Document:

Prepared by R.R. Donnelley Financial -- Business Security Loan Agreement

  EXHIBIT 10.2 
   
 US BANK LOGO APPEARS HERE 
  
 BUSINESS LOAN AGREEMENT 
  
 References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or
item. 
  
 
	 Borrower:
 	 	 NUTECH DIGITAL, INC.
 15210 KESWICK STREET

VAN NUYS, CA 91405
 	    	 Lender:
 	 	 U.S. Bank National Association
 15910 Ventura
Boulevard
 Encino, CA 91436
 

 
  
  THIS BUSINESS LOAN AGREEMENT between NUTECH DIGITAL, INC. (“Borrower”)
and U.S. Bank National Association (“Lender”) is made and executed on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans and other financial
accommodations, including those which may be described on any exhibit or schedule attached to this Agreement. All such loans and financial accommodations, together with all future loans and financial accommodations from Lender to Borrower, are
referred to in this Agreement individually as the “Loan” and collectively as the “Loans.” Borrower understands and agrees that: (a) in granting, renewing, or extending any Loan, Lender is relying upon Borrower’s
representations, warranties, and agreements, as set forth in this Agreement; (b} the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and (c) all such Loans shall be
and shall remain subject to the following terms and conditions of this Agreement. 
   
 TERM.    This
Agreement shall be effective as of March 20, 2001, and shall continue thereafter until all Indebtedness of Borrower to Lender has been performed in full and the parties terminate this Agreement in writing. 
  
  DEFINITIONS.    The following words shall have the following meanings when used in this Agreement. Terms not otherwise defined in
this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of the United States of America. 
   
 Agreement.     The word “Agreement” means this Business Loan Agreement, as this Business Loan Agreement may be amended or
modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.  
  
  Borrower.    The word “Borrower” means NUTECH DIGITAL, INC. “The word “Borrower” also includes, as applicable, all subsidiaries and affiliates of Borrower as provided below in the
paragraph titled “Subsidiaries and Affiliates.” 
   
 CERCLA.    The word “CERCLA” means
the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended. 
  
  Cash
Flow.    The words “Cash Flow” mean net income after taxes, and exclusive of extraordinary gains and income, plus depreciation and amortization. 
   
 Collateral.    The word “Collateral” means and includes without limitation all property and assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, deed or trust, assignment, pledge, chattel mortgage, chattel trust, factor’s
lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or
otherwise. 
  

 Debt.    The word “Debt” means all of Borrower’s liabilities excluding Subordinated Debt.

  
 ERISA.    The word “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

  
 Event of Default.     The words “Event of Default” mean and include without limitation any of the
Events of Default set forth below in the section titled ‘EVENTS OF DEFAULT.’ 
  
 Grantor.    The word
“Grantor” means and includes without limitation each and all of the persons or entities granting a Security Interest in any Collateral for the indebtedness, including without limitation all Borrowers granting such a Security Interest.

  
 Guarantor.    The word “Guarantor” means and includes without limitation each and all of the
guarantors, sureties, and accommodation parties in connection with any Indebtedness. 
  
 Indebtedness.    The
word “Indebtedness” means and includes without limitation all Loans, together with all other obligations. debts and liabilities of Borrower to Lender, or anyone or more of them, as well as all claims by Lender against Borrower, or anyone
or more of them; whether now or hereafter existing, voluntary or involuntary, due or not due, absolute or contingent, liquidated or unliquidated; whether Borrower may be liable individually or jointly with others; whether Borrower may be obligated
as a guarantor, surety, or otherwise; whether recovery upon such Indebtedness may be or hereafter may become barred by any statute of limitations; and whether such Indebtedness may be or hereafter may become otherwise unenforceable. 

 
 Lender.    The word “Lender” means U.S. Bank National Association, its successors and assigns. 

 
 Liquid Assets.    The words “Liquid Assets” mean Borrower’s cash on hand plus Borrower’s readily
marketable securities. 
  
 Loan.    The word “Loan” or “Loans” means and includes without
limitation any and all commercial loans and financial accommodations from Lender to Borrower, whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or
described on any exhibit or schedule attached to this Agreement from time to time. 
  
 Note.    The word
“Note” means and includes without limitation Borrower’s promissory note or notes, if any, evidencing Borrower’s Loan obligations in favor of Lender, as well as any substitute, replacement or refinancing note or notes therefor.

  
  Permitted Liens.    The words “Permitted Liens” mean: (a) liens and security interests securing
Indebtedness owed by Borrower to Lender; (b) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (c) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the
ordinary course of business and securing obligations which are not yet delinquent; (d) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure
indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled “Indebtedness and Liens”; (e) liens and security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender in writing; and (f) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower’s assets. 

  
 Related Documents.    The words “Related Documents” mean and include without limitation all promissory
notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the
Indebtedness. 
   
 Security Agreement.    The words “Security Agreement” mean and include
without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. 
  
 Security Interest.    The words “Security Interest” mean and include without limitation any type of collateral security,
whether in the form of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.
 

   
 SARA.    The word “SARA” means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended. 
  
 Subordinated Debt.    The words “Subordinated
Debt” mean indebtedness and liabilities of Borrower which have been subordinated by written agreement to indebtedness owed by Borrower to Lender in form and substance acceptable to Lender. 
  

Tangible Net Worth.    The words “Tangible Net Worth” mean Borrower’s total assets excluding all intangible assets {i.e., goodwill, trademarks,
patents, copyrights, organizational expenses, and similar intangible items, but including leaseholds and leasehold improvements) less total Debt. 
  
 Working Capital.    The words “Working Capital” mean Borrower’s current assets, excluding prepaid expenses, less Borrower’s current liabilities. 
  
 CONDITIONS PRECEDENT TO EACH ADVANCE.    Lender’s obligation to make the initial Loan Advance and each subsequent Loan Advance
under this Agreement shall be subject to the fulfillment to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents. 
  
  Loan Documents.    Borrower shall provide to Lender in form satisfactory to Lender the following documents for the Loan: (a) the Note, (b) Security Agreements granting to
Lender security interests in the Collateral, (c) Financing Statements perfecting Lender’s Security Interests; (d) evidence of insurance as required below; and (e) any other documents required under this Agreement or by Lender or its counsel,
including without limitation any guaranties described below. 
   
 Borrower’s Authorization.    Borrower
shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents, and such other authorizations and other documents and
instruments as Lender or its counsel, in their sole discretion, may require. 
  
 Payment of Fees and
Expenses.    Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document. 
  
 Representations and Warranties.    The representations and warranties set forth in this Agreement, in the Related Documents, and in
any document or certificate delivered to Lender under this Agreement are true and correct. 
  
 No Event of
Default.    There shall not exist at the time of any advance a condition which would constitute an Event of Default under this Agreement. 
  
 REPRESENTATIONS AND WARRANTIES.    Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of Loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any Indebtedness exists: 
  
 Organization.    Borrower is
a corporation which is duly organized, validity existing, and in good standing under the laws of the State of California and is validly existing and in good standing in all states in which Borrower is doing business. Borrower has the full power and
authority to own its properties and to transact the businesses in which it is presently engaged or presently proposes to engage. Borrower also is duly qualified as a foreign corporation and is in good standing in all states in which the failure to
so qualify would have a material adverse effect on its businesses or financial condition. 
  
  Authorization.    The execution, delivery, and performance of this Agreement and all Related Documents by Borrower, to the extent to be executed, delivered or performed by Borrower, have been duly
authorized by all necessary action by Borrower; do not require the consent or approval of any other person, regulatory authority or governmental body; and do not conflict with, result in a violation of, or constitute a default under (a) any
provision of its articles of incorporation or organization, or bylaws, or any agreement or other instrument binding upon Borrower or (b) any law, governmental regulation, court decree, or order applicable to Borrower. 
   
 Financial Information.    Each financial statement of Borrower supplied to Lender truly and completely disclosed Borrower’s
financial condition as of the date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material
contingent obligations except as disclosed in such financial statements.
 

   
  Legal Effect.    This Agreement constitutes, and any instrument
or agreement required hereunder to be given by Borrower when delivered will constitute, legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. 
   
 Properties.    Except as contemplated by this Agreement or as previously disclosed in Borrower’s financial statements or in
writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower’s properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower has not used, or filed a financing statement under, any other name for at
least the last five (5) years. 
  
 Hazardous Substances.    The terms “hazardous waste,”
“hazardous substance,” “disposal,” “release,” and “threatened release,” as used in this Agreement, shall have the same meanings as set forth in the “CERCLA,” “SARA,” the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code, Section 25100, et sec., or other
applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (a) During the period of Borrowers ownership of
the properties, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release or any hazardous waste or substance by any person on, under, about or from any or the properties. (b) Borrower has no
knowledge of, or reason to believe that there has been (i) any use, generation, manufacture, storage, treatment, disposal release, or threatened release of any hazardous waste or substance on, under, about or from the properties by any prior owners
or occupants of any of the properties, or (ii) any actual or threatened litigation or claims of any kind by any person relating to such matters. (c) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the properties
shall use, generate, manufacture, store, treat, dispose of, or release any hazardous waste or substance on, under, about or from any of the properties; and any such activity shall be conducted in compliance with all applicable federal, state, and
local laws, regulations, and ordinances, including without limitation those laws, regulations and ordinances described above. Borrower authorizes Lender and its agents to enter upon the properties to make such inspections and tests as Lender may
deem appropriate to determine compliance of the properties with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower’s expense and for Lender’s purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower’s due diligence in investigating the properties for hazardous waste and hazardous
substances. Borrower hereby (a) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (b) agrees to indemnify and hold harmless
Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the properties. The provisions of this section of the Agreement, including the obligation to indemnify, shall survive the payment of the Indebtedness
and the termination or expiration of this Agreement and shall not be affected by Lender’s acquisition of any interest in any of the properties, whether by foreclosure or otherwise. 
  

Litigation and Claims.    No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is
pending or threatened, and no other event has occurred which may materially adversely affect Borrower’s financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by
Lender in writing. 
  
 Taxes.    To the best of Borrower’s knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided. 
  
 Lien Priority.    Unless otherwise previously
disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of
Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s Security Interests and rights in and to such Collateral.
 

   
 Binding Effect.    This Agreement, the Note, all Security Agreements
directly or indirectly securing repayment of Borrower’s Loan and Note and all of the Related Documents are binding upon Borrower as well as upon Borrower’s successors, representatives and assigns, and are legally enforceable in accordance
with their respective terms. 
  
 Commercial Purposes.    Borrower intends to use the Loan proceeds solely for
business or commercial related purposes. 
  
 Employee Benefit Plans.    Each employee benefit plan as to which
Borrower may have any liability complies in all material respects with all applicable requirements of law and regulations, and (i) no Reportable Event nor Prohibited Transaction (as defined in ERISA) has occurred with respect to any such plan, (ii)
Borrower has not withdrawn from any such plan or initiated steps to do so, (iii) no steps have been taken to terminate any such plan, and (iv) there are no unfunded liabilities other than those previously disclosed to Lender in writing.

  
  Location of Borrower’s Offices and Records.    Borrower’s place of business, or Borrower’s
chief executive office, if Borrower has more than one place of business, is located at 15210 KESWICK STREET, VAN NUYS, CA 91405. Unless Borrower has designated otherwise in writing this location is also the office or offices where Borrower keeps its
records concerning the Collateral. 
   
  Information.    All information heretofore or contemporaneously
herewith furnished by Borrower to Lender for the purposes of or in connection with this Agreement or any transaction contemplated hereby is, and any information hereafter furnished by or on behalf of Borrower to Lender will be, true and accurate in
every material respect on the date as of which such information is dated or certified; and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading. 

 
  Survival of Representations and Warranties.    Borrower understands and agrees that Lender, without independent
investigation, is relying upon the above representations and warranties in extending Loan Advances to Borrower. Borrower further agrees that the foregoing representations and warranties shall be continuing in nature and shall remain in full force
and effect until such time as Borrower’s indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur. 
   

AFFIRMATIVE COVENANTS.    Borrower covenants and agrees with Lender that, while this Agreement is in effect, Borrower will: 
  
 Litigation.    Promptly inform Lender in writing of (a) all material adverse changes in Borrower’s financial condition, and (b)
all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any
Guarantor. 
  
 Financial Records.    Maintain its books and records in accordance with generally accepted
accounting principles, applied on a consistent basis, and permit Lender to examine and audit Borrowers books and records at all reasonable times. 
  
 Financial Statements.    Furnish Lender with, as soon as available, but in no event later than ninety (90) days after the end of each fiscal year, Borrower’s balance sheet and income statement for the
year ended, reviewed by a certified public accountant satisfactory to Lender, and, as soon as available, but in no event later than forty five (45) days after the end of each fiscal quarter, Borrower’s balance sheet and profit and loss
statement for the period ended, prepared and certified as correct to the best knowledge and belief by Borrower’s chief financial officer or other officer or person acceptable to Lender. All financial reports required to be provided under
this Agreement shall be prepared in accordance with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct. 
  
 Additional Information.    Furnish such additional information and statements, lists of assets and liabilities, agings of receivables and payables, inventory schedules,
budgets, forecasts, tax returns, and other reports with respect to Borrower’s financial condition and business operations as Lender may request from time to time.
 

   
 Financial Covenants and Ratios.    Comply with the following
covenants and ratios: 
  
 Tangible Net Worth.    Maintain a minimum Tangible Net Worth of
not less than $400,000.00. 
  
 Current Ratio.    Maintain a ratio of Current Assets to
Current Liabilities in excess of 1.10 to 1.00. 
  
  Income.    Maintain not less than
the following income level: Company to report profits at Fiscal Year End, after officers’ compensation, taxes, advances, withdrawals. and distributions. 
   
  The following provisions shall apply for purposes of determining compliance with the foregoing financial covenants and ratios: Compliance with the foregoing ratios/amounts shall be determined by
calculating the ratios/amounts as of the end of each fiscal quarter. Except as provided above, an computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted
accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct. 
   
 Insurance.    Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower’s properties and operations, in form, amounts,
coverages and with insurance companies reasonably acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that
coverages will not be canceled or diminished without at least ten (10) days’ prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by
any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such loss payable or other
endorsements as Lender may require. 
  
  Insurance Reports.    Furnish to Lender, upon request of Lender,
reports on each existing insurance policy showing such Information as Lender may reasonably request, including without limitation the following: (a) the name of the insurer; (b) the risks insured; (c) the amount of the policy; (d) the properties
insured; (e) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (f) the expiration date of the policy. In addition, upon request of Lender (however not more often than
annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. 
   
  Guaranties.    Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed
by the guarantor named below, on Lender’s forms, and in the amount and under the conditions spelled out in those guaranties. 
   
 
	 Guarantor
 
	 	 Amount
 

	 LEE KASPER
 	 	 Unlimited
 

 
  
 Other Agreements.    Comply with all terms and conditions of
all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements. 
  

Loan Fees and Charges.    In addition to all other agreed upon fees and charges, pay the following: $2,563.00.  
  
  Loan Proceeds.    Use all Loan proceeds solely for Borrower’s business operations, unless specifically consented to the
contrary by Lender writing.
 

   
  Taxes, Charges and Liens.    Pay and discharge when due all of
its indebtedness and obligations, including without limitation all assessments. taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s properties, income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax,
charge, levy, lien or claim so long as (a) the legality of the same shall be contested in good faith by appropriate proceedings, and (b) Borrower shall have established on its books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted accounting practices. Borrower, upon demand of Lender, will furnish to Lender evidence of payment of the assessments, taxes, charges, levies, liens and claims and will authorize the
appropriate governmental official to deliver to Lender at any time a written statement of any assessments, taxes, charges, levies, liens and claims against Borrower’s properties, income, or profits, 
   
  Performance.    Perform and comply with all terms, conditions, and provisions set forth in this Agreement and in the Related
Documents in a timely manner, and promptly notify Lender if Borrower learns of the occurrence of any event which constitutes an Event of Default under this Agreement or under any of the Related Documents. 
   
  Operations.    Maintain executive and management personnel with substantially the same qualifications and experience as the
present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner and in compliance with all applicable federal, state
and municipal laws, ordinances, rules and regulations respecting its properties, charters, businesses and operations, including without limitation, compliance with the Americans With Disabilities Act and with all minimum funding standards and other
requirements of ERISA and other laws applicable to Borrower’s employee benefit plans. 
   
  Inspection.    Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit
Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records
and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide
Lender with copies of any records it may request, all at Borrower’s expense. 
   
  Compliance
Certificate.    Unless waived in writing by Lender, provide Lender NOT REQUIRED and at the time of each disbursement of Loan proceeds with a certificate executed by Borrower’s chief financial officer, or other officer or
person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default
exists under this Agreement. 
   
  Environmental Compliance and Reports.    Borrower shall comply in all
respects with all environmental protection federal, state and local laws, statutes, regulations and ordinances; not cause or permit to exist, as a result of an intentional or unintentional action or omission on its part or on the part of any third
party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the
appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication
from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower’s part in connection with any environmental activity whether or not there is damage to the environment and/or other
natural resources.
 

   
  Additional Assurances.    Make, execute and deliver to Lender
such promissory note, mortgages, deeds of trust, security agreements, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security
Interests. 
   
  RECOVERY OF ADDITIONAL COSTS.    If the imposition of or any change in any law, rule,
regulation or guideline, or the interpretation or application of any thereof by any court or administrative or governmental authority (including any request or policy not having the force of law) shall impose, modify or make applicable any taxes
(except U.S. federal, state or local income or franchise taxes imposed on Lender), reserve requirements, capital adequacy requirements or other obligations which would (a) increase the cost to Lender for extending or maintaining the credit
facilities to which this Agreement relates, (b) reduce the amounts payable to Lender under this Agreement or the Related Documents, or (c) reduce the rate of return on Lender’s capital as a consequence of Lender’s obligations with respect
to the credit facilities to which this Agreement relates, then Borrower agrees to pay Lender such additional amounts as will compensate Lender therefore, within five (5) days after Lender’s written demand for such payment, which demand shall be
accompanied by an explanation of such imposition or charge and a calculation in reasonable detail of the additional amounts payable by Borrower, which explanation and calculations shall be conclusive in the absence of manifest error, 

  
  NEGATIVE COVENANTS.    Borrower covenants and agrees with lender that while this Agreement is in effect, Borrower
shall not, without the prior written consent of Lender: 
   
  Indebtedness and Liens.    (a) Except for
trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (b) except as allowed as a Permitted Lien, sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower’s assets, or (c) sell with recourse any of Borrower’s accounts, except to Lender. 
   
 Continuity of Operations.    (a) Engage in any business activities substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change ownership, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, (c) pay any dividends on
Borrower’s stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if
Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to enable the shareholders to
pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of stock of
Borrower, or (d) purchase or retire any of Borrower’s outstanding shares or alter or amend Borrower’s capital structure. 
  
 Loans, Acquisitions and Guaranties.    (a) Loan, invest in or advance money or assets, (b) purchase, create or acquire any interest in any other enterprise or entity, or (c) incur any obligation as surety
or guarantor other than in the ordinary course of business. 
  
 CESSATION OF ADVANCES.    If Lender has made any
commitment to make any Loan to Borrower, whether under his Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (a) Borrower or any Guarantor is in default under the terms of
this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt;
(c) there occurs a material adverse change in Borrower’s financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such Guarantor’s guaranty of the Loan or any other loan with Lender; or (e) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred. 
  

  ADDITIONAL FINANCIAL COVENANTS AND RATIOS. NET WORTH RATIO.    Maintain a ratio of Total Liabilities to Tangible
Net Worth of less than 8.00 to 1.00, to be reduced to 6.00 to 1.00 at June 30, 2001 and to 4.50 to 1.00 by Fiscal Year End December 31, 2001. The Leverage Ratio is defined as total liabilities divided by tangible net worth. 

 
 AGING AND LISTING OF ACCOUNTS RECEIVABLE (AND PAYABLE).    Borrower covenants and agrees with Lender that, while this
Agreement is in effect, Borrower shall deliver to Lender twenty (20) days after the end of each quarter, a detailed aging of Borrower’s accounts and contracts receivable and accounts payable as of the last day of that quarter,
together with an explanation of any adjustments made at the end of that quarter all in a form acceptable to Lender. 
  
  INVENTORY
REPORT.    Borrower covenants and agrees with Lender that, while this Agreement is in effect, Borrower shall deliver to Lender within twenty (20) days after the end of each quarter, a detailed listing of the Inventory of
Borrower as of the last day of that quarter, prepared in a form acceptable to Lender. 
   
 BORROWER’S SUBMISSION OF TAX
RETURNS.    Borrower covenants and agrees with Lender that, while this Agreement is in effect, Borrower will furnish to Lender, no later than thirty (30) days after filing thereof, a copy of Borrowers filed
federal tax return (including all applicable schedules). 
  
  GUARANTOR’S SUBMISSION OF FINANCIAL STATEMENTS AND TAX
RETURNS.    Borrower covenants and agrees with Lender that, while this Agreement is in effect, Guarantor will furnish to Lender the following: 1) As soon as available, but in no event later than March 31st of each year,
Guarantor’s personal financial statement for such yearly period, prepared and certified as correct to the best knowledge and belief by Guarantor. 2) No later than thirty (30) days after filing thereof, a copy of Guarantor’s filed federal
tax return (including all applicable schedules and K-1s). 
   
 ADDITIONAL FINANCIAL PROVISIONS.    No
consecutive quarterly losses allowed. ADDITIONAL PROVISIONS. 
  
 1)  US Bank National Association to hold a first priority
interest on the company’s assets. SBA loan to fully subordinate their interest to the bank prior to funding, 
  
 2)  Subject to review of CPA prepared financial statements as of Fiscal Year End December 31, 2000. 
  
 3)  Verification of Guarantor’s liquid assets reflecting minimum liquidity of $200,000.00. 
  
 RIGHT OF
SETOFF.    Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all Borrower’s right, title and interest in and to, Borrower’s
accounts with Lender (whether checking, savings, or some other account), including without limitation all accounts held jointly with someone else and all accounts Borrower may open in the future, excluding however all IRA and Keogh accounts, and all
trust accounts for which the grant of a security interest would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts.

  
 EVENTS OF DEFAULT.    Each of the following shall constitute an Event of Default under this Agreement:

  
 Default on Indebtedness.    Failure of Borrower to make any payment when due on the Loans. 

 
  Other Defaults.    Failure of Borrower or any Guarantor to comply with or to perform when due any other term,
obligation, covenant or condition contained in this Agreement or in any of the Related Documents, or failure of Borrower to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
 

   
  Default in Favor of Third Parties.    Should Borrower
or any Guarantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of
Borrower’s property or Borrower’s or any Guarantor’s ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents. 
   

 False Statements.    Any warranty, representation or statement made or furnished to Lender by or on behalf of Borrower or any Guarantor under this Agreement or
the Related Documents is false or misleading in any material respect at the time made or furnished, or becomes false or misleading at any time thereafter. 
   
 Defective Collateralization.    This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any Security Agreement to create a valid and perfected
Security Interest) at any time and for any reason. 
  
 Insolvency.    The dissolution or termination of
Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower. 
  
  Creditor or Forfeiture
Proceedings.    Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower, any creditor of any Guarantor against any
collateral securing the Indebtedness, or by any governmental agency. This includes a garnishment, attachment, or levy on or of any of Borrower’s deposit accounts with Lender. 
   
 Events Affecting Guarantor.    Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or
revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. 
  
 Change In
Ownership.    Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. 
  
  Adverse Change.    A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. 

 
  Insecurity.    Lender, in good faith, deems itself insecure. 
   

 EFFECT OF AN EVENT OF DEFAULT.    If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make Loan Advances or disbursements), and, at Lender’s option, all Indebtedness
immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the “Insolvency” subsection above, such acceleration shall be automatic and not
optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender’s rights and remedies shall be
cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any
Grantor shall not affect Lender’s right to declare a default and to exercise its rights and remedies. 
   
 MISCELLANEOUS
PROVISIONS.    The following miscellaneous provisions are a part of this Agreement: 
  
 Amendments.    This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.
 

   
 Applicable Law.    This Agreement has been delivered to Lender and
accepted by Lender in the State of California. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of Sacramento County, the State of California. Subject to the provisions on arbitration,
this Agreement shall be governed by and construed in accordance with the laws of the State of California. 
  
  Arbitration.    Lender and Borrower agree that all disputes, claims and controversies between them, whether individual, joint, or class in nature, arising from this Agreement or otherwise, including
without limitation contract and tort disputes, shall be arbitrated pursuant to the Rules of the American Arbitration Association, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of
attachment or imposition of a receiver; or exercising any rights relating to personal properly, including taking or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code. Any disputes,
claims, or controversies concerning the lawfulness or reasonableness of any act, or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating to the Collateral, shall also be
arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain any act of any party. Lender and Borrower agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil
Procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims,
as lawfully may be referred to arbitration. judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement shall preclude any party from seeking equitable relief from a court of
competent jurisdiction. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. 
   
  Caption Headings.    Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement. 
   
  Consent to Loan Participation.    Borrower agrees and
consents to Lender’s sale or transfer, whether now or later, of one or more participation interests in the Loans to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any
one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy it may have with respect to such matters.
Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be
considered as the absolute owners of such interests in the Loans and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or
counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under the Loans irrespective
of the failure or insolvency of any holder of any interest in the Loans. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have
against Lender. 
   
 Costs and Expenses.    Borrower agrees to pay upon demand all of Lender’s expenses,
including without limitation attorneys’ fees, incurred in connection with the preparation, execution, enforcement, modification and collection of this Agreement or in connection with the Loans made pursuant to this Agreement. Lender may pay
someone else to help collect the Loans and to enforce this Agreement, and Borrower will pay that amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not
there is a lawsuit, including attorneys’ fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also will pay any court
costs, in addition to all other sums provided by law.
 

   
 Notices.    All notices required to be given under this Agreement
shall be given in writing, may be sent by telefacsimile (unless otherwise required by law), and shall be effective when actually delivered or when deposited with a nationally recognized overnight courier or deposited in the United States mail, first
class, postage prepaid, addressed to the party to whom the notice is to be given at the address shown above. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party’s address. To the extent permitted by applicable law, if there is more than one Borrower, notice to any Borrower will constitute notice to all Borrowers. For notice purposes, Borrower will keep
Lender informed at all times of Borrower’s current address(es). 
  
 Severability.    If a court of competent
jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other
respects shall remain valid and enforceable. 
  
  Subsidiaries and Affiliates of Borrower.    To the extent
the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word “Borrower” as used herein shall include all subsidiaries and affiliates of Borrower.
Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any subsidiary or affiliate of Borrower. 
   
 Successors and Assigns.    All covenants and agreements contained by or on behalf of Borrower shall bind its successors and assigns
and shall inure to the benefit of Lender, its successors and assigns. Borrower shall not, however, have the right to assign its rights under this Agreement or any interest therein, without the prior written consent of Lender. 

 
 Survival.    All warranties. representations, and covenants made by Borrower in this Agreement or in any certificate or
other instrument delivered by Borrower to Lender under this Agreement shall be considered to have been relied upon by Lender and will survive the making of the Loan and delivery to Lender of the Related Documents, regardless of any investigation
made by Lender or on Lender’s behalf. 
  
 Time Is of the Essence.    Time is of the essence in the
performance of this Agreement. 
  
  Waiver.    Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower,
or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights or of any obligations of Borrower or of any Guarantor as to any future transactions. Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not constitute continuing consent in subsequent instances where such consent is required, and in all cases such consent may be granted or withheld in the sole discretion of Lender.
 

   
 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT, AND
BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF MARCH 20, 2001. 
  
 BORROWER:

  
 NUTECH DIGITAL, INC. 
  
 
	 
	 By:
 	 	 /s/    LEE
KASPER        
 

	  	 	 LEE KASPER, PRESIDENT SECRETARY
 

 
  
 LENDER: 
  
 U.S. Bank National Association 
  
 
	 
	 By:
 	 	 /s/                        
 

	  	 	 Authorized Officer
 

 

  
 Due April 30th 2003 
  
 Customer # 6517305943 
 Loan # 18/26 
  
 AMENDMENT TO LOAN AGREEMENT AND NOTE 
  
 This amendment (the
“Amendment”) dated as of the date specified below, is by and between the borrower (the “Borrower”) and the bank (the “Bank”) identified below. 
  
 RECITALS 
  
 A.    The Borrower and the Bank have executed a Loan Agreement (the “Agreement”) dated MARCH 20, 2001 and the Borrower has executed a Note (the “Note”), dated MARCH 20, 2001,
either or both which may have been amended from time to time, and the Borrower (and if applicable, certain third parties) have executed the collateral documents which may or may not be identified in the Agreement and certain other related documents
(collectively the “Loan Documents”), setting forth the terms and conditions upon which the Borrower may obtain loans from the Bank from time to time in the original amount of $ 500,000.00, as may be amended from time to time.

  
 B.    The Borrower has requested that the Bank permit certain modifications to the Agreement
and Note as described below. 
  
 C.    The Bank has agreed to such modifications, but only upon
the terms and conditions outlined in this Amendment. 
  
 TERMS OF AGREEMENT 
  
 In consideration of the mutual covenants contained herein, and for other good and valuable consideration, the Borrower and the Bank agree
as follows: 
  
 x  Extension of Maturity
Date.    If checked here, any references in the Agreement or Note to the maturity date or date of final payment are hereby deleted and replaced with “APRIL 30, 2003”. 
  
 x  Change in Maximum Loan Amount.    If checked
here, all references to “$ 500,000.00” in the Agreement and in the Note (whether or not numerically) as the maximum loan amount which may be borrowed from time to time are hereby deleted and replaced with “$ 650.000.00”.

  
  ̈  Change in Multiple Advance Termination Date.    If checked here, all references to “ N/A” as the termination date for multiple advances are hereby deleted and replaced with
“N/A”. 
 

  
 Change in Financial Covenant(s). 
  
 (i)   ̈   If
checked here, all references to “$            ” in the Agreement as the minimum Net Working Capital amount are hereby deleted and replaced with
“$            ” for the period beginning             and thereafter. 
  
 (ii)  x  If checked here, all references to “$400,000.00”
in the Agreement as the minimum Tangible Net Worth amount are hereby deleted and replaced with “$1,000,000.00”, for the period beginning 03/20/02 and thereafter. 
  
 (iii)  x  If checked here, all references to “4.50 TO 1.00” in the Agreement as the maximum
Debt to Worth Ratio are hereby deleted and replaced with “4.00 TO 1.00” for the period beginning 03/20/02 and thereafter. 
  
 (iv)   ̈  If checked here, all references to
“            ” in the Agreement as the minimum Current Ratio are hereby deleted and replaced with
“            “ for the period beginning                  and thereafter. 
  
 (v)   ̈  If checked here, all references to “$            ” in the Agreement as the maximum Capital Expenditures amount are hereby deleted and replaced with
“$            ” for the period beginning                  and thereafter. 
  
 (vi)   ̈  If checked here, all references to “            ” in the Agreement as the minimum Cash Flow Coverage Ratio are hereby deleted and replaced with
“            ” for the period beginning                  and thereafter. 
  
 (vii)   ̈  If checked here, all references to “$            ” in the Agreement as the maximum Officers, Directors, Partners, and Management Salaries and Other
Compensation amount are hereby deleted and replaced with “$            ” for the period beginning
                 and thereafter. 
  
  ̈  Change in Payment Schedule.    If checked here,
effective upon the date of this Amendment, any payment terms are amended as follows: 
  
  ̈  Change in Late Payment Fee.    If checked here, subject to applicable law, if any
payment is not made on or before its due date, the Bank may collect a delinquency charge of             % of the unpaid amount. Collection of the late payment fee shall not be deemed to be
a waiver of the Bank’s right to declare a default hereunder. 
  
 Effectiveness of Prior
Documents.    Except as specifically amended hereby, the Agreement, the Note and the other Loan Documents shall remain in full force and effect in accordance with their respective terms. All warranties and
representations contained in the Agreement and the other Loan Documents are hereby reconfirmed as of the date hereof All collateral previously provided to secure the Agreement and/or Note continues as security, and all guaranties guaranteeing
obligations under the Loan Documents remain in full force and effect. This is an amendment, not a novation. 
  
 

  
 Preconditions to Effectiveness.    This
Amendment shall only become effective upon execution by the Borrower and the Bank, and approval by any other third party required by the Bank. 
  
 No Waiver of Defaults; Warranties.    This Amendment shall not be construed as or be deemed to be a waiver by the Bank of existing defaults by the Borrower,
whether known or undiscovered. All agreements, representations and warranties made herein shall survive the execution of this Amendment. 
  
 Counterparts.    This Amendment may be signed in any number of counterparts, each of which shall be considered an original, but when taken together shall constitute one document.

  
 Authorization.    The Borrower represents and warrants that the
execution, delivery and performance of this Amendment and the documents referenced herein are within the authority of the Borrower and have been duly authorized by all necessary action. 
  
 Attachments.    All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Amendment, are hereby expressly
incorporated herein by reference. 
  
 March 20, 2002 
 Dated as
of:                                       
                                   
  
 
	  	 	  	 	  	 	 NUTECH DIGITAL, INC.
 
	 	 	 	 	 	
	

	 (Individual Borrower)
 	 	  	 	  	 	 Borrower Name (Organization)
 
	  	 	  	 	  	 	  
	  	 	  	 	 (SEAL)
 	 	  	 	 a
 	 	 CALIFORNIA Corporation
 
	 	
	
	 	 	 	 	 	 	
	

	  	 	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	 By:
 	 	 /s/    LEE
KASPER                
 
	 	 	 	 	 	 	 	 	 	
	

	 Borrower Name             
 	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	 Name and Title: Lee Kasper, President
 
	  	 	 N/A
 	 	 (SEAL)
 	 	  	 	  	 	  
	 	
	
	 	 	 	 	 	 	 	 
	  	 	  	 	  	 	  	 	 By:
 	 	  
	 	 	 	 	 	 	 	 	 	
	

	  	 	  	 	  	 	  	 	  	 	  
	 Borrower Name
 	 	  	 	  	 	 Name and Title:
 
	  	 	 N/A
 	 	  	 	  	 	  	 	  
	 	
	
	
	
	 	 	 	 	 	 
	  	 	  	 	  	 	  	 	  	 	  
	 	 	 	 	 	 	 	 	 	
	

	 
	 Agreed to:
 	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  	 	  
	  	 	 U.S. BANK N.A.
 	 	  	 	  	 	  	 	  
	 	
	
	
	
	 	 	 	 	 	 
	  	 	 (Bank)
 	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  	 	  
	 By:
 	 	 /s/    GUS GMUSAYNT
 	 	  	 	  	 	  	 	  
	 	
	
	
	
	 	 	 	 	 	 
	  	 	  	 	  	 	  	 	  	 	  
	 Name and Title: Gus Gmusaynt, Vice President
 	 	  	 	  	 	  	 	  

 
  
  
 For additional terms see attached
addendum 
 

  
 AUTHORIZATION FOR PREAUTHORIZED 
 DEBITS FOR PAYMENT OF LOANS 
  
 1.    NuTech Digital. Inc.    (“Customer”) hereby authorizes and requests U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”) to initiate debit entries
(“withdrawals”) from the account indicated below and to transfer the withdrawn funds in accordance with the following instructions. 
  
 2.    The withdrawals shall be made from:  x  Checking   ̈  Savings   ̈  Money Market 
  
 Account Number 1-534-9182-4642 
 Maintained at X Branch           Bk TR/ABA No. 
 City Encino State CA Zip 91436 
  
 3.    The withdrawn funds shall be transferred to U.S. Bank for application to: 
  
 Loan Number                  (the “Loan”)
                 
 Maintained at
                           Bk TR/ABA No.
             
 City 
                         State      Zip
            . 
  
 4.    The
amount of each withdrawal shall be: 
  
  ̈  A fixed amount of $ 
  ̈  An amount equal to each scheduled payment periodically due on the Loan of (select only one): 
  ̈  Accrued Interest
only   ̈  Designated Principal Payment plus Accrued Interest 
  ̈  Designated Principal
Payment only   ̈  Designated Payment of Principal and Interest 
  
 U.S. Bank may apply the amount withdrawn as authorized pursuant to the documents governing the Loan. 

 
 5.    Withdrawals shall be made on each payment due date of the Loan, which is the: 

 
  ̈           day of each calendar month 
  ̈           day of each
             (list applicable month(s) for quarterly, semi-annual or annual payments) 
  ̈           day of each calendar month beginning
                 through and including and on the          day of each (list applicable month(s)) thereafter.

  
 If this box is checked   ̈, notwithstanding the foregoing, Customer acknowledges that U.S. Bank will not make a withdrawal on the final payment due date of the Loan and that U.S. Bank
will bill Customer for such final payment. 
  
 Withdrawals shall be made on each day indicated above
or on the following business day if that day falls on a Saturday, Sunday or legal holiday in the state where the depository account is held. 
  
 If there are insufficient funds in the account described above or U.S. Bank is otherwise unable to make any preauthorized debit, U.S. Bank may, at its option, (a) make the 
 

 automatic debit notwithstanding insufficient available funds and allow the account to become temporarily overdrawn, or
(b) refuse to make the automatic debit, in which case Customer agrees to separately make Customer’s Loan payment. Customer agrees to pay all fees on the account resulting from the automatic debits, including any overdraft/NSF charges, and the
amount of any resulting overdraft. 
  
 Note: If the account indicated in paragraph 2 above is a Money Market Account,
the number and frequency of withdrawals is limited as set out in Customers Agreement with U.S. Bank governing such Money Market Account. 
  
 6.    Customer acknowledges and agrees that U.S. Bank may cancel this automatic withdrawal service at any time and will endeavor to give written notice to Customer of such cancellation. 

 
 7.    Subject to paragraph 6 above, this authorization shall remain in full force and effect until U.S.
Bank has received written notification from Customer that this authorization is terminated in such time as to afford U.S. Bank a reasonable opportunity to act on it. 
  
 Customer acknowledges receipt of a signed copy of this authorization. 
  
 
	 NAME:  /S/    LEE KASPER

 	 	  	 	 TITLE
 
	 
	 BY:
 	 	  	 	 DATE:
 

 
  
 

 ADDENDUM TO AMENDMENT TO LOAN AGREEMENT AND NOTE 
  
 This Addendum is made part of the Amendment to Loan Agreement and Note (the “Amendment”) made and entered into by and between the undersigned borrower (the
“Borrower”) and the undersigned bank (the “Bank”) as of the date identified below. The following provisions are hereby added to the Agreement, (or to the extent such provisions already exist, are hereby modified) as follows.

  
 1)  Borrower agrees with Bank that the section titled “Financial Statements” has been
modified and replaced with: 
  
 Furnish Bank with, as soon as available, but in no event later than one hundred
twenty (120) days after the end of each fiscal year, Borrower’s balance sheet and income statement for the year ended, audited by a certified public accountant satisfactory to Bank, and, as soon as available, but in no event later than sixty
(60) days after the end of each fiscal quarter, Borrower’s balance sheet and profit and loss statement for the period ended, reviewed by a certified public accountant satisfactory to Bank. All financial reports required to be provided under
this Agreement shall be prepared in accordance with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct. 
  
 2)  Borrower agrees with Bank that Borrower shall rest the Line of Credit facility with no outstanding principal balance for a minimum of thirty (30) consecutive
days during the term of the loan. 
  
 Dated: March 20, 2002 
  
 
	 NUTECH DIGITAL, INC.
 
	 
	 By:
 	 	 /s/    LEE KASPER        

	  	 	 Lee Kasper, President
 

 
 

 19 

 COMMERCIAL GUARANTY 
  
 References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item. 
  
  
	 Borrower:
 

 	 	 NUTECH DIGITAL, INC.
 15210 KESWICK STREET
 VAN NUYS, CA 91405
  
 	  	 Lender:
 	 	 U.S. Bank National Association
 15910 Ventura Boulevard

Encino, CA 91436
 
	 Guarantor:
 	 	 LEE KASPER
 15210 KESWICK STREET
 VAN NUYS CA 91405
 	  	  	 	  

 
   
 AMOUNT OF GUARANTY.    The amount of this Guaranty is
Unlimited. 
  
 CONTINUING UNLIMITED GUARANTY.    For good and valuable consideration, LEE KASPER
(“Guarantor”) absolutely and unconditionally guarantees and promises to pay to U.S. Bank National Association (“Lender”) or its order, on demand, in legal tender of the United States of America, the Indebtedness (as that term is
defined below) of NUTECH DIGITAL, INC. (“Borrower”) to Lender on the terms and conditions set forth in this Guaranty. Under this Guaranty, the liability of Guarantor is unlimited and the obligations of Guarantor are continuing.

  
 DEFINITIONS.    The following words shall have the following meanings when used in this Guaranty;

  
 Borrower.    The word “Borrower” means NUTECH DIGITAL, INC. 

 
 Guarantor.    The word “Guarantor” means LEE KASPER. 
  
 Guaranty.    The word “Guaranty” means this Guaranty made by Guarantor for the benefit of Lender
dated March 20, 2001. 
  
  Indebtedness.    The word “Indebtedness” is used
in its most comprehensive sense and means and includes any and all of Borrower’s liabilities, obligations, debts, and indebtedness to Lender, now existing or hereinafter incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease obligations, other obligations, and liabilities of Borrower, or any of them, and any present or future judgments against Borrower, or any of them; and whether any such
Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily,
or as guarantor or surety; whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever; and whether the Indebtedness arises from transactions which may be voidable on account of
infancy, insanity, ultra vires, or otherwise. 
   
  Lender.    The word
“Lender” means U.S. Bank National Association, its successors and assigns. 
   
 Related
Documents.    The words “Related Documents” mean and include without limitation all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and ail other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. 

  
  NATURE OF GUARANTY.    Guarantor’s liability under this Guaranty
shall be open and continuous for so long as this Guaranty remains in force. Guarantor intends to guarantee at all times the performance and prompt payment when due, whether at maturity or earlier by reason of acceleration or otherwise, of all
Indebtedness. Accordingly, no payments made upon the Indebtedness will discharge or diminish the continuing liability of Guarantor in connection with any remaining portions of the Indebtedness or any of the Indebtedness which subsequently arises or
is thereafter incurred or contracted. Any married person who signs this Guaranty hereby expressly agrees that recourse may be had against both his or her separate property and community property. 
   
  DURATION OF GUARANTY.    This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,
or any notice to Guarantor or to Borrower, and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all other
obligations of Guarantor under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor’s written notice of revocation must be mailed to Lender, by certified
mail, at the address of Lender listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor’s
written revocation. For this purpose and without limitation, the term “new Indebtedness’ does not include Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind Guarantor for all indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor’s written notice of revocation, including any extensions,
renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifications of the Indebtedness granted after Guarantor’s revocation, are contemplated under this Guaranty and, specifically will not
be considered to be new Indebtedness. This Guaranty shall bind the estate of Guarantor as to Indebtedness created both before and after the death or incapacity of Guarantor, regardless of Lender’s actual notice of Guarantor’s death.
Subject to the foregoing, Guarantor’s executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or
termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation received by Lender from any one or more Guarantors shall not affect the liability of any remaining Guarantors under
this Guaranty. The obligations of Guarantor under this Guaranty shall be in addition to any obligations of Guarantor, or any of them, under any other guaranties of the Indebtedness of Borrower or any other person heretofore or hereafter given to
Lender unless such other guaranties are modified or revoked in writing; and this Guaranty shall not, unless herein provided, affect, invalidate, or supersede any such other guaranty. It is anticipated that fluctuations may occur in the aggregate
amount of Indebtedness covered by this Guaranty, and it is specifically acknowledged and agreed by Guarantor that reductions in the amount of Indebtedness, even to zero dollars ($0.00), prior to written revocation of this Guaranty by Guarantor shall
not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor’s heirs, successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though the Indebtedness guaranteed may
from time to time be zero dollars ($0.00). 
   
 GUARANTOR’S AUTHORIZATION TO LENDER.    Guarantor
authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor’s liability under this Guaranty, from time to time: (a) prior to revocation as set forth above, to make one or more
additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (b) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the
time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (c) to
take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fall or decide not to perfect, and release any such security, with or without the substitution of new collateral; (d) to release,
substitute, agree not to sue, or deal with anyone or more of Borrower’s sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (e) to determine how, when and what application of payments and credits shall be
made on the Indebtedness; (f) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its
discretion may determine; (g) to sell, transfer, assign, or grant participations in all or any part of the Indebtedness; and (h) to assign or transfer this Guaranty in whole or in part. 

  
  GUARANTOR’S REPRESENTATIONS AND WARRANTIES.    Guarantor represents
and warrants to Lender that (a) no representations or agreements of any kind have been made to Guarantor which could limit or qualify in any way the terms of this Guaranty; (b) this Guaranty is executed at Borrower’s request and not at the
request of Lender; (c) Guarantor has lull power, right and authority to enter into this Guaranty; (d) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (e) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise
dispose of all or substantially all of Guarantor’s assets, or any interest therein; (f) upon Lender’s request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial
information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present the financial condition of Guarantor as of the dates the
financial information is provided; (g) no material adverse change has occurred in Guarantor’s financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely
affect Guarantor’s financial condition; (h) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (i) Lender has made no representation to
Guarantor as to the creditworthiness of Borrower; and (j) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower’s financial condition. Guarantor agrees to keep adequately
informed from such means of any facts, events, or circumstances, which might in any way affect Guarantor’s risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to
disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. 
   
 GUARANTOR’S WAIVERS.    Except as prohibited by applicable raw, Guarantor waives any right to require Lender to (a) make any presentment, protest, demand, or notice of any kind, including notice of
change of any terms of repayment of the Indebtedness, default by Borrower or any other guarantor or surety, any action or nonaction taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the creation of new or additional
Indebtedness; (b) proceed against any person, including Borrower, before proceeding against Guarantor; (c) proceed against any collateral for the Indebtedness, including Borrower’s collateral, before proceeding against Guarantor; (d) apply any
payments or proceeds received against the Indebtedness in any order; (e) give notice of the terms, time, and place of any sale of the collateral pursuant to the Uniform Commercial Code or any other law governing such sale; (f) disclose any
information about the Indebtedness, the Borrower, the collateral, or any other guarantor or surety, or about any action or nonaction of Lender; or (g) pursue any remedy or course of action in Lender’s power whatsoever. 
  
  Guarantor also waives any and all rights or defenses arising by reason of (h) any disability or other defense of Borrower, any other guarantor or surety or
any other person; (i) the cessation from any cause whatsoever, other than payment in full, of the Indebtedness; (j) the application of proceeds of the indebtedness by Borrower for purposes other than the purposes understood and intended by Guarantor
and Lender; (k) any act of omission or commission by Lender which directly or indirectly results in or contributes to the discharge of Borrower or any other guarantor or surety, or the Indebtedness, or the loss or release of any collateral by
operation of law or otherwise; (I) any statute of limitations in any action under this Guaranty or on the Indebtedness; or (m) any modification or change in terms of the Indebtedness, whatsoever, including without limitation, the renewal, extension,
acceleration, or other change in the time payment of the Indebtedness is due and any change in the interest rate, and including any such modification or change in terms after revocation of this Guaranty on Indebtedness incurred prior to such
revocation. 
   
 Guarantor waives any rights and any defenses arising out of an election of remedies by Lender even though that election
of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor’s rights of subrogation and reimbursement against Borrower by operation of Section 580d of the California Code of Civil
Procedure or otherwise. 
  
  Guarantor waives all rights and defenses that Guarantor may have because Borrower’s obligation is
secured by real property. This means among other things: (1) Lender may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower. (2) If Lender forecloses on any real property collateral
pledged by Borrower: (A) The amount of Borrower’s obligation may be reduced only by the price for which the collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price. (B) Lender may collect from
Guarantor even if Lender, by foreclosing on the real property collateral, has destroyed any right Guarantor may have to collect from Borrower. This is an unconditional waiver of any rights and defenses Guarantor may have because Borrower’s
obligation is secured by real property. These rights and defenses include, but are not limited to, any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure. 

  
  Guarantor understands and agrees that the foregoing waivers are waivers of substantive rights and
defenses to which Guarantor might otherwise be entitled under state and federal law. The rights and defenses waived include, without limitation, those provided by California laws of suretyship and guaranty, anti-deficiency laws, and the Uniform
Commercial Code. Guarantor acknowledges that Guarantor has provided these waivers of rights and defenses with the intention that they be fully relied upon by Lender. Until all Indebtedness is paid in full, Guarantor waives any right to enforce any
remedy Lender may have against Borrower or any other guarantor, surety, or other person, and further, Guarantor waives any right to participate in any collateral for the Indebtedness now or hereafter held by Lender. 
   
 If now or hereafter (a) Borrower shall be or become insolvent, and (b) the Indebtedness shall not at all times until paid be fully secured by collateral pledged
by Borrower, Guarantor hereby forever waives and relinquishes in favor of Lender and Borrower, and their respective successors, any claim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or
otherwise, so that at no time shall Guarantor be or become a “creditor” of Borrower within the meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal bankruptcy laws. 
  
 GUARANTOR’S UNDERSTANDING WITH RESPECT TO WAIVERS.    Guarantor warrants and agrees that each of the waivers set forth above is
made with Guarantor’s full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. 
  
 LENDER’S RIGHT OF
SETOFF.    In addition to all liens upon and rights of setoff against the moneys, securities or other property of Guarantor given to Lender by law, Lender shall have, with respect to Guarantor’s obligations to Lender
under this Guaranty and to the extent permitted by law, a contractual security interest in and a right of setoff against, and Guarantor hereby assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor’s right, title and
interest in and to, all deposits, moneys, securities and other property of Guarantor now or hereafter in the possession of or on deposit with Lender, whether held in a general or special account or deposit, whether held jointly with someone else, or
whether held for safekeeping or otherwise, excluding however all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to Guarantor. No security interest or right of setoff
shall be deemed to have been waived by any act or conduct on the part of Lender or by any neglect to exercise such right of setoff or to enforce such security interest or by any delay in so doing. Every right of setoff and security
interest shall continue in full force and effect until such right of setoff or security interest is specifically waived or released by an instrument in writing executed by Lender. 
  
 SUBORDINATION OF BORROWER’S DEBTS TO GUARANTOR.    Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be
prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to
any claim that Lender may now or hereafter have against Borrower. In the event of Insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or
otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all
claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of
the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to
Lender. Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor, from time to time to execute and file financing statements and continuation statements and to execute such other documents and to take such other actions as Lender
deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. 
  
 MISCELLANEOUS
PROVISIONS.    The following miscellaneous provisions are a part of this Guaranty: 
  
 Integration,
Amendment.    Guarantor warrants, represents and agrees that this Guaranty, together with any exhibits or schedules incorporated herein, fully incorporates the agreements and understandings of Guarantor with Lender with
respect to the subject matter hereof and all prior negotiations, drafts, and other extrinsic communications between Guarantor and Lender shall have no evidentiary effect whatsoever. Guarantor further agrees that Guarantor has read and fully
understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor’s attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor’s intentions and parol evidence is not required to
interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender’s attorneys’ fees) suffered or incurred by Lender as a result of any breach by
Guarantor of the warranties, representations and agreements of this paragraph. No alteration or amendment to this Guaranty shall be effective unless given in writing and signed by the parties sought to be charged or bound by the alteration or
amendment. 

  
 Applicable Law.    This Guaranty has been delivered to Lender and accepted by
Lender in the Stale of California. If there is a lawsuit, Guarantor agrees upon Lender’s request to submit to the jurisdiction of the courts of Sacramento County, State of California. Subject to the provisions on arbitration, this Guaranty
shall be governed by and construed in accordance with the laws of the State of California. 
  
  Arbitration.    Lender and Guarantor agree that all disputes, claims and controversies between them, whether individual, joint, or class in nature, arising from this Guaranty or otherwise, including without
limitation contract and tort disputes, shall be arbitrated pursuant to the Rules of the American Arbitration Association, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment
or imposition of a receiver; or exercising any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating to the Collateral, shall also be
arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain any act of any party. Lender and Guarantor agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil
Procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims,
as lawfully may be referred to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Guaranty shall preclude any party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. 
   
 Attorneys’ Fees; Expenses.    Guarantor agrees to pay upon demand all of Lender’s costs and expenses, including
attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs
and expenses include Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (and including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. 
  
  Notices.    All notices required to be given by either party to the other under this Guaranty shall be in writing, may be sent by telefacsimile (unless otherwise required by
law), and, except for revocation notices by Guarantor, shall be effective when actually delivered or when deposited with a nationally recognized overnight courier, or when deposited in the United States mail, first class postage prepaid, addressed
to the party to whom the notice is to be given at the address shown above or to such other addresses as either party may designate to the other in writing. All revocation notices by Guarantor shall be in writing and shall be effective only upon
delivery to Lender as provided above in the section titled “DURATION OF GUARANTY.” If there is more than one Guarantor notice to any Guarantor will constitute notice to all Guarantors. For notice purposes, Guarantor agrees to keep Lender
informed at all times of Guarantor’s current address. 

  
  Interpretation.    In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be deemed have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is
executed by more than one Guarantor, the words “Borrower” and “Guarantor” respectively shall mean all and any one or more of them. The words “Guarantor,” “Borrower,” and “Lender” include the heirs,
successors, assigns, and transferees of each of them. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. If a court of competent jurisdiction finds any
provision of this Guaranty to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances, and all provisions of this Guaranty in all
other respects shall remain valid and enforceable. If any one or more Borrower or Guarantor are corporations or partnerships, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners,
or agents acting or purporting to act on their behalf, and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. 
   

Waiver.    Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or
omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender’s right otherwise to
demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender’s rights or of any of
Guarantor’s obligations as of any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. 
  
 EACH UNDERSIGNED
GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT
THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY.” NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MARCH 20, 2001.

 

 25 

  
 
	 GUARANTOR:
 
	 
	 X
 	 	 /s/    LEE KASPER
 

	  	 	 LEE KASPER
 

 
  
 LENDER: 
  
 U.S. Bank National Association 
  
 
	 
	 By:
 	 	 /s/    
 

	  	 	 Authorized Officer
 

 
 

 26 

  
  BUSINESS SECURITY AGREEMENT 
  
 This Business Security Agreement (“Agreement”) is made and entered into by the undersigned borrower, guarantor and/or other
obligor/pledgor (the “Debtor”) in favor of U.S. BANK N.A. (the “ Bank”) as of the date set forth on the last page of this Agreement. 
  
 ARTICLE I.    SECURITY INTEREST 
  
 1.1    Grant of Security Interest.    Debtor hereby grants a security interest in and collaterally assigns the Collateral (defined below) to Bank to secure all of Debtor’s
Obligations (defined below) to Bank. The intent of the parties hereto is that the Collateral secures all Obligations of Debtor to Bank, whether or not such Obligations exist under this Agreement or any other agreements, whether now or hereafter
existing, between Debtor and Bank or in favor of Bank, including, without limitation, any note, any loan or security agreement, any lease, any mortgage, deed of trust or other pledge of an interest in real or personal property, any guaranty any
letter of credit or banker’s acceptance, any agreement for any other services or credit extended by Bank to Debtor even though not specifically enumerated herein, and any other agreement with Bank (together and individually, the “Loan
Documents”). 
  
 1.2    “Collateral”    means all of
the following whether now owned or existing or hereafter acquired by Debtor (or by Debtor with spouse), wherever located (including all documents, general intangibles, additions and accessions, spare and repair parts, special tools, replacements,
returned or repossessed goods and books and records relating to the following; and all proceeds, supporting obligations and products of the following) [check all that apply]: 
  

	 	x
	 
	All accounts, instruments, documents, chattel paper, general intangibles, contract rights, investment property (including any securities entitlements and/or
securities accounts held by Debtor), securities and certificates of deposit, deposit accounts, and letter of credit rights; 
 

  

	 	x
	 
	All inventory: 
 

  

	 	x
	 
	All equipment; 
 

  

	 	 ̈
	 
	All fixtures; and 
 

  

	 	 ̈
	 
	Specific Collateral (the following, whether constituting equipment, inventory, fixtures, or other collateral)
                                        
                              
 

  
 In the event the first four boxes are checked, Debtor acknowledges and agrees that, in applying the law of any jurisdiction that at any
time enacts all or 

  
 substantially all of the uniform provisions of Revised Article 9 of the Uniform Commercial Code (1999
Official Text), the foregoing collateral description covers all assets of Debtor. Bank may at any time and from time to time file financing and continuation statements and amendments thereto reflecting the same. Unless otherwise defined, the terms
set forth in this Agreement shall have the meanings set forth in the Uniform Commercial Code as adopted in the Loan Documents and as amended from time to time. The defined terms hereunder shall be interpreted in a manner most favorable to Bank.

  
 1.3    “Obligations” means all Debtor’s debts (except for consumer
credit if Debtor is a natural person), liabilities, obligations, covenants, warranties, and duties to Bank (plus its affiliates including any credit card debt, but specifically excluding any type of consumer credit), whether now or hereafter
existing or incurred, whether liquidated or unliquidated, whether absolute or contingent, whether arising out of the Loan Documents or otherwise, and all other debts and obligations due Bank under any lease, agricultural, real estate or other
financing transaction and regardless of whether such financing is related in time or type to the financing provided at the time of grant of this security interest, and regardless of whether such Obligations arise out of existing or future credit
granted by Bank to any Debtor, to any Debtor and others, to others guaranteed, endorsed or otherwise secured by any Debtor or to any debtor-in-possession or other successor-in-interest of any Debtor, and including principal, interest, fees, expenses
and charges relating to any of the foregoing. 
  
 ARTICLE II.    WARRANTIES AND COVENANTS

  
 In addition to all other warranties and covenants of Debtor under the Loan Documents which are expressly
incorporated herein as, part of this Agreement and while any part of the credit granted Debtor under the Loan Documents is available or any Obligations of Debtor to Bank are unpaid or outstanding, Debtor continuously warrants and agrees as follows:

  
 2.1    Debtor’s Name, Location; Notice of Location
Changes.    Except as indicated in the Article 9 Certificate executed by Debtor and made a part hereof, Debtor’s name and organizational structure has remained the same during the past five (5) years. Debtor will
continue to use only the name set forth with Debtor’s signature unless Debtor gives Bank prior written notice of any change. Furthermore, Debtor shall not do business under another name nor use any trade name without giving ten (10) days prior
written notice to Bank. Debtor will not change its status or organizational structure without the prior written consent of Bank. Debtor will not change its location or registration (if Debtor is a registered organization) to another state without
prior written notice to Bank. The address appearing in the Article 9 Certificate is Debtor’s chief executive office (or residence if Debtor is a sole proprietor). 
  
 2.2    Status of Collateral.    All Collateral is genuine and validly existing. Except for items of insignificant value or as
otherwise reflected in writing by Debtor to Bank under 

  
 a borrowing base or otherwise, (i) Collateral constituting inventory, equipment and fixtures is in good
condition, not obsolete and is either currently saleable or usable; and (ii) Collateral constituting accounts, contract rights, notes, chattel paper and other third-party obligations to pay is fully enforceable in accordance with its terms and not
subject to return, dispute, setoff, credit allowance or adjustment, except for discounts for prompt payment. Unless Debtor provides Bank with written notice to the contrary, Debtor has no notice or knowledge of anything that would impair the ability
of any third-party obligor to pay any debt to Debtor when due. 
  
 2.3    Ownership;
Maintenance of Collateral; Restrictions on Liens and Dispositions.    Debtor is the sole owner of the Collateral free of all liens, claims, other encumbrances and security interests except as permitted in writing by Bank.
Debtor shall: (i) maintain the Collateral in good condition and repair (reasonable wear and tear excepted), and not permit its value to be impaired; (ii) not permit waste, removal or loss of identity of the Collateral; (iii) keep the Collateral free
from all liens, executions, attachments, claims, encumbrances and security interests (other than Bank’s paramount security interest and those permitted in writing by Bank); (iv) defend the Collateral against all claims and legal
proceedings by persons other than Bank; (v) pay and discharge when due all taxes, levies and other charges or fees upon the Collateral except for payment of taxes contested by Debtor in good faith by appropriate proceedings so long as no levy or
lien has been imposed upon the Collateral; (vi) not lease, sell or transfer the Collateral to any party nor move it to any new location outside of the ordinary course of business; (vii) not permit the Collateral, without the consent of Bank, to
become a fixture or an accession to other goods; (viii) not permit the Collateral to be used in violation of any applicable law, regulation or policy of insurance; and, (ix) as to the Collateral consisting of instruments and chattel paper, preserve
Bank’s rights in it against air other parties. Notwithstanding the above, Debtor may sell, lease or transfer inventory in the ordinary course of its business provided that no sale, lease or transfer shall include any transferor sale in
satisfaction (partial or complete) of a debt owed by Debtor; title will not pass to buyer until Debtor physically delivers the goods to buyer or Debtor ships the goods F.O.B. to buyer’s destination; and sales and/or leases to Debtor’s
affiliates shall be for fair market value, cash on delivery, with the proceeds remitted to Bank. 
  
 2.4    Maintenance of Security Interest; Purchase Money Security Interests.    Debtor shall take any action requested by Bank to preserve the Collateral and to establish the value of,
the priority of, to perfect, to continue the perfection of or to enforce Bank’s interest in the Collateral and Bank’s rights under this Agreement; and shall pay all costs and expenses related thereto. Debtor shall also cooperate with Bank
in obtaining control (for purposes of perfection under the Uniform Commercial Code) of Collateral consisting of deposit accounts, investment property, letter of credit rights, electronic chattel paper and any other collateral where Bank may obtain
perfection through control. Debtor hereby authorizes Bank to take any and all actions described above and in place of Debtor with respect to the Collateral and hereby ratifies any such actions Bank has taken prior to the date of this Agreement and
hereafter, which actions may include, without limitation, filing UCC financing statements and obtaining or attempting to obtain control 

  
 agreements from holders of the Collateral. Debtor and Bank intend to maintain the full effect of any
purchase money security interest granted in favor of Bank notwithstanding the fact that the Collateral so purchased is also pledged as security for other Obligations under the Loan Documents. 
  

2.5    Collateral Inspections; Modifications and Changes in Collateral.    At reasonable times, Bank may examine the
Collateral and Debtor’s records pertaining to it, wherever located, and make copies of such records at Debtor’s expense; and Debtor shall assist Bank in so doing. Without Bank’s prior written consent, Debtor shall not alter, modify,
discount, extend, renew or cancel any Collateral, except for ordinary discounts for prompt payment on accounts, physical modifications to the inventory occurring in the manufacturing process or alterations to equipment which do not materially affect
its value. Debtor shall promptly notify Bank in writing of any material change in the condition of the Collateral and of any change in location of the Collateral. 
  
 2.6    Collateral Records, Reports and Statements.    Debtor shall keep accurate and complete records respecting the
Collateral in such form as Bank may approve. At such times as Bank may require, Debtor shall furnish to Bank any records/information Bank might require, including, without limitation, a statement certified by Debtor and in such form and containing
such information as may be prescribed by Bank showing the current status and value of the Collateral. 
  
 2.7    Chattel Paper, Instruments, Etc.    Chattel paper, instruments, drafts, notes, acceptances, and other documents which constitute Collateral shall be on forms satisfactory to Bank.
Debtor shall promptly mark chattel paper to indicate conspicuously Bank’s security interest therein, shall not deliver any chattel paper or negotiable instruments to any other entity and, upon request, shall deliver any original chattel paper,
instruments, drafts, notes, acceptances and other documents which constitute Collateral to Bank. 
  
 2.8    United States Government Contracts.    If any accounts or contract rights arose out of contracts with the United States or any of its departments, agencies or instrumentalities,
Debtor shall promptly notify Bank and execute any writings required by Bank so that any money due or to become due under such contracts shall be assigned to Bank under the Federal Assignment of Claims Act. 
  
 2.9    Environmental Matters.    Except as disclosed in a written schedule attached to this
Agreement (if no schedule is attached, there are no exceptions), there exists no uncorrected violation by Debtor of any federal, state or local laws (including statutes, regulations, ordinances or other governmental restrictions and requirements)
relating to the discharge of air pollutants, water pollutants or process waste water or otherwise relating to the environment or Hazardous Substances as hereinafter defined, whether such laws currently exist or are enacted in the future
(collectively “Environmental Laws’). The term “Hazardous Substances” shall mean any hazardous or toxic wastes, chemicals or other substances, the generation, possession or existence of which is prohibited or governed by any
Environmental Laws. Debtor is not subject to any judgment, decree, 

  
 order or citation, or a party to (or threatened with) any litigation or administrative proceeding, which
asserts that Debtor (i) has violated any Environmental Laws; (ii) is required to clean up, remove or take remedial or other action with respect to any Hazardous Substances (collectively “Remedial Action”); or (iii) is required to pay all
or a portion of the cost of any Remedial Action, as a potentially responsible party. There are not now, nor to Debtor’s knowledge after reasonable investigation have there ever been, any Hazardous Substances (or tanks or other facilities for
the storage of Hazardous Substances) stored, deposited, recycled or disposed of on, under or at any real estate owned or occupied by Debtor during the periods that Debtor owned or occupied such real estate, which if present on the real estate or in
soils or ground water, could require Remedial Action. To Debtor’s knowledge, there are no proposed or pending changes in Environmental Laws which would adversely affect Debtor or its business, and there are no conditions existing currently or
likely to exist while the Loan Documents are in effect which would subject Debtor to Remedial Action or other liability. Debtor currently complies with and will continue to timely comply with all applicable Environmental Laws; and will provide Bank,
immediately upon receipt, copies of any correspondence, notice, complaint, order or other document from any source asserting or alleging any circumstance or condition which requires or may require a financial contribution by Debtor or Remedial
Action or other response by or on the part of Debtor under Environmental Laws, or which seeks damages or civil, criminal or punitive penalties from Debtor for an alleged violation of Environmental Laws. 
  
 2.10    Insurance.    Debtor will maintain insurance to such
extent, covering such risks and with such insurers as is usual and customary for businesses operating similar properties, and as is satisfactory to Bank, including insurance for fire and other risks insured against by extended or comprehensive
coverage, public liability insurance and workers’ compensation insurance; and will designate Bank as loss payee with a “Lender’s Loss Payable” endorsement on any casualty policies and take such other action as Bank may reasonably
request to ensure that Bank will receive (subject to no other interests) the insurance proceeds of the Collateral. Debtor hereby assigns all insurance proceeds to and irrevocably directs, while any Obligations remain unpaid, any insurer to pay to
Bank the proceeds of all such insurance and any premium refund; and authorizes Bank to endorse Debtor’s name to effect the same, to make, adjust or settle, in Debtor’s name, any claim on any insurance policy relating to the Collateral;
and, at the option of Bank, to apply such proceeds and refunds to the Obligations or to restoration of the Collateral, returning any excess to Debtor. In the event of any failure of the Debtor to obtain or maintain any insurance required hereunder,
the Bank shall have the authority, but not the obligation, to obtain any such insurance coverage, and the Debtor shall immediately reimburse the Bank for the cost thereof, together with interest on such amount at the highest rate of interest then
accruing on any of the Obligations. 
  
 ARTICLE III.    COLLECTIONS 
  
 3.1    Deposit with Bank.    At any time Bank may require that
all proceeds of Collateral received by Debtor shall be held by Debtor upon an express trust for Bank, shall not be commingled with any other funds or property of Debtor and shall be turned over to Bank in precisely the form received (but endorsed by
Debtor, if necessary for collection) not
 
 

 
later than the business day following the day of their receipt. All proceeds of Collateral received by Bank directly or from Debtor shall be applied against the Obligations in such order and at
such times as Bank shall determine. 
  
 ARTICLE IV.    RIGHTS AND DUTIES OF BANK 

 
 In addition to all other rights (including setoff) and duties of Bank under the Loan Documents which are expressly incorporated
herein as a part of this Agreement, the following provisions shall also apply: 
  
 4.1    Authority to Perform for Debtor.    Debtor presently appoints any officer of Bank as Debtor’s attorney-in-fact (coupled with an interest and
irrevocable while any Obligations remain unpaid to do any of the following upon default by Debtor hereunder (notwithstanding any notice requirements or grace/cure periods under this or other agreements between Debtor and Bank): (i) to file, endorse
or place the name of Debtor on any invoice or document of title relating to accounts, drafts against customers, notices to customers, notes, acceptances, assignments of government contracts, instruments, financing statements, checks, drafts, money
orders, insurance claims or payments or other documents evidencing payment or a security interest relating to the Collateral; (ii) to receive, open and dispose of all mail addressed to Debtor and to notify the Post Office authorities to change the
address for delivery of mail addressed to Debtor to an address designated by Bank; (iii) to do all such other acts and things necessary to carry out Debtor’s duties under this Agreement and the other loan Documents; and (iv) to perfect, protect
and/or realize upon Bank’s interest in the Collateral. If the Collateral includes funds or property in depository accounts, Debtor authorizes each of its depository institutions to remit to Bank, without liability to Debtor, all of
Debtor’s funds on deposit with such institution upon written direction by Bank after default by Debtor hereunder. All acts by Bank are hereby ratified and approved, and Bank shall not be liable for any acts of commission or omission, nor for
any errors of judgment or mistakes of fact or law. 
  
 4.2    Verification and
Notification; Bank’s Rights.    Bank may verify Collateral in any manner, and Debtor shall assist Bank in so doing. Upon the occurrence of a default hereunder, Bank may at any time and Debtor shall, upon request
of Bank, notify the account debtors to make payment directly to Bank; and Bank may enforce collection of, sell, settle, compromise, extend or renew the indebtedness of such account debtors; all without notice to or the consent of Debtor. Until
account debtors are so notified, Debtor, as agent of Bank, shall make collections on the Collateral. Bank may at any time notify any bailee possessing Collateral to turn over the Collateral to Bank. 
  
 4.3    Collateral Preservation.    Bank shall use reasonable care in
the custody and preservation of any Collateral in its physical possession but in determining such standard of reasonable care, Debtor expressly acknowledges that Bank has no duty to: (i) insure the Collateral against hazards; (ii) ensure that the
Collateral will not cause damage to property or injury to third parties; (iii) protect it from seizure, theft or conversion by third parties, third parties’ claims or acts of God; (iv) give to Debtor any notices received by Bank regarding the
Collateral; (v) perfect or continue perfection of any security interest in favor of Debtor; (vi) perform any services, complete any work-in-process or take any
 
 

 
other action in connection with the management or maintenance of the Collateral; or (vii) sue or otherwise effect collection upon any accounts even if Bank shall have made a demand for payment
upon individual account debtors. Notwithstanding any failure by Bank to use reasonable care in preserving the Collateral, Debtor agrees that Bank shall not be liable for consequential or special damages arising therefrom. 
  
 ARTICLE V.    DEFAULTS AND REMEDIES 
  
 Bank may enforce its rights and remedies under this Agreement upon default. A default shall occur if Debtor fails to comply with the terms of any Loan Documents (including
this Agreement or any guaranty by Debtor) a demand for payment is made under a demand loan, or any other obligor fails to comply with the terms of any Loan Documents for which Debtor has given Bank a guaranty or pledge. 
  
 5.1    Cumulative Remedies; Notice; Waiver.    In addition to the
remedies for default set forth in the Loan Documents, Bank upon default shall have all other rights and remedies for default provided by the Uniform Commercial Code, as well as any other applicable law and this Agreement, INCLUDING, WITHOUT
LIMITATION, THE RIGHT TO REPOSSESS, RENDER UNUSABLE AND/OR DISPOSE OF THE COLLATERAL WITHOUT JUDICIAL PROCESS. The rights and remedies specified herein are cumulative and are not exclusive of any rights or remedies which Bank would otherwise have.
With respect to such rights and remedies: 
  
 (a)  Assembling Collateral; Storage; Use of
Debtor’s Name/Other Property.    Bank may require Debtor to assemble the Collateral and to make it available to Bank at any convenient place designated by Bank. Debtor recognizes that Bank will not have an
adequate remedy in law if this obligation is breached and accordingly, Debtor’s obligation to assemble the Collateral shall be specifically enforceable. Bank shall have the right to take immediate possession of said Collateral and Debtor
irrevocably authorizes Bank to enter any of the premises wherever said Collateral shall be located, and to store, repair, maintain, assemble, manufacture, advertise and sell, lease or dispose of (by public sale or otherwise) the same on said
premises until sold, all without charge or rent to Bank. Bank is hereby granted an irrevocable license to use, without charge, Debtor’s equipment, inventory, labels, patents, copyrights, franchises, names, trade secrets, trade names, trademarks
and advertising matter and any property of a similar nature; and Debtor’s rights under all licenses and franchise agreements shall inure to Bank’s benefit. Further, Debtor releases Bank from obtaining a bond or surety with respect to any
repossession and/or disposition of the Collateral. 
  
 (b)  Notice of
Disposition.    Written notice, when required by law, sent to any address of Debtor in this Agreement, at least five (5) calendar days (counting the day of sending) before the date of a proposed disposition of the
Collateral is reasonable notice but less notice may be reasonable under the circumstances. Notification to account debtors by Bank shall not be deemed a disposition of the Collateral. Notice of any record shall be deemed delivered when the record
has been (a) deposited in the United States Mail, postage pre-paid, (b) received by overnight delivery service, (c) received by telex, (d) received by telecopy, (e) received through the internet, or (f) when personally delivered. 

  
 (c)  Possession of Collateral/Commercial
Reasonableness.    Bank shall not, at any time, be obligated to either take or retain possession or control of the Collateral. With respect to Collateral in the possession or control of Bank, Debtor and Bank agree that
as a standard for determining commercial reasonableness, Bank need not liquidate, collect, sell or otherwise dispose of any of the Collateral if Bank believes, in good faith, that disposition of the Collateral would not be commercially reasonable,
would-subject Bank to third-party claims or liability, that other potential purchasers could be attracted or that a better price could be obtained if Bank held the Collateral for up to 2 years. Bank may sell Collateral without giving any warranties
and may specifically disclaim any warranties of title or the like. Furthermore, Bank may sell the Collateral on credit (and reduce the Obligations only when payment is received from the buyer), at wholesale and/or with or without an agent or broker;
and Bank need not complete, process, repair, clean-up or otherwise prepare the Collateral prior to disposition. If the purchaser fails to pay for the Collateral, Bank my resell the Collateral and Debtor shall be credited with the cash proceeds of
the sale. Bank may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

  
 (d)  Waiver by Debtor.    Bank has no obligation and Debtor waives any
obligation to attempt to satisfy the Obligations by collecting the obligations from any third parties and Bank may release, modify or waive any collateral provided by any third party to secure any of the Obligations, all without affecting
Bank’s rights against Debtor. Debtor further waives any obligation on the part of Bank to marshal any assets in favor of Debtor or in payment of the Obligations. Notwithstanding any provisions in this Agreement or any other agreement between
Debtor and Bank, Debtor does not waive any statutory rights except to the extent that the waiver thereof is permitted by law. 
  
 (e)  Waiver by Bank.    Bank may permit Debtor to attempt to remedy any default without waiving its rights and remedies hereunder, and Bank may waive any default without waiving any
other subsequent or prior default by Debtor. Furthermore, delay on the part of Bank in exercising any right, power or privilege hereunder or at law shall not operate as a waiver thereof, nor shall any single or partial exercise of such right, power
or privilege preclude other exercise thereof or the exercise of any other right, power or privilege. No waiver or suspension shall be deemed to have occurred unless Bank has expressly agreed in writing specifying. such waiver or suspension.

  
 ARTICLE VI.    MISCELLANEOUS 
  
 All other provisions in the Loan Documents are expressly incorporated as a part of this Agreement. 
  
 All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Agreement, are hereby expressly incorporated by reference. 

 
 IN WITNESS WHEREOF, the undersigned has/have executed this BUSINESS SECURITY AGREEMENT as MARCH 20, 2002. 

 
 
	 (Individual Debtor)
 	 	  	 	  	 	 NUTECH DIGITAL, INC.
 
	 	 	 	 	 	
	

	  	 	  	 	  	 	 Debtor Name (Organization)
 
	  	 	  	 	  	 	  	 	  	 	  	 	  
	  	 	  	 	 (SEAL)
 	 	  	 	 a
 	 	 CALIFORNIA Corporation
 
	
	
	
	 	 	 	 	 	 	
	

	  	 	  	 	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	 By:
 	 	 /s/    LEE
KASPER                
 
	 	 	 	 	 	 	 	 	 	
	

	 Debtor Name
 	 	 N/A
 	 	  	 	  	 	  	 	  	 	  
	 	
	
	
	
	 	 	 	 	 	 	 	 
	  	 	  	 	  	 	  	 	 Name and Title:
 	 	 Lee Kasper, President
 
	 	 	 	 	 	 	 	 	 	
	

	  	 	  	 	 (SEAL)
 	 	  	 	  	 	  	 	  
	
	
	
	 	 	 	 	 	 	 	 	 	 
	  	 	  	 	  	 	  	 	 By:
 	 	  
	 	 	 	 	 	 	 	 	 	
	

	  	 	  	 	  	 	  	 	  	 	  	 	  
	 Debtor Name
 	 	 N/A
 	 	  	 	  	 	 Name and Title:
 	 	  
	 	
	
	
	
	 	 	 	 	
	

 
 

  
 INSURANCE COVERAGE FOR THE BENEFIT OF THE BANK 
  
 
	 TO:    INSURANCE AGENT
 	 	 OWNER:
 
	 
	 PCPP4006078
 
	 	 NUTECH DIGITAL, INC
 

	 Policy Number
 	 	 Name
 
	 
	 310-207-7737
 
	 	 15210 KESWICK STREET
 

	 Telephone Number
 	 	 Address
 
	 
	 COAST INSURANCE AGENCY
 
	 	 VAN NUYS, CA 91405
 

	 Insurance Company Name
 	 	 City        State        Zip Code
 
	 
	 
	 	 

	 Insurance Agent’s Name 
 	 	  

 
  
 
	  	  	 11611 SAN VICENTE BLVD., SUITE 720
 	  	  
	 	
	
	 	 
	  	  	 Address
 	  	  	  	  	  	  
	 
	  	  	 LOS ANGELES, 
 	  	 CA
 	  	 90049
 	  	  
	 	
	
	
	
	
	
	 	 
	  	  	 City
 	  	 State
 	  	 Zip Code
 	  	  

 
  
 As set forth below, this is a request and authorization that you
name U.S. BANK N.A. (“the Bank”) as “Lenders Loss Payee” and/or “Mortgage Payee” under our property coverage from COAST INSUARANCE AGENCY (insert name of insurance company as follows: 
  
 (Fill Out the Appropriate Sections) 
  
 x    Lenders Loss Payee on all our tangible personal property (inventory/equipment) in the minimum amount of $50,000.00 and on any Business Interruption Insurance we have bound.

  
  ̈    Lenders Loss Payee on that equipment described below or on the attached sheet in the minimum amount of
$                         
  
  ̈    Lenders Loss Payee on motor vehicles up to their insurable value, as described below or
on the attached sheet. 
  
 
	 
	 
	 	 
	 	 
	 	 

	 Year
 	 	 Make
 	 	 Model
 	 	 VIN/Serial #
 
	 
	 
	 	 
	 	 
	 	 

	 Year
 	 	 Make
 	 	 Model
 	 	 VIN/Serial #
 

 
  
  ̈    Mortgage Payee on real estate at the following locations with coverage in the amounts specified: 
  
  
 
	  	  	 $                    
 
	 
	  	 

	 Address                                    
                          City              
              State
 	  	 Amount of Coverage
 

 

  
 
	  	  	 $                    
 
	 
	  	 

	 Address                City                State
 	  	 Amount of Coverage
 
	  	  	 $                    
 
	 
	  	 

	 Address                City                State
 	  	 Amount of Coverage
 

 
  
 The Bank will require a binder or certificate showing such coverage
and listing the Bank as Lenders Loss Payee and/or Mortgage Payee as stated above, or, alternatively, please provide the Bank with language from the policy showing its “Lender Loss Payee” and/or “Mortgage Payee” coverage. Such
coverage should insure that the Bank is paid in the event of loss despite any neglect on our part, and that the Bank is given prior notice of cancellation. 
  
 Lastly, the Bank requires that there be no other loss payee and/or mortgage payee on its collateral without its consent. If there presently exists any other loss payee and/or mortgage payee on such
collateral, please itemize such parties and their insured collateral on a separate attachment. 
  
 Please send the
binder/certificate and any applicable loss payee/mortgage list to: 
  
 U.S. Bank N.A. 
 Attn:    Corporate Loan Servicing Center 
             Commercial Collateral 
 #651730594318/26 
 555 SW Oak PD_OR_P7LD 
 Portland, OR 97204 
  
 Please direct any questions regarding this request to: 1-503-275-7136. 
  
 Thank you for your assistance. 
  
 
	 
	  
	  
 Nutech Digital, Inc. 
 

	 (Owner Name) 
 
	 
	 By:         /s/    LEE
KASPER
 

	           (Owner’s Signature)
 
	 
	 Name and Title: Lee Kasper, President
 

	 (For Company Only)EXHIBIT 4.1
                                                                     -----------

                                 TRUST AGREEMENT

               TRUST AGREEMENT, between MSDW Structured Asset Corp. (the
"Depositor") and LaSalle Bank National Association (the "Trustee"), made as of
the date set forth in Schedule I attached hereto, which Schedule together with
Schedules II and III attached hereto, are made a part hereof and are hereinafter
referred to collectively as the "Terms Schedule". The terms of the Standard
Terms for Trust Agreements, dated July 7, 1999 (the "Standard Terms") are,
except to the extent otherwise expressly stated, hereby incorporated by
reference herein in their entirety with the same force and effect as though set
forth herein. Capitalized terms used herein and not defined shall have the
meanings defined in the Standard Terms. References to "herein", "hereunder",
"this Trust Agreement" and the like shall include the Terms Schedule attached
hereto and the Standard Terms so incorporated by reference.

               WHEREAS, the Depositor and the Trustee desire to establish the
Trust identified in Schedule I attached hereto (the "Trust") for the primary
purposes of (i) holding the Securities, (ii) entering into any Swap Agreement
with the Swap Counterparty and (iii) issuing the Units;

               WHEREAS, the Depositor desires that the respective beneficial
interests in the Trust be divided into transferable fractional shares, such
shares to be represented by the Units; and

               WHEREAS, the Depositor desires to appoint the Trustee as trustee
of the Trust and the Trustee desires to accept such appointment;

               WHEREAS, the Depositor shall transfer, convey and assign to the
Trust without recourse, and the Trust shall acquire, all of the Depositor's
right, title and interest in and under the Securities and other property
identified in Schedule II to the Trust Agreement (the "Trust Property"); and

               WHEREAS, the Trust agrees to acquire the Trust Property specified
herein in consideration for Units having an initial Unit Principal Balance
identified in Schedule I attached hereto, subject to the terms and conditions
specified in the Trust Agreement;

               NOW THEREFORE, the Depositor hereby appoints the Trustee as
trustee hereunder and hereby requests the Trustee to receive the Securities from
the Depositor and to issue in accordance with the instructions of the Depositor
Units having the terms specified in Schedule I attached hereto, and the Trustee
accepts such appointment and, for itself and its successors and assigns, hereby
declares that it shall hold all the estate, right, title and interest in any
property contributed to the trust account established hereunder (except property
to be applied to the payment or reimbursement of or by the Trustee for any fees
or expenses which under the terms hereof is to be so applied) in trust for the
benefit of all present and future Holders of the fractional shares of beneficial
interest issued hereunder, namely, the Unitholders, and subject to the terms and
provisions hereof and of the Standard Terms.

               IN WITNESS WHEREOF, each of the undersigned has executed this
instrument as of the date set forth in the Terms Schedule attached hereto.

                             LASALLE BANK NATIONAL ASSOCIATION
                                as  Trustee  on  behalf  of  the  Trust
                                identified  in Schedule
                                I hereto, and not in its individual capacity

                             By:     /s/ Brian Ames
                                 ------------------------------
                                 Name:      Brian D. Ames
                                 Title:     Vice President

                             MSDW STRUCTURED ASSET CORP.

                             By:    /s/ John Kehoe
                                 ------------------------------
                                 Name:      John Kehoe
                                 Title:     Vice President

Attachments: Terms Schedule (consisting of Schedules I, II and III)

<PAGE>

                                   Schedule I
                           (Terms of Trust and Units)

Trust:                              SATURNS Trust No. 2002-8

Date of Trust Agreement:            July 11, 2002

Trustee:                            LaSalle Bank National Association.
                                    References to Chase Bank of Texas, National
                                    Association in the Standard Terms shall be
                                    inapplicable.

Initial Unit Principal Balance
of the Units:                       $25,000,000

Issue Price:                        100%

Number of Units:                    1,000,000 (Unit Principal Balance of $25
                                    each)

Minimum Denomination:               $25 and $25 increments in excess thereof.
                                    The minimum denomination specified in
                                    Section 5.01(a) of the Standard Terms shall
                                    not apply. Each $25 of Unit Principal
                                    Balance is a Unit.

Cut-off Date:                       July 11, 2002

Closing Date:                       July 11, 2002

Specified Currency:                 United States dollars

Business Day:                       New York, New York and Chicago, Illinois

Interest Rate:                      9.25% per annum on the basis of a 360 day
                                    year consisting of twelve 30 day months.

Interest Reset Period:              Not Applicable

Rating:                             Baa2 by Moody's

                                    BBB by S&P

Rating Agencies:                    Moody's and S&P

Scheduled Final Distribution Date:  March 1, 2031. The Units will have the same
                                    final maturity as the Securities.

Prepayment/Redemption:              The Trust Property is subject to redemption
                                    in accordance with the terms of the
                                    Securities and as described in Schedule II
                                    and is subject to call in accordance with
                                    Schedule III. Any such call or redemption
                                    will cause a redemption of a corresponding
                                    portion of the Units.

                                    If the call rights under the Swap Agreement
                                    are partially exercised or if there is a
                                    partial redemption of the Securities, the
                                    Trustee will randomly select Units to be
                                    redeemed in full from the proceeds of such
                                    partial exercise of the Swap Agreement or
                                    partial redemption of the Securities. If
                                    sufficient funds are not available to redeem
                                    each such redeemed Unit in full, one Unit
                                    may be fractionally redeemed as a result of
                                    each such partial redemption or exercise.

Additional Distribution:            If any of the Securities are redeemed by the
                                    Security Issuer prior to July 11, 2007, each
                                    of the Units being redeemed in connection
                                    with such redemption of Securities (or
                                    related exercise of the call rights under
                                    the Swap Agreement) may receive a pro rata
                                    distribution from the proceeds of the
                                    redemption of the Securities (or related
                                    exercise of the Swap Agreement if physical
                                    settlement applies) remaining, after payment
                                    of principal and interest on the Units and
                                    any amounts payable to the Swap Counterparty
                                    and the Expense Administrator, of up to a
                                    maximum of $2.50 per Unit. The Units will
                                    also receive any additional amounts
                                    available at maturity or upon a redemption
                                    by the Security Issuer if all or a portion
                                    of the Swap Agreement has expired
                                    unexercised.

Corporate Trust Office:             The definition of "Corporate Trust Office"
                                    in the Standard Terms shall not apply.

                                    The Corporate Trust Office shall be the
                                    Trustee's Asset-Backed Securities Trust
                                    Services Group having an office at 135 S.
                                    LaSalle Street, Suite 1625, Chicago,
                                    Illinois 60603 or such other addresses as
                                    the Trustee may designate from time to time
                                    by notice to the Unitholders, the Depositor,
                                    the Swap Counterparty and the Guarantor.

Swap Agreement:                     The ISDA Agreement referred to in Schedule
                                    III. In addition, in connection with an
                                    additional issuance of Units, any additional
                                    Swap Agreement entered into in connection
                                    therewith.

Swap Counterparty:                  Party A to the Swap Agreement referred to in
                                    Schedule III or any assignee thereof. In
                                    addition, in connection with an additional
                                    issuance of Units, Party A to any additional
                                    Swap Agreement or any assignee thereof.

                                    In the event that there is more than one
                                    Swap Counterparty at any time when a partial
                                    redemption of the Securities occurs, the
                                    Trustee shall randomly select which options
                                    under the Swap Agreements shall be selected
                                    for exercise or termination (and receipt of
                                    a Swap Termination Payment).

Guaranty:                           Morgan Stanley (formerly known as Morgan
                                    Stanley Dean Witter & Co., the "Guarantor")
                                    shall guarantee the obligations of Morgan
                                    Stanley & Co. International Limited ("MSIL")
                                    for so long as MSIL is Party A to any Swap
                                    Agreement with the Trust.

Swap Notional Amount:               The notional amount specified in Schedule
                                    III.

Swap Payment Date:                  Not Applicable

Swap Rate:                          Not Applicable

Additional Swap Agreements:         In connection with an additional issuance of
                                    Units, the Depositor may arrange for the
                                    Trust to enter into an additional Swap
                                    Agreement with identical terms to those of
                                    the Swap Agreement entered into as of the
                                    Closing Date with an additional Swap
                                    Counterparty, except that such Swap
                                    Agreement may have a different Swap
                                    Counterparty, number of options, and premium
                                    amount than the Swap Agreement entered into
                                    on the Closing Date. The Rating Agency
                                    Condition must be satisfied with respect to
                                    such additional Swap Agreement.

Distribution Date:                  Each March 1 and September 1, commencing
                                    September 1, 2002.

                                    If any payment with respect to the
                                    Securities held by the Trust is not received
                                    by the Trustee by 12 noon (New York City
                                    time) on a Distribution Date, the
                                    corresponding distribution on the Units will
                                    not occur until the next Business Day that
                                    the Trust is in receipt of proceeds of such
                                    payment prior to 12 noon, with no adjustment
                                    to the amount distributed.

Record Date:                        Each February 15 and August 15, regardless
                                    of whether such day is a Business Day.

Form:                               Global Security

Depositary:                         DTC

Trustee Fees and Expenses:          As compensation for and in payment of trust
                                    expenses related to its services hereunder
                                    other than Extraordinary Trust Expenses, the
                                    Trustee will receive Trustee Fees on each
                                    Distribution Date in the amount equal to
                                    $3,750. The Trustee Fee shall cease to
                                    accrue after termination of the Trust. The
                                    "Trigger Amount" with respect to
                                    Extraordinary Trust Expenses for the Trust
                                    is $25,000 and the Maximum Reimbursable
                                    Amount is $100,000. The Trustee Fee will be
                                    paid by the Expense Administrator. Expenses
                                    will be reimbursed by the Expense
                                    Administrator in accordance with the Expense
                                    Administration Agreement.

Expense Administrator:              The Depositor will act as Expense
                                    Administrator on behalf of the Trust
                                    pursuant to an Expense Administration
                                    Agreement, dated as of the date of the Trust
                                    Agreement (the "Expense Administration
                                    Agreement"), between the Depositor as
                                    Expense Administrator (the "Expense
                                    Administrator") and the Trust.

                                    The Expense Administrator will receive a fee
                                    equal to 0.06% per annum of the principal
                                    amount of the Securities held by the Trust
                                    as its fee, payable on the basis of a 360
                                    day year consisting of twelve 30 day months.
                                    The Expense Administrator's fee is payable
                                    only from available interest receipts
                                    received with respect to the Securities
                                    after application of such receipts to
                                    payment of accrued interest on the Units.

                                    In addition, the Expense Administrator shall
                                    own that portion of the Securities which
                                    represent the interest of a fractional
                                    Unitholder that would remain after a partial
                                    exercise of the Swap Agreement had the Swap
                                    Counterparty not been obligated to pay the
                                    Fractional Unit Make Whole Amount (pursuant
                                    to and as defined in the Swap Agreement and
                                    the Expense Administration Agreement). The
                                    Expense Administrator shall own that portion
                                    of the Securities which represent the
                                    interest of a fractional Unitholder that
                                    would remain after a partial redemption by
                                    the Security Issuer if the Expense
                                    Administrator had not actually paid to the
                                    Trust the amount specified above. The
                                    Expense Administrator shall receive all
                                    interest and principal with respect to such
                                    portion of the Securities.

                                    The Expense Administrator will be
                                    responsible for paying the Trustee Fee and
                                    reimbursing certain other expenses of the
                                    Trust in accordance with the Expense
                                    Administration Agreement.

Listing:                            The Depositor has applied to list the Units
                                    on the New York Stock Exchange

ERISA Restrictions:                 None of the restrictions in the Standard
                                    Terms relating to the Employee Retirement
                                    Income Security Act of 1974, as amended, and
                                    related matters shall apply to the Units.

Alternative ERISA Restrictions:     Not Applicable

Deemed Representations:             Not Applicable

QIB Restriction:                    Not Applicable

Trust Wind-Up Event:                The Trust Wind-Up Events specified in
                                    Sections 9.01(a), 9.01(c), 9.01(d), 9.01(f)
                                    and 9.01(h) shall not apply. The Trust Wind
                                    Events specified in Sections 9.01(b)
                                    (Security Default), 9.01(e) (Early
                                    Termination Date designated due to
                                    "illegality" or "tax event" under the Swap
                                    Agreement), 9.01(g) (Disqualified
                                    Securities), 9.01(i) (Excess Expense Event)
                                    shall apply. Pursuant to Section 9.01(j),
                                    the following events also shall constitute
                                    Trust Wind-Up Events: (i) redemption by the
                                    Security Issuer of all Securities held by
                                    the Trust and (ii) exercise of the call
                                    rights under the Swap Agreement as to all
                                    Securities held by the Trust.

                                    If (i) cash settlement applies under the
                                    Swap Agreement, (ii) a Trust Wind-Up Event
                                    has occurred in connection with the exercise
                                    of any Option under the Swap Agreement and
                                    (iii) the Selling Agent cannot obtain a bid
                                    for the Securities in excess of 100% of the
                                    aggregate Unit Principal Balance of the
                                    Units and accrued interest on the
                                    Securities, then the Securities will not be
                                    sold, the Swap Counterparty's exercise of
                                    the call option will be rescinded (and the
                                    Swap Counterparty shall be entitled to
                                    exercise such options in the future) and any
                                    related Trust Wind-Up Event will be deemed
                                    not to have occurred.

Termination:                        If a Trust Wind-Up Event occurs, any
                                    Securities held by the Trust will be
                                    liquidated (by delivery to the Security
                                    Issuer in the event of a redemption or
                                    pursuant to the terms of the Swap Agreement
                                    in the event of an exercise of the Swap
                                    Agreement).

                                    If the related Trust Wind-Up Event occurs
                                    due to a redemption of the Securities by the
                                    Security Issuer or exercise of the call
                                    rights under the Swap Agreement as to all
                                    Securities held by the Trust, (i) amounts
                                    received as accrued interest on the
                                    Securities will be applied as to amounts
                                    treated as accrued interest on the Units,
                                    (ii) amounts received as principal or par on
                                    the Securities will be applied to the Unit
                                    Principal Balance of the Units up to 100% of
                                    the Unit Principal Balance of each Unit, and
                                    (iii) if prior to July 11, 2007, any amount
                                    received as a make-whole premium or
                                    redemption premium on the Securities will be
                                    applied to the Units up to $2.50 per Unit.
                                    Remaining accrued interest will be applied
                                    to the Expense Administrator's fee. Any
                                    remaining amounts will be paid to the Swap
                                    Counterparty as a Swap Termination Payment
                                    under the Swap Agreement.

                                    If the Trust is terminated for any other
                                    reason, the proceeds of liquidation will be
                                    applied to redeem the Units. If the proceeds
                                    of liquidation exceed the aggregate Unit
                                    Principal Balance and accrued interest on
                                    the Securities, the excess will be paid to
                                    the Swap Counterparty as a Swap Termination
                                    Payment under the Swap Agreement.

Self-Tenders by Security Issuer:    The Trust will not participate in any
                                    self-tender by the Security Issuer for the
                                    Securities and the Trustee will not accept
                                    any instructions to the contrary from the
                                    Unitholders.

Terms of Retained Interest:         The Depositor retains the right to receive
                                    any and all interest that accrues on the
                                    Securities prior to the Closing Date. The
                                    Depositor will receive such accrued interest
                                    on the first Distribution Date for the Units
                                    and such amount shall be paid from the
                                    interest payment made with respect to the
                                    Securities on the first Distribution Date.

                                    The amount of the Retained Interest is
                                    $835,069.

                                    If a Security Default occurs on or prior to
                                    the first Distribution Date and the
                                    Depositor does not receive such Retained
                                    Interest amount in connection with such
                                    Distribution Date, the Depositor will have a
                                    claim for such Retained Interest, and will
                                    share pro rata with holders of the Units to
                                    the extent of such claim in the proceeds
                                    from the recovery on the Securities.

Call Option Terms:                  Not Applicable.

Security Default:                   The definition of Security Default in the
                                    Standard Terms shall not apply. A "Security
                                    Default" shall mean one of the following
                                    events: (i) the acceleration of the
                                    outstanding Securities under the terms of
                                    the Securities and/or the applicable
                                    Security Agreement and failure to pay the
                                    accelerated amount on the acceleration date;
                                    (ii) the failure of the Security Issuer to
                                    pay an installment of principal of, or any
                                    amount of interest due on, the Securities
                                    after the due date thereof and after the
                                    expiration of any applicable grace period;
                                    or (iii) the occurrence of any of the events
                                    of default under such Securities and/or
                                    Security Agreement relating to the
                                    insolvency or bankruptcy of the Security
                                    Issuer.

Sale of Securities:                 If the Trust must sell the Securities it
                                    holds, the Trust will sell the Securities
                                    through the Selling Agent in accordance with
                                    Section 9.03(b) and the following terms. The
                                    Selling Agent must solicit at least three
                                    bids for all of the Securities held by the
                                    Trust. The Selling Agent must solicit at
                                    least three of such bids from registered
                                    broker-dealers of national reputation, but
                                    additional bids may be solicited from one or
                                    more financial institutions or other
                                    counterparties with credit worthiness
                                    acceptable to the Selling Agent in its
                                    discretion. The Selling Agent will, on
                                    behalf of the Trust, sell the Securities at
                                    the highest bid price received. The Selling
                                    Agent may not bid for the Securities.

                                    If cash settlement applies and if the Swap
                                    Counterparty exercises any of its Options
                                    other than in connection with a redemption
                                    of the Securities by the Security Issuer, a
                                    number of Securities corresponding to the
                                    number of Options exercised by the Swap
                                    Counterparty will be sold by the Selling
                                    Agent on behalf of the Trust.

                                    If the Selling Agent cannot obtain a bid for
                                    the Securities in excess of 100% of the
                                    aggregate Unit Principal Balance of the
                                    Units to be redeemed and accrued interest on
                                    the Securities to be sold, then the
                                    Securities will not be sold, the Swap
                                    Counterparty's exercise will be rescinded
                                    (and the Swap Counterparty shall be entitled
                                    to exercise such Option(s) in the future)
                                    and any related Trust Wind-Up Event will be
                                    deemed not to have occurred.

Additional Issuance of Units:       Upon no less than 5 days' notice to the
                                    Trustee, the Depositor may deposit
                                    additional Securities at any time in
                                    exchange for additional Units in a minimum
                                    aggregate amount of $250,000 and, if in
                                    excess of such amount, in a $25 integral
                                    multiple in excess thereof. The principal
                                    amount of Securities deposited must be in
                                    the same ratio to the Unit Principal Balance
                                    of the Units received for such deposit as
                                    the ratio of the aggregate principal amount
                                    of the Securities deposited on the Closing
                                    Date to the aggregate Unit Principal Balance
                                    on the Closing Date. The Depositor must
                                    either arrange for the Swap Counterparty and
                                    the Trust to increase proportionally the
                                    notional amount under the Swap Agreement or
                                    arrange for an additional Swap Agreement to
                                    be entered into between the Trust and an
                                    additional Swap Counterparty. Any accrued
                                    interest will be reflected in the price of
                                    the additional Units and the Securities. The
                                    Rating Agency Condition must be satisfied in
                                    connection with any such additional
                                    issuance.

Selling Agent:                      Morgan Stanley & Co. Incorporated.
                                    Notwithstanding any provision of the
                                    Standard Terms to the contrary, any sale of
                                    the Securities shall be conducted by and
                                    through the Selling Agent and not the
                                    Trustee.

Rating Agency Condition:            The definition of Rating Agencies Condition
                                    in the Standard Terms shall not apply.

                                    "Rating Agency Condition": With respect to
                                    any specified action or determination, means
                                    receipt of (i) oral or written confirmation
                                    by Moody's (for so long as the Units are
                                    outstanding and rated by Moody's) and (ii)
                                    written confirmation by S&P (for so long as
                                    the Units are outstanding and rated by S&P),
                                    that such specified action or determination
                                    will not result in the reduction or
                                    withdrawal of their then-current ratings on
                                    the Units; provided, however, that if the
                                    Rating Agency Condition specified herein is
                                    to be satisfied only with respect to Moody's
                                    or S&P, only clause (i) or clause (ii) shall
                                    be applicable. Such satisfaction may relate
                                    either to a specified transaction or may be
                                    a confirmation with respect to any future
                                    transactions which comply with generally
                                    applicable conditions published by the
                                    applicable rating agency.

Eligible Account:                   The definition of "Eligible Account" in the
                                    Standard Terms shall not apply.

                                    "Eligible Account": A non-interest bearing
                                    account, held in the United States, in the
                                    name of the Trustee for the benefit of the
                                    Trust that is either (i) a segregated
                                    account or segregated accounts maintained
                                    with a Federal or State chartered depository
                                    institution or trust company the short-term
                                    and long-term unsecured debt obligations of
                                    which (or, in the case of a depository
                                    institution or trust company that is the
                                    principal subsidiary of a holding company,
                                    the short-term and long-term unsecured debt
                                    obligations of such holding company) are
                                    rated P-1 and Aa2 by Moody's, A-1+ and AA by
                                    S&P, and, if rated by Fitch, F1 and AA by
                                    Fitch at the time any amounts are held on
                                    deposit therein including when such amounts
                                    are initially deposited and all times
                                    subsequent or (ii) a segregated trust
                                    account or segregated accounts maintained as
                                    a segregated account or as segregated
                                    accounts and held by the Trustee in its
                                    Corporate Trust Office in trust for the
                                    benefit of the Unitholders.

Permitted Investments:              The following shall be a Permitted
                                    Investment in addition to the investments
                                    specified in the Standard Terms:

                                    Units of the Dreyfus Cash Management Fund
                                    Investor Shares or any other money market
                                    funds which are rated in the highest
                                    applicable rating category by each Rating
                                    Agency (or such lower rating if the Rating
                                    Agency Condition is satisfied).

Amendment of Trust Agreement:       Section 12.01(a) of the Standard Terms shall
                                    be replaced with the following:

                                    (a) The Trust Agreement may be amended from
                                    time to time by the Depositor and the
                                    Trustee without the consent of any of the
                                    Unitholders, upon delivery by the Depositor
                                    of an Opinion of Counsel acceptable to the
                                    Trustee to the effect that such amendment
                                    will not materially and adversely affect the
                                    interests of any holder of a Class of Units
                                    that is not voting with respect to such
                                    amendment pursuant to Section 12.01(b), for
                                    any of the following purposes: (i) to cure
                                    any ambiguity or defect or to correct or
                                    supplement any provision in the Trust
                                    Agreement which may be defective or
                                    inconsistent with any other provision in the
                                    Trust Agreement; (ii) to provide for any
                                    other terms or modify any other terms with
                                    respect to matters or questions arising
                                    under the Trust Agreement; (iii) to amend
                                    the definitions of Trigger Amount and
                                    Maximum Reimbursable Amount so as to
                                    increase, but not decrease, the respective
                                    amounts contained in such definitions or to
                                    otherwise amend or waive the terms of
                                    Section 10.05(b) in any manner which shall
                                    not adversely affect the Unitholders in any
                                    material respect; (iv) to amend or correct
                                    or to cure any defect with respect to the
                                    Trustee Fee or Expense Administrator's fee;
                                    (v) to evidence and provide for the
                                    acceptance of appointment under the Trust
                                    Agreement by a successor Trustee; or (vi) to
                                    add or change any of the terms of the Trust
                                    Agreement as shall be necessary to provide
                                    for or facilitate the administration of the
                                    Trust, including any amendment necessary to
                                    ensure the classification of the Trust as a
                                    grantor trust for United States federal
                                    income tax purposes; provided, however, that
                                    in the case of any amendment pursuant to any
                                    of clauses (i) through (vi) above, the
                                    Rating Agency Condition shall be satisfied
                                    with respect to such amendment. If more than
                                    one Class of Units has been issued under the
                                    Trust Agreement, the provisions of this
                                    Section 12.01(a) shall apply to each Class
                                    of Units that is not materially and
                                    adversely affected by such amendment.

                                    Section 12.01(c) shall be re-designated
                                    Section 12.01(d).

                                    Section 12.01(b) shall be re-designated
                                    Section 12.01(c).

                                    The following shall constitute Section
                                    12.01(b):

                                    (b) The Trust Agreement may be amended from
                                    time to time by the Depositor and the
                                    Trustee with the consent of a 100% of the
                                    outstanding Unit Principal Balance of each
                                    Class of Units materially and adversely
                                    affected thereby. The Rating Agency
                                    Condition shall be satisfied with respect to
                                    such amendment unless Units representing
                                    100% of the Unit Principal Balance of all
                                    affected Units vote in favor of such
                                    amendment with notice that the Rating Agency
                                    Condition will not be satisfied.

                                    The following shall constitute Section
                                    12.01(e):

                                    (e) For purposes of this Section 12.01,
                                    Schedule III to any Trust Agreement and any
                                    Swap Agreements entered into in connection
                                    with any related Trust shall not be
                                    considered part of the Trust Agreement.
                                    Section 7.02 shall govern action taken under
                                    the Trust Agreement with respect to any
                                    amendments to such Swap Agreements.

Other Terms:                        The Trust shall not merge or consolidate
                                    with any other trust, entity or person and
                                    the Trust shall not acquire the assets of,
                                    or an interest in, any other trust, entity
                                    or person except as specifically
                                    contemplated herein.

                                    The Trustee shall provide to the Unitholders
                                    copies of any notices it receives with
                                    respect to a redemption of the Securities or
                                    an exercise of the call rights under the
                                    Swap Agreement and any other notices with
                                    respect to the Securities.

                                    The reference to "B2" in the definition of
                                    Certificate in the Standard Terms shall be
                                    replaced with "Exhibit B2".

                                    The reference to "Section 10.02(ix)" in the
                                    definition of Available Funds in the
                                    Standard Terms shall be replaced with
                                    "Section 10.02(a)(ix)".

                                    The reference to "Section 3.04" in the
                                    definition of Unit Account in the Standard
                                    Terms shall be replaced with "Section 3.05".

                                    The transfer by the Depositor to the Trustee
                                    specified in Section 2.01(a) of the Standard
                                    Terms shall be in trust.

                                    Section 2.06 of the Standard Terms shall be
                                    incorporated herein by inserting "cash in an
                                    amount equal to the premium under the Swap
                                    Agreement and" after the phrase
                                    "constituting the Trust Property," therein.

                                    The reference to "calendar day" in the last
                                    sentence of Section 3.06 of the Standard
                                    Terms shall be replaced with "Business Day".

                                    Section 4.02(d) of the Standard Terms shall
                                    be incorporated herein by striking "and the
                                    Trustee on behalf of the Unitholders" from
                                    the first sentence of the second paragraph
                                    thereof.

                                    Section 5.03(c) of the Standard Terms shall
                                    be incorporated herein by striking "(if so
                                    required by the Trustee or the Unit
                                    Registrar)" from the first sentence thereof.

                                    Section 7.01(c)(i) of the Standard Terms
                                    shall be incorporated herein by replacing
                                    the first word thereof ("after") with
                                    "alter".

                                    Section 7.01(c) of the Standard Terms shall
                                    be incorporated herein by inserting "(i)"
                                    between "Securities" and "would" in the
                                    clause that begins "and provided, further,"
                                    and adding at the end of the same sentence
                                    "and (ii) will not alter the classification
                                    of the Trust for Federal income tax
                                    purposes."

                                    Section 7.02 of the Standard Terms shall be
                                    incorporated herein by striking "(i) the
                                    Trustee determines that such amendment will
                                    not adversely affect the interests of the
                                    Unitholders and (ii)" from the first
                                    sentence thereof, inserting "on which it may
                                    conclusively rely" after "Opinion of
                                    Counsel" in such sentence, and striking
                                    "clause (ii)" from the second sentence of
                                    such Section.

                                    For the avoidance of doubt, Section 9.03(c)
                                    of the Standard Terms shall not be
                                    incorporated herein.

                                    Section 9.03(i) of the Standard Terms shall
                                    be incorporated herein by striking "or oral"
                                    after the phrase "at any time by" in the
                                    third sentence thereof.

                                    Clause (ix) of Section 10.02(a) shall not
                                    apply.

                                    Section 10.02(a)(x) of the Standard Terms
                                    shall be replaced with the following:

                                    (x) the Trustee shall have the power to sell
                                    the Securities and other Trust Property, in
                                    accordance with Article IX and XI, through
                                    the Selling Agent or, if the Selling Agent
                                    shall have resigned or declined to sell some
                                    or all of the Securities, any broker
                                    selected by the Trustee (at the direction of
                                    the Depositor) with reasonable care, in an
                                    amount sufficient to pay any amount due to
                                    the Swap Counterparty under the Swap
                                    Agreement (including Termination Payments)
                                    or reimbursable to itself in respect of
                                    unpaid Extraordinary Trust Expenses and to
                                    use the proceeds thereof to make such
                                    payments after the distribution of funds or
                                    Trust Property to Unitholders. Any such
                                    broker shall be instructed by the Trustee to
                                    sell such Trust Property in a reasonable
                                    manner designed to maximize the sale
                                    proceeds.

                                    Section 10.05(b) of the Standard Terms shall
                                    be incorporated herein by replacing ",
                                    pursuant to the first sentence of this
                                    paragraph" with "the Trustee shall be
                                    indemnified by the Trust, however," in the
                                    last sentence thereof.

                                    Section 10.06(a) of the Standard Terms shall
                                    be incorporated herein by inserting "or
                                    association" after the word "corporation" in
                                    the second sentence thereof.

                                    Section 10.07(a) of the Standard Terms shall
                                    be incorporated herein by replacing "notice
                                    or resignation" with "notice of resignation"
                                    in the second sentence thereof and striking
                                    the last two sentences thereof.

                                    Section 10.10(b) of the Standard Terms shall
                                    be incorporated herein by inserting "The
                                    Trustee shall not be liable for the acts or
                                    omissions of any co-trustee." after the last
                                    sentence thereof.

                                    Section 10.14 of the Standard Terms shall be
                                    replaced with the following:

                                    SECTION 10.14. Non-Petition. Prior to the
                                    date that is one year and one day after all
                                    distributions in respect of the Units have
                                    been made, none of the Trustee, the Trust or
                                    the Depositor shall take any action,
                                    institute any proceeding, join in any action
                                    or proceeding or otherwise cause any action
                                    or proceeding against any of the others
                                    under the United States Bankruptcy Code or
                                    any other liquidation, insolvency,
                                    bankruptcy, moratorium, reorganization or
                                    similar law ("Insolvency Law") applicable to
                                    any of them, now or hereafter in effect, or
                                    which would be reasonably likely to cause
                                    any of the others to be subject to, or seek
                                    the protection of, any such Insolvency Law.

                                    Section 12.01(a) of the Standard Terms shall
                                    be incorporated herein by replacing "(v)"
                                    with "(vi)" in the last proviso thereof.

                                    Section 12.01(c) of the Standard Terms shall
                                    be incorporated herein by inserting ",
                                    provided at the expense of the party
                                    requesting such amendment," after "Opinion
                                    of Counsel".

                                    Section 12.05 of the Standard Terms shall be
                                    incorporated herein by striking "the Trustee
                                    and" in the last sentence of the second
                                    paragraph thereof.

                                    The reference to "its President, its
                                    Treasurer, or one of its Vice Presidents,
                                    Assistant Vice Presidents or Trust Officers"
                                    in the first sentence of Section 5.02(a) of
                                    the Standard Terms shall be replaced with "a
                                    Responsible Officer".

                                    The reference to "the proper officers" in
                                    the second sentence of Section 5.02(a) of
                                    the Standard Terms shall be replaced with "a
                                    Responsible Officer".

                                    The reference to "one of its authorized
                                    signatories" in the first sentence of
                                    Section 5.02(d) of the Standard Terms shall
                                    be replaced with "a Responsible Officer".

                                    The reference to the "Trust" in the first
                                    sentence of Section 5.08(b) of the Standard
                                    Terms shall be replaced with the "Trustee".

                                    References to D&P in the Standard Terms
                                    shall be incorporated as references to Fitch
                                    Inc. ("Fitch").

<PAGE>

                                   Schedule II
                            (Terms of Trust Property)

Securities:                         AT&T Wireless 8.75% debentures due March 1,
                                    2031

Security Issuer:                    AT&T Wireless Services, Inc.

Principal Amount:                   $26,580,000

Security Rate:                      8.75%

Credit Ratings:                     Baa2 by Moody's

                                    BBB by S&P

Listing:                            Luxembourg Stock Exchange

Security Agreement:                 An indenture dated as of March 6, 2001
                                    between the Security Issuer and the Security
                                    Trustee.

Form:                               Global Security

Currency of
Denomination:                       United States dollars

Acquisition Price by Trust:         91.342927%

Security Payment Date:              Each March 1 and September 1

Original Issue Date:                On or about March 6, 2001

                                    The Security Issuer offered to exchange the
                                    securities then issued for publicly
                                    registered securities and such offering
                                    closed on or about September 1, 2001.

Maturity Date:                      March 1, 2031

Sinking Fund Terms:                 Not Applicable

Redemption Terms:                   The Securities may be redeemed at the option
                                    of the Security Issuer with a make-whole
                                    payment as described in the Security
                                    Agreement. The Security Issuer may also
                                    redeem the Securities upon a "tax event"
                                    without a make-whole payment.

CUSIP No.:/ISIN No.                 00209AAF3

Security Trustee:                   The Bank of New York

Available Information
Regarding the Security Issuer
(if other than U.S.
Treasury obligations):              The Security Issuer is subject to the
                                    informational requirements of the Securities
                                    Exchange Act of 1934, as amended, and in
                                    accordance therewith files reports and other
                                    information with the Securities and Exchange
                                    Commission (the "Commission"). Such reports
                                    and other information can be inspected and
                                    copied at the public reference facilities
                                    maintained by the Commission at 450 Fifth
                                    Street, N.W., Washington, District of
                                    Columbia 20549 and at the following Regional
                                    Offices of the Commission: Woolworth
                                    Building, 233 Broadway, New York, New York
                                    10279, and Northwest Atrium Center, 500 West
                                    Madison Street, Chicago, Illinois 60661.
                                    Copies of such materials can be obtained
                                    from the Public Reference Section of the
                                    Commission at 450 Fifth Street, N.W.,
                                    Washington, District of Columbia 20549 at
                                    prescribed rates.

<PAGE>

                                  Schedule III
                              (Call Option Confirm)

Date:     July 11, 2002

To:       SATURNS Trust No. 2002-8         From:     Morgan  Stanley  & Co.
                                                     International Limited

Attn:     Asset-Backed Securities Group    Contact:  Chris Boas
          SATURNS Trust No. 2002-8

Fax:      312-904-2084                     Fax:      212-761-0406

Tel:      312-904-9387                     Tel:      212-761-1395

Re: Bond Option Transaction. MS Reference Number SQ1GD

        The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between you and Morgan Stanley & Co.
International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated
("MS&Co."), as agent, on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the
Agreement below.

        The definitions and provisions contained in the 1997 ISDA Government
Bond Option Definitions as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation and this
transaction shall be deemed a "Government Bond Option Transaction" for purposes
of such definitions. In the event of any inconsistency between those definitions
and this Confirmation, this Confirmation will govern.

        1. This Confirmation supplements, forms a part of, and is subject to,
the ISDA Master Agreement dated as of the date hereof, as amended and
supplemented from time to time (the "Agreement"), between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below.

         2. The terms of the particular Transaction to which this Confirmation
relates are as follows:

I. General Terms

Trade Date:                           June 25, 2002

Option Style:                         American

Option Type:                          Call

Buyer:                                MSIL ("Party A")

Seller:                               SATURNS Trust No. 2002-8 ("Party B")
<TABLE>
<CAPTION>

Bonds:                                The obligation identified as follows:
<S>                                   <C>
                                      Bond Issuer:           AT&T Wireless Services, Inc.
                                      Issue:                 8.75% debentures due 2031
                                      CUSIP:                 00209AAF3
                                      Coupon:                8.75%
                                      Maturity Date:         March 1, 2031
                                      Face Amount Purchased: USD 26,580,000
</TABLE>

Premium:                              USD $66,450

Premium Payment Date:                 July 11, 2002

Number of Options:                    26,580

Option Entitlement:                   USD 1,000 of face amount of the Bonds per
                                      Option.

Strike Price:                         (i) For any Exercise Date prior to July
                                      11, 2007, the redemption price of the
                                      Bonds including any make-whole amount
                                      (expressed as a percentage) subject to a
                                      maximum of 110% of the face amount of the
                                      corresponding portion of the aggregate
                                      Unit Principal Balance (as defined in the
                                      Trust Agreement) but exclusive of accrued
                                      interest or (ii) for any Exercise Date on
                                      or after July 11, 2007, 94.056% of the
                                      face amount of the Bonds exclusive of
                                      accrued interest.

Calculation Agent:                    Party A

II. Exercise Terms

Automatic Exercise:                   Inapplicable

Exercise Period:                      Any Business Day from, and including, 9:00
                                      a.m. (New York time) on July 11, 2007, to,
                                      and including, the Expiration Time on the
                                      Expiration Date; provided, however, the
                                      Exercise Period shall also include any
                                      Business Day prior to July 11, 2007, if
                                      notice of redemption has been delivered by
                                      the Bond Issuer.

Exercise Date:                        For each Option exercised, the day during
                                      the Exercise Period on which that Option
                                      is exercised.

Rescission  of  Exercise  (Cash       If Party B cannot obtain a bid for the
Settlement Only):                     Bonds held by it in excess of the Strike
                                      Price together with accrued interest on
                                      the Bonds, then Party A's notice of
                                      exercise shall be rescinded and the
                                      Options for which notice of exercise was
                                      given shall continue in full force and
                                      effect without regard to such provision of
                                      notice.

Multiple Exercise:                    Applicable

Minimum Number of Options:            1

Written  Confirmation of              Applicable. Buyer shall give irrevocable
Exercise:                             exercise notice which may be given orally
                                      (including by telephone) during the
                                      Exercise Period but no later than the
                                      Notification Date. Buyer will execute and
                                      deliver a written exercise notice
                                      confirming the substance of such oral
                                      notice, however, failure to provide such
                                      written notice will not affect the
                                      validity of the oral notice.

Limitation on Rights of MSIL:         Buyer may, by written notice thereof to
                                      Seller, delegate its rights to provide a
                                      notice of exercise hereunder to a third
                                      party (the "Third Party"). Any such
                                      delegation will be irrevocable by Buyer
                                      without the written consent of the Third
                                      Party. Any such Third Party will have the
                                      same rights and obligations regarding
                                      providing notice of exercise hereunder as
                                      the Buyer had prior to such delegation.
                                      While any such delegation is effective,
                                      Seller will only recognize a notice of
                                      exercise that is provided by the Third
                                      Party.

Notification Date:                    Any date at least 25 calendar days prior
                                      to the Exercise Date.

Limited Right to Confirm              Inapplicable
Exercise:

Expiration Date:                      March 1, 2028

Expiration Time:                      4:00 p.m. New York time

Business Days:                        New York and Chicago

III. Settlements:

Settlement:                           Cash Settlement if MSIL is Party A;
                                      otherwise Physical Settlement. Party A
                                      will notify Party B separately regarding
                                      the clearance system details for Physical
                                      Settlement.

Spot  Price  (Cash   Settlement      The cash proceeds received by Party B in
Only):                               connection with sale of the Bonds by Party
                                      B, excluding any amounts in respect of
                                      accrued interest. In the event of a
                                      redemption by the Bond Issuer, the
                                      redemption price paid by the Bond Issuer,
                                      excluding accrued interest.

Deposit    of   Bond    Payment       Party A must deposit the Bond Payment with
(Physical Settlement Only):           the Trustee on the Business Day prior to
                                      the Exercise Date. The Bonds are to be
                                      delivered "free" to Party A.

Additional  Payment  Obligation       To the Expense Administrator (the "Expense
of Party A:                           Administrator Payment Obligation"):

                                      If the Bond Issuer has not given notice of
                                      redemption in connection with the exercise
                                      of Options hereunder and if any such
                                      exercise is an exercise of less than all
                                      Options remaining unexercised hereunder,
                                      Party A shall pay to the Expense
                                      Administrator an amount equal to the
                                      present value of a stream of payments
                                      equal to $6,575 payable on each payment
                                      date for the Bonds until the maturity of
                                      the Bonds discounted at a rate of 6.0% per
                                      annum on the basis of a 360 day year
                                      consisting of twelve 30 day months from
                                      the date of such exercise until the
                                      Scheduled Final Distribution Date (as
                                      defined in the Trust Agreement), assuming
                                      for this purpose that the Trust (as
                                      defined in the Trust Agreement) is not
                                      terminated prior to the Scheduled Final
                                      Distribution Date, multiplied by the
                                      Option Entitlement multiplied by the
                                      number of Options exercised and divided by
                                      $26,580,000.

                                      To Party B:

                                      Upon any exercise, Party A shall pay to
                                      Party B the Fractional Unit Make Whole
                                      Amount. Party A shall be entitled to
                                      reimbursement of any amounts paid or
                                      netted from payments received in respect
                                      of the Fractional Unit Make Whole Amount
                                      from the Expense Administrator to the
                                      extent, and only to the extent, provided
                                      in the Expense Administration Agreement.

Settlement Date:                      For Cash Settlement, as applicable, the
                                      Business Day of settlement of the sale of
                                      the Bonds by Party B or the Business Day
                                      of settlement of a redemption of Bonds by
                                      the Bond Issuer. For Physical Settlement,
                                      the Exercise Date.

        3.     Additional Definitions.

        "Expense Administration Agreement" means the expense administration
agreement dated as of the date hereof between Party B and the Expense
Administrator.

         "Expense Administrator" means MSDW Structured Asset Corp. acting
pursuant to the Expense Administration Agreement.

        "Fractional Unit Make Whole Amount" means an amount equal to the Unit
Principal Balance (as defined in the Trust Agreement) of any fractional Unit (as
defined in the Trust Agreement) that would remain after any exercise hereunder
if no provision were made to pay to Party B an additional amount equal to such
Unit Principal Balance, together with accrued interest on such fractional Unit
and, if applicable, any Additional Distribution (as defined in the Trust
Agreement) on such fractional Unit.

         "Trust Agreement" means the trust agreement dated as of the date hereof
between the MSDW Structured Asset Corp. and LaSalle Bank National Association.

         4. Representations. Morgan Stanley & Co. Incorporated is acting as
agent for both parties but does not guarantee the performance of Party A.

         5. Additional Termination Event. As set forth in the Agreement, a Trust
Wind-Up Event will result in an Additional Termination Event under the Agreement
with respect to which Party B shall be the Affected Party and this Transaction
shall be an Affected Transaction.

         6. Swap Termination Payments. In the event an Early Termination Date is
designated with respect to which this Transaction is an Affected Transaction,
there shall be payable to Party A as a termination payment in lieu of the
termination payment determined in accordance with Section 6(e) of the Agreement
an amount equal to the excess (if any) of the sale proceeds (or redemption
proceeds), excluding accrued interest, of the Bonds in excess of the Strike
Price.

        7. Assignment. The rights under this Confirmation and the Agreement may
be assigned at any time and from time to time in whole or in part; provided that
the Rating Agency Condition (as defined in the Trust Agreement) is satisfied
with respect to such assignment and any transfer. The transferee in any such
assignment or transfer must be a qualified institutional buyer as defined in
Rule 144A under the Securities Act of 1933.

        8.     Account Details.

Payments to Party A:                   Citibank, N.A., New York
                                       SWIFT BIC Code: CITIUS33
                                       ABA No.  021 000 089
                                       FAO: Morgan Stanley & Co. International
                                       Limited
                                       Account No. 3042-1519

Operations Contact:                    Barbara Kent
                                       Tel  212-537-1449
                                       Fax  212-537-1868

Payments to Party B:                   LaSalle Bank, Chicago, Illinois
                                       ABA No. 071 000 505
                                       Reference:  SATURNS 2002-8
                                       Unit Account / AC-2090067/
                                       Account No.: 67-9040-70-9

Operations Contact:                    Andy Streepey
                                       Tel:  312-904-9387
                                       Fax: 312-904-2084

<PAGE>

                                                                  MORGAN STANLEY

        Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number SQ1GD by executing this Confirmation and returning
it to us.

Best Regards,

MORGAN STANLEY & CO. INTERNATIONAL LIMITED

BY: /s/ Chris Boas
    -----------------------
    Name:  Chris Boas
    Title: Attorney in fact

Acknowledged and agreed as of the date first written above:

SATURNS TRUST NO. 2002-8
BY:  LaSalle Bank National Association,
     solely as Trustee and not in its individual capacity.

BY:  /s/ Brian Ames
    ------------------------
    Name:  Brian Ames
    Title: Vice-President

MORGAN STANLEY & CO. INCORPORATED hereby agrees to and
acknowledges its role as agent for both parties in accordance with
the Schedule to the Agreement.

BY:  /s/ John Kehoe
    ------------------------
    Name:  John Kehoe
    Title: Attorney in fact

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