Document:

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Exhibit 10.3

                                 LIBOR TERM NOTE
                                    NEW YORK

Buffalo, New York      May 17, 2005                                $5,000,000.00

BORROWER: THE PEOPLES PUBLISHING GROUP, INC., A corporation organized under the
laws of the State of Delaware

Address of its chief executive office: 299 Market Street, Saddle Brook, New
Jersey 07663, Attention: Office of CFO

BANK: MANUFACTURERS AND TRADERS TRUST COMPANY, New York banking corporation with
      its principal banking office at One M&T Plaza, Buffalo, New York 14240,
      Attention: Office of General Counsel

1. DEFINITIONS. As used in this Note, each capitalized term shall have the
meaning specified in the Note or as it appears in initial capitalization.
Additionally, the following terms shall have the indicated meanings:

      a. "APPLICABLE RATE" shall mean either the LIBOR Rate or the Base Rate, as
the case may be.

      b. "ADJUSTMENT DATE", when applicable, shall mean:

            (i) If the Interest Period duration selected below is "one day": the
first day of the applicable Interest Period (or, if such date is not a Business
Day, the immediately preceding Business Day).

            (ii) If the Interest Period duration selected below is other than
"one day": two (2) Business Days before the first day of the applicable Interest
Period (each of which shall have a duration as selected below; see LIBOR Rate
definition).

      c. "BASE RATE" shall mean the rate of interest announced by the Bank as
its prime rate of interest.

      d. "BUSINESS DAY" shall mean any day of the year on which banking
institutions in New York, New York are not authorized or required by law or
other governmental action to close and, to the extent the LIBOR Rate is
applicable, on which dealings are carried on in the London Interbank market.

      e. "CONTINUATION DATE" shall mean the last day of each Interest Period.

      f. "COST OF FUNDS" shall mean the most recent yield on United States
Treasury Obligations adjusted to constant maturity to match the corresponding
loan term in effect two (2) business days prior to the reset date as published
by the Board of Governors of the Federal Reserve System in the Federal Reserve
Statistical Release H.15 (519), or by such other quoting service, index or
commonly available source utilized by the Bank, plus the "ask" side of the
like-year swap spread in effect two (2) business days prior to the reset date as
set forth in Bloomberg L.P., or such other quoting service, index or commonly
available source utilized by the Bank.

      g. "CREDIT AGREEMENT" shall mean the Credit Agreement dated even date
herewith by and between the Borrower and the Bank.

      h. "INTEREST PERIOD" shall mean, as to the LIBOR Rate, the period
commencing on the date of this Note or Continuation Date (as the case may be)
and ending on the date that shall be:

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         (i)  If the Interest Period duration selected below is "one day": the
              following day; provided, however, that if an Interest Period would
              end on a day that is not a Business Day, such Interest Period
              shall be extended to the next succeeding Business Day.

         (ii) If the Interest Period duration selected below is other than "one
              day": the numerically corresponding day (or, if there is no
              numerically corresponding day, on the last day) of the calendar
              month that is one (1), two (2), three (3) or six (6) months
              thereafter (as selected below); provided, however, that if an
              Interest Period would end on a day that is not a Business Day,
              such Interest Period shall be extended to the next succeeding
              Business Day unless such next succeeding Business Day would fall
              in the next calendar month, in which case such Interest Period
              shall end on the immediately preceding Business Day.

      i. "LIBOR" shall mean the rate obtained by dividing (i) the one-day,
one-month, two-month, three-month or six-month interest period London Interbank
Offered Rate (as selected below), fixed by the British Bankers Association for
United States dollar deposits in the London Interbank Eurodollar Market at
approximately 11:00 a.m. London, England time (or as soon thereafter as
practicable) as determined by the Bank from any broker, quoting service or
commonly available source utilized by the Bank by (ii) a percentage equal to
100% minus the stated maximum rate of all reserves required to be maintained
against "Eurocurrency Liabilities" as specified in Regulation D (or against any
other category of liabilities which includes deposits by reference to which the
interest rate on LIBOR Rate loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States' office of a
bank to United States residents) on such date to any member bank of the Federal
Reserve System.

      j. "LIBOR RATE" shall mean the interest rate determined on the pricing
grid as follows with an Interest Period duration of one day, one month, two
months, three months or six months:

<TABLE>
<CAPTION>
               Total Funded Debt
                 To EBITDA (as
                defined in the           LIBOR
Level          Credit Agreement          Margin
<S>            <C>                       <C>
 I                   <1.00                1.75%
 II                1.0>2.0                2.00%
 III                  >2.0                2.25%
</TABLE>

      k. "MATURITY DATE" is the Payment Due Date in May 17, 2012.

      l. "PAYMENT DUE DATE", when applicable, shall mean the same day of the
calendar month as the date of this Note (or if there is no numerically
corresponding day in a month, on the last day of such month); provided, however,
if that day is not a Business Day, the Payment Due Day shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case such Payment Due Date shall be the
immediately preceding Business Day.

      m. "PRINCIPAL AMOUNT" shall mean Five Million Dollars ($5,000,000.00).

2. PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES.

      a. PROMISE TO PAY. For value received, and intending to be legally bound,
Borrower promises to pay to the order of the Bank on the dates set forth below,
the Principal Amount, plus interest as agreed below and all fees and costs
(including without limitation attorneys' fees and disbursements whether for
internal or outside counsel) the Bank incurs in order to collect any amount due
under this Note, to negotiate or document a workout or restructuring, or to
preserve its rights or realize upon any guaranty or other security for the
payment of this Note ("Expenses").

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      b. INITIAL APPLICABLE RATE. The initial Applicable Rate shall be the LIBOR
Rate (based on the Interest Period duration selected above) in effect on the
date that is:

            (i) If the Interest Period duration selected above is "one day": the
date of this Note (or, if such date is not a Business Day, the immediately
preceding Business Day).

            (ii) If the Interest Period duration selected above is other than
"one day": two (2) Business Days before the date of this Note.

In either case, the initial Interest Period shall start on the date of this
Note.

      c. INTEREST. Interest shall accrue on the outstanding Principal Amount
calculated on the basis of a 360-day year for the actual number of days of each
year (365 or 366) at the Applicable Rate that on each day shall be:

            (i) IF THE LIBOR RATE IS THE APPLICABLE RATE. Interest shall accrue
on the Principal Amount from and including the first day of the Interest Period
(with the duration selected above) until, but not including, the last day of
such Interest Period or the day the Principal Amount is paid in full (if
sooner), at a rate per annum equal to the LIBOR Rate determined and in effect on
the applicable Adjustment Date.

            (ii) IF THE BASE RATE IS THE APPLICABLE RATE. Interest shall accrue
on the Principal Amount from and including the first date the Base Rate is the
Applicable Rate to but not including, the day such Principal Amount is paid in
full or the Applicable Rate is converted to the LIBOR Rate, at the rate per
annum equal to the Base Rate. Any change in the Base Rate resulting from a
change in the Bank's prime rate shall be effective on the date of such change.

      d. PAYMENT SCHEDULE:

        Borrower shall pay interest only on this Note until May 16, 2006;
        thereafter, Borrower shall pay the outstanding Principal Amount in
        seventy-two (72) consecutive monthly installments as follows: (i) if the
        Interest Period duration is "one day", starting on the first Payment Due
        Date after the date of this Note and on each Payment Due Date
        thereafter, or (ii) if the Interest Period duration is other than "one
        day", starting on the last day of the Interest Period that commences on
        the date of this Note and on last day of each Interest Period
        thereafter; in either case, consisting of seventy-one (71) equal
        installments of principal each in the amount of $69,444.44 and ONE (1)
        FINAL INSTALLMENT on the Maturity Date in an amount equal to the
        outstanding Principal Amount at that time together with all other
        amounts outstanding hereunder including, without limitation, accrued
        interest, costs and Expense (the "Final Installment"); provided,
        however, if the Applicable Rate is converted to the Base Rate, Borrower
        shall pay the outstanding Principal Amount in consecutive monthly
        installments commencing on the first Payment Due Date after the date of
        such conversion and on the same Payment Due Date thereafter until
        conversion back to the LIBOR Rate (at which time Borrower shall resume
        the monthly, bi-monthly, quarterly or semi-annual installments in the
        amount set forth above or as otherwise agreed to by the Bank and
        Borrower in writing) or the Maturity Date (at which time Borrower shall
        pay the Final Installment) with each such installment being equal in an
        amount to fully amortize the outstanding Principal Amount of the Note in
        full by the Maturity Date or such other date agreed to by the Bank and
        Borrower in writing. The determination by the Bank of the foregoing
        amount shall, in the absence of manifest error, be conclusive and
        binding upon Borrower. In addition, until the outstanding Principal
        Amount is paid in full, Borrower shall pay all accrued and unpaid
        interest, in amounts which may vary, as follows: (i) if the LIBOR Rate
        is the Applicable Rate, on the last day of each Interest Period (except,
        however, if the Interest Period duration selected above is "one day", in
        which case such interest payments shall be made on the Payment Due Date
        for each month, or as otherwise invoiced by the Bank), (ii) if the Base
        Rate is the Applicable Rate, on the Payment Due Date for each month, and
        (iii) at maturity (whether by acceleration or otherwise) and, after such
        maturity, on demand.

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      e. MAXIMUM LEGAL RATE. It is the intent of the Bank and Borrower that in
no event shall interest be payable at a rate in excess of the maximum rate
permitted by applicable law (the "Maximum Legal Rate"). If this Note is for a
personal loan of less than $2,500,000 and is secured primarily by a one- to
four-family residence, the interest rate shall not exceed 16%. Solely to the
extent necessary to prevent interest under this Note from exceeding the Maximum
Legal Rate, any amount that would be treated as excessive under a final judicial
interpretation of applicable law shall be deemed to have been a mistake and
automatically canceled, and, if received by the Bank, shall be refunded to
Borrower.

      f. DEFAULT RATE. If an Event of Default (defined below) occurs, the
interest rate on the unpaid Principal Amount shall immediately be automatically
increased to 3 percentage points per year above the higher of the LIBOR Rate or
the Base Rate, and any judgment entered hereon or otherwise in connection with
any suit to collect amounts due hereunder shall bear interest at such default
rate.

      g. REPAYMENT OF PRINCIPAL AND INTEREST; LATE CHARGE. Payments shall be
made in immediately available United States funds at any banking office of the
Bank. Interest will continue to accrue until payment is actually received. If
payment is not received within five days of its due date, Borrower shall pay a
late charge equal to the greatest of (a) $50.00, (b) 5% of the delinquent amount
or (c) the Bank's then current late charge as announced from time to time. If
this Note is secured by a one to six-family owner-occupied residence, the late
charge shall equal 2% of the delinquent amount and shall be payable if payment
is not received within fifteen days of its due date. Payments may be applied in
any order in the sole discretion of the Bank but, prior to default, shall be
applied first to past due interest, Expenses, late charges and principal, then
to current interest, Expenses, late charges and principal, and last to remaining
principal.

      h. PREPAYMENT.

            (i) Subject to the following, during the term of this Note, Borrower
shall have the option of paying the Principal Amount to the Bank in advance of
the Maturity Date, in whole or in part, at any time and from time to time upon
written notice received by the Bank at least three (3) business days prior to
making such payment. If (i) Borrower prepays, in whole or in part, any Principal
Amount when the Applicable Rate is the LIBOR Rate before the end of the Interest
Period, (ii) there occurs an Event of Default or the Applicable Rate is
converted from the LIBOR Rate to the Base Rate before the end of an Interest
Period pursuant to Section 3, then Borrower shall be liable for and shall pay
the Bank, on demand, the higher of $250.00 or the actual amount of the
liabilities, expenses, costs or funding losses that are a direct or indirect
result of such prepayment (based on the entire Principal Amount pre-paid),
failure to draw, early termination of the Interest Period, revocation,
bankruptcy or otherwise. The determination by the Bank of the foregoing amount
shall, in the absence of manifest error, be conclusive and binding upon
Borrower. The provisions of this paragraph shall not be applicable if the
Interest Period duration selected above is "one day".

            (ii) Upon making any prepayment of the Principal Amount in whole,
Borrower shall pay to the Bank all interest and Expenses owing pursuant to the
Note and remaining unpaid. Each partial prepayment of the Principal Amount shall
be applied in inverse order of maturity to the principal included in the
installments provided herein.

            (iii) In the event the Maturity Date is accelerated following an
Event of Default by Borrower, any tender of payment of the amount necessary to
satisfy the entire indebtedness made after such Event of Default shall be
expressly deemed a voluntary prepayment. In such a case, to the extent permitted
by law, the Bank shall be entitled to the amount necessary to satisfy the entire
indebtedness, plus the appropriate prepayment premium calculated in accordance
with this Section 2(h).

            (iv) In the event of a conversion to a fixed rate, subject to the
prepayment premium provided for hereafter in this paragraph, during the term of
this Note, the Borrower shall have the option of paying the Principal Sum to the
Bank in advance of the Maturity Date, in whole or in part, at any time and from
time to time upon written notice received by the Bank at least thirty (30) days
prior to making such prepayment; provided however, that together with such
prepayment, the Borrower shall pay to the Bank, as consideration of the
privilege of making such prepayment, a premium equal to the greater of (a) one
percent (1%) of the Principal Sum prepaid, or (b) an amount equal to the present
value of the difference between (i) the amount of interest that would have
accrued on the Principal Sum during the remaining term of this Note, at the
interest rate set forth in this Note in effect on the

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date of prepayment and (ii) the amount of interest that would have accrued on
the Principal Sum during the remaining term of this Note at the Current Market
Rate. Upon making any prepayment of the Principal Sum in whole, the Borrower
shall pay to the Bank all interest and Expense owing pursuant to this Note and
remaining unpaid. Each partial prepayment of the Principal Sum shall be applied
in inverse order of maturity to the principal included in the installments
provided for the paragraph of this Note captioned "Repayment of Principal and
Interest". In the event the Maturity Date of the Note is accelerated following
an Event of Default, any tender payment of the amount necessary to satisfy the
entire indebtedness made after such Event of Default shall be expressly deemed a
voluntary prepayment. In such case, to the extent permitted by law, the Bank
shall be entitled to the amount necessary to satisfy the entire indebtedness,
plus the appropriate prepayment premium calculated in accordance with this
paragraph.

3. CONTINUATIONS AND CONVERSIONS.

      a. EXPIRATION OF INTEREST PERIOD. Subject to Section 3(b), upon the
expiration of the first Interest Period and each Interest Period thereafter, on
the Continuation Date the LIBOR Rate will be automatically continued with an
Interest Period of the same duration as the Interest Period duration initially
selected above. Borrower shall have the right on the first anniversary of this
Note to elect a fixed rate equal to the Bank's six year Cost of Funds plus 225
basis points to be set at conversion to an amortizing loan as set forth in
paragraph 2d of this Note.

      b. CONVERSION UPON DEFAULT. Unless the Bank shall otherwise consent in
writing, if (i) Borrower has failed to pay when due, in whole or in part, the
indebtedness under the Note (whether upon maturity, acceleration or otherwise),
or (ii) there exists a condition or event which with the passage of time, the
giving of notice or both shall constitute an Event of Default, the Bank, in its
sole discretion, may (i) permit the LIBOR Rate to continue until the last day of
the applicable Interest Period at which time such the Applicable Rate shall
automatically be converted to the Base Rate or (ii) convert the LIBOR Rate to
the Base Rate before the end of the applicable Interest Period. Notwithstanding
the foregoing, upon the occurrence of an Event of Default in Section 5(ix), the
Applicable Rate shall be automatically converted to the Base Rate without
further action by the Bank and Borrower shall have no right to have the
Applicable Rate converted from the Base Rate to the LIBOR Rate. Nothing herein
shall be construed to be a waiver by the Bank to have the Principal Amount
accrue interest at the Default Rate or the right of the Bank to the amounts set
forth in Section 2(h) of this Note, if any.

4. CREDIT AGREEMENT. This Note (i) is the Term Note referred to in the Credit
Agreement, (ii) is subject to the terms and conditions of the Credit Agreement
and the Transaction Documents, as defined in the Credit Agreement, it being
agreed that all the provisions of the Credit Agreement are incorporated herein
by reference, and (iii) without limiting the generality of the immediately
preceding clause (ii), is secured as provided in the Credit Agreement.

5. EVENTS OF DEFAULT; ACCELERATION. Upon the occurrence and during the
continuance of any one or more of the Events of Default, as defined in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, due and payable all as provided in the Credit
Agreement.

6. RIGHT OF SETOFF. The Bank shall have the right to set off against the amounts
owing under this Note any property held in a deposit or other account with the
Bank or any Affiliate or otherwise owing by the Bank or any Affiliate in any
capacity to Borrower or any guarantor or endorser of this Note. Such set-off
shall be deemed to have been exercised immediately at the time the Bank or such
Affiliate elect to do so.

7. INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.

      a. INCREASED COSTS. If the Bank shall determine that, due to either (a)
the introduction of any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the LIBOR) in or
in the interpretation of any requirement of law or (b) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Bank of agreeing to make or making, funding or maintaining any loans
based on LIBOR, then Borrower shall be liable for, and shall from time to time,
upon demand therefor by the Bank and pay to the Bank such additional amounts as
are sufficient to compensate the Bank for such increased costs.

<PAGE>

      b. INABILITY TO DETERMINE RATES. If the Bank shall determine that for any
reason adequate and reasonable means do not exist for ascertaining LIBOR for the
Interest Period specified above, the Bank will give notice of such determination
to Borrower. Thereafter, the Bank may not maintain the loan hereunder at the
LIBOR Rate until the Bank revokes such notice in writing and, until such
revocation, the Bank may convert the Applicable Rate from the LIBOR Rate to the
Base Rate.

      c. ILLEGALITY. If the Bank shall determine that the introduction of any
law (statutory or common), treaty, rule, regulation, guideline or determination
of an arbitrator or of a governmental authority or in the interpretation or
administration thereof, has made it unlawful, or that any central bank or other
governmental authority has asserted that it is unlawful for the Bank to make
loans at based on LIBOR then, on notice thereof by the Bank to Borrower, the
Bank may suspend the maintaining of the loan hereunder at the LIBOR Rate until
the Bank shall have notified Borrower that the circumstances giving rise to such
determination shall no longer exist. If the Bank shall determine that it is
unlawful to maintain the loan hereunder based on LIBOR, the Bank may convert the
Applicable Rate from the LIBOR Rate to the Base Rate.

8. MISCELLANEOUS. This Note, together with any related loan and security
agreements and guaranties, contains the entire agreement between the Bank and
Borrower with respect to the Note, and supersedes every course of dealing, other
conduct, oral agreement and representation previously made by the Bank. All
rights and remedies of the Bank under applicable law and this Note or amendment
of any provision of this Note are cumulative and not exclusive. No single,
partial or delayed exercise by the Bank of any right or remedy shall preclude
the subsequent exercise by the Bank at any time of any right or remedy of the
Bank without notice. No waiver or amendment of any provision of this Note shall
be effective unless made specifically in writing by the Bank. No course of
dealing or other conduct, no oral agreement or representation made by the Bank,
and no usage of trade, shall operate as a waiver of any right or remedy of the
Bank. No waiver of any right or remedy of the Bank shall be effective unless
made specifically in writing by the Bank. Borrower agrees that in any legal
proceeding, a copy of this Note kept in the Bank's course of business may be
admitted into evidence as an original. This Note is a binding obligation
enforceable against Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its successors and assigns. If a court deems any
provision of this Note invalid, the remainder of the Note shall remain in
effect. Section headings are for convenience only. Borrower hereby waives
protest, presentment and notice of any kind in connection with this Note.
Singular number includes plural and neuter gender includes masculine and
feminine as appropriate.

9. NOTICES. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Borrower
(at its address on the Bank's records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower's relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Borrower and the Bank.

10. JOINT AND SEVERAL. If there is more than one Borrower, each of them shall be
jointly and severally liable for all amounts which become due under this Note
and the term "Borrower" shall include each as well as all of them.

11. GOVERNING LAW; JURISDICTION. This Note has been delivered to and accepted by
the Bank and will be deemed to be made in the State of New York. This Note will
be interpreted in accordance with the laws of the State of New York excluding
its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN
A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH, AND CONSENTS
THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER'S
ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING
CONTAINED IN THIS NOTE WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING
ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY,
AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER
COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Borrower acknowledges
and agrees that the venue provided above is the most convenient forum for both
the Bank and Borrower. Borrower waives any objection to venue and any objection
based on a more convenient forum in any action instituted under this Note.

<PAGE>

12. WAIVER OF JURY TRIAL. Borrower and the Bank hereby knowingly, voluntarily,
and intentionally waive any right to trial by jury Borrower and the Bank may
have in any action or proceeding, in law or in equity, in connection with this
note or the transactions related hereto. Borrower represents and warrants that
no representative or agent of the Bank has represented, expressly or otherwise,
that the Bank will not, in the event of litigation, seek to enforce this jury
trial waiver. Borrower Acknowledges that the Bank has been induced to enter into
this note by, among other things, the provisions of this Section.

PREAUTHORIZED TRANSFERS FROM DEPOSIT ACCOUNT. If a deposit account number is
provided in the following blank Borrower hereby authorizes the Bank to debit
Borrower's deposit account # 9836813304 with the Bank automatically for any
amount which becomes due under this Note.

ACKNOWLEDGMENT. Borrower acknowledges that it has read and understands all the
provisions of this Note, including the GOVERNING LAW, JURISDICTION and WAIVER OF
JURY TRIAL, and has been advised by counsel as necessary or appropriate.

TAX ID/SS # 2199108                           THE PEOPLES PUBLISHING GROUP, INC.

_____________________________
Signature of Witness
                                         /s/ Michael L. DeMarco
_____________________________            ----------------------
Printed Name of Witness                  Name:  Michael L. DeMarco
                                         Title:  Chief Financial Officer<PAGE>

Exhibit 10.4

                           GENERAL SECURITY AGREEMENT

DEBTOR: THE PEOPLES PUBLISHING GROUP, INC. a corporation organized and
registered under the laws of the State of Delaware

Organizational Identification Number (if any): 2199108

Chief executive office: 299 Market Street, Saddle Brook, New Jersey 07663

SECURED PARTY: Manufacturers and Traders Trust Company, a New York banking
corporation having its chief executive office at One M&T Plaza, Buffalo, New
York 14240 Attention: General Counsel's Office.

For good and valuable consideration, the receipt and sufficiency of which is
acknowledged, and intending to be legally bound, Debtor agrees with Secured
Party as follows:

1. SECURITY INTERESTS.

      1.1 Grant. As security for the prompt and complete payment and performance
when due of all of the Obligations, Debtor does hereby grant to Secured Party a
continuing security interest ("Security Interest") in all personal property and
fixtures of Debtor, wherever located, whether now existing or owned or hereafter
arising or acquired, whether or not subject to the Uniform Commercial Code, as
the same may be in effect in the State of New York, as amended from time to time
("UCC"), and whether or not affixed to any realty including (i) all accounts,
chattel paper, investment property, deposit accounts, documents, equipment, farm
products, general intangibles (including trademarks, service marks, trade names,
patents, copyrights, licenses and franchises), instruments, inventory, money,
letter of credit rights, causes of action (including tort claims) and other
personal property (including agreements and instruments not constituting chattel
paper or a document, general intangible or instrument); (ii) all additions,
accessions to, substitutions for, or replacements of the foregoing; (iii) all
proceeds and products of the foregoing including insurance proceeds; and (iv)
all business records and information relating to any of the foregoing and any
software or other programs for accessing and manipulating such information
(collectively, the "Collateral"). 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.

      1.2 Obligations. The term "Obligations" means any and all indebtedness or
other obligations of Debtor to Secured Party in any capacity, now existing or
hereafter incurred, however created or evidenced, regardless of kind, class or
form, whether direct, indirect, absolute or contingent (including obligations
pursuant to any guaranty, endorsement, other assurance of payment or otherwise),
whether joint or several, whether from time to time reduced and thereafter
increased, or entirely extinguished and thereafter re-incurred, together with
all extensions, renewals and replacements thereof, and all interest, fees,
charges, costs or expenses which accrue on or in connection with the foregoing,
including any indebtedness or obligations (i) not yet outstanding but contracted
for, or with regard to which any other commitment by Secured Party exists; (ii
arising prior to, during or after any pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding; (iii) owed by Debtor to others and which Secured
Party obtained, or may obtain, by assignment or otherwise; and (iv) payable
under this Agreement.

2. COVENANTS. Debtor covenants and agrees as follows:

      2.1 Perfection of Security Interest. Debtor shall execute and deliver to
Secured Party such financing statements, control agreements or other documents,
in form and content satisfactory to Secured Party, as Secured Party may from
time to time request to perfect and continue the Security Interest. Upon the
request of Secured Party, Debtor shall deliver to Secured Party any and all
instruments, chattel paper, negotiable documents or other documents evidencing
or constituting any part of the Collateral properly endorsed or assigned, in a
manner satisfactory to Secured Party. Until such delivery, Debtor shall hold
such portion of the Collateral in trust for Secured Party. Debtor shall pay all
expenses for the preparation, filing, searches and related costs in connection
with the grant and perfection of the Security Interest. Debtor authorizes (both
prospectively and retroactively) Secured Party to file financing statements, and
any continuations and amendments thereof, with respect to the Collateral without
Debtor's signature. A photocopy or other reproduction of any financing statement
or this Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.

<PAGE>

      2.2 Negative Pledge; Disposition of Collateral. Debtor shall not grant or
allow the imposition of any lien, security interest or encumbrance on, or
assignment of, the Collateral unless consented to in writing by Secured Party.
Debtor shall not make or permit to be made any sale, transfer or other
disposition of the Collateral; provided, however, prior to the occurrence of an
Event of Default, Debtor may in the ordinary course of business consistent with
its past practices and with prudent and standard practices used in the industry
that is the same or similar to that in which Debtor is engaged: (i) dispose of
any Collateral consisting of equipment that is obsolete or worn-out; (ii) sell
or exchange any Collateral consisting of equipment in connection with the
acquisition of other equipment that is at least as valuable as such equipment,
that Debtor intends to use for substantially the same purposes as such equipment
and that is not subject to any security interest or other lien or encumbrance;
(iii) collect Collateral consisting of accounts or assign such Collateral for
purposes of collection; or (iv) sell or lease Collateral consisting of
inventory. A sale, lease or other transfer of such Collateral consisting of
inventory in the ordinary course of Debtor's business does not include a
transfer in partial or complete satisfaction of any liability or obligation or
any bulk sale.

      2.3 Condition of Collateral; Impermissible Use. Debtor shall keep the
Collateral consisting of goods in good condition (other than ordinary wear and
tear) and shall not commit or permit damage or destruction to such Collateral.
Debtor shall not permit (i) the Collateral consisting of goods to be used in
such a manner that would violate any insurance policy or warranty covering the
Collateral or that would violate any applicable law of any governmental
authority (including any environmental law) now or hereafter in effect; (ii) the
Collateral consisting of goods to become fixtures on any real property on which
Secured Party does not have a first priority mortgage lien (unless Secured Party
has been provided with an acceptable landlord/mortgagee waiver) or become an
accession to any goods not included in the Collateral; or (iii) any goods
included in the Collateral to be placed in any warehouse that may issue a
negotiable document with regard to such goods.

      2.4 Modification to Collateral. Debtor shall not, without Secured Party's
prior written consent, grant any extension, compound, settlement for less than
full amount, release (in whole or in part), modification or cancellation of, or
substitution for, or credits or adjustments on Collateral consisting of
accounts, chattel paper, general intangibles, instruments, documents, investment
property, except that so long as no Event of Default is then in existence,
Debtor may grant to account debtors, or other persons obligated with the
Collateral, extensions, credits, discounts, compromises or settlements in the
ordinary course of business consistent with its past practices and consistent
with prudent and standard practices used in the industries that are the same or
similar to those in which Debtor is engaged.

      2.5 Titled Goods. Debtor shall cause all goods included in the Collateral
to be properly titled and registered to the extent required by applicable law.
Upon the request of Secured Party, Debtor shall cause the interest of Secured
Party to be properly indicated on any certificate of title relating to such
goods and deliver to Secured Party each such certificate, and any additional
evidence of ownership, certificates of origin or other documents evidencing any
interest in such goods.

      2.6 Insurance. Debtor shall at its own expense, keep in force at all times
insurance covering damage to persons and against fire, flood, theft and all
other risks which the Collateral may be subject, all in such amounts, with such
deductibles and issued by such insurance company as shall be satisfactory to
Secured Party. Such insurance shall have all endorsements that Secured Party may
require and shall further (i) name Secured Party as an additional insured on the
casualty insurance and a lender's loss payable or mortgagee on the hazard
insurance; (ii) provide Secured Party with a minimum of thirty (30) days prior
written notice of any amendment or cancellation; and (iii) insure Secured Party
notwithstanding any act or neglect of Debtor or other owner of the property
described in such insurance. If Debtor fails to obtain the insurance as provided
herein, Secured Party may, but is not obligated, to obtain such insurance as
Secured Party may deem appropriate including, if it so chooses, "single interest
insurance" which will cover only Secured Party's interest in the Collateral.
Debtor shall pay to Secured Party for the cost of such insurance. Secured Party
shall have the option to hold insurance proceeds as part of the Collateral,
apply any insurance proceeds toward the Obligations or apply the insurance
proceeds towards repair or replacement of the item of Collateral in respect of
which such proceeds were received. Upon the request of Secured Party, Debtor
shall from time to time deliver to Secured Party such insurance policies, or
other evidence of such policies satisfactory to Secured Party and such other
related information Secured Party may request.

      2.7 Collateral Information. Debtor shall provide all information, in form
and substance satisfactory to Secured Party, that Secured Party shall from time
to time request to (i) identify the nature, extent, value, age and location of
any of the Collateral, or (ii) identify any account debtor or other party
obligated with respect to any chattel paper, general intangible, instrument,
investment property, document or deposit account included in the Collateral.

      2.8 Financial Information. Debtor shall furnish to Secured Party financial
statements in such form (e.g., audited, reviewed, compiled) and at such
intervals as Secured Party shall request from time to time plus any additional
financial information that Secured Party may request. All such financial
statements shall be in conformity with generally accepted accounting principles
consistently applied.

<PAGE>

      2.9 Taxes; Licenses; Compliance with Laws. Before the end of any
applicable grace period, Debtor shall pay each tax, assessment, fee and charge
imposed by any governmental authority upon the Collateral, the ownership,
disposition or use of any of the Collateral, this Agreement or any instrument
evidencing any of the Obligations. Debtor shall maintain in full force and
effect each license, franchise or other authorization needed for any ownership,
disposition or use of the Collateral and the conduct of its business, operations
or affairs. Debtor shall comply with all applicable law of any governmental
authority (including any environmental law), now or hereafter in effect,
applicable to the ownership, disposition or use of the Collateral or the conduct
of its business, operations or affairs.

      2.10 Records; Legend. Debtor shall maintain accurate and complete books
and records relating to the Collateral in conformity with generally accepted
accounting principles consistently applied. At Secured Party's request, Debtor
will legend, in form and manner satisfactory to Secured Party, its books and
records to indicate the Security Interest.

      2.11 Additional Collateral. If at any time the liquidation value of any of
the Collateral is unsatisfactory to Secured Party, then on demand of Secured
Party Debtor shall either immediately (i) furnish such additional collateral
satisfactory to Secured Party to be held by Secured Party as if originally
pledged hereunder and shall execute such additional security agreements,
financing statements or other agreements as requested by Secured Party (ii) or
repay the Obligations to bring the outstanding amount of the Obligations to
within a satisfactory relationship to the liquidation value of the Collateral.

      2.12 Notifications of Change. Immediately upon acquiring knowledge or
reason to know of any of the following, Debtor shall notify Secured Party of the
occurrence or existence of (i) any Event of Default; (ii) any event or condition
that, after notice, lapse of time or after both notice and lapse of time, would
constitute an Event of Default; (iii) any account or general intangible that
arises out of a contract with any governmental authority (including the United
States); (iv) any event or condition that has or (so far as can be foreseen)
will or might have any material adverse effect on the Collateral (including a
material loss destruction or theft of, or of any damage to, the Collateral,
material decline in value of the Collateral or a material default by an account
debtor or other party's performance of obligations with respect to the
Collateral), on Debtor or its business, operations, affairs or condition
(financial or otherwise).

      2.13 Lien Law. If any account or general intangible included in the
Collateral represents money owing pursuant to any contract for the improvement
of real property or for a public improvement for purposes of the Lien Law of the
State of New York (the "Lien Law"), Debtor shall (i) give Secured Party notice
of such fact; (ii) receive and hold any money advanced by Secured Party with
respect to such account or general intangible as a trust fund to be first
applied to the payment of trust claims as such term is defined in the Lien Law
(Section 71 or otherwise); and (iii) until such trust claim is paid, not use or
permit the use of any such money for any purpose other than the payment of such
trust claims.

      2.14 Protection of Collateral; Further Assurances. Debtor shall, at its
own cost, faithfully preserve, defend and protect the Security Interest as a
prior perfected security interest in the Collateral under the UCC and other
applicable law, superior and prior to the rights of all third parties (other
than those permitted pursuant to Section 3.1) and shall defend the Collateral
against all setoffs, claims, counterclaims, demands and defenses. At the request
of Secured Party, Debtor shall do, obtain, make, execute and deliver all such
additional and further acts, things, deeds, assurances and instruments as
Secured Party may deem necessary or advisable from time to time in order to
attach, continue, preserve, perfect or protect the Security Interest and Secured
Party's rights hereunder including obtaining waivers (in form and content
acceptable to Secured Party) from landlords, warehousemen and mortgagees. Debtor
hereby irrevocably appoints Secured Party, its officers, employees and agents,
or any of them, as attorneys-in-fact for Debtor with full power and authority in
the place and stead of Debtor and in the name of Debtor or its own name from
time to time in Secured Party's discretion, to perform all acts which Secured
Party deems appropriate to attach, continue, preserve or perfect and continue
the Security Interest, including signing for Debtor (to the extent such
signature may be required by applicable law) UCC-1 financing statements and
UCC-3 Statements of Change or to accomplish the purposes of this Agreement. This
power of attorney, being coupled with an interest, is irrevocable and shall not
be affected by the subsequent disability or incompetence of Debtor.

3. REPRESENTATIONS AND WARRANTIES. Debtor represents, warrants and agrees as
follows:

      3.1 Title. Debtor holds good and marketable title to the Collateral free
and clear from any security interest or other lien or encumbrance of any party,
other than the Security Interest or such liens, security interests or other
liens or encumbrances specifically permitted by Secured Party and set forth on
Exhibit A hereto ("Permitted Liens"). Debtor has not made any prior sale,
pledge, encumbrance, assignment or other disposition of any of the Collateral
except for the Permitted Liens.

      3.2 Authority. If Debtor is a business entity, it is duly organized,
validly existing and in good standing under the laws of the above-named state of
organization. Debtor has the full power and authority to grant the Security
Interest and to execute, deliver and perform its obligations in accordance with
this Agreement. The execution and delivery of this Agreement will not (i)
violate any applicable law of any governmental authority or any judgment or
order of any court, other governmental authority or arbitrator; (ii) violate any
agreement governing Debtor or to which Debtor is a party; or (iii) result in a
security interest or other lien or encumbrance on any of its assets. Debtor's
certificate of incorporation, by-laws or other organizational documents do not
prohibit any term or condition of this Agreement. Each authorization, approval
or consent from, each registration and filing with, each declaration and

<PAGE>

notice to, and each other act by or relating to, any party required as a
condition of Debtor's execution, delivery or performance of this Agreement
(including any shareholder or board of directors or similar approvals) has been
duly obtained and is in full force and effect. Debtor has the power and
authority to transact the business in which it is engaged and is duly licensed
or qualified and in good standing in each jurisdiction in which the conduct of
its business or ownership of property requires such licensing or such
qualifications.

      3.3 Judgments and Litigation. There is no pending or threatened claim,
audit, investigation, action or other legal proceeding or judgment or order of
any court, agency or other governmental authority or arbitrator which involves
Debtor or the Collateral and which might have a material adverse effect upon the
Collateral, the Debtor, its business, operations, affairs or condition
(financial or otherwise), or threaten the validity of this Agreement or any
related document or action. Debtor will immediately notify Secured Party upon
acquiring knowledge of the foregoing.

      3.4 Enforceability of Collateral. Instruments, chattel paper, accounts or
documents which constitute any part of the Collateral are genuine and
enforceable in accordance with their terms, comply with the applicable law of
any governmental authority concerning form, content, manner of preparation and
execution, and all persons appearing to be obligated on such Collateral have
authority and capacity to contract and are in fact obligated as they appear to
be on such Collateral. There are no restrictions on any assignment or other
transfer or grant of the Security Interest by Debtor. Each sum represented by
Debtor from time to time as owing on accounts, instruments, deposit accounts,
chattel paper and general intangibles constituting any part of the Collateral by
account debtors and other parties with respect to such Collateral is the sum
actually and unconditionally owing by account debtors and other parties with
respect thereto at such time, except for applicable normal cash discounts. None
of the Collateral is subject to any defense, set-off, claim or counterclaim of a
material nature against Debtor except as to which Debtor has notified Secured
Party in writing.

      3.5 Location of Chief Executive Office, Records, Collateral. The locations
of the following are listed on page one of this Agreement or, if different or
additional, on Exhibit A hereto: (i) Debtor's residence, principal place of
business and chief executive office; (ii) the office in which Debtor maintains
its books or records relating to the Collateral; (iii) the facility (including
any storage facility) at which now owned or subsequently acquired inventory,
equipment and fixtures constituting any part of the Collateral shall be kept;
and (iv) the real property on which any crop included in the Collateral is
growing or is to be grown, or on which any timber constituting any part of the
Collateral is or is to be standing. Debtor will not effect or permit any change
in any of the foregoing locations (or remove or permit the removal of the
records or Collateral therefrom, except for mobile equipment included in the
Collateral which may be moved to another location for not more than thirty (30)
days) without thirty (30) days prior written notice to Secured Party and all
actions deemed necessary by Secured Party to maintain the Security Interest
intended to be granted hereby at all times fully perfected and in full force and
effect have been taken. All of the locations listed on page one or Exhibit A are
owned by Debtor, of if not, by the party(ies) identified on Exhibit A.

      3.6 Structure; Name. Debtor's organizational structure, state of
registration and organizational identification number (if any) are stated
accurately on page one of this Agreement, and its full legal name and any trade
name used to identify it are stated accurately on page one of this Agreement, or
if different or additional are listed on Exhibit A hereto. Debtor will not
change its name, any trade names or its identity, its organizational structure,
state of registration or organizational identification number without thirty
(30) days prior written notice to Secured Party. All actions deemed necessary by
Secured Party to maintain the Security Interest intended to be granted hereby at
all times fully perfected and in full force and effect have been taken.

4. PERFORMANCE AND EXPENDITURES BY SECURED PARTY. If Debtor fails to perform or
comply with any of the terms hereof, Secured Party, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such terms including the payment or discharge of all taxes,
fees, security interest or other liens, encumbrances or claims, at any time
levied or placed on the Collateral. An election to make expenditures or to take
action or perform an obligation of Debtor under this Agreement, after Debtor's
failure to perform, shall not affect Secured Party's right to declare an Event
of Default and to exercise its remedies. Nor shall the provisions of this
Section relieve Debtor of any of its obligations hereunder with respect to the
Collateral or impose any obligation on Secured Party to proceed in any
particular manner with respect to the Collateral.

5. DUTY OF SECURED PARTY. Secured Party's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as Secured Party deals with similar
property for its own account. Neither Secured Party nor its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of the Collateral upon the request of
Debtor or any other person or to take any other action whatsoever with regard to
the Collateral. The powers conferred on Secured Party hereunder are solely to
protect Secured Party's interests in the Collateral and shall not impose any
duty upon any Secured Party to exercise any such powers. Secured Party shall be
accountable only for amounts that it actually receives as a result of the
exercise of its powers under this Agreement, and neither it nor its officers,
directors, employees or agents shall be responsible to Debtor for any act or
failure to act hereunder, except for its own gross negligence or willful
misconduct.

<PAGE>

6. CERTAIN RIGHTS AND REMEDIES.

      6.1 Inspection; Verification. Secured Party, and such persons as it may
designate, shall have the right from time to time to (i) audit and inspect (a)
the Collateral, (b) all books and records related thereto (and make extracts and
copies from such records), and (c) the premises upon which any of the Collateral
or books and records may be located; (ii) discuss Debtor's business, operations,
affairs or condition (financial or otherwise) with its officers, accountants;
and (iii) verify the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to the Collateral in any manner and
through any medium Secured Party may consider appropriate (including contacting
account debtors or third party possessing the Collateral for purpose of making
such verification). Debtor shall furnish all assistance and information and
perform any acts Secured Party may require regarding thereto. Debtor shall bear
the cost and expense of any such inspection and verification.

      6.2 Notification of Security Interest. Secured Party may notify any or all
account debtors and other person obligated with respect to the Collateral of the
Security Interest therein. Upon the request of Secured Party, Debtor agrees to
enter into such warehousing, lockbox or other custodial arrangement with respect
to any of the Collateral that Secured Party shall deem necessary or desirable.

      6.3 Application of Proceeds. Secured Party may apply the proceeds from the
sale, lease or other disposition or realization upon the Collateral to the
Obligations in such order and manner and at such time as Secured Party shall, in
its sole discretion, determine. Debtor waives and agrees not to assert any
rights it may have or acquire under current Section 9-112 of the UCC (or any
subsequent amendment thereto). Debtor shall remain liable for any deficiency if
the proceeds of any sale, lease or other disposition or realization upon the
Collateral are insufficient to pay the Obligations. Any proceeds received by
Debtor from the Collateral after an Event of Default shall (i) be held by Debtor
in trust for Secured Party in the same medium in which received; (ii) not be
commingled with any assets of Debtor; and (iii) be delivered to Secured Party in
the form received, properly indorsed to permit collection. After an Event of
Default, Debtor shall promptly notify Secured Party of the return to or
repossession by Debtor of goods constituting part of the Collateral, and Debtor
shall hold the same in trust for Secured Party and shall dispose of the same as
Secured Party directs.

      6.4 Income and Proceeds of Instruments and Investment Property. Until the
occurrence of an Event of Default, Debtor reserves the right to request to
receive all cash income or cash distribution (whether in cash or evidenced by
check) payable on account of any instrument or investment property constituting
part of the Collateral (collectively, "Cash Distribution"). Until actually paid,
all rights in the foregoing shall remain subject to the Security Interest. Any
other income, dividend, distribution, increase in or profits (including any
stock issued as a result of any stock split or dividend, any capital
distributions and the like) on account of any instrument or investment property
constituting part of the Collateral and, upon the occurrence of an Event of
Default, all Cash Distributions, shall be delivered to Secured Party immediately
upon receipt, in the exact form received and without commingling with other
property which may be received by, paid or delivered to Debtor or for Debtor's
account, whether as an addition to, in discharge of, in substitution of, or in
exchange of the Collateral. Until delivery, such Collateral shall be held in
trust for Secured Party.

      6.5 Registered Holder of the Collateral. Secured Party shall have the
right to transfer to or register (with or without reference to this Agreement)
in the name of Secured Party or its nominee any investment property, general
intangible, instrument or deposit account constituting part of the Collateral so
that Secured Party or such nominee shall appear as the sole owner of record
thereof; provided, however, that so long as no Event of Default has occurred,
Secured Party shall deliver to Debtor all notices, statements or other
communications received by it or its nominee as such registered owner, and upon
demand and receipt of payment of necessary expenses thereof, shall give to
Debtor or its designee a proxy or proxies to vote and take all action with
respect to such Collateral. After the occurrence of any Event of Default, Debtor
waives all rights to be advised of or to receive any notices, statements or
communications received by Secured Party or its nominee as such record owner,
and agrees that no proxy or proxies given by Secured Party to Debtor or its
designee as aforesaid shall thereafter be effective.

7. DEFAULT.

      7.1 Events of Default. Any of the following events or conditions shall
constitute an "Event of Default": (i) failure by Debtor to pay when due (whether
at the stated maturity, by acceleration, upon demand or otherwise) the
Obligations, or any part thereof, or there occurs any event or condition which
after notice, lapse of time or after both notice and lapse of time will permit
acceleration of any Obligation; (ii) default by Debtor in the performance of any
obligation, term or condition of this Agreement or any other agreement with
Secured Party or any of its affiliates or subsidiaries (collectively,
"Affiliates"); (iii) failure by Debtor to pay when due (whether at the stated
maturity, by acceleration, upon demand or otherwise) any indebtedness or
obligation owing to any third party or any Affiliate, the occurrence of any
event which could result in acceleration of payment of any such indebtedness or
obligation or the failure to perform any agreement with any third party or any
affiliate; (iv) Debtor is dissolved, becomes insolvent, generally fails to pay
or admits in writing its inability generally to pay its debts as they become
due; (v) Debtor makes a general assignment, arrangement or composition agreement
with or for the benefit of its creditors or makes, or sends notice of any
intended, bulk sale; the sale, assignment, transfer or delivery of all or
substantially all of the assets of Debtor to a third party; or the cessation by
Debtor as a going business concern; (vi) Debtor files a petition in bankruptcy
or institutes any action under federal or state law for the

<PAGE>

relief of debtors or seeks or consents to the appointment of an administrator,
receiver, custodian or similar official for the wind up of its business (or has
such a petition or action filed against it and such petition action or
appointment is not dismissed or stayed within forty-five (45) days); (vii) the
reorganization, merger, consolidation or dissolution of Debtor (or the making of
any agreement therefor); (viii) the death or judicial declaration of
incompetency of Debtor, if an individual; (ix) the entry of any judgment or
order of any court, other governmental authority or arbitrator against Debtor;
(x) falsity, omission or inaccuracy of facts submitted to Secured Party or any
Affiliate (whether in a financial statement or otherwise); (xi) an adverse
change in the Collateral, Debtor, its business, operations, affairs or condition
(financial or otherwise) from the status shown on any financial statement or
other document submitted to Secured Party, and which change Secured Party
determines will have a material adverse affect on (a) Debtor, its business,
operations or condition (financial or otherwise), or (b) the ability of Debtor
to pay or perform the Obligations; (xii) any pension plan of Debtor fails to
comply with applicable law or has vested unfunded liabilities that, in the
opinion of Secured Party, might have a material adverse effect on Debtor's
ability to repay its debts; (xiii) any indication or evidence received by
Secured Party that Debtor may have directly or indirectly been engaged in any
type of activity which, in Secured Party's discretion, might result in the
forfeiture or any property of Debtor to any governmental authority; or (xiv) the
occurrence of any event described in Section 7.1(i) through and including
7.1(xiii) with respect to any endorser, guarantor or any other party liable for,
or whose assets or any interest therein secures, payment of any of the
Obligations.

      7.2 Rights and Remedies Upon Default. Upon the occurrence of any Event of
Default, Secured Party without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law) to or upon Debtor or any other person (all and each of which
demands, presentments, protests, advertisements and notices are hereby waived),
may exercise all rights and remedies of a secured party under the UCC, under
other applicable law, in equity or otherwise or available under in this
Agreement including:

      7.2.1 Obligations Immediately Due; Termination of Lending. Secured Party
      may declare all or any part of any Obligations not payable on demand to be
      immediately due and payable without demand or notice of any kind. All or
      any part of any Obligations whether or not payable on demand, shall be
      immediately due and payable automatically upon the occurrence of an Event
      of Default in Section 7.1 (vi) above. The provisions hereof are not
      intended in any way to affect any rights of Secured Party with respect to
      any Obligations which may now or hereafter be payable on demand. Secured
      Party may terminate any obligation it may have to grant any additional
      loan, credit or other financial accommodation to Debtor.

      7.2.2 Access to Collateral. Secured Party, or its agents, may peaceably
      retake possession of the Collateral with or without notice or process of
      law, and for that purpose may enter upon any premises where the Collateral
      is located and remove the same. At Secured Party's request, Debtor shall
      assemble the Collateral and deliver it to Secured Party or any place
      designated by Secured Party, at Debtor's expense.

      7.2.3 Sell Collateral. Secured Party shall have the right to sell, lease
      or otherwise dispose of the Collateral in one or more parcels at public or
      private sale or sales upon such terms and conditions as it may deem
      advisable and at such prices as it may deem best, for cash or on credit or
      for future delivery without assumption of any credit risk. Each purchaser
      at any such sale shall hold the property sold absolutely, free from any
      claim or right on the part of Debtor. Debtor hereby waives (to the extent
      permitted by law) all rights of redemption, stay and appraisal which
      Debtor now has or may at any time in the future have under any applicable
      law now existing or hereafter enacted. Secured Party shall have the right
      to use Debtor's premises and any materials or rights of Debtor (including
      any intellectual property rights) without charge for such sales or
      disposition of the Collateral or the completion of any work in progress
      for such times as Secured Party may see fit. Without in any way requiring
      notice to be given in the following time and manner, Debtor agrees that
      with respect to any notice by Secured Party of any sale, lease or other
      disposition or realization or other intended action hereunder or in
      connection herewith, whether required by the UCC or otherwise, such notice
      shall be deemed reasonable and proper if given at least five (5) days
      before such action in the manner described below in the Section entitled
      "Notices".

      7.2.4 Collect Revenues. Secured Party may either directly or through a
      receiver (i) demand, collect and sue on any Collateral consisting of
      accounts or any other Collateral including notifying account debtors or
      any other persons obligated on the Collateral to make payment on the
      Collateral directly to Secured Party; (ii) file any claim or to take any
      other action or proceeding in any court of law or equity or otherwise
      deemed appropriate by Secured Party with respect to the Collateral or to
      enforce any other right in respect of the Collateral; (iii) take control,
      in any manner, of any payment or proceeds from the Collateral; (iv)
      prosecute or defend any suit, action or proceeding brought against Debtor
      with respect to the Collateral; (v) settle, compromise or adjust any and
      all claims arising under the Collateral or, to give such discharges or
      releases as Secured Party may deem appropriate; (vi) receive and collect
      all mail addressed to Debtor, direct the place of delivery thereof to any
      location designated by Secured Party; to open such mail; to remove all
      contents therefrom; to retain all contents thereof constituting or
      relating to the Collateral; (vii) execute, sign or endorse any and all
      claims, endorsements, assignments, checks or other instruments with
      respect to the Collateral; or (viii) generally, use, sell, transfer,
      pledge and make any agreement with respect to or otherwise deal with any
      of the Collateral; and Debtor hereby irrevocably appoints Secured Party,
      its officers, employees and agents, or any of them, as attorneys-in-fact
      for Debtor with full power and authority in the place and stead of Debtor
      and in the name of Debtor or in its own name from time to

<PAGE>

      time in Secured Party's discretion, to take any and all appropriate action
      Secured Party deems necessary or desirable to accomplish any of the
      foregoing or otherwise to protect, preserve, collect or realize upon the
      Collateral or to accomplish the purposes of this Agreement. Debtor revokes
      each power of attorney (including any proxy) heretofore granted by Debtor
      with regard to the Collateral. This power of attorney, being coupled with
      an interest, is irrevocable and shall not be affected by the subsequent
      disability or incompetence of Debtor.

      7.2.5 Setoff. Secured Party may place an administrative hold on and set
      off against the Obligations any property held in a deposit or other
      account with Secured Party or any of its Affiliates or otherwise owing by
      Secured Party or any of its Affiliates in any capacity to Debtor. Such
      set-off shall be deemed to have been exercised immediately at the time
      Secured Party or such Affiliate elects to do so.

8. EXPENSES. Debtor shall pay to Secured Party on demand all costs and expenses
(including all reasonable fees and disbursements of all counsel retained for
advice, suit, appeal or other proceedings or purpose and of any experts or
agents it may retain), which Secured Party may incur in connection with (i) the
administration of this Agreement, including any administrative fees Secured
Party may impose for the preparation of discharges, releases or assignments to
third-parties; (ii) the custody or preservation of, or the sale, lease or other
disposition or realization on the Collateral; (iii) the enforcement and
collection of any Obligations or any guaranty thereof; (iv) the exercise,
performance ,enforcement or protection of any of the rights of Secured Party
hereunder; or (v) the failure of Debtor to perform or observe any provisions
hereof. After such demand for payment of any cost, expense or fee under this
Section or elsewhere under this Agreement, Debtor shall pay interest at the
highest default rate specified in any instrument evidencing any of the
Obligations from the date payment is demanded by Secured Party to the date
reimbursed by Debtor. All such costs, expenses or fees under this Agreement
shall be added to the Obligations.

9. INDEMNIFICATION. Debtor shall indemnify Secured Party and its Affiliates and
each officer, employee, accountant, attorney and other agent thereof (each such
person being an "Indemnified Party") on demand, without any limitation as to
amount, against each liability, cost and expense (including all reasonable fees
and disbursements of all counsel retained for advice, suit, appeal or other
proceedings or purpose, and of any expert or agents an Indemnified Party may
retain) heretofore or hereafter imposed on, incurred by or asserted against any
Indemnified Party (including any claim involving any allegation of any violation
of applicable law of any governmental authority (including any environmental law
or criminal law)), however asserted and whether now existing or hereafter
arising, arising out of any ownership, disposition or use of any of the
Collateral; provided, however, the foregoing indemnity shall not apply to
liability, cost or expense solely attributable to an Indemnified Party's gross
negligence or willful misconduct. This indemnity agreement shall survive the
termination of this Agreement. Any amounts payable under this or any other
section of this Agreement shall be additional Obligations secured hereby.

10. MISCELLANEOUS.

      10.1 Notices. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Debtor (at
its address on Secured Party's records) or to Secured Party (at the address on
page one and separately to Secured Party's officer responsible for Debtor's
relationship with Secured Party). Such notice or demand shall be deemed
sufficiently given for all purposes when delivered (i) by personal delivery and
shall be deemed effective when delivered, or (ii) by mail or courier and shall
be deemed effective three (3) business days after deposit in an official
depository maintained by the United States Post Office for the collection of
mail or one (1) business day after delivery to a nationally recognized overnight
courier service (e.g., Federal Express). Notice by e-mail is not valid notice
under this or any other agreement between Debtor and Secured Party.

      10.2 Governing Law; Jurisdiction. This Agreement has been delivered to and
accepted by Secured Party and will be deemed to be made in the State of New
York. Except as otherwise provided under federal law, this Agreement will be
interpreted in accordance with the laws of the State of New York excluding its
conflict of laws rules. DEBTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY
OR JUDICIAL DISTRICT WHERE SECURED PARTY MAINTAINS A BRANCH AND CONSENTS THAT
SECURED PARTY MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT DEBTOR'S
ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING
CONTAINED IN THIS AGREEMENT WILL PREVENT SECURED PARTY FROM BRINGING ANY ACTION,
ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST DEBTOR
INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF DEBTOR WITHIN ANY
OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Debtor
acknowledges and agrees that the venue provided above is the most convenient
forum for both Secured Party and Debtor. Debtor waives any objection to venue
and any objection based on a more convenient forum in any action instituted
under this Agreement.

<PAGE>

      10.3 Security Interest Absolute. All rights of Secured Party hereunder,
the Security Interest and all obligations of Debtor hereunder shall be absolute
and unconditional irrespective of (i) any filing by or against Debtor of any
petition in bankruptcy or any action under federal or state law for the relief
of debtors or the seeking or consenting to of the appointment of an
administrator, receiver, custodian or similar officer for the wind up of its
business; (ii) any lack of validity or enforceability of any agreement with
respect to any of the Obligations, (iii) any change in the time, manner or place
of payment of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from any agreement
or instrument with respect to the Obligations, (iv)any exchange, release or
non-perfection of any lien or any release or amendment or waiver of or consent
under or departure from any guarantee, securing or guaranteeing all or any of
the Obligations, or (v) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Debtor in respect of the Obligations or
this Agreement. If, after receipt of any payment of all or any part of the
Obligations, Secured Party is for any reason compelled to surrender such payment
to any person or entity, because such payment is determined to be void or
voidable as a preference, impermissible setoff, or a diversion of trust funds,
or for any other reason, such payment shall be reinstated as part of the
Obligations and this Agreement shall continue in full force notwithstanding any
contrary action which may have been taken by Secured Party in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
Secured Party's rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.

      10.4 Remedies Cumulative; Preservation of Rights. The rights and remedies
herein are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies which Secured Party may have under
other agreements now or hereafter in effect between Debtor and Secured Party, at
law (including under the UCC) or in equity. No failure or delay of Secured Party
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. Debtor expressly disclaims any reliance on any course of dealing
or usage of trade or oral representation of Secured Party including
representations to make loans to Debtor. No notice to or demand on Debtor in any
case shall entitle Debtor to any other or further notice or demand in similar or
other circumstances.

      10.5 Joint and Several; Successors and Assigns. If there is more than one
Debtor, each of them shall be jointly and severally liable for all amounts,
which become due, and the performance of all obligations under this Agreement
and the term "Debtor" shall include each as well as all of them. This Agreement
shall be binding upon Debtor and upon its heirs and legal representatives, its
successors and assignees, and shall inure to the benefit of, and be enforceable
by, Secured Party, its successors and assignees and each direct or indirect
assignee or other transferee of any of the Obligations; provided, however, that
this Agreement may not be assigned by Debtor without the prior written consent
of Secured Party.

      10.6 Waivers; Changes in Writing. No course of dealing or other conduct,
no oral agreement or representation made by Secured Party or usage of trade
shall operate as a waiver of any right or remedy of Secured Party. No waiver of
any provision of this Agreement or consent to any departure by Debtor therefrom
shall in any event be effective unless made specifically in writing by Secured
Party and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No modification to any provision
of this Agreement shall be effective unless made in writing in an agreement
signed by Debtor and Secured Party.

      10.7 Interpretation. Unless the context otherwise clearly requires,
references to plural includes the singular and references to the singular
include the plural; the word "or" has the inclusive meaning represented by the
phrase "and/or"; the word "including", "includes" and "include" shall be deemed
to be followed by the words "without limitation"; and captions or section
headings are solely for convenience and not part of the substance of this
Agreement. Any representation, warranty, covenant or agreement herein shall
survive execution and delivery of this Agreement and shall be deemed continuous.
Each provision of this Agreement shall be interpreted as consistent with
existing law and shall be deemed amended to the extent necessary to comply with
any conflicting law. If any provision nevertheless is held invalid, the other
provisions shall remain in effect. Debtor agrees that in any legal proceeding, a
photocopy of this Agreement kept in Secured Party's course of business may be
admitted into evidence as an original. Terms not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the UCC.

      10.8 Waiver of Jury Trial. DEBTOR AND SECURED PARTY HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY DEBTOR AND
SECURED PARTY MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS RELATED HERETO. DEBTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SECURED PARTY WILL NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. DEBTOR ACKNOWLEDGES THAT
SECURED PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE PROVISIONS OF THIS SECTION.

<PAGE>

Dated:  May  17, 2005
                                       THE PEOPLES PUBLISHING GROUP, INC.

                                       /s/ Michael L. DeMarco
                                       -----------------------------------------

                                       Name: Michael L. DeMarco
                                       Title: Chief Financial Officer

                                       MANUFACTURERS AND TRADERS TRUST COMPANY

                                       /s/ Ira A. Brown
                                       -----------------------------------------
                                       Name:  Ira A. Brown
                                       Title:  Vice President

<PAGE>

                                    EXHIBIT A

1.    Permitted Liens (Section 3.1)

      NONE

2.    Residence, principal place of business or chief executive office (Section
      3.5(i))

      299 Market Street, Saddle Brook, New Jersey 07663

3.    Location of Books and Records (Section 3.5(ii))

      299 Market Street, Saddle Brook, New Jersey 07663

4.    Location of Inventory, Equipment, Fixtures, Crops or Timber (Section
      3.5(iii) and Section 3.5(iv))

      (a)   299 Market Street, Saddle Brook, New Jersey 07663

      (b)   63 Flushing Avenue, Brooklyn, New York 11205

5.    Locations Not Owned by Debtor and Name of Record Owner (Section 3.5)

      (a)   Paramus Woodbrook Venture, LLC

      (b)   Mercedes Distribution Center, Inc.

6.    Trade Name, "Doing Business As" Name or Assumed Name (Section 3.6)

      Step Up Publishing, Inc.

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