Exhibit 10.22

SECURITY AGREEMENT

     SECURITY AGREEMENT, dated as of April 18, 2005 (this “Agreement”), between
Brillian Corporation, a Delaware corporation (the “Company” or the “Debtor”) and
the holder or holders of the Company’s 9% Senior Secured Debenture due April 20,
2008 in the original aggregate principal amount of $2,000,000 (the “Debenture”),
signatory hereto, their endorsees, transferees and assigns (collectively
referred to as, the “Secured Parties”).

W I T N E S S E T H:

     WHEREAS, pursuant to the Purchase Agreement and the Debentures, the Secured
Parties have agreed to extend the loans to the Company evidenced by the
Debentures; and

     WHEREAS, in order to induce the Secured Parties to extend the loans
evidenced by the Debentures, Debtor has agreed to execute and deliver to the
Secured Parties this Agreement and to grant the Secured Parties, pari passu with
each other Secured Party, a perfected first priority security interest in
certain property of Debtor to secure the prompt payment, performance and
discharge in full of all of the Company’s obligations under the Debentures and
the other Debtor’s obligations under the Guaranty.

     NOW, THEREFORE, in consideration of the agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

     1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as “account”, “chattel paper”, “commercial tort claim”, “deposit account”,
“document”, “equipment”, “fixtures”, “general intangibles”, “goods”,
“instruments”, “inventory”, “investment property”, “letter-of-credit rights”,
“proceeds” and “supporting obligations”) shall have the respective meanings
given such terms in Article 9 of the UCC.

     (a) “Collateral” means the collateral in which the Secured Parties are
granted a security interest by this Agreement and which shall include the
following personal property of the Debtor, whether presently owned or existing
or hereafter acquired or coming into existence, wherever situated, and all
additions and accessions thereto and all substitutions and replacements thereof,
and all proceeds, products and accounts thereof, including, without limitation,
all proceeds from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection therewith, and all
dividends, interest, cash, notes, securities, equity interest or other property
at any time and from time to time acquired, receivable or otherwise distributed
in respect of, or in exchange for, any or all of the Pledged Securities (as
defined below):

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     (i) All goods, including, without limitations, (A) all machinery,
equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices
and other equipment of every kind and nature and wherever situated, together
with all documents of title and documents representing the same, all additions
and accessions thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used and useful in
connection with Debtor’s businesses and all improvements thereto; and (B) all
inventory;

     (ii) All Inventory and Intellectual Property of the Debtor;

     (iii) All contract rights and other general intangibles, including, without
limitation, all partnership interests, membership interests, stock or other
securities, rights under any of the Organizational Documents, agreements related
to the Pledged Securities, licenses, distribution and other agreements, computer
software (whether “off-the-shelf”, licensed from any third party or developed by
Debtor), computer software development rights, leases, franchises, customer
lists, quality control procedures, grants and rights, goodwill, trademarks,
service marks, trade styles, trade names, patents, patent applications,
copyrights, and income tax refunds (collectively, the “General Intangibles”);

     (iv) All Receivables of the Debtor including all insurance proceeds, and
rights to refunds or indemnification whatsoever owing, together with all
instruments, all documents of title representing any of the foregoing, all
rights in any merchandising, goods, equipment, motor vehicles and trucks which
any of the same may represent, and all right, title, security and guaranties
with respect to each Receivable, including any right of stoppage in transit;

     (v) All documents, letter-of-credit rights, instruments and chattel paper;

     (vi) All commercial tort claims;

     (vii) All deposit accounts and all cash (whether or not deposited in such
deposit accounts);

     (viii) All investment property;

     (ix) All supporting obligations; and

     (x) All files, records, books of account, business papers, and computer
programs; and

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     (xi) the products and proceeds of all of the foregoing Collateral set forth
in clauses (i)-(ix) above.

     Without limiting the generality of the foregoing, the “Collateral” shall
include all investment property and general intangibles respecting ownership
and/or other equity interests, including, without limitation, the shares of
capital stock and the other equity interests listed on Schedule H hereto (as the
same may be modified from time to time pursuant to the terms hereof), and any
other shares of capital stock and/or other equity interests of any entity
obtained in the future, and, in each case, all certificates representing such
shares and/or equity interests and, in each case, all rights, options, warrants,
stock, other securities and/or equity interests that may hereafter be received,
receivable or distributed in respect of, or exchanged for, any of the foregoing
(all of the foregoing being referred to herein as the “Pledged Securities”) and
all rights arising under or in connection with the Pledged Securities,
including, but not limited to, all dividends, interest and cash.

     Notwithstanding the foregoing, nothing herein shall be deemed to constitute
an assignment of any asset which, in the event of an assignment, becomes void by
operation of applicable law or the assignment of which is otherwise prohibited
by applicable law (in each case to the extent that such applicable law is not
overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar
applicable law); provided, however, that to the extent permitted by applicable
law, this Agreement shall create a valid security interest in such asset and, to
the extent permitted by applicable law, this Agreement shall create a valid
security interest in the proceeds of such asset.

     (b) “Intellectual Property” means the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, (ii) all letters patent of
the United States, any other country or any political subdivision thereof, all
reissues and extensions thereof, and all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof, (iii) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade dress,
service marks, logos, domain names and other source or business identifiers, and
all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or

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any other country or any political subdivision thereof, or otherwise, and all
common law rights related thereto, (iv) all trade secrets arising under the laws
of the United States, any other country or any political subdivision thereof,
(v) all rights to obtain any reissues, renewals or extensions of the foregoing,
(vi) all licenses for any of the foregoing, and (vii) all causes of action for
infringement of the foregoing.

     (c) “Majority in Interest” shall mean, at any time of determination, the
majority in interest (based on then-outstanding principal amounts of Debentures
at the time of such determination) of the Secured Parties.

     (d) “Necessary Endorsement” shall mean undated stock powers endorsed in
blank or other proper instruments of assignment duly executed and such other
instruments or documents as the Agent (as that term is defined below) may
reasonably request.

     (e) “Obligations” means all of the Debtor’s obligations under this
Agreement, the Purchase Agreement, the Debentures and any other instruments,
agreements or other documents executed and/or delivered in connection herewith
or therewith, in each case, whether now or hereafter existing, voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from any of the Secured Parties as a preference, fraudulent transfer
or otherwise as such obligations may be amended, supplemented, converted,
extended or modified from time to time. Without limiting the generality of the
foregoing, the term “Obligations” shall include, without limitation:
(i) principal of, and interest on the Debentures and the loans extended pursuant
thereto; (ii) any and all other fees, indemnities, costs, obligations and
liabilities of the Debtor from time to time under or in connection with this
Agreement, the Debentures and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith; and
(iii) all amounts (including but not limited to post-petition interest) in
respect of the foregoing that would be payable but for the fact that the
obligations to pay such amounts are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving
Debtor.

     (f) “Organizational Documents” means with respect to Debtor, the documents
by which Debtor was organized (such as a certificate of incorporation,
certificate of limited partnership or articles of organization, and including,
without limitation, any certificates of designation for preferred stock or other
forms of preferred equity) and which relate to the internal governance of Debtor
(such as bylaws, a partnership agreement or an operating, limited liability or
members agreement).

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     (g) “UCC” means the Uniform Commercial Code of the State of New York and or
any other applicable law of any state or states which has jurisdiction with
respect to all, or any portion of, the Collateral or this Agreement, from time
to time. It is the intent of the parties that defined terms in the UCC should be
construed in their broadest sense so that the term “Collateral” will be
construed in its broadest sense. Accordingly if there are, from time to time,
changes to defined terms in the UCC that broaden the definitions, they are
incorporated herein and if existing definitions in the UCC are broader than the
amended definitions, the existing ones shall be controlling.

     2. Grant of Perfected First Priority Security Interest. As an inducement
for the Secured Parties to extend the loans as evidenced by the Debentures and
to secure the complete and timely payment, performance and discharge in full, as
the case may be, of all of the Obligations, Debtor hereby unconditionally and
irrevocably pledges, grants and hypothecates to the Secured Parties a continuing
and perfected first priority security interest in and to, a lien upon and a
right of set-off against all of its right, title and interest of whatsoever kind
and nature in and to, the Collateral (the “Security Interest”).

     3. Delivery of Certain Collateral. Contemporaneously or prior to the
execution of this Agreement, Debtor shall deliver or cause to be delivered to
the Agent (a) any and all certificates and other instruments representing or
evidencing the Pledged Securities, and (b) any and all certificates and other
instruments or documents representing any of the other Collateral, in each case,
together with all Necessary Endorsements. The Debtor is, contemporaneously with
the execution hereof, delivering to Agent, or has previously delivered to Agent,
a true and correct copy of each Organizational Document governing any of the
Pledged Securities.

     4. Representations, Warranties, Covenants and Agreements of the Debtor.
Debtor represents and warrants to, and covenants and agrees with, the Secured
Parties as follows:

     (a) Debtor has the requisite corporate, partnership, limited liability
company or other power and authority to enter into this Agreement and otherwise
to carry out its obligations hereunder. The execution, delivery and performance
by Debtor of this Agreement and the filings contemplated therein have been duly
authorized by all necessary action on the part of Debtor and no further action
is required by Debtor. This Agreement has been duly executed by Debtor. This
Agreement constitutes the legal, valid and binding obligation of Debtor,
enforceable against Debtor in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws of general application relating to or affecting
the rights and remedies of creditors and by general principles of equity.

     (b) The Debtor has no place of business or offices where its books of
account and records are kept (other than temporarily at the offices of its
attorneys

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or accountants) or places where Collateral is stored or located, except as set
forth on Schedule A attached hereto. Except as specifically set forth on
Schedule A, Debtor is the record owner of the real property where such
Collateral is located, and there exist no mortgages or other liens on any such
real property except for Permitted Liens (as defined in the Debentures). Except
as disclosed on Schedule A, none of such Collateral is in the possession of any
consignee, bailee, warehouseman, agent or processor.

     (c) Except for Permitted Liens (as defined in the Debentures) and except as
set forth on Schedule B attached hereto, the Debtor is the sole owner of the
Collateral (except for non-exclusive licenses granted by Debtor in the ordinary
course of business), free and clear of any liens, security interests,
encumbrances, rights or claims, and are fully authorized to grant the Security
Interest. There is not on file in any governmental or regulatory authority,
agency or recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those that
will be filed in favor of the Secured Parties pursuant to this Agreement)
covering or affecting any of the Collateral, other than the lien of Three Five
Systems, Inc. on the clean room equipment of the Company’s plant in Tempe,
Arizona. So long as this Agreement shall be in effect, the Debtor shall not
execute and shall not knowingly permit to be on file in any such office or
agency any such financing statement or other document or instrument (except to
the extent filed or recorded in favor of the Secured Parties pursuant to the
terms of this Agreement or for a Permitted Lien).

     (d) No written claim has been received that any Collateral or Debtor’s use
of any Collateral violates the rights of any third party. There has been no
adverse decision to Debtor’s claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to Debtor’s right to keep and maintain
such Collateral in full force and effect, and there is no proceeding involving
said rights pending or, to the best knowledge of Debtor, threatened before any
court, judicial body, administrative or regulatory agency, arbitrator or other
governmental authority.

     (e) Debtor shall at all times maintain its books of account and records
relating to the Collateral at its principal place of business and its Collateral
at the locations set forth on Schedule A attached hereto and may not relocate
such books of account and records or tangible Collateral unless it delivers to
the Secured Parties at least 30 days prior to such relocation (i) written notice
of such relocation and the new location thereof (which must be within the United
States) and (ii) evidence that appropriate financing statements under the UCC
and other necessary documents have been filed and recorded and other steps have
been taken to perfect the Security Interest to create in favor of the Secured
Parties a valid, perfected and continuing perfected first priority lien in the
Collateral.

     (f) This Agreement creates in favor of the Secured Parties a valid, first
priority security interest in the Collateral, subject only to Permitted Liens
(as

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defined in the Debentures) securing the payment and performance of the
Obligations. Upon making the filings described in the immediately following
paragraph, all security interests created hereunder in any Collateral which may
be perfected by filing Uniform Commercial Code financing statements shall have
been duly perfected. Except for the filing of the Uniform Commercial Code
financing statements referred to in the immediately following paragraph, the
recordation of the Intellectual Property Security Agreement (as defined below)
with respect to copyrights and copyright applications in the United States
Copyright Office referred to in paragraph (m), the execution and delivery of
deposit account control agreements satisfying the requirements of
Section 9-104(a)(2) of the UCC with respect to each deposit account of the
Debtor, and the delivery of the certificates and other instruments provided in
Section 3, no action is necessary to create, perfect or protect the security
interests created hereunder. Without limiting the generality of the foregoing,
except for the filing of said financing statements, the recordation of said
Intellectual Property Security Agreement, and the execution and delivery of said
deposit account control agreements, no consent of any third parties and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for (i) the execution,
delivery and performance of this Agreement, (ii) the creation or perfection of
the Security Interests created hereunder in the Collateral or (iii) the
enforcement of the rights of the Secured Parties hereunder.

     (g) Debtor hereby authorizes the Secured Parties, or any of them, to file
one or more financing statements under the UCC, with respect to the Security
Interest with the proper filing and recording agencies in any jurisdiction
deemed proper by them.

     (h) The execution, delivery and performance of this Agreement by the Debtor
does not (i) violate any of the provisions of any Organizational Documents of
Debtor or any judgment, decree, order or award of any court, governmental body
or arbitrator or any applicable law, rule or regulation applicable to Debtor or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing Debtor’s debt or otherwise) or other understanding to
which Debtor is a party or by which any property or asset of Debtor is bound or
affected. No consent (including, without limitation, from stockholders or
creditors of Debtor) is required for Debtor to enter into and perform its
obligations hereunder.

     (i) The capital stock and other equity interests listed on Schedule H
hereto represent all capital stock and other equity interests owned, directly or
indirectly, by the Company. All of the Pledged Securities are validly issued,
fully paid and nonassessable, and the Company is the legal and beneficial owner
of the Pledged Securities, free and clear of any lien, security interest or
other

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encumbrance except for the security interests created by this Agreement and
other Permitted Liens (as defined in the Debenture).

     (j) The ownership and other equity interests in partnerships and limited
liability companies (if any) included in the Collateral (the “Pledged
Interests”) by their express terms do not provide that they are securities
governed by Article 8 of the UCC and are not held in a securities account or by
any financial intermediary.

     (k) Debtor shall at all times maintain the liens and Security Interest
provided for hereunder as valid and perfected first priority liens and security
interests in the Collateral in favor of the Secured Parties until this Agreement
and the Security Interest hereunder shall be terminated pursuant to Section 11
hereof. Debtor hereby agrees to defend the same against the claims of any and
all persons and entities. Debtor shall safeguard and protect all Collateral for
the account of the Secured Parties. At the request of the Secured Parties,
Debtor will sign and deliver to the Secured Parties at any time or from time to
time one or more financing statements pursuant to the UCC in form reasonably
satisfactory to the Secured Parties and will pay the cost of filing the same in
all public offices wherever filing is, or is deemed by the Secured Parties to
be, necessary or desirable to effect the rights and obligations provided for
herein. Without limiting the generality of the foregoing, Debtor shall pay all
fees, taxes and other amounts necessary to maintain the Collateral and the
Security Interest hereunder, and Debtor shall obtain and furnish to the Secured
Parties from time to time, upon demand, such releases and/or subordinations of
claims and liens which may be required to maintain the priority of the Security
Interest hereunder.

     (l) Debtor will not transfer, pledge, hypothecate, encumber, license, sell
or otherwise dispose of any of the Collateral (except for non-exclusive licenses
granted by Debtor in its ordinary course of business and sales of inventory by
Debtor in its ordinary course of business) without the prior written consent of
a Majority in Interest.

     (m) Debtor shall keep and preserve its equipment, inventory and other
tangible Collateral in good condition, repair and order and shall not operate or
locate any such Collateral (or cause to be operated or located) in any area
excluded from insurance coverage.

     (n) Debtor shall maintain with financially sound and reputable insurers,
insurance with respect to the Collateral against loss or damage of the kinds and
in the amounts customarily insured against by entities of established reputation
having similar properties similarly situated and in such amounts as are
customarily carried under similar circumstances by other such entities and
otherwise as is prudent for entities engaged in similar businesses but in any
event sufficient to cover the full replacement cost thereof. Debtor shall cause
each insurance policy issued in connection herewith to provide, and the insurer
issuing

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such policy to certify to the Agent that (a) the Agent will be named as lender
loss payee and additional insured under each such insurance policy; (b) if such
insurance be proposed to be cancelled or materially changed for any reason
whatsoever, such insurer will promptly notify the Agent and such cancellation or
change shall not be effective as to the Agent for at least thirty (30) days
after receipt by the Agent of such notice, unless the effect of such change is
to extend or increase coverage under the policy; and (c) the Agent will have the
right (but no obligation) at its election to remedy any default in the payment
of premiums within thirty (30) days of notice from the insurer of such default.
If no Event of Default (as defined in the Debenture) exists and if the proceeds
arising out of any claim or series of related claims do not exceed $100,000,
loss payments in each instance will be applied by the Debtor to the repair
and/or replacement of property with respect to which the loss was incurred to
the extent reasonably feasible, and any loss payments or the balance thereof
remaining, to the extent not so applied, shall be payable to the Debtor,
provided, however, that payments received by Debtor after an Event of Default
occurs and is continuing or in excess of $100,000 for any occurrence or series
of related occurrences shall be paid to the Agent and, if received by Debtor,
shall be held in trust for and immediately paid over to the Agent unless
otherwise directed in writing by the Agent. Copies of such policies or the
related certificates, in each case, naming the Agent as lender loss payee and
additional insured shall be delivered to the Agent at least annually and at the
time any new policy of insurance is issued.

     (o) Debtor shall, within ten (10) days of obtaining knowledge thereof,
advise the Secured Parties promptly, in sufficient detail, of any substantial
change in the Collateral, and of the occurrence of any event which would have a
material adverse effect on the value of the Collateral or on the Secured
Parties’ security interest therein.

     (p) Debtor shall promptly execute and deliver to the Secured Parties such
further deeds, mortgages, assignments, security agreements, financing statements
or other instruments, documents, certificates and assurances and take such
further action as the Secured Parties may from time to time request and may in
its sole discretion deem necessary to perfect, protect or enforce its security
interest in the Collateral including, without limitation, if applicable, the
execution and delivery of a separate security agreement with respect to Debtor’s
Intellectual Property (“Intellectual Property Security Agreement”) in which the
Secured Parties have been granted a security interest hereunder, substantially
in a form acceptable to the Secured Parties, which Intellectual Property
Security Agreement, other than as stated therein, shall be subject to all of the
terms and conditions hereof.

     (q) Debtor shall permit the Secured Parties and their representatives and
agents to inspect the Collateral at any time, and to make copies of records
pertaining to the Collateral as may be requested by a Secured Party from time to
time.

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     (r) Debtor shall take all steps reasonably necessary to diligently pursue
and seek to preserve, enforce and collect any rights, claims, causes of action
and accounts receivable in respect of the Collateral.

     (s) Debtor shall promptly notify the Secured Parties in sufficient detail
upon becoming aware of any attachment, garnishment, execution or other legal
process levied against any Collateral and of any other information received by
Debtor that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Parties hereunder.

     (t) All information heretofore, herein or hereafter supplied to the Secured
Parties by or on behalf of Debtor with respect to the Collateral is accurate and
complete in all material respects as of the date furnished.

     (u) Debtor shall at all times preserve and keep in full force and effect
their respective valid existence and good standing and any rights and franchises
material to its business.

     (v) Debtor will not change its name, type of organization, jurisdiction of
organization, organizational identification number (if it has one), legal or
corporate structure, or identity, or add any new fictitious name unless it
provides at least 30 days prior written notice to the Secured Parties of such
change and, at the time of such written notification, Debtor provides any
financing statements or fixture filings necessary to perfect and continue
perfected the perfected first priority Security Interest granted and evidenced
by this Agreement.

     (w) Debtor may not consign any of its Inventory or sell any of its
Inventory on bill and hold, sale or return, sale on approval, or other
conditional terms of sale without the consent of a Majority in Interest which
shall not be unreasonably withheld, except to the extent such consignment or
sale does not exceed 15% of the total value of all of the Company’s finished
goods in Inventory; provided, the Company may consign inventory to a contract
manufacturer from whom the Company intends to purchased finished products
incorporating such consigned Inventory.

     (x) Debtor may not relocate its chief executive office to a new location
without providing 30 days prior written notification thereof to the Secured
Parties and so long as, at the time of such written notification, Debtor
provides any financing statements or fixture filings necessary to perfect and
continue perfected the perfected first priority Security Interest granted and
evidenced by this Agreement.

     (y) Debtor was organized and remains organized solely under the laws of the
state set forth next to Debtor’s name in the first paragraph of this Agreement.
Schedule D attached hereto sets forth Debtor’s organizational

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identification number or, if Debtor does not have one, states that one does not
exist.

     (z) (i) The actual name of Debtor is the name set forth in the preamble
above; (ii) Debtor has no trade names except as set forth on Schedule E attached
hereto; (iii) Debtor has not used any name other than that stated in the
preamble hereto or as set forth on Schedule E for the preceding five years; and
(iv) no entity has merged into Debtor or been acquired by Debtor within the past
five years except as set forth on Schedule E.

     (aa) At any time and from time to time that any Collateral consists of
instruments, certificated securities or other items that require or permit
possession by the secured party to perfect the security interest created hereby,
Debtor shall deliver such Collateral to the Agent.

     (bb) Debtor, in its capacity as issuer, hereby agrees to comply with any
and all orders and instructions of Agent regarding the Pledged Interests
consistent with the terms of this Agreement without the further consent of
Debtor as contemplated by Section 8-106 (or any successor section) of the UCC.
Further, Debtor agrees that it shall not enter into a similar agreement (or one
that would confer “control” within the meaning of Article 8 of the UCC) with any
other person or entity.

     (cc) Debtor shall cause all tangible chattel paper constituting Collateral
to be delivered to the Agent, or, if such delivery is not possible, then to
cause such tangible chattel paper to contain a legend noting that it is subject
to the security interest created by this Agreement. To the extent any Collateral
consists of electronic chattel paper, Debtor shall cause the underlying chattel
paper to be “marked” within the meaning of Section 9-105 of the UCC (or
successor section thereto).

     (dd) If there is any investment property or deposit account included as
Collateral that can be perfected by “control” through an account control
agreement, Debtor shall cause such an account control agreement, in form and
substance in each case satisfactory to the Secured Parties, to be entered into
and delivered to the Secured Parties.

     (ee) To the extent any Collateral consists of letter-of-credit rights,
Debtor shall cause the issuer of each underlying letter of credit to consent to
an assignment of the proceeds thereof to the Secured Parties.

     (ff) To the extent that any Collateral is in the possession of any third
party, Debtor shall join with the Secured Parties in notifying such third party
of the Secured Parties’ security interest in such Collateral and shall use its
best efforts to obtain an acknowledgement and agreement from such third party
with respect to the Collateral, in form and substance satisfactory to the
Secured Parties.

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     (gg) If Debtor shall at any time hold or acquire a commercial tort claim,
Debtor shall promptly notify the Secured Parties in a writing signed by Debtor
of the particulars thereof and grant to the Secured Parties in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
the Secured Parties.

     (hh) Debtor shall immediately provide written notice to the Secured Parties
of any and all accounts which arise out of contracts with any governmental
authority and, to the extent necessary to perfect or continue the perfected
status of the Security Interest in such accounts and proceeds thereof, shall
execute and deliver to the Secured Parties an assignment of claims for such
accounts and cooperate with the Secured Parties in taking any other steps
required, in their judgment, under the Federal Assignment of Claims Act or any
similar federal, state or local statute or rule to perfect or continue the
perfected status of the Security Interest in such accounts and proceeds thereof.

     (ii) Debtor shall cause each of its subsidiaries to immediately become a
party hereto (an “Additional Debtor”), by executing and delivering an Additional
Debtor Joinder in substantially the form of Annex A attached hereto and comply
with the provisions hereof applicable to the Debtor. Concurrent therewith, the
Additional Debtor shall deliver replacement schedules for, or supplements to all
other Schedules to (or referred to in) this Agreement, as applicable, which
replacement schedules shall supersede, or supplements shall modify, the
Schedules then in effect. The Additional Debtor shall also deliver such opinions
of counsel, authorizing resolutions, good standing certificates, incumbency
certificates, organizational documents, financing statements and other
information and documentation as the Secured Parties may reasonably request.
Upon delivery of the foregoing to the Secured Parties, the Additional Debtor
shall be and become a party to this Agreement with the same rights and
obligations as the Debtor, for all purposes hereof as fully and to the same
extent as if it were an original signatory hereto and shall be deemed to have
made the representations, warranties and covenants set forth herein as of the
date of execution and delivery of such Additional Debtor Joinder, and all
references herein to the “Debtor” shall be deemed to include each Additional
Debtor.

     (jj) Debtor shall vote the Pledged Securities to comply with the covenants
and agreements set forth herein and in the Debentures.

     (kk) Debtor shall register the pledge of the applicable Pledged Securities
on its books. Debtor shall notify each issuer of Pledged Securities to register
the pledge of the applicable Pledged Securities in the name of the Secured
Parties on the books of such issuer. Further, except with respect to
certificated securities delivered to the Agent, Debtor shall deliver to Agent an
acknowledgement of pledge (which, where appropriate, shall comply with the
requirements of the relevant UCC with respect to perfection by registration)
signed by the issuer of the applicable Pledged Securities, which acknowledgement

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shall confirm that: (a) it has registered the pledge on its books and records;
and (b) at any time directed by Agent during the continuation of an Event of
Default, such issuer will transfer the record ownership of such Pledged
Securities into the name of any designee of Agent, will take such steps as may
be necessary to effect the transfer, and will comply with all other instructions
of Agent regarding such Pledged Securities without the further consent of the
Debtor.

     (ll) In the event that, upon an occurrence of an Event of Default, Agent
shall sell all or any of the Pledged Securities to another party or parties
(herein called the “Transferee”) or shall purchase or retain all or any of the
Pledged Securities, Debtor shall, to the extent applicable: (i) deliver to Agent
or the Transferee, as the case may be, the articles of incorporation, bylaws,
minute books, stock certificate books, corporate seals, deeds, leases,
indentures, agreements, evidences of indebtedness, books of account, financial
records and all other Organizational Documents and records of the Debtor and its
direct and indirect subsidiaries; (ii) use its best efforts to obtain
resignations of the persons then serving as officers and directors of the Debtor
and its direct and indirect subsidiaries, if so requested; and (iii) use its
best efforts to obtain any approvals that are required by any governmental or
regulatory body in order to permit the sale of the Pledged Securities to the
Transferee or the purchase or retention of the Pledged Securities by Agent and
allow the Transferee or Agent to continue the business of the Debtor and its
direct and indirect subsidiaries.

     (mm) Without limiting the generality of the other obligations of the Debtor
hereunder, Debtor shall promptly (i) cause to be registered at the United States
Copyright Office all of its material copyrights, (ii) cause the security
interest contemplated hereby with respect to all Intellectual Property
registered at the United States Copyright Office or United States Patent and
Trademark Office to be duly recorded at the applicable office, and (iii) give
the Agent notice whenever it acquires (whether absolutely or by license) or
creates any additional material Intellectual Property.

     (nn) Debtor will from time to time, at its own cost and expense, promptly
execute and deliver all such further instruments and documents, and take all
such further action as may be necessary or desirable, or as the Secured Parties
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Secured Parties to
exercise and enforce their rights and remedies hereunder and with respect to any
Collateral or to otherwise carry out the purposes of this Agreement.

     (oo) Schedule F attached hereto lists all of the patents, patent
applications, trademarks, trademark applications, registered copyrights, and
domain names owned by Debtor as of the date hereof. Schedule F lists all
material licenses in favor of Debtor for the use of any patents, trademarks,
copyrights and domain names as of the date hereof. All material patents and
trademarks of the Debtor have been duly recorded at the United States Patent and

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Trademark Office and all material copyrights of the Debtor has been duly
recorded at the United States Copyright Office.

     (pp) Except as set forth on Schedule G attached hereto, none of the account
debtors or other persons or entities obligated on any of the Collateral is a
governmental authority covered by the Federal Assignment of Claims Act or any
similar federal, state or local statute or rule in respect of such Collateral.

     5. Effect of Pledge on Certain Rights. If any of the Collateral subject to
this Agreement consists of nonvoting equity or ownership interests (regardless
of class, designation, preference or rights) that may be converted into voting
equity or ownership interests upon the occurrence of certain events (including,
without limitation, upon the transfer of all or any of the other stock or assets
of the issuer), it is agreed that the pledge of such equity or ownership
interests pursuant to this Agreement or the enforcement of any of Agent’s rights
hereunder shall not be deemed to be the type of event which would trigger such
conversion rights notwithstanding any provisions in the Organizational Documents
or agreements to which Debtor is subject or to which Debtor is party.

     6. Defaults. The following events shall be “Events of Default”:

     (a) The occurrence of an Event of Default (as defined in the Debentures)
under the Debentures;

     (b) Any representation or warranty of Debtor in this Agreement shall prove
to have been incorrect in any material respect when made;

     (c) The failure by Debtor to observe or perform any of its obligations
hereunder for five (5) days after delivery to Debtor of notice of such failure
by or on behalf of a Secured Party unless such default is capable of cure but
cannot be cured within such time frame and Debtor is using best efforts to cure
same in a timely fashion; or

     (d) If any provision of this Agreement shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by Debtor, or a proceeding shall be commenced by Debtor, or by any
governmental authority having jurisdiction over Debtor, seeking to establish the
invalidity or unenforceability thereof, or Debtor shall deny that Debtor has any
liability or obligation purported to be created under this Agreement.

     7. Duty To Hold In Trust.

     (a) Upon the occurrence of any Event of Default and at any time thereafter,
Debtor shall, upon receipt of any revenue, income, dividend, interest or other
sums subject to the Security Interest, whether payable pursuant to the Debenture
or otherwise, or of any check, draft, note, trade acceptance or other instrument
evidencing an obligation to pay any such sum, hold the same in trust

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for the Secured Parties and shall forthwith endorse and transfer any such sums
or instruments, or both, to the Secured Parties, pro-rata in proportion to their
initial purchases of Debentures for application to the satisfaction of the
Obligations (and if any Debenture is not outstanding, pro-rata in proportion to
the initial purchases of the remaining Debentures).

     (b) If Debtor shall become entitled to receive or shall receive any
securities or other property (including, without limitation, shares of Pledged
Securities or instruments representing Pledged Securities acquired after the
date hereof, or any options, warrants, rights or other similar property or
certificates representing a dividend, or any distribution in connection with any
recapitalization, reclassification or increase or reduction of capital, or
issued in connection with any reorganization of Debtor or any of its direct or
indirect subsidiaries) in respect of the Pledged Securities (whether as an
addition to, in substitution of, or in exchange for, such Pledged Securities or
otherwise), Debtor agrees to (i) accept the same as the agent of the Secured
Parties; (ii) hold the same in trust on behalf of and for the benefit of the
Secured Parties; and (iii) to deliver any and all certificates or instruments
evidencing the same to Agent on or before the close of business on the fifth
business day following the receipt thereof by Debtor, in the exact form received
together with the Necessary Endorsements, to be held by Agent subject to the
terms of this Agreement as Collateral.

     8. Rights and Remedies Upon Default.

     (a) Upon the occurrence of any Event of Default and at any time thereafter,
the Secured Parties, acting through any agent appointed by them for such
purpose, shall have the right to exercise all of the remedies conferred
hereunder and under the Debentures, and the Secured Parties shall have all the
rights and remedies of a secured party under the UCC. Without limitation, the
Secured Parties shall have the following rights and powers:

     (i) The Secured Parties shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and Debtor shall assemble the Collateral and make it
available to the Secured Parties at places which the Secured Parties shall
reasonably select, whether at Debtor’s premises or elsewhere, and make available
to the Secured Parties, without rent, all of Debtor’s premises and facilities
for the purpose of the Secured Parties taking possession of, removing or putting
the Collateral in saleable or disposable form.

     (ii) Upon notice to the Debtor by Agent, all rights of Debtor to exercise
the voting and other consensual rights which it would otherwise be entitled to
exercise and all rights of Debtor to receive the dividends and interest which it
would otherwise be authorized to receive and retain, shall

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cease. Upon such notice, Agent shall have the right to receive any interest,
cash dividends or other payments on the Collateral and, at the option of Agent,
to exercise in such Agent’s discretion all voting rights pertaining thereto.
Without limiting the generality of the foregoing, Agent shall have the right
(but not the obligation) to exercise all rights with respect to the Collateral
as it were the sole and absolute owners thereof, including, without limitation,
to vote and/or to exchange, at its sole discretion, any or all of the Collateral
in connection with a merger, reorganization, consolidation, recapitalization or
other readjustment concerning or involving the Collateral or Debtor or any of
its direct or indirect subsidiaries.

     (iii) The Secured Parties shall have the right to operate the business of
Debtor using the Collateral and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Parties may deem commercially reasonable,
all without (except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to Debtor or right of redemption
of Debtor, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Parties may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of Debtor, which are hereby waived and released.

     (iv) The Secured Parties shall have the right (but not the obligation) to
notify any account debtors and any obligors under instruments or accounts to
make payments directly to the Secured Parties and to enforce the Debtor’s rights
against such account debtors and obligors.

     (v) The Secured Parties may (but are not obligated to) direct any financial
intermediary or any other person or entity holding any investment property to
transfer the same to the Secured Parties or their designee.

     (vi) The Secured Parties may (but are not obligated to) transfer any or all
Intellectual Property registered in the name of Debtor at the United States
Patent and Trademark Office and/or Copyright Office into the name of the Secured
Parties or any designee or any purchaser of any Collateral.

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     (b) The Agent may comply with any applicable law in connection with a
disposition of Collateral and such compliance will not be considered adversely
to affect the commercial reasonableness of any sale of the Collateral. The Agent
may sell the Collateral without giving any warranties and may specifically
disclaim such warranties. If the Agent sells any of the Collateral on credit,
the Debtor will only be credited with payments actually made by the purchaser.
In addition, Debtor waives any and all rights it may have to a judicial hearing
in advance of the enforcement of any of the Agent’s rights and remedies
hereunder, including, without limitation, its right following an Event of
Default to take immediate possession of the Collateral and to exercise its
rights and remedies with respect thereto.

     (c) For the purpose of enabling the Agent to further exercise rights and
remedies under this Section 8 or elsewhere provided by agreement or applicable
law, Debtor hereby grants to the Agent, for the benefit of the Agent and the
Secured Parties, an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to Debtor) to use, license or
sublicense following an Event of Default, any Intellectual Property now owned or
hereafter acquired by Debtor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof.

     9. Applications of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral hereunder shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and
the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable
attorneys’ fees and expenses incurred by the Secured Parties in enforcing their
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations pro rata among the
Secured Parties (based on then-outstanding principal amounts of Debentures at
the time of any such determination), and to the payment of any other amounts
required by applicable law, after which the Secured Parties shall pay to the
Debtor any surplus proceeds. If, upon the sale, license or other disposition of
the Collateral, the proceeds thereof are insufficient to pay all amounts to
which the Secured Parties are legally entitled, the Debtor will be liable for
the deficiency, together with interest thereon, at the rate of 10% per annum or
the lesser amount permitted by applicable law (the “Default Rate”), and the
reasonable fees of any attorneys employed by the Secured Parties to collect such
deficiency. To the extent permitted by applicable law, Debtor waives all claims,
damages and demands against the Secured Parties arising out of the repossession,
removal, retention or sale of the Collateral, unless due solely to the gross
negligence or willful misconduct of the Secured Parties as determined by a final
judgment (not subject to further appeal) of a court of competent jurisdiction.

     10. Securities Law Provision. Debtor recognizes that Agent may be limited
in its ability to effect a sale to the public of all or part of the Pledged
Securities by reason of certain prohibitions in the Securities Act of 1933, as
amended, or other federal or state

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securities laws (collectively, the “Securities Laws”), and may be compelled to
resort to one or more sales to a restricted group of purchasers who may be
required to agree to acquire the Pledged Securities for their own account, for
investment and not with a view to the distribution or resale thereof. Debtor
agrees that sales so made may be at prices and on terms less favorable than if
the Pledged Securities were sold to the public, and that Agent has no obligation
to delay the sale of any Pledged Securities for the period of time necessary to
register the Pledged Securities for sale to the public under the Securities
Laws. Debtor shall cooperate with Agent in its attempt to satisfy any
requirements under the Securities Laws (including, without limitation,
registration thereunder if requested by Agent) applicable to the sale of the
Pledged Securities by Agent.

     11. Costs and Expenses. Debtor agrees to pay all reasonable out-of-pocket
fees, costs and expenses incurred in connection with any filing required
hereunder, including without limitation, any financing statements pursuant to
the UCC, continuation statements, partial releases and/or termination statements
related thereto or any expenses of any searches reasonably required by the
Secured Parties. The Debtor shall also pay all other claims and charges which in
the reasonable opinion of the Secured Parties might prejudice, imperil or
otherwise affect the Collateral or the Security Interest therein. The Debtor
will also, upon demand, pay to the Secured Parties the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, which the Secured Parties may incur in connection
with (i) the enforcement of this Agreement, (ii) the custody or preservation of,
or the sale of, collection from, or other realization upon, any of the
Collateral, or (iii) the exercise or enforcement of any of the rights of the
Secured Parties under the Debentures. Until so paid, any fees payable hereunder
shall be added to the principal amount of the Debentures and shall bear interest
at the Default Rate.

     12. Responsibility for Collateral. The Debtor assumes all liabilities and
responsibility in connection with all Collateral, and the Obligations shall in
no way be affected or diminished by reason of the loss, destruction, damage or
theft of any of the Collateral or its unavailability for any reason. Without
limiting the generality of the foregoing, (a) neither the Agent nor any Secured
Party (i) has any duty (either before or after an Event of Default) to collect
any amounts in respect of the Collateral or to preserve any rights relating to
the Collateral, or (ii) has any obligation to clean-up or otherwise prepare the
Collateral for sale, and (b) Debtor shall remain obligated and liable under each
contract or agreement included in the Collateral to be observed or performed by
Debtor thereunder. Neither the Agent nor any Secured Party shall have any
obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Agent or any Secured Party
of any payment relating to any of the Collateral, nor shall the Agent or any
Secured Party be obligated in any manner to perform any of the obligations of
Debtor under or pursuant to any such contract or agreement, to make inquiry as
to the nature or sufficiency of any payment received by the Agent or any Secured
Party in respect of the Collateral or as to the sufficiency of any performance
by any party under any such contract or agreement, to present or file any claim,
to take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to the Agent or to which the Agent or any
Secured Party may be entitled at any time or times.

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     13. Security Interest Absolute. All rights of the Secured Parties and all
obligations of the Debtor hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures or any agreement entered into in connection with the foregoing,
or any portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Debentures or any other agreement entered into in connection with the
foregoing; (c) any exchange, release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure from any other
collateral for, or any guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance which might
otherwise constitute any legal or equitable defense available to Debtor, or a
discharge of all or any part of the Security Interest granted hereby. Until the
Obligations shall have been paid and performed in full, the rights of the
Secured Parties shall continue even if the Obligations are barred for any
reason, including, without limitation, the running of the statute of limitations
or bankruptcy. Debtor expressly waives presentment, protest, notice of protest,
demand, notice of nonpayment and demand for performance. In the event that at
any time any transfer of any Collateral or any payment received by the Secured
Parties hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise due to any party other than the Secured Parties, then, in any such
event, Debtor’s obligations hereunder shall survive cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or cancellation of this Agreement, but shall remain a valid and binding
obligation enforceable in accordance with the terms and provisions hereof.
Debtor waives all right to require the Secured Parties to proceed against any
other person or entity or to apply any Collateral which the Secured Parties may
hold at any time, or to marshal assets, or to pursue any other remedy. Debtor
waives any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.

     14. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debentures have been
indefeasibly paid in full and all other Obligations have been paid or
discharged; provided, however, that all indemnities of the Debtor contained in
this Agreement (including, without limitation, Annex B hereto) shall survive and
remain operative and in full force and effect regardless of the termination of
this Agreement.

     15. Power of Attorney; Further Assurances.

     (a) Debtor authorizes the Secured Parties, and does hereby make, constitute
and appoint the Secured Parties and their respective officers, agents,
successors or assigns with full power of substitution, as Debtor’s true and
lawful attorney-in-fact, with power, in the name of the various Secured Parties
or Debtor,

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to, after the occurrence and during the continuance of an Event of Default, (i)
endorse any note, checks, drafts, money orders or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Secured Parties;
(ii) to sign and endorse any financing statement pursuant to the UCC or any
invoice, freight or express bill, bill of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications and notices in connection
with accounts, and other documents relating to the Collateral; (iii) to pay or
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iv) to demand,
collect, receipt for, compromise, settle and sue for monies due in respect of
the Collateral; (v) to transfer any Intellectual Property or provide licenses
respecting any Intellectual Property; and (vi) generally, at the option of the
Secured Parties, and at the expense of the Debtor, at any time, or from time to
time, to execute and deliver any and all documents and instruments and to do all
acts and things which the Secured Parties deem necessary to protect, preserve
and realize upon the Collateral and the Security Interest granted therein in
order to effect the intent of this Agreement and the Debentures all as fully and
effectually as the Debtor might or could do; and Debtor hereby ratifies all that
said attorney shall lawfully do or cause to be done by virtue hereof. This power
of attorney is coupled with an interest and shall be irrevocable for the term of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding. The designation set forth herein shall be deemed to amend and
supersede any inconsistent provision in the Organizational Documents or other
documents or agreements to which Debtor is subject or to which Debtor is a
party. Without limiting the generality of the foregoing, after the occurrence
and during the continuance of an Event of Default, each Secured Party is
specifically authorized to execute and file any applications for or instruments
of transfer and assignment of any patents, trademarks, copyrights or other
Intellectual Property with the United States Patent and Trademark Office and the
United States Copyright Office.

     (b) On a continuing basis, Debtor will make, execute, acknowledge, deliver,
file and record, as the case may be, with the proper filing and recording
agencies in any jurisdiction, including, without limitation, the jurisdictions
indicated on Schedule C attached hereto, all such instruments, and take all such
action as may reasonably be deemed necessary or advisable, or as reasonably
requested by the Secured Parties, to perfect the Security Interest granted
hereunder and otherwise to carry out the intent and purposes of this Agreement,
or for assuring and confirming to the Secured Parties the grant or perfection of
a perfected first priority security interest in all the Collateral under the
UCC.

     (c) Debtor hereby irrevocably appoints the Secured Parties as Debtor’s
attorney-in-fact, with full authority in the place and instead of Debtor and in
the name of Debtor, from time to time in the Secured Parties’ discretion, to
take any action and to execute any instrument which the Secured Parties may deem
necessary or advisable to accomplish the purposes of this Agreement, including

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the filing, in its sole discretion, of one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral without the
signature of Debtor where permitted by law, which financing statements may (but
need not) describe the Collateral as “all assets” or “all personal property” or
words of like import, and ratifies all such actions taken by the Secured
Parties. This power of attorney is coupled with an interest and shall be
irrevocable for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.

     16.  Notices. All notices, requests, demands and other communications
hereunder shall be subject to the notice provision of the Purchase Agreement (as
such term is defined in the Debentures).

     17.  Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Parties shall have the right, in its sole discretion, to
pursue, relinquish, subordinate, modify or take any other action with respect
thereto, without in any way modifying or affecting any of the Secured Parties’
rights and remedies hereunder.

   18. Appointment of Agent. The Secured Parties hereby appoint Regenmacher
Holdings, Ltd. to act as their agent (“Agent”) for purposes of exercising any
and all rights and remedies of the Secured Parties hereunder. Such appointment
shall continue until revoked in writing by a Majority in Interest, at which time
a Majority in Interest shall appoint a new Agent; provided, that Regenmacher
Holdings, Ltd. may not be removed as Agent unless Regenmacher Holdings, Ltd.
shall then hold less than $100,000 principal amount of Debentures.; provided
further that such removal may occur only if each of the other Secured Parties
shall then hold not less than $100,000 principal amount of Debentures. The Agent
shall have the rights, responsibilities and immunities set forth in Annex B
hereto.

     19.  Miscellaneous.

     (a) No course of dealing between the Debtor and the Secured Parties, nor
any failure to exercise, nor any delay in exercising, on the part of the Secured
Parties, any right, power or privilege hereunder or under the Debentures shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

     (b) All of the rights and remedies of the Secured Parties with respect to
the Collateral, whether established hereby or by the Debentures or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.

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     (c) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

     (d) In the event any provision of this Agreement is held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, unless such
provision is narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

     (e) No waiver of any breach or default or any right under this Agreement
shall be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default or right, whether of the same or similar nature or otherwise.

     (f) This Agreement shall be binding upon and inure to the benefit of each
party hereto and its successors and assigns.

     (g) Each party shall take such further action and execute and deliver such
further documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.

     (h) All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Debtor agrees that all proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and the Debenture (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York, Borough of Manhattan.
Debtor hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and

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agrees not to assert in any proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such proceeding is improper.
Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If any party shall commence a proceeding to enforce any provisions of
this Agreement, then the prevailing party in such proceeding shall be reimbursed
by the other party for its reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
proceeding.

     (i) This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

     (j) Debtor shall indemnify, reimburse and hold harmless the Secured Parties
and their respective partners, members, shareholders, officers, directors,
employees and agents (collectively, “Indemnitees”) from and against any and all
losses, claims, liabilities, damages, penalties, suits, costs and expenses, of
any kind or nature, (including fees relating to the cost of investigating and
defending any of the foregoing) imposed on, incurred by or asserted against such
Indemnitee in any way related to or arising from or alleged to arise from this
Agreement or the Collateral, except any such losses, claims, liabilities,
damages, penalties, suits, costs and expenses which result from the gross
negligence or willful misconduct of the Indemnitee as determined by a final,
nonappealable decision of a court of competent jurisdiction. This
indemnification provision is in addition to, and not in limitation of, any other
indemnification provision in the Debentures, the Purchase Agreement (as such
term is defined in the Debentures) or any other agreement, instrument or other
document executed or delivered in connection herewith or therewith.

     (k) Nothing in this Agreement shall be construed to subject Agent or any
Secured Party to liability as a partner in Debtor or any if its direct or
indirect subsidiaries that is a partnership or as a member in Debtor or any of
its direct or indirect subsidiaries that is a limited liability company, nor
shall Agent or any Secured Party be deemed to have assumed any obligations under
any partnership

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agreement or limited liability company agreement, as applicable, of Debtor or
any if its direct or indirect subsidiaries or otherwise, unless and until any
such Secured Party exercises its right to be substituted for Debtor as a partner
or member, as applicable, pursuant hereto.

     (m) To the extent that the grant of the security interest in the Collateral
and the enforcement of the terms hereof require the consent, approval or action
of any partner or member, as applicable, of Debtor or any direct or indirect
subsidiary of Debtor or compliance with any provisions of any of the
Organizational Documents, the Debtor hereby grants such consent and approval and
waive any such noncompliance with the terms of said documents.

[SIGNATURE PAGES FOLLOW]

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     IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.

            BRILLIAN CORPORATION
      By:   /s/ Wayne Pratt         Name:   Wayne Pratt        Title:   Vice
President and Chief Executive Officer     

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

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[SIGNATURE PAGE OF HOLDERS TO BRLC SA]

Name of Investing Entity: Regenmacher Holdings Ltd.
Signature of Authorized Signatory of Investing entity: /s/ Jonathan P. Knight
Name of Authorized Signatory: Jonathan P. Knight
Title of Authorized Signatory: President

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

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ANNEX A
to
SECURITY
AGREEMENT

FORM OF ADDITIONAL DEBTOR JOINDER

Security Agreement dated as of April 18, 2005 made by
Brillian Corporation
and its subsidiaries party thereto from time to time, as Debtor
to and in favor of
the Secured Parties identified therein (the “Security Agreement”)

     Reference is made to the Security Agreement as defined above; capitalized
terms used herein and not otherwise defined herein shall have the meanings given
to such terms in, or by reference in, the Security Agreement.

     The undersigned hereby agrees that upon delivery of this Additional Debtor
Joinder to the Secured Parties referred to above, the undersigned shall (a) be
an Additional Debtor under the Security Agreement, (b) have all the rights and
obligations of the Debtor under the Security Agreement as fully and to the same
extent as if the undersigned was an original signatory thereto and (c) be deemed
to have made the representations and warranties set forth in Section 4 therein
as of the date of execution and delivery of this Additional Debtor Joinder.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY
GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE
FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE
WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

     Attached hereto are supplemental and/or replacement Schedules to the
Security Agreement, as applicable.

     An executed copy of this Joinder shall be delivered to the Secured Parties,
and the Secured Parties may rely on the matters set forth herein on or after the
date hereof. This Joinder shall not be modified, amended or terminated without
the prior written consent of the Secured Parties.

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     IN WITNESS WHEREOF, the undersigned has caused this Joinder to be executed
in the name and on behalf of the undersigned.

[Name of Additional Debtor]

By:

Name:
Title:

Address:

Dated:

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ANNEX B
to
SECURITY
AGREEMENT

THE AGENT

          1. Appointment. The Secured Parties (all capitalized terms used herein
and not otherwise defined shall have the respective meanings provided in the
Security Agreement to which this Annex B is attached (the “Agreement”)), by
their acceptance of the benefits of the Agreement, hereby designate Regenmacher
Holdings, Ltd. as the Agent to act as specified herein and in the Agreement.
Each Secured Party shall be deemed irrevocably to authorize the Agent to take
such action on its behalf under the provisions of the Agreement and any other
Transaction Document (as such term is defined in the Debentures) and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
may perform any of its duties hereunder by or through its agents or employees.

          2. Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in the Agreement. Neither the
Agent nor any of its partners, members, shareholders, officers, directors,
employees or agents shall be liable for any action taken or omitted by it as
such under the Agreement or hereunder or in connection herewith or therewith, be
responsible for the consequence of any oversight or error of judgment or
answerable for any loss, unless caused solely by its or their gross negligence
or willful conduct as determined by a final judgment (not subject to further
appeal) of a court of competent jurisdiction. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
the Agreement or any other Transaction Document a fiduciary relationship in
respect of Debtor or any Secured Party; and nothing in the Agreement or any
other Transaction Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of the
Agreement or any other Transaction Document except as expressly set forth herein
and therein.

          3. Lack of Reliance on the Agent. Independently and without reliance
upon the Agent, each Secured Party, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Company and its subsidiaries in
connection with such Secured Party’s investment in the Debtor, the creation and
continuance of the Obligations, the transactions contemplated by the Transaction
Documents, and the taking or not taking of any action in connection therewith,
and (ii) its own appraisal of the creditworthiness of the Company and its
subsidiaries, and of the value of the Collateral from time to time, and the
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Secured Party with any credit, market or other information
with respect thereto, whether coming into its possession before any Obligations
are incurred or at any time or times thereafter. The Agent shall not be
responsible to the Debtor or any

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Secured Party for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith, or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Agreement or any other Transaction Document, or for the financial condition of
the Debtor or the value of any of the Collateral, or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of the Agreement or any other Transaction Document, or
the financial condition of the Debtor, or the value of any of the Collateral, or
the existence or possible existence of any default or Event of Default under the
Agreement, the Debentures or any of the other Transaction Documents.

          4. Certain Rights of the Agent. The Agent shall have the right to take
any action with respect to the Collateral, on behalf of all of the Secured
Parties. To the extent practical, the Agent shall request instructions from the
Secured Parties with respect to any material act or action (including failure to
act) in connection with the Agreement or any other Transaction Document, and
shall be entitled to act or refrain from acting in accordance with the
instructions of Secured Parties holding a majority in principal amount of
Debentures (based on then-outstanding principal amounts of Debentures at the
time of any such determination); if such instructions are not provided despite
the Agent’s request therefor, the Agent shall be entitled to refrain from such
act or taking such action, and if such action is taken, shall be entitled to
appropriate indemnification from the Secured Parties in respect of actions to be
taken by the Agent; and the Agent shall not incur liability to any person or
entity by reason of so refraining. Without limiting the foregoing, (a) no
Secured Party shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder in accordance
with the terms of the Agreement or any other Transaction Document, and the
Debtor shall have no right to question or challenge the authority of, or the
instructions given to, the Agent pursuant to the foregoing and (b) the Agent
shall not be required to take any action which the Agent believes (i) could
reasonably be expected to expose it to personal liability or (ii) is contrary to
this Agreement, the Transaction Documents or applicable law.

          5. Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by the proper person
or entity, and, with respect to all legal matters pertaining to the Agreement
and the other Transaction Documents and its duties thereunder, upon advice of
counsel selected by it and upon all other matters pertaining to this Agreement
and the other Transaction Documents and its duties thereunder, upon advice of
other experts selected by it.

          6. Indemnification. To the extent that the Agent is not reimbursed and
indemnified by the Debtor, the Secured Parties will jointly and severally
reimburse and indemnify the Agent, in proportion to their initially purchased
respective principal amounts of Debentures, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any

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kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in performing its duties hereunder or under the Agreement or
any other Transaction Document, or in any way relating to or arising out of the
Agreement or any other Transaction Document except for those determined by a
final judgment (not subject to further appeal) of a court of competent
jurisdiction to have resulted solely from the Agent’s own gross negligence or
willful misconduct. Prior to taking any action hereunder as Agent, the Agent may
require each Secured Party to deposit with it sufficient sums as it determines
in good faith is necessary to protect the Agent for costs and expenses
associated with taking such action.

          7. Resignation by the Agent.

     (a) The Agent may resign from the performance of all its functions and
duties under the Agreement and the other Transaction Documents at any time by
giving 30 days’ prior written notice (as provided in the Agreement) to the
Debtor and the Secured Parties. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below.

     (b) Upon any such notice of resignation, the Secured Parties, acting by a
Majority in Interest, shall appoint a successor Agent hereunder.

     (c) If a successor Agent shall not have been so appointed within said
30-day period, the Agent shall then appoint a successor Agent who shall serve as
Agent until such time, if any, as the Secured Parties appoint a successor Agent
as provided above. If a successor Agent has not been appointed within such
30-day period, the Agent may petition any court of competent jurisdiction or may
interplead the Debtor and the Secured Parties in a proceeding for the
appointment of a successor Agent, and all fees, including, but not limited to,
extraordinary fees associated with the filing of interpleader and expenses
associated therewith, shall be payable by the Debtor on demand.

          8. Rights with respect to Collateral. Each Secured Party agrees with
all other Secured Parties and the Agent (i) that it shall not, and shall not
attempt to, exercise any rights with respect to its security interest in the
Collateral, whether pursuant to any other agreement or otherwise (other than
pursuant to this Agreement), or take or institute any action against the Agent
or any of the other Secured Parties in respect of the Collateral or its rights
hereunder (other than any such action arising from the breach of this Agreement)
and (ii) that such Secured Party has no other rights with respect to the
Collateral other than as set forth in this Agreement and the other Transaction
Documents.

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