officer
	 	FEIN:

    

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	 	SECURED
      PARTY:
	 	 
	 	
              CUSTOMER ACQUISITION NETWORK
      HOLDINGS, INC., a Delaware corporation company,

            
	 	 
	 	By: /s/Michael D. Mathews
	 	Name: Michael
      D. Mathews
	 	
              Title:  
      Chief Executive Officer

            

    

     

    
      	 	
              Notice
      Address:

            
	 	 
	 	Customer
      Acquisition Network Holdings, Inc.
	 	200 Park Avenue
      South
	 	
              Suite
      908-909

            
	 	
              New
      York, NY

            
	 	Attention:  Michael
      D. Mathews
	 	Phone:  (954)
      712-0000

    

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    

    Form of
Joinder

    Joinder
to Security Agreement

    

    The
undersigned, ______________________________, hereby joins in the execution of
that certain Security Agreement dated as of June 23, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Security Agreement”) by
OPTIONS MEDIA GROUP HOLDINGS, INC., a Delaware corporation,
OPTIONS ACQUISITION SUB, INC., a Delaware corporation, and each other Person
that becomes a Debtor thereunder after the date hereof and pursuant to the terms
thereof, to and in favor of Customer Acquisition Network Holdings,
Inc.  By executing this Joinder, the undersigned hereby agrees that it
is a Debtor thereunder and agrees to be bound by all of the terms and provisions
of the Security Agreement.

    

    The
undersigned represents and warrants to Secured Party that:

    

    (a)           all
of the Equipment, Inventory and Goods owned by such Debtor is located at the
places as specified on Schedule I and such
Debtor conducts business in the jurisdiction set forth on Schedule
I;

    

    (b)           except
as disclosed on Schedule I, none of
such Collateral is in the possession of any bailee, warehousemen, processor or
consignee;

    

    (c)           the
chief place of business, chief executive office and the office where such Debtor
keeps its books and records are located at the place specified on Schedule
I;

    

    (d)           such
Debtor (including any Person acquired by such Debtor) does not do business or
has not done business during the past five years under any tradename or
fictitious business name, except as disclosed on Schedule
II;

    

    (e)           all
Copyrights, Patents and Trademarks owned or licensed by the undersigned are
listed in Schedules
III, IV
and V,
respectively;

    

    (f)           all
Deposit Accounts, securities accounts, brokerage accounts and other similar
accounts maintained by such Debtor, and the financial institutions at which such
accounts are maintained, are listed on Schedule
VI;

    

    (g)           all
Commercial Tort Claims of such Debtor are listed on Schedule
VII;

    

    (h)           all
interests in real property held by such Debtor are listed on Schedule VIII;

    

    (i)           all
Equipment (including Motor Vehicles) owned by such debtor are listed on Schedule IX;
and

    

    (j)           all
other representations and warranties made by the Debtors in the Security
Agreement are true, complete and correct in all respects as of the date
hereof.

    
    

     

    
      	 	________________, a
      _____ corporation
	 	
              By:___________________________

            
	 	Title:__________________________
	 	FEIN:__________________________

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
I

    TO

    SECURITY
AGREEMENT

    

    UCC Financing Statements;
Location of Equipment, Inventory, Goods and Books and Records; Goods in
Possession of Consignees, Bailees, Warehousemen, Agents and Processors; Debtors’
Legal Names; State of Incorporation; Organizational Identification Number; Chief
Executive Office.

    

    I.           DEBTOR:

    

    
      	
              1

            	
              Legal
      Name of Debtor:

            	 
      
	 
      	 
      	 
      
	
              2

            	
              State
      of Incorporation:

            	 
      
	 
      	 
      	 
      
	
              3

            	
              Organizational
      Identification Number:

            	 
      
	 
      	 
      	 
      
	
              4

            	
              Chief
      Executive Office:

            	 
      
	 
      	 
      	 
      
	
              5

            	
              Location
      of Books and Records:

            	 
      
	 
      	 
      	 
      
	
              6

            	
              Locations
      of Equipment, Inventory and Goods:

            	 
      
	 
      	 
      	 
      
	
              7

            	
              Locations
      of Goods in Possession of Consignees, Bailees, Warehousemen, Agents and
      Processors (including names of such consignees, bailees,
      etc.):

            
	 
      	 
      	 
      
	
              8

            	
              Jurisdictions
      For UCC Filings:

            	 
      

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
II

    TO

    SECURITY
AGREEMENT

    

    Tradenames and Fictitious
Names

    (Present and Past Five
Years)

    

    
      	
              1.

            	 
      	 
      
	
              2.

            	 
      	 
      

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
III

    TO

    SECURITY
AGREEMENT

    

    U.S. Copyright
Registrations; Foreign Copyright Registrations; U.S. Copyright Applications;
Foreign Copyright Applications; Copyright Licenses

    

    

    U.S. Copyright
Registrations

    

    

    

    Foreign Copyright
Registrations

    

    

    

    U.S. Copyright
Applications

    

    

    

    Foreign Copyright
Applications

    

    

    

    Copyright
Licenses

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
IV

    TO

    SECURITY
AGREEMENT

    

    U.S. Patent Registrations;
Foreign Patent Registrations; U.S. Patent Applications; Foreign Patent
Applications; Patent Licenses

    

    

    U.S. Patent
Registrations

    

    

    

    Foreign Patent
Registrations

    

    

    

    U.S. Patent
Applications

    

    

    

    Foreign Patent
Applications

    

    

    

    Patent
Licenses

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
V

    TO

    SECURITY
AGREEMENT

    

    U.S. Trademark
Registrations; Foreign Trademark Registrations; U.S. Trademark Applications;
Foreign Trademark Applications; Trademark Licenses

    

    

    U.S. Trademark
Registrations

    

    

    

    Foreign Trademark
Registrations

    

    

    

    U.S. Trademark
Applications

    

    

    

    Foreign Trademark
Applications

    

    

    

    Trademark
Licenses

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
VI

    TO

    SECURITY
AGREEMENT

    

    Depository Accounts and
Other Accounts

    

    
      	
              Name of Account Holder

            	
              Bank

            	
              Type of Account (with general
      description)

            	
              Account Number

            
	 
      	 
      	 
      	 
      

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
VII

    TO

    SECURITY
AGREEMENT

    

    Commercial Tort
Claims

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
VIII

    TO

    SECURITY
AGREEMENT

    

    Interests in Real
Property

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    

    

    SCHEDULE
IX

    TO

    SECURITY
AGREEMENT

    

    Titled
Equipment

    

    [To be
completed]ex10_13.htm

    GUARANTY

     

    This
GUARANTY (as amended,
restated, supplemented, or otherwise modified and in effect from time to time,
this “Guaranty”) is made
as of this 23rd day of
June, 2008 , by Options Acquisition Sub,, Inc., a Delaware corporation (“the
“Guarantor”) in favor of
CUSTOMER
ACQUISITION NETWORK HOLDINGS, INC., a Delaware corporation.(the “Secured Party”).

     

    W
I T N E S S E T H:

     

    WHEREAS, as of the date hereof, the
Secured Party  has made a loan and certain other financial
accommodations (collectively, the “Loan”) to OPTIONS
MEDIA GROUP HOLDINGS, INC., a Nevada  corporation (the “Company”), as evidenced by
those certain secured senior note in an original aggregate principal amount of
$1,000,000.00 (such
note, together with any promissory notes or other securities issued in exchange
or substitution therefor or replacement thereof, and as any of the same may be
amended, supplemented, restated or modified and in effect from time to time, the
“Note”);

     

    WHEREAS, pursuant to a Pledge Agreement
of even date herewith (as the same may be amended, restated, supplemented or
otherwise modified and in effect from time to time, the “Pledge Agreement”) by the
Company in favor of the Secured Party, the Company has created a lien on and
security interest in all of the capital stock and other equity interests of the
Guarantor to the Secured Party, and pledged such capital stock and equity
interests to the Secured Party, for its benefit;

     

    WHEREAS, pursuant to a Security
Agreement of even date herewith (as the same may be amended, restated,
supplemented or otherwise modified and in effect from time to time, the “Security Agreement”) by the
“Debtors” (as defined therein) in favor of the Secured Party, such Debtors have
granted the Secured Party , for its benefit, a first priority security interest
in, and lien upon and pledge of each of their rights in the Collateral (as
defined in the Security Agreement); and

     

    WHEREAS, the Guarantor is
a  direct subsidiary of the Company and, as such, will derive
substantial benefit and advantage from the Loans and other financial
accommodations available to the Company set forth in the Note, and it will be to
each Guarantor’s direct interest and economic benefit to assist the Company in
procuring said Loans and other financial accommodations from the Secured
Party.

     

    NOW, THEREFORE, for and in
consideration of the premises and in order to induce the Secured Party to make
the Loans, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as
follows:

     

    1. Definitions. As used
herein:

     

    “Bankruptcy Code” shall mean
the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended
and in effect from time to time thereunder.

     

    “Event of Default” shall have
the meaning ascribed to such term in the Note.

     

    “Obligations” shall mean (i)
all obligations, liabilities and indebtedness of every nature of the Company
from time to time owed or owing to the Secured Party, including, without
limitation, all obligations, liabilities and indebtedness of every nature of the
Company under the Loan, the Note, the Security Agreement and the other
transaction documents, including, without limitation, the principal amount of
all debts, claims and indebtedness, accrued and unpaid interest and all fees,
taxes, indemnities, costs and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and/or from time to time
hereafter owing, due or payable whether before or after the filing of a

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    bankruptcy,
insolvency or similar proceeding under applicable federal, state, foreign or
other law and whether or not an allowed claim in any such proceeding, and
(ii) all obligations, liabilities and indebtedness of every nature of the
Guarantor from time to time owed or owing to the  Secured Party,
including, without limitation, all obligations, liabilities and indebtedness of
every nature of the Guarantor under or in respect of this Guaranty, the Loan,
the Note, the Pledge Agreement, the Security Agreement, and the other documents
executed in relation to the Loan (the “Transaction Documents”), as
the case may be, including, without limitation, the principal amount of all
debts, claims and indebtedness, accrued and unpaid interest and all fees, taxes,
indemnities, costs and expenses, whether primary, secondary, direct, contingent,
fixed or otherwise, heretofore, now and/or from time to time hereafter owing,
due or payable whether before or after the filing of a bankruptcy, insolvency or
similar proceeding under applicable federal, state, foreign or other law and
whether or not an allowed claim in any such proceeding.

     

    2. Guaranty of
Payment.

     

    (a) The  Guarantor
hereby unconditionally and irrevocably guaranties the full and prompt payment
and performance to  the Secured Party when due, upon demand, at
maturity or by reason of acceleration or otherwise and at all times thereafter,
of any and all of the Obligations.

     

    (b) The  Guarantor
acknowledges that valuable consideration supports this Guaranty, including,
without limitation, the consideration set forth in the recitals above, as well
as any commitment to lend, extension of credit or other financial accommodation,
whether heretofore or hereafter made by the Secured Party  to the
Company; any extension, renewal or replacement of any of the Obligations; any
forbearance with respect to any of the Obligations or otherwise; any
cancellation of an existing guaranty; any purchase of any of the Company’s
assets by the Secured Party; or any other valuable consideration.

     

    (c) The  Guarantor
agrees that all payments under this Guaranty shall be made in United States
currency and in the same manner as provided for the Obligations.

     

    (d) Notwithstanding
any provision of this Guaranty to the contrary, it is intended that this
Guaranty, and any interests, liens and security interests granted by the
Guarantor as security for this Guaranty, not constitute a “Fraudulent
Conveyance” (as defined below) in the event that this Guaranty or such interest
is subject to the Bankruptcy Code or any applicable fraudulent conveyance or
fraudulent transfer law or similar law of any state.  Consequently,
the Guarantor and the Secured Party agree that if this Guaranty, or any such
interests, liens or security interests securing this Guaranty, would, but for
the application of this sentence, constitute a Fraudulent Conveyance, this
Guaranty and each such lien and security interest shall be valid and enforceable
only to the maximum extent that would not cause this Guaranty or such interest,
lien or security interest to constitute a Fraudulent Conveyance, and this
Guaranty shall automatically be deemed to have been amended accordingly at all
relevant times.  For purposes hereof, “Fraudulent Conveyance” means a
fraudulent conveyance under Section 548 of the Bankruptcy Code or a fraudulent
conveyance or fraudulent transfer under the provisions of any applicable
fraudulent conveyance or fraudulent transfer law or similar law of any state, as
in effect from time to time.

     

    3. Costs and
Expenses. The  Guarantor agrees to pay on demand, all
costs and expenses of every kind incurred bythe Secured Party: (a) in enforcing
this Guaranty, (b) in collecting any of the Obligations from the Company or the
Guarantor, (c) in realizing upon or protecting or preserving any collateral for
this Guaranty or for payment of any of the Obligations, and (d) in connection
with any amendment of, modification to, waiver or forbearance granted under, or
enforcement or administration of any transaction document or for any other
purpose in connection with any transaction document.  “Costs and expenses” as used in
the preceding sentence shall include, without limitation, reasonable attorneys’
fees incurred by the Secured Party in retaining counsel for advice, suit,
appeal, any insolvency or other 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    proceedings
under the Bankruptcy Code or otherwise, or for any other purpose specified in
the preceding sentence.

     

    4. Nature of Guaranty:
Continuing, Absolute and Unconditional.

     

    (a) This
Guaranty is and is intended to be a continuing guaranty of payment of the
Obligations, and not of collection, and is intended to be independent of and in
addition to any other guaranty, indorsement, collateral or other agreement held
by the Secured Party therefor or with respect thereto, whether or not furnished
by the  Guarantor.  The Secured Party shall not be required
to prosecute collection, enforcement or other remedies against Company, the
Guarantor or guarantor of the Obligations or any other person or entity, or to
enforce or resort to any of the Collateral or other rights or remedies
pertaining thereto, before calling on the  Guarantor for
payment.  The obligations of the Guarantor to repay the Obligations
hereunder shall be unconditional.  The Guarantor shall have no right
of subrogation with respect to any payments made by the Guarantor hereunder
until the termination of this Guaranty in accordance with Section 8 below, and
hereby waives any benefit of, and any right to participate in, any security or
collateral given to the Secured Party to secure payment of the Obligations, and
the Guarantor agrees that it will not take any action to enforce any obligations
of the Company to the  Guarantor prior to the Obligations being
finally and irrevocably paid in full in cash, provided that, in the
event of the bankruptcy or insolvency of the Company, the Secured Party shall be
entitled notwithstanding the foregoing, to file in the name of the Guarantor or
in its own name a claim for any and all indebtedness owing to the Guarantor by
the Company (exclusive of this Guaranty), vote such claim and to apply the
proceeds of any such claim to the Obligations.

     

    (b) For the
further security of the Secured Party and without in any way diminishing the
liability of the Guarantor, following the occurrence of an Event of Default, all
debts and liabilities, present or future of the Company to the Guarantor and all
monies received from the Company or for its account by the Guarantor in respect
thereof shall be received in trust for the Secured Party and forthwith upon
receipt shall be paid over to the Secured Party, for its benefit, until all of
the Obligations have been finally and irrevocably paid in full in
cash.  This assignment and postponement is independent of and
severable from this Guaranty and shall remain in full effect whether or not
the  Guarantor is liable for any amount under this
Guaranty.

     

    (c) This
Guaranty is absolute and unconditional and shall not be changed or affected by
any representation, oral agreement, act or thing whatsoever, except as herein
provided.  This Guaranty is intended by the Guarantor to be the final,
complete and exclusive expression of the guaranty agreement between the
Guarantor and the Secured Party.  No modification or amendment of any
provision of this Guaranty shall be effective against any party hereto unless in
writing and signed by a duly authorized officer of such party.

     

    (d) The
Guarantor hereby releases the Company from all, and agrees not to assert or
enforce (whether by or in a legal or equitable proceeding or otherwise) any
“claims” (as defined in Section 101(5) of the Bankruptcy Code), whether arising
under any law, ordinance, rule, regulation, order, policy or other requirement
of any domestic or foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of its business or assets or otherwise, to
which the Guarantor is  or would at any time be entitled by virtue of
its obligations hereunder, any payment made pursuant hereto or the exercise
by  the Secured Party of its rights with respect to the Collateral,
including any such claims to which the  Guarantor may be entitled as a
result of any right of subrogation, exoneration or reimbursement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    5. Certain Rights and
Obligations.

     

    (a) The  Guarantor
acknowledges and agrees that the Secured Party may, without notice, demand or
any reservation of rights against the  Guarantor and without affecting
the  Guarantor’s obligations hereunder, from time to
time:

     

    (i) renew,
extend, increase, accelerate or otherwise change the time for payment of, the
terms of or the interest on the Obligations or any part thereof or grant other
indulgences to the Company or others;

     

    (ii) accept
from any person or entity and hold collateral for the payment of the Obligations
or any part thereof, and modify, exchange, enforce or refrain from enforcing, or
release, compromise, settle, waive, subordinate or surrender, with or without
consideration, such collateral or any part thereof;

     

    (iii) accept
and hold any indorsement or guaranty of payment of the Obligations or any part
thereof, and discharge, release or substitute any such obligation of any such
indorser or guarantor, or discharge, release or compromise
the  Guarantor, or any other person or entity who has given any
security interest in any collateral as security for the payment of the
Obligations or any part thereof, or any other person or entity in any way
obligated to pay the Obligations or any part thereof, and enforce or refrain
from enforcing, or compromise or modify, the terms of any obligation of any such
indorser, guarantor, or person or entity;

     

    (iv) dispose
of any and all collateral securing the Obligations in any manner as the
Collateral Agent, in its sole discretion, may deem appropriate, and direct the
order or manner of such disposition and the enforcement of any and all
endorsements and guaranties relating to the Obligations or any part thereof as
the Secured Party t in its sole discretion may determine;

     

    (v) determine
the manner, amount and time of application of payments and credits, if any, to
be made on all or any part of any component or components of the Obligations
(whether principal, interest, fees, costs, and expenses, or otherwise),
including, without limitation, the application of payments received from any
source to the payment of indebtedness other than the Obligations even though the
Secured Party  might lawfully have elected to apply such payments to
the Obligations to amounts which are not covered by this Guaranty;
and

     

    (vi) take
advantage or refrain from taking advantage of any security or accept or make or
refrain from accepting or making any compositions or arrangements when and in
such manner as the Secured Party, in its sole discretion, may deem
appropriate;

     

    and
generally do or refrain from doing any act or thing which might otherwise, at
law or in equity, release the liability of the Guarantor as a guarantor or
surety in whole or in part, and in no case shall  the Secured Party be
responsible or shall the  Guarantor be released either in whole or in
part for any act or omission in connection with  the Secured Party
having sold any security at less than its value.

     

    (b) Following
the occurrence of an Event of Default, and upon demand by the Secured Party, the
Guarantor hereby agrees to pay the Obligations to the extent hereinafter
provided:

     

    (i) without
deduction by reason of any setoff, defense (other than payment) or counterclaim
of the Company or the  Guarantor;

     

    (ii) without
requiring presentment, protest or notice of nonpayment or notice of default to
the  Guarantor, to the Company or to any other person or
entity;

     

    
      
        
        

      

      
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    (iii) without
demand for payment or proof of such demand or filing of claims with a court in
the event of receivership, bankruptcy or reorganization of the Company or
the  Guarantor;

     

    (iv) without
requiring the Secured Party to resort first to the Company (this being a
guaranty of payment and not of collection) or to any other guaranty or any
collateral which  the Secured Party may hold;

     

    (v) without
requiring notice of acceptance hereof or assent hereto by the Secured Party;
and

     

    (vi) without
requiring notice that any of the Obligations has been incurred, extended or
continued or of the reliance by  the Secured Party upon this
Guaranty;

     

    all of
which the  Guarantor hereby waives.

     

    (c) The  Guarantor’s
obligation hereunder shall not be affected by any of the following, all of which
the  Guarantor hereby waives:

     

    (i) any
failure to perfect or continue the perfection of any security interest in or
other lien on any collateral securing payment of any of the Obligations or
the  Guarantor’s obligation hereunder;

     

    (ii) the
invalidity, unenforceability, propriety of manner of enforcement of, or loss or
change in priority of any document or any such security interest or other lien
or guaranty of the Obligations;

     

    (iii) any
failure to protect, preserve or insure any such collateral;

     

    (iv) failure
of the Guarantor to receive notice of any intended disposition of such
collateral;

     

    (v) any
defense arising by reason of the cessation from any cause whatsoever of
liability of the Company including, without limitation, any failure, negligence
or omission by  the Guarantor in enforcing its claims against the
Company;

     

    (vi) any
release, settlement or compromise of any obligation of the Company, or any other
guarantor of the Obligations;

     

    (vii) the
invalidity or unenforceability of any of the Obligations;

     

    (viii) any
change of ownership of the Company or any other guarantor of the Obligations or
the insolvency, bankruptcy or any other change in the legal status of the
Company, or any other guarantor of the Obligations;

     

    (ix) any
change in, or the imposition of, any law, decree, regulation or other
governmental act which does or might impair, delay or in any way affect the
validity, enforceability or the payment when due of the
Obligations;

     

    
      
        
        

      

      
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    (x) the
existence of any claim, setoff or other rights which the Guarantor, Company, or
guarantor of the Obligations or any other person or entity may have at any time
against  the Secured Party or the Company in connection herewith or
any unrelated transaction;

     

    (xi)  the
Secured Party’s election in any case instituted under chapter 11 of the
Bankruptcy Code, of the application of section 1111(b)(2) of the Bankruptcy
Code;

     

    (xii) any use
of cash collateral, or grant of a security interest by the Company, as debtor in
possession, under sections 363 or 364 of the Bankruptcy Code;

     

    (xiii) the
disallowance of all or any portion of any of  the Secured Party’s
claims for repayment of the Obligations under sections 502 or 506 of the
Bankruptcy Code; or

     

    (xiv) any other
fact or circumstance which might otherwise constitute grounds at law or equity
for the discharge or release of the Guarantor from its obligations hereunder,
all whether or not the  Guarantor shall have had notice or knowledge
of any act or omission referred to in the foregoing clauses (i) through (xiii)
of this Section 5(c).

     

    6. Representations and
Warranties.   The Guarantor further represents and
warrants to  the Secured Party that: (a) the  Guarantor is a
corporation or other entity duly incorporated or organized, as applicable,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, as applicable, and has full power, authority and
legal right to own its property and assets and to transact the business in which
it is engaged; (b) the Guarantor has full power, authority and legal right to
execute and deliver, and to perform its obligations under, this Guaranty, and
has taken all necessary action to authorize the guarantee hereunder on the terms
and conditions of this Guaranty and to authorize the execution, delivery and
performance of this Guaranty; (c) this Guaranty has been duly executed and
delivered by the Guarantor and constitutes a legal, valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance with its terms,
except to the extent that such enforceability is subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium
laws and other laws of general application affecting enforcement of creditors’
rights generally, or the availability of equitable remedies, which are subject
to the discretion of the court before which an action may be brought; and (d)
the execution, delivery and performance by the  Guarantor of this
Guaranty do not require any action by or in respect of, or filing with, any
governmental body, agency or official and do not violate, conflict with or cause
a breach or a default under any provision of applicable law or regulation or of
the organizational documents of the Guarantor or of any agreement, judgment,
injunction, order, decree or other instrument binding upon it.

     

    7. [Reserved]

     

    8. Termination.  This
Guaranty shall not terminate until such time, if any, as (i) all Indebtedness
under the Note secured hereby shall be finally and irrevocably paid in full in
cash, (ii) no Note shall remain outstanding, and (iii) there shall exist no
other outstanding payment or reimbursement obligations (other than contingent
indemnification obligations for which no claims shall have been asserted) of the
Company or the Guarantor to the  Secured Party under any of the
transaction documents.  Thereafter, but subject to the following, this
Guaranty shall automatically terminate and  the Secured Party take
such action and execute such documents as the Guarantor may request (and at the
Guarantor’s cost and expense) in order to evidence the termination of this
Guaranty.  The Guarantor further agrees that, to the extent that the
Company makes a payment or payments to  the Secured Party on the
Obligations, or  the Secured Party receive any proceeds of collateral
securing the Obligations or any other payments with respect to the Obligations,
which payment or receipt of proceeds or any part thereof is 

     

    
      
        
        

      

      
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    subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be returned or repaid to the Company, its estate, trustee, receiver, debtor in
possession or any other person or entity, including, without limitation, the
Guarantor, under any insolvency or bankruptcy law, state or federal law, common
law or equitable cause, then to the extent of such payment, return or repayment,
the obligation or part thereof which has been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
when such initial payment, reduction or satisfaction occurred, and this Guaranty
shall continue in full force notwithstanding any contrary action which may have
been taken by  the Secured Party in reliance upon such payment, and
any such contrary action so taken shall be without prejudice to  the
Secured Party’s rights under this Guaranty and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.

     

    9. Guaranty of
Performance.   The  Guarantor also guaranties
the full, prompt and unconditional performance of all obligations and agreements
of every kind owed or hereafter to be owed by the Company to the Secured Party
under the Transaction Documents.  Every provision for the benefit of
the Secured Party  contained in this Guaranty shall apply to the
guaranty of performance given in this paragraph.

     

    10. Assumption of Liens and
Obligations. To the extent that the  Guarantor has
received or shall hereafter receive distributions or transfers from the Company
of property or cash that are subject, at the time of such contribution, to liens
and security interests in favor of the Secured Party in accordance with the
Note, the Security Agreement or the Pledge Agreement, the Guarantor hereby
expressly agrees that (i) it shall hold such assets subject to such liens and
security interests, and (ii) it shall be liable for the payment of the
Obligations secured thereby.  The  Guarantor’s obligations
under this Section
10 shall be in addition to its obligations as set forth in other sections
of this Guaranty and not in substitution therefor or in lieu
thereof.

     

    11. Miscellaneous.

     

    (a) The terms
“Company” and “Guarantor” as used in this Guaranty shall include: (i) any
successor individual or individuals, association, partnership, limited liability
company or corporation to which all or substantially all of the business or
assets of the Company or the  Guarantor shall have been transferred
and (ii) any other association, partnership, limited liability company,
corporation or entity into or with which the Company or the  Guarantor
shall have been merged, consolidated, reorganized, or absorbed.

     

    (b) Without
limiting any other right of a the Secured Party, whenever the Secured Party has
the right to declare any of the Obligations to be immediately due and payable
(whether or not it has been so declared), the Secured Party, at its sole
election without notice to the undersigned may appropriate and set off against
the Obligations:

     

    (i) any and
all indebtedness or other moneys due or to become due to
the  Guarantor by the Secured Party; and

     

    (ii) any
credits or other property belonging to the Guarantor (including all account
balances, whether provisional or final and whether or not collected or
available) at any time held by or coming into the possession of the Secured
Party, or any affiliate of the Secured Party, whether for deposit or
otherwise;

     

    whether
or not the Obligations or the obligation to pay such moneys owed by the Secured
Party is then due, and the Secured Party shall be deemed to have exercised such
right of set off immediately at the time of such election even though any charge
therefor is made or entered on the Secured Party’s records 

     

    
      
        
        

      

      
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    subsequent
thereto.  The Secured Party agrees to notify the  Guarantor
in a reasonably practicable time of any such set-off; however, failure to so
notify the  Guarantor shall not affect the validity of any
set-off.

     

    (c) The  Guarantor’s
obligation hereunder is to pay the Obligations in full in cash when due
according to the Transaction Documents and the other agreements, documents and
instruments governing the Obligations to the extent provided herein, and shall
not be affected by any stay or extension of time for payment by the Company
resulting from any proceeding under the Bankruptcy Code or any similar
law.

     

    (d) No course
of dealing between the Company or the  Guarantor and  the
Secured Party and no act, delay or omission by the Secured Party  in
exercising any right or remedy hereunder or with respect to any of the
Obligations shall operate as a waiver thereof or of any other right or remedy,
and no single or partial exercise thereof shall preclude any other or further
exercise thereof or the exercise of any other right or
remedy.   The Secured Party may remedy any default by the Company
under any agreement with the Company or with respect to any of the Obligations
in any reasonable manner without waiving the default remedied and without
waiving any other prior or subsequent default by the Company.  All
rights and remedies of  the Secured Party hereunder are
cumulative.

     

    (e) This
Guaranty shall inure to the benefit of the Secured Party and each such entity’s
successors and assigns.

     

    (f) The
Secured Party may assign its rights hereunder without the consent of the
Guarantor, in which event such assignee shall be deemed to be  the
Secured Party hereunder with respect to such assigned rights.

     

    (g) Captions
of the sections of this Guaranty are solely for the convenience of the parties
hereto, and are not an aid in the interpretation of this Guaranty and do not
constitute part of the agreement of the parties set forth herein.

     

    (h) If any
provision of this Guaranty is unenforceable in whole or in part for any reason,
the remaining provisions shall continue to be effective.

     

    (i) All
questions concerning the construction, validity, enforcement and interpretation
of this Guaranty shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.  The  Guarantor hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New York, borough of Manhattan, 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 suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  The  Guarantor hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Guaranty 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.  The parties acknowledge
that  the Secured Party has executed each of the transaction documents
to be executed by it in the State of New York.

     

    (j) Notices.  All
notices, approvals, requests, demands and other communications hereunder shall
be delivered or made in the manner set forth in, and shall be effective in
accordance with 

     

    
      
        
        

      

      
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    the terms
of, and , directed to the notice address set forth in the Security Agreement;
provided, that any communication shall be effective as to
the  Guarantor if made or sent to the Company in accordance with the
foregoing.

     

    12. WAIVERS.

     

    (a) THE
GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND EXEMPTION
LAWS.

     

    (b) UPON
THE OCCURRENCE OF A DEFAULT OR EVENT OF DEFAULT, THE GUARANTOR HEREBY WAIVES ALL
RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY  THE
SECURED PARTY OF ITS RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS
OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR
HEARING.  EACH GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY
COUNSEL OF ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS
GUARANTY.

     

    (c) THE  GUARANTOR
WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS GUARANTY, OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
PARTY TO THIS GUARANTY.  THE  GUARANTOR AGREES THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY.  WITHOUT LIMITING THE FOREGOING, THE  GUARANTOR
FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS GUARANTY OR ANY
PROVISION HEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY.

     

    13. Payments Free of
Taxes.

     

    (a) Definitions.  In
this Section
13:

     

    (i) “Excluded Taxes” means, with
respect to the Secured Party, or any other recipient of any payment to be made
by or on account of any obligations of the Guarantor under this Guaranty, or
under the Security Agreement or the Pledge Agreement, income or franchise taxes
imposed on (or measured by) its net income by any jurisdiction under the laws of
which such recipient is organized or in which its principal office is
located.

     

    (ii) “Governmental Authority” means
the government of the United States of America or any other nation, or any
political subdivision thereof, whether state or local, or any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government over the Company or any of its
Subsidiaries, or any of their respective properties, assets or
undertakings.

     

    (iii) “Indemnified Taxes” means Taxes
other than Excluded Taxes.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (iv) “Taxes” means any and all
present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

     

    (b) Any and
all payments by or on account of any obligation of any of the Guarantor under
this Guaranty or the Security Agreement or the Pledge Agreement shall be made
without any set-off, counterclaim or deduction and free and clear of and without
deduction for any Indemnified Taxes; provided that if the  Guarantor
shall be required to deduct any Indemnified Taxes from such payments, then (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section
14(b)), the Secured Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the  Guarantor
shall make such deductions and (iii) the  Guarantor shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

     

    (c) Indemnification by the
Guarantor.  The  Guarantor shall indemnify
the  the Secured Party within ten (10) days after written demand
therefor, for the full amount of any Indemnified Taxes paid by the Secured
Party, on or with respect to any payment by or on account of any obligation of
the  Guarantor under this Guaranty and the Security Agreement and the
Pledge Agreement (including Indemnified Taxes or imposed or asserted on or
attributable to amounts payable under this Section 14) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority.  The Secured Party
shall provide the Guarantor reasonably prompt notification of the assessment and
pay the Indemnified Taxes to the Governmental Authority promptly following
receipt of indemnification therefor from the Guarantor.  A certificate
of the  Secured Party as to the amount of such payment or liability
under this Section
13 shall be delivered to the  Guarantor and shall be conclusive
absent manifest error.

     

    (d)  Refunds.  If  the
Secured Party receives a refund in respect of any Indemnified Taxes as to which
it has been indemnified by the  Guarantor or with respect to which
the  Guarantor has paid additional amounts pursuant to this Section 13, it shall
within 30 days from the date of such receipt pay over such refund to the
Guarantor (but only to the extent of additional amounts paid by
the  Guarantor under this Section 13 with
respect to the Indemnified Taxes giving rise to the refund), net of all
reasonable out-of-pocket expenses of  the Secured Party and without
interest (other than interest paid by the relevant Governmental Authority with
respect to such refund); provided that the  Guarantor, upon the
request of the Secured Party , agrees to repay the amount paid over to
the  Guarantor (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to  the Secured Party in the
event  the Secured Party is required to repay such refund to such
Governmental Authority.  This paragraph shall not be construed to
require  the Secured Party to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to
the  Guarantor or any other person.

     

    14. Counterparts;
Headings.  This Guaranty may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to each other party; provided that a facsimile, .pdf or
similar electronically transmitted signature shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect
as if the signature were an original signature. The headings in this Guaranty
are for convenience of reference only and shall not alter or otherwise affect
the meaning hereof.

     

    [rest of
page intentionally left blank; signature page follows]

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the date first
written above.

    
    

     

    
      	 	

              GUARANTOR:

            
	 	 
	 	

              OPTIONS  ACQUISITION
      SUB, INC.,

            
	 	

              a
      Delaware corporation

            
	 	 
	 	By: /s/ Scott Frohman
	 	Name:  Scott
      Frohman
	 	

              Title:    Chief
      Executive Officer

            

    

     

    
      
        
        

      

      
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    EXHIBIT
A

    

    Form
of Joinder

    Joinder
to Guaranty

    

    The
undersigned, [__________] a [__________], hereby joins in the execution of that
certain Guaranty dated as of June  23, 2008 (the “Guaranty”),
by  Options Acquisition Sub, Inc., a Delaware corporation, and each
other person or entity that becomes a Guarantor thereunder after such date and
pursuant to the terms thereof, to and in favor of Customer Acquisition Network
Holdings, Inc., as secured party.  By executing this Joinder, the
undersigned hereby agrees that it is a Guarantor thereunder with the same force
and effect as if originally named therein as a Guarantor.  The
undersigned agrees to be bound by all of the terms and provisions of the
Guaranty and represents and warrants that the representations and warranties set
forth in Section
6 of the Guaranty are, with respect to the undersigned, true and correct
as of the date hereof.  Each reference to a Guarantor in the Guaranty
shall be deemed to include the undersigned.

     

    In
Witness Whereof, the undersigned has executed this Joinder this ___ day of
_________, 200_.

     

    ___________________________

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