Document:

Exhibit 10.2

FIRST AMENDMENT TO
AMENDED AND RESTATED LICENSE AGREEMENT

THIS
FIRST AMENDMENT TO AMENDED AND RESTATED LICENSE AGREEMENT
(this “First Amendment”) is entered into as of the 10th day of November, 2003 by and between LINGUAGEN
CORP., a Delaware corporation (“Linguagen”) and MOUNT SINAI SCHOOL OF MEDICINE
OF NEW YORK UNIVERSITY, a New York corporation (“MSSM”).

WHEREAS,
Linguagen and MSSM are parties to that certain Amended and Restated License
Agreement, dated as of April 2, 2002 (the “Agreement”);

WHEREAS,
the parties hereto wish to amend certain provisions of the Agreement to reflect
certain changes in the understanding of the parties in connection with
Linguagen entering into the Series A Convertible Preferred Stock Purchase
Agreement between Linguagen and the Investors named therein on or prior to the
date hereof (the “Series A Agreement”);

WHEREAS,
certain amounts are owed by Linguagen to MSSM under the Agreement as of the
date hereof;

NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and other good, valuable and sufficient consideration, the parties
hereto agree as follows:

1.                         Definitions

Capitalized terms used
but not otherwise defined or amended in this First Amendment shall have the
meanings ascribed thereto in the Agreement.

2.                         Amendments

(a)       Exhibit 1 attached to the
Agreement is hereby amended to include the provisional patent application filed
on September 29, 2003 with the United States Patent and Trademark Office (“USPTO”)
and captioned Taste Signaling in Gastrointestinal Cells (the “Cell Line Patent”)
(serial number not yet assigned) and all patents and patent applications that
claim a right to the filing date of that provisional application or that claim
subject matter disclosed in that provisional application.

(b)       Section 1 of the Agreement
is hereby amended by adding the words, “the Cell Line Patent” after “December
22, 1999” in the third line of the definition of “Net Sales” in subsection g.
thereof.

(c)       Section 3 of the Agreement
is hereby amended by including at the end of subsection a. thereof a new
subsection (iv), which reads as follows:

“Notwithstanding anything of the foregoing set forth
in this subsection a., with respect to the Cell Line Patent only, Linguagen
shall pay to MSSM (A) 1.5% of Linguagen’s

Net Sales of Licensed Products covered in whole or in
part by the Cell Line Patent (giving effect to the deductions set forth in
Section 1.g(i)-(v) hereof) and (B) MSSM’s share in payments in respect of
sublicenses due under Section 3.a.(ii) (or 12.25%). Further, notwithstanding
anything of the foregoing set forth in this subsection a., with respect to the
Cell Line Patent only, Linguagen shall not pay to MSSM any royalty on Licensed
Products that are compounds whose activity was first identified through a
screening assay claimed in the Cell Line Patent. For purposes of clarity,
nothing in this subsection 3.a.(iv) shall affect the payment of the Annual
Minimum Fees under Section 3.b. below.”

(d)       Section
4 of the Agreement shall be amended in its entirety to read as follows:

“4.                    Equity
Participation.

a.         On the Effective Date,
Linguagen shall issue to MSSM a number of shares of Linguagen capital stock
which, without giving effect to such issuance, shall equal ten percent (10%) of
the then-outstanding capital stock of Linguagen (assuming full conversion of
all then-outstanding convertible securities and full exercise of any
then-outstanding options and warrants). Attached on Exhibit 2 hereto is a true
and correct schedule, setting forth the total number of shares of capital stock
of Linguagen outstanding as of the date hereof (including all then-outstanding
convertible securities, options and warrants) and the number of shares of
capital stock of Linguagen to be issued to MSSM pursuant to this Section 4.a.

b.         In case, at any time
after the date hereof, Linguagen enters into subsequent rounds of financing in
which shares of its capital stock (or securities convertible or exchangeable
into such capital stock) are issued, then, at the time each such issuance
becomes effective, MSSM, at no additional cost, shall receive a distribution of
such number of additional shares of common stock, so that MSSM shall maintain
an equity ownership interest equal to 5.5% of the then-outstanding capital
stock of Linguagen (assuming full conversion of all then-outstanding
convertible securities and full exercise of any then-outstanding options and
warrants). For purposes of the foregoing sentence, the fully-diluted
capitalization shall only include conversion of those options and warrants that
are issued and outstanding as of November 7, 2003, if any. Such issuance of
additional shares of common stock to MSSM shall continue until such time as the
Company has consummated an equity financing with the total gross proceeds to
the Company of $8,800,000; provided, however, that the Company’s obligations to
issue additional shares of Common Stock to MSSM shall end at such point as the
Company has raised $8,800,000, regardless of the total amount raised pursuant
to such equity financing.”

3.         Future Amendments

The parties hereby
covenant and agree that Exhibit 1 to the Agreement shall be amended further to
include the proposed patent applications relating to the inventions listed
below within ten (10) business days of the respective filing of such
applications with the USPTO, provided however, that such applications shall
have been filed by Linguagen within 120 days after the Amendment Effective Date
(as defined below):

	
  MSSM

  Docket #

  	
   

  	
  Description

  
	
   

  	
   

  	
   

  
	
  030204

  	
   

  	
  Amino Terminal Domain (ATD) Fragments of TIR Taste
  Receptors Useful for Identifying Novel Taste Modifiers

  
	
   

  	
   

  	
   

  
	
  030205

  	
   

  	
  Amino Terminal Domain (ATD) Models of TIR Taste
  Receptors Useful for Predicting Novel Taste Modifiers

  

 

4.         Payment of Past Due
Amounts.

MSSM hereby acknowledges
and agrees that any amounts due and owing to MSSM pursuant to the Agreement as
of the date hereof, shall be paid on a “Payment Date” that is the earlier of
(i) the sixtieth day following the closing of an investment out of which
Linguagen receives gross proceeds of at least $2 million (the “Initial Closing”)
or (ii) the Second Closing (as such term is defined in the Series A Agreement)
and that, until the Payment Date, MSSM shall not take any action to collect
such amounts or declare an event of default under the Agreement for non-payment
thereof.

5.         Amendment
Effective Date.

(a)       This First Amendment shall
be effective on the date of, and contingent upon the occurrence of, the Initial
Closing (the “Amendment Effective Date”).

(b)       This First Amendment shall
cease to be effective and shall be of no further force and effect, if any and
all payments due and owing to MSSM are not received on the Payment Date.

6.                         Reference
to and Effect on the Agreement.

(a)       On and after the date
hereof, each reference to “this Agreement,” “hereunder,” “hereof,” “herein,” or
words of like import shall mean and be a reference to the Agreement as amended
hereby. No reference to this First Amendment need be made in any instrument or
document at any time referring to the Agreement, a reference to the Agreement
in any such instrument or document to be deemed to be a reference to the
Agreement as amended hereby.

(b)       Except as expressly amended
by this First Amendment, the provisions of the Agreement shall remain in full
force and effect.

7.                         Governing
Law.

This First Amendment
shall be governed by and its provisions construed and enforced in accordance
with the laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws.

8.                         Counterparts.

This First Amendment may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute a single instrument.

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

IN
WITNESS WHEREOF, the parties hereto have, by their authorized
agents, affixed their signatures as of the date set forth above.

	
  

  	
  LINGUAGEN CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shawn M.
  Marcell

  
	
   

  	
   

  	
  Name:

  	
  Shawn M. Marcell

  
	
   

  	
   

  	
  Title:

  	
  EVP & COO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  MOUNT SINAI SCHOOL OF MEDICINE OF NEW

  YORK UNIVERSITY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey S.
  Silberstein

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey S. Silberstein

  
	
   

  	
   

  	
  Title:

  	
  EVP & Dean for Operations

  
					

 

[Signature Page to First Amendment to Amended and

Restated License Agreement]Exhibit 10.3

MASTER SECURITY AGREEMENT

No. 5081081

THIS
SECURITY AGREEMENT (“Agreement”)
is entered into as of February 16, 2005, by and between Oxford Finance Corporation, a Delaware
corporation (together with its successors and assigns, if any, “Secured Party”), located at 133 N. Fairfax
Street, Alexandria, VA 22314 and Linguagen
Corp., a Delaware corporation (“Debtor”)
located at 2005 Eastpark Boulevard, Cranbury, NJ 08512-3515.

1.                         CREATION
OF SECURITY INTEREST.

Debtor grants to Secured
Party, its successors and assigns, a security interest in and against all
property listed on any collateral schedule now or in the future annexed to or
made a part of this Agreement, executed by Debtor and Secured Party (“Collateral Schedule”). This security
interest is given to secure the payment and performance of all debts,
obligations and liabilities of any kind whatsoever of Debtor to Secured Party,
now existing or arising in the future, including but not limited to the payment
and performance of certain Promissory Notes from time to time identified on any
Collateral Schedule (each a “Note”
and collectively “Notes”), and any
renewals, extensions and modifications of such debts, obligations and
liabilities (Notes, together with debts, obligations and liabilities collectively,
“Indebtedness”). Debtor
acknowledges that this Agreement shall continue to secure the payment and
performance of all Indebtedness of any kind whatsoever of Debtor to Secured
Party, now existing or arising in the future, and that Secured Party shall be
under no obligation to release the Collateral unless and until all Indebtedness
of Debtor to Secured Party has been paid and satisfied; provided, however,
Secured Party, in its sole and exclusive discretion, may elect to release some
of the Collateral without prejudice to Secured Party’s security interest in the
remaining Collateral. Unless otherwise provided by applicable law,
notwithstanding anything to the contrary contained in this Agreement, to the
extent that Secured Party asserts a purchase money security interest in any
items of Collateral (“PMSI Collateral”):
(i) the PMSI Collateral shall secure only that portion of the Indebtedness
which has been advanced by Secured Party to enable Debtor to purchase, or
acquire rights in or the use of such PMSI Collateral (the “PMSI Indebtedness”), and (ii) no other
Collateral shall secure the PMSI Indebtedness.

2.                         REPRESENTATIONS,
WARRANTIES AND COVENANTS OF DEBTOR.

Debtor represents,
warrants and covenants as of the date of this Agreement and as of the date of
each Collateral Schedule that:

(a)                    Due
Organization. Debtor’s exact legal name is as set forth in the preamble of
this Agreement and Debtor is, and will remain, duly organized, existing and in
good standing under the laws of the state set forth in the preamble of this
Agreement, has its chief executive offices at the location specified in the
preamble, and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations, except
where the failure to be so qualified would not reasonably have a material
adverse effect on the Debtor’s business;

(b)                   Power
and Capacity to Enter Into and Perform Obligations. Debtor has adequate
power and capacity to enter into, and to perform its obligations under this
Agreement, each Note and any other documents evidencing, or given in connection
with, any of the Indebtedness (“Debt
Documents”);

(c)                    Due
Authorization. This Agreement and the other Debt Documents have been duly
authorized, executed and delivered by Debtor and constitute legal, valid and
binding agreements enforceable in accordance with their terms, except to the
extent that the enforcement of remedies may be limited under applicable
bankruptcy and insolvency laws;

(d)                   Approvals
and Consents. No approval, consent or withholding of objections is required
from any governmental authority or instrumentality with respect to the entry
into, or performance by Debtor of any of the Debt Documents, except any already
obtained;

(e)                    No
Violations or Defaults. The entry into, and performance by, Debtor of the
Debt Documents will not (i) violate any of the organizational documents of
Debtor or any judgment, order, law or regulation applicable to Debtor or (ii)
result in

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any breach of or constitute a default under any material
contract to which Debtor is a party, or result in the creation of any lien,
claim or encumbrance on any of Debtor’s property (except for liens in favor of
Secured Party) pursuant to any indenture, mortgage, deed of trust, bank loan,
credit agreement, or other agreement or instrument to which Debtor is a party;

(f)                      Litigation.
There are no suits or proceedings pending in court or before any commission,
board or other administrative agency against or affecting Debtor which could,
in the aggregate, have a material adverse effect on Debtor, its business or
operations, or its ability to perform its obligations under the Debt Documents.
Debtor does not have reason to believe that any such suits or proceedings are
threatened;

(g)                   Financial
Statements Prepared In Accordance with GAAP. All financial statements
delivered to Secured Party in connection with the Indebtedness have been
prepared in accordance with generally accepted accounting principles, and since
the date of the most recent financial statement, there has been no material
adverse change in Debtor’s financial condition;

(h)                   Use
of Collateral. The Collateral is not, and will not be, used by Debtor for
personal, family or household purposes;

(i)                       Collateral
in Good Condition and Repair. The Collateral is, and will remain, in good
condition and repair, and Debtor will not be negligent in its care and use;

(j)                       Location
of Collateral. All of the tangible Collateral is located at the locations
set forth on any Collateral Schedule. Debtor shall give the Secured Party 30
days prior written notice of any relocation of any Collateral;

(k)                    Ownership
of Collateral. Debtor is, and will remain, the sole and lawful owner and in
possession of the Collateral and has the sole right and lawful authority to
grant the security interest described in this Agreement;

(l)                       Encumbrances.
The Collateral is, and will remain, free and clear of all liens, claims and
encumbrances of any kind whatsoever, except for (i) liens in favor of Secured
Party, (ii) liens for taxes not yet due or for taxes being contested in good
faith and which do not involve, in the judgment of Secured Party, any risk of
the sale, forfeiture or loss of any of the Collateral, (iii) inchoate material
men’s, mechanic’s, repairmen’s and similar liens arising by operation of law in
the normal course of business for amounts which are not delinquent, and (iv)
liens securing Subordinated Debt (as defined below), provided such liens are
subordinated to the liens granted by Debtor in favor of Secured Party pursuant
to a subordination agreement acceptable to Secured Party (all of which shall be
“Permitted Liens”);

(m)                 Taxes.
All federal, state and local tax returns required to be filed by Debtor have
been filed with the appropriate governmental agencies and all taxes due and
payable by Debtor have been timely paid. Debtor will pay when due all taxes,
assessments and other liabilities except as contested in good faith and by
appropriate proceedings and for which adequate reserves have been established;

(n)                   No
Defaults. No event or condition exists under any material agreement,
instrument or document to which Debtor is a party or may be subject, or by
which Debtor or any of its properties are bound, which constitutes a default or
an event of default thereunder, or will, with the giving of notice, passage of
time, or both, would constitute a default or event of default thereunder;

(o)                   Certification
of Financial Information. All reports, certificates, schedules, notices and
financial information submitted by Debtor to the Secured Party pursuant to this
Agreement shall be certified as true and correct by the president or chief
financial officer of Debtor;

(p)                   Notice
of Material Adverse Change. Debtor shall give the Secured Party prompt
written notice of any event, occurrence or other matter which has resulted or
may likely result in a material adverse change (i) in the financial condition
or business operations of Debtor which would impair the ability of Debtor to
perform its obligations hereunder or under any of the other Debt Documents or
(ii) to the ability of Secured Party to enforce the Indebtedness or realize
upon the Collateral;

 2
 

(q)                   Perfection
Certificate. Debtor has previously delivered to the Secured Party a
certificate signed by the Debtor and entitled “Perfection Certificate” (“Perfection Certificate”). The Debtor
represents and warrants to the Secured Party as follows: (i) the Debtor’s exact
legal name is that indicated on the Perfection Certificate and on the signature
page hereof, (ii) the Debtor is an organization of the type, and is organized
in the jurisdiction set forth in the Perfection Certificate, (iii) the
Perfection Certificate accurately sets forth the Debtor’s organizational
identification number or accurately states that the Debtor has none, (iv) the
Perfection Certificate accurately sets forth the Debtor’s place of business or,
if more than one, its chief executive office, as well as the Debtor’s mailing
address, if different, (v) all other information set forth on the Perfection
Certificate pertaining to the Debtor is accurate and complete and (vi) that
there has been no change in any information provided in the Perfection
Certificate since the date on which it was executed by the Debtor; and

(r)                      Indebtedness.
Debtor will not create, incur, assume, or be liable for any Debt (as defined
herein), other than Permitted Indebtedness (as defined herein). “Debt” is (i) indebtedness for borrowed
money or the deferred price of property or services, such as reimbursement and
other obligations for surety bonds and letters of credit, (ii) obligations
evidenced by notes, bonds, debentures or similar instruments, (iii) capital
lease obligations and (iv) contingent obligations. [“Permitted Indebtedness” is (i) Debtor’s Indebtedness to
Secured Party under this Agreement or any other Debt Documents, (ii)
indebtedness existing on the date hereof and shown on Exhibit A attached
hereto, (iii) Subordinated Debt, (iv) indebtedness to trade creditors in the
ordinary course of business, (v) indebtedness secured by Permitted Liens, (vi) other
indebtedness not to exceed five hundred thousand dollars ($500,000), (vii)
unsecured indebtedness from existing equity investors of Debtor (the “Bridge
Loan Lenders”), provided that all such Bridge Loan Lenders are prohibited from
receiving any payments with respect to the indebtedness owed to them from the
Debtor (or exercising any remedies) at any time that a Default (as defined
herein) has occurred and is continuing, and (viii) unsecured indebtedness
incurred in connection with federal, state or agency sponsored economic
incentive programs. “Subordinated Debt”
is Indebtedness incurred by Debtor subordinated to Debtor’s Indebtedness owed
to Secured Party pursuant to a written agreement in a manner and form
acceptable to Secured Party and approved by Secured Party in writing.

3.                         COLLATERAL.

(a)                    Possession
of Collateral: Inspection of Collateral. Until the declaration of any
default, Debtor shall remain in possession of the Collateral; except that
Secured Party shall have the right to possess (i) any chattel paper or
instrument that constitutes a part of the Collateral and (ii) any other
Collateral in which Secured Party’s security interest may be perfected only by
possession. Secured Party may inspect any of the Collateral during normal
business hours after giving Debtor reasonable prior notice.

(b)                   Maintenance
of Collateral. Debtor shall (i) use the Collateral only in its trade or
business, (ii) maintain all of the Collateral in good operating order and
repair, normal wear and tear excepted, (iii) use and maintain the Collateral in
material compliance with manufacturers recommendations and all applicable laws
and (iv) keep all of the Collateral free and clear of all liens, claims and
encumbrances (except for Permitted Liens).

(c)                    Disposition
of Collateral. Secured Party does not authorize and Debtor agrees it shall
not (i) part with possession of any of the Collateral (except to Secured Party
or for maintenance and repair), (ii) remove any of the Collateral from the
continental United States or (iii) sell, rent, lease, mortgage, license, grant
a security interest in or otherwise transfer or encumber (except for Permitted
Liens) any of the Collateral.

(d)                   Taxes.
Debtor shall pay promptly when due all taxes, license fees, assessments and
public and private charges levied or assessed on any of the Collateral, on its
use, or on this Agreement or any of the other Debt Documents. At its option,
Secured Party may discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on the Collateral and may pay for the
maintenance, insurance and preservation of the Collateral and effect compliance
with the terms of this Agreement or any of the other Debt Documents. Debtor
agrees to reimburse Secured Party, on demand, all costs and expenses incurred
by Secured Party in connection with such payment or performance and agrees that
such reimbursement obligation shall constitute additional Indebtedness.

(e)                    Books
and Records. Debtor shall, at all times, keep accurate and complete records
of the Collateral, and Secured Party shall have the right to inspect and make
copies of all of Debtor’s books and records relating to the Collateral during
normal business hours, after giving Debtor reasonable prior notice.

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(f)                      Third
Party Possession of Collateral. Debtor agrees and acknowledges that any
third person who may at any time possess all or any portion of the Collateral
shall be deemed to hold, and shall hold, the Collateral as the agent of, and as
pledge holder for, Secured Party. Secured Party may at any time give notice to
any third person described in the preceding sentence that such third person is
holding the Collateral as the agent of, and as pledge holder for, the Secured
Party.

4.                         INSURANCE.

(a)                    Risk
of Loss. Debtor shall at all times bear the entire risk of any loss, theft,
damage to, or destruction of, any of the Collateral from any cause whatsoever,
except that risk of Loss for the Collateral shall no longer be the
responsibility of Debtor if and when Secured Party takes possession of such Collateral
following a Default hereunder.

(b)                   Insurance
Requirements. Debtor agrees to keep the Collateral insured against loss or
damage by fire and extended coverage perils, theft, burglary, and for any or
all Collateral, which are vehicles, for risk of loss by collision, and if
requested by Secured Party, against such other risks as Secured Party may
reasonably require. The insurance coverage shall be in an amount no less than
the full replacement value of the Collateral, and deductible amounts, insurers
and policies shall be reasonably acceptable to Secured Party. Debtor shall
deliver to Secured Party reasonably acceptable policies or certificates of
insurance evidencing such coverage. Each policy shall name Secured Parry as a
loss payee, shall provide for reasonable coverage to Secured Party regardless
of the breach by Debtor of any warranty or representation made therein, shall
not be subject to co-insurance, and shall provide that coverage may not be
canceled or altered by the insurer except upon thirty (30) days prior written
notice to Secured Party. Debtor appoints Secured Party as its attorney-in-fact
to make proof of loss, claim for insurance and adjustments with insurers, and
to receive payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments, with regard to the Collateral. Secured
Party shall not act as Debtor’s attorney-in-fact unless on event of Default.
Proceeds of insurance shall be applied, at the option of Secured Party, to
reduce any of the Indebtedness.

5.                         REPORTS.

(a)                    Notice
of Events. Debtor shall promptly notify Secured Party of (i) any change in
the name of Debtor, (ii) any change in the state of its incorporation or
registration, (iii) any relocation of its chief executive offices, (iv) any
lost, stolen, missing, destroyed, materially damaged or worn out Collateral or
(v) any lien, claim or encumbrance other than Permitted Liens attaching to or
being made against any of the Collateral.

(b)                   Financial
Statements, Reports and Certificates. Debtor will deliver to Secured Party
within one hundred twenty (120) days of the close of each fiscal year of
Debtor, Debtor’s complete financial statements including a balance sheet,
income statement, statement of shareholders’ equity and statement of cash
flows, each prepared in accordance with generally accepted accounting
principles consistently applied, certified by a recognized firm of certified
public accountants satisfactory to Secured Party. Debtor will deliver to
Secured Party copies of Debtor’s quarterly financial statements including a
balance sheet, income statement and statement of cash flows, each prepared by
Debtor in accordance with generally accepted accounting principles consistently
applied by Debtor and certified by Debtor’s chief financial officer, within
ninety (90) days after the close of each of Debtor’s fiscal quarter. Debtor
will deliver to Secured Party copies of all Forms 10-K and 10-Q, if any, within
thirty (30) days after the dates on which they are filed with the Securities
and Exchange Commission. Debtor will deliver to Secured Party copies of Debtor’s
monthly financial statements including a balance sheet, income statement and
statement of cashflows, each prepared by Debtor in accordance with generally
accepted accounting principles consistently applied by Debtor and certified by
Debtor’s chief financial officer, within forty-five (45) days after the close
of each month. Debtor will deliver to Secured Party promptly upon request of
Secured Party, in form satisfactory to Secured Party, such other and additional
information as Secured Party may reasonably request from time to time.

6.                         FURTHER
ASSURANCES.

(a)                    Further
Assurances Regarding Security Interests. Debtor shall, upon request of
Secured Party, furnish to Secured Party such further information, execute and
deliver to Secured Party such documents and instruments (including, without

 4
 

limitation, Uniform Commercial Code financing
statements) and shall do such other acts and things as Secured Party may at any
time reasonably request relating to the perfection or protection of the
security interest created by this Agreement or for the purpose of carrying out
the intent of this Agreement. Without limiting the foregoing, Debtor shall
cooperate and do all acts deemed necessary or advisable by Secured Party to
continue hi Secured Party a perfected first security interest in the
Collateral, and shall obtain and furnish to Secured Party any subordinations,
releases, landlord waivers, lessor waivers, mortgagee waivers, or control
agreements, and similar documents as may be from time to time requested by, and
in form and substance satisfactory to, Secured Party.

(b)                   Authorization
To File Financing Statements. Debtor shall perform any and all acts
reasonably requested by the Secured Party to establish, maintain and continue
the Secured Party’s security interest and liens in the Collateral, including
but not limited to, executing or authenticating financing statements and such
other instruments and documents when and as reasonably requested by the Secured
Party. Debtor hereby authorizes Secured Party through any of Secured Party’s
employees, agents or attorneys to file any and all financing statements,
including, without limitation, any original filings, continuations, transfers
or amendments thereof required to perfect Secured Party’s security interest and
liens in the Collateral under the Uniform Commercial Code without
authentication or execution by Debtor. Debtor hereby irrevocably authorizes the
Secured Party at any time and from time to time to file in any filing office in
any Uniform Commercial Code jurisdiction any initial financing statement(s) and
amendments thereto that (i) indicate the Collateral is subject to the Secured
Party’s security interest, 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 or such jurisdiction and (ii) provide any other information
required by part 5 of Article 9 of the Uniform Commercial Code of the state or
such other jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including (1) whether the Debtor is an
organization, the type of organization and any organization identification
number issued to the Debtor and (2) in the case of a financing statement filed
as a fixture filing, a sufficient description of real property to which the
Collateral relates. The Debtor agrees to furnish any such information to the
Secured Party promptly upon the Secured Party’s request.

(c)                    Indemnification.
Debtor shall indemnify and defend the Secured Party, its successors and
assigns, and their respective directors, officers and employees, from and
against all claims, actions and suits (including, without limitation, related
attorneys’ fees) of any kind whatsoever arising, directly or indirectly, in
connection with any of the Collateral.

7.                         DEFAULT
AND REMEDIES.

(a)                    Defaults.
Debtor shall be in default under this Agreement and each of the other Debt
Documents (a “Default”) if any one of the following should occur:

	
  (i)

  	
   

  	
  Debtor breaches
  its obligation to pay when due any installment or other amount due or coming
  due under any of the Debt Documents and fails to cure that breach within five
  (5) days.;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Debtor, without
  the prior written consent of Secured Party, sells, rents, leases, licenses,
  mortgages, grants a security interest in, or otherwise transfers or encumbers
  (except for Permitted Liens) any of the Collateral;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Debtor breaches
  any of its insurance obligations under Section 4;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Debtor breaches
  any of its other non-payment obligations under any of the Debt Documents and
  fails to cure that breach within thirty (30) days after written notice from
  Secured Party;

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  Any warranty,
  representation or statement made by Debtor in any of the Debt Documents, or
  otherwise in connection with any of the Indebtedness that is written and/or
  material, shall be false or misleading in any material respect;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  Any of the
  Collateral is subjected to attachment, execution. levy, seizure or
  confiscation in any legal proceeding or otherwise, or if any legal or
  administrative proceeding is commenced against Debtor or any of the
  Collateral, which in the good faith judgment of Secured Party subjects any of
  the Collateral to a material risk of attachment, execution, levy, seizure or
  confiscation and no bond is posted or protective order obtained to negate
  such risk;

  

 

 5
 

 

	
  (vii)

  	
   

  	
  Debtor breaches
  or is in default under any other material written agreement between Debtor
  and Secured Party that is not remedied within any applicable cure period;

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  Debtor or any
  guarantor or other obligor for any of the Indebtedness (“Guarantor”)
  dissolves, terminates its existence, becomes insolvent or ceases to do
  business as a going concern;

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  Debtor or any
  Guarantor should become a natural person, or if Debtor or any such Guarantor
  should die or become incompetent;

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  A receiver is
  appointed for all or of any part of the property of Debtor or any Guarantor,
  or Debtor or any Guarantor makes any assignment for the benefit of creditors;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  Debtor or any
  Guarantor files a petition under any bankruptcy, insolvency or similar law,
  or any such petition is filed against Debtor or any Guarantor and is not
  dismissed within forty-five (45) days;

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  Debtor’s
  improper filing of an amendment or termination statement relating to a filed
  financing statement describing the Collateral;

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

  	
  Debtor, without
  the prior written consent of Secured Party, which consent shall not be
  unreasonably delayed, conditioned or withheld, shall merge with or
  consolidate with any other entity or sell all or substantially all of its
  assets or in any manner terminate its existence except where (a) Debtor is
  the surviving entity, the shareholders of the Debtor as of the date of this
  Agreement hold more than 50% of the voting stock of Debtor following such
  transaction, and no default has occurred and is continuing or would exist
  after giving effect to the transaction, or (b) Debtor is not the surviving
  entity following such transaction, no default has occurred and is continuing
  or would exist after giving effect to the transaction, and the surviving
  entity either assumes the Indebtedness or prepays the Indebtedness in full
  within 10 days after the closing of the transaction, as Secured Party may
  elect;

  
	
   

  	
   

  	
   

  
	
  (xiv)

  	
   

  	
  Debtor should be
  a privately held corporation, more than 50% of Debtor’s voting capital stock
  is not retained by the holders of such stock on the date the Agreement is
  executed;

  
	
   

  	
   

  	
   

  
	
  (xv)

  	
   

  	
  Debtor should be
  a publicly held corporation, there shall be a change in the ownership of
  Debtor’s stock such that Debtor is no longer subject to the reporting
  requirements of the Securities Exchange Act of 1934 or no longer has a class
  of equity securities registered under Section 12 of the Securities Act of
  1933;

  
	
   

  	
   

  	
   

  
	
  (xvi)

  	
   

  	
  Debtor defaults
  under any other financing arrangement between Debtor and a third party where
  such accelerated indebtedness exceeds an amount of two hundred fifty thousand
  dollars ($250,000.00); or

  
	
   

  	
   

  	
   

  
	
  (xvii)

  	
   

  	
  Secured Party,
  in its good faith business judgment, determines that (a) it becomes unlikely
  that Debtor can obtain sufficient additional equity investments to satisfy
  the Indebtedness as it comes due, (b) Debtor does not have sustainable
  positive cash flow and c) Debtor has no other source of capital sufficient to
  repay all outstanding Indebtedness, then Secured Party reserves the right to
  declare a Default.

  

 

(b)                   Acceleration.
If an event of Default has occurred hereunder, the Secured Party, at its
option, may declare any or all of the Indebtedness to be immediately due and
payable, without demand or notice to Debtor or any Guarantor. The accelerated
obligations and liabilities shall bear interest (both before and after any
judgment) until paid in full at the lower of thirteen (13%) per annum or the
maximum rate not prohibited by applicable law.

(c)                    Rights
and Remedies. Secured Party shall have all of the rights and remedies of a
Secured Party under the Uniform Commercial Code, and under any other applicable
law. Without limiting the foregoing. Secured Party shall have the right to (i)
notify any account debtor of Debtor or any obligor on any instrument which
constitutes part of the Collateral to make payment to the Secured Party, (ii)
with or without legal process, enter any premises where the Collateral may be
and take possession of and remove the Collateral from the premises or store it
on the premises, (iii) sell the Collateral at public or private sale, in whole
or in part, and have the right to bid and purchase at said sale or (iv) lease
or otherwise dispose of

 6
 

all or part of the Collateral, applying proceeds from
such disposition to the obligations then in Default. If requested by Secured
Party, Debtor shall promptly assemble the Collateral and make it available to
Secured Party at a place to be designated by Secured Party, which is reasonably
convenient to both parties. Secured Party may also render any or all of the
Collateral unusable at the Debtor’s premises and may dispose of such Collateral
on such premises without liability for rent or costs. Any notice that Secured
Party is required to give to Debtor under the Uniform Commercial Code of the
time and place of any public sale or the time after which any private sale or
other intended disposition of the Collateral is to be made shall be deemed to
constitute reasonable notice if such notice is given to the last known address
of Debtor at least five (5) days prior to such action. Upon the occurrence and
during the continuation of an event of Default, Debtor hereby appoints Secured
Party as Debtor’s attorney-in-fact, with full authority in Debtor’s place and
stead and in Debtor’s name or otherwise, from time to time in Secured Party’s
sole and arbitrary discretion, to take any action and to execute any instrument
which Secured Party may deem necessary or advisable to accomplish the purpose
of this Agreement.

(d)                   Application
of Proceeds. Proceeds from any sale or lease or other disposition shall be
applied: first, to all costs of repossession, storage, and disposition
including without limitation attorneys’, appraisers’, and auctioneers’ fees;
second, to discharge the obligations then in default; third, to discharge any
other Indebtedness of Debtor to Secured Party, whether as obligor, endorser,
guarantor, surety or indemnitor; fourth, to expenses incurred in paying or
settling liens and claims against the Collateral; and lastly, to Debtor, if
there exists any surplus. Debtor shall remain fully liable for any deficiency.

(e)                    Fees
and Costs. Debtor agrees to pay all reasonable and documented attorneys’
fees and other costs incurred by Secured Party in connection with the
enforcement, assertion, defense or preservation of Secured Party’s rights and
remedies under this Agreement, or if prohibited by law, such lesser sum as may
be permitted. Debtor further agrees that such fees and costs shall constitute
Indebtedness.

(f)                      Remedies
Cumulative. Secured Party’s rights and remedies under this Agreement or
otherwise arising are cumulative and may be exercised singularly or
concurrently. Neither the failure nor any delay on the part of the Secured
Party to exercise any right, power or privilege under this Agreement shall
operate as a waiver, nor shall any single or partial exercise of any right,
power or privilege preclude any other or further exercise of that or any other
right, power or privilege. SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY
OF ITS RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR
PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY
SECURED PARTY. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion.

(g)                   WAIVER
OF JURY TRIAL. DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS
SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY OTHER DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

8.                         MISCELLANEOUS.

(a)                    Assignment.
This Agreement, any Note and/or any of the other Debt Documents may be
assigned, in whole or in part, by Secured Party, without notice to Debtor, and
Debtor agrees not to assert against any such assignee, or assignee’s assigns,
any defense, set-off, recoupment claim or counterclaim which Debtor has or may
at any time have against Secured Party for any reason whatsoever; provided that
Secured Party shall remain liable for all obligations owing Debtor under the
Debt Documents. Debtor agrees that if Debtor receives written notice of an
assignment from Secured Party, Debtor will pay all amounts payable under any
assigned Debt Document to such assignee in accordance with the terms of each
such Debt Document Debtor also agrees to confirm in writing receipt of the
notice of assignment as may be reasonably requested by Secured Party or
assignee.

 7
 

(b)                   Notices.
All notices to be given in connection with this Agreement shall be in writing,
shall be addressed to the parties at their respective addresses set forth in
this Agreement (unless and until a different address may be specified in a
written notice to the other party), and shall be deemed given (i) on the date
of receipt if delivered in hand or by facsimile transmission, (ii) on the next
business day after being sent by express mail and (iii) on the fourth business
day after being sent by regular, registered or certified mail. As used herein,
the term “business day” shall mean and include any day other than Saturdays,
Sundays, or other days on which commercial banks in New York, New York are
required or authorized to be closed.

(c)                    Correction
of Errors. Secured Party may correct patent errors and fill in all blanks
in this Agreement or in any Collateral Schedule consistent with the agreement
of the parties.

(d)                   Time
is of the Essence. Time is of the essence of this Agreement. This Agreement
shall be binding, jointly and severally, upon all parties described as the “Debtor”
and their respective heirs, executors, representatives, successors and assigns,
and shall inure to the benefit of Secured Party, its successors and assigns.

(e)                    Entire
Agreement. This Agreement and the Other Debt Documents (including all
Collateral Schedules) constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersede all prior
understandings (whether written, verbal or implied) with respect to such
subject matter. THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS SHALL NOT BE
CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT ONLY BY A WRITING
SIGNED BY BOTH PARTIES. Section headings contained in this Agreement have been
included for convenience only, and shall not affect the construction or
interpretation of this Agreement.

(f)                      Termination
of Agreement. This Agreement shall continue in full force and effect until
all of the Indebtedness has been indefeasibly paid in full to Secured Party or
its assignee. The surrender, upon payment or otherwise, of any Note or any of
the other documents evidencing any of the Indebtedness shall not affect the
right of Secured Party to retain the Collateral for such other Indebtedness as
may then exist or as it may be reasonably contemplated will exist in the
future. This Agreement shall automatically be reinstated if Secured Party is
ever required to return or restore the payment of all or any portion of the
Indebtedness (all as though such payment had never been made).

(g)                   CHOICE
OF LAW. DEBTOR AND SECURED PARTY HEREBY CONSENT TO THE EXERCISE OF
JURISDICTION OVER IT BY ANY FEDERAL COURT SITTING IN VIRGINIA OR ANY VIRGINIA
COURT FOR THE PURPOSES OF ANY AND ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THE DEBT DOCUMENTS. DEBTOR AND SECURED PARTY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN ANY
SUCH COURT, ANY CLAIM BASED ON THE CONSOLIDATION OF PROCEEDINGS IN SUCH COURTS
IN WHICH PROPER VENUE MAY LIE IN DIVERGENT JURISDICTIONS, AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. MAKER AND OBLIGORS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, THE DEBT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.

[SIGNATURES APPEAR ON
PAGE 9]

 8
 

IN
WITNESS WHEREOF, Debtor and Secured Party, intending to be
legally bound hereby, have duly executed this Agreement in one or more
counterparts, each of which shall be deemed to be an original, as of the day
and year first aforesaid.

	
  SECURED PARTY:

  	
   

  	
  DEBTOR:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Oxford
  Finance Corporation

  	
   

  	
  Linguagen Corp.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael J. Altenburger

  	
   

  	
  By:

  	
  /s/ Scott M. Horvitz

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Michael J. Altenburger

  	
   

  	
  Name:

  	
  Scott M. Horvitz

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  	
  Title:

  	
  CFO

  	
   

  
										

 

 9

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