Document:

EXHIBIT
      10.3

    

    
      
        

      

     

    SECURITY
      AGREEMENT

    Dated
      as
      of December 21, 2006

     

    between

     

    EAR
      CAPITAL I, LLC

    as
      Obligor

     

    and

     

    SHERIDAN
      ASSET MANAGEMENT, LLC

    as
      Secured Party

     

    
      
        

      

     

    Hebble
      & Associates, P.C.

    61
      Broadway, Suite 1000

    New
      York,
      New York 10006-2731

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS

    
      	 	 	
              Page

            
	
              Section
                1.

            	
              Definitions

            	
              1

            
	
              Section
                2.

            	
              Grant
                of Security Interest as Security for the Payment of the
                Liabilities

            	
              1

            
	
              Section
                3.

            	
              Maintenance
                of Collateral

            	
              1

            
	
              Section
                4.

            	
              Collection
                and Disposition of Collateral

            	
              2

            
	
              Section
                5.

            	
              Representations
                and Warranties

            	
              2

            
	
              Section
                6.

            	
              Survival
                of Representations and Warranties

            	
              4

            
	
              Section
                7.

            	
              Negative
                Covenants

            	
              5

            
	
              Section
                8.

            	
              Events
                of Default

            	
              6

            
	
              Section
                9.

            	
              Setoff

            	
              9

            
	
              Section
                10.

            	
              Notices

            	
              9

            
	
              Section
                11.

            	
              Entire
                Agreement; Amendment and Waiver

            	
              10

            
	
              Section
                12.

            	
              General
                Waivers

            	
              10

            
	
              Section
                13.

            	
              Rights
                Cumulative

            	
              11

            
	
              Section
                14.

            	
              Governing
                Law; Jurisdiction

            	
              11

            
	
              Section
                15.

            	
              Assignment;
                Termination

            	
              12

            
	
              Section
                16.

            	
              Waiver
                of Presentment, Etc.

            	
              12

            
	
              Section
                17.

            	
              Conflicts

            	
              12

            
	
              Section
                18.

            	
              Further
                Assurances

            	
              12

            
	
              Section
                19.

            	
              Counterparts

            	
              12

            
	
              Section
                20.

            	
              Telecopier
                Execution and Delivery

            	
              12

            
	
              Section
                21.

            	
              Titles
                and Headings

            	
              13

            
	
              Section
                22.

            	
              Miscellaneous

            	
              13

            

    

     

    

    SCHEDULES

    

    Schedule
      A -
      Collateral

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECURITY
      AGREEMENT

     

    SECURITY
      AGREEMENT
      (the
“Security
      Agreement’)
      dated
      as of December 21, 2006, executed and delivered by EAR
      Capital I, LLC,
      a
      Delaware limited liability company (“DRV”),
      and
Sheridan
      Asset Management, LLC,
      a
      Delaware limited liability company (together with its Affiliates, including
      subsidiaries, whether now existing or hereafter created or acquired,
      collectively, “SAM”).

     

    WHEREAS,
      DRV is
      entering into, executing and delivering to SAM this Security Agreement in
      consideration of loans made to DRV pursuant to that certain Master Loan and
      Servicing Agreement dated as of December 21, 2006 (the “Loan
      Agreement”),
      by
      and among SAM, DRV, DRV Capital, LLC, a Delaware limited liability company
      (“DRV
      Cap”),
      and
      Debt Resolve, Inc., a Delaware corporation and the parent of DRV Cap and,
      indirectly, of DRV (“Debt
      Resolve”).
      Accordingly, SAM shall have the rights, remedies and benefits hereinafter set
      forth.

     

    NOW
      THEREFORE,
      in
      consideration of the Loan Agreement and the premises, covenants and undertakings
      contained herein, the parties hereto do hereby agree as follows:

     

    Section
      1. Definitions:
      For the
      purposes of this Security Agreement, the following terms shall have the
      following meanings:

     

    “Collateral”
means
      the “initial collateral” as shown in Schedule A
      attached
      hereto, as the same may be amended as provided hereunder, and each Asset
      Portfolio purchased by DRV and financed by SAM, and shall include the proceeds,
      products and accessions of and to any and all of the foregoing.

     

    “Liabilities”
means
      the Loans under the Loan Agreement and any and all indebtedness, obligations
      and
      liabilities of any Obligor to SAM arising directly between such Obligor and
      SAM
      pursuant to the Loan Documents, including, without limitation, the Lender’s
      Residual and any and all other amounts due, or which may become due, from DRV
      to
      SAM under any of the Loan Documents.

     

    “Obligor”
means
      DRV and any guarantor, surety, accommodation party or other person liable upon
      or for any of the Liabilities or Collateral, but excluding persons liable for
      payments payable under and pursuant to the Assets included in the
      Collateral.

     

    Unless
      the context otherwise requires, all terms used herein which are defined in
      the
      Loan Agreement shall have the same meanings herein as defined therein and any
      terms used herein which are defined in the Uniform Commercial Code shall have
      the meanings herein as defined therein.

     

    Section
      2. Grant
      of Security Interest as Security for the Payment of the
      Liabilities.
      DRV
      hereby grant(s) to SAM a security interest in, a general lien upon, and/or
      right
      of set-off against the Collateral.

     

    Section
      3. Maintenance
      of Collateral.
      DRV may
      amend the Collateral set forth on Schedule A
      attached
      hereto with SAM’s express prior written consent. At any time and from time to
      time, DRV will, (a) deliver and pledge to SAM, indorsed and/or accompanied
      by such instruments of assignment and transfer in such form and substance as
      SAM
      may reasonably request, any and all instruments, documents and/or chattel paper
      which may constitute Collateral as SAM may specify in its demand; (b) give,
      execute, deliver, file and/or record any notice, statement, instrument,
      document, agreement or other papers that may be necessary or desirable, or
      that
      SAM may request, in order to create, preserve, perfect, or validate any security
      interest granted pursuant hereto or to enable SAM to exercise and enforce its
      rights hereunder or with respect to such security interest; (c) keep and
      stamp or otherwise mark any and all documents and chattel paper and its
      individual books and records relating to inventory, accounts and contract rights
      in such manner as SAM may require, (d) permit representatives of SAM at
      reasonable times and with reasonable notice, unless an Event of Default exists
      hereunder, to inspect its inventory and to inspect and make abstracts from
      DRV’s
      books and records pertaining to inventory, accounts, contract rights, chattel
      paper, instruments and documents, provided that SAM does not materially
      interfere with the business of DRV; and (e) obtain SAM’s consent prior to
      any change of name, address, legal entity status, location of books and records
      or location of Collateral. Without the prior written consent of SAM, DRV will
      not file or authorize or permit to be filed in any jurisdiction any such
      financing or like statement in which SAM is not named as the sole secured party.
      DRV shall at all times act in such a manner as to preserve and protect the
      value
      of the Collateral and shall not, to the extent practicable, allow, permit or
      cause any of the Collateral, or its value, to be wasted.

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    Section
      4. Collection
      and Disposition of Collateral.
      If SAM,
      in its reasonable discretion, determines that a threat exists to the Collateral
      and/or the value of the Collateral, then SAM may, at its discretion, whether
      or
      not any of the Liabilities be then due, and in its own name or in the name
      of
      DRV or otherwise, (a) demand, sue for, collect or receive any money or
      property at any time payable or receivable on account of or in exchange for,
      or
      make any compromise or settlement that SAM deems desirable with respect to,
      any
      of the Collateral; provided,
      however,
      that
      SAM shall not be under any obligation to do so, and/or (b) extend the time
      of payment, arrange for payment in installments, or otherwise modify the terms
      of, or release, any of the Collateral, without thereby incurring any
      responsibility or liability to, or discharging or otherwise affecting any
      liability of, Obligor. SAM shall not be required to take any steps necessary
      to
      preserve any rights against prior parties to any of the Collateral. SAM may
      use
      or operate any of the Collateral for the purpose of preserving the Collateral
      or
      its value in the manner and to the extent that SAM deems appropriate;
provided,
      however,
      that
      SAM shall not be under any obligation to do so.

     

    Section
      5. Representations
      and Warranties.
      To
      induce SAM to enter into this Security Agreement and to extend the Liabilities,
      DRV represents and warrants to SAM as follows:

     

    (a) Organization,
      Etc. Obligor and each member of Obligor (i) is duly incorporated, organized
      or formed, validly existing, and in good standing under the laws of the
      jurisdiction of its incorporation, organization or formation; (ii) has duly
      qualified and is authorized to do business, and is in good standing as, a
      foreign limited liability company, partnership or corporation in all states
      and
      jurisdictions where the character of its assets or the nature of its activities
      make such qualification necessary; (iii) has the requisite corporate,
      partnership or limited liability company power and authority and legal right
      to
      own and pledge or otherwise encumber its properties, to lease any property
      it
      operates under lease, and to conduct its business as now, heretofore and
      proposed to be conducted; (iv) and has not been known as or used any
      corporate, fictitious or trade names in the past. DRV’s chief executive office
      and principal place of business is located at the address identified in the
      preamble, and has been maintained at such address since DRV’s
      formation.

     

    (b) Power
      and
      Authority. Obligor and each officer, general partner and manager of Obligor
      executing and delivering on behalf of Obligor any Loan Document has the right
      and power to execute and deliver, and is duly authorized to enter into and
      perform its obligations under, the Promissory Note and each of the other Loan
      Documents to which it is a party, and each such Loan Document, when executed
      and
      delivered, will be a legal, valid and binding obligation of Obligor or such
      officer, general partner or manager, as applicable, enforceable against it
      in
      accordance with its terms, subject to bankruptcy, insolvency and equitable
      principles. Neither the execution and delivery of each of the Loan Documents
      to
      which Obligor or any such officer, general partner or manager is a party nor
      the
      performance of such party’s obligations thereunder (i) will violate any
      provision of any law, statute, or order of any governmental authority in any
      respect material to the transactions contemplated in the Loan Documents,
      (ii) requires the consent or approval of any other Person, including any
      Asset Seller, that has not already or will be obtained, (iii) contravenes
      the organizational documentation of such Person, or (iv) conflicts with,
      results in a breach of, or constitutes a default under, any agreement or other
      instrument to which Obligor or such officer, general partner or manager is
      a
      party or by which any of them is bound.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (c) Consents,
      Etc.
      Obligor
      has, and is in good standing with respect to, all material governmental
      consents, approvals, licenses, authorizations, permits, certificates,
      inspections and franchises necessary to conduct its business as heretofore,
      now
      or proposed to be conducted by it and to own or lease and operate its assets
      as
      now owned or leased by it or as a condition to the execution, delivery or
      performance of each of the Loan Documents to which Obligor is a
      party.

     

    (d) Pending
      Proceedings. There are no actions, suits, proceedings or investigations pending,
      or to the knowledge of DRV, threatened, against or affecting DRV or any
      shareholder, partner or member of DRV in any court or before any governmental
      authority or arbitration board or tribunal (i) that might materially and
      adversely affect the ability of DRV to perform its obligations under any of
      the
      Loan Documents to which it is a party, or (ii) that might materially and
      adversely affect the enforceability of any Loan Document to which it is a party.
      Neither Obligor nor any shareholder, partner or member of Obligor is
      contemplating either the filing of a petition by it under any state or federal
      bankruptcy or insolvency laws, or the liquidation of all or a major portion
      of
      its assets or property, and DRV has no knowledge of any Person contemplating
      the
      filing of any such petition against it or any shareholder, partner or member
      of
      Obligor.

     

    (e) Assets.
      DRV is the sole owner of all of the Collateral, in each case free and clear
      of
      all liens.

     

    (f) Material
      Facts. There is no fact or circumstance known to DRV that materially and
      adversely affects the ability of DRV to perform its obligations under this
      Security Agreement and that DRV has failed to disclose to SAM in writing. No
      statement of fact made by or on behalf of DRV in this Security Agreement, in
      any
      of the other Loan Documents, or in any written statement furnished by or on
      behalf of DRV pursuant to or in contemplation of this Security Agreement,
      contains any untrue statement of a material fact or omits to state any material
      fact necessary to make statements contained herein or therein not
      misleading.

     

    (g) Taxes
      and
      Assessments. All federal, state, local and foreign tax returns, reports and
      statements required to be filed by DRV have been filed with the appropriate
      governmental authority and all charges and other impositions shown thereon
      to be
      due and payable have been paid prior to the date on which any fine, penalty,
      interest or late charge may be added thereto for nonpayment thereof, or any
      such
      fine, penalty, interest, late charge or loss has been paid. DRV has paid when
      due and payable all charges required to be paid by it. Proper and accurate
      amounts have been withheld by DRV from its employees for all periods in full
      and
      complete compliance with the tax, social security and unemployment withholding
      provisions of applicable federal, state, local and foreign law, and such
      withholdings have been timely paid to the respective governmental agencies.
      DRV
      has not executed or filed with the IRS or any other governmental authority
      any
      agreement or other document extending, or having the effect of extending, the
      period for assessment or collection of any charges. None of the Collateral
      is
      property that is required to be treated as being owned by any other Person
      pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
      Code of 1954, as amended, and in effect immediately prior to the enactment
      of
      the Tax Reform Act of 1986, or is “tax-exempt use property” within the meaning
      of Internal Revenue Code Section 168(h). DRV has not agreed to or been
      requested to make any adjustment under Internal Revenue Code Section 481(a)
      by reason of a change in accounting method or otherwise. DRV has no obligation
      under any written tax sharing agreement.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (h) Compliance
      with Laws. DRV has complied in all material respects with all federal, state
      and
      local laws, rules and regulations applicable to it, its assets or the conduct
      of
      its business.

     

    (i) Solvency.
      Giving effect to the transactions contemplated hereby, the fair saleable value
      of DRV’s assets exceeds DRV’s total liabilities, including without limitation
      subordinated, unliquidated, disputed and contingent liabilities. The fair
      saleable value of DRV’s assets is greater than DRV’s probable liabilities,
      including the maximum amount of its contingent liabilities on its debts as
      such
      debts become absolute and matured. DRV’s assets will not constitute unreasonably
      small capital to carry out its business as proposed to be conducted. DRV does
      not intend to, and does not believe that it will, incur debts and liabilities,
      including without limitation contingent liabilities and other commitments,
      beyond its ability to pay such debts as they mature, taking into account the
      timing and amounts to be payable on or in respect of obligations of
      DRV.

     

    (j) Other
      Indebtedness. DRV has no Indebtedness other than that created by the Loan
      Documents.

     

    (k) Not
      Foreign Person. DRV is not a “foreign person” within the meaning of
      Section 1445(f)(3) of the Internal Revenue Code.

     

    (l) Investment
      Company Act. DRV is not an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
      as amended. None of the making of the Loan by SAM, the application of the
      proceeds and repayment thereof by DRV and the consummation of the transactions
      contemplated by this Security Agreement and the other Loan Documents will
      violate any provision of such Act or any rule, regulation or order issued by
      the
      Securities and Exchange Commission thereunder.

     

    (m) Disclosure.
      DRV has disclosed to SAM all material facts and has not failed to disclose
      any
      material fact that could cause any representation or warranty made herein to
      be
      materially misleading.

     

    Section
      6. Survival
      of Representations and Warranties.
      All
      representations and warranties relating to Obligor contained in this Security
      Agreement or any of the other Loan Documents shall be deemed made on and as
      of
      the date hereof and shall survive the execution, delivery and acceptance of
      the
      Loan Documents by the parties thereto and the closing of the transactions
      described therein or related thereto.

     

    Section
      7. Negative
      Covenants.
      Until
      the payment in full of all Liabilities:

     

    (a)Dissolution,
      Merger, Etc. DRV shall not dissolve, liquidate, or otherwise terminate its
      existence or merge or consolidate with any Person, or acquire all or any
      substantial part of the assets of any Person, except as may be expressly
      permitted by the Loan Agreement.

     

    (b) Loans,
      Advances, and Investments. DRV shall not make any loan, advance, extension
      of
      credit, or capital contribution to any Person.

     

    (c) Other
      Indebtedness. DRV shall not (i) create, incur, assume, become or be liable
      in any manner or suffer to exist, any indebtedness other than the Liabilities,
      or (ii) guarantee the indebtedness of any other Person.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (d) Transactions
      with Affiliates. DRV shall not, either directly or indirectly, enter into any
      contracts, agreements or transactions, including but not limited to, brokerage
      contracts, property management agreements, sales contracts for the providing
      of
      any other goods or services, or the reimbursement or payment of any fees or
      expenses, with any of its shareholders, officers, directors, managers, partners
      or members, or with any of DRV’s Affiliates or any entities owned in whole or in
      part by DRV or its shareholders, officers, directors, managers, partners or
      members, without the prior written consent of SAM. SAM hereby approves and
      consents to DRV Capital, LLC, an Affiliate of DRV, being engaged as the initial
      Servicer under the Loan Agreement.

     

    (e) Other
      Liens. DRV shall not create or suffer to exist any Lien or liability upon any
      of
      the Collateral.

     

    (f) Distributions.
      DRV shall not declare or make any distributions of any of its assets, income
      or
      profits to any of its shareholders during any Event of Default which has
      occurred and is continuing.

     

    (g) New
      Place
      of Business. DRV shall not change its principal place of business or chief
      executive office, except upon at least thirty (30) days’ prior written
      notice to SAM and after the delivery to SAM of Financing Statements, if required
      by applicable law, in form satisfactory to perfect or continue the perfection
      of
      SAM’s Liens and security interest under the Loan Documents.

     

    (h) New
      Businesses. DRV shall not enter into any new business or make any material
      change in any of its business objectives, purposes and operations as set forth
      in its organizational documentation as in effect on the date of the Loan
      Agreement.

     

    (i) Fictitious
      Name, Etc. DRV shall not use any fictitious name or “d/b/a” (unless, after
      notice to SAM and the execution and filing of any financing statements requested
      by SAM, required in order to qualify to do business in any state) or fail to
      hold itself out to the public as a legal entity separate and distinct from
      any
      other Person.

     

    (j)Margin
      Stock. DRV shall not own, purchase or acquire (or enter into any contract to
      purchase or acquire) any “margin security” as defined by any regulation of the
      Federal Reserve Board as now in effect or as the same may hereafter be in
      effect.

     

    (k) Fiscal
      Year. DRV shall not change its fiscal year.

     

    (l) Credit
      and Collection Policy. DRV shall comply, and shall use its best efforts to
      ensure that DRV Capital, LLC, an Affiliate of DRV, shall comply, with the Credit
      and Collection Policy in all material respects unless specific acts of
      noncompliance are expressly approved in advance by SAM in writing.

     

    (m) Ownership
      Interests; Structure; Transfers. Without the prior written consent of SAM
      (i) DRV shall not amend its bylaws, certificate of incorporation,
      shareholders agreement, corporate minutes, limited liability company agreement,
      operating agreement, partnership agreement, or management agreement; and
      (ii) unless, after giving effect to such transfer, the initial and current
      shareholders, partners or members (collectively with their respective immediate
      family members) of DRV continue to own, directly or indirectly, collectively
      as
      a group, at least seventy-five percent (75%) of the ownership interest in
      DRV, or such transfer is to a member of the immediate family of the
      shareholders, partners or members of DRV existing on the date hereof,
      (A) no shareholder, partner or member of DRV shall assign, transfer, sell,
      convey, encumber, pledge or otherwise hypothecate, whether directly or
      indirectly, by operation of law or otherwise, any of the ownership interests
      in
      DRV or permit any change in its ownership; (B) no shareholder, partner or
      member of DRV shall withdraw or otherwise dilute, directly or indirectly, its
      capital investment in the equity of DRV; and (C) no holder of the common
      stock, partnership interest, or membership interest of any shareholder, partner
      or member of DRV shall, directly or indirectly, assign, transfer, sell,
      encumber, pledge or otherwise hypothecate any of such common stock, partnership
      interest or membership interest.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (n) No
      Events
      of Default. DRV shall not take or omit to take any action, which act or omission
      would constitute:

     

    (i) a
      Default
      or an Event of Default pursuant to, or noncompliance with any of, the terms
      of
      any of the Loan Documents; or

     

    (ii) a
      material default or an event of default pursuant to, or noncompliance with
      any
      of, the terms of any other contract or instrument to which it is a party or
      by
      which it or any of its property is bound, which default, event of default,
      or
      noncompliance has or would have a Material Adverse Effect.

     

    Section
      8. Events
      of Default.

     

    (a) The
      occurrence of any of the following events shall constitute an “Event
      of Default”:

     

    (i) any
      Event
      of Default as defined in the Loan Agreement;

     

    (ii) any
      Obligor shall default in the performance of (i) any of its agreements or
      obligations herein, or in any Loan Document if such default remains uncured
      after any applicable permitted cure period, if any, or in any instrument or
      document delivered pursuant to this Security Agreement, or (ii) the
      Liabilities;

     

    (iii) any
      Obligor:

     

    (A) shall
      generally not, or be unable to or shall admit in writing its inability to,
      pay
      its debts as such debts become due;

     

    (B) shall
      make an assignment for the benefit of creditors;

     

    (C) shall
      file a petition in bankruptcy or for any relief under any law of any
      jurisdiction relating to reorganization, arrangement, readjustment of debt,
      dissolution or liquidation;

     

    (D) shall
      have any such petition filed against it and the same shall remain undismissed
      for a period of forty-five (45) days, or shall consent or acquiesce
      thereto; or

     

    (E) shall
      have had a receiver, custodian or trustee appointed for all or a substantial
      part of its property;

     

    (iv) any
      action, suit, proceeding or investigation against or affecting any Obligor
      before any court or governmental agency which involves forfeiture of any assets
      of such Obligor shall have been commenced;

     

    (v) one
      or
      more judgments, decrees or orders for payment of money in excess of $50,000
      in
      the aggregate and not covered by insurance shall be rendered against any Obligor
      and shall continue unsatisfied and in effect for a period of thirty (30)
      consecutive days without being vacated, discharged, satisfied or stayed or
      bonded pending appeal; provided,
      however,
      that
      the foregoing defaults shall be subject to the cure periods, if any, contained
      in any note or loan agreement between Obligor and SAM; or

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (vi) SAM
      shall
      no longer have a first priority perfected security interest in any part of
      the
      Collateral.

     

    (b) Upon
      the
      occurrence and during the continuance of any Event of Default, SAM may elect
      that all of the Liabilities shall become and be due and payable
      forthwith.

     

    (c) Upon
      the
      occurrence of an Event of Default hereunder, or in connection with any of the
      Liabilities (whether such Event of Default be that of Obligor or of any other
      party obligated thereon), DRV shall, at the request of SAM, assemble the
      Collateral at such place or places as SAM designates in its request, and, to
      the
      extent permitted by applicable law, SAM shall have the right, with or without
      legal process and with or without prior notice or demand, to take possession
      of
      the Collateral or any part thereof and to enter any premises for the purpose
      of
      taking possession thereof. SAM shall have the rights and remedies with respect
      to the Collateral of a secured party under the Uniform Commercial Code (whether
      or not such Code is in effect in the jurisdiction where the rights and remedies
      are asserted). In addition, with respect to the Collateral, or any part thereof,
      which shall then be or shall thereafter come into the possession or custody
      of
      SAM or any of its agents, associates, representatives, or correspondents, SAM
      may sell or cause to be sold at any location selected by it and reasonable
      under
      the circumstances, in one or more sales or parcels, at such price as SAM may
      deem best, and for cash or on credit or for future delivery, without assumption
      of any credit risk, all or any of the Collateral, at any broker’s board or at
      public or private sale, in any reasonable manner permissible under the Uniform
      Commercial Code (except that, to the extent permitted thereunder, Obligor hereby
      waives the requirements of said Code), and SAM or anyone else may be the
      purchaser of any or all of the Collateral so sold and thereafter hold the same
      absolutely, free from any claim or right of whatsoever kind including any equity
      or redemption, of Obligor, any such demand, notice or right and equity being
      hereby expressly waived and released. Obligor will pay to SAM all expenses
      (including reasonable attorneys’ fees and legal expenses incurred by SAM) of, or
      incidental to, the enforcement of any of the provisions hereof or of any of
      the
      Liabilities, or any actual or attempted sale, or any exchange, enforcement,
      collection, compromise or settlement of any of the Collateral or receipt of
      the
      proceeds thereof, by litigation or otherwise, including expenses of insurance,
      and all such expenses shall be Liabilities secured by this Security Agreement.
      SAM, at any time, at its option, may apply the net cash receipts from the
      Collateral to the payment of principal or interest on any of the Liabilities,
      whether or not then due, making proper rebate of interest or discount.
      Notwithstanding that SAM, whether in its own behalf and/or on behalf of another
      or others, may continue to hold Collateral and regardless of the value thereof,
      Obligor shall be and remain liable for the payment in full, principal and
      interest. If any balance of the Liabilities and expenses at any time remain
      unpaid, then SAM may exercise its rights with respect to Collateral without
      resorting to or regard to other collateral or sources of reimbursement for
      the
      Liabilities.

     

    (d) With
      respect to the Collateral, or any part thereof, which at any time shall come
      into the possession or custody or under the control of SAM or any of its agents,
      associates, Affiliates, or correspondents, for any purpose, the right is
      expressly granted to SAM, at its discretion, to transfer to or register in
      the
      name of itself or its nominee any of the Collateral, to exchange any of the
      Collateral for other property upon any reorganization, recapitalization or
      other
      readjustment and in connection therewith to deposit any of the Collateral with
      any committee or depositary upon such terms as it may determine, to notify
      any
      account debtor or obligor on an instrument to make payment to SAM, and to
      exercise or cause its nominee to exercise all or any powers with respect to
      the
      Collateral with same force and effect as an absolute owner thereof. All of
      the
      foregoing may occur without notice (except such notice as may be required by
      applicable law and cannot be waived (as any such notice that may be waived
      is
      hereby waived by Obligor)) and shall occur without liability except to account
      for property actually received by it. Without limiting the generality of the
      foregoing, any and all payments, distributions and/or dividends, whether in
      securities, property, cash or otherwise (including, without limitation,
      dividends representing stock or liquidating dividends or a distribution on
      or
      return of capital upon or in respect of the Collateral or any part thereof,
      or
      resulting from any split-up, reorganization or reclassification of the
      Collateral or any part thereof, or received in exchange for the Collateral
      or
      any part thereof as a result of a merger, consolidation or otherwise), shall
      be
      paid directly to and retained by SAM and held by it until applied, as herein
      provided, as additional collateral security pledged under and subject to the
      terms hereof. SAM shall be deemed to have possession of any of the Collateral
      in
      transit to or set apart for it or any of its agents, associates, Affiliates,
      or
      correspondents.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (e) If
      any
      Event of Default shall occur, then, whether or not any of the Liabilities be
      due, SAM may, at its discretion, in its name or in the name of Obligor or
      otherwise, demand, sue for, collect or receive any money or property at any
      time
      payable or receivable on account of or in exchange for, or make any compromise
      or settlement which SAM deems desirable with respect to, any of the Collateral,
      but shall be under no obligation to do so, or SAM may extend the time of
      payment, arrange for payment in installments, or otherwise modify the terms
      of,
      or release, any of the Collateral, without thereby incurring responsibility
      to,
      or discharging or otherwise affecting any Liability of Obligor. SAM shall not
      be
      required to take any steps necessary to preserve any rights against prior
      parties to any of the Collateral. SAM may use or operate any of the Collateral
      for the purpose of preserving the Collateral or its value in the manner and
      to
      the extent SAM deems appropriate, but SAM shall be under no obligation to do
      so.

     

    (f) THE
      RIGHTS OF SAM SET FORTH IN THIS SECURITY AGREEMENT ARE WITHOUT LIMITATION OF,
      AND IN ADDITION TO, ANY OTHER RIGHT OF SAM UNDER ANY OTHER DOCUMENT EVIDENCING,
      OR EXECUTED IN CONNECTION WITH, THE LIABILITIES (INCLUDING BUT NOT LIMITED
      TO
      ANY RIGHT OF ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR
      ANY
      RIGHT OF SAM TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY
      PARTICULAR CONDITION OR EVENT).

     

    Section
      9. Setoff.
      In the
      event that any amount becomes due and payable hereunder and SAM shall have
      demanded payment thereof from DRV, in addition to all other rights and remedies,
      SAM (including its subsidiaries and each and every Affiliate) is hereby
      irrevocably authorized, without prior notice to DRV, to set off any balances
      held for the account of or any other liability owing by SAM or any such
      Affiliate to DRV at any of SAM’s (or such subsidiary’s or Affiliate’s) offices,
      in dollars or any other currency, against any of the obligations of DRV to
      SAM,
      as SAM may elect.

     

    Section
      10. Notices.
      All
      notices, requests and demands to or upon the respective parties hereto shall
      be
      in writing and addressed as set forth below:

    

      
        	 	
                SAM:

              	
                Sheridan
                  Asset Management, LLC

              
	 	 	
                1025 Westchester
                  Avenue, Suite 311

              
	 	 	
                White
                  Plains, New York  10604-3508

              
	 	 	
                Telephone
                  No.:  (914) 285-0070

              
	 	 	
                Facsimile
                  No.:  (914) 285-0071

              
	 	 	
                Attn.:  Christopher
                  J. Morrissey, Manager

              

      

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      
        	 	
                With
                  a copy to:

              	
                Hebble
                  & Associates, P.C.

              
	 	 	
                61 Broadway,
                  Suite 1000

              
	 	 	
                New
                  York, New York  10006-2731

              
	 	 	
                Telephone
                  No.:  (212) 624-1280

              
	 	 	
                Facsimile
                  No.:  (212) 624-1288

              
	 	 	
                Attn.:  Robert
                  M. Hebble, Esq.

              
	 	 	 
	 	
                DRV:

              	
                EAR
                  Capital I,
                  LLC

              
	 	 	
                707 Westchester
                  Avenue, Suite L-7

              
	 	 	
                White
                  Plains, New York  10604

              
	 	 	
                Telephone
                  No.:  (914) 949-5000

              
	 	 	
                Facsimile
                  No.:  (914) 428-3044

              
	 	 	
                Attn.:  Howard
                  Knauer

              
	 	 	 
	 	
                With
                  a copy to:

              	
                Greenberg
                  Traurig, LLP

              
	 	 	
                MetLife
                  Building

              
	 	 	
                200 Park
                  Avenue

              
	 	 	
                New
                  York, New York  10166

              
	 	 	
                Telephone
                  No.:  (212) 801-9200

              
	 	 	
                Facsimile
                  No.:  (212) 801-6400

              
	 	 	
                Attn.:  Spencer
                  Feldman, Esq.

              

      

    

     

    and
      shall
      be deemed to have been duly given or made when delivered by hand or facsimile
      at
      the address set forth above, or if sent by certified mail, five (5) days
      after the date on which mailed, or, in the case of an overnight courier service,
      one (1) business day after delivery to such courier service, addressed as
      set forth above, or to such other address as may be hereafter notified by the
      respective parties hereto.

     

    Section
      11. Entire
      Agreement; Amendment and Waiver.
      This
      Security Agreement, together with the Loan Agreement, constitutes the entire
      agreement between DRV and SAM in respect of the subject matter hereof and may
      be
      amended only by a writing signed on behalf of each party and shall be effective
      only to the extent set forth in that writing; provided,
      however,
      that
Schedule A
      shall be
      automatically amended by adding to the list of Collateral set forth thereon
      those Assets set forth in each and every Proposal which is accepted by SAM
      in
      accordance with the Loan Agreement. No delay by SAM in exercising any power
      or
      right hereunder shall operate as a waiver thereof, or of any other power or
      right; nor shall any single or partial exercise of any power or right preclude
      any other or future exercise thereof, or the exercise of any other power or
      right hereunder.

     

    Section
      12. General
      Waivers.
      

     

    (a) DRV
      hereby waives presentment, notice of dishonor and protest of all instruments
      included in or evidencing the Liabilities or the Collateral and any and all
      other notices and demands whatsoever (except where such waiver may be prohibited
      or ineffective by law), whether or not relating to such instruments
      (collectively, the “Secured
      Documents”).
      DRV
      waives all demands, notices and protests of every kind which are not expressly
      required under this Security Agreement which are permitted by law to be waived,
      and which would, if not waived, impair SAM’s enforcement of this Security
      Agreement or release any Collateral from SAM’s security interest hereunder. By
      way of example, but not in limitation of SAM’s rights under this Security
      Agreement, SAM does not have to give DRV notice of any of the
      following:

     

    (i) notice
      of
      acceptance of this Security Agreement; 

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (ii) notice
      of
      loans made, credit extended, Collateral received or delivered;

     

    (iii) any
      Event
      of Default;

     

    (iv) any
      action which SAM does or does not take regarding any Obligor or any other person
      or any other collateral securing the Liabilities;

     

    (v) except
      as
      otherwise provided herein, enforcement of this Security Agreement against the
      Collateral; or

     

    (vi) any
      other
      action taken in reliance on this Security Agreement.

     

    (b) DRV
      waives all rules of suretyship law and any other law whatsoever which is legally
      permitted to be waived and which would, if not waived, impair SAM’s enforcement
      of its security interests. By way of example, but not in limitation of SAM’s
      rights under this Security Agreement, SAM may do any of the following without
      notice to DRV except to the extent that notice to DRV is required under another
      Loan Document or Secured Document or in each case in which the agreement of
      DRV
      is required because DRV is a principal party to a Liability and as a matter
      of
      contract the agreement of DRV is required:

     

    (i) change,
      renew or extend the time for repayment of all or any part of the
      Liabilities;

     

    (ii) change
      the rate of interest or any other provisions with respect to all or any part
      of
      the Liabilities;

     

    (iii) release,
      surrender, sell or otherwise dispose of any money or property which is in SAM’s
      possession as collateral security for the Liabilities; 

     

    (iv) fail
      to
      perfect any security interest of SAM’s in any Collateral;

     

    (v) release
      or discharge any party liable to SAM in whole or in part for the Liabilities
      or
      accept any additional parties or guarantors;

     

    (vi) delay
      or
      refrain from exercising any of SAM’s rights;

     

    (vii) settle
      or
      compromise any and all claims pertaining to the Liabilities and the Collateral;
      and

     

    (viii) apply
      any
      money or property of DRV or that of any other party liable to SAM for any part
      of the Liabilities in any order SAM chooses.

     

    (c) DRV
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT
      PERMITTED BY NEW YORK LAW) ANY RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING
      UNDER OR RELATING TO THIS SECURITY AGREEMENT, THE NOTE, OR ANY LOAN DOCUMENT,
      AND AGREES THAT ANY SUCH DISPUTE SHALL, AT SAM’S OPTION, BE TRIED BEFORE A JUDGE
      SITTING WITHOUT A JURY.

     

    (d) IN
      ADDITION, DRV WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE
      OF LIMITATIONS OR ANY CLAIM OF DELAY BY SAM AND ANY SET-OFF OR COUNTERCLAIM
      OF
      ANY NATURE OR DESCRIPTION.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    Section
      13. Rights
      Cumulative.
      The
      rights, powers and remedies granted to SAM herein shall be cumulative and in
      addition to any rights, powers and remedies to which SAM may be entitled either
      by operation of law or pursuant to any other document or instrument delivered
      or
      from time to time to be delivered to SAM in connection with any of the
      Liabilities or other Loan Documents.

     

    Section
      14. Governing
      Law; Jurisdiction.
      This
      Security Agreement shall be governed by and construed in accordance with the
      laws of the State of New York. SAM shall have the rights and remedies of a
      secured party under applicable law including, but not limited to, the Uniform
      Commercial Code. The parties hereto consent to the nonexclusive jurisdiction
      and
      venue of the state or federal courts located in such state. In the event of
      a
      dispute hereunder, suit may be brought against DRV in such courts or in any
      jurisdiction where DRV or any of its assets may be located. The parties hereto
      waive personal service of process. Service of process upon any party hereto
      in
      connection with any dispute shall be binding on such party if sent to such
      party
      by registered mail at the address(es) specified in Section 10
      above or
      to such further address(es) as such party may specify to each of the other
      parties hereto in writing.

     

    Section
      15. Assignment;
      Termination.
      SAM may
      assign, transfer and/or deliver to any transferee of any of the Liabilities
      any
      or all of the Collateral, and thereafter shall be fully discharged from all
      responsibility with respect to the Collateral so assigned, transferred and/or
      delivered. Such transferee shall be vested with all the powers and rights of
      SAM
      hereunder with respect to such Collateral, but SAM shall retain all rights
      and
      powers hereby given with respect to any of the Collateral not so assigned,
      transferred or delivered. Upon the payment in full of all Liabilities and the
      termination of the Loan Agreement, all liens and security interests shall be
      terminated and released, all Collateral shall be reassigned and returned to
      DRV,
      and DRV may file termination statements in respect of all financing statements
      filed hereunder.

     

    Section
      16. Waiver
      of Presentment, Etc.
      Obligor
      hereby waives presentment, notice of dishonor and protest of all instruments
      included in or evidencing the Liabilities or the Collateral and any and all
      other notices and demands relating to such instruments.

     

    Section
      17. Conflicts.
      If a
      conflict exists or arises between any of the terms and provisions of this
      Security Agreement and those of any of the other Loan Documents (other than
      the
      Loan Agreement), then the terms and provisions of this Security Agreement shall
      prevail and control. If a conflict exists or arises between any of the terms
      and
      provisions of this Security Agreement and those of the Loan Agreement, then
      the
      terms and provisions of the Loan Agreement shall prevail and
      control.

     

    Section
      18. Further
      Assurances.
      DRV
      agrees to execute and deliver to SAM such instruments and documents, and to
      take
      such actions, as SAM may, from time to time, reasonably request in order to
      effectuate the purpose of, and carry out the terms and provisions of, this
      Security Agreement and each of the other Loan Documents.

     

    Section
      19. Counterparts.
      This
      Security Agreement may be executed in any number of counterparts, each of which
      shall be deemed an original, but all of which together shall constitute one
      and
      the same instrument. The signature of any party hereto on any counterpart shall
      be deemed to be a signature to each counterpart, and such signed counterpart
      may
      be appended to any other counterpart. Any counterpart of this Security Agreement
      which has attached to it separate signature pages which collectively contain
      the
      signatures of all of the parties hereto shall for all purposes be deemed to
      be a
      fully-executed instrument.

     

    Section
      20. Telecopier
      Execution and Delivery.
      A
      facsimile, telecopy or other reproduction of this Security Agreement may be
      executed by one or more of the parties hereto, and an executed copy of this
      Security Agreement, or the signature page hereof, may be delivered by one or
      more parties hereto by telecopier or other similar electronic transmission
      device pursuant to which the signature of or on behalf of such party can be
      legibly seen, and such execution and delivery shall be considered valid, binding
      and effective for all purposes. Notwithstanding the foregoing, each of the
      parties hereto shall promptly execute and deliver to each other party an
      original hard copy of this Security Agreement in addition to any facsimile,
      telecopy or other electronic reproduction hereof previously executed and
      delivered.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    Section
      21. Titles
      and Headings .
      The
      titles and headings of the Articles, Sections, and paragraphs of this Security
      Agreement (a) are merely for convenience of reference only in reading this
      Security Agreement, (b) shall not be construed to alter, modify or
      interpret the meaning of the provisions under said titles and headings, and
      (c) shall not have any effect on the construction or interpretation of the
      content of this Security Agreement.

     

    Section
      22. Miscellaneous.
      This
      Security Agreement shall be binding upon the heirs, executors, administrators,
      permitted assigns, or successors of the parties hereto, and shall so continue
      in
      force notwithstanding any change in any membership of any party hereto, whether
      such change occurs through death, retirement or otherwise.

     

    (Remainder
      of Page Intentionally Left Blank - Signature Page Follows)

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has executed this Security Agreement as of the date first
      written above.

     

    
      	 	 	 
	 	EAR
              CAPITAL I, LLC
	 
 	 
 	 
 
	 	By:  	/s/ James
              D.
              Burchetta
	 	
              

              Name:  James
                D. Burchetta

              Title:  Chief
                Executive Officer 

            

    

     

    
    

    
      	 	 	 
	 	SHERIDAN
              ASSET MANAGEMENT, LLC
	 
 	 
 	 
 
	 	By:  	/s/ Christopher
              J. Morrissey
	 	
              

              Name:  Christopher
                J. Morrissey

              Title:  Manager

            

     

    
      
        
        

      

      
        -13-INVESTMENT
      MANAGEMENT TRUST AGREEMENT

    

    This
      Agreement is made as of _____________, 2007 by and between Rand Acquisition
      Corp. II (the “Company”) and Continental Stock Transfer & Trust Company
      (“Trustee”).

    

    WHEREAS,
      the Company’s registration statement on Form S-1, No. 333-138452
      (“Registration Statement”), for its initial public offering of securities
      (“IPO”) has been declared effective as of the date hereof (“Effective Date”) by
      the Securities and Exchange Commission (capitalized terms used herein and not
      otherwise defined shall have the meanings set forth in the Registration
      Statement); and 

    

    WHEREAS,
      EarlyBirdCapital, Inc. (“EBC”) is acting as the representative of the
      underwriters in the IPO; and

    

    WHEREAS,
      as described in the Registration Statement, and in accordance with the Company’s
      Certificate of Incorporation, $46,640,000 of the gross proceeds of the IPO
      and
      sale of the Insider Units (as defined in the Registration Statement)
      ($53,552,000 if the underwriters over-allotment option is exercised in full)
      will be delivered to the Trustee to be deposited and held in a trust account
      for
      the benefit of the Company and the holders of the Company’s common stock, par
      value $.0001 per share, issued in the IPO as hereinafter provided and in the
      event the Units are registered in Colorado, pursuant to Section 11-51-302(6)
      of
      the Colorado Revised Statutes. A copy of the Colorado Statute is attached hereto
      and made a part hereof (the amount to be delivered to the Trustee will be
      referred to herein as the “Property”; the stockholders for whose benefit the
      Trustee shall hold the Property will be referred to as the “Public
      Stockholders,” and the Public Stockholders and the Company will be referred to
      together as the “Beneficiaries”); and 

    

    WHEREAS,
      the Company and the Trustee desire to enter into this Agreement to set forth
      the
      terms and conditions pursuant to which the Trustee shall hold the
      Property;

    

    IT
      IS
      AGREED:

    

    1. Agreements
      and Covenants of Trustee.
      The
      Trustee hereby agrees and covenants to:

     

    (a) Hold
      the
      Property in trust for the Beneficiaries in accordance with the terms of this
      Agreement, including the terms of Section 11-51-302(6) of the Colorado Statute,
      in a segregated trust account (“Trust Account”) established by the
      Trustee; 

    

    (b) Manage,
      supervise and administer the Trust Account subject to the terms and conditions
      set forth herein;

    

    (c) In
      a
      timely manner, upon the instruction of the Company, to invest and reinvest
      the
      Property in United States “government securities” within the meaning of Section
      2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days
      or
      less,
      and/or
      in any open ended investment company registered under the Investment Company
      Act
      of 1940 that holds itself out as a money market fund selected by the Company
      meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7
      promulgated under the Investment Company Act of 1940, as determined by the
      Company;

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    (d) Collect
      and receive, when due, all principal and income arising from the Property,
      which
      shall become part of the “Property,” as such term is used herein;

    

    (e) Notify
      the Company of all communications received by it with respect to any Property
      requiring action by the Company;

    

    (f) Supply
      any necessary information or documents as may be requested by the Company in
      connection with the Company’s preparation of its returns;

    

    (g) Participate
      in any plan or proceeding for protecting or enforcing any right or interest
      arising from the Property if, as and when instructed by the Company to do
      so;

    

    (h) Render
      to
      the Company and to EBC, and to such other person as the Company may instruct,
      monthly written statements of the activities of and amounts in the Trust Account
      reflecting all receipts and disbursements of the Trust Account; and

    

    (i) Commence
      liquidation of the Trust Account only after and promptly after receipt of,
      and
      only in accordance with, the terms of a letter (“Termination Letter”), in a
      form substantially similar to that attached hereto as either Exhibit A or
      Exhibit B hereto, signed on behalf of the Company by its President or
      Chairman of the Board and Secretary or Assistant Secretary and affirmed by
      counsel for the Company, and complete the liquidation of the Trust Account
      and
      distribute the Property in the Trust Account only as directed in the Termination
      Letter and the other documents referred to therein; provided,
      however,
      that in
      the event that a Termination Letter has not been received by the Trustee by
      the
      24-month anniversary of the effective date of the Registration Statement (“Last
      Date”), the Trust Account shall be liquidated in accordance with the procedures
      set forth in the Termination Letter attached as Exhibit B hereto and distributed
      to the stockholders of record on the Last Date. In all cases, the Trustee shall
      provide EBC with a copy of any Termination Letters and/or any other
      correspondence that it receives with respect to any proposed withdrawal from
      the
      Trust Account promptly after it receives same. The provisions of this Section
      1(i) may not be modified, amended or deleted under any
      circumstances.

    

    (j) Upon
      written request from the Company, which may be given from time to time at any
      time in a form substantially similar to that attached hereto as Exhibit C,
      the
      Trustee shall distribute to the Company the amount requested by the Company
      to
      cover
      expenses related to investigating and selecting a target business, income and
      other taxes and other working capital requirements; provided, however, that
      (i)
      such distribution shall be only from income collected on the Property and (ii)
      the aggregate amount of all such distributions shall not exceed $1,100,000.

    
      
        
        

      

      
        2

        
          

        

      

       

    

    

    2. Agreements
      and Covenants of the Company.
      The
      Company hereby agrees and covenants to:

    

    (a) Give
      all
      instructions to the Trustee hereunder in writing, signed by the Company’s
      Chairman of the Board or President. In addition, except with respect to its
      duties under paragraphs 1(i) and 1(j) above, the Trustee shall be entitled
      to
      rely on, and shall be protected in relying on, any verbal or telephonic advice
      or instruction which it in good faith believes to be given by any one of the
      persons authorized above to give written instructions, provided that the Company
      shall promptly confirm such instructions in writing;

    

    (b) Hold
      the
      Trustee harmless and indemnify the Trustee from and against, any and all
      expenses, including reasonable counsel fees and disbursements, or loss suffered
      by the Trustee in connection with any action, suit or other proceeding brought
      against the Trustee involving any claim, or in connection with any claim or
      demand which in any way arises out of or relates to this Agreement, the services
      of the Trustee hereunder, or the Property or any income earned from investment
      of the Property, except for expenses and losses resulting from the Trustee's
      gross negligence or willful misconduct. Promptly after the receipt by the
      Trustee of notice of demand or claim or the commencement of any action, suit
      or
      proceeding, pursuant to which the Trustee intends to seek indemnification under
      this paragraph, it shall notify the Company in writing of such claim
      (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the
      right to conduct and manage the defense against such Indemnified Claim,
      provided, that the Trustee shall obtain the consent of the Company with respect
      to the selection of counsel, which consent shall not be unreasonably withheld.
      The Trustee may not agree to settle any Indemnified Claim without the prior
      written consent of the Company unless such settlement includes a full release
      of
      the Company with respect to such Indemnified Claim. The Company may participate
      in such action with its own counsel; 

    

    (c) Pay
      the
      Trustee an initial acceptance fee, an annual fee and a transaction processing
      fee for each disbursement made pursuant to Section 1(j) as set forth on Schedule
      A hereto, which fees shall be subject to modification by the parties from time
      to time. It is expressly understood that the Property shall not be used to
      pay
      such fees and further agreed that said transaction processing fees shall be
      deducted by the Trustee from accumulated income at the time that disbursements
      are made to the Company pursuant to Section 1(j). The Company shall pay the
      Trustee the initial acceptance fee and first year’s fee at the consummation of
      the IPO and thereafter on the anniversary of the Effective Date. The Trustee
      shall refund to the Company the annual fee (on a pro rata basis) with respect
      to
      any period after the liquidation of the Trust Fund. The Company shall not be
      responsible for any other fees or charges of the Trustee except as set forth
      in
      this Section 2(c) and as may be provided in Section 2(b) hereof (it being
      expressly understood that the Property shall not be used to make any payments
      to
      the Trustee under such Sections);

    (d) Not,
      nor
      authorize the Trustee to, use the Property, or income earned on the Property,
      to
      pay any taxes except in the event that the Property, or a portion thereof,
      is
      released to the Company: (i) in accordance with Section 1(j) above or (ii)
      in
      accordance with Section 1(i) hereof if and only if the Trustee receives a
      Termination Letter in the form of Exhibit A attached hereto; and

    

    (e) In
      connection with any vote of the Company’s stockholders regarding a Business
      Combination, provide to the Trustee an affidavit or certificate of a firm
      regularly engaged in the business of soliciting proxies and/or tabulating
      stockholder votes (which firm may be the Trustee) verifying the vote of the
      Company’s stockholders regarding such Business Combination.

    
      
        
        

      

      
        3

        
          

        

      

       

    

    

    3. Limitations
      of Liability.
      The
      Trustee shall have no responsibility or liability to:

    

    (a) Take
      any
      action with respect to the Property, other than as directed in paragraph 1
      hereof and the Trustee shall have no liability to any party except for liability
      arising out of its own gross negligence or willful misconduct;

    

    (b) Institute
      any proceeding for the collection of any principal and income arising from,
      or
      institute, appear in or defend any proceeding of any kind with respect to,
      any
      of the Property unless and until it shall have received instructions from the
      Company given as provided herein to do so and the Company shall have advanced
      or
      guaranteed to it funds sufficient to pay any expenses incident
      thereto;

    

    (c) Change
      the investment of any Property, other than in compliance with
      paragraph 1(c);

    

    (d) Refund
      any depreciation in principal of any Property;

    

    (e) Assume
      that the authority of any person designated by the Company to give instructions
      hereunder shall not be continuing unless provided otherwise in such designation,
      or unless the Company shall have delivered a written revocation of such
      authority to the Trustee;

    

    (f) The
      other
      parties hereto or to anyone else for any action taken or omitted by it, or
      any
      action suffered by it to be taken or omitted, in good faith and in the exercise
      of its own best judgment, except for its gross negligence or willful misconduct.
      The Trustee may rely conclusively and shall be protected in acting upon any
      order, notice, demand, certificate, opinion or advice of counsel (including
      counsel chosen by the Trustee), statement, instrument, report or other paper
      or
      document (not only as to its due execution and the validity and effectiveness
      of
      its provisions, but also as to the truth and acceptability of any information
      therein contained) which is believed by the Trustee, in good faith, to be
      genuine and to be signed or presented by the proper person or persons. The
      Trustee shall not be bound by any notice or demand, or any waiver, modification,
      termination or rescission of this Agreement or any of the terms hereof, unless
      evidenced by a written instrument delivered to the Trustee signed by the proper
      party or parties and, if the duties or rights of the Trustee are affected,
      unless it shall give its prior written consent thereto;

    

    (g) Verify
      the correctness of the information set forth in the Registration Statement
      or to
      confirm or assure that any acquisition made by the Company or any other action
      taken by it is as contemplated by the Registration Statement; and

    

    (h) Pay
      any
      taxes on behalf of or from the Trust Account.

    
      
        
        

      

      
        4

        
          

        

      

       

    

    

    4. Termination.
      This
      Agreement shall terminate as follows:

    

    (a) If
      the
      Trustee gives written notice to the Company that it desires to resign under
      this
      Agreement, the Company shall use its reasonable efforts to locate a successor
      trustee. At such time that the Company notifies the Trustee that a successor
      trustee has been appointed by the Company and has agreed to become subject
      to
      the terms of this Agreement, the Trustee shall transfer the management of the
      Trust Account to the successor trustee, including but not limited to the
      transfer of copies of the reports and statements relating to the Trust Account,
      whereupon this Agreement shall terminate; provided, however, that, in the event
      that the Company does not locate a successor trustee within ninety days of
      receipt of the resignation notice from the Trustee, the Trustee may submit
      an
      application to have the Property deposited with any court in the State of New
      York or with the United States District Court for the Southern District of
      New
      York and upon such deposit, the Trustee shall be immune from any liability
      whatsoever; or 

    

    (b) At
      such
      time that the Trustee has completed the liquidation of the Trust Account in
      accordance with the provisions of paragraph 1(i) hereof, and distributed the
      Property in accordance with the provisions of the Termination Letter, this
      Agreement shall terminate except with respect to Paragraph 2(b).

    

    5. Miscellaneous.

    

    (a) The
      Company and the Trustee each acknowledge that the Trustee will follow the
      security procedures set forth below with respect to funds transferred from
      the
      Trust Account. Upon receipt of written instructions, the Trustee will confirm
      such instructions with an Authorized Individual at an Authorized Telephone
      Number listed on the attached Exhibit D. The Company and the Trustee will
      each restrict access to confidential information relating to such security
      procedures to authorized persons. Each party must notify the other party
      immediately if it has reason to believe unauthorized persons may have obtained
      access to such information, or of any change in its authorized personnel. In
      executing funds transfers, the Trustee will rely upon account numbers or other
      identifying numbers of a beneficiary, beneficiary's bank or intermediary bank,
      rather than names. The Trustee shall not be liable for any loss, liability
      or
      expense resulting from any error in an account number or other identifying
      number, provided it has accurately transmitted the numbers
      provided.

    

    (b) This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of New York, without giving effect to conflicts of law
      principles that would result in the application of the substantive laws of
      another jurisdiction. It may be executed in several original or facsimile
      counterparts, each one of which shall constitute an original, and together
      shall
      constitute but one instrument.

    

    (c) This
      Agreement contains the entire agreement and understanding of the parties hereto
      with respect to the subject matter hereof. Except for Section 1(i) (which may
      not be amended under any circumstances), this Agreement or any provision hereof
      may only be changed, amended or modified by a writing signed by each of the
      parties hereto; provided, however, that no such change, amendment or
      modification may be made without the prior written consent of EBC. As to any
      claim, cross-claim or counterclaim in any way relating to this Agreement, each
      party waives the right to trial by jury.

    
      
        
        

      

      
        5

        
          

        

      

       

    

     

    (d) The
      parties hereto consent to the jurisdiction and venue of any state or federal
      court located in the City of New York, Borough of Manhattan, for purposes of
      resolving any disputes hereunder.

    

    (e) Any
      notice, consent or request to be given in connection with any of the terms
      or
      provisions of this Agreement shall be in writing and shall be sent by express
      mail or similar private courier service, by certified mail (return receipt
      requested), by hand delivery or by facsimile transmission:

    

    
      	 	
              if
                to the Trustee, to:

            
	 	 
	 	
              Continental
                Stock Transfer 

            
	
               

            	
              &
                Trust Company

            
	
               

            	
              17
                Battery Place 

            
	
               

            	
              New
                York, New York 10004

            
	
               

            	
              Attn:
                Steven G. Nelson

            
	
               

            	
              Fax
                No.: (212) 509-5150

            
	 	 
	 	
              if
                to the Company, to:

            
	 	 
	 	
              Rand
                Acquisition Corp. II

            
	
               

            	
              461
                Fifth Avenue, 25th
                Floor

            
	
               

            	
              New
                York, New York 10017

            
	
               

            	
              Attn:
                Chief Executive Officer

            
	
               

            	
              Fax
                No.: (212)
                644-6262

            
	 	 
	 	
              in
                either case with a copy to:

            
	 	 
	 	
              EarlyBirdCapital,
                Inc. 

            
	
               

            	
              275
                Madison Avenue, Suite 1203

            
	
               

            	
              New
                York, New York 10016

            
	
               

            	
              Attn:
                David M. Nussbaum

            
	
               

            	
              Fax
                No.: (212) 269-3796

            

    

    

    (f) This
      Agreement may not be assigned by the Trustee without the prior consent of the
      Company.

    
      
        
        

      

      
        6

        
          

        

      

       

    

     

    (g) Each
      of
      the Trustee and the Company hereby represents that it has the full right and
      power and has been duly authorized to enter into this Agreement and to perform
      its respective obligations as contemplated hereunder. The Trustee acknowledges
      and agrees that it shall not make any claims or proceed against the Trust
      Account, including by way of set-off, and shall not be entitled to any funds
      in
      the Trust Account under any circumstance.

    

    (h) Each
      of
      the Company and the Trustee hereby acknowledge that EBC is a third party
      beneficiary of this Agreement.

    
      
        
        

      

      
        7

        
          

        

      

       

    

    IN
      WITNESS WHEREOF, the parties have duly executed this Investment Management
      Trust
      Agreement as of the date first written above.

    
      	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
              as Trustee
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
                

              

              Name:
                

              Title:
                

            

    

    
    

     

    
      	 	 	 
	 	RAND ACQUISITION CORP. II
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
                

              

              Name:
                

              Title:
                

            

    

    
      
        
        

      

      
        8

        
          

        

      

       

    

     

    
      SCHEDULE
        A

    

    

      
        	
                Fee
                  Item

              	
                Time
                  and method of payment 

              	
                Amount

              
	
                Initial
                  acceptance fee

              	
                Initial
                  closing of IPO by wire transfer 

              	
                $1,000

              
	
                Annual
                  fee

              	
                First
                  year, initial closing of IPO by wire transfer; thereafter on the
                  anniversary of the effective date of the IPO by wire transfer or
                  check

              	
                $3,000

              
	
                Transaction
                  processing fee for disbursements to Company under Section
                  1(j)

              	
                Deduction
                  by Trustee from accumulated income following disbursement made
                  to Company
                  under Section 1(j)

              	
                $250

              

      

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
               EXHIBIT
                A

            

    

     

    [Letterhead
      of Company]

    

    [Insert
      date]

    

    Continental
      Stock Transfer 

    &
      Trust Company

    17
      Battery Place

    New
      York,
      New York 10004

    Attn:
      Steven Nelson

    

    Re: Trust
      Account No. 530- Termination Letter

    

    Gentlemen:

    

    Pursuant
      to paragraph 1(i) of the Investment Management Trust Agreement between Rand
      Acquisition Corp. II (“Company”) and Continental Stock Transfer & Trust
      Company (“Trustee”), dated as of __________, 2006 (“Trust Agreement”), this is
      to advise you that the Company has entered into an agreement (“Business
      Agreement”) with __________________ (“Target Business”) to consummate a business
      combination with Target Business (“Business Combination”) on or about
[insert
      date].
      The
      Company shall notify you at least 48 hours in advance of the actual date of
      the
      consummation of the Business Combination (“Consummation Date”).

    

    In
      accordance with the terms of the Trust Agreement, we hereby authorize you to
      commence liquidation of the Trust Account to the effect that, on the
      Consummation Date, all of funds held in the Trust Account will be immediately
      available for transfer to the account or accounts that the Company shall direct
      on the Consummation Date.

    

    On
      the
      Consummation Date (i) counsel for the Company shall deliver to you written
      notification that (a) the Business Combination has been consummated and (b)
      the
      provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado Statute
      have
      been met, and (ii) the Company shall deliver to you (a) [an affidavit] [a
      certificate] of __________________, which verifies the vote of the Company’s
      stockholders in connection with the Business Combination and (b) written
      instructions with respect to the transfer of the funds held in the Trust Account
      (“Instruction Letter”). You are hereby directed and authorized to transfer the
      funds held in the Trust Account immediately upon your receipt of the counsel's
      letter and the Instruction Letter, in accordance with the terms of the
      Instruction Letter. In the event that certain deposits held in the Trust Account
      may not be liquidated by the Consummation Date without penalty, you will notify
      the Company of the same and the Company shall direct you as to whether such
      funds should remain in the Trust Account and distributed after the Consummation
      Date to the Company. Upon the distribution of all the funds in the Trust Account
      pursuant to the terms hereof, the Trust Agreement shall be
      terminated.

    
      
        
        

      

      
        10

        
          

        

      

       

    

     

    In
      the
      event that the Business Combination is not consummated on the Consummation
      Date
      described in the notice thereof and we have not notified you on or before the
      original Consummation Date of a new Consummation Date, then the funds held
      in
      the Trust Account shall be reinvested as provided in the Trust Agreement on
      the
      business day immediately following the Consummation Date as set forth in the
      notice.

    
      	 	 	 
	 	
              Very
                truly yours,

               

              RAND
                ACQUISITION CORP. II

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
                
Laurence
                S. Levy, Chairman of the
                Board

            

    
      	 	 	 
	
            	By:  	
            
	 	
              
                
Carol
                Zelinski, Secretary

            

    

     

    cc:
      EarlyBirdCapital, Inc.

    
      
        
        

      

      
        11

        
          

        

      

       

    

    EXHIBIT
      B

    

    [Letterhead
      of Company]

    

    [Insert
      date]

     

    Continental
      Stock Transfer 

    &
      Trust Company

    17
      Battery Place

    New
      York,
      New York 10004

    Attn:
      

    

    Re: Trust
      Account No. 530- Termination Letter

    

    Gentlemen:

    

    Pursuant
      to paragraph 1(i) of the Investment Management Trust Agreement between Rand
      Acquisition Corp. II (“Company”) and Continental Stock Transfer & Trust
      Company (“Trustee”), dated as of ___________, 2006 (“Trust Agreement”),
this
      is
      to advise you that the Company has been unable to effect a Business Combination
      with a Target Company within the time frame specified in the Company’s
      Certificate of Incorporation, as described in the Company’s prospectus relating
      to its IPO.

    

    In
      accordance with the terms of the Trust Agreement, we hereby (a) certify to
      you
      that the provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado
      Statute have been met and (b) authorize you to commence liquidation of the
      Trust
      Account as promptly as practicable to stockholders of record on the Last Date
      (as defined in the Trust Agreement). You will notify the Company in writing
      as
      to when all of the funds in the Trust Account will be available for immediate
      transfer (“Transfer Date”) in accordance with the terms of the Trust Agreement
      and the Certificate of Incorporation of the Company. You shall commence
      distribution of such funds directly to the Company’s stockholders (other than
      with respect to the Initial Shares, as defined in the Company’s Prospectus dated
      ___________, 2006) in accordance with the terms of the Trust Agreement and
      the
      Certificate of Incorporation of the Company and you shall oversee the
      distribution of the funds. Upon the distribution of all the funds in the Trust
      Account, your obligations under the Trust Agreement shall be
      terminated.

    
      
        	 	 	 
	 	
                Very
                  truly yours,

                 

                RAND
                  ACQUISITION CORP. II

              
	 
 	 
 	 
 
	
              	By:  	
              
	 	
                
                  
Laurence
                  S. Levy, Chairman of the
                  Board

              

      
        	 	 	 
	
              	By:  	
              
	 	
                
                  
Carol
                  Zelinski,
                  Secretary

              

      

    

     

    cc:
      EarlyBirdCapital, Inc. 

    
      
        
        

      

      
        12

        
          

        

      

       

    

    EXHIBIT
      C

     

    [Letterhead
      of Company]

    

    [Insert
      date]

     

    Continental
      Stock Transfer 

    &
      Trust Company

    17
      Battery Place

    New
      York,
      New York 10004

    Attn:
      

    

    Re: Trust
      Account No. 530- 

    

    Gentlemen:

    

    Pursuant
      to paragraph 1(j) of the Investment Management Trust Agreement between Rand
      Acquisition Corp. II (“Company”) and Continental Stock Transfer & Trust
      Company (“Trustee”), dated as of ___________, 2006 (“Trust Agreement”),
this
      is
      to advise you that the Company hereby requests that you deliver to the Company
      $_______ of the income earned on the Property as of the date hereof. The Company
      needs such funds to cover its expenses relating to investigating and selecting
      a
      target business and other working capital requirements. In accordance with
      the
      terms of the Trust Agreement, you are hereby directed and authorized to transfer
      (via wire transfer) such funds promptly upon your receipt of this letter to
      the
      Company’s operating account at:

    

    [WIRE
      INSTRUCTION INFORMATION]

    
      
        
          	 	 	 
	 	
                  Very
                    truly yours,

                   

                  RAND
                    ACQUISITION CORP. II

                
	 
 	 
 	 
 
	
                	By:  	
                
	 	
                  
                    
Laurence
                    S. Levy, Chairman of the
                    Board

                

        
          	 	 	 
	
                	By:  	
                
	 	
                  
                    
Carol
                    Zelinski,
                    Secretary

                

        

      

    

    

    cc:
      EarlyBirdCapital, Inc.

    
      
        
        

      

      
        13

        
          

        

      

       

    

    EXHIBIT
      D

     

    
      	
              AUTHORIZED
                INDIVIDUAL(S)

            	
              AUTHORIZED

            
	
              FOR
                TELEPHONE CALL BACK 

            	
              TELEPHONE
                NUMBER(S)

            
	 	 
	
              Company:

            	 
	 	 
	
              Rand
                Acquisition Corp. II

              461
                Fifth Avenue, 25th
                Floor

              New
                York, New York 10017

              Attn:
                Laurence S. Levy, Chairman

            	
              (212)
                644-3450

            
	 	 
	
              Trustee:

            	 
	 	 
	
              Continental
                Stock Transfer 

              &
                Trust Company

              17
                Battery Place

              New
                York, New York 10004

              Attn:
                Steven G. Nelson, Chairman

            	
              (212)
                845-3200

            

    

    
      
        
        

      

      
        14

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