Document:

OPTION
      AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OPTION
      AGREEMENT

     

    THIS
      OPTION AGREEMENT is made and entered into as of this 22nd
      day of
      January, 2008, by and among Red Moon, Inc., a Delaware corporation (the
“Company”),
      Zoom
      Technologies, Inc., a Delaware corporation (the “Option
      Holder”),
      and
      each of the stockholders of the Company listed on Schedule
      A
      (together with any subsequent stockholders, or any transferees, who become
      parties hereto as “Holders” pursuant to Sections
      7.1 or 7.2
      below,
      the “Holders”).
      

     

    RECITALS

     

    A. Concurrently
      with the execution of this Agreement, the Company and the Option Holder are
      entering into a Convertible Promissory Note Purchase Agreement (the
“Purchase
      Agreement”)
      providing for the sale of a Convertible Promissory Note in original principal
      amount of $300,000 to the Option Holder.

     

    B. The
      parties desire to enter into this Agreement to set forth their agreements and
      understandings with respect to the Option Holder’s right and option (the
“Option”)
      to
      purchase the Company (whether by means of a purchase of the assets, a merger
      or
      consolidation, a purchase of all outstanding capital stock of the Company not
      then owned by the Option Holder, or otherwise, as determined pursuant to this
      Agreement) on the terms and conditions set forth in this Agreement.

     

    NOW,
      THEREFORE, the parties agree as follows:

     

    1. The
      Option. 

    

    1.1 The
      Option.
      The
      Option Holder shall have the right, exercisable during the period (the
“Option
      Period”)
      commencing with the date of this Agreement and ending at the close of the
      business day, 5:00 p.m. Plano, Texas time, on August 31, 2008, to purchase
      the
      Company. Such purchase (the “Transaction”),
      to
      take the form of either (i) the purchase of all of the capital stock of the
      Company then outstanding and not then held by the Option Holder such that,
      upon
      such purchase, the Option Holder will own all of the outstanding shares of
      the
      capital stock of the Company of any and all classes and series; or, (ii) such
      other form as both of the Option Holder and the Company may agree, including
      without limitation: (a) the purchase of all or substantially all of the assets
      of the Company; or (b) the merger or consolidation of the Company with or into
      the Option Holder or other entity. It is hereby agreed and acknowledged that,
      in
      selecting the form of the Transaction, the parties hereto desire that such
      form
      accommodate, as much as possible, the desire of all parties to limit or reduce
      then current taxation to the Company and the holders of its capital stock and
      to
      provide the best possible long term tax and accounting treatment for the
      Transaction to the Option Holder and the selling stockholders of the Company.
      The Option may be exercised by the Option Holder at any time during the Option
      Period by providing written notice (the “Exercise
      Notice”)
      to the
      Company of the Option Holder’s exercise of the Option. Upon receipt of the
      Exercise Notice, the Company shall promptly provide notice to all Holders of
      the
      exercise of the Option. In
      the
      event the Option Holder’s common stock is not listed for trading on either of
      the NASDAQ Capital Market or the OTC Bulletin Board at the time of exercise
      of
      the Option, the Option will terminate.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    1.2 Option
      Price.
      The
      aggregate price (the “Purchase
      Price”)
      the
      Option Holder shall pay upon exercise of the Option will be (i) 1,000,000 shares
      of the Common Stock of the Option Holder (the “Initial
      Payment”);
      and
      (ii) the Earn-Out Payments (as defined below), if any. Notwithstanding the
      terms
      and conditions of any (i) long term debt; (ii) current liability notes over
      $11,000 and (iii) accrued interest payable to note holders of the Company
      assumed by the Option Holder in acquiring the Company pursuant to the exercise
      of the Option, such assumed debt will be paid in cash in eight (8) equal
      quarterly installments commencing thirty (30) days after the Closing.

    

    1.3 Payment
      of Purchase Price; Closing.
      No part
      of the Purchase Price will be paid or distributed to the Option Holder as a
      stockholder of the Company. In connection with the exercise of the Option,
      the
      Company and the Option Holder shall negotiate in good faith a purchase agreement
      containing customary and reasonable representations, warranties and covenants.
      The closing (the “Closing”)
      of the
      exercise of the Option will occur within thirty (30) days of the date of the
      Exercise Notice. “Transferee”
      shall
      mean any an individual, firm, corporation, partnership, association, limited
      liability company, trust or any other entity (each of which, a “Person”)
      to
      which the Option has been transferred pursuant to the terms of Section 7.2
      hereof. Shares of the common stock of the Option Holder constituting a portion
      of the Purchase Price are hereinafter referred to as “Consideration
      Shares”).
      

    

    1.4 Earn-Out
      Payments.
      In
      addition to the Initial Payment, the stockholders of the Company other than
      the
      Option Holder are entitled to receive an aggregate of up to four (4) million
      additional shares of the Common Stock of the Option Holder or, at the Option
      Holder’s option, “share equivalents” as earn-out payments (the “Earn-Out
      Payments”)
      on the
      terms and conditions set forth in this Section 1.4. A “share equivalent” is
      defined as $1.25 per share if the Option Holder’s Common Stock remains listed
      for trading on the NASDAQ CM; provided, however, if the Option Holder’s Common
      Stock is only listed for trading on the OTCBB as of the date the Option is
      exercised, the “share equivalent” shall instead be equal to $1.50. From zero (0)
      to four (4) million shares or share equivalents may be earned as summarized
      in
      the Performance Earn-out below. At the time of an Earn-Out Payment, the
      stockholders of the Company other than the Option Holder (by means of a
      stockholder representative) may request that any Earn-Out Payment be a specific
      combination of stock and cash ranging from 100% cash to 100% stock. Such request
      must be made by written notice to the Option Holder within thirty (30) days
      of
      the end of the quarter to which such Earn-Out Payment relates. In the event
      the
      stockholders of the Company request a combination of stock and cash that is
      50/50, the Option Holder will pay any earn-out 50/50 cash and stock. In the
      event the stockholders of the Company request that the combination include
      more
      than 50% cash or more than 50% stock, the Option Holder will pay at least 50%
      of
      the Earn-Out Payment in the form of consideration so requested by the
      stockholders of the Company, but will retain the right to pay less of the
      Earn-Out Payment in the form of consideration requested by the stockholders
      of
      the Company than such stockholders may request provided such form of
      consideration is at least 50% of the Earn-Out Payment. For example, if
      stockholders of the Company specify payment of at least 60% in stock, the Option
      Holder may elect to either grant such request or make the Earn-Out Payment
      in
      some other mix of cash and stock, provided such payment is at least 50% stock.
      If the stockholders of the Company elect to receive any portion of an Earn-Out
      Payment in cash, the Option Holder may, at its option, pay such cash earn-out
      amount in eight (8) equal quarterly installments, with simple interest at six
      percent (6%) per annum, starting 60 days after the end of the quarter, pursuant
      to a promissory note in form and substance reasonably acceptable to the
      Company.

    
      
        
        

      

      
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    An
      Earn-Out Payment will be made for a given quarter if and only if:

    

    a) EBITDA
      of
      the Redmoon division is positive for the quarter; and 

    b) The
      accumulated EBITDA of the Redmoon division is positive starting with the quarter
      ending June 30, 2008; and

    c) The
      quarter ends between June 30th, 2008 through June 30, 2009.

    

    If
      an
      Earn-Out Payment is to be made for a quarter, its dollar value will equal seven
      (7) times the accumulated EBITDA less the total earn-out already paid, not
      to
      exceed one (1) million shares or share-equivalents in any quarter and not to
      allow the total accumulated earn-out to exceed four (4) million shares or
      share-equivalents. As an example, the Option Holder’s payment of $1.25 million
      cash and 1 million shares would be equivalent to the Option Holder paying 2
      million “shares or share-equivalents” if the Option Holder’s Common Stock is
      then listed for trading on the NASDAQ CM; however, if the Option Holder’s Common
      Stock is instead then only listed for trading on the OTCBB, $1.5 million would
      be 1 million share equivalents. Further examples are set forth in Exhibit
      B
      attached
      hereto. Each Earn-Out Payment to be made in stock will be made within sixty
      (60)
      days after the end of the quarter to which it relates. 

    

    2. Holder
      Covenants. 

     

    2.1 Actions
      to be Taken.
      In the
      event of the exercise of the Option, then each Holder hereby
      agrees:

     

    (a) if
      the
      Transaction requires approval of the stockholders of the Company or any of
      them,
      with respect to all capital stock that such Holder owns or over which such
      Holder otherwise exercises voting power, to vote (in person, by proxy or by
      action by written consent, as applicable) all such capital stock in favor of,
      and adopt, the Transaction (together with any related amendment or waiver to
      the
      Company’s Certificate of Incorporation, as amended to date and as the same may
      be further amended and/or restated from time to time (as the same may be so
      amended and/or restated, the “Charter”))
      and to
      vote in opposition to any and all other proposals that could delay or impair
      the
      ability to consummate the Transaction;

     

    (b) if
      the
      Transaction is a sale of the outstanding capital stock, to sell all of its
      capital stock to the Option Holder in connection with and at the Closing of
      the
      Transaction;

     

    (c) to
      execute and deliver all related documentation and take such other action in
      support of the exercise of the Option and the closing of the Transaction
      contemplated thereunder as shall reasonably be requested by the Company or
      the
      Option Holder in order to carry out the terms and provision of this Section
      2,
      including without limitation executing and delivering instruments of conveyance
      and transfer, and any purchase agreement, merger agreement, indemnity agreement,
      escrow agreement, consent, waiver, governmental filing, share certificates
      duly
      endorsed for transfer (free and clear of impermissible liens, claims and
      encumbrances) and any similar or related documents; 

     

    
      
        
        

      

      
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    (d) not
      to
      deposit, and to cause its Affiliates not to deposit, except as provided in
      this
      Agreement or the Charter, any capital stock of the Company owned by such party
      or Affiliate in a voting trust or subject any capital stock to any arrangement
      or agreement with respect to the voting of such capital stock, unless
      specifically requested to do so by the Option Holder; 

     

    (e) to
      refrain from exercising any dissenters’ rights or rights of appraisal under
      applicable law at any time with respect to the exercise of the Option and the
      closing of the Transaction; and

     

    (f) if
      the
      consideration to be paid in exchange for the capital stock includes any
      securities and due receipt thereof by any Holder would require under applicable
      law (x) the registration or qualification of such securities or of any person
      as
      a broker or dealer or agent with respect to such securities or (y) the provision
      to any Holder of any information other than such information as a prudent issuer
      would generally furnish in an offering made solely to “accredited investors” as
      defined in Regulation D promulgated under the Securities Act of 1933, as
      amended, the Option Holder may cause to be paid to any such Holder in lieu
      thereof, against surrender of the capital stock which would have otherwise
      been
      sold by such Holder, an amount in cash equal to the fair value (as determined
      in
      good faith by the Company) of the securities which such Holder would otherwise
      receive as of the date of the issuance of such securities in exchange for the
      Capital stock.

     

    2.2 Exceptions.
      Notwithstanding the foregoing Section 2.1, a Holder will not be required to
      comply with Section
      2.1
      above in
      connection with any exercise of the Option unless: 

     

    (a) any
      representations and warranties to be made by such Holder in connection with
      the
      Transaction are limited to representations and warranties related to authority,
      ownership and the ability to convey title to such Holder’s capital stock,
      including but not limited to representations and warranties that (i) the Holder
      holds all right, title and interest in and to the capital stock such Holder
      purports to hold, free and clear of all liens and encumbrances, (ii) the
      obligations of the Holder in connection with the Transaction have been duly
      authorized, if applicable, (iii) the documents to be entered into by the Holder
      have been duly executed by the Holder and delivered to the acquirer and are
      enforceable against the Holder in accordance with their respective terms and
      (iv) neither the execution and delivery of documents to be entered into in
      connection with the Transaction, nor the performance of the Holder’s obligations
      thereunder, will cause a breach or violation of the terms of any agreement,
      law
      or judgment, order or decree of any court or governmental agency;

     

    
      
        
        

      

      
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    (b) the
      Holder shall not be liable for the inaccuracy of any representation or warranty
      made by any other person in connection with the Transaction, other than the
      Company (except to the extent that funds may be paid out of an escrow
      established to cover breach of representations, warranties and covenants of
      the
      Company as well as breach by any stockholder of any of identical
      representations, warranties and covenants provided by all
      stockholders);

     

    (c) the
      liability for indemnification, if any, of such Holder in the Transaction and
      for
      the inaccuracy of any representations and warranties made by the Company in
      connection with the Transaction, is several and not joint with any other Person
      (except to the extent that funds may be paid out of an escrow established to
      cover breach of representations, warranties and covenants of the Company as
      well
      as breach by any Holder of any of identical representations, warranties and
      covenants provided by all Holders), and is pro rata in proportion to the amount
      of consideration paid to such Holder in connection with such Transaction (in
      accordance with the provisions of the Charter); 

     

    (d) liability
      shall be limited to such Holder's applicable share (determined based on the
      respective proceeds payable to each Holder in connection with such Transaction
      in accordance with the provisions of the Charter) of a negotiated aggregate
      indemnification amount that applies equally to all Holders but that in no event
      exceeds the amount of consideration otherwise payable to such Holder in
      connection with such Transaction, except with respect to claims related to
      fraud
      by such Holder, the liability for which need not be limited as to such Holder;
      

     

    (e) upon
      or
      after (as appropriate) the consummation of the Transaction, (i) each holder
      of
      each class or series of the Company’s capital stock will receive the same form
      of consideration for their capital stock of such class or series as is received
      by other holders in respect of their capital stock of such same class or series;
      and (ii) the aggregate Purchase Price shall be allocated among the Holders
      on
      the basis of the relative ownership percentages in accordance with the Charter;
      and 

     

    (f) subject
      to clause (e) above, requiring the same form of consideration to be available
      to
      the holders of any single class or series of capital stock, if any Holders
      are
      given an option as to the form and amount of consideration to be received as
      a
      result of the Transaction, all Holders of such class or series of capital stock
      will be given the same option.

     

    3. Remedies.

     

    3.1 Covenants
      of the Company.
      Each of
      the Option Holder and the Company agrees to use its best efforts, within the
      requirements of applicable law, to ensure that the rights granted under this
      Agreement are effective and that the parties enjoy the benefits of this
      Agreement and to
      take
      such actions as may be required and to grant such waivers and consents as may
      be
      necessary or required, whether under the Charter or otherwise, to effectuate
      the
      closing of the Transaction upon and after the exercise of the Option.
      

     

    
      
        
        

      

      
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    3.2 Irrevocable
      Proxy.
      Each
      Holder hereby constitutes and appoints the Treasurer of the Company, and in
      such
      officer’s absence, the President of the Company, and a designee of the Option
      Holder, and each of them, with full power of substitution, as the proxies of
      the
      Holder with respect to the votes regarding any exercise of the Option pursuant
      to Section 2 hereof, and hereby authorizes each of them to represent and to
      vote, if and only if the party (i) fails to vote or (ii) attempts to
      vote (whether by proxy, in person or by written consent), in a manner which
      is
      inconsistent with the terms of this Agreement, all of such party’s capital stock
      pursuant to and in accordance with the terms and provisions of said Section
      2.
      The proxy granted pursuant to the immediately preceding sentence is given in
      consideration of the agreements and covenants of the parties in connection
      with
      the transactions contemplated by this Agreement and, as such, is coupled with
      an
      interest and shall be irrevocable unless and until this Agreement terminates
      or
      expires pursuant to Section 6 hereof. Each party hereto hereby revokes any
      and
      all previous proxies with respect to the shares of capital stock of the Company
      and shall not hereafter, unless and until this Agreement terminates or expires
      pursuant to Section 6 hereof, purport to grant any other proxy or power of
      attorney with respect to any of such shares of capital stock, deposit any of
      such shares of capital stock into a voting trust or enter into any agreement
      (other than this Agreement), arrangement or understanding with any person,
      directly or indirectly, to vote, grant any proxy or give instructions with
      respect to the voting of any of such shares of capital stock, in each case,
      with
      respect to any of the matters set forth herein.

     

    3.3 Specific
      Enforcement.
      Each
      party acknowledges and agrees that each party hereto will be irreparably damaged
      in the event any of the provisions of this Agreement are not performed by the
      parties in accordance with their specific terms or are otherwise breached.
      Accordingly, it is agreed that each of the Company and the Option Holder shall
      be entitled to an injunction to prevent breaches of this Agreement, and to
      specific enforcement of this Agreement and its terms and provisions in any
      action instituted in any court of the United States or any state having subject
      matter jurisdiction. 

     

    3.4 Remedies
      Cumulative.
      All
      remedies, either under this Agreement or by law or otherwise afforded to any
      party, shall be cumulative and not alternative.

     

    4. Option
      Holder Covenants.

     

    4.1 Registration.

     

    (a) The
      following terms have the following meanings for purposes of this Section
      4:

     

    “Business
      Day”
shall
      mean a day other than a Saturday, Sunday or other day on which commercial banks
      in Boston, Massachusetts are authorized or required by law to
      close.

     

    “Commission”
means
      the United States Securities and Exchange Commission, or any successor
      governmental agency or authority.

     

    “Effectiveness
      Period”
means
      the period beginning on the date the Registration Statement is declared
      effective by the Commission and ending on the earlier of (i) the date when
      all
      Registrable Securities covered by the Registration Statement (A) cease to be
      outstanding or otherwise to be Registrable Securities or (B) may be resold
      pursuant to Rule 144(k) under the Securities Act or (ii) all Registrable
      Securities have been sold.

     

    
      
        
        

      

      
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    “Exchange
      Act” means
      the
      United States Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder.

     

    “Person”
means
      any individual, sole proprietorship, partnership, corporation, limited liability
      entity, joint venture, unincorporated society or association, trust or other
      legal entity or Governmental Authority.

     

    “Prospectus”
means
      the prospectuses included in any Registration Statement, as amended or
      supplemented by any amendment or prospectus supplement, including post-effective
      amendments, and all materials incorporated by reference or explicitly deemed
      to
      be incorporated by reference in such Prospectus.

     

    “Registrable
      Securities”
means
      the Consideration Shares until the earliest of (a) their resale in
      accordance with a Registration Statement covering such securities and
      (b) their sale pursuant to an exemption from registration under the
      Securities Act or in any other transaction in which the applicable purchaser
      does not receive “restricted securities” (as such term is defined for the
      purposes of Rule 144 under the Securities Act).

     

    “Registration
      Expenses” means
      all
      fees and expenses incurred by the Option Holder in connection with the
      performance of its obligations under Section 4, whether or not a Registration
      Statement is filed or becomes effective, including (i) all preparation,
      registration and filing fees, (ii) printing expenses, (iii) all listing
      fees and expenses, if any and (iv) fees and disbursements of counsel for
      the Option Holder in connection with the Registration Statements relating to
      the
      Registrable Securities, but not including any and all
      underwriting discounts, selling commissions, and stock transfer taxes applicable
      to the sale of Registrable Securities, and fees and disbursements of legal
      counsel for any selling security holder.
      

    

    “Registration
      Statement”
means
      any registration statement of the Option Holder that covers any of the
      Registrable Securities pursuant to the provisions of this Agreement, including a
      Prospectus, amendments and supplements to such registration statement, including
      post-effective amendments, all exhibits, and all materials incorporated by
      reference or explicitly deemed to be incorporated by reference in such
      registration statement.

     

    “Securities
      Act”
means
      the United States Securities Act of 1933, as amended, and the rules and
      regulations promulgated thereunder.

    
      
        
        

      

      
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    (b) In
      the
      event of the exercise of the Option and Consideration Shares constitute a
      portion of the Purchase Price, the Option Holder shall, for the benefit of
      the
      Holders, at the Option Holder’s cost, (A) as soon as practicable, but not later
      than 180 days following the date on which the final aggregate amount of
      Consideration Shares, including Consideration Shares issued as Earn-Out
      Payments, is determined, prepare and file with the Commission, a Registration
      Statement on an appropriate form under the Securities Act permitting
      registration of the Registrable Securities for resale by the Holders to be
      made
      on a delayed or continuous basis, (B) use its best efforts to cause the
      Registration Statement to be declared effective as soon as practicable, but
      in
      any event not later than 180 days after the date hereof, and (C) use its best
      efforts to keep the Registration Statement (or any Subsequent Registration
      Statement) continuously effective under the Securities Act until the expiration
      of the Effectiveness Period. Notwithstanding the above, no Holder shall be
      entitled to have the Registrable Securities held by such Holder covered by
      the
      Registration Statement unless such Holder agrees in writing to be bound by
      the
      provisions of this Section 4 applicable to such Holder.

     

    (c) At
      the
      time the Registration Statement is declared effective, each Holder shall be
      named as a selling securityholder in the Registration Statement and the related
      Prospectus in such a manner as to permit such Holder to deliver such Prospectus
      to purchasers of Registrable Securities in accordance with applicable
      law.

     

    (d) If
      the
      Registration Statement ceases to be effective for any reason at any time during
      the Effectiveness Period, the Option Holder shall use its best efforts to obtain
      the prompt withdrawal of any order suspending the effectiveness thereof, and
      in
      any event shall within 30 days of such cessation of effectiveness amend the
      Registration Statement in a manner reasonably expected to obtain the withdrawal
      of the order suspending the effectiveness thereof, or promptly file an
      additional Registration Statement covering all of the securities that as of
      the
      date of such filing are Registrable Securities (a “Subsequent Registration
      Statement”).
      If a
      Subsequent Registration Statement is filed, the Option Holder shall use its
      best
      efforts to cause the Subsequent Registration Statement to become effective
      as
      promptly as is practicable after such filing and to keep such Subsequent
      Registration Statement continuously effective under the Securities Act until
      the
      expiration of the Effectiveness Period.

     

    (e) The
      Option Holder shall supplement and amend the Registration Statement (or any
      Subsequent Registration Statement) if required by the rules, regulations or
      instructions applicable to the registration form used by The Option Holder
      for
      such Registration Statement, if required by the Securities Act or as reasonably
      requested by a Holder.

     

    (f) Notwithstanding
      any other provisions of this Agreement to the contrary, the Option Holder shall
      cause the Registration Statement and the Prospectus and any amendment or
      supplement thereto, as of the effective date of the Registration Statement,
      amendment or supplement, (A) to comply in all material respects with the
      applicable requirements of the Securities Act, and (B) not to contain any untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein or necessary in order to make the statements therein, in light
      of
      the circumstances under which they were made, not misleading.

     

    
      
        
        

      

      
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    4.2 Registration
      Procedures.
      In
      connection with the registration obligations of the Option Holder under
      Section 4.1:

     

    (a) As
      far in
      advance as practical, but not less than 10 Business Days as such term is defined
      below), before filing a Prospectus, Registration Statement or any amendment
      or
      supplement thereto, the Option Holder shall furnish to the Holders copies of
      reasonably complete drafts of all such documents proposed to be filed (including
      exhibits) and shall use its reasonable best efforts to reflect in each such
      document, when so filed with the Commission, such comments as any counsel for
      the Holders’ reasonably may propose. 

     

    (b) As
      promptly as practicable, the Option Holder shall give notice to Holders (A)
      when
      any Prospectus, prospectus supplement, Registration Statement or post-effective
      amendment to a Registration Statement has been filed with the Commission and,
      with respect to a Registration Statement or any post-effective amendment, when
      the same has been declared effective, (B) of any request, following the
      effectiveness of a Registration Statement under the Securities Act, by the
      Commission or any other Federal or state governmental authority for amendments
      or supplements to any Registration Statement or related Prospectus or for
      additional information, (C) of the issuance by the Commission or any other
      Federal or state governmental authority of any stop order suspending the
      effectiveness of any Registration Statement or the initiation or threatening
      of
      any proceedings for that purpose, (D) of the receipt by the Option Holder of
      any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Registrable Securities for sale in any
      jurisdiction or the initiation or threatening of any proceeding for such
      purpose, (E) of the occurrence of and details concerning a Material Event and
      (F) of the determination by the Option Holder that a post-effective amendment
      to
      a Registration Statement will be filed with the Commission, which notice may,
      at
      the discretion of the Option Holder (or as required pursuant to Section
      4.2(f),
      state
      that it constitutes a Deferral Notice, in which event the provisions of Section
      4.2(f) shall
      apply. As promptly as practicable after receipt thereof, the Option Holder
      shall
      give Holders copies of any comments received from the Commission with respect
      to
      any Registration Statement and responses thereto.

     

    (c) The
      Option Holder shall use its best efforts to obtain the prompt withdrawal of
      any
      order suspending the effectiveness of a Registration Statement or the lifting
      of
      any suspension of the qualification (or exemption from qualification) of any
      of
      the Registrable Securities for sale in any jurisdiction in which they have
      been
      qualified for sale.

     

    (d) During
      the Effectiveness Period, the Option Holder shall deliver to each Holder in
      connection with any sale of Registrable Securities pursuant to a Registration
      Statement, without charge, as many copies as such Holder may reasonably request,
      of (A) the Prospectus or Prospectuses relating to such Registrable Securities
      and any amendment or supplement thereto and (B) such other documents and
      information as the Option Holder may be required to deliver with the Prospectus
      under the Securities Act, including, but not limited to, copies of the Option
      Holder’s latest Annual Report on Form 10-K or annual report to securityholders
      meeting the requirements of Rule 14a-3 and latest Quarterly Report on Form
      10-Q.

     

    
      
        
        

      

      
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    (e) Prior
      to
      any public offering of the Registrable Securities pursuant to any Registration
      Statement, the Option Holder shall register or qualify or cooperate with the
      Holders and their counsel in connection with the registration or qualification
      of the Registrable Securities for offer and sale under the securities or “blue
      sky” laws of such states of the United States as any Holder reasonably requests
      in writing and do any and all other acts or things necessary or advisable to
      enable the offer and sale in such jurisdictions of the Registrable Securities
      covered by the Registration Statement; provided,
      however,
      that
      the Option Holder shall not be required to (A) qualify generally to do business
      in any jurisdiction where it is not then so qualified or (B) take any action
      which would subject it to general service of process or to taxation in any
      jurisdiction where it is not then so subject. In the event that the Option
      Holder’s common stock is listed or admitted for trading on any national
      securities exchange or quotation on any national-automated quotation system,
      the
      Option Holder shall cause all Registrable Securities to be included in such
      listing or admission.

     

    (f) Upon
      (A)
      the issuance by the Commission of a stop order suspending the effectiveness
      of
      the Registration Statement (or any Subsequent Registration Statement) or the
      initiation of proceedings with respect to the Registration Statement (or any
      Subsequent Registration Statement) under the Securities Act, (B) the occurrence
      of any event or the existence of any fact (a “Material
      Event”)
      as a
      result of which (1) any Registration Statement shall contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary to make the statements therein not misleading,
      or
      (2) any Prospectus shall contain any untrue statement of a material fact or
      omit
      to state any material fact required to be stated therein or necessary to make
      the statements therein, in the light of the circumstances under which they
      were
      made, not misleading, or (C) the occurrence or existence of any pending
      corporate development with respect to the Option Holder that may (1) interfere
      with or affect the negotiation or completion of a transaction that is being
      contemplated by the Option Holder or (2) involve initial or continuing
      disclosure obligations that are not in the best interests of the Option Holder’s
      stockholders at such time, that, in the reasonable discretion of the Option
      Holder, makes it appropriate to suspend the availability of the Registration
      Statement (or any Subsequent Registration Statement) and the related
      Prospectus(es), then (y) in the case of clause (B) above, the Option Holder
      shall, as promptly as practicable, prepare and file a post-effective amendment
      to such Registration Statement or a supplement to the related Prospectus or
      any
      document incorporated therein by reference or file any other required document
      that would be incorporated by reference into such Registration Statement and
      Prospectus so that such Registration Statement does not contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary to make the statements therein not misleading,
      and
      such Prospectus does not contain any untrue statement of a material fact or
      omit
      to state any material fact required to be stated therein or necessary to make
      the statements therein, in the light of the circumstances under which they
      were
      made, not misleading, as thereafter delivered to the purchasers of the
      Registrable Securities being sold thereunder, and, in the case of a
      post-effective amendment to a Registration Statement, use its best efforts
      to
      cause it to be declared effective as promptly as is reasonably practicable,
      and
      (z) the Option Holder shall give notice to Holders that the availability of
      the
      Registration Statement (or any Subsequent Registration Statement) is suspended
      (a “Deferral
      Notice”)
      and,
      upon receipt of any Deferral Notice, each Holder agrees not to sell any
      Registrable Securities pursuant to such Registration Statement until such
      Holder’s receipt of copies of the supplemented or amended Prospectus provided
      for in clause (y) above, and until such Holder is advised in writing by the
      Option Holder that the existing, supplemented or amended Prospectus may be
      used,
      and has received copies of any additional or supplemental filings that are
      incorporated or deemed incorporated by reference in the applicable Prospectus,
      provided,
      that,
      in the case of a Deferral Notice with respect to clause (C) above, no such
      suspension of the availability of the Registration Statement (or any Subsequent
      Registration Statement) or the related Prospectus(es) shall extend for a period
      of more than 45 consecutive days or an aggregate of 90 days in any twelve-month
      period. If the Option Holder provides the Holders with a Deferral Notice, then
      the date set forth in clause (ii) of the definition of Effectiveness Period
      shall be extended by the number of days from and including the date of the
      giving of such Deferral Notice to and including the date when the Holders shall
      have received such amended or supplemented Prospectus pursuant to this Section
      6.15(c)(vi). The Option Holder shall use its best efforts to ensure that the
      use
      of the Prospectus may be resumed (1) in the case of clause (A) above, as
      promptly as is practicable, (2) in the case of clause (B) above, as soon as,
      in
      the good faith judgment of the Option Holder, public disclosure of such Material
      Event would not be materially prejudicial to or contrary to the interests of
      the
      Option Holder or, if necessary to avoid unreasonable burden or expense, as
      soon
      as reasonably practicable thereafter and (3) in the case of clause (C) above,
      as
      soon as, in the good faith judgment of the Option Holder, such suspension is
      no
      longer appropriate.

     

    
      
        
        

      

      
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    (g) The
      Option Holder shall cooperate with each Holder to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      sold pursuant to a Registration Statement free of any restrictive legends and
      in
      such denominations and registered in such names as such Holder may request
      a
      reasonable period of time prior to sales of the Registrable Securities pursuant
      to the Registration Statement (or any Subsequent Registration
      Statement).

     

    4.3 Registration
      Expenses.
      The
      Option Holder shall be responsible for and shall pay all Registration Expenses.
      In addition, the Option Holder shall be responsible for and shall reimburse
      the
      Holders the reasonable fees and disbursements of not more than one counsel
      (in
      an amount not to exceed $20,000), exclusive of underwriting discounts and
      commissions and stock transfer taxes, designated by the Seller Representative
      to
      act as counsel for the Holders in connection with this Section 4.3
      (“Holders’
      Counsel”).

     

    
      
        
        

      

      
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    4.4 Indemnification.

     

    (a) The
      Option Holder agrees to indemnify and hold harmless each Holder and each person,
      if any, who controls the Holder within the meaning of the Securities Act or
      the
      Exchange Act (each Holder, and such controlling persons are referred to
      collectively as the “Holder
      Indemnified Parties”)
      from
      and against any losses, claims, damages or liabilities, joint or several, or
      any
      actions in respect thereof (including, but not limited to, any losses, claims,
      damages, liabilities or actions relating to purchases and sales of the
      Registrable Securities) to which each Holder Indemnified Party may become
      subject under the Securities Act, the Securities Exchange Act of 1934 or
      otherwise, insofar as such losses, claims, damages, liabilities or actions
      arise
      out of or are based upon any untrue statement or alleged untrue statement of
      a
      material fact contained in any Registration Statement or Prospectus including
      any document incorporated by reference therein, or in any amendment or
      supplement thereto or in any preliminary Prospectus relating to the Registration
      Statement, or arise out of, or are based upon, the omission or alleged omission
      to state therein a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading, and shall reimburse, as incurred,
      the Holder Indemnified Parties for any legal or other expenses reasonably
      incurred by them in connection with investigating or defending any such loss,
      claim, damage, liability or action in respect thereof; provided,
      however,
      that
      the Option Holder shall not be liable in any such case to the extent that such
      loss, claim, damage or liability arises out of or is based upon any untrue
      statement or alleged untrue statement or omission or alleged omission made
      in
      any Registration Statement or Prospectus or in any amendment or supplement
      thereto or in any preliminary Prospectus relating to the Registration Statement
      in reliance upon and in conformity with written information pertaining to the
      Holder furnished to the Option Holder by or on behalf of the Holder specifically
      for inclusion therein; provided,
      further,
      that
      this indemnity agreement will be in addition to any liability which the Option
      Holder may otherwise have to the Holder Indemnified Party. The Option Holder
      shall also indemnify any underwriters, their officers and directors and each
      person who controls such underwriters within the meaning of the Securities
      Act
      or the Exchange Act to the same extent as provided above with respect to the
      indemnification of the holders of the Registrable Securities if requested by
      the
      Holders.

     

    (b) Each
      Holder, severally and not jointly, will indemnify and hold harmless the Option
      Holder, its officers and directors and each person, if any, who controls the
      Option Holder within the meaning of the Securities Act or the Exchange Act
      from
      and against any losses, claims, damages or liabilities or any actions in respect
      thereof, to which the Option Holder or any such controlling person may become
      subject under the Securities Act, the Exchange Act or otherwise, insofar as
      such
      losses, claims, damages, liabilities or actions arise out of or are based upon
      any untrue statement or alleged untrue statement of a material fact contained
      in
      any Registration Statement or Prospectus or in any amendment or supplement
      thereto or in any preliminary Prospectus relating to the Registration Statement,
      or arise out of or are based upon the omission or alleged omission to state
      therein a material fact necessary to make the statements therein not misleading,
      but in each case only to the extent that the untrue statement or omission or
      alleged untrue statement or omission was made in reliance upon and in conformity
      with written information pertaining to such Holder furnished to the Option
      Holder by or on behalf of such Holder specifically for inclusion therein and,
      subject to the limitation set forth immediately preceding this clause, shall
      reimburse, as incurred, the Option Holder for any legal or other expenses
      reasonably incurred by the Option Holder or any such controlling person in
      connection with investigating or defending any loss, claim, damage, liability
      or
      action in respect thereof. This indemnity agreement will be a part of any
      liability which the Holder may otherwise have to the Option Holder or any of
      its
      controlling persons.

     

    
      
        
        

      

      
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    (c) Promptly
      after receipt by an indemnified party under this Section 4.4 of notice of the
      commencement of any action or proceeding (including a governmental
      investigation), such indemnified party will, if a claim in respect thereof
      is to
      be made against the indemnifying party under this Section 4.4, notify the
      indemnifying party of the commencement thereof; but the failure to notify the
      indemnifying party shall not relieve it from any liability that it may have
      under Section 4.4(a) or
      Section 4.4(b) above except to the extent that it has been materially prejudiced
      (through the forfeiture of substantive rights or defenses) by such failure;
      and
      provided further that the failure to notify the indemnifying party shall not
      relieve it from any liability that it may have to an indemnified party otherwise
      than under Section 4.4(a) or
      Section 4.4(b) above.
      In
      case any such action is brought against any indemnified party, and it notifies
      the indemnifying party of the commencement thereof, the indemnifying party
      will
      be entitled to participate therein and, to the extent that it may wish, jointly
      with any other indemnifying party similarly notified, to assume the defense
      thereof, with counsel reasonably satisfactory to such indemnified party (who
      shall not, except with the consent of the indemnified party, be counsel to
      the
      indemnifying party), and after notice from the indemnifying party to such
      indemnified party of its election so to assume the defense thereof the
      indemnifying party will not be liable to such indemnified party under this
      Section 4.4 for any legal or other expenses, other than reasonable costs of
      investigation, subsequently incurred by such indemnified party in connection
      with the defense thereof. No indemnifying party shall, without the prior written
      consent of the indemnified party, effect any settlement of any pending or
      threatened action in respect of which any indemnified party is or could have
      been a party and indemnity could have been sought hereunder by such indemnified
      party unless such settlement (x) includes an unconditional release of such
      indemnified party from all liability on any claims that are the subject matter
      of such action, and (y) does not include a statement as to or an admission
      of
      fault, culpability or a failure to act by or on behalf of any indemnified party.
      No indemnified party shall effect any settlement of any pending or threatened
      action without the prior written consent of the indemnifying party, which such
      consent shall not be unreasonably withheld or delayed.

     

    (d) If
      (A)
      the indemnification provided for in this Section 4.4 is unavailable or
      insufficient to hold harmless an indemnified party under Section 4.4(a) or
      Section 4.4(b) above, then each indemnifying party shall contribute to the
      amount paid or payable by such indemnified party as a result of the losses,
      claims, damages or liabilities (or actions in respect thereof) referred to
      in
      Section 4.4(a) or Section 4.4(b) above in such proportion as is appropriate
      to
      reflect the relative benefits received by the indemnifying party or parties
      on
      the one hand and the indemnified party on the other from the sale of the
      Registrable Securities, pursuant to the Registration Statement, or (B) the
      allocation provided by the foregoing clause (A) is not permitted by applicable
      law, in such proportion as is appropriate to reflect not only the relative
      benefits referred to in clause (A) above but also the relative fault of the
      indemnifying party or parties on the one hand and the indemnified party on
      the
      other in connection with the statements or omissions that resulted in such
      losses, claims, damages or liabilities (or actions in respect thereof) as well
      as any other relevant equitable considerations. The amount paid by an
      indemnified party as a result of the losses, claims, damages or liabilities
      referred to in the first sentence of this Section 4.4(d) shall be deemed to
      include any legal or other expenses reasonably incurred by such indemnified
      party in connection with investigating or defending any action or claim which
      is
      the subject of this Section 4.4(d). Notwithstanding any other provision of
      this
      Section 4.4(d), no Holder shall be required to contribute any amount in excess
      of the amount by which the net proceeds received by such Holder from the sale
      of
      the Registrable Securities pursuant to the Registration Statement exceeds the
      amount of damages which such Holder has otherwise been required to pay by reason
      of such untrue or alleged untrue statement or omission or alleged omission.
      No
      person guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) shall be entitled to contribution from any person
      who was not guilty of such fraudulent misrepresentation.

     

    
      
        
        

      

      
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    (e) The
      agreements contained in this Section 4.4 shall survive the sale of the
      Registrable Securities pursuant to the Registration Statement and shall remain
      in full force and effect, regardless of any termination or cancellation of
      this
      Agreement or any investigation made by or on behalf of any indemnified
      party.

     

    4.5 Holders’
      Obligations.
      Each
      Holder agrees promptly to furnish to the Option Holder all information with
      respect to such Holder as may be required to be disclosed in the Registration
      Statement under applicable law or pursuant to Commission comments or as the
      Option Holder may reasonably request and all material information with respect
      to such Holder required to be disclosed in order to make the information
      previously furnished to the Option Holder by such Holder not false or
      misleading.

     

    4.6 “Market
      Stand-off” Agreement. Each
      Holder hereby agrees that it will not, without the prior written consent of
      Option Holder, during the period commencing on the date of the final prospectus
      relating to the registration
      by the Option Holder of shares of its Common Stock or any other equity
      securities under
      the
      Securities Act on a
      registration statement on
      Form
      S-1, Form S-2, Form S-3
      or Form
      SB-2, and
      ending on the date specified by the Option Holder (such period not to exceed
      ninety
      (90) days), which period may be extended, to the extent required by any NASD
      rules, for an additional period of up to fifteen (15) days if the Option Holder
      issues or proposes to issue an earnings or other public release within fifteen
      (15) days of the expiration of the 90-day lockup period, (i)
      lend;
      offer; pledge; sell; contract to sell; sell any option or contract to purchase;
      purchase any option or contract to sell; grant any option, right, or warrant
      to
      purchase; or otherwise transfer or dispose of, directly or indirectly, any
      shares of Common Stock or any securities convertible into or exercisable or
      exchangeable (directly
      or indirectly) for
      Common Stock
      held
      immediately before the effective date of the registration statement for such
      offering
      or
      (ii) enter into any swap or other arrangement that transfers to another, in
      whole or in part, any of the economic consequences of ownership of such
      securities,
      whether
      any such transaction described in clause (i) or (ii) above is to be settled
      by
      delivery of Common Stock or other securities, in cash, or otherwise.

     

    4.7 Volume
      Trading Limitations.
      Collectively, the amount of the Option Holder’s securities registered hereunder
      sold by the Holders during any one week period shall not exceed ten percent
      (10%) of the Option Holder’s Average Weekly Trading Volume. For purposes hereof,
“Average Weekly Trading Volume” shall mean the number of shares (excluding those
      shares traded by the Holders) traded on NASDAQ Small Cap on a weekly basis
      for
      the four weeks immediately prior to the week in which securities are to be
      sold.
      In the event that the Holders wish to sell more than ten percent (10%) of the
      Option Holder’s Average Weekly Trading Volume, the Holders shall agree among
      those Holders wishing to sell such shares.

     

    
      
        
        

      

      
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    4.8 Board
      Representation and Employment Agreements.
      Upon
      the acquisition of the balance of the Company pursuant to the exercise of the
      Option, the Option Holder will promptly take all reasonable actions to have
      Bryan Thompson nominated and appointed to the Board of Directors of the Option
      Holder. Bryan Thompson or other designee of the stockholders of the Company
      will
      be entitled to remain on the Board of Directors of the Option Holder for so
      long
      as the stockholders of the Company collectively continue to own at least 50%
      of
      the Consideration Shares received by them. Bryan Thompson or such other designee
      shall serve subject to the Certificate of Incorporation and By-laws of the
      Option Holder, as each may be amended from time to time.

     

    In
      connection with the acquisition of the Company pursuant to the exercise of
      the
      Option, the Option Holder will offer employment agreements to Bryan Thompson
      and
      any other key employees of the Company (as determined by the Option Holder)
      upon
      terms and conditions determined by the Option Holder but including in any event
      significant employment related options in the Option Holder’s common stock
      pursuant to the Option Holder’s employee option plan.

     

    5. Company
      Covenants.
      

     

    5.1 Audited
      Financial Statements.
      The
      Company hereby acknowledges that the Option Holder is a company subject to
      the
      periodic reporting requirements of the Securities Exchange Act of 1934, and,
      as
      such, will be required following the exercise of the Option to timely file
      certain audited historical financial statements of the Company as required
      by
      Item 9.01 of Form 8-K pursuant to the Securities Exchange Act of 1934 (or any
      successor or other requirement) (the
      “Required Financial Statements”).  It
      is
      understood and acknowledged that the Company currently has audited financial
      statements for its 2004 and 2005 fiscal years and that the Company can obtain
      audited financial statements for its 2006 fiscal year within 30 days or less
      of
      paying its auditors approximately $15,000 in overdue fees. The
      Company hereby agrees, in addition to complying with its obligations under
      section the
      financial statements set forth in Section 3.1(a) of the Investor’s Rights
      Agreement,
      to use
      its commercially reasonable efforts to deliver to the Option Holder as
      soon
      as practicable, but in any event within 120 days after the end of the Company’s
      2007 fiscal year, (i) balance sheets as of December 31, 2006 and as of December
      31, 2007,
      and
      (ii) statements of income and of cash flows for such years,
      all
      such financial statements
      audited
      and certified by the Company’s independent public accountants. The
      Option Holder agrees and consents to the payment by the Company from the initial
      investment made by the Option Holder under the Purchase Agreement of the
      auditor’s fees and any other fees for professional services then outstanding or
      incurred in connection with the transactions contemplated herein. 

     

    6. Term.
      This
      Agreement shall be effective as of the date hereof and shall continue in effect
      until and shall terminate at and upon 5:01 p.m., Plano, Texas time, on the
      last
      day of the Option Period, unless the Option shall have been exercised prior
      to
      such time in which event this Agreement shall not terminate until the earlier
      of
      the consummation of the transaction contemplated by the Option or its earlier
      abandonment by the Option Holder (as evidenced only by written notice from
      the
      Option Holder to such effect). 

     

    
      
        
        

      

      
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    7. Miscellaneous.

     

    7.1 Additional
      Parties. 
      Notwithstanding anything to the contrary contained herein, if the Company issues
      additional shares of capital stock after the date hereof, as a condition to
      the
      issuance of such capital stock the Company shall require the recipient of such
      capital stock become a Holder party to this Agreement by executing and
      delivering (i) the Adoption Agreement attached to this Agreement as Exhibit
      A,
      or (ii)
      a counterpart signature page hereto agreeing to be bound by and subject to
      the
      terms of this Agreement as a Holder hereunder. In addition, the Company shall
      (i) within thirty (30) days of the date of this Agreement, cause the following
      stockholders of the Company to become a Holder party to this Agreement by
      executing and delivering a counterpart signature page hereto agreeing to be
      bound by and subject to the terms of this Agreement as a Holder hereunder:
      Chris
      Barnhart, Matt Barnes, Bill Bredy, Sten Carlson, Steve Dunn, Todd Feldman,
      David
      McMillan, Wendy McMillan/Sean Briggs, Greg Nelson, Loyal M. Nordstrom, John
      Nordstrom, John R. Troup and Vicki Winn-Didio (together, the “Preferred
      Holders”);
      and
      (ii) use its best efforts to cause, within ninety (90) days of the date of
      this
      Agreement, the following stockholders of the Company to become a Holder party
      to
      this Agreement by executing and delivering a counterpart signature page hereto
      agreeing to be bound by and subject to the terms of this Agreement as a Holder
      hereunder: Don Hudnall and New Market Technology. In any such event, each such
      person shall thereafter shall be deemed a Holder for all purposes under this
      Agreement.
      .
      In
      addition, the Company shall, within thirty (30) days of the date of this
      Agreement, cause the Preferred Holders to become Stockholder parties to the
      Voting Agreement, dated as of even date hereof, by and among the Company, the
      Option Holder and the other Stockholder parties thereto.

     

    7.2 Transfers.
      Each
      transferee or assignee of any capital stock subject to this Agreement shall
      continue to be subject to the terms hereof, and, as a condition precedent to
      the
      Company’s recognizing such transfer, each transferee or assignee shall agree in
      writing to be subject to each of the terms of this Agreement by executing and
      delivering an Adoption Agreement substantially in the form attached hereto
      as
Exhibit
      A.
      Upon
      the execution and delivery of an Adoption Agreement by any transferee, such
      transferee shall be deemed to be a Holder party hereto as if such transferee
      were the transferor and such transferee’s signature appeared on the signature
      pages of this Agreement. The Company shall not permit the transfer of the shares
      of capital stock subject to this Agreement on its books or pursuant to the
      Charter or issue a new certificate representing any such shares of capital
      stock
      unless and until such transferee shall have complied with the terms of this
      Section
      7.2.
      Each
      certificate representing the shares of capital stock subject to this Agreement
      if issued on or after the date of this Agreement shall be endorsed by the
      Company with the legend set forth in Section
      7.12.
      The
      Option Holder may transfer its rights and obligations under this Agreement,
      including its rights under the Option, to any Person, subject to the Company’s
      consent as to the transferee, such consent not to be unreasonably withheld.
      

     

    7.3 Successors
      and Assigns.
      The
      terms and conditions of this Agreement shall inure to the benefit of and be
      binding upon the respective successors and assigns of the parties. Nothing
      in
      this Agreement, express or implied, is intended to confer upon any party other
      than the parties hereto or their respective successors and assigns any rights,
      remedies, obligations, or liabilities under or by reason of this Agreement,
      except as expressly provided in this Agreement. The
      Option Holder may transfer and assign its rights hereunder, including its rights
      under the Option, subject to the Company’s consent which shall not be
      unreasonably withheld. The rights of the Option Holder hereunder, including
      its
      rights under the Option, may be transferred by the Option Holder without the
      consent of the Company to an acquirer in the event of the acquisition of the
      Option Holder.

     

    
      
        
        

      

      
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    7.4 Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Delaware, regardless of the laws that might otherwise govern under
      applicable principles of conflicts of law.

     

    7.5 Counterparts;
      Facsimile.
      This
      Agreement may be executed and delivered by facsimile signature and in two or
      more counterparts, each of which shall be deemed an original, but all of which
      together shall constitute one and the same instrument.

     

    7.6 Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    7.7 Notices.
      All
      notices and other communications given or made pursuant to this Agreement shall
      be in writing and shall be deemed effectively given upon the earlier of actual
      receipt or: (a) personal delivery to the party to be notified, (b) when sent,
      if
      sent by electronic mail or facsimile during normal business hours of the
      recipient, and if not sent during normal business hours, then on the recipient’s
      next business day, (c) five (5) days after having been sent by registered or
      certified mail, return receipt requested, postage prepaid, or (d) one (1)
      business day after the business day of deposit with a nationally recognized
      overnight courier, freight prepaid, specifying next business day delivery,
      with
      written verification of receipt. All communications shall be sent to the
      respective parties at their address as set forth on Schedule
      A
      hereto,
      or to such email address, facsimile number or address as subsequently modified
      by written notice given in accordance with this Section
      7.7.
      If
      notice
      is given to the Option Holder, a copy shall also be given to Morse, Barnes-Brown
      & Pendleton, P.C., Reservoir Place, 1601 Trapelo Road, Waltham,
      Massachusetts 02451, Attention: Jeffrey P. Steele. 

     

    7.8 Consent
      Required to Amend, Terminate or Waive.
      This
      Agreement may be amended or terminated and the observance of any term hereof
      may
      be waived (either generally or in a particular instance and either retroactively
      or prospectively) only
      by a
      written instrument executed by (a) the Company; (b) the Option Holder; and
      (c)
      the Holders holding a majority of the then outstanding shares of the capital
      stock then held by the Holders. Notwithstanding the foregoing, (i) the consent
      of the Holders shall not be required for any amendment or waiver if such
      amendment or waiver either (A) is not directly applicable to the rights or
      obligations of the Holders hereunder or (B) does not adversely affect the rights
      or obligations of the Holders; (ii) Schedule
      A
      hereto
      may be amended by the Company from time to time to add information regarding
      additional stockholders without the consent of the other parties hereto; and
      (iii) any provision hereof may be waived by the waiving party on such party’s
      own behalf, without the consent of any other party.

     

    The
      Company shall give prompt written notice of any amendment, termination or waiver
      hereunder to any party that did not consent in writing thereto. Any amendment,
      termination or waiver effected in accordance with this Section
      7.8
      shall be
      binding on each party and all of such party’s successors and permitted assigns,
      whether or not any such party, successor or assignee entered into or approved
      such amendment, termination or waiver. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    7.9 Delays
      or Omissions.
      No
      delay or omission to exercise any right, power or remedy accruing to any party
      under this Agreement, upon any breach or default of any other party under this
      Agreement, shall impair any such right, power or remedy of such non-breaching
      or
      non-defaulting party nor shall it be construed to be a waiver of any such breach
      or default, or an acquiescence therein, or of or in any similar breach or
      default thereafter occurring; nor shall any waiver of any single breach or
      default be deemed a waiver of any other breach or default previously or
      thereafter occurring. Any waiver, permit, consent or approval of any kind or
      character on the part of any party of any breach or default under this
      Agreement, or any waiver on the part of any party of any provisions or
      conditions of this Agreement, must be in writing and shall be effective only
      to
      the extent specifically set forth in such writing. All remedies, either under
      this Agreement or by law or otherwise afforded to any party, shall be cumulative
      and not alternative. 

     

    7.10 Severability.
      The
      invalidity or unenforceability of any provision hereof shall in no way affect
      the validity or enforceability of any other provision.

     

    7.11 Entire
      Agreement.
      This
      Agreement (including the Exhibits hereto), constitutes the full and entire
      understanding and agreement between the parties with respect to the subject
      matter hereof, and any other written or oral agreement relating to the subject
      matter hereof existing between the parties is expressly canceled. 

     

    7.12 Legend
      on Certificates.
      Each
      certificate representing any shares of the capital stock issued after the date
      hereof shall be endorsed by the Company with a legend reading substantially
      as
      follows:

     

    “THE
      SHARES EVIDENCED HEREBY ARE SUBJECT TO AN OPTION AGREEMENT, AS MAY BE AMENDED
      FROM TIME TO TIME, (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM
      THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING
      SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
      PROVISIONS OF THAT OPTION AGREEMENT, INCLUDING CERTAIN OBLIGATIONS OF THE HOLDER
      OF THE SHARES SET FORTH THEREIN.”

     

    The
      Company, by its execution of this Agreement, agrees that it will cause the
      certificates evidencing the shares of the capital stock issued after the date
      hereof to bear the legend required by this Section
      7.12
      of this
      Agreement, and it shall supply, free of charge, a copy of this Agreement to
      any
      holder of a certificate evidencing shares of the capital stock upon written
      request from such holder to the Company at its principal office. The parties
      to
      this Agreement do hereby agree that the failure to cause the certificates
      evidencing the shares of the capital stock to bear the legend required by this
      Section
      7.12
      herein
      and/or the failure of the Company to supply, free of charge, a copy of this
      Agreement as provided hereunder shall not affect the validity or enforcement
      of
      this Agreement.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    7.13 Stock
      Splits, Stock Dividends, etc.
      In the
      event of any issuance of shares of capital stock of the Company hereafter to
      any
      of the holders thereof (including, without limitation, in connection with any
      stock split, stock dividend, recapitalization, reorganization, or the like),
      such shares of capital stock shall become subject to this Agreement and shall
      be
      endorsed with the legend set forth in Section
      7.12.

     

    7.14 Manner
      of Voting.
      The
      voting of shares of capital stock pursuant to this Agreement may be effected
      in
      person, by proxy, by written consent or in any other manner permitted by
      applicable law. 

     

    7.15 Further
      Assurances.
      At any
      time or from time to time after the date hereof, the parties agree to cooperate
      with each other, and at the request of any other party, to execute and deliver
      any further instruments or documents and to take all such further action as
      the
      other party may reasonably request in order to evidence or effectuate the
      consummation of the transactions contemplated hereby and to otherwise carry
      out
      the intent of the parties hereunder.

     

    7.16 Costs
      of Enforcement.
      If any
      party to this Agreement seeks to enforce its rights under this Agreement by
      legal proceedings, the non-prevailing party shall pay all costs and expenses
      incurred by the prevailing party, including, without limitation, all reasonable
      attorneys’ fees.

     

    [Signature
      Page Follows]

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Option Agreement as of the
      date
      first written above.

     

    
      	
              Red
                Moon, Inc.

            
	 	 
	 	 
	
              By:

            	
              /s/Bryan
                Thompson

            
	
              Name:

            	
              Bryan
                Thompson

            
	
              Title:

            	
              President

            
	 	 
	 	 
	
              OPTION
                HOLDER:

            
	 
	
              Zoom
                Technologies, Inc.

            
	 	 
	 	 
	
              By:

            	
              /s/Frank
                Manning

            
	
              Name:

            	
              Frank
                Manning

            
	
              Title:

            	
              President

            
	 	 
	 	 
	
              HOLDERS:

            
	 	 
	 	 
	
              Signature:
                

            	
              /s/Bryan
                Thompson

            
	
              Name:
                Bryan
                Thompson

            
	 	 
	 	 
	
              Signature:
                

            	
              /s/John
                McMillan

            
	
              Name:
                John
                McMillan

            
	 	 
	 	 
	
              Signature:
                

            	  

	
              Name:
                Chris
                Barnhart

            
	 	 
	 	 
	
              Signature:
                

            	  

	
              Name:
                Matt
                Barnes

            
	 	 
	 	 
	
              Signature:
                

            	  

	
              Name:
                Bill
                Bredy

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

    
      	
              Signature:
                

            	 

	
              Name:
                Sten
                Carlson

            
	 	 
	 	 
	
              Signature:
                

            	 

	
              Name:
                Steve
                Dunn

            
	 
	 	 
	
              Signature:
                

            	 

	
              Name:

            	
              Todd
                Feldman

            
	 	 
	
              Signature:
                

            	 

	
              Name:
                David
                McMillan

            
	 
	 	 
	
              Signature:
                

            	 

	
              Name:
                Wendy
                McMillan/Sean Briggs

            
	 
	 	 
	
              Signature:
                

            	 

	
              Name:
                Greg
                Nelson

            
	 
	 	 
	
              Signature:
                

            	 

	
              Name:
                Loyal
                M. Nordstrom

            
	 
	 	 
	
              Signature:
                

            	 

	
              Name:

            	
              John
                Nordstrom

            
	 	 
	
              Signature:
                

            	 

	
              Name:
                John
                R. Troup

            
	 
	 	 
	
              Signature:
                

            	 

	
              Name:
                Vicki
                Winn-Didio

            
	 
	 	 
	
              Signature:
                

            	 

	
              Name:
                Don
                Hudnall

            
	 
	 	 
	
              Signature:

            	 

	
              Name:
                New
                Market Technology

            
	 
	 
	
              By:

            	 
	
              Title

            	 

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      A

     

    HOLDERS

     

    
      	
              Name
                and Address

            	 	
              Capital
                stock Held

            
	 	 	 
	
              Bryan
                Thompson

            	 	
              33,278,000
                shares Common Stock

            
	 	 	 
	
              John
                McMillan

            	 	
              15,393,677
                shares Preferred Stock

            
	 	 	 
	
              Chris
                Barnhart

            	 	
              860,000
                shares Preferred Stock

            
	 	 	 
	
              Matt
                Barnes

            	 	
              400,000
                shares Preferred Stock

            
	 	 	 
	
              Bill
                Bredy

            	 	
              480,000
                shares Preferred Stock

            
	 	 	 
	
              Sten
                Carlson

            	 	
              574,022
                shares Preferred Stock

            
	 	 	 
	
              Steve
                Dunn

            	 	
              400,000
                shares Preferred Stock

            
	 	 	 
	
              Todd
                Feldman

            	 	
              200,000
                shares Preferred Stock

            
	 	 	 
	
              David
                McMillan

            	 	
              1,562,000
                shares Preferred Stock

            
	 	 	 
	
              Wendy
                McMillan/Sean Briggs

            	 	
              700,000
                shares Preferred Stock

            
	 	 	 
	
              Greg
                Nelson

            	 	
              4,861,932
                shares Preferred Stock

            
	 	 	 
	
              Loyal
                M. Nordstrom

            	 	
              2,995,278
                shares Preferred Stock

              1,210,200
                shares Common Stock

            
	 	 	 
	
              John
                Nordstrom

            	 	
              1,200,000
                shares Preferred Stock

            
	 	 	 
	
              John
                R. Troup

            	 	
              100,000
                shares Preferred Stock

            
	 	 	 
	
              Vicki
                Winn-Didio

            	 	
              200,000
                shares Preferred Stock

            
	 	 	 
	
              Don
                Hudnall

            	 	
              1,537,500
                shares Common Stock

            
	 	 	 
	
              New
                Market Technology

            	 	
              8,032,817
                shares Common Stock

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    ADOPTION
      AGREEMENT

     

    This
      Adoption Agreement (“Adoption
      Agreement”)
      is
      executed on ___________________, 20__, by the undersigned (the “New
      Party”)
      pursuant to the terms of that certain Option Agreement dated as of January
      22,
      2008 (the “Agreement”),
      by
      and among the Company and the Option Holder and Holder parties thereto, as
      such
      Agreement may be amended or amended and restated hereafter. Capitalized terms
      used but not defined in this Adoption Agreement shall have the respective
      meanings ascribed to such terms in the Agreement. By the execution of this
      Adoption Agreement, the New Party agrees as follows.

     

    1.1 Acknowledgement.
      Holder
      acknowledges that New Party is acquiring certain shares of the capital stock
      of
      the Company, for one of the following reasons (Check the correct
      box):

     

    
      	 	
               ̈

            	
              as
                a new Holder in accordance with Section
                7.1
                of
                the Agreement, in which case New Party will be a “Holder” for all purposes
                of the Agreement.

            

    

     

    
      	 	
               ̈

            	
              as
                a transferee of Capital stock from a party in such party’s capacity as a
                “Holder” bound by the Agreement in accordance with Section
                7.2
                of
                the Agreement, and after such transfer, New Party shall be considered
                a
                “Holder” for all purposes of the
                Agreement.

            

    

     

    1.2 Agreement.
      New
      Party hereby (a) agrees that the shares of the capital stock, and any other
      securities required by the Agreement to be bound thereby, shall be bound by
      and
      subject to the terms of the Agreement and (b) adopts the Agreement with the
      same
      force and effect as if New Party were originally a “Holder” party
      thereto.

     

    1.3 Notice.
      Any
      notice required or permitted by the Agreement shall be given to New Party at
      the
      address or facsimile number listed below New Party’s signature hereto.

     

    

      
        	
                NEW PARTY:
                  

              	 	 	
                ACCEPTED
                  AND AGREED:

              

      

       

      
        	 	 	 	 
	
                By:
                  

              	 	   	
                Red
                  Moon, Inc.

              
	
                Name
                  and Title of Signatory

              	 	 
	 	 	 	 	 
	
                Address:
                  

              	 
	 	
                By:
                  

              	 

	 	 	 	 	 
	   
	 	
                Title: 

              	 

      

       

      
        	 	 	 	 	 
	
                Facsimile Number:
                  

              	 
                	 	 	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    EARN-OUT
      EXAMPLES.

     

    
      
        	
                Quarter

              	 	
                EBITDA

              	 	
                Earnout

              	 	
                Comments

              
	
                1

              	 	
                $360K

              	 	
                1
                  million shares or $1.25 million

              	 	
                $360Kx7=$2.52
                  million

                Max
                  payout is 1 million shares

              
	 	 	 	 	 	 	 
	
                2

              	 	
                -$200K

              	 	
                0

              	 	
                EBITDA
                  must be positive

              
	 	 	 	 	 	 	 
	
                3

              	 	
                $100K

              	 	
                $.57
                  million or (570K/1.25) shares

              	 	
                7x$260K
                  = $1.82 million

                New
                  Earn ($1.82million-$1.25

                million
                  already paid out)

              
	 	 	 	 	 	 	 
	
                4

              	 	
                $200K

              	 	
                1
                  million shares or $1.25 million

              	 	
                New
                  Earn ($3.22 million -$1.82 Mil. already paid out)=$1.35 

                Million.
                  Cap $1.25 million

              

      

    

     

    
      	 	
              ·

            	
              Assumes
                Zoom shares remain listed on the NASDAQ
                CM.

            

    

    

    (This
      continues until 4 million shares or share-equivalents are reached or until
      the
      quarter ending June 30, 2009 is reached.)SECURITY
      AGREEMENT

    

    THIS
      SECURITY AGREEMENT, dated as of January 22, 2008, is made by Red Moon, Inc.,
      a
      Delaware corporation (the “Borrower”), in favor of Zoom Technologies, Inc., a
      Delaware corporation (the “Lender”). 

    

    RECITALS

    

    WHEREAS,
      on the date hereof the Lender will make a loan in the amount of Three Hundred
      Thousand Dollars ($300,000.00) to the Borrower, which loan is evidenced by
      a
      Promissory Note of even date hereof (the “Initial Note”). After the date of this
      Agreement, the Lender may make further loans to the Borrower pursuant to the
      terms of a Convertible Note Purchase Agreement, of even date hereof, and by
      and
      between the Borrower and the Lender, which loans shall be evidenced by one
      of
      more additional promissory notes (the “Additional Notes” and, together with the
      Initial Note, the “Notes”). The obligation of the Borrower under the Notes,
      including the payment of the outstanding principal and accrued but unpaid
      interest thereunder is secured as set forth in this Agreement.

    

    NOW,
      THEREFORE, in consideration of the premises and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      and
      to induce the Lender to make such loans to the Borrower, the Borrower hereby
      agrees with the Lender as follows:

    

    1.
      Defined
      Terms.
      Unless
      otherwise defined herein, terms which are defined in the Notes and used herein
      are so used as so defined, and terms which are defined in the Uniform Commercial
      Code in effect in the State of Texas on the date hereof are used herein as
      therein defined, and the following terms shall have the following
      meanings:

    

    “Code”
      means the Uniform Commercial Code as from time to time in effect in the State
      of
      Texas.

    

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

    

    “Default”
      and “Event of Default” shall have the meanings assigned to such terms in the
      Notes and shall include any breach of the Borrower’s obligations under this
      Agreement.

    

    “Lien”
      means any lien (statutory or other), mortgage, pledge, hypothecation,
      assignment, deposit arrangement, security interest, charge, claim or other
      encumbrance of any kind (including any conditional sale or other title retention
      agreement, any lease in the nature thereof, and any agreement to give any
      security interest) and any agreement to give or refrain from giving a lien,
      mortgage, pledge, hypothecation, assignment, deposit arrangement, security
      interest, charge, claim or other encumbrance of any kind.

    

    “Permitted
      Liens” means: (i) Liens imposed by law, such as carriers’, warehousemen’s,
      materialmen’s and mechanics’ liens, or Liens arising out of judgments or awards
      against Borrower with respect to which Borrower at the time shall currently
      be
      prosecuting an appeal or proceedings for review, (ii) Liens for taxes not
      yet subject to penalties for nonpayment and Liens for taxes the payment of
      which
      is being contested in good faith and by appropriate proceedings and for which,
      to the extent required by generally accepted accounting principles then in
      effect, proper and adequate book reserves relating thereto are established
      by
      Borrower, (iii) Liens in favor of customs and revenue authorities arising as
      a
      matter of law to secure payment of customs duties in connection with the
      importation of goods; (iv) Liens to which the Lender has expressly consented
      in
      writing; and (v) Liens in favor of the Lender.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “Obligations”
      means the unpaid principal amount of, and interest on, the Notes and any
      additional costs and expenses incurred by the Lender pursuant to the
      Notes.

    

    “Security
      Agreement” means this Security Agreement, as amended or restated from time to
      time.

    

    2.
      Grant
      of Security Interest.
      As
      collateral security for the prompt and complete payment and performance when
      due
      (whether at the stated maturity, by acceleration or otherwise) of the
      Obligations, the Borrower hereby grants to the Lender a security interest in
      and
      a Lien on all right, title and interest of the Borrower in all of the property
      set forth on Schedule A
      hereto
      (collectively, the “Collateral”) now owned or at any time hereafter acquired by
      the Borrower or in which the Borrower now has or at any time in the future
      may
      acquire any right, title or interest. The Borrower represents and warrants
      to
      the Lender that it has good title to all of the Collateral, free and clear
      of
      all liens, security interests and adverse interests, in favor of any person
      or
      entity other than the Lender.

    

    3.
      Covenants.
      The
      Borrower covenants and agrees with the Lender that, from and after the date
      of
      this Security Agreement until the principal and any interest under the Notes
      are
      paid in full:

    

    (a) Further
      Documentation; Pledge of Instruments and Chattel Paper.
      At any
      time and from time to time, upon the written request of the Lender, and at
      the
      sole expense of the Borrower, the Borrower will promptly and duly execute and
      deliver such instruments and documents and take such action as the Lender may
      reasonably request for the purpose of obtaining or preserving the full benefits
      of this Security Agreement and of the rights and powers herein granted,
      including, without limitation, the filing of any financing or continuation
      statements under the Uniform Commercial Code in effect in any jurisdiction
      with
      respect to the security interests and liens created hereby. The Borrower also
      hereby authorizes the Lender to file any such financing or continuation
      statement without the signature of the Borrower to the fullest extent permitted
      by applicable law. A carbon, photographic or other reproduction of this Security
      Agreement shall be sufficient as a financing statement for filing in any
      jurisdiction. If any amount payable under or in connection with any of the
      Collateral shall be or become evidenced by any Instrument or Chattel Paper,
      such
      Instrument or Chattel Paper shall be immediately delivered to the Lender, duly
      endorsed in a manner satisfactory to the Lender, to be held as Collateral
      pursuant to this Security Agreement. 

    

    (b) Indemnification.
      The
      Borrower agrees to pay, and to save the Lender harmless from, any and all
      liabilities, reasonable costs and expenses (including, without limitation,
      reasonable legal fees and expenses) (i) with respect to, or resulting from,
      any delay in paying, any and all excise, sales or other taxes which may be
      payable or determined to be payable with respect to any of the Collateral;
      (ii) with respect to, or resulting from, any delay in complying with any
      law, rule, regulation or order of any court, arbitrator or governmental entity,
      jurisdiction or authority applicable to any of the Collateral or (iii) in
      connection with any of the transactions contemplated by this Security Agreement.
      In any suit, proceeding or action brought by the Lender under any Account for
      any sum owing thereunder, or to enforce any provisions of any Account, the
      Borrower will save, indemnify and keep the Lender harmless from and against
      all
      expense, loss or damage suffered by reason of any defense, setoff, counterclaim,
      recoupment or reduction or liability whatsoever of the account debtor or obligor
      thereunder, arising out of a breach by the Borrower of any obligation thereunder
      or arising out of any other agreement, indebtedness or liability at any time
      owing to or in favor of such account debtor or obligor or its successors from
      the Borrower. The foregoing indemnification shall not apply to any liabilities,
      costs or expenses resulting directly from the gross negligence, actual willful
      misconduct or bad faith of the Lender. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (c) Maintenance
      of Records.
      The
      Borrower will keep and maintain at its own cost and expense satisfactory and
      complete records of the Collateral. For the Lender’s further security, the
      Borrower hereby grants to the Lender a security interest in all of the
      Borrower’s books and records pertaining to the Collateral, and upon the
      occurrence and during the continuance of an Event of Default, the Borrower
      shall
      turn over any such books and records to the Lender or to its representatives
      during normal business hours at the request of the Lender. 

    

    (d) Compliance
      with Laws, etc.
      The
      Borrower will comply in all material respects with all laws, rules, regulations
      and orders of any court, arbitrator or governmental entity, jurisdiction or
      authority applicable to the Collateral or any part thereof or to the operation
      of the Borrower’s business; provided, however, that the Borrower may contest any
      such law, rule, regulation or order in any reasonable manner which shall not,
      in
      the reasonable opinion of the Lender, adversely affect the Lender’s rights or
      the priority of their liens on the Collateral.

    

    (e) Payment
      of Obligations.
      The
      Borrower will pay promptly when due all taxes, assessments and governmental
      charges or levies imposed upon the Collateral or in respect of its income or
      profits therefrom, as well as all claims of any kind (including, without
      limitation, claims for labor, materials and supplies) against or with respect
      to
      the Collateral, except that no such charge need be paid if (i) the validity
      thereof is being contested in good faith by appropriate proceedings;
      (ii) such proceedings do not involve any material danger of the sale,
      forfeiture or loss of any of the Collateral or any interest therein and
      (iii) such charge is adequately reserved against on the Borrower’s books in
      accordance with GAAP.

    

    (f) Limitation
      on Liens on Collateral.
      The
      Borrower will not create or permit to be created or suffer to exist any Lien,
      except Permitted Liens, of any kind on any of the Collateral.

    

    (g) Limitations
      on Dispositions of Collateral.
      The
      Borrower will not sell, transfer, lease or otherwise dispose of any of the
      Collateral, or attempt, offer or contract to do so, except for sales and
      non-exclusive licenses of Collateral in the ordinary course of
      business.

    

    (h) Further
      Identification of Collateral.
      The
      Borrower will furnish to the Lender from time to time statements and schedules
      further identifying and describing the Collateral and such other reports in
      connection with the Collateral as the Lender may reasonably request, all in
      reasonable detail. Furthermore, the Borrower will notify the Lender of any
      material claim made or asserted against the Collateral by any person or entity
      and of any change in the composition of the Collateral or other event which
      could materially adversely affect the value of the Collateral or the Lender's
      Lien thereon.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    4.
      Lender’s
      Appointment as Attorney-in-Fact.

    

    (a) Powers.
      The
      Borrower hereby irrevocably constitutes and appoints the Lender and any officer
      or agent thereof, with full power of substitution, as its true and lawful
      attorney-in-fact with full irrevocable power and authority in the place and
      stead of the Borrower and in the name of the Borrower or in its own name, from
      time to time in the Lender’s discretion, for the purpose of carrying out the
      terms of this Security Agreement, to take any and all appropriate action and
      to
      execute any and all instruments which may be necessary or desirable to
      accomplish the purposes of this Security Agreement, and, without limiting the
      generality of the foregoing, the Borrower hereby gives the Lender the power
      and
      right, on behalf of the Borrower, without notice to or assent by the Borrower,
      to do the following: 

    

    
      	
            	(i)	
              to
                pay or discharge taxes and liens levied or placed on or threatened
                against
                the Collateral, to effect any repairs or any insurance called for
                the
                terms of this Security Agreement and to pay all or any part of the
                premiums therefor and the costs thereof; and

            

    

    

    
      	
            	(ii)	
              Upon
                the occurrence and during the continuance of any Event of Default,
                (A) to direct any party liable for any payment under any of the
                Collateral to make payment of any and all moneys due or to become
                due
                thereunder directly to the Lender, or as the Lender shall direct;
                (B) to ask or demand for, collect, receive payment of and receipt
                for, any and all moneys, claims and other amounts due or to become
                due at
                any time in respect of or arising out of any Collateral; (C) to sign
                and endorse any invoices, freight or express bills, bills of lading,
                storage or warehouse receipts, drafts against debtors, assignments,
                verifications, notices and other documents in connection with any
                of the
                collateral; (D) to commence and prosecute any suits, actions or
                proceedings at law or in equity in any court of competent jurisdiction
                to
                collect the Collateral or any thereof and to enforce any other right
                in
                respect of any Collateral; (E) to defend any suit, action or
                proceeding brought against the Borrower with respect to any Collateral;
                (F) to settle, compromise or adjust any suit, action or proceeding
                described in clause (E) above and, in connection therewith, to give
                such discharges or releases as the Lender may deem appropriate; and
                (G) generally, to sell, transfer, pledge and make any agreement with
                respect to or otherwise deal with any of the Collateral as fully
                and
                completely as though the Lender was the absolute owner thereof for
                all
                purposes, and to do, at the Lender’s option and the Borrower’s expense, at
                any time, or from time to time, all acts and things which the Lender
                deem
                necessary to protect, preserve or realize upon the Collateral and
                the
                Lender’ liens thereon and to effect the intent of this Security Agreement,
                all as fully and effectively as the Borrower might do.
                

            

    

    

    At
      the
      reasonable request of the Lender, the Borrower shall deliver to the Lender,
      one
      or more further documents ratifying any and all actions that said attorneys
      shall lawfully take or do or cause to be taken or done by virtue hereof. This
      power of attorney is a power coupled with an interest and shall be irrevocable.
      

    

    (b) Other
      Powers.
      The
      Borrower also authorizes the Lender, at any time and from time to time, to
      execute, in connection with the sales provided for in Section 7 hereof, any
      endorsements, assignments or other instruments of conveyance or transfer with
      respect to the Collateral. 

    

    (c) No
      Duty on Lender’s Part.
      The
      powers conferred on the Lender hereunder are solely to protect the Lender’s
      interests in the Collateral and shall not impose any duty upon it to exercise
      any such powers. The Lender shall be accountable only for amounts that it
      actually receives as a result of the exercise of such powers, and neither it
      nor
      any of its officers, directors, employees or Lender shall be responsible to
      the
      Borrower for any act or failure to act hereunder, except for its own gross
      negligence or willful misconduct. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    5.
      Performance
      by Lender of Borrower’s Obligations.
      If the
      Borrower fails to perform or comply with any of its agreements contained herein
      and the Lender, as provided for by the terms of this Security Agreement, shall
      itself perform or comply, or otherwise cause performance or compliance, with
      such agreement, the reasonable expenses of the Lender incurred in connection
      with such performance or compliance shall be payable by the Borrower to the
      Lender on demand and shall constitute obligations secured hereby. 

    

    6.
      Remedies.
      If an
      Event of Default shall occur and be continuing, the Lender may exercise, in
      addition to all other rights and remedies granted to it in this Security
      Agreement, the Notes and in any other instrument or agreement securing,
      evidencing or relating to the Obligations, all rights and remedies of a secured
      party under the Code. Without limiting the generality of the foregoing, the
      Lender, without demand of performance or other demand, presentment, protest,
      or
      notice of any kind (except any notice required by law referred to below) to
      or
      upon the Borrower or any other person or entity (all and each of which are
      hereby waived), may in such circumstances forthwith collect, receive,
      appropriate and realize upon the Collateral, or any part thereof, and/or may
      forthwith sell, lease, assign, give option or options to purchase, or otherwise
      dispose of and deliver the Collateral or any part thereof (or contract to do
      any
      of the foregoing), in one or more parcels at public or private sale or sales,
      at
      any exchange, broker’s board or office of the Lender or elsewhere 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. The Lender shall have the right upon any such public sale or sales,
      and, to the extent permitted by law, upon any such private sale or sales, to
      purchase the whole or any part of the Collateral so sold, free of any right
      or
      equity or redemption in the Borrower, which right or equity is hereby waived
      or
      released. The Borrower further agrees, at the Lender’s request, to assemble the
      Collateral and make it available to the Lender at places which the Lender shall
      reasonably select, whether at the Borrower’s premises or elsewhere. The Lender
      shall apply the net proceeds of any such collection, recovery, receipt,
      appropriation, realization or sale, after deducting all reasonable costs and
      expenses of every kind incurred therein or incidental to the care or safekeeping
      of any of the Collateral or in any way relating to the Collateral or the rights
      of the Lender hereunder, including, without limitation, reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Obligations,
      in such order as the Lender may elect, and only after such application and
      after
      the payment by the Lender of any other amount required by any provision of
      law,
      including, without limitation, Section 9-615 of the Code, need the agent
      account for the surplus, if any, to the Borrower. To the extent permitted by
      applicable law, the Borrower waives all claims, damages and demands it may
      acquire against the Lender arising out of the exercise by the Lender of any
      of
      its rights hereunder, provided that such release shall not apply to any claim,
      damage or demand resulting directly from the gross negligence, actual willful
      misconduct or bad faith of the Lender. If any notice of a proposed sale or
      other
      disposition of Collateral shall be required by law, such notice shall be deemed
      reasonable and proper if given at least seven days before such sale or other
      disposition. The Borrower shall remain liable for any deficiency if the proceeds
      of any sale or other disposition of the Collateral are insufficient to pay
      the
      Obligations and the fees and disbursements of any attorneys employed by the
      Lender to collect such deficiency. Any sale, whether under any power of sale
      hereby given or by virtue of judicial proceedings, shall operate to divest
      all
      Borrower’s right, title, interest, claim and demand whatsoever, either at law or
      in equity, in and to the Collateral sold, and shall be a perpetual bar, both
      at
      law and in equity, against Borrower, its successors and assigns, and against
      all
      persons and entities claiming the Collateral sold or any part thereof under,
      by
      or through Borrower, its successors or assigns.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7.
      Limitation
      on Duties Regarding Preservation of Collateral.
      The
      Lender’s sole duty with respect to the custody, safekeeping and physical
      preservation of the Collateral in its possession, under Section 9-207 of
      the Code or otherwise, shall be to deal with it in the same manner as the Lender
      deals with similar property for its own account. Neither the Lender nor any
      of
      its directors, officers, employees or agents shall be liable for failure to
      demand, collect or realize upon all or any part of the Collateral or for any
      delay in doing so or shall be under any obligation to sell or otherwise dispose
      of any Collateral upon the request of the Borrower or otherwise. 

    

    8.
      Powers
      Coupled with an Interest.
      All
      authorizations and agencies herein contained with respect to the Collateral
      are
      irrevocable and powers coupled with an interest. 

    

    9.
      Severability.
      Any
      provision of this Security Agreement which is prohibited or unenforceable in
      any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction. 

    

    10.
      Paragraph
      Headings.
      The
      paragraph headings used in this Security Agreement are for convenience of
      reference only and are not to affect the construction hereof or be taken into
      consideration in the interpretation hereof. 

    

    11.
      No
      Waiver; Cumulative Remedies.
      The
      Lender shall not by any act (except by a written instrument pursuant to
      Section 12 hereof), delay, indulgence, omission or otherwise be deemed to
      have waived any right or remedy hereunder or to have acquiesced in any Default
      or Event of Default or in any breach of any of the terms and conditions hereof.
      No failure to exercise, nor any delay in exercising, on the part of the Lender,
      any right, power or privilege hereunder shall operate as a waiver thereof.
      No
      single or partial exercise of any right, power or privilege hereunder shall
      preclude any other or further exercise thereof or the exercise of any other
      right, power or privilege. A waiver by the Lender of any right or remedy
      hereunder on any one occasion shall not be construed as a bar to any right
      or
      remedy which the Lender would otherwise have on any future occasion. The rights
      and remedies herein provided are cumulative, may be exercised singly or
      concurrently and are not exclusive of any rights or remedies provided by law.
      

    

    12.
      Waivers
      and Amendments; Successors and Assigns.
      None of
      the terms or provisions of this Security Agreement may be waived, amended,
      supplemented or otherwise modified except by a written instrument executed
      by
      the Borrower and the Lender, provided that any provision of this Security
      Agreement may be waived by the Lender in a written letter or agreement executed
      by the Lender or by e-mail or facsimile transmission from the Lender. This
      Security Agreement shall be binding upon the successors and assigns of the
      Borrower and shall inure to the benefit of the Lender and its successors and
      assigns. 

    

    13.
      Governing
      Law.
      This
      Security Agreement shall be governed by, and construed and interpreted in
      accordance with, the laws of the State of Texas.

    

    14.
      Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    15.
      Waiver
      of Jury Trial.
      TO THE
      EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
      RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
      PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY
      CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALING OF THE PARTIES
      HERETO WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO,
      IN
      EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
      SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT EACH MAY LEGALLY DO
      SO,
      EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR
      PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT EITHER
      PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH
      ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE
      WAIVER OF ITS RIGHT TO TRIAL BY JURY.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Borrower has caused this Security Agreement to be duly
      executed and delivered in favor of the Lender as of the date first above
      written. 

     

    
      	
              BORROWER:

            
	 
	
              RED
                MOON, INC.

            
	 
	 
	
              By:

            	
                
                /s/Bryan Thompson

            
	
              Name:
                

            	
              Bryan
                Thompson

            
	
              Title:
                

            	
              President

            
	 
	 
	
              LENDER:

            
	 
	
              ZOOM
                TECHNOLOGIES, INC.

            
	 
	 
	
              By:

            	
                
                /s/Frank Manning

            
	
              Name:
                

            	
              Frank
                Manning

            
	
              Title:
                

            	
              President

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      A

     

    
      	
              
                Redmoon
                  Colo

                Equipment
                  List

              

            
	 
	
              Server
                Farm Rack

            	 	 	 	 
	
              Device

            	 	
              Description

            	 	
              Serial

            
	
              Catalyst
                2924 XL

            	 	
              Server
                Farm Switch

            	 	
              FAB0430NOR5

            
	
              Catalyst
                2924 XL

            	 	
              Private
                Switch

            	 	 
	
              Barracuda
                400

            	 	
              Email
                Firewall

            	 	
              L14804A5080405

            
	
              MBX
                3U Server

            	 	
              MySQL

            	 	
              S6023P815A03098
                / 150262-1

            
	
              SuperMicro
                SuperServer 5010E

            	 	
              Graphs

            	 	
              SE5011099

            
	
              MBX
                3U Server

            	 	
              MSSQL
                2005

            	 	
              S6023P8253043291
                144216-2

            
	
              MBX
                3U Server

            	 	
              Tropos-EMS

            	 	
              S6023P825302271
                1144216-1

            
	
              Compaq
                Proliant DL38OR01

            	 	
              Redmoon-Web

            	 	
              D012DKN1L187

            
	
              1U
                Server

            	 	
              Colo-Sensor

            	 	
              1MC203502479
                AA A09188-301

            
	
              Sun
                Netra T1 105

            	 	
              NS1

            	 	
              O24COFBF

            
	
              Sun
                Netra Ti 105,

            	 	
              NS2

            	 	
              024C0F7B

            
	
              VA
                Linux System 501

            	 	
              WebMD

            	 	
              SXO81
                1 9921 37

            
	
              1U
                Rackable Server

            	 	
              IDS

            	 	
              29022

            
	
              Dell
                PowerEdge 750

            	 	
              Addison

            	 	
              J24WS71

            
	
              VA
                Linux System 501

            	 	
              Rad1

            	 	
              SX0921993200

            
	
              SonicWall
                Pro 3060

            	 	
              Firewall

            	 	
              USM511031
                H

            
	
              SuperMicro
                SuperServer 6041

            	 	
              Mail

            	 	
              S60410335

            
	
              SuperMicro
                SuperServer 6041

            	 	
              MSSQL
                2000 / Rodopi

            	 	
              $60410336

            

    

     

    
      	
              Hosting
                Rack

            	 	 	 	 
	
              Cisco
                RPS

            	 	
              Server
                Farm and Hosting RPS

            	 	
              CAH03520228

            
	
              Philips
                15inch monitor

            	 	 	 	
              63519850

            
	
              Master
                View Plus

            	 	
              Top
                8 port KVM

            	 	
              IALEAO74001
                G

            
	
              (SSD
                Iview

            	 	
              Bottom
                8 port KVM

            	 	
              NA0117DE00031

            
	
              3U
                Rackable System

            	 	
              DotNet
                -1

            	 	
              29023

            
	
              1U
                Rackable Server

            	 	
              Win-1

            	 	
              29024

            

    

     

    
      	
              Communications
                Rack

            	 	 	 	 
	
              Catalyst
                3512 XL

            	 	
              Edge
                Switch

            	 	
              FAA0446Y17P

            
	
              Catalyst
                2912 XL

            	 	
              ColoCustomer
                Master Switch

            	 	
              FABO523YOV7

            
	
              Allot
                NetEnforcer AC-201

            	 	 	 	
              992635

            
	
              Cisco
                3640 Router

            	 	
              Core
                Router

            	 	
              JABO524816H

            
	
              SuperMicro
                SuperSery 5012E-E

            	 	
              Dyband

            	 	
              E51201906

            
	
              Cisco
                7206 VXR Router

            	 	
              Distro

            	 	
              72794892

            
	
              Cisco
                1841 Router

            	 	
              Emdeon
                Router

            	 	
              FTXO951W2WO

            
	
              Cisco
                RPS

            	 	
              Comm
                Rack RPS

            	 	
              CAH03520544

            
	
              3Comm
                Total Control

            	 	
              Redmoon
                Dial up

            	 	
              1261
                B80908G

            

    

     

    
      	
              ColoCustomer
                Rack #1

            	 	 	 	 
	
              Catalyst
                2924 XL Switch

            	 	
              CaloCust
                1 Switch

            	 	
              FAB0447T323

            
	
              MBX
                1U Server

            	 	
              GinGon
                Solutions Dedicated Server 
                Hosting

              

            	 	
              155099-1

            

    

    

    
      	
              
                ColoCustomer
                  Rack #2

              

            	 	 	 	 
	
              Catalyst
                2924 XL Switch

            	 	
              ColoCust
                2 Switch

            	 	
              FABO6O2Y2UM

            
	
              MBX
                1U Server

            	 	
              Cshore-Mail
                Dedicated Server Hosting

            	 	
              228
                1 153949-1

            
	
              MBX
                1 U Server

            	 	
              Cshore-Newsvues
                Dedicated Server Hosting

            	 	
              155049-1

            

    

     

    
      	
              oloCustomer
                Rack #3

            	 	 	 	 
	
              Catalyst
                2924 XL Switch

            	 	
              ColoCust
                3
                Switch

            	 	
              FABO411VOEG

            
	
              Cisco
                RPS

            	 	
              ColoCust
                2 and 3 RPS

            	 	
              CAH03320275

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]