EXHIBIT 10.8
 
PROMISSORY NOTE
 

  $ 100,000.00   
LOS ANGELES, CALIFORNIA
SEPTEMBER 23,2008

 
 
For value received, National Lampoon, Inc., promises to pay to the order of
Robert Levy, on or before October 6, 2008, at 3550 Wilshire Boulevard, Suite
840, Los Angeles, California, the sum of One Hundred Thousand Dollars and 00/100
($100,000.00) in lawful money of the United States of America, with interest
from September 22, 2008, at the rate of 6% per month until paid. This promissory
note is secured by certain collateral consisting of amounts due to the
undersigned from the Screen Actors Guild pursuant to that certain Pledge
Agreement of even date. In the event there is a suit or action to enforce
payment of this note or any portion thereof, the undersigned promises to pay
such additional sum as the court may adjudge reasonable as attorney fees in said
action or suit, and such amount shall be made a part of the judgment, or if
placed in the hands of attorneys for collection and collection is effectuated
without suit, the undersigned promises to pay all costs and expenses of
collection including reasonable attorney fees.
 
 
[sig5_natlampoon.jpg]

DUE DATE:
OCTOBER 6, 2008

 
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PLEDGE AGREEMENT
 
AGREEMENT is made as of this 24th day of  September, 2008, by and between
NATIONAL LAMPOON, INC., a California corporation (the "Borrower") and ROBERT
LEVY, an individual ("Secured Party") with respect to the following:
 

    A.   Borrower conducts a publishing business and motion picture production
business.            B. In order to continue its business, Borrower desires to
borrow and Secured Party desires to lend the sum of One Hundred Thousand Dollars
($100,000) to Borrower (the "Loan").         C.   Borrower executed a promissory
note in favor of Secured Party in the amount of the Loan, bearing interest, of
even date herewith (the "Note").         D.    In consideration of and as an
additional inducement for Secured Party to enter into the Loan, Borrower agrees
to give, and Secured Party agrees to accept, a first-priority security interest
in and to Borrower's rights, title, and interests in the Collateral (as
hereinafter defined), as collateral security for the full and prompt performance
of all indebtedness, liabilities, and obligations of the Borrower to Secured
Party in respect of the Note         F Pursuant to the aforesaid security
interest granted hereby, the Borrower will forthwith deliver either to Secured
Party or to Secured Party's designees such ancillary documents necessary to
perfect the pledge or to take such other action as may be appropriate to perfect
the pledge

.
ACCORDINGLY, the parties hereby agree as follows:
 

  1. 
 Creation of Security Interest. The Borrower as sole beneficial owner hereby 
charges and grants to Secured Party a first-priority security interest in all of
the Borrower's right, title, and interest, both legal and equitable, in and to
the collateral described in Section 2 hereof  (the "Collateral"), and
establishes a pledge on all of the Collateral in order to secure the payment and
performance of the obligations described in Section 3 hereof.
 
  2.
Collateral. The Collateral under this Pledge Agreement is:
 
  2.1 
All rights to payments due from the Screen Actors Guild with respect to amounts
deposited as a bond for the motion picture "Legend of the Awesomest Maximus";
and
 
  2.2  Any substituted or additional Collateral required to be supplied under
the terms of this Agreement.

  
The Collateral shall include any assets described in this Section 2, whether
owned by Borrower now or acquired in the future during the term of this Pledge
Agreement.
 
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  3. Secured Obligations of the Borrower. The Collateral secures and shall
hereafter secure (a) the full and prompt performance of all obligations of the
Borrower to Secured Party under, pursuant to or in connection with the Note and
(b) the performance of all other obligations and the discharge of all other
liabilities of the Borrower to Secured Party of every kind and character, direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, joint, several or joint and several, whether created under
this Agreement or any other agreement, as such agreement may be amended from
time to time, to which the Borrower and Secured Party are parties. All payments
and performances by the Borrower shall be in accordance with the terms under
which said indebtedness, obligations, and liabilities were or are hereafter
incurred or created.   4
The Borrower's Representations and Warranties. The Borrower represents and
warrants that:
 
  4.1
The Borrower is the sole owner of the Collateral;
 
  4.2 
The security interest hereunder in the Collateral is a first, prior, and
perfected security interest;
 
  4.3 
There are no security interests, liens or encumbrances upon, or adverse claims
of title to, or any other interest whatsoever in, the Collateral or any portion
thereof except that created by this Agreement;
 
  4.4  No financing statement covering the Collateral or any portion thereof
exists or is on file in any public office; and
 
  4.5 The Borrower has full right, power, and authority to enter into this
Agreement and no consent of, or registration or filing with, any person or
public authority is require

 

  5.
 Covenants of the Borrower. The Borrower covenants that:
 
  5.1 
The Borrodeliver to Secured Party each item of Collateral hereunder capable of
delivery immediately upon the Borrower's acquisition thereof and will take all
reasonable actions to defend the Collateral against all claims and demands of
all persons at any time claiming the same or any interest therein.wer will
 
  5.2 
The Borrower will, promptly upon request by Secured Party, procure or execute
and deliver any documents, deliver to Secured Party any instruments, give any
notices, execute any proxies, execute and file any financing statements or other
documents, all in form reasonably satisfactory to Secured Party, and take any
other actions which are necessary or, in the reasonable judgment of Secured
Party, desirable to perfect or continue the perfection and first priority of
Secured Party's security interest in the Collateral, to protect the Collateral
against the rights, claims, or interests of third persons or to effect the
purposes of this Agreement (including, without limitation, for vesting or
enabling Secured Party to vest title in any item of  Collateral in Secured Party
or Secured Party's nominees or in any Borrower in accordance with this
Agreement), and will pay all costs incurred in connection therewith, including,
without limitation, reasonable attorneys' fees.
 
  5.3 
The Borrower will not, without the pri
or written consent of Secured Party, in any way hypothecate or create or permit
to exist any lien, security interest, or encumbrance on or other interest in the
Collateral, nor will the Borrower sell, transfer, assign, exchange, or otherwise
dispose of the Collateral or any interest therein. If any Collateral, or any
interest therein, is sold, transferred, assigned, exchanged, or otherwise
disposed of in violation of these provisions, the security interest of Secured
Party shall continue in such Collateral or part thereof notwithstanding such
sale, transfer, assignment, exchange, or other disposition, and the Borrower
will hold the proceeds thereof in a separate account for Secured Party's
benefit. The Borrower will, at Secured Party's request, transfer such proceeds
to Secured Party in kind.
 

 
 
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5.4 The Borrower will pay and discharge all taxes, assessments, and governmental
charges or levies against the Collateral prior to delinquency thereof and will
keep the Collateral free of all unpaid charges whatsoever.
 
5.5 The Borrower will permit representatives designated by Secured Party to
visit and inspect any of its properties and examine, take copies and make
abstracts from any of its books and records at all times and within such scope
as Secured Party may reasonably request, and the Borrower will reimburse Secured
Party for all reasonable costs incurred thereby
 
5.6 Secured Party shall have the right at any time to make any payments and do
any other acts Secured Party shall deem reasonably necessary to protect his or
its security interest in the Collateral, including, without limitation, the
rights to pay, purchase, contest, or compromise any encumbrance, charge, or lien
which in the reasonable judgment of Secured Party appears to be prior or
superior to the security interest granted hereunder, and appear in and defend
any action or proceeding purporting to affect his or its security interest in
and/or the value of the Collateral, and in exercising any such powers or
authority, the right to pay all expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees. The Borrower hereby
agrees that it shall be bound by any such payment made or act taken by Secured
Party hereunder and shall reimburse Secured Party for all reasonable payments
made and reasonable expenses incurred, which amounts shall be secured under this
Agreement. Secured Party shall have no obligation to make any of the foregoing
payments or perform any of the foregoing acts.
 
6.   Defaults and Remedies.

6.1 The occurrence of any one or more of the following events or conditions
affecting the Borrower shall constitute an event of default ("Event of Default")
under this Agreement with respect to the Borrower:
 
6.1.1    The Borrower fails to perform fully and promptly all obligations of the
Borrower to Secured Party under, pursuant to or in connection with the Note,
including, without limitation, the full and prompt payment when due of all
indebtedness of the Borrower to Secured Party; .
 
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6.1.2 The Borrower fails to pay any indebtedness, perform any obligation
required to be performed by any of them, or discharge any liability to Secured
Party in accordance with the terms upon which such indebtedness, obligation, or
liability was incurred or created, or otherwise defaults under any agreement to
which Secured Party and the Borrower are parties, as such agreements may be
amended from time to time, and such failure continues for a period of ten (10)
days;
 
6.1.3 The Borrower makes or has made or furnishes or has furnished any warranty,
representation, or statement to Secured Party in connection with this Agreement,
or any other agreement to which the Borrower and Secured Party are parties,
including, without limitation, the Note, as such agreements may be amended from
time to time, which is or was false or misleading in any material respect when
made or furnished;
 
6.1.4 Any lien (other than for property taxes which are not delinquent) or
encumbrance other than that created by this Agreement is placed on or any levy
is made on the Collateral or any portion thereof or any assets of the Borrower
or any portion thereof, or the Collateral or any portion thereof or any assets
of the Borrower or any portion thereof is seized or attached pursuant to legal
process, unless such lien, encumbrance, levy, seizure or attachment is removed
or released within thirty (30) days from the time such lien or encumbrance was
placed thereon or such levy, seizure, or attachment was effected, but in any
event not later than five (5) days prior to any date for sale of such property);
 
6.1.5 Any substantial portion of the assets of the Borrower is transferred, or
any material obligation is incurred by the Borrower, unless such transfer or
obligation is made or incurred in good faith for fair equivalent consideration;
 
6.1.6 The Borrower becomes insolvent as defined in the federal Bankruptcy Code,
admits in writing its insolvency or its present or prospective inability to pay
its debts generally as they become due, is unable to or does not pay all or any
material portion (in number or dollar amount) of its debts as they become due,
permits or suffers a judgment to exist against it (unless enforcement thereof is
stayed pending appeal), makes or proposes an assignment for the benefit of
creditors, convenes or proposes to convene a meeting of its creditors or any
class thereof for purposes of effecting a moratorium upon or extension or
composition of its debts, proposes any such moratorium, extension or
composition, or commences or proposes to commence any bankruptcy, reorganization
or insolvency proceeding, or other proceeding under any federal, state or other
law for the relief of the Borrower;
 
6.1.7 The Borrower fails to obtain the dismissal, within thirty (30) days after
the commencement thereof, of any bankruptcy, reorganization, or insolvency
proceeding, or other proceeding under any law for the relief of the Borrower,
instituted against it by one or more third parties, fails actively to oppose any
such proceeding, or, in any such proceeding, defaults or files an answer
admitting the material allegations upon which the proceeding was based or
alleges its willingness to have an order for relief entered or its desire to
seek liquidation, reorganization or adjustment of any of its debts; or
 
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6.1.8 Any receiver, trustee, or custodian is appointed to take possession of all
or any substantial portion of the assets of the Borrower or any committee of the
creditors of the Borrower, or any class thereof, is formed for the purpose of
monitoring or investigating the financial affairs of the Borrower or enforcing
such creditors' rights.

 
6.2 Upon the occurrence of an Event of Default hereunder, Secured Party may, at
Secured Party's option, without notice to or demand upon the Borrower, do any
one or more of the following:
 
6.2.1 Declare the Note and all other indebtedness of the Borrower to Secured
Party to be immediately due and payable;
 
6.2.2 Take possession of all items of Collateral hereunder not then in his or
its possession and require the Borrower or the parties in possession thereof to
deliver such Collateral to Secured Party at one or more locations as Secured
Party shall designate;
 
6.2.3 Exercise any or all of the rights and remedies provided for by applicable
law, including, without limitation, the rights and remedies of a secured party
under the Uniform Commercial Code, specifically including, without limitation,
the right to recover the reasonable attorneys' fees incurred by Secured Party in
the enforcement of this Agreement or in connection with the Borrower's
redemption of the Collateral;
 
6.2.4 Sell the Collateral, or any portion thereof, at any public or private sale
or on any securities exchange or other recognized market, for cash, upon credit
or for future delivery, as Secured Party shall deem appropriate. Secured Party
shall be entitled at any such sale, if Secured Party deems it advisable to do
so, to restrict the prospective bidders or Borrowers to persons who will provide
assurances satisfactory to Secured Party that they may be offered and sold the
Collateral to be sold without registration under the Securities Act of 1933 or
any other applicable statute, whether such statute be state or federal, and upon
the consummation of any such sale, Secured Party shall have the right to assign,
transfer and deliver to the Borrower or Borrowers thereof the Collateral so
sold. Secured Party may solicit offers to buy the Collateral, or any part of it,
from a limited number of investors deemed by Secured Party, in Secured Parry's
reasonable judgment, to meet the requirements to purchase securities under
Regulation D or its equivalent promulgated under the Securities Act of 1933. If
Secured Party solicits such offers from such investors, then the acceptance by
Secured Party of the highest offer obtained therefrom shall be deemed to be a
commercially reasonable method of disposition of the Collateral. Each Borrower
at any such sale shall hold the property sold free from any claim or right on
the part of the Borrower, and the Borrower hereby waive, to the full extent
permitted by law, all rights of redemption, stay and/or appraisal which the
Borrower now or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Secured Party shall give the Borrower
at least ten (10) business days' written notice of any public sale or of the
date on or after which a private sale may be made. Such notice, in case of a
public sale, shall state the time and place fixed for such sale.
 
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Any public sale shall be held at such time or times during ordinary business
hours and at such place or places as Secured Party may fix in the notice of such
sale. Secured Party may sell all or any portion of the Collateral on any
securities exchange or other recognized market without notice to the Borrower.
At any private or public sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate lots, as Secured Party
shall determine. Secured Party may bid (which bid may be, in whole or in part,
in the form of cancellation of indebtedness) for and purchase for his or its
account the whole or any part of the Collateral at any public sale or sale on
any securities exchange or other recognized market. Secured Party shall not be
obligated to sell any Collateral if it shall determine not to do so,
notwithstanding that notice of sale of Collateral shall have been given. Secured
Party may, without notice or publication, adjourn any sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by Secured Party until the sale price is paid by the Borrower or
Borrowers thereof, and Secured Party shall not incur any liability in case any
such Borrower or Borrowers shall fail to take up and pay for the Collateral
purchased. In case of any such failure, such Collateral may be sold again upon
like notice. The parties hereto agree that the method, manner and terms of sale
or disposition of the Collateral authorized by this subsection are commercially
reasonable;
 
6.2.5 Proceed by an action or actions at law or in equity to recover the
indebtedness secured hereunder or to foreclose this Agreement and sell the
Collateral, or any portion thereof, pursuant to a judgment or decree of a court
or courts of competent jurisdiction;
 
6.2.6 Use, manage, operate, and control the Collateral and the business and
property of the Borrower to preserve the Collateral or its value, or to pay the
indebtedness secured hereunder, including, without limitation, the rights to
take possession of all of the premises and property of the Borrower and to
exclude the Borrower and any third parties, whether or not claiming under the
Borrower, from such premises and property, to operate the Borrower and all of
its property until all of the indebtedness secured hereunder is paid to Secured
Party;
 
6.2.7 Use, in connection with any assembly, use or disposition of any property
of the Borrower any trademark, trade name, trade style, copyright, patent, or
other similar right, or technical knowledge or process used or utilized by the
Borrower; and
 
6.2.8 Enforce one or more remedies hereunder, successively or concurrently, and
such action shall not operate to estop or prevent Secured Party from pursuing
any other or further remedy Secured Party may have, and any repossession or
retaking or sale of the Collateral pursuant to the terms hereof shall not
operate to release the Borrower until full payment of any deficiency has been
made in cash. The Borrower shall reimburse Secured Party upon demand for, and
Secured Party may apply any proceeds of Collateral to, the costs and expenses,
including, without limitation, reasonable attorneys' fees, transfer taxes, and
other charges incurred by Secured Party in connection with any sale, disposition
or retention of any Collateral hereunder.
 
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7.  Authority of Secured Party. Secured Party shall have and be entitled to
exercise all powers hereunder which are specifically delegated to Secured Party
by the terms hereof, together with such powers as are reasonably incident
thereto. In connection with such powers, upon the occurrence of an Event of
Default hereunder, Secured Party shall be entitled to transfer into street name
or the name of a nominee or nominees any certificates or instruments
representing or evidencing any of the Collateral hereunder, and to have any such
certificates or instruments exchanged for ones of smaller or larger
denominations. Secured Party may perform any of his or its duties hereunder or
in connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Neither Secured Party nor any director, officer,
employee, attorney, or agent of Secured Party shall be liable to the Borrower
for any action taken or omitted to be taken by it or them hereunder, except for
Secured Party's or their own gross negligence or willful misconduct; nor shall
Secured Party be responsible for the validity, effectiveness, or sufficiency
hereof or of any document or security furnished pursuant hereto. Secured Party
and such other persons shall be entitled to rely on any communication,
instrument, or document believed by Secured Party or them to be genuine and
correct and to have been signed or sent by the proper person or persons. The
Borrower shall indemnify and hold harmless Secured Party and/or any such other
person from and against any and all reasonable costs, expenses, including,
without limitation, reasonable attorneys' fees, claims, or liability incurred by
Secured Party or such person hereunder or in connection herewith, unless such
claim or liability shall be due to willful misconduct or gross negligence on the
part of Secured Party or such other person, as the case may be.

8.   Miscellaneous Provisions.
 
 8.1 Headings. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
 
 8.2 Choice of Law. This Agreement and the respective rights and obligations of
the parties hereunder shall be governed and construed in accordance with the
laws of the State of California, without reference to its principles of conflict
of laws.
 
 8.3 Amendments. This Agreement or any provision hereof may be changed, waived,
or terminated only by a statement in writing signed by the party against which
such change, waiver or termination is sought to be enforced.
 
 8.4 No Waiver. No delay in enforcing or failure to enforce any right under this
Agreement by any party to this Agreement shall constitute a waiver by such party
of such right. No waiver by any party of any default hereunder shall be
effective unless in writing, nor shall any waiver operate as a waiver of any
other default or of the same default on a future occasion.
 
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 8.5 Time of the Essence. Time is of the essence of each provision of this
Agreement of which time is an element.
 
 8.6 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof. Acceptance of or acquiescence in
a course of performance rendered under this Agreement shall not be relevant to
determine the meaning of this Agreement even though the accepting or acquiescing
party had knowledge of the nature of the performance and opportunity for
objection.
 
 8.7 Expenses of Litigation. In the event of any legal action, equitable suit,
arbitration, or other proceeding arising out of or related to this Pledge
Agreement or the relationship of the parties created hereby (including, without
limitation, any action, suit or other proceeding brought by a party for the
enforcement of this Pledge Agreement or collection of any judgment, order, or
award issued by any court or tribunal of competent jurisdiction or arbitrator in
connection herewith), the successful or prevailing party shall be entitled to
recover his or its reasonable attorneys' fees and costs incurred in such
proceeding, whether incurred prior to or after commencement of such proceeding,
on appeal or otherwise, in addition to any other relief to which such party may
be entitled.
 
 8.8 Arbitration. The parties shall make a good faith effort to settle any
dispute or claim arising under this Agreement. If the parties fail to resolve
such disputes or claims, they shall submit them to binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association then in
effect.
 
8.8.1 All proceedings before the arbitrators shall be held in Los Angeles,
California.
 
 8.8.2 Discovery shall be allowed pursuant to Section 1283.05 of the California
Code of Civil Procedure.
 
 8.8.3 The costs and fees of such arbitration shall be assessed by order of the
arbitrators pursuant to Section 8.7 hereof. In order to secure highly qualified
arbitrators, the parties agree to compensate the arbitrators at a daily rate
generally commensurate with the regular daily compensation of persons of such
caliber.
 
 8.8.4 The authority of the arbitrators shall be limited to the specific
issue(s) submitted to them by the parties for determination.
 
 8.9   Statute of Limitations. The Borrower hereby waives the right to plead any
statute of limitations as a defense to any indebtedness or obligation hereunder
or secured hereunder to the full extent permitted by law.
 
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8.10 Severability. If any provision of this Agreement should be found to be
invalid or unenforceable, all of the other provisions shall nonetheless remain
in full force and effect to the maximum extent permitted by law.
 
8.11 Survival of Provisions. All representations, warranties, and covenants of
the Borrower contained herein shall survive the execution and delivery of this
Agreement, and shall terminate only upon the full and final payment and
performance by the Borrower of its indebtedness and obligations secured
hereunder.
 
8.12 Power of Attorney. The Borrower hereby appoints and constitutes Secured
Party and its officers, directors and legal counsel as the Borrower's
attorneys-in-fact for purposes of (a) collecting any Collateral; (b) conveying
any item of Collateral to any Borrower thereof; (c) making any payments or
taking any acts under Section 5.6 hereof; and (d) sealing and delivering and
otherwise completing and/or perfecting any deed, assurance, agreement,
instrument or act that may be required for the purposes hereof. The authority
hereunder shall include, without limitation, the authority to endorse and
negotiate, for Secured Party's account, any checks or instruments in the name of
the Borrower, to execute or receipt for any document, to transfer title to any
item of Collateral, and to take any other actions necessary or incident to the
powers granted to Secured Party in this Agreement. This power of attorney is
coupled with an interest and is irrevocable by the Borrower.
 
8.13 Setoff. Secured Party shall have the right, at any time, to setoff and
apply any indebtedness or obligation of the Borrower to Secured Party against
any indebtedness or obligation of Secured Party to the Borrower, without notice
to or demand upon the Borrower, any guarantor of any such indebtedness or
obligation, or any other person. The indebtedness and obligations which may be
setoff hereunder include, without limitation, any deposits held by Secured Party
for the benefit or account of the Borrower, and any indebtedness or obligations
of any party, whether or not unliquidated, contingent or unmatured at the time
of such setoff, and however such indebtedness or obligations were created or
incurred. Secured Party's right of setoff hereunder shall be in addition to and
not in limitation of any other rights or remedies which may exist in favor of
Secured Party.
 
8.14 Notice. All notices and requests hereunder shall be in writing and shall be
delivered in person or by certified or registered mail, postage prepaid, or by
overnight delivery service such as Federal Express, addressed to:
 
Borrower:                                                      National Lampoon,
Inc.
8228 Sunset Blvd.
Los Angeles, CA 90046

 
Secured
Party:                                                              Robert Levy
c/o Harabedian, Hall & Co.
3550 Wilshire Blvd., Suite 840
Los Angeles, CA 90010
 
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with copy to:                                                Leslie S. Klinger,
Esq.
               Kopple & Klinger, LLP
10866 Wilshire Blvd., Suite 1500
Los Angeles, California 90024

 
Such notices and requests shall be deemed delivered on the day on which
personally delivered or, if delivered by mail, on the third (3rd) business day
after deposit in the United States mail, as evidenced by a post office receipt
furnished to the sender. Any party may change its address for receipt of notices
and requests hereunder by notice duly given to the other parties in accordance
with the provisions of this Section 8.14.
 
8.15 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall together
constitute one and the same agreement.
 
8.16 Duty of Care. Secured Party shall have no duty or obligation to care for
the Collateral hereunder or to take any actions to protect the value of the
Collateral or any rights or privileges the Borrower might have with respect
thereto, except that Secured Party shall exercise reasonable caution in the
physical care of the Collateral in Secured Party's possession.
 
8.17 Binding Effect. This Agreement and the respective right and obligations of
the parties hereunder shall be binding upon and inure to the benefit of such
parties and their respective heirs, personal and legal representatives,
successors and assigns.
 
8.18 Termination of Pledge. This Agreement and the security interest and pledge
hereunder shall not terminate until the full and final payment and performance
of all indebtedness due under the Note and the costs and expenses incurred by
Secured Party to enforce this Agreement or any rights hereunder. At such time,
Secured Party shall reassign and redeliver to the Borrower all of the Collateral
hereunder which has not been sold, disposed of, retained or applied by Secured
Party in accordance with the terms hereof. Such reassignment and redelivery
shall be without warranty by or recourse to Secured Party, and shall be at the
expense of the Borrower. Without limiting the generality of the foregoing, the
security interest and pledge hereunder shall not be terminated by the transfer
of any of the Collateral hereunder from Secured Party to the Borrower, or any
person designated by the Borrower, for the purpose of ultimate sale, exchange,
presentation, collection, renewal, or registration of transfer or for any other
purpose.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
 
 
 
/s/  Daniel Laikin
 
DANIEL LAIKIN
 
_____________________________
ROBERT LEVY