Document:

SECURITY
      AGREEMENT AND

    FINANCING
      STATEMENT

     

    THIS
      SECURITY AGREEMENT AND FINANCING STATEMENT is made this 20th
      day of
      August,
      2001,
      between TRANSCAP
      TRADE FINANCE, an
      Illinois general partnership (the "SECURED PARTY"), and DESTINATION
      SOFTWARE, INC., a
      New
      Jersey corporation (the
      "DEBTOR"), as follows:

     

    BACKGROUND:

     

    
      	
              A.

            	
              On
                this date, the Secured Party and Debtor entered into a Master Purchase
                Order Assignment Agreement
                (the "Assignment Agreement").

            

    

     

    
      	
              B.

            	
              It
                is a condition to Secured Party's performance of its obligations
                under the
                Assignment Agreement
                that the Debtor execute and deliver this Agreement to secure performance
                and payment
                of the "Liabilities" (as hereinafter
                defined).

            

    

     

    THEREFORE,
      in
      consideration of the agreements described in this Agreement and the Assignment
      Agreement, the parties agree as follows:

     

    1. Definitions.
      In
      this
      Agreement, the following frequently used terms are defined as set
      forth
      in this paragraph 1:

     

    (a) Each
      term
      used in this Agreement which is defined in the Assignment Agreement will
have
      the
      same meaning herein as that ascribed to it in the Assignment
      Agreement.

     

    (b) The
      "LIABILITIES"
      are
      all
      payments and other obligations from time to time due or owing to the Secured
      Party by the Debtor under the Assignment Agreement, this Agreement and
any
      agreement referred to in the Assignment Agreement or this
      Agreement.

     

    (c) The
      "PRIMARY
      COLLATERAL" means
      those assets of the Debtor set forth on Exhibit
      "A" attached to and made part of this Agreement, whether now or hereafter
      existing or acquired, together with all the proceeds thereof and Debtor's
      interests therein.

     

    (d) The
      "COMMON
      COLLATERAL" are
      those
      assets of Debtor set forth on Exhibit "B"
      attached to and made part of this Agreement, whether now or hereafter existing
      or acquired, together
      with all the proceeds thereof and Debtor's interests therein which from time
      to
      time are also pledged to a Senior Lender and as to which the Secured Party
      shall
      maintain a subordinated security interest.
      If no Senior Lender is involved in the subject transaction, Exhibit "B" shall
      be
      excluded from this Agreement and the Primary Collateral and Common Collateral
      shall refer to the same assets.

     

    (e) The
      "COLLATERAL"
      means
      the
      Primary Collateral and the Common Collateral and
      the
      Secured Party's security interest in the Collateral is referred to as the
      "LIEN".

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) The
      "SENIOR
      LIEN" is
      the
      security interest in the Common Collateral maintained by
      a
      Senior Lender (if any).

     

    (g) The
      "LOCATIONS"
      are
      Debtor's facilities set forth at the end of this Agreement at
      which
      all or a portion of the Collateral will be located.

     

    2. Grant
      of Security Interest.
      As
      security for the performance and payment of the Liabilities,
      the Debtor hereby assigns, grants, conveys, mortgages, hypothecates, pledges,
      and sets over
      to
      the Secured Party a continuing first priority security interest for the use
      and
      benefit of the Secured
      Party in the Primary Collateral; and a security interest for the use and benefit
      of the Secured Party
      in
      the Common Collateral which is subordinate only to the Senior Lien, if
      any.

     

    3. Representations
      and Warranties.
      The
      Debtor represents, warrants, and agrees that: (i)
      except with respect to the Senior Lien, no financing statement or other lien
      notice covering any portion
      of the Collateral is on file in any public office; (ii) the Debtor is and at
      all
      times will be the lawful
      owner of all Collateral, free of all liens and claims whatsoever except the
      Senior Lien and the Lien;
      (iii) the Debtor has full power and authority to execute this Agreement and
      to
      perform the Debtor's obligations hereunder, and to subject the Collateral to
      the
      Lien; (iv) all information with respect
      to Collateral set forth in any schedule, certificate or other writing at any
      time heretofore, and all
      other
      written information heretofore or hereafter furnished by the Debtor to the
      Secured Party is and
      will
      be true and correct in all respects as of the date furnished; (v) the Locations
      include the address
      at which any portion of the Collateral is located and Debtor will immediately
      notify Secured Party
      of
      any other location at which any portion of the Collateral is hereafter located;
      and (vi) there is
      no
      litigation or regulatory complaint against the Debtor or affecting or relating
      to the Collateral or
      any
      portion thereof which is pending or threatened as of this date other than as
      set
      forth on Exhibit "E"
      of
      the Assignment Agreement.

     

    4. Certificates,
      Schedules and Reports.
      The
      Debtor will from time to time, as the Secured Party may request, deliver to
      the
      Secured Party such schedules and such certificates and reports respecting the
      Collateral to such extent as the Secured Party may reasonably request. Any
      such
      schedule, certificate or report shall be executed by an authorized officer
      of
      the Debtor and shall be
      in
      such form and detail as the Secured Party may specify. The Debtor shall
      immediately notify the
      Secured Party of the occurrence of any event causing a material loss or
      depreciation in the value of
      any
      item of Collateral, and the amount of such loss or
      depreciation.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    5. Agreements
      of the Debtor.
      The
      Debtor (i) will, upon request of the Secured Party, execute
      such financing statements and other documents (and pay the cost of filing or
      recording the same),
      and do such other acts and things as Secured Party may from time to time
      reasonably request to
      establish and maintain valid perfected security interests in the Collateral;
      (ii) will keep all items of
      Collateral at the Locations; (iii) will keep its records concerning all items
      of
      Collateral at the Locations,
      which records will be of such character as will enable Secured Party to
      determine at any time
      the
      status thereof; (iv) will furnish the Secured Party such information concerning
      the Debtor and
      the
      Collateral as the Secured Party may from time to time reasonably request; (v)
      will permit the Secured Party or its designees, at all times, to inspect the
      Collateral, and to inspect, audit and make
      copies of and extracts from all records and all other papers in the
      possession of
      the
      Debtor, and will,
      upon request of the Secured Party, deliver to the Secured Party all of such
      records and papers that
      pertain to the Collateral; (vi) will, upon request of the Secured Party, stamp
      on its records concerning
      the Collateral (and/or enter in its computer records concerning the Collateral)
      a notation, in
      form
      reasonably satisfactory to the Secured Party, of the security interests of
      the
      Secured Party hereunder; (vii) except as consented to in writing by the Secured
      Party, will not sell, lease, assign or
      create
      or permit to exist any lien on or security interest in any item of Collateral
      to
      or in favor of anyone other than the Secured Party and the Senior Lender(s);
      (viii) will at all times keep all items of
      Collateral insured against loss, damage, theft and other risks, in such amounts,
      by such companies, under
      such policies and in
      such
      form
      as may be required pursuant to the Assignment Agreement, which policies shall
      contain a so-called lender's loss payable (or comparable) clause, whereby a
      denial
      of
      payment based on policy conditions will not prevent recovery by Secured Party,
      and such policies or certificates thereof shall be deposited with the Secured
      Party; (ix) furnish to the Secured Party
      no
      less than thirty (30) days prior to the occurrence of any change in the
      Locations or in Debtor's name, notice in writing of such change; and (x) will
      reimburse the Secured Party for all expenses,
      including reasonable attorneys' fees and legal expenses incurred by the Secured
      Party in seeking
      to collect or enforce any rights under this Agreement or the Assignment
      Agreement.

     

    6. Remedies. Whenever
      Debtor shall fail to perform any obligation in the manner and at
      the
      time required by the Assignment Agreement or this Agreement, or whenever the
      Debtor or any of
      them
      shall breach or default on a covenant made by any Debtor pursuant to the
      Assignment Agreement
      or this Agreement (collectively an "event of default"), the Secured Party may
      exercise any
      rights and remedies available to it under the Assignment Agreement and
      applicable law. The Debtor and each of them agrees, upon the occurrence of
      an
      event of default and during the continuance
      thereof, if requested by the Secured Party, to assemble, at the Debtor's
      expense, all or any
      part
      of the Collateral at a place designated by the Secured Party. Without limiting
      the foregoing, upon
      an
      event of default the Secured Party may, to the fullest extent permitted by
      applicable law, without
      notice, advertisement, hearing or process of law of any kind, (i) enter upon
      any
      premises where
      any
      of the Collateral may be located and take possession of and remove such
      Collateral, (ii) sell
      any
      or all of the Collateral, free of all rights and claims of the Debtor therein
      and thereto, at any public or private sale, and (iii) bid for and purchase
      any
      or all of the Collateral at any such sale. The Debtor and each of them hereby
      expressly waives, to the fullest extent permitted by applicable law,
any
      and
      all notices, advertisements, hearings or process of law in connection with
      the
      exercise by the
      Secured Party of any of its rights and remedies upon an event of default. Any
      notification of the intended
      disposition of any of the Collateral required by law shall be deemed reasonably
      and properly
      given if given at least ten (10)
      days
      before such disposition. Any proceeds of any disposition
      by the Secured Party of any of the Collateral will be applied by the Secured
      Party.

     

    First,
      to the
      payment of the Secured Party's reasonable out-of-pocket expenses in connection
      with
      the
      Collateral or this Agreement and enforcement of the Secured Party's rights
      with
      respect thereto or hereunder, including reasonable attorney's fees and legal
      expenses;

     

    Second,
      toward
      the payment or satisfaction of the Liabilities in full; and

     

    Third,
      any
      surplus to be paid to the Debtor, its successors and assigns, or as a court
      of
      competent jurisdiction may direct.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    7. Relationship
      with Senior Lender.
      If
      a
      Senior Lender is involved in the instant transaction,
      the Secured Party and each Senior Lender have entered into a Subordination
      Agreement of
      even
      date herewith which defines and sets forth the respective rights and interests
      of the Secured Party
      and
      each Senior Lender in connection with the Collateral.

     

    8. Miscellaneous.
      (a)
      The
      Secured Party shall be deemed to have exercised reasonable
      care in the custody and preservation of any of the Collateral in its possession
      if it takes such
      action for that purpose as the Debtor requests in writing, but failure of the
      Secured Party to comply
      with any such request shall not of itself be deemed a failure to exercise
      reasonable care, and no
      failure of the Secured Party to
      preserve
      or protect any rights with respect to such Collateral against prior parties,
      or
      to do any act with respect to the preservation of such Collateral not so
      requested by the Debtor, shall be deemed a failure to exercise reasonable care
      in the custody or preservation of such Collateral.

     

    (b) All
      notices required or permitted pursuant to this Agreement shall be in writing
      and
either
      personally delivered, sent by facsimile transmission (provided evidence of
      transmission is maintained and the original of the transmittal notice is sent
      by
      U.S. mail), or Federal Express or similar overnight delivery service, to the
      Secured Party at its address set forth at the end of this Agreement
      and to the Debtor at any one of the Locations. Notices given in the manner
      prescribed herein
      shall be deemed given on the date sent or transmitted (as the case may be).
      Either party may change
      its notice address by notice to the other party in the manner prescribed
      herein.

     

    (c) No
      delay
      on the part of the Secured Party in the exercise of any right or remedy shall
      operate
      as a waiver thereof, and no single or partial exercise by the Secured Party
      of
      any right or remedy
      shall preclude other or further exercise thereof or the exercise of any other
      right or remedy.

     

    (d) No
      amendment to, modification or waiver of, or consent with respect to, any
provision
      of this Agreement shall in any event be effective unless the same shall be
      in
      writing and signed
      and delivered by the Secured Party, and then any such amendment, modification,
      waiver or consent shall be effective only in the specific instance and for
      the
      specific purpose for which given.

     

    (e) All
      obligations of the Debtor and all rights, powers and remedies of the Secured
      Party expressed
      herein are in addition to all other rights, powers and remedies possessed by
      Secured Party, including,
      without limitation, those provided by applicable law or in any other written
      instrument or agreement relating to any of the Liabilities or security
      therefor.

     

    (f) The
      Agreement shall in all respects be a continuing agreement and shall remain
      in
      full force and effect until final payment in full of all the
      Liabilities.

     

    (g) THIS
      AGREEMENT HAS BEEN DELIVERED AT CHICAGO, ILLINOIS, AND
      SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
      OF
      ILLINOIS, SUBJECT, HOWEVER, TO THE UNIFORM COMMERCIAL
      CODE OF ANY APPLICABLE JURISDICTION. WHENEVER POSSIBLE,
      EACH PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO
      BE
      EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT  IF
      ANY PROVISION OF THIS AGREEMENT SHALL BE HELD INVALID, ILLEGAL OR
UNENFORCEABLE
      UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF
      SUCH
      INVALIDITY, ILLEGALITY OR UNENFORCEABILITY, WITHOUT INVALIDATING THE REMAINDER
      OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
      AGREEMENT.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (h) THE
      DEBTOR IRREVOCABLY SUBMITS AND CONSENTS TO THE JURISDICTION
      OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT
      OF ILLINOIS, EASTERN DIVISION, OR ANY COURT OF THE STATE OF
ILLINOIS
      LOCATED IN COOK COUNTY, AND WAIVES ANY AND ALL OBJECTIONS TO
      JURISDICTION OR VENUE THAT ANY SUCH PARTY MAY HAVE UNDER THE LAWS OF THE STATE
      OF ILLINOIS OR OTHERWISE IN THOSE COURTS IN ANY SUCH
      SUIT, ACTION, OR PROCEEDING. FURTHER, TO THE EXTENT PERMITTED
BY
      LAW, SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION
      AGAINST THE DEBTOR MAY BE MADE _BY REGISTERED OR CERTIFIED
      MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS FOR NOTICE AS
      PROVIDED IN THIS AGREEMENT.

     

    (i) DEBTOR
      AND SECURED PARTY ACKNOWLEDGE AND AGREE THAT ANY
      CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT, ANY OTHER
AGREEMENT
      RELATED HERETO OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED
      HEREBY OR THEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX
      ISSUES, AND THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING
      ARISING OUT OF ANY
      SUCH
CONTROVERSY
      WILL BE TRIED IN A COURT
      OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A
      JURY.

     

    (j) This
      Agreement shall be binding upon, and shall inure to the benefit of, the Secured
      Party
      and
      the Debtor and their respective successors and assigns.

     

    (k) At
      the
      option of the Secured Party, this Agreement, or a carbon, photographic or other
      reproduction
      of this Agreement or of any Uniform Commercial Code financing statement covering
      the
      Collateral or any portion thereof, shall be sufficient as
      a
      Uniform
      Commercial Code financing statement
      and may be filed as such.

     

    (l) This Agreement
      is the Security Agreement referred to in the Assignment Agreement.

     

    (m) In
      the
      case of any irreconcilable conflict between the provisions of this Agreement
      and
      the
      Assignment Agreement, the provisions of the Assignment Agreement shall
      control.

     

    (n) If
      more
      than
      one person or entity is included as a Debtor hereunder, each of Debtor's
obligations,
      covenants, warranties, and representations hereunder is joint, several and
      mutually binding on each such party.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (o) This
      Agreement may be executed in one or more counterparts, each of which taken
      together
      shall constitute one and the same instrument, admissible
      into evidence.
      Delivery of an executed
      counterpart of this Agreement by facsimile shall be equally as effective as
      delivery of a manually
      executed counterpart of this Agreement. Any party delivering an executed
      counterpart of this
      Agreement by facsimile shall also deliver a manually executed counterpart of
      this Agreement, but
      the
      failure to deliver a manually executed counterpart shall not affect the
      validity, enforceability, and
      binding effect of this Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
       

      IN
        WITNESS WHEREOF, this
        Agreement has been duly signed at Northbrook, Illinois on the day and year
        first
        above written.

    

     

    
      	
              SECURED
                PARTY:

            
	 
	
              TRANSCAP
                TRADE FINANCE

            
	 	 
	
              By:

            	
              /s/
                Michael Sear

            

    

    
      	
              Address:  

            	
              900
                N. Skokie Blvd.

            
	 	
              Northbrook,
                LL 60062

            
	 	 

    

    

    
      	
              DEBTOR:

            
	 
	
              DESTINATION
                SOFTWARE, INC.

            
	 	 
	
              By:

            	
              /s/
                Susan Kain

            
	
              Title:

            	
              President

            
	 	 
	
              LOCATIONS:

            
	 
	    

	 
	      

	 
	      
              

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    EXHIBIT
      "A"

    

    PRIMARY
      COLLATERAL

     

    The
      "Collateral" with respect to which Secured Party's first priority security
      interest applies shall
      be
      (i) all merchandise, inventory and goods and all additions, substitutions and
      replacements thereof,
      wherever located, together with all goods, supplies, incidentals, packaging
      materials, labels, materials
      and any other items used or usable in manufacturing, processing, packaging
      or
      shipping "Materials" and "Products" pursuant to "Accepted Purchase Orders",
      as
      such terms are defined in a
      certain
      Master Purchase Order Purchase Agreement dated August 20,2001 between Secured
      Party and Debtor, and all products and proceeds of whatever sort now or
      hereafter owned by
      Debtor
      and related thereto; (ii) all accounts receivable, credit card receivables,
      payment intangibles,
      contract rights and other customer obligations for the payment of money arising
      out of the
      Debtor's sale, lease, or license of any tangible or intangible property or
      the
      rendering of services pursuant
      to "Accepted Purchase Orders" now or hereafter existing; and (iii) all proceeds
      and products of
      the
      foregoing.

     

    Debtor's
      facility at which the Collateral is located
      is:_______________________________________________________
      _____________________________________________________.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    EXHIBIT
      "B" 

    COMMON
      COLLATERAL

     

    The
      "Collateral" with respect to which Secured Party's subordinated lien applies
      shall be (i) all
      merchandise, inventory and goods and all additions, substitutions and
      replacements thereof, wherever located, together with all goods, supplies,
      incidentals, packaging materials, labels, materials
      and any other items used or usable in manufacturing, processing, packaging
      or
      shipping same,
      in
      all stages of production, and all products and proceeds of whatever sort,
      including specifically
      all "inventory" as such term is defined in the Code, now or hereafter owned
      by
      Debtor; (ii)
      all
      machinery and equipment, now or hereafter owned by Debtor, including, but not
      limited to, all
      machinery, equipment, furnishings, movable trade fixtures and vehicles now
      or
      hereafter owned by
      Debtor
      and all additions, substitutions and replacements of any of the foregoing,
      wherever located,
      together with all attachments, components, spare and replacement parts, related
      computer software,
      maintenance and repair supplies and manuals, instructional manuals, warranties,
      and equipment and accessories installed thereon or affixed thereto; (iii) all
      accounts receivable, credit card
      receivables, payment intangibles, contract rights and other customer obligations
      for the payment of
      money
      arising out of the Debtor's sale, lease, or license of any tangible or
      intangible property or the rendering of services, now existing or hereafter
      arising; (iv) all trademarks, copyrights, patents, contract
      rights, investment property, rights to payment evidenced by tangible or
      electronic chattel paper,
      instruments, and all general intangible assets of Debtor now or hereafter
      existing; and (v) all proceeds
      and products of the foregoing, except such assets of the Debtor as are described
      on Exhibit
      "A".

     

    Debtor's
      facility at which the Collateral is located is:
      _______________________________________________________
      _____________________________________________________.

     

    
      
        
        

      

      
        9GUARANTY

    

    This
      Guaranty (the "Guaranty”) is made on the 19 day of December 2007, among the
      persons whose names are set forth at the end of this Guaranty (collectively
      the
      "GuarantoI8"), and TRANSCAP TRADEFINANCE LLC, an Illinois limited liability
      company as successor in interest to TRANSCAP TRADE FINANCE, an Illinois general
      partnership (the "Contractor"),
      as follows:

    

    BACKGROUND
      OF AGREEMENT:

    

    A.
      The
      Contractor and Destination Software, Inc., a New Jersey corporation (the
      "Distributor"), have on this day entered into a Master Purchase Order Assignment
      Agreement (the "Assignment Agreement") under the terms of which the Distributor
      will assign customer purchase orders to the Contractor and request the
      Contractor to purchase the required materials to fulfill such purchase orders;
      the Contractor will retain the Distributor to manufacture, process and ship
      ordered goods; and fees will be paid to the Contractor and the Distributor
      for
      their services there under.

    

    B.
      Each
      of the Guarantors has a substantial financial stake in the Distributor and
      will
substantially
      benefit from the performance by Contractor of its obligations under the
Assignment
      Agreement.

    

    C.
      The
      execution of this Guaranty is an express condition to the consummation of the
      transactions
      contemplated by the Assignment Agreement and the Contractor is unwilling to
      enter into or perform in accordance with the Assignment Agreement in the absence
      of the execution of this Guaranty.

    

    NOW
      THEREFORE, in consideration of the services to be performed, the payments to
      be
      made, and the obligations to be assumed by the Contractor pursuant to the
      Assignment Agreement, and further as an inducement to the Contractor to enter
      into and perform in accordance with the Assignment Agreement, the Guarantors
      hereby agree as follows:

    

    I.
      DEFINITIONS. In this Guaranty. the following frequently used terms are defined
      as
      set
      forth in this Section I:

    

    (a)
      Any
      terms used in this Guaranty which are defined in the Assignment Agreement will
      have
      the
      same meaning herein as is ascribed to such term in the Assignment
      Agreement.

    

    (b)
      The
      "Contract Documents" are, collectively, the Assignment Agreement, ~e Security
      Agreement
      and Financing Statement between the Contractor and the Distributor dated this
      day. The Subordination Agreement between the Contractor, the Distributor, and
      the Senior Lender dated this day, and this Guaranty.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)
      The
      "Obligations” mean all of the obligations of the Distributor and each of the
      Guarantors pursuant to the Contract Documents.

    

    (d)
      The
      term "Guarantors" means all of the undersigned, jointly and severally; and
      the
term
      "Guarantor" means each of the undersigned. individually and
      collectively.

    

    (e)
      A
      ''Default'' means the occurrence of an event of default by the Distributor
      pursuant to
      or in
      accordance with the provisions of any of the Contract Documents or the failure
      of the Guarantors (or any of them) to perform any covenant agreement contained
      in this Guaranty or if any representation or warranty contained in this Guaranty
      is found to have been untrue, incomplete or misleading in any material respect
      when furnished.

    

    2.
      GUARANTY.
      The
      Guaranty supercedes that certain Guaranty and Pledge Agreement
      dated August 20, 2001, by the Guarantor in favor of the Contractor. The
      Guarantors jointly and severally, unconditionally and irrevocably, guaranty
      to
      Contractor the full and prompt payment and performance when due, whether at
      maturity or earlier (by reason of acceleration) and at all times thereafter,
      of
      all of the Obligations, and the undersigned further agree to pay all costs
      and
      expenses including, without limitation, all court costs and reasonable
      attorneys' fees and expenses paid or incurred by the Contractor in endeavoring
      to collect all or any part of the Obligations from or in prosecuting any action
      against, Distributor or any of the Guarantors. Notwithstanding anything
      contained in this Guaranty, the Contractor shall release the Guarantor and
      terminate this Guaranty if the
      Contractor obtains a replacement guaranty from a third party which is acceptable
      to the Contractor in its sole and absolute discretion.

    

    3.
      TERMS
      AND CONDITIONS. (a) Subject to the provisions of the Contract Documents,
      Contractor shall have the exclusive right to determine the application of
      payments and credits, if any, received by Contractor from the undersigned,
      the
      Distributor, the Senior Lender, and any Customer.

    

    (b)
      Contractor is authorized, without notice or demand and without affecting the
      liability of
      any of
      the Guarantors, from time to time to (i) renew, extend, accelerate or otherwise
      change the time for payment or performance of, or other terms relating to,
      the
      Obligations or any of them, or otherwise modify, amend or change the terms
      of
      the Contract Documents or any of them, or any other agreement, document or
      instrument now or here after executed by the Distributor and delivered to
      Contractor: (ii) accept partial payments on or performance of the Obligations;
      and (iii) settle, release, compromise, collect or otherwise liquidate the
      Obligations in any manner, without affecting or impairing the Obligations of
      the
      undersigned. 

    

    (c)
      At
      any time after a Default, Contractor may at its discretion, upon notice to
      the
Guarantors
      and regardless of the acceptance of any security or collateral for the payment.
      appropriate
      and apply toward the payment and satisfaction of the Obligations (i) any
      indebtedness due or to become due from Contractor to one or more of the
      Guarantors; and (ii) any monies, credits or other property belonging to one
      or
      more of the Guarantors, at any time held by Contractor on deposit or otherwise.
      

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)
      Contractor shall not be required to take any steps to preserve any rights
      against prior parties
      (if any) to or in any of the Obligations.

    

    (e)
      The
      Guarantors agree that to the extent that the Distributor makes a payment(s)
      to
Contractor,
      which payment(s) are subsequently invalidated, declared to be fraudulent or
      preferential, set aside and/or required to be repaid to a trustee, receiver
      or
      any other party under any bankruptcy act, state or federal law, common law
      or
      equitable case, then to the extent of such payment or repayment, the obligation
      intended to be satisfied shall be renewed and continued in full force and effect
      as if said payment had not been made, and the Guarantors shall, upon demand
      by
      Contactor, immediately satisfy such obligation in full in accordance with the
      terms of this Guaranty. The Guarantors further agree that any and all claims
      of
      the Guarantors againstt4e Distributor or against its properties, arising by
      reason of any loan, advance, inves1ment or other payment by the undersigned
      to
      Contractor shall be subordinate and subject in right of payment to the prior
      payment, in full, of all sums due pursuant to the Obligations. 

    

    (f)
      Each
      Guarantor assumes responsibility for keeping himself, herself or itself informed
      of the financial condition of the Distributor and of all other circumstances
      bearing upon the risk of Default. Contractor shall have no duty to advise the
      Guarantors of information known to Contractor regarding such condition or
      circumstances. 

    

    (g)
      No
      delay on the part of Contractor in the exercise of any right or remedy shall
      operate as
      a
      waiver or constitute a discharge of any of the Guarantors' obligations under
      this Guaranty, and no single or partial exercise by Contractor any right or
      remedy shall preclude the further exercise to any extent; nor shall any
      modification 01:' waiver of any of the provisions of this Guaranty be binding
      upon Contractor except as expressly set forth in a writing duly signed and
      delivered by an authorized officer of Contractor. Con1:ractors failure at any
      time to require strict performance by the Distributor or any other party of
      any
      after provisions, warranties, terms and conditions contained in the Contract
      Documents shall not discharge any of the Guarantors' obligations under this
      Guaranty, nor shall it waive, affect or diminish any right of the Contractor
      at
      any time to demand strict performance and such right shall not be deemed to
      have
      been waived by any act or knowledge of Contractor unless such waiver is
      contained in an instrument in writing, signed by an officer of Contractor
      specifying such waiver. No waiver by Contractor any default shall operate as
      a
      waiver of either any other default or the same default on a future occasion.
      and
      no action or inaction by Contractor shall in any way affect or impair
      Contractor's rights or the obligations of the Guarantors under this Guaranty.
      The Guarantors agree that their obligations under this Guaranty will not be
      discharge except by complete performance of the Obligations. Any determination
      by a court of competent jurisdiction of the sums owing by the Distributor to
      Contractor shall be conclusive and binding on the Guarantors irrespective of
      whether any of the Guarantors was a party to the suit or action in which such
      determination was made.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.
      WARRANTIES AND REPRESENTATIONS. 

    

    Each
      of
      the guarantors jointly and severally, hereby represent and warrant to the:
      Contractor that:

    

    (a)
      The
      execution, delivery, and performance by each Guarantor of this Guaranty will
      not
      violate any provision of law, any order of any court or other agency of
      government, or any agreement or other instrument to which any of the Guarantors
      is a party or by which any of the Guarantors is bound or be in conflict with,
      result in a breach of or constitute (with due notice or lapse of time, or both)
      a. default under any such agreement or oilier instrument, or result in the
      creation or imposition of any lien, charge, or encumbrance of any nature
      whatsoever upon any of the property or assets of any Guarantor, except as
      contemplated by the provisions of this Guaranty; and

    

    (b)
      This
      Guaranty constitutes the legal, valid and binding obligation of each of the
      Guarantors
      and is enforceable against each of the Guarantors in accordance with the terms
      here of.

    

    5.
      DEFAULT. (a) Upon and during the continuance of any Default, Contractor
may,
      at
      its sole election, proceed directly and at once, without notice, against one
      or
      more of the Guarantors to collect and recover the full amount or any portion
      of
      the Obligations, without first proceeding against the Distributor or any other
      Guarantor, or any other party or any other person, firm or corporation. All
      of
      the above rights and powers may be exercised by Contractor without liability,
      except the obligation to account for property actually received.

    

    (b)
      Any
      right to setoff exercised by Contractor shall be deemed to have been exercised
      immediately
      on the occurrence of a Default, even though such set-off is made or entered
      on
      the books of Contractor at any subsequent time.

    

    6.
      INDEMNIFICATION. The Guarantors will at all times, now and here after, jointly
      and
      severally, indemnify and hold Contractor harmless from and against all loss
      or
      damage arising in connection with this Guaranty and against all claims,
      liability, demands, actions or suits, and all liabilities, payments, costs,
      charges and expenses including, without limitation, attorneys fees and costs
      charges by Contractor on account of or in connection with this Guaranty or
      the
      transactions or assertions of rights contemplated or permitted
      hereunder.

    

    7.
      MISCELLANEOUS. (a.) This Guaranty shall be binding upon the Undersigned
and
      upon
      the heirs, executors, successors and assigns of the undersigned and shall insure
      to the benefit of Contractor's successors and assigns; all references to the
      Distributor and to the undersigned
      shall be deemed to include their respective successors, assigns, participants,
      receivers or trustees (as the case may be).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
      This
      Guaranty embodies the entire understanding of the parties pertaining to the
      subject
      matter hereof and shall constitute a continuing agreement applicable to future
      as well as existing transactions between the Contractor and the
      Distributor.

    

    (c)
      THIS
      GUARANTY HAS BEEN DELIVEREDATANDSHALL BE DEEMED TO
      HAVE
      BEEN MADE IN NORTH BROOK, Illinois, AND SHALL BE INTERPRETED, AND THE RIGHTS
      AND
      LIABILITIES OF THE PARTIES DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE
      OF ILLlNOIS, AND AS PART OF THE CONSIDERATION FOR CONTRACTOR'S PERFORMANCE
      PURSUANT TO THE CONTRACT DOCUMENTS, THE UNDERSIGNED CONSENT TO THE JURISDICTION
      OF ANY LOCAL, STATE ORFEDERAL COURT LOCATED WITHIN THE STATE OF ILLINOIS, AND
      FURTHER CONSENT THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR
      REGISTERED MAIL DIRECTED TO THE UNDERSIGNED AT THE ADDRESS STATED HEREIN AND
      SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETEDTWO (2) DAYS AFTER THE SAME
      SHALL
      HAVE BEEN POSTED. THE UNDERSIGNED FURTBER CONSENT TO THE GRANTING OF SUCH LEGAL
      OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

    

    (d)
      The
      headings used in this Guaranty are for the convenience of the reader only;
      such
headings
      constitute no part whatsoever of the agreement between the parties.

    

    (e)
      No
      invalidity, irregularity or unenforceability of the Obligations (or any of
      them)
hereby
      secured Shall affect impair or be a defense to any provision contained in this
      Guaranty. If any term, condition or provision of this Guaranty is determined
      to
      be invalid or unenforceable, such determination shall not affect the validity
      or
      enforceability of any other terms, condition or provision of this
      Guaranty.

    

    (f)
      If
      this Guaranty shall differ or conflict in terms with any of the Contract
      Documents, the
      agreement which gives Contractor the greater right, as determined by Contractor
      shall prevail

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