Document:

EXHIBIT 10.12

                               SECURITY AGREEMENT
                               ------------------

     THIS SECURITY AGREEMENT ("Agreement") is executed made effective on July
24, 2001, by and between WILLIAM R. PARKER, an individual ("Parker"), and EMB
Corporation, a Hawaii corporation ("EMB"). Capitalized terms not otherwise
defined in this Agreement shall have the meanings ascribed to them in the Note
(as hereinafter defined).

     WHEREAS, EMB entered into a Purchase Agreement with Parker on July 23, 2001
(the "Purchase Agreement"), for the acquisition by EMB from Parker of all of the
common stock of Saddleback Investment Services, Inc. ("Saddleback"); and

     WHEREAS, in connection with such Purchase Agreement, EMB has executed a
Secured Promissory Note of even date herewith in favor of Parker in the
principal amount of One Hundred Thousand Dollars ($100,000.00) (the "Note"), the
terms of which are incorporated herein by reference and made a part hereof; and

     WHEREAS, to secure payment and performance of EMB's duties and obligations
under the Note, EMB has agreed to grant Parker a continuing security interest in
the 10,000 shares of common stock of Saddleback that were acquired by the
Company pursuant to the Purchase Agreement, subject to the terms and conditions
set forth herein and in the Note;

     NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, EMB and Parker,
intending to be legally bound hereby, agree as follows:

     1.   Security Interest.

          (a) To secure payment and performance of EMB's "Obligations" (as
hereinafter defined) under the Note, EMB hereby pledges, assigns, transfers and
grants to Parker a continuing security interest in the following: Ten thousand
(10,000) shares of common stock of Saddleback together with the dividends,
rights, options, issues, products, proceeds and profits therefrom (collectively,
the "Collateral Shares"). The interest of Parker in the Collateral Shares is a
first priority lien and security interest in and to the Collateral Shares. In
addition to a stock certificate representing the Collateral Shares, EMB shall
deliver to the Collateral Agent EMB's undated assignment separate from such
certificate executed in blank, together with such other assignments, agreements,
instruments and documents (collectively, the "Assignment Documentation") as
Parker from time to time may reasonably require and as may be necessary or
expedient to facilitate the transfer thereof. The Collateral Shares and the
Assignment Documentation shall be held and distributed by the Collateral Agent
in accordance with the terms and conditions of the Note and this Agreement; and

          (b) The Collateral Shares referenced by Subparagraph (a)(i) of this
Section, shall hereinafter also be referred to as the "Collateral".

          (c) EMB expressly understands and agrees that the security interest
granted to Parker hereunder shall remain as security for payment and performance
of EMB's Obligations, whether now existing or that may hereafter be incurred by
future advances or otherwise. Notice of the continuing grant of these security

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interests shall, therefore, not be required to be stated on the face of any
document representing any such Obligations, nor otherwise identify such document
as being secured hereby.

     2.   Definitions. The following terms shall have the following meanings:

          (a) "Loan Documents" means this Agreement, and any and all agreements,
notes, guaranties, instruments, security agreements, mortgages, assignments, and
documents evidencing, governing, securing or relating in any way to any of the
Obligations, including without limitation, that certain Note in the original
principal amount of $100,000.00 from EMB in favor of Parker of even date
herewith and that certain Form UCC-1 Financing Statement executed by the parties
of even date herewith; and

          (b) "Obligations" means any and all indebtedness, obligations,
liabilities, contracts, indentures, agreements, warranties, covenants,
guaranties, representations, provisions, terms and conditions of whatever kind
with regard to the Loan Documents, whether due or to become due, absolute or
contingent, now existing or hereafter incurred or arising, whether or not
otherwise guaranteed or secured and whether evidenced by any note or draft or
documented on the books and records of Parker or otherwise on open account,
including without limitation, all costs, expenses, fees, charges and attorneys'
and other professional fees incurred by Parker in connection with, involving or
related to the administration, protection, modification, collection,
enforcement, preservation or defense of any of Parker's rights with respect to
any of the Obligations, the Collateral or any agreement, instrument or document
evidencing, governing, securing or relating to any of the foregoing, including
without limitation, all costs and expenses incurred in inspecting or surveying
mortgaged real estate, if any, or conducting environmental studies or tests, and
in connection with any "workout" or default resolution negotiations involving
legal counsel or other professionals and any renegotiation or restructuring of
any of the Obligations.

     3.   EMB's Representations and Warranties. EMB makes the following
representations and warranties hereunder and upon which Parker relies:

          (a) Authority. EMB has full power and authority to enter into and
perform the Obligations under this Agreement, to execute and deliver the Loan
Documents and to incur the obligations provided for herein and therein, all of
which have been duly authorized by all necessary and proper corporate action. No
other consent or approval or the taking of any other action is required as a
condition to the validity or enforceability of this Agreement or any of the
other Loan Documents.

          (b) Binding Agreements. This Agreement and the other Loan Documents
constitute the valid and legally binding obligations of EMB, enforceable in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.

          (c) No Conflicting Law or Agreements. The execution, delivery and
performance by EMB of this Agreement and the other Loan Documents: (i) do not
violate any provision of the bylaws of EMB, (ii) do not violate any order,
decree or judgment, or any provision of any statute, rule or regulation, (iii)
do not violate or conflict with, result in a breach of or constitute (with
notice or lapse of time, or both) a default under any mortgage, indenture,

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contract or other agreement to which EMB is a party, or by which any of EMB's
properties are bound, or (iv) except for the lien granted to Parker hereunder,
do not result in the creation or imposition of any lien, charge or encumbrance
of any nature whatsoever upon any property or assets of EMB.

          (d) Collateral. EMB is and shall continue to be the sole owner of the
Collateral free and clear of all liens, encumbrances, security interests and
claims, except for the liens granted to Parker hereunder. EMB is fully
authorized to sell, transfer, pledge and/or grant a security interest in the
Collateral to Parker. All documents and agreements related to the Collateral
shall be true and correct and in all respects what they purport to be; all
signatures and endorsements that appear thereon shall be genuine and all
signatories and endorsers shall have full capacity to contract. None of the
transactions underlying or giving rise to the Collateral shall violate any
applicable state or federal laws or regulations. All documents relating to the
Collateral shall be legally sufficient under such laws or regulations and shall
be legally enforceable in accordance with their terms. EMB agrees to defend the
Collateral against the claims of all persons other than Parker, except as
expressly reserved or otherwise provided herein.

     4.   Covenants of EMB. EMB covenants and agrees that from the date
hereof until full and final payment and performance of all Obligations EMB
shall:

          (a) Financial Information. Deliver to Parker promptly upon Parker's
request, such documentation and information about EMB's financial condition,
business and/or operations as Parker may, at any time and from time to time,
reasonably request, including without limitation, monthly unaudited interim,
quarterly unaudited interim and annual audited or unaudited financial
statements, and such other records and documentation as shall reasonably related
to Parker's interest as a secured creditor of EMB under the terms of the Note.

          (b) Litigation. Promptly advise Parker of the commencement or threat
of litigation, including arbitration proceedings and any proceedings before any
governmental agency, or any other legal action (collectively, "Litigation"),
which is instituted against EMB in connection with the Collateral or which might
jeopardize the first lien of Parker as against the Collateral.

          (c) Maintenance of Existence. Maintain its corporate existence, and
comply with all valid and applicable statutes, rules and regulations, and
maintain its properties in good repair, working order and operating condition.
EMB shall immediately notify Parker of any event causing material loss in the
value of its assets.

          (d) Collateral Duties. Do whatever Parker may reasonably request from
time to time by way of obtaining, executing, delivering and filing financing
statements, assignments, landlord's or mortgagee's waivers, and other notices
and amendments and renewals thereof, and EMB will take any and all steps and
observe such formalities as Parker may reasonably request in order to create and
maintain a valid and enforceable first lien upon, pledge of, and first priority
security interest in, any and all of the Collateral. Parker is authorized to
file financing statements without the signature of EMB and to execute and file
such financing statements on behalf of EMB as specified by the UCC to perfect or
maintain Parker's security interest in all of the Collateral.

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          (e) Notice of Default. Provide to Parker, not later than five (5)
business days after becoming aware of the occurrence or existence of an Event of
Default (as defined in the Note) or a condition which would constitute an Event
of Default but for the giving of notice or passage of time on both, notice in
writing of such Event of Default or condition.

          (f) Maintenance of Current Public Information. EMB agrees to use its
best efforts to make available "adequate current public information" concerning
itself within the meaning of Rule 144(c) promulgated under the Securities Act of
1933, as amended. Notwithstanding anything herein to the contrary, this covenant
shall continue until the 15th month after the payment in full of the Obligations
and shall survive the termination of this Agreement.

     5.   Additional Rights of Parker.

          (a) Upon the occurrence of an Event of Default as defined in the Note,
EMB hereby constitutes and appoints Parker (with full power of substitution) its
true and lawful attorney and agent in fact to take any or all of the actions
described below in Parker's or EMB's name and at EMB's expense, and EMB hereby
ratifies and confirms all actions so taken:

              (i) Evidence of Liens. Parker may execute such financing
statements and other documents and take such other actions as Parker deems
reasonably necessary or proper in order to create, perfect or continue the
security interest and other liens provided for by this Security Agreement, and
Parker may file the same (or a photocopy of this Security Agreement or of any
financing statement signed by EMB) in any appropriate governmental office.

              (ii) Preservation of Collateral. Parker may take any and all
action that Parker deems reasonably necessary or proper to preserve his interest
in the Collateral, including, without limitation, the payment of debts of EMB,
which, if unpaid, might materially impair the Collateral or Parker's security
interest therein; or the payment of taxes, assessments or other liens thereon.
All sums so expended by Parker shall be added to the Obligations, shall be
secured by the Collateral, and shall be payable thirty (30) days following
Parker's written demand.

              (iii) Parker's Right to Cure. In the event EMB fails to perform
any of its obligations, then Parker may perform the same but shall not be
obligated to do so. All sums so expended by Parker shall be added to the
Obligations, shall be secured by the Collateral, and shall be payable thirty
(30) days following Parker's written demand.

          (b) EMB covenants and agrees that the power of attorney granted by the
foregoing subsection (a) is coupled with an interest and shall be irrevocable so
long as this Security Agreement is in force; that said powers are granted solely
for the protection of Parker's interest and that Parker shall have no duty to
exercise any thereof; that the decision whether to exercise any of such powers,
and the manner of exercise, shall be solely within Parker's reasonable
discretion.

     6.   Remedies of Parker in Respect of the Collateral Shares.

          (a) Upon the occurrence of any Event of Default (as defined in the
Note), Parker shall have the right, following expiration of any time period
during which EMB may have the right to cure such default, to declare all of the

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Obligations to be immediately due and payable and shall then, in respect of the
Collateral Shares, have the rights and remedies of a secured party under the
Uniform Commercial Code or under any other applicable law, including, without
limitation to take possession of the Collateral Shares. Following an Event of
Default, Parker shall have the right, following expiration of any time period
during which EMB may have the right to cure such default, to immediately make
written demand upon the Collateral Agent to deliver the Collateral Shares and
the Assignment Documentation to Parker. Not later than five (5) days after the
Collateral Agent's receipt of such written demand, the Collateral Agent shall
make delivery, in accordance with Parker's demand, of the certificate
representing the Collateral Shares together with the Assignment Documentation in
blank or completed as Parker shall have specified unless, prior to the end of
such five (5) day period, EMB shall have given written notice to the Collateral
Agent and to Parker in good faith disputing the occurrence of the Event of
Default and directing the Collateral Agent to withhold the delivery of the
Collateral Shares and the Assignment Documentation. Upon receipt of such written
notice from EMB, the Collateral Agent shall not deliver the Collateral Shares
and the Assignment Documentation to any person other than into court until the
controversy shall have been settled either by an agreement or by a final
judgment of a court of competent jurisdiction. Each party shall be entitled to
reimbursement by the other of its reasonable attorneys fees and costs and other
reasonable expenses incurred in the event that a court of competent jurisdiction
shall determine in its favor (that is, as to Parker, that an Event of Default
shall have occurred following EMB's dispute of same; and that is, as to EMB,
that an Event of Default shall not have occurred), notwithstanding a party's
good faith in asserting the existence of an Event of Default (in the case of
Parker) or the absence thereof (in the case of EMB).

          (b) Upon the delivery to Parker of the Collateral Shares and the
Assignment Documentation pursuant to Section 6(a) above, Parker may date any of
the Assignment Documents and participate as the owner of the Collateral Shares
in the election of directors and may exercise such other rights as a stockholder
of Saddleback as he may, in his sole and absolute discretion, see fit. In
addition to the foregoing remedies, Parker may be the purchaser of any or all of
the Collateral Shares sold at any public or private sale and thereafter hold the
same, absolutely, free and clear of and from any and all claims or rights of any
kind whatsoever. EMB hereby acknowledges and agrees that ten days' notice shall
be deemed commercially reasonable notice with respect to the time and place of
any public sale or the time after which any private sale or any other intended
disposition of the Collateral Shares is to be made, and, in the case of any
notice to EMB of a private sale, such notice shall advise EMB of the terms and
conditions of the sale as are then known to Parker. Recognizing the possibility
that there may be no adequate market for the Collateral Shares or that the sale
of the Collateral Shares may require registration under the Securities Act of
1933 or qualification under other state or federal laws relating to securities,
EMB specifically authorizes a private sale of all or any of the Collateral
Shares without attempts by Parker to approach more than one possible purchaser.

          (c) The proceeds of any sale of any of the Collateral Shares shall be
applied to expenses, including, without limitation, attorney's fees to the
fullest extent allowable by law, reasonably incurred in connection with such
sales, the collection of the Note, and the prosecution or defense of any
proceeding related thereto, and then to the payment or satisfaction of the Note.
In the event the proceeds of any sale or other disposition of the Collateral
hereunder, are insufficient to pay all of the Obligations in full, EMB will be
liable for the deficiency, together with interest thereon, at the maximum rate
allowable by law, and the costs and expenses of collection of such deficiency,
including (to the extent permitted by law) without limitation, attorney's fees,

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expenses and disbursements. From and after the occurrence of an Event of
Default, and the expiration of any time period during which EMB may have the
right to cure such default, and unless and until the Note has been fully paid
and satisfied, Parker shall be entitled to act with respect to the Collateral
Shares in all matters or events, and to exercise all rights and privileges, to
the maximum extent permitted by law, as an absolute owner of the Collateral
Shares and to hold all proceeds from the sale thereof as part of the Collateral
hereunder.

     7.   Costs and Expenses. Upon the occurrence of an Event of Default as
defined in the Note, EMB agrees to pay on demand all of Parker's reasonable
expenses in collecting, enforcing, safeguarding, holding and disposing of
Collateral, and all other losses, costs and expenses incurred by Parker in
connection with the enforcement of this Security Agreement, the Note or the Loan
Documents, or in connection with legal advice relating to the rights or
responsibilities of Parker under any thereof (including in each case, without
limitation, the reasonable fees and out-of-pocket expenses of attorneys,
accountants and appraisers).

     With respect to any amount advanced by Parker and required to be reimbursed
by EMB pursuant to any provision of this Security Agreement, EMB shall also pay
Parker interest on such amount at the rate from time to time applicable to
overdue principal of the Note from the date on which EMB receives written notice
of the expenditure to the date of reimbursement. EMB's obligations under this
Section 7 shall survive payment of the Note and the other Obligations.

     8.   Waivers; Etc. EMB hereby waives presentment, demand, notice, protest
and all other demands and notices in connection with this Agreement or the
enforcement of Parker's rights hereunder or in connection with any Obligations
or any Collateral; and consents to and waives notice of: (a) the granting of
renewals, extensions of time for payment or other indulgences to EMB or to any
account debtor in respect of any account receivable of EMB; (b) substitution,
release or surrender of any Collateral; (c) the addition or release of persons
primarily or secondarily liable on any of the Obligations or on any account
receivable or other Collateral; and (d) the acceptance of partial payments on
any Obligations or on any account receivable or other Collateral and/or the
settlement or compromise thereof. No delay or omission on the part of Parker in
exercising any right hereunder shall operate as a waiver of such right or of any
other right hereunder. Any waiver of any such right on any one occasion shall
not be construed as a bar to or waiver of any such right on any such future
occasion. EMB'S WAIVERS UNDER THIS SECTION HAVE BEEN MADE VOLUNTARILY,
INTELLIGENTLY, KNOWINGLY, WITHOUT DURESS AND ONLY AFTER EXTENSIVE CONSIDERATION
OF THE RAMIFICATIONS THEREOF.

     9.   Termination; Assignment; Etc. This Agreement and the security interest
in the Collateral created hereby shall terminate when all of the Obligations
have been paid and finally discharged in full. No waiver by Parker or by any
other holder of the Obligations of any default shall be effective unless in
writing signed by Parker nor shall any waiver granted on any one occasion
operate as a waiver of any other default or of the same default on a future
occasion. In the event of a sale or assignment by Parker of all or any of the
Obligations held by Parker, Parker may not assign or transfer its respective
rights and interests under this Agreement in whole or in part to the purchaser
or purchasers of such Obligations; accordingly, such purchaser or purchasers
shall become vested with all of the powers and rights hereunder Further, no sale
or assignment shall act to release or discharge, in whole or in part, Parker
from any liability or responsibility hereunder with respect to the rights and
interests so assigned.

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     10.  Miscellaneous.

          (a) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon Parker and EMB and their respective successors and
assigns.

          (b) Changes. Changes in or additions to this Agreement may be made or
compliance with any term, covenant, agreement, condition or provision set forth
herein may be omitted or waived (either generally or in a particular instance
and either retroactively or prospectively), only upon written consent of EMB and
Parker.

          (c) Notices. All notices, requests, consents and demands shall be made
in writing and shall be delivered by facsimile to the fax number set forth below
or by hand, sent via a reputable overnight courier service or mailed by first
class certified or registered mail, return receipt requested, postage prepaid to
EMB;

          If to EMB:

          EMB Corporation
          5075 Warner Avenue
          Suite B
          Attention:  Chief Executive Officer
          (Fax Number:  714-377-2123)

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

          Bryan Cave LLP
          2020 Main Street, Suite 600
          Irvine, California 92614
          Attention:  Randolf W. Katz, Esquire
          (Fax Number:  949-223-7100)

          If to Parker:

          William R. Parker
          835 South Broadway
          Santa Ana, California 92704
          (Fax Number:  714-513-4179)

          (d) Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of California notwithstanding any conflict-of-laws doctrines of such
state or other jurisdictions to the contrary, and without the aid of any canon,
custom or rule of law requiring constructions against the draftsman. The parties
agree to submit to the jurisdiction and venue of the state and federal courts of
Orange County, California, for the purposes of resolving disputes hereunder. and
authorize any such action to be instituted and prosecuted exclusively in the
Superior Court of the State of California or, if appropriate, the United States
District Court for the Central District of California.

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          (e) Breach. EMB agrees to pay all costs of enforcement, including
reasonable attorney's fees and legal expenses incurred by Parker in the event
that EMB fails to comply with or otherwise breaches this Agreement.

          (f) Severability. If any provision of this Agreement is held invalid
or unenforceable, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions of this Agreement, all of
which are declared severable.

          (g) Headings. The headings used in this Agreement are solely for
convenience of reference and shall not affect its interpretation.

          (h) Words and Phrases. Words and phrases such as "to this Agreement,"
"herein," "hereinafter," "hereto," "hereof," "hereby," and "hereunder," when
used with reference to this Agreement, refer to this Agreement as a whole,
unless the context otherwise requires.

          (i) Gender and Number. Wherever from the context of this Agreement it
appears appropriate, each term stated in either the singular or the plural shall
include the singular or the plural, and pronouns sated in either the masculine,
feminine or neuter gender, shall include the masculine, feminine and neuter.

          (j) Conflict. In the event of any conflict between the terms of any of
the Loan Documents, including, but not limited to, this Agreement and the Note,
the terms of the Note shall control.

          (k) Entire Understanding. Except as expressly reserved or otherwise
provided herein, this Agreement contains the entire understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained. The
express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof.

          (l) Jury Waiver. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY COURT
IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN
ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART
AND/OR THE ENFORCEMENT OF ANY OF THE PARTIES' RESPECTIVE RIGHTS AND REMEDIES,
INCLUDING WITHOUT LIMITATION, TORT CLAIMS. THE PARTIES ACKNOWLEDGE THAT EACH
MADE THIS WAIVER VOLUNTARILY, INTELLIGENTLY, KNOWINGLY, WITHOUT DURESS AND ONLY
AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS THEREOF.

          (m) Counterparts. This Agreement may be executed in any number of
counterparts, including separate counterparts, all of which when taken together,
shall constitute one instrument.

                       [SIGNATURES ON THE FOLLOWING PAGE]

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                            By:  /s/  William R. Parker
                                               --------------------------------
                                                      William R. Parker

                                            EMB CORPORATION

                                            By:  /s/  James E. Shipley
                                               --------------------------------
                                                      James E. Shipley
                                                      Chairman and Chief
                                                      Executive Officer

                                       9EXHIBIT 10.13

                           COLLATERAL AGENT AGREEMENT
                           --------------------------

     This Collateral Agent Agreement (the "Collateral Agreement") is made and
entered into and effective as of the 24th day of July, 2001 (the "Effective
Date") by and among William R. Parker, an individual ("Parker"), EMB
Corporation, a Hawaii corporation ("EMB"), and that individual set forth below
as the Collateral Agent. Parker and EMB are sometimes collectively referred to
herein as "Parties" and individually as "Party". Capitalized terms not otherwise
defined in this Agreement shall have the meanings ascribed to them in the Note
(as hereinafter defined).

                                    RECITALS
                                    --------

     A.   As provided for in the Purchase Agreement by and between EMB and
          Parker dated July 23, 2001 (the "Purchase Agreement") whereby EMB
          acquired from Parker all of the common stock of Saddleback Investment
          Services, Inc., ("Saddleback"), EMB has executed a Secured Note dated
          as of the Effective Date in favor of Parker (the "Note"), pursuant to
          which EMB has agreed to pay Parker the principal amount of
          $100,000.00.

     B.   The Note provides, among other things, that, the Obligations of EMB
          thereunder shall be secured by an aggregate of 10,000 shares of the
          common stock of Saddleback acquired by EMB pursuant to the Purchase
          Agreement (the "Collateral Shares"), to be released to Parker under
          the terms of the Note and the Security Agreement of even date herewith
          that is being executed in connection with the execution of this
          Collateral Agreement (the "Security Agreement").

     NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Parker and EMB, intending to be
legally bound hereby, agree as follows:

     1.   Appointment of Collateral Agent; Commencement and Termination.
          --------------------------------------------------------------

          (a)  EMB and Parker hereby nominate, constitute and appoint Randolf W.
               Katz, Esq. of Bryan Cave LLP as Collateral Agent (the "Collateral
               Agent") upon the terms and conditions set forth in this
               Agreement, the Note and the Security Agreement. It is intended by
               the Parties and the Collateral Agent that, to the extent required
               in order to perfect Parker's first lien position in the
               Collateral Shares, the Collateral Agent shall be deemed an agent
               of Parker.

          (b)  EMB shall deliver to the Collateral Agent contemporaneously with
               the execution of this Agreement a certificate or certificates
               representing the Collateral Shares as provided for under the
               terms of the Security Agreement. The Collateral Shares shall not
               be registered under the Securities Act of 1933 or any state blue
               sky law and shall bear a restrictive legend so indicating.

          (c)  The Collateral Agent agrees to act in accordance with the
               provisions of the Security Agreement, the Note, and this
               Collateral Agreement. The Collateral Agent shall be reimbursed by
               EMB promptly upon submission of an invoice or invoices on a

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               monthly basis for all of the Collateral Agent's fees at his
               standard hourly rates and out-of-pocket expenses, if any,
               incurred in connection with this Collateral Agreement.

     2.   General Instructions. Unless and until any of the events or
contingencies specified in this Collateral Agreement shall occur, the Collateral
Agent shall hold and retain in his possession at all times all of the Collateral
Shares.

     3.   Disposition of the Collateral Shares. The disposition of the
Collateral Shares shall be governed by the Security Agreement.

     4.   Receipts. Any of the Parties or the Collateral Agent may, at its
option, demand a receipt as a condition of the delivery of any payments, stock
certificates, securities or documents under this Collateral Agreement

     5.   Liability of the Collateral Agent. The Collateral Agent (which term
for purposes of this Section 5 shall refer to any and all affiliates of the
Collateral Agent) shall not be liable for any error of judgment or for any act
done or omitted by him in good faith, or for anything he may in good faith do or
refrain from doing in connection with this Agreement; nor for any negligence
other than his gross negligence; nor shall the Collateral Agent be answerable
for the default or misconduct of his agents, attorneys or employees, if they be
selected with reasonable care; nor will any liability be incurred by the
Collateral Agent, if, in the event of any dispute or question as to his duties
or obligations under this Agreement, he acts in accordance with advice of his
legal counsel. The Collateral Agent is authorized to act upon any document
believed by him to be genuine and to be signed by one or more of the Parties,
and will incur no liability in so acting.

     6.   Resignation or Removal of Collateral Agent. The Collateral Agent may
resign at any time, upon thirty (30) days' prior written notice to Parker and
EMB, and may be removed by the mutual consent of Parker and EMB, upon at least
thirty (30) days' prior notice to the Collateral Agent. Prior to the effective
date of the resignation or removal of the Collateral Agent, or any successor
Collateral Agent, Parker and EMB shall appoint a successor collateral agent to
hold the Collateral Shares then held by the Collateral Agent, and any such
successor collateral agent shall execute and deliver to the predecessor
collateral agent and to Parker and EMB an instrument accepting such appointment,
and thereupon such successor collateral agent shall, without further act, become
vested with all the rights and powers of the predecessor collateral agent as if
originally named in this Collateral Agreement, and shall thereafter become
subject to the duties of the predecessor collateral agent. If Parker and EMB are
unable to agree on a successor collateral agent by the effective date of the
resignation or removal of the Collateral Agent, or any successor collateral
agent, the Collateral Shares then held by the Collateral Agent or such successor
collateral agent shall be deposited with a party that shall be selected by EMB
provided that EMB shall provide a written opinion of its legal counsel (who
shall be reasonably acceptable to Parker) that the holding of the Collateral
Shares by such party shall permit Parker to obtain and maintain a valid
perfected first lien position in the Collateral Shares.

     7.   Governing Document. In the event that any terms, provisions, rights,
duties, or obligations set forth in this Collateral Agreement should be in
conflict with any terms, provisions, rights, duties, or obligations set forth in
the Note, the Security Agreement or any agreements collateral thereto, the

                                       2

<PAGE>

terms, provisions, rights, duties, or obligations set forth in the Security
Agreement shall control and the conduct of the Collateral Agent shall be
governed accordingly.

     8.   Notices. Any notice required to be given under this Collateral
Agreement or which may be given under this Collateral Agreement to any party or
the Collateral Agent shall be in writing and shall be deemed given: (a) upon
receipt if delivered or sent by identified telecopier; or (b) one (1) business
day after being sent via reputable overnight courier, prepaid; (c) or three (3)
business days after being sent by registered or certified mail, postage prepaid,
return receipt requested; or (d) personally delivered to the Parties or the
Collateral Agent at their respective addresses or telecopy numbers set forth
below:

          If to Parker:                     William R. Parker
                                            835 South Broadway
                                            Santa Ana, California 92704
                                            (Fax Number: 714-513-4179)

          If to EMB:                        EMB Corporation
                                            Attention: Chief Executive Officer
                                            5075 Warner Avenue
                                            Suite B
                                            Huntington Beach, California 92649
                                            (Fax Number:  714-377-2123)

          With a copy to:                   Bryan Cave LLP
          (which shall not                  Attention:  Randolf W. Katz, Esq.
          constitute notice)                2020 Main Street, Suite 600
                                            Irvine, California 92614
                                            (Fax Number:  949-223-7100)

          If to Collateral Agent:           Bryan Cave LLP
                                            Attention:  Randolf W. Katz, Esq.
                                            2020 Main Street, Suite 600
                                            Irvine, California 92614
                                            (Fax Number:  949-223-7100)

or such other address as shall be furnished in writing by the appropriate
person, and any such notice or communication shall be deemed to have been given
as of the date so mailed.

     9.   Miscellaneous.

          (a)  Entire Agreement and Modification. Except as expressly reserved
               or otherwise provided herein, this Collateral Agreement
               constitutes the entire agreement between the Parties with regard
               to its subject matter. The Collateral Agent shall not be bound by
               any modification of this Collateral Agreement unless there is
               delivered to the Collateral Agent a written modification signed
               by the Parties. No such modification shall, without the prior
               written consent of the Collateral Agent, modify the provisions of
               this Collateral Agreement relating to the duties, obligations or
               rights of the Collateral Agent.

                                       3

<PAGE>

          (b)  Words and Phrases. Words and phrases such as "to this Agreement,"
               "herein," "hereinafter," "hereto," "hereof," "hereby,"
               "hereinbelow," and "hereunder" when used with reference to this
               Collateral Agreement, refer to this Collateral Agreement as a
               whole, unless the context otherwise requires.

          (c)  Severability. If any provision of this Collateral Agreement is
               determined by a court of competent jurisdiction to be invalid,
               void or unenforceable, the provisions that have not been held
               invalid or unenforceable shall remain in full force and effect
               and shall in no way be affected, impaired or invalidated.

          (d)  No Waiver. No failure or delay on the part of either the Parties
               of the Collateral Agent, or any of them, in exercising any right,
               power or privilege under this Agreement shall constitute a waiver
               thereof or of any other right, power or privilege under this
               Collateral Agreement.

          (e)  Gender and Number. Wherever from the context of this Collateral
               Agreement it appears appropriate, each term stated in either the
               singular or the plural, and pronouns stated in either the
               masculine, feminine or neuter gender, shall include the
               masculine, feminine and neuter.

          (f)  Consent to Jurisdiction; Choice of Law. Any and all claims by or
               against any of the Parties and/or the Collateral Agent shall be
               decided under the laws of the State of California, with venue in
               Orange County, California and each of the Parties and the
               Collateral Agent hereby consent to the exclusive jurisdiction of,
               and agrees not to commence any action in a court other than, the
               state and/or federal courts of the State of California for the
               purpose of making claims under this Collateral Agreement. Each
               Party and the Collateral Agent irrevocably and unconditionally
               waives any objection to the laying of venue in Orange County,
               California, in connection with any action that may be brought
               hereunder in the state and/or federal courts of the State of
               California, and hereby further irrevocably and unconditionally
               waives and agrees not to plead or claim in any such court that
               any such action brought in any such court has been brought in an
               inconvenient form.

          (g)  Benefit. This Collateral Agreement shall be binding upon and
               inure to the benefit of the Parties, the Collateral Agent, their
               respective, successors and assigns.

          (h)  Counterparts. This Collateral Agreement may be executed by the
               Parties and the Collateral Agent in separate counterparts, each
               of which when so executed and delivered shall be an original, but
               all such counterparts shall together constitute one and the same
               instrument. Each counterpart may consist of a number of copies
               hereof each signed by less than all, but altogether signed by the
               Collateral Agent and all of the Parties hereto.

                                       4

<PAGE>

IN WITNESS WHEREOF, the Parties and Collateral Agent have hereunto set their
hands and seals as of the date first above written.

EMB CORPORATION

By:  /s/  James E. Shipley
   -------------------------------
          James E. Shipley
          Chairman and CEO

                  "EMB"

/s/  William R. Parker
----------------------------------
     William R. Parker

                  "Parker"

/s/  Randolf W. Katz, Esq.
----------------------------------
     Randolf W. Katz, Esq.

        "Collateral Agent"

                                       5

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