Document:

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
SUCH REGISTRATION, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE FORM AND SUBSTANCE OF WHICH IS ACCEPTABLE TO THE
ISSUER.

     

    
      	
              MERRIMAN
      CURHAN FORD GROUP, INC.

            
	 
      	 
      	 
      
	
              SECURED
      PROMISSORY NOTE

            
	 
      
	
              $500,000                           

            	 
      	
              July
      31, 2009

            
	 
      	 
      	 
      
	 
      	 
      	
              San
      Francisco, California

            

    

     

    FOR VALUE RECEIVED, and upon
and subject to the terms and conditions set forth herein, MERRIMAN CURHAN FORD
GROUP, INC., a
Delaware corporation (“Issuer”), hereby promises to
pay to the order of_____________________________________, (together with
its permitted successors and assigns, “Holder”), the principal sum of
FIVE HUNDRED THOUSAND UNITED STATED DOLLARS (U.S. $500,000) on the Maturity
Date, together with interest as provided herein. 

     

    1.           Maturity
Date.  This
Note will mature, and be due and payable in full, on the earlier of (i) July 31,
2012; or (ii) 5 days following the written demand of Holder given in accordance
with the provisions of Section 10 hereof.  “Maturity Date” shall mean
the earlier to occur of (i) or (ii) above.

     

    2.           Interest.  From and after the
date hereof, all outstanding principal of this Note will bear interest on the
outstanding principal balance at the rate of Nine Percent (9.00%) per annum.
Outstanding interest shall be paid on the Maturity Date.  Upon the
occurrence and during the continuance of any Event of Default (as hereinafter
defined) under this Note, all outstanding principal of this Note shall bear
interest at the rate of Fifteen Percent (15%) per annum. All accrued but unpaid
interest on this Note shall be payable on the Maturity Date or on such earlier
date as this Note shall be prepaid.

    

    3.           Guaranty.

    

    (a)  The
undersigned, D. Jonathan Merriman, an individual (“Merriman”), and Peter V.
Coleman, an individual (“Coleman”) (each of Merriman and Coleman a “Guarantor”
and collectively the “Guarantors”), each having a financial interest in Issuer,
and benefiting from any financial accommodations provided or credit extended by
Holder to Issuer, each hereby, jointly and severally, absolutely and
unconditionally personally guaranties the payment by Issuer to Holder of all
amounts due and owing now, and from time to time hereafter, from Issuer to
Holder evidenced by this Note (collectively, the “Liabilities”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    (b)           Each
Guarantor further agrees that to the extent that Issuer makes a payment or
payments to Holder, which payment or payments, or any part thereof, are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to Issuer, their respective estates, trustees,
receivers or any other person or entity, then the Liabilities shall be
reinstated to the extent of and as of the date of such payment or
repayment.  Each Guarantor does hereby acknowledge that he or she may
have rights of indemnification, contribution, reimbursement or exoneration from
Issuer if either or both Guarantors assume or perform his or her obligations
under this Guaranty.  Each Guarantor understands the benefits of
having such rights.  These benefits include, but are not limited
to:  (i) a Guarantor’s right to the reimbursement from Issuer of all
money spent from the Guarantor’s performance of his obligations under this
guaranty, and (ii) a Guarantor’s right to succeed to any position held by Holder
after a Guarantor has fulfilled its obligations under this
Guaranty.  Each Guarantor, in further consideration of Holder
extending financial accommodations, however, knowingly and voluntarily waives
and relinquishes any right of indemnification, contribution, reimbursement, and
exoneration from Issuer which may arise, until such time as Holder has been
indefeasably paid in full with respect to the Liabilities  (it being
understood that, following such time, each Guarantor may exercise all rights it
may have against the Issuer with respect to payments under this
Guaranty) .

    

      (c)          This
Guaranty and the full and timely payment of the Liabilities shall be a
continuing, absolute and unconditional guaranty of payment and not of
collection, and the obligations of the Guarantors under this Guaranty may be
enforced directly against such Guarantor independently of and without proceeding
against Issuer or any other guarantor(s) or foreclosing any collateral pledged
to Holder.  Each Guarantor unconditionally and irrevocably waives each
and every defense which would otherwise impair, restrict, diminish, or affect
any of the Guarantors’ liabilities or obligations, or Holder’s rights or
remedies under this Guaranty, including, without limitation, set-off;
counterclaim; reduction of any obligation; or notice of acceptance, default,
dishonor, protest or presentment.  Without limiting the foregoing,
Holder shall have the exclusive right from time to time without impairing,
restricting, diminishing, or affecting any of the Guarantors’ liabilities or
obligations hereunder, and without notice of any kind to either Guarantor, to:
(i) provide additional extensions of credit and other financial accommodations
to Issuer; (ii) renew, extend, accelerate, modify, or otherwise change the terms
of any instrument, agreement, or document between Holder and Issuer; (iii)
accept partial payments on Issuer’s liabilities to Holder; (iv) take and hold
collateral or security to secure Issuer’s liabilities or obligations to Holder,
or take any other guaranty to the same; (v) in its sole discretion, apply any
such collateral or security, and direct the order or manner of sale thereof, and
the application of the proceeds thereof; and (vi) settle, release, compromise,
collect, or otherwise liquidate Issuer’s liabilities or obligations or exchange,
enforce, sell, lease, use, maintain, and release any collateral or security
therefor in any manner, without affecting or impairing any of the Guarantors’
liabilities or obligations hereunder.  Nothing contained in this
guaranty, except the full and timely payment of Issuer’s liabilities and
obligations to Holder, shall operate to discharge any of Guarantors’ liabilities
or obligations hereunder.

     

    
      
        
        

      

      
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    (d) Each
Guarantor agrees to pay all costs, expenses, and fees, including reasonable
attorneys’ fees, which may be incurred by Holder in enforcing this Guaranty or
otherwise protecting its rights.  This Guaranty shall be binding upon
each Guarantor, each Guarantor’s heirs, successors, assigns, and
representatives, and shall inure to the benefit of Holder, and each of its
successors, assigns, affiliates, and shareholders and may be assigned by Holder
without notice to the Guarantors.  No extension of time, failure to
exercise, and no delay in exercising, any right, power or privilege hereunder
shall operate as a waiver thereof.

     

    4.           Additional
Consideration; Warrants.  As
additional consideration to Holder, and a material inducement to Holder to loan
funds to the Issuer pursuant to this Note, and as consideration to the
Guarantors to guaranty this Note, Issuer agrees to issue warrants to purchase
Common Stock of the Company at an exercise price of $0.65 per share in the forms
attached hereto as Exhibit A (the ”Warrants”) in the following amounts: (i)
Warrants to purchase 1,162,791 shares of Common Stock to Holder; (ii) Warrants
to purchase 581,395 shares of Common Stock to Merriman; and (iii) Warrants to
purchase 581,395 shares of Common Stock to Coleman.

    

    5.        
  Cash
Prepayment. At
any time prior to repayment of this Note, the Issuer my elect to repay all or a
portion of the outstanding principal and any accrued interest on this Note in
cash without notice of prepayment.

    

    6.           No Rights
as a Shareholder.  This Note, as such, shall not entitle Holder to
any rights as a stockholder of Issuer.

      

    7.           Security. 
Repayment of this Note is secured by a security interest in substantially all
the assets of Issuer, other than (a) any
and all proceeds of insurance litigation and the Fidelity insurance policy; and
(b) any and all commercial tort claims held by Issuer, including, but not
limited to, the insurance litigation and the Fidelity
insurance,  pursuant to the security agreement attached hereto as
Exhibit B (the “Security Agreement”), together with any related collateral
assignments and such other necessary documents entered into by Issuer in favor
of Holder.  Issuer is also party to a security agreement (the “Prior
Security Agreement”) with holders of the notes issued pursuant to the
Subscription Agreement (the “Subscription Agreement”), by and among the Company
and the purchasers set forth on Schedule A thereto, dated June
1, 2009.  Issuer shall use commercially reasonable efforts to
secure the agreement of all parties to the Prior Security Agreement to
subordinate their security interest to Holder within 60 days of the date
hereof.

    

    8.      
   Transfer. 
Purchaser may transfer this Note in compliance with applicable U.S. federal and
state and/or foreign securities laws.

     

    
      
        
        

      

      
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    9.           Events of
Default.  If
there shall be any Event of Default hereunder, at the option and upon the
declaration of and upon written notice to Issuer (which declaration and notice
shall not be required in the case of an Event of Default under Section 9(c) or
9(d)), this Note shall accelerate and all principal and unpaid accrued interest
shall become due and payable. Subject to the provisions hereof, Holder shall
have all rights and may exercise any remedies available to it under law,
successively or concurrently.  The occurrence of any one or more of the
following shall constitute an Event of Default:

    

    (a)           Issuer
fails to pay (i) when due any principal payment on the due date hereunder or
(ii) any interest or other payment required under the terms of this Note on the
date due and any such payment described in (i) or (ii) above shall not have been
made within three (3) business days of Issuer's receipt of Holder's written
notice to Issuer of such failure to pay;

    

    (b)           Issuer
fails to perform any covenant under this Note in a timely manner after Issuer's
receipt of Holder's written notice to Issuer of such failure and a fifteen day
cure period; or any representation or warranty of Issuer hereunder shall be
inaccurate in any material respect when made;

    

    (c)           Issuer
(i) applies for or consents to the appointment of a receiver, trustee,
liquidator or custodian of itself or of all or a substantial part of its
property; (ii) is unable, or admits in writing its inability, to pay its debts
generally as they mature; (iii) makes a general assignment for the benefit of
its or any of its creditors; (iv) is dissolved or liquidated in full or in part;
(v) becomes insolvent (as such term may be defined or interpreted under any
applicable statute); (vi) commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or consents to any such relief or to the appointment of or taking possession of
its property by any official in an involuntary case or other proceeding
commenced against it; or (vii) takes any action for the purpose of effecting any
of the foregoing;

    

    (d)      
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of Issuer or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to Issuer or the debts thereof under any bankruptcy,
insolvency or other similar law or hereafter in effect are commenced and an
order for relief entered or such proceeding is not be dismissed or discharged
within thirty (30) days of commencement;

    

    (e)        Issuer
is in default under any indebtedness of Issuer in excess of One Hundred Thousand
Dollars ($100,000) (“Material Indebtedness”) or in the performance of or
compliance with any term of any evidence of any such indebtedness or of any
mortgage, indenture or other agreement relating thereto the effect of which is
to cause such indebtedness  to become due and payable before its stated
maturity or before its regularly scheduled dates of payment, and such default,
event or condition continues for more than the period of grace, if any,
specified therein and not waived pursuant thereto; provided, however, that for
purposes of this Section 9(e), indebtedness shall not include trade payables,
compensation to employees, officers or directors or other obligations arising in
the ordinary course of the business of the Issuer.

     

    
      
        
        

      

      
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    10.       
Notices. 
All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Issuer, to: Merriman Curhan Ford Group,
Inc., 600 California Street, 9th Floor, San Francisco, California 94108,
Attention: Chief Financial Officer, telecopier: (415) 415-248-5690, (ii) if to
the Holder to: the address and telecopier number indicated in the Company’s
records, as may be updated in accordance with the provisions
hereof.

     

    11.         Governing Law.  This
Note shall be governed by and construed in accordance with the laws of the State
of California without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the transactions
contemplated by this Note shall be brought only in the state courts of State of
California located in the city and county of San Francisco or in the federal
courts located in the city and county of San Francisco, California. The parties
and the individuals executing this Note and other agreements referred to herein
or delivered in connection herewith on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney’s fees
and costs. In the event that any provision of this Note or any other agreement
delivered in connection herewith is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of any agreement.

    

    [Remainder
of page intentionally blank]

     

    

    
      
        
        

      

      
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     IN WITNESS WHEREOF, Issuer has
caused this Note to be duly executed by an authorized signatory as of the date
first written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	 
      	
                                                                      MERRIMAN
      CURHAN FORD GROUP, INC.

                                                                    
	 
      	 
      	 
	 
      	 
      	 
	 
      	
                                                                      By:

                                                                    	 
	 
      	
                                                                      Name:

                                                                    	 
	 
      	Title:	
                                                                        
      

                                                                    
	 	 	 
	 	 	 
	 	
                                                                      GUARANTORS

                                                                    
	 	 
	 	
                                                                      MERRIMAN

                                                                    
	 	 
	 	 	 
      
	 	 	
                                                                      D.
      Jonathan Merriman

                                                                    
	 	 	 
	 	 	 
	 	COLEMAN
	 	 	 
	 	 	 
      
	 	 	
                                                                      Peter
      V.
Coleman

                                                                    

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
    

    
 

    

    [Signature
page to Secured Promissory Note]

     

     

    
      
        
        

      

      
        6SECURITY
AGREEMENT

     

     

    THIS SECURITY AGREEMENT dated
as of July 31, 2009 (“Security
Agreement”), is made by and among MERRIMAN CURHAN FORD GROUP,
INC., a Delaware corporation (the “Grantor”),
and ___________________________ (the “Secured
Party”).

     

    RECITALS

     

    A.              The
Secured Party has agreed to make certain advances of money and to extend certain
financial accommodation to Grantor (collectively, the “Loan”) as
evidenced by that certain Secured Promissory Note executed by Grantor in favor
of the Secured Party (the “Note”)
dated of even date herewith, by and between Grantor and the Secured
Party.

    

    B.              The
Secured Party is willing to make the Loan to Grantor, but only upon the
condition, among others, that Grantor shall have executed and delivered this
Security Agreement to the Secured Party.

    

    C.              The
Grantor’s obligations under the Note are not guaranteed by the Grantor’s
Subsidiaries and the assets of the Grantor’s Subsidiaries are not subject to
this Security Agreement.

    

    D.              Grantor
is a party to a security agreement (the “Prior Security Agreement”)
with holders of the notes issued pursuant to the Subscription Agreement (the
“Subscription
Agreement”), by and among the Company and the purchasers set forth on
Schedule A thereto, dated June 1, 2009.

    

    AGREEMENT

     

    NOW, THEREFORE, in order to
induce the Secured Party to make the Loan and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound, the Grantor hereby represents, warrants,
covenants and agrees as follows:

     

    1.               DEFINED TERMS. When used in
this Security Agreement the following terms shall have the following meanings
(such meanings being equally applicable to both the singular and plural forms of
the terms defined):

    

    “Bankruptcy
Code” means
Title XI of the United States Code.

     

    “Collateral” shall
have the meaning assigned to such term in Section 2 of this Security
Agreement.

     

    “Contracts” means
all contracts (including any customer, vendor, supplier, service or maintenance
contract), leases, licenses, undertakings, purchase orders, permits, franchise
agreements or other agreements (other than any right evidenced by Chattel Paper,
Documents or Instruments), whether in written or electronic form, in or under
which a Grantor now holds or hereafter acquires any right, title or interest,
including, without limitation, with respect to an Account, any agreement
relating to the terms of payment or the terms of performance
thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Copyright
License” means any agreement,
whether in written or electronic form, in which a Grantor now holds or hereafter
acquires any interest, granting any right in or to any Copyright or Copyright
registration (whether a Grantor is the licensee or the licensor thereunder)
including, without limitation, licenses pursuant to which a Grantor has obtained
the exclusive right to use a copyright owned by a third party.

     

    “Copyrights” means all of the
following now owned or hereafter acquired or created (as a work for hire for the
benefit of a Grantor) by a Grantor or in which a Grantor now holds or hereafter
acquires or receives any right or interest, in whole or in part: (a) all
copyrights, whether registered or unregistered, held pursuant to the laws of the
United States, any State thereof or any other country; (b) registrations,
applications, recordings and proceedings in the United States Copyright Office
or in any similar office or agency of the United States, any State thereof or
any other country; (c) any continuations, renewals or extensions thereof; (d)
any registrations to be issued in any pending applications, and shall include
any right or interest in and to work protectable by any of the foregoing which
are presently or in the future owned, created or authorized (as a work for hire
for the benefit of a Grantor) or acquired by a Grantor, in whole or in part; (e)
prior versions of works covered by copyright and all works based upon, derived
from or incorporating such works; (f) income, royalties, damages, claims and
payments now and hereafter due and/or payable with respect to copyrights,
including, without limitation, damages, claims and recoveries for past, present
or future infringement; (g) rights to sue for past, present and future
infringements of any copyright; and (h) any other rights corresponding to any of
the foregoing rights throughout the world.

     

    “Event of
Default” means any “Event of
Default” as defined in the Note.

     

    “Intellectual
Property” means any intellectual
property, in any medium, of any kind or nature whatsoever, now or hereafter
owned or acquired or received by a Grantor or in which a Grantor now holds or
hereafter acquires or receives any right or interest, and shall include, in any
event, any Copyright, Trademark, Patent, trade secret, customer list, internet
domain name (including any right related to the registration thereof),
proprietary or confidential information, mask work, source, object or other
programming code, invention (whether or not patented or patentable), technical
information, procedure, design, knowledge, know-how, software, data base, data,
skill, expertise, recipe, experience, process, model, drawing, material or
record.

     

    “License” means any Copyright
License, Patent License, Trademark License or other license of rights or
interests, whether in-bound or out-bound, whether in written or electronic form,
now or hereafter owned or acquired or received by a Grantor or in which a
Grantor now holds or hereafter acquires or receives any right or interest, and
shall include any renewals or extensions of any of the foregoing
thereof.

     

    
      
         

      

      
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    “Lien” means any mortgage,
lien, deed of trust, charge, pledge, security interest or other
encumbrance.

     

    “Patent
License” means any agreement,
whether in written or electronic form, in which a Grantor now holds or hereafter
acquires any interest, granting any right with respect to any invention on which
a Patent is in existence (whether a Grantor is the licensee or the licensor
thereunder).

     

    “Patents” means all of the
following in which a Grantor now holds or hereafter acquires any interest: (a)
all letters patent of the United States or any other country, all registrations
and recordings thereof and all applications for letters patent of the United
States or any other country, including, without limitation, registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state thereof or any
other country; (b) all reissues, divisions, continuations, renewals,
continuations-in-part or extensions thereof; (c) all petty patents, divisionals
and patents of addition; (d) all patents to issue in any such applications; (e)
income, royalties, damages, claims and payments now and hereafter due and/or
payable with respect to patents, including, without limitation, damages, claims
and recoveries for past, present or future infringement; and (f) rights to sue
for past, present and future infringements of any patent.

     

     “Permitted
Lien” means: (a) any Liens
granted in settlement of litigation to litigants, former litigants or potential
litigants, to (i) proceeds of insurance litigation and the Fidelity insurance
policy; and (ii) any and all commercial tort claims held by Grantor, including,
but not limited to, insurance litigation and the Fidelity insurance policy; (b)
Liens for taxes, fees, assessments or other governmental charges or levies,
either not delinquent or being contested in good faith by appropriate
proceedings, provided the same have no priority over any of Secured Party’s
security interests; (c) Liens (i) upon or in any Equipment acquired or held by a
Grantor to secure the purchase price of such Equipment or indebtedness incurred
solely for the purpose of financing the acquisition of such Equipment or (ii)
existing on such Equipment at the time of its acquisition, provided that the
Lien is confined solely to the Equipment so acquired, improvements thereon and
the Proceeds of such Equipment; (d) leases or subleases and licenses or
sublicenses granted to others in the ordinary course of a Grantor’s business if
such are otherwise permitted under this Security Agreement and do not interfere
in any material respect with the business of such Grantor; (e) any right, title
or interest of a licensor under a license provided that such license or
sublicense does not prohibit the grant of the security interest granted
hereunder; (f) Liens arising from judgments, decrees or attachments; (g)
easements, reservations, rights-of-way, restrictions, minor defects or
irregularities in title and other similar Liens affecting real property not
interfering in any material respect with the ordinary conduct of the business of
a Grantor; (h) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; (i) Liens arising solely by virtue of any statutory or
common law provision relating to banker’s liens, rights of setoff or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; (j) Liens on equipment leased by a Grantor
pursuant to an operating lease in the ordinary course of such Grantor’s business
(including proceeds thereof and accessions thereto), all incurred solely for the
purpose of financing the lease of such equipment (including Liens arising from
UCC financing statements regarding such leases); (k) any Lien approved in
advance in writing by the Secured Party; and (l) liens granted pursuant to the
Prior Security Agreement.

     

    
      
         

      

      
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    “Secured
Obligations” means (a) the
obligation of a Grantor to repay the Secured Party all of the unpaid principal
amount of, and accrued interest on (including any interest that accrues after
the commencement of bankruptcy), such Secured Party’s Loan; (b) the obligation
of a Grantor to pay any fees, costs or expenses of the Secured Party under the
Note, or this Security Agreement; and (c) all other indebtedness, liabilities
and obligations of Grantor to the Secured Party, whether now existing or
hereafter incurred, and whether created under, arising out of or in connection
with any written agreement or otherwise.

     

    “Security
Agreement” means this Security
Agreement and all Schedules hereto, as the same may from time to time be
amended, modified, supplemented or restated.

     

    “Trademark
License” means any agreement,
whether in written or electronic form, in which a Grantor now holds or hereafter
acquires any interest, granting any right in and to any Trademark or Trademark
registration (whether a Grantor is the licensee or the licensor
thereunder).

     

    “Trademarks” means any of the
following in which a Grantor now holds or hereafter acquires any interest: (a)
any trademarks, tradenames, corporate names, company names, business names,
trade styles, service marks, logos, other source or business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof and any applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country (collectively, the “Marks”);
(b) any reissues, extensions or renewals thereof; (c) the goodwill of the
business symbolized by or associated with the Marks; (d) income, royalties,
damages, claims and payments now and hereafter due and/or payable with respect
to the Marks, including, without limitation, damages, claims and recoveries for
past, present or future infringement; and (e) rights to sue for past, present
and future infringements of the Marks.

     

    “UCC” means the Uniform
Commercial Code as the same may from time to time be in effect in the State of
Delaware (and each reference in this Security Agreement to an Article thereof
(denoted as a Division of the UCC as adopted and in effect in the State of
Delaware) shall refer to that Article (or Division, as applicable) as from time
to time in effect; provided, however, in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Secured Party’s security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Delaware, the term “UCC” shall mean the Uniform
Commercial Code (including the Articles thereof) as in effect at such time in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.

     

    
      
         

      

      
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    In
addition, the following terms shall be defined terms having the meaning set
forth for such terms in the UCC: “Account” (including health-care-insurance
receivables), “Account Debtor”, “Chattel Paper” (including tangible and
electronic chattel paper), “Commercial Tort Claims”, “Commodity Account”,
“Deposit Account”, “Documents”, “Equipment” (including all accessions and
additions thereto), “Fixtures”, “General Intangible” (including payment
intangibles and software), “Instrument”, “Inventory” (including all goods held
for sale or lease or to be furnished under a contract of service, and including
returns and repossessions), “Investment Property” (including securities and
securities entitlements), “Letter-of-Credit Right” (whether or not the letter of
credit is evidenced by a writing), “Payment Intangibles”, “Proceeds”,
“Promissory Notes”, “Securities Account”, and “Supporting Obligations”. Each of
the foregoing defined terms shall include all of such items now owned, or
hereafter acquired, by a Grantor.

     

    2.              
GRANT OF SECURITY INTEREST.
Certain provisions of this Security Agreement might conflict with or
violate the terms of the Prior Security Agreement unless any such conflicts are
waived by the secured parties under the Prior Security
Agreement.  Grantor hereby covenants to use commercially reasonable
efforts to obtain such waivers promptly.  This Security Agreement
shall be not be effective until and unless such waivers are obtained from all
secured parties under the Prior Security Agreement.  Upon delivery of
such waivers to Secured party, this Security Agreement shall become effective
without further action on the part of the parties hereto.  As
collateral security for the full, prompt, complete and final payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all the Secured Obligations and in order to induce the Secured Party to cause
the Loan to be made, the Grantor hereby assigns, conveys, mortgages, pledges,
hypothecates and transfers to the Secured Party, and hereby grants to the
Secured Party, a security interest in all of such Grantor’s right, title and
interest in, to and under the following, whether now owned or hereafter
acquired, (all of which being collectively referred to herein as the “Collateral”):

     

    (a)      
All Accounts of Grantor;

     

    (b)      
All Chattel Paper of Grantor;

     

    (c)       All
Contracts of Grantor;

    

    (d)      
All Deposit Accounts of Grantor;

    

    (e)       All
Documents of Grantor;

    

    (f)      
All Equipment of Grantor;

    

    (g)      All
Fixtures of Grantor;

    

    (h)      All
General Intangibles of Grantor, including, without limitation, Payment
Intangibles, all Copyrights, Patents, Trademarks, Licenses, designs, drawings,
technical information, marketing plans, customer lists, trade secrets,
proprietary or confidential information, inventions (whether or not patentable),
procedures, know-how, models and data;

     

    
      
         

      

      
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    (i)       All
Instruments of Grantor, including, without limitation, Promissory
Notes;

    (j)       All
Investment Property of Grantor;

    

    (k)     
All Letter-of Credit Rights of Grantor;

    

    (l)       All
Supporting Obligations of Grantor;

    

    (m)     All
property of Grantor held by Secured Party, or any other party for whom Secured
Party is acting as agent hereunder, including, without limitation, all property
of every description now or hereafter in the possession or custody of or in
transit to Secured Party or such other party for any purpose, including, without
limitation, safekeeping, collection or pledge, for the account of Grantor, or as
to which Grantor may have any right or power;

    

    (n)      All
other goods and personal property of Grantor, wherever located, whether tangible
or intangible, and whether now owned or hereafter acquired, existing, leased or
consigned by or to Grantor; and

    

    (o)       To
the extent not otherwise included, all Proceeds of each of the foregoing and all
accessions to, substitutions and replacements for and rents, profits and
products of each of the foregoing.

    

    Notwithstanding
the foregoing provisions of this Section 2, the grant,
assignment and transfer of a security interest as provided herein shall not
extend to, and the term “Collateral” shall not include: (a)
any and all proceeds of insurance litigation and the Fidelity insurance policy;
(b) any and all commercial tort claims held by Issuer, including, but not
limited to, the insurance litigation and the Fidelity insurance policy, (c) “intent-to-use”
trademarks at all times prior to the first use thereof, whether by the actual
use thereof in commerce, the recording of a statement of use with the United
States Patent and Trademark Office or otherwise; (d) any Contract, Instrument or
Chattel Paper in which a Grantor has any right, title or interest if and to the
extent such Contract, Instrument or Chattel Paper includes a provision
containing a restriction on assignment such that the creation of a security
interest in the right, title or interest of such Grantor therein would be
prohibited and would, in and of itself, cause or result in a default thereunder
enabling another person party to such Contract, Instrument or Chattel Paper to
enforce any remedy with respect thereto; provided that the foregoing
exclusion shall not apply if (i) such prohibition has been waived or such other
person has otherwise consented to the creation hereunder of a security interest
in such Contract, Instrument or Chattel Paper or (ii) such prohibition would be
rendered ineffective pursuant to Sections 9-407(a) or 9-408(a) of the UCC, as
applicable and as then in effect in any relevant jurisdiction, or any other
applicable law (including the Bankruptcy Code) or principles of equity); provided further that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and the Grantor shall be deemed to have
granted a security interest in, all its rights, title and interests in and to
such Contract, Instrument or Chattel Paper as if such provision had never been
in effect; and provided
further that the foregoing exclusion
shall in no way be construed so as to limit, impair or otherwise affect Secured
Party’s unconditional continuing security interest in and to all rights, title
and interests of the Grantor in or to any payment obligations or other rights to
receive monies due or to become due under any such Contract, Instrument or
Chattel Paper and in any such monies and other proceeds of such Contract,
Instrument or Chattel Paper; or (e) any Equipment subject to Permitted Liens in
cases where the secured party has prohibited additional Liens.

     

    
      
         

      

      
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    3.               RIGHTS
OF SECURED PARTY; COLLECTION OF ACCOUNTS.

    

    (a)       Notwithstanding
anything contained in this Security Agreement to the contrary, the Grantor
expressly agrees that it shall remain liable under each of its Contracts and
each of its Licenses to observe and perform all the conditions and obligations
to be observed and performed by it thereunder and that it shall perform all of
its duties and obligations thereunder, all in accordance with and pursuant to
the terms and provisions of each such Contract or License. No Secured Party
shall have any obligation or liability under any Contract or License by reason
of or arising out of this Security Agreement or the granting to the Secured
Party of a lien therein or the receipt by Secured Party of any payment relating
to any Contract or License pursuant hereto, nor shall Secured Party be required
or obligated in any manner to perform or fulfill any of the obligations of any
Grantor under or pursuant to any Contract or License, or to make any payment, or
to make any inquiry as to the nature or the sufficiency of any payment received
by it or the sufficiency of any performance by any party under any Contract or
License, or to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time.

     

    (b)       The
Secured Party authorizes the Grantor to collect its Accounts, provided that such
collection is performed in a prudent and businesslike manner, and the Secured
Party may, upon the occurrence and during the continuation of any Event of
Default, limit or terminate said authority at any time. Upon the occurrence and
during the continuance of any Event of Default, at the request of the Secured
Party, Grantor shall deliver all original and other documents evidencing and
relating to the performance of labor or service which created such Accounts,
including, without limitation, all original orders, invoices and shipping
receipts.

    

    (c)       The
Secured Party may at any time, upon the occurrence and during the continuance of
any Event of Default, without notifying Grantor of its intention to do so,
notify Account Debtors of Grantor, parties to the Contracts of Grantor, obligors
in respect of Instruments of Grantor and obligors in respect of Chattel Paper of
Grantor that the Accounts and the right, title and interest of Grantor in and
under such Contracts, Instruments and Chattel Paper have been assigned to the
Secured Party and that payments shall be made directly to the Secured Party.
Upon the request of the Secured Party, the Grantor shall so notify such Account
Debtors, parties to such Contracts, obligors in respect of such Instruments and
obligors in respect of such Chattel Paper. Upon the occurrence and during the
continuance of any Event of Default, Secured Party may communicate with such
Account Debtors, parties to such Contracts, obligors in respect of such
Instruments and obligors in respect of such Chattel Paper to verify with such
parties, to such Secured Party’s satisfaction, the existence, amount and terms
of any such Accounts, Contracts, Instruments or Chattel Paper.

     

    
      
         

      

      
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    4.               REPRESENTATIONS AND
WARRANTIES. Grantor hereby represents and warrants to the Secured Party
that:

    

    (a)       Except
for the security interest granted to the Secured Party under this Security
Agreement, the security interest granted under the Prior Security Agreement and
Permitted Liens, Grantor is the sole legal and equitable owner of each item of
the Collateral in which it purports to grant a security interest hereunder,
having good and marketable title thereto, free and clear of any and all
Liens.

    

    (b)       No
effective security agreement, financing statement, equivalent security or lien
instrument or continuation statement covering all or any part of the Collateral
exists, except for those granted pursuant to the Prior Security Agreement and
other Permitted Liens.

    

    (c)      This
Security Agreement creates a legal and valid security interest on and in all of
the Collateral in which Grantor now has rights and will create a legal and valid
security interest in the Collateral in which Grantor later acquires
rights.

    

    (d)       Grantor’s
taxpayer identification number is, and chief executive office, principal place
of business, and the place where Grantor maintains its records concerning the
Collateral are presently located at the address set forth on the signature page
hereof. If Grantor is a corporation, limited liability company, limited
partnership, corporate trust or other registered organization, the State (or if
not a state, the other jurisdiction) under whose law such registered
organization was organized is set forth on the signature page hereof. The
Collateral, other than Deposit Accounts, Securities Accounts, Commodity Accounts
and motor vehicles and other mobile goods of the type contemplated in Section
9103(3)(a) of the UCC, is presently located at such address and at such
additional addresses set forth on Schedule A attached
hereto.

    

    (e)   
   The name and address of each depository institution at which
Grantor maintains any Deposit Account and the account number and account name of
each such Deposit Account is listed on Schedule B attached hereto.
The name and address of each securities intermediary or commodity intermediary
at which Grantor maintains any Securities Account or Commodity Account and the
account number and account name is listed on Schedule B attached hereto.
Grantor agrees to notify the Secured Party from time to time within five (5)
business days after opening any additional Deposit Account, Securities Account
or Commodity Account, or closing or changing the account name or number on any
existing Deposit Account, Securities Account, or Commodity Account.

     

    
      
         

      

      
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    (f)       None
of the Investment Property of Grantor has been transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such transfer may be subject.

    

    (g)      All
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and
Trademark Licenses now owned, held or in which Grantor otherwise has any
interest are listed on Schedule
C attached hereto. Grantor shall amend Schedule C from time to time
within twenty (20) business days after the filing of any application for a
Patent, Trademark or Copyright or the issuance of any Patent or registration of
any Trademark or Copyright to reflect any additions to or deletions from this
list. Except as set forth on Schedule C, none of the
Patents, Trademarks or Copyrights has been licensed to any third
party.

    

    5.              COVENANTS. The Grantor
covenants and agrees with the Secured Party that from and after the date of this
Security Agreement and until the Secured Obligations have been performed and
paid in full:

    

    5.1.     Disposition of Collateral.
Subject to the next sentence of this Section 5.1, Grantor shall not
sell, lease, transfer or otherwise dispose of any of the Collateral, or attempt
or contract to do so, other than (a) the sale of Inventory; (b) the granting of
non-exclusive Licenses or exclusive Licenses if the grant of an exclusive
License is approved by the Board of the Directors of the Grantor; and (c) the
disposal of worn-out or obsolete Equipment, all in the ordinary course of
Grantor’s business.

    

    5.2.     Change of Jurisdiction of
Organization, Relocation of Business or Collateral. Grantor shall not
change its jurisdiction of organization, relocate its chief executive office,
principal place of business or its records, or allow the relocation of any
Collateral (except as allowed pursuant to Section 5.1 immediately above)
from such address(es) provided to the Secured Party pursuant to Section 4(d) above without
thirty (30) days prior written notice to the Secured Party.

    

    5.3.     Limitation on Liens on Collateral.
Grantor shall not, directly or indirectly, create, permit or suffer to
exist, and shall defend the Collateral and any other assets of Grantor of any
kind (including real property) against and take such other action as is
necessary to remove, any Lien on the Collateral or any other such property,
except (a) Permitted Liens and (b) the Lien granted to the Secured Party under
this Security Agreement. Grantor shall use its commercially reasonable efforts
to further defend the right, title and interest of the Secured Party in and to
any of Grantor’s rights under the Chattel Paper, Contracts, Documents, General
Intangibles, Instruments and Investment Property and to the Equipment and
Inventory and in and to the Proceeds thereof against the claims and demands of
all persons whomsoever.

    

    5.4.     Limitations on Modifications of
Accounts, Etc. Upon the occurrence and during the continuance of any
Event of Default, Grantor shall not, without the Secured Party’s prior written
consent which shall not be unreasonably withheld, grant any extension of the
time of payment of any of the Accounts, Chattel Paper, Instruments or amounts
due under any Contract or Document, compromise, compound or settle the same for
less than the full amount thereof, release, wholly or partly, any person liable
for the payment thereof, or allow any credit or discount whatsoever thereon
other than trade discounts and rebates granted in the ordinary course of
Grantor’s business.

     

    
      
         

      

      
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    5.5.     Insurance. Grantor shall
maintain reasonable insurance policies insuring the Collateral against loss or
damage from such risks and in such amounts and forms and with such companies as
are customarily maintained by businesses similar to Grantor.

    

    5.6.     Taxes, Assessments, Etc.
Grantor shall pay promptly when due all property and other taxes,
assessments and government charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Equipment,
Fixtures or Inventory, except to the extent the validity thereof is being
contested in good faith and adequate reserves are being maintained in connection
therewith.

    

    5.7.     Maintenance of Records.
Grantor shall keep and maintain at its own cost and expense reasonably
satisfactory and complete records of the Collateral. Grantor shall not create
any Chattel Paper without placing a legend on the Chattel Paper acceptable to
the Secured Party indicating that the Secured Party has a security interest in
the Chattel Paper.

    

    5.8.     Registration of Intellectual Property
Rights. Grantor shall promptly register or cause to be registered (to the
extent not already registered) the most recent version of any Copyright and any
Copyright License and any Patent, Patent License, Trademark or Trademark
License, which, individually or in the aggregate, is material to the conduct of
Grantor’s business, with the United States Copyright Office or Patent and
Trademark Office or similar offices in overseas jurisdictions, as applicable,
including, without limitation, in all such cases, the filing of applications for
renewal, affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings. Grantor shall register or cause to be
registered with the United States Copyright Office or Patent and Trademark
Office or similar offices in overseas jurisdictions, as applicable, those
additional rights and interests developed or acquired by Grantor after the date
of this Security Agreement, including, without limitation, any additions to the
rights and interests of Grantor listed on Schedule C hereto, prior to
the sale nr licensing of any product containing such rights and
interests.

    

    5.9.     Notification Regarding Changes in
Intellectual Property. Grantor shall:

    

    (a)       promptly
advise the Secured Party of any subsequent ownership right or interest of the
Grantor in or to any Copyright, Patent, Trademark or License not specified on
Schedule C hereto and
shall permit the Secured Party to amend such Schedule, as necessary, to reflect
any addition or deletion to such ownership rights; and

    

    (b)       promptly
give Secured Party written notice of any applications or registrations of
intellectual property rights filed with the United States Patent and Trademark
Office and the United States Copyright Office or similar offices in overseas
jurisdictions, including the date of such filing and the registration or
application numbers, if any.

     

    
      
         

      

      
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    5.10.  Defense of
Intellectual Property. Grantor shall (a) use its commercially reasonable
efforts to protect, defend and maintain the validity and enforceability of the
Copyrights, Patents and Trademarks, (b) use its commercially reasonable efforts
to detect infringements of the Copyrights, Patents and Trademarks and promptly
advise the Secured Party in writing of material infringements detected and (c)
not allow any Copyrights, Patents or Trademarks to be abandoned, forfeited or
dedicated to the public without the written consent of the Secured Party unless
reasonable business practice would determine that any such abandonment is
appropriate.

    

    5.11.  Further Assurances; Pledge of
Instruments. At any time and from time to time, upon the written request
of the Secured Party, and at the sole expense of Grantor, Grantor shall promptly
and duly execute and deliver any and all financing statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, mortgages, deeds of trust, opinions of counsel, and all other documents
(collectively, the “Additional
Documents”) and take such further action as the Secured Party may
reasonably deem necessary or desirable to obtain the full benefits of this
Security Agreement, including, without limitation, (a) using its commercially
reasonable efforts to secure all consents and approvals necessary or appropriate
for the grant of a security interest to the Secured Party in any Contract held
by Grantor or in which Grantor has any right or interest not heretofore
assigned; (b) executing, delivering and causing to be filed any financing or
continuation statements (including “in lieu” continuation statements) under the
UCC with respect to the security interests granted hereby; (c) filing or
cooperating with the Secured Party in filing any forms or other documents
required to be recorded with the United States Patent and Trademark Office,
United States Copyright Office or similar offices in overseas jurisdictions, or
any actions, filings, recordings or registrations in any foreign jurisdiction or
under any international treaty, required to secure or protect the Secured
Party’s interest in Grantor’s Collateral; (d) transferring Grantor’s Collateral
to the Secured Party’s possession (only if a security interest in such
Collateral can be perfected by possession); (e) at Secured Party’s reasonable
request, placing the interest of the Secured Party as lienholder on the
certificate of title (or similar evidence of ownership) of any vehicle,
watercraft or other Equipment constituting Collateral owned by Grantor which is
covered by a certificate of title (or similar evidence of ownership); (f) at
Secured Party’s reasonable request, executing and delivering or causing to be
delivered written notice to insurers of the Secured Party’s security interest
in, or claim in or under, any policy of insurance (including unearned premiums);
and (g) at the Secured Party’ reasonable request, using its commercially
reasonable efforts to obtain acknowledgments from bailees having possession of
any Collateral and waivers of liens from landlords and mortgagees of any
location where any of the Collateral may from time to time be stored or located.
Secured Party may at any time and from time to time file Additional Documents
that describe the Collateral as all assets of Grantor or words of similar
effect. To the maximum extent permitted by law, any Additional Documents may be
signed by Secured Party on behalf of Grantor and may be filed at any time in any
jurisdiction. Grantor also hereby authorizes Secured Party to file any such
Additional Documents (including “in lieu” continuation statements) without the
signature of Grantor.  If any amount payable under or in connection with
any of the Collateral is or shall become evidenced by any Instrument, such
Instrument, other than checks and notes received in the ordinary course of
business and any Instrument in the outstanding or stated amount of less than
twenty-five thousand dollars ($25,000), shall be duly endorsed in a manner
reasonably satisfactory to the Secured Party and delivered to the Secured Party
promptly and in any event within five (5) business days of Grantor’s receipt
thereof.

     

    
      
         

      

      
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    5.12    Subordination.  Issuer
shall use commercially reasonable efforts to secure the agreement of all parties
to the Prior Security Agreement to subordinate their security interest to Holder
within 60 days of the date hereof.

    

    6.               RIGHTS AND REMEDIES UPON DEFAULT.
After any Event of Default shall have occurred and while such Event of
Default is continuing:

     

    (a)       The Secured Party may exercise
in addition to all other rights and remedies granted to it under this Security
Agreement, the Note and under any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies of a
secured party under the UCC. Without limiting the generality of the foregoing,
the Grantor expressly agrees that in any such event the Secured Party, without
demand of performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private sale)
to or upon such Grantor or any other person (all and each of which demands,
advertisements and notices are hereby expressly waived to the maximum extent
permitted by the UCC and other applicable law), may (i) reclaim, take
possession, recover, store, maintain, finish, repair, prepare for sale or lease,
shop, advertise for sale or lease and sell or lease (in the manner provided
herein) the Collateral, and in connection with the liquidation of the Collateral
and collection of the accounts receivable pledged as Collateral, use any
Trademark, Copyright, or process used or owned by a Grantor and (ii) forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and may forthwith sell, lease, assign, give an option or options to
purchase or sell or otherwise dispose of and deliver said Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker’s board or at Secured Party’s
offices or elsewhere at such prices as they may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. To the extent the
Grantor has the right to do so, the Grantor authorizes Secured Party, on the
terms set forth in this Section
6 to enter the premises where the Collateral is located during normal
business hours, to take possession of the Collateral, or any part of it, and to
pay, purchase, contact, or compromise any encumbrance, charge, or lien which, in
the opinion of Secured Party, appears to be prior or superior to its security
interest. Secured Party shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of said Collateral so sold, free of any right or
equity of redemption, which equity of redemption the Grantor hereby releases.
The Grantor further agrees, at the Secured Party’ request, to assemble its
Collateral and make it available to the Secured Party at places which the
Secured Party shall reasonably select, whether at Grantor’s premises or
elsewhere. The Secured Party shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale as provided in
Section 6(f) below and
only after so paying over such net proceeds and after the payment by the Secured
Party of any other amount required by any provision of law, remit the surplus
from the Secured Party’s account, if any, to Grantor. To the maximum extent
permitted by applicable law, the Grantor waives all claims, damages, and demands
against the Secured Party arising out of the repossession, retention or sale of
the Collateral. The Grantor agrees that the Secured Party need not give more
than ten (10) days’ notice of the time and place of any public sale or of the
time after which a private sale may take place and that such notice is
reasonable notification of such matters. The Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of its Collateral are
insufficient to pay all amounts to which the Secured Party is entitled from
Grantor, such Grantor also being liable for the attorney costs of any attorneys
employed by the Secured Party to collect such deficiency.

     

    
      
         

      

      
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    (b)       As
to any Collateral constituting certificated securities or uncertificated
securities, if, at any time when the Secured Party shall determine to exercise
their right to sell the whole or any part of such Collateral hereunder, such
Collateral or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under Securities Act of 1933, as amended (as so
amended the “Act”), the
Secured Party may, in its discretion (subject only to applicable requirements of
law), sell such Collateral or part thereof by private sale in such manner and
under such circumstances as the Secured Party may deem necessary or advisable,
but subject to the other requirements of this Section 6(b), and shall not be
required to effect such registration or cause the same to be effected. Without
limiting the generality of the foregoing, in any such event the Secured Party
may, in its discretion, (i) in accordance with applicable securities laws,
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Collateral or part thereof could be or shall
have been filed under the Act; (ii) approach and negotiate with a single
possible purchaser to effect such sale; and (iii) restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Collateral or part thereof. In addition to a private sale as provided above
in this Section 6(b), if
any of such Collateral shall not be freely distributable to the public without
registration under the Act at the time of any proposed sale hereunder, then the
Secured Party shall not be required to effect such registration or cause the
same to be effected but may, in their discretion (subject only to applicable
requirements of law), require that any sale hereunder (including a sale at
auction) be conducted subject to such restrictions as the Secured Party may, in
its discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors’
rights and the Act and all applicable state securities laws.

     

    (c)       The
Grantor agrees that in any sale of any of such Collateral, whether at a
foreclosure sale or otherwise, the Secured Party is hereby authorized to comply
with any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental authority, and the Grantor further
agrees that such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Secured Party be liable nor accountable to a Grantor for any discount allowed by
the reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.

     

    
      
         

      

      
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    (d)       The
Grantor also agrees to pay all fees, costs and expenses of the Secured Party,
including, without limitation, reasonable attorneys’ fees, incurred in
connection with the enforcement of any of their rights and remedies
hereunder.

    

    (e)       The
Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.

    

    (f)       The
Proceeds of any sale, disposition or other realization upon all or any part of
the Collateral shall be distributed by the Secured Party in the following order
of priorities:

    

    FIRST,
to the Secured Party in an amount sufficient to pay in full the reasonable costs
of the Secured Party in connection with such sale, disposition or other
realization, including all fees, costs, expenses, liabilities and advances
incurred or made by the Secured Party in connection therewith, including,
without limitation, reasonable attorneys’ fees;

     

    SECOND,
to the Secured Party in an amount up to the then unpaid Secured Obligations;
and

     

    FINALLY,
upon payment in full of the Secured Obligations, to the Grantor or its
representatives, in accordance with the UCC or as a court of competent
jurisdiction may direct.

     

    (g)      The
costs of enforcing or pursuing any right or remedy hereunder, including without
limitation any repossession, sale, possession and management (including, without
limitation, reasonable attorneys’ fees), and distribution shall be borne by the
Secured Party.

    

    9.               INDEMNITY. The Grantor agrees
to defend, indemnify and hold harmless the Secured Party and their officers,
employees, and agents against (a) all obligations, demands, claims, and
liabilities claimed or asserted by any other party in connection with the
transactions contemplated by this Security Agreement and (b) all losses or
expenses in any way suffered, incurred, or paid by Secured Party as a primary
and direct result of transactions between Secured Party and any Grantor, whether
under this Security Agreement or otherwise (including without limitation,
reasonable attorneys fees and expenses), except for losses arising from or out
of such Secured Party’s negligence, bad faith or willful
misconduct.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    
 

    10.            REINSTATEMENT. This Security
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against any Grantor for liquidation or
reorganization, should any Grantor become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of any Grantor’s property and assets, and shall continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

    

    11.            MISCELLANEOUS.

    

    11.1.  Waivers; Modifications. None
of the terms or provisions of this Security Agreement may be waived, altered,
modified or amended except by an instrument in writing, duly executed by the
Grantor, the Secured Party and the “Guarantors” as such term is defined in the
Note.

    

    11.2.  Termination of this Security
Agreement. Subject to Section 10 hereof, this
Security Agreement shall terminate upon the payment and performance in full of
the Secured Obligations..

    

    11.3.  Successor and Assigns. This
Security Agreement and all obligations of Grantor hereunder shall be binding
upon the successors and assigns of Grantor, and shall, together with the rights
and remedies of the Secured Party hereunder, inure to the benefit of the Secured
Party, any future holder of any of the indebtedness and their respective
successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or instrument
evidencing the Secured Obligations or any portion thereof or interest therein
shall in any manner affect the lien granted to the Secured Party
hereunder.

    

    11.4.  Governing Law. In all
respects, including all matters of construction, validity and performance, this
Security Agreement and the Secured Obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws, except to
the extent that the UCC provides for the application of the law of a different
jurisdiction.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
 

    11.5.  Counterparts. This Security
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instruments.

    

     

    [Signature
page follows]

     

     

     

     

     

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, each of
the parties hereto has caused this Security Agreement to be executed and
delivered by its dilly authorized officer on the date first set forth
above.

     

    

    Grantor

    

    
      
        
          
            
              	
                      MERRIMAN CURHAN FORD
      GROUP,
      INC.

                    	
                      Address
      for Notice:

                    
	 
      
	
                      By:

                    	 	
                           

                    	
                      600
      California Street, 9th Floor,

                      San
      Francisco, California 94108

                    
	
                       

                    	Name:	 
      	
                      Facsimile: (415)
      415-248-5690

                    
	
                    	      
                      Title:

                    	 
      	
                      Attention: Chief Financial
      Officer

                    

            

          

        

      

    

    

    

     

    

     

    

     

    [Signature
Page to the Security Agreement]

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    Schedule
A

     

    Location
of Collateral

     

    

     

    

     

    

     

     

     

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    Schedule
B

     

    Deposit,
Securities and Commodities Accounts

     

    

     

    
      
        
          
            
              
                
                  	
                          Name

                        	
                          Address

                        	
                          Account Number

                        	
                          Account Name

                        
	
                          [Bank]

                        	 
      	 
      	 
      
	
                          [Bank]

                        	 
      	 
      	 
      
	
                          [Bank]

                        	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

                

              

            

          

        

      

    

    

     

    

     

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    Schedule
C

     

    Intellectual
Property

     

    Patents

     

    
      
        
          
            
              
                
                  
                    	
                            Docket

                            No.

                          	
                            Application

                            Date or

                            First

                            Claimed

                          	
                            U.S.

                            Patent
    No.

                          	
                            Inventor(s)

                          	
                            Title

                          	
                            Issue
    Date

                          
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      

                  

                

              

            

          

        

      

    

    

     

    

     

    Trademarks

     

    
      
        
          
            
              
                
                  	
                           Trademark

                        	
                          Filing Date

                        	
                          Case No.

                        	
                          Registration No.

                        	
                          Renewal Date

                        
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

                

              

            

          

        

      

    

    

    Copyrights

     

    

     

    Licenses

     

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

     

    Domain
Names

    

     

    
      
        
          
            
              
                
                  
                    	
                            Website

                          	
                            Current

                            Owner

                          	
                            Domain

                            Name

                            Registry

                          	
                            Status

                          	
                            Renewal

                            Due

                            Date

                          	
                            Creation

                            Date

                          
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      

                  

                

              

            

          

        

      

    

    

     

    

     

    

     

    
      
         

      

      
        21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]