Exhibit 10.8

SECURITY AGREEMENT

SECURITY AGREEMENT

, dated as of April 25, 2007 (this "Agreement") made by CARRINGTON LABORATORIES,
INC., a Texas corporation (the "Company"), and the undersigned subsidiaries of
the Company (each a "Grantor" and collectively and together with the Company,
the "Grantors"), in favor of ROCKMORE INVESTMENT MASTER FUND LTD., a Bermuda
exempted company, in its capacity as collateral agent (in such capacity, the
"Collateral Agent") for the "Purchasers" (as defined below) party to the
Securities Purchase Agreement, dated as of even date herewith (as amended,
restated or otherwise modified from time to time, the "Securities Purchase
Agreement").

W

I T N E S S E T H:

WHEREAS, the Company and each party listed as a "Purchaser" on the Schedule of
Purchasers attached thereto (together with their respective successors and
assigns each a "Purchaser" and collectively, the "Purchasers") are parties to
the Securities Purchase Agreement, pursuant to which the Company shall be
required to sell, and the Purchasers shall purchase or have the right to
purchase, the "Debentures" (as defined therein) from time to time issued
pursuant thereto (as such Debentures may be amended, restated, replaced or
otherwise modified from time to time in accordance with the terms thereof,
collectively, the "Debentures");

WHEREAS, each of the Grantors (other than the Company) (collectively, the
"Guarantors") has executed and delivered a Guaranty dated the date hereof (as
amended, restated or otherwise modified from time to time, the "Guaranty") in
favor of the Collateral Agent for the benefit of itself and the Purchasers, with
respect to the Company's obligations under the Securities Purchase Agreement,
the Debentures and the Transaction Documents (as defined below);

WHEREAS, it is a condition precedent to the Purchasers purchasing the Debentures
pursuant to the Securities Purchase Agreement that the Grantors shall have
executed and delivered to the Collateral Agent this Agreement providing for the
grant to the Collateral Agent for the benefit of itself and the Purchasers of a
security interest in all personal property and Fixtures of each Grantor other
than Excluded Collateral (defined below) to secure all of the Company's
obligations under the Securities Purchase Agreement, the Debentures, the
"Transaction Documents" (as defined in the Securities Purchase Agreement) (all
such documents amended, restated or otherwise modified from time to time, the
"Transaction Documents") and the Guarantors' obligations under the Guaranty; and

WHEREAS, the Grantors have determined that the execution, delivery and
performance of this Agreement directly benefits, and is in the best interest of,
the Grantors.

NOW, THEREFORE, in consideration of the premises and the agreements herein and
in order to induce the Purchasers to perform under the Securities Purchase
Agreement, each Grantor agrees with the Collateral Agent, for the benefit of the
Purchasers and the Collateral Agent, as follows:

Section 1.     Definitions.

(a)     Reference is hereby made to the Securities Purchase Agreement and the
Debentures for a statement of the terms thereof. All terms used in this
Agreement and the recitals hereto which are defined in the Securities Purchase
Agreement, the Debentures or in Articles 8 or 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York (the "Code"), and which
are not otherwise defined herein shall have the same meanings herein as set
forth therein; provided that terms used herein which are defined in the Code as
in effect in the State of New York on the date hereof shall continue to have the
same meaning notwithstanding any replacement or amendment of such statute except
as the Collateral Agent may otherwise determine. The meanings given to terms
defined herein shall be equally applicable to both the singular and plural forms
of such terms unless the context clearly requires a different construction.

(b)     The following terms shall have the respective meanings provided for in
the Code: "Accounts", "Cash Proceeds", "Chattel Paper", "Commercial Tort Claim",
"Commodity Account", "Commodity Contracts", "Deposit Account", "Documents",
"Equipment", "Fixtures", "General Intangibles", "Goods", "Instruments",
"Inventory", "Investment Property", "Letter-of-Credit Rights", "Noncash
Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes", "Security",
"Record", "Security Account", "Software", and "Supporting Obligations".

(c)     As used in this Agreement, the following terms shall have the respective
meanings indicated below, such meanings to be applicable equally to both the
singular and plural forms of such terms:

"Capital Stock" means (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (ii) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person.

"Copyright Licenses" means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to use or sell any works covered by any Copyright
(including, without limitation, all Copyright Licenses set forth in Schedule II
hereto).

"Copyrights" means all domestic and foreign copyrights, whether registered or
not, including, without limitation, all copyright rights throughout the universe
(whether now or hereafter arising) in any and all media (whether now or
hereafter developed), in and to all original works of authorship fixed in any
tangible medium of expression, acquired or used by any Grantor (including,
without limitation, all copyrights described in Schedule II hereto), all
applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.

"Event of Default" shall have the meaning set forth in the Debentures.

"Excluded Collateral" shall mean all property of any Grantor not subject to
Collateral Agent's security interest to the extent specified in the next to last
paragraph of Section 2 of this Agreement.

"Governmental Authority" means any nation or government, any Federal, state,
city, town, municipality, county, local or other political subdivision thereof
or thereto and any department, commission, board, bureau, instrumentality,
agency or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.

"Insolvency Proceeding" means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code (Chapter 11 of Title 11 of the United
States Code) or under any other bankruptcy or insolvency law, assignments for
the benefit of creditors, formal or informal moratoria, compositions, or
extensions generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.

"Intellectual Property" means the Copyrights, Trademarks and Patents.

"Licenses" means the Copyright Licenses, the Trademark Licenses and the Patent
Licenses.

"Lien" means any mortgage, lien, pledge, charge, security interest or other
encumbrance upon or in any property or assets (including accounts and contract
rights).

"Patent Licenses" means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to manufacture, use or sell any invention covered by any
Patent (including, without limitation, all Patent Licenses set forth in Schedule
II hereto).

"Patents" means all domestic and foreign letters patent, design patents, utility
patents, industrial designs, inventions, trade secrets, ideas, concepts,
methods, techniques, processes, proprietary information, technology, know-how,
formulae, rights of publicity and other general intangibles of like nature, now
existing or hereafter acquired (including, without limitation, all domestic and
foreign letters patent, design patents, utility patents, industrial designs,
inventions, trade secrets, ideas, concepts, methods, techniques, processes,
proprietary information, technology, know-how and formulae described in Schedule
II hereto), all applications, registrations and recordings thereof (including,
without limitation, applications, registrations and recordings in the United
States Patent and Trademark Office, or in any similar office or agency of the
United States or any other country or any political subdivision thereof), and
all reissues, divisions, continuations, continuations in part and extensions or
renewals thereof.

"Person"

means an individual, corporation, limited liability company, partnership,
association, joint-stock company, trust, unincorporated organization, joint
venture or other enterprise or entity or Governmental Authority.

"Security Documents"

has the meaning set forth in the Securities Purchase Agreement, except that, for
the avoidance of doubt, it shall include all amendments, restatements or other
modifications of such documents.

"Titled Collateral"

means motor vehicles or any asset in which ownership or Liens are evidenced by a
certificate of title or other similar evidence of title.

"Trademark Licenses" means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensor or licensee and providing for
the grant of any right concerning any Trademark, together with any goodwill
connected with and symbolized by any such trademark licenses, contracts or
agreements and the right to prepare for sale or lease and sell or lease any and
all Inventory now or hereafter owned by any Grantor and now or hereafter covered
by such licenses (including, without limitation, all Trademark Licenses
described in Schedule II hereto).

"Trademarks" means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a's,
Internet domain names, trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature, now or hereafter owned,
adopted, acquired or used by any Grantor (including, without limitation, all
domestic and foreign trademarks, service marks, collective marks, certification
marks, trade names, business names, d/b/a's, Internet domain names, trade
styles, designs, logos and other source or business identifiers described in
Schedule II hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together
with all goodwill of the business symbolized by such marks and all customer
lists, formulae and other Records of any Grantor relating to the distribution of
products and services in connection with which any of such marks are used.

Section 2.     Grant of Security Interest. As collateral security for all of the
"Obligations" (as defined in Section 3 hereof), each Grantor hereby pledges and
assigns to the Collateral Agent for the benefit of the Purchasers, and grants to
the Collateral Agent for the benefit of itself and the Purchasers a continuing
security interest in, all personal property and Fixtures of each Grantor,
wherever located and whether now or hereafter existing and whether now owned or
hereafter acquired, of every kind and description, tangible or intangible
(collectively, the "Collateral"), including, without limitation, the following:

(a)     all Accounts;

(b)     all Chattel Paper (whether tangible or electronic);

(c)     the Commercial Tort Claims specified on Schedule VI hereto;

(d)     all Deposit Accounts, all cash and other property from time to time
deposited therein and the monies and property in the possession or under the
control of the Collateral Agent or any Purchaser or any affiliate,
representative, agent or correspondent of the Collateral Agent or any Purchaser;

(e)     all Documents;

(f)     all Equipment;

(g)     all Fixtures;

(h)     all General Intangibles (including, without limitation, all Payment
Intangibles);

(i)     all Goods

(j)     all Instruments (including, without limitation, all Promissory Notes and
each certificated Security);

(k)     all Inventory;

(l)     all Investment Property;

(m)    all Copyrights, Patents and Trademarks, and all Licenses;

(n)     all Letters of Credit and Letter-of-Credit Rights;

(o)     all Supporting Obligations;

(p)     all other tangible and intangible personal property of each Grantor
(whether or not subject to the Code), including, without limitation, all bank
and other accounts and all cash and all investments therein, all proceeds,
products, offspring, accessions, rents, profits, income, benefits, substitutions
and replacements of and to any of the property of any Grantor described in the
preceding clauses of this Section 2 (including, without limitation, any proceeds
of insurance thereon and all causes of action, claims and warranties now or
hereafter held by each Grantor in respect of any of the items listed above), and
all books, correspondence, files and other Records, including, without
limitation, all tapes, desks, cards, Software, data and computer programs in the
possession or under the control of any Grantor or any other Person from time to
time acting for any Grantor, in each case, to the extent of such Grantors rights
therein, that at any time evidence or contain information relating to any of the
property described in the preceding clauses of this Section 2 or are otherwise
necessary or helpful in the collection or realization thereof; and

(q)     all Proceeds, including all Cash Proceeds and Noncash Proceeds, and
products of any and all of the foregoing Collateral;

in each case howsoever any Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).

Notwithstanding anything herein to the contrary, the term "Collateral" shall not
include in the case of a Subsidiary of such Grantor organized under the laws of
a jurisdiction other than the United States, any of the states thereof or the
District of Columbia (a "Foreign Subsidiary"), more than 65% (or such greater
percentage that, due to a change in applicable law after the date hereof, (i)
would not reasonably be expected to cause the undistributed earnings of such
Foreign Subsidiary as determined for United States federal income tax purposes
to be treated as a deemed dividend to such Foreign Subsidiary's United States
parent and (ii) would not reasonably be expected to cause any material adverse
tax consequences) of the issued and outstanding shares of Capital Stock entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) (it being
understood and agreed that the Collateral shall include 100% of the issued and
outstanding shares of Capital Stock not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) or other equity interest of such Foreign
Subsidiary).

The Grantors agree that the pledge of the shares of Capital Stock acquired by a
Grantor of any and all Persons now or hereafter existing who is a Foreign
Subsidiary may in Collateral Agent's sole discretion be supplemented by one or
more separate pledge agreements, deeds of pledge, share charges, or other
similar agreements or instruments, executed and delivered by the relevant
Grantors in favor of the Collateral Agent, which pledge agreements will provide
for the pledge of such shares of Capital Stock in accordance with the laws of
the applicable foreign jurisdiction. With respect to such shares of Capital
Stock, the Collateral Agent may, at any time and from time to time, in its sole
discretion, take actions and require Grantors to take actions in such foreign
jurisdictions that will result in a perfected first priority enforceable Lien
created in such shares of Capital Stock and/or enhanced rights respecting such
Liens or the enforceability, perfection or priority thereof.

Section 3.     Security for Obligations. The security interest created hereby in
the Collateral constitutes continuing collateral security for all of the
following obligations, whether now existing or hereafter incurred (collectively,
the "Obligations"):

(a)      (i) the payment by the Company, as and when due and payable (by
scheduled maturity, required prepayment, acceleration, demand or otherwise), of
all amounts from time to time owing by it in respect of or under the Securities
Purchase Agreement, the Debentures and the other Transaction Documents, and (ii)
in the case of any Guarantors, the payment by such Grantors, as and when due and
payable of all "Guaranteed Obligations" under (and as defined in) the Guaranty,
including, without limitation, in both cases of (i) and (ii), (A) all principal
of and interest on the Debentures (including, without limitation, all interest
that accrues after the commencement of any Insolvency Proceeding of any Grantor,
whether or not the payment of such interest is unenforceable or is not allowable
due to the existence of such Insolvency Proceeding), and (B) all fees,
commissions, expense reimbursements, indemnifications and all other amounts due
or to become due under any of the Transaction Documents, including, without
limitation, attorneys' and fees and expenses of Collateral Agent; and

(b)     the due performance and observance by each Grantor of all of its other
obligations from time to time existing in respect of any of the Transaction
Documents, including without limitation, with respect to any conversion or
redemption rights of the Purchasers under the Debentures.

Section 4.     Representations and Warranties. Each Grantor represents and
warrants as of the date of this Agreement as follows:

(a)     Schedule I hereto sets forth (i) the exact legal name of each Grantor,
and, if any such name has changed within the last 5 years, all predecessor names
of such Grantor, and if such Grantor has consolidated or merged with any Person
in the last 5 years, the name of the Person with whom such Grantor merged or
consolidated, and (ii) the state of incorporation, organization or formation and
the organizational identification number of each Grantor in such state.

(b)     There is no pending or, to its knowledge, written notice threatening any
action, suit, proceeding or claim affecting any Grantor before any governmental
authority or any arbitrator, or any order, judgment or award issued by any
governmental authority or arbitrator, in each case, that may adversely affect
the grant by any Grantor, or the perfection, of the security interest purported
to be created hereby in the Collateral, or the exercise by the Collateral Agent
of any of its rights or remedies hereunder.

(c)     All Federal, state and local tax returns and other reports required by
applicable law to be filed by any Grantor have been filed, or extensions have
been obtained, and all taxes, assessments and other governmental charges imposed
upon any Grantor or any property of any Grantor (including, without limitation,
all federal income and social security taxes on employees' wages) and which have
become due and payable on or prior to the date hereof have been paid, except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with generally accepted accounting principles consistently
applied ("GAAP").

(d)      All Equipment, Fixtures, Goods and Inventory of each Grantor now
existing are, and all Equipment, Fixtures, Goods and Inventory of each Grantor
hereafter existing will be, located and/or based at the addresses specified
therefor in Schedule III hereto. Each Grantor will give the Collateral Agent
written notice of any change in the location of any such Collateral within 20
days of such change, other than to locations set forth on Schedule III hereto
(or a new Schedule III delivered by the Grantors to the Collateral Agent from
time to time) and with respect to which the Collateral Agent has filed financing
statements and otherwise fully perfected its Liens thereon or will take such
actions pursuant to Section 5(a). Each Grantor's chief place of business and
chief executive office, the place where each Grantor keeps its Records
concerning Accounts and all originals of all Chattel Paper are located at the
addresses specified therefor in Schedule III hereto. None of the Accounts is
evidenced by Promissory Notes or other Instruments. Set forth in Schedule IV
hereto is a complete and accurate list, as of the date of this Agreement, of (i)
each Promissory Note, Security and other Instrument owned by each Grantor and
(ii) each Deposit Account, Securities Account and Commodities Account of each
Grantor, together with the name and address of each institution at which each
such account is maintained, the account number for each such account and a
description of the purpose of each such account. Within ten (10) Business Days
of the execution and delivery of this Agreement, Schedule IV hereto shall be
updated by Grantors to reflect the certificate numbers for the Securities. Set
forth in Schedule II hereto is a complete and correct list of each trade name
used by each Grantor and the name of, and each trade name used by, each Person
from which each Grantor has acquired any substantial part of the Collateral.

(e)      Each Grantor has delivered to the Collateral Agent complete and correct
copies of each License described in Schedule II hereto, including all schedules
and exhibits thereto, which represents all of the Licenses existing on the date
of this Agreement. Each such License sets forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof, and
there are no other agreements, arrangements or understandings, written or oral,
relating to the matters covered thereby or the rights of such Grantor or any of
its affiliates in respect thereof. Each material License now existing is, and
any material License entered into in the future will be, the legal, valid and
binding obligation of the parties thereto, enforceable against such parties in
accordance with its terms. No default under any material License by any such
party has occurred, nor does any defense, offset, deduction or counterclaim
exist thereunder in favor of any such party. No Licenseprevents, impairs or
affects Collateral Agent's right to dispose of the Inventory utilizing or
incorporating intellectual property of others and no consent of any Person is
required to be obtained under any License before Collateral Agent disposes of
such Inventory utilizing or incorporating intellectual property of others.

(f)      Each Grantor owns and controls, or otherwise possesses adequate rights
to use, all Trademarks, Patents and Copyrights, which are the only trademarks,
patents, copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae, rights of publicity necessary to conduct its
business in substantially the same manner as conducted as of the date hereof.
Schedule II hereto sets forth a true and complete list of all registered
Copyrights, issued Patents, Trademarks, and Licenses owned or used by each
Grantor as of the date hereof. To the best knowledge of each Grantor, all such
Intellectual Property of each Grantor is subsisting and in full force and
effect, has not been adjudged invalid or unenforceable, is valid and enforceable
and has not been abandoned in whole or in part. Except as set forth in Schedule
II, no such Intellectual Property is the subject of any licensing or franchising
agreement. Each Grantor has no knowledge of any conflict with therights of
others to any such Intellectual Property and, to the best knowledge of each
Grantor, each Grantor is not now infringing or in conflict with any such rights
of others in any material respect, and to the best knowledge of each Grantor, no
other Person is now infringing or in conflict in any material respect with any
such properties, assets and rights owned or used by each Grantor. No Grantor has
received any notice that it is violating or has violated the trademarks,
patents, copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae, rights of publicity or other intellectual
property rights of any third party.

(g)     Each Grantor is and will be at all times the sole and exclusive owner
of, or otherwise has and will have adequate rights in, the Collateral free and
clear of any Liens, except for Permitted Liens. No effective financing statement
or other instrument similar in effect covering all or any part of the Collateral
is on file in any recording or filing office except such as (i) may have been
filed in favor of the Collateral Agent relating to this Agreement or the other
Security Documents and (ii) are described on Schedule V hereto.

(h)     The exercise by the Collateral Agent of any of its rights and remedies
hereunder will not contravene any law, rule or regulation or any contractual
restriction binding on or otherwise affecting each Grantor or any of its
properties and will not result in or require the creation of any Lien, upon or
with respect to any of its properties.

(i)      No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or other regulatory body, is required
for (i) the grant by each Grantor, or the perfection, of the security interest
purported to be created hereby in the Collateral, or (ii) the exercise by the
Collateral Agent of any of its rights and remedies hereunder, except (except
(A) for the filing under the Uniform Commercial Code as in effect in the
applicable jurisdiction of the financing statements described in Schedule VI
hereto (or a new Schedule VI delivered by the Grantors to the Collateral Agent
from time to time), all of which financing statements have been duly filed and
are in full force and effect or will be duly filed and in full force and effect,
(B) with respect to Deposit Accounts, and all cash and other property from time
to time deposited therein, for the execution of a control agreement with the
depository institution with which such account is maintained, as provided in
Section 5(i), (C) with respect to Commodity Contracts, for the execution of a
control agreement with the commodity intermediary with which such commodity
contract is carried, as provided in Section 5(i), (D) with respect to the
perfection of the security interest created hereby in the United States
Intellectual Property and Licenses, for the recording of the appropriate
Assignment for Security, substantially in the form of Exhibit A hereto in the
United States Patent and Trademark Office or the United States Copyright Office,
as applicable, (E) with respect to the perfection of the security interest
created hereby in foreign Intellectual Property and Licenses, for registrations
and filings in jurisdictions located outside of the United States and covering
rights in such jurisdictions relating to such foreign Intellectual Property and
Licenses, (F) with respect to the perfection of the security interest created
hereby in Titled Collateral, for the submission of an appropriate application
requesting that the Lien of the Collateral Agent be Debentured on the
Certificate of Title or certificate of ownership, completed and authenticated by
the applicable Grantor, together with the Certificate of Title or certificate of
ownership, with respect to such Titled Collateral, to the appropriate
governmental authority, (G) with respect to the perfection of the security
interest created hereby in any Letter-of-Credit Rights, for the consent of the
issuer of the applicable letter of credit to the assignment of proceeds as
provided in the Uniform Commercial Code as in effect in the applicable
jurisdiction, (H) with respect to any action that may be necessary to obtain
control of Collateral constituting Deposit Accounts, Commodity Contracts,
Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights, the
taking of such actions, and (I) the Collateral Agent having possession of all
Documents, Chattel Paper, Instruments and cash constituting Collateral
(subclauses (A), (B), (C), (D), (E), (F), G), (H) and (I), each a "Perfection
Requirement" and collectively, the "Perfection Requirements").

(j)      This Agreement creates in favor of the Collateral Agent a legal, valid
and enforceable security interest in the Collateral, as security for the
Obligations. The Perfection Requirements result in the perfection of such
security interests. Such security interests are, or in the case of Collateral in
which each Grantor obtains rights after the date hereof, will be, perfected,
first priority security interests, subject only to Permitted Liens and the
Perfection Requirements and the financing statements described in Schedule 4(g).
Such recordings and filings and all other action necessary to perfect and
protect such security interest have been duly taken or will be taken pursuant to
Section 5(n), and, in the case of Collateral in which each Grantor obtains
rights after the date hereof, will be duly taken, except for the Collateral
Agent's having possession of all Documents, Chattel Paper, Instruments and cash
constituting Collateral after the date hereof and the other actions, filings and
recordations described above, including the Perfection Requirements.

(k)     As of the date hereof, no Grantor holds any Commercial Tort Claims or
has knowledge of any pending Commercial Tort Claims, except for such Commercial
Tort Claims described in Schedule VII.

(l)     No Grantor owns any interest in real property except as set forth on
Schedule VIII and Schedule VIII accurately reflects the name, address and
contact information of all landlords that lease real property to any Grantor.

Section 5.     Covenants as to the Collateral. So long as any of the Obligations
shall remain outstanding, unless the Collateral Agent shall otherwise consent in
writing:

(a)      Further Assurances. Each Grantor will at its expense, at any time and
from time to time, promptly execute and deliver all further instruments and
documents and take all further action that the Collateral Agent may reasonably
request in order to: (i) perfect and protect the security interest purported to
be created hereby; (ii) enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder in respect of the Collateral; or (iii) otherwise
effect the purposes of this Agreement, including, without limitation: (A)
marking conspicuously all Chattel Paper and each License and, at the request of
the Collateral Agent, each of its Records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Collateral Agent, indicating
that such Chattel Paper, License or Collateral is subject to the security
interest created hereby, (B) delivering and pledging to the Collateral Agent
pursuant to the Pledge each Promissory Note, Security, Chattel Paper or other
Instrument, now or hereafter owned by any Grantor, duly endorsed and accompanied
by executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent, (C) executing and filing (to the extent,
if any, that any Grantor's signature is required thereon) or authenticating the
filing of, such financing or continuation statements, or amendments thereto, as
may be necessary or that the Collateral Agent may reasonably request in order to
perfect and preserve the security interest purported to be created hereby, (D)
furnishing to the Collateral Agent from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral in each case as the Collateral Agent may
reasonably request, all in reasonable detail, (E) if any Collateral shall be in
the possession of a third party, or in premises of a third party, notifying such
Person of the Collateral Agent's security interest created hereby and obtaining
a written agreement in form and substance satisfactory to the Collateral Agent
from such Person providing access to such Collateral in order to remove such
Collateral from such premises during an Event of Default and acknowledging that
such Person holds possession of the Collateral for the benefit of the Collateral
Agent, and agreeing to such other matters as Collateral Agent may reasonably
require; (F) if at any time after the date hereof, any Grantor acquires or holds
any Commercial Tort Claim, promptly notifying the Collateral Agent in a writing
signed by such Grantor setting forth a brief description of such Commercial Tort
Claim and granting to the Collateral Agent a security interest therein and in
the proceeds thereof, which writing shall incorporate the provisions hereof and
shall be in form and substance satisfactory to the Collateral Agent, (G) upon
the acquisition after the date hereof by any Grantor of any motor vehicle or
other Equipment subject to a certificate of title or ownership (other than a
Motor Vehicle or Equipment that is subject to a purchase money security
interest), causing the Collateral Agent to be listed as the lienholder on such
certificate of title or ownership and delivering evidence of the same to the
Collateral Agent in accordance with Section 5(j) hereof; and (H) taking all
actions required by any earlier versions of the Uniform Commercial Code or by
other law, as applicable, in any relevant Uniform Commercial Code jurisdiction,
or by other law as applicable in any foreign jurisdiction (I) fulfilling the
Perfection Requirements; and (J) obtaining consents from licensors under any
Licenses so that the Collateral Agent can dispose of Inventory incorporating or
utilizing intellectual property of others, in form and substance satisfactory to
Collateral Agent.

(b)     Location of Equipment and Inventory. Each Grantor will keep the
Equipment and Inventory (i) at the locations specified therefor on Schedule III
hereto, or (ii) at such other locations set forth on Schedule III (or a new
Schedule III delivered by the Grantors to Collateral Agent from time to time)
and with respect to which the Collateral Agent has filed financing statements
and otherwise fully perfected its Liens thereon, or (iii) at such other
locations in the United States, provided that within 20 days following the
relocation of Equipment or Inventory to such other location or the acquisition
of Equipment or Inventory, such Grantor shall deliver to the Collateral Agent a
new Schedule III indicating such new locations.

(c)     Condition of Equipment. Each Grantor will maintain or cause the
Equipment (necessary or useful to its business) to be maintained and preserved
in good condition, repair and working order, ordinary wear and tear excepted,
and will forthwith, or in the case of any loss or damage to any Equipment of any
Grantor within a commercially reasonable time after the occurrence thereof, make
or cause to be made all repairs, replacements and other improvements in
connection therewith which are necessary or desirable, consistent with past
practice, or which the Collateral Agent may request to such end. Any Grantor
will promptly furnish to the Collateral Agent a statement describing in
reasonable detail any such loss or damage in excess of $250,000 per occurrence
to any Equipment.

(d)     Taxes, Etc. Each Grantor agrees to pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against, the
Equipment and Inventory, except to the extent the validity thereof is being
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves in accordance with GAAP have been set aside for the
payment thereof.

(e)     Insurance.

(i)      Each Grantor will, at its own expense, maintain insurance (including,
without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties in such amounts, against
such risks, in such form and with responsible and reputable insurance companies
or associations as is required by any governmental authority having jurisdiction
with respect thereto or as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated and in
any event, in amount, adequacy and scope reasonably satisfactory to the
Collateral Agent. To the extent requested by the Collateral Agent at any time
and from time to time, each such policy for liability insurance shall provide
for all losses to be paid on behalf of the Collateral Agent and any Grantor as
their respective interests may appear, and each policy for property damage
insurance shall provide for all losses to be adjusted with, and paiddirectly to,
the Collateral Agent. To the extent requested by the Collateral Agent at any
time and from time to time, each such policy shall in addition (A) name the
Collateral Agent as an additional insured party thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as their
interests may appear, (B) contain an agreement by the insurer that any loss
thereunder shall be payable to the Collateral Agent on its own account
notwithstanding any action, inaction or breach of representation or warranty by
any Grantor, (C) provide that there shall be no recourse against the Collateral
Agent for payment of premiums or other amounts with respect thereto, and (D)
provide that at least 30 days' prior written notice of cancellation, lapse,
expiration or other adverse change shall be given to the Collateral Agent by the
insurer. Any Grantor will, if so requested by the Collateral Agent, deliver to
the Collateral Agent original or duplicate policies of such insurance and, as
often as the Collateral Agent may reasonably request, a report of a reputable
insurance broker with respect to such insurance. Any Grantor will also, at the
request of the Collateral Agent, execute and deliver instruments of assignment
of such insurance policies and cause the respective insurers to acknowledge
notice of such assignment.

(ii)     Reimbursement under any liability insurance maintained by any Grantor
pursuant to this Section 5(e) may be paid directly to the Person who shall have
incurred liability covered by such insurance. To the extent required by the
Collateral Agent, the case of any loss involving damage to Equipment or
Inventory, any proceeds of insurance maintained by any Grantor pursuant to this
Section 5(e) shall be paid to the Collateral Agent (except as to which paragraph
(iii) of this Section 5(e) is not applicable), any Grantor will make or cause to
be made the necessary repairs to or replacements of such Equipment or Inventory,
and any proceeds of insurance maintained by any Grantor pursuant to this Section
5(e) shall be paid by the Collateral Agent to any Grantor as reimbursement for
the costs of such repairs or replacements.

(iii)     Following and during the continuance of an Event of Default, all
insurance payments in respect of such Equipment or Inventory shall be paid to
the Collateral Agent and applied as specified in Section 7(b) hereof.

(f)     Provisions Concerning the Accounts and the Licenses.

(i)     Each Grantor will (A) give the Collateral Agent at least 30 days' prior
written notice of any change in such Grantor's name, identity or organizational
structure, (B) maintain its jurisdiction of incorporation, organization or
formation as set forth in Schedule I hereto, (C) immediately notify the
Collateral Agent upon obtaining an organizational identification number, if on
the date hereof such Grantor did not have such identification number, and (D)
keep adequate records concerning the Accounts and Chattel Paper and permit
representatives of the Collateral Agent during normal business hours on
reasonable notice to such Grantor, to inspect and make abstracts from such
Records and Chattel Paper.

(ii)      Each Grantor will, except as otherwise provided in this subsection
(f), continue to collect, at its own expense, all amounts due or to become due
under the Accounts. In connection with such collections, any Grantor may (and,
at the Collateral Agent's direction, will) take such action as any Grantor or
the Collateral Agent may deem necessary or advisable to enforce collection or
performance of the Accounts; provided, however, that the Collateral Agent shall
have the right at any time, upon the occurrence and during the continuance of an
Event of Default, to notify the account debtors or obligors under any Accounts
of the assignment of such Accounts to the Collateral Agent and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to any Grantor thereunder directly to the Collateral Agent or its designated
agent and, upon such notification and at the expense of any Grantor and to the
extent permitted by law, to enforce collection of any such Accounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as any Grantor might have done. After receipt by any
Grantor of a notice from the Collateral Agent that the Collateral Agent has
notified, intends to notify, or has enforced or intends to enforce any Grantor's
rights against the account debtors or obligors under any Accounts as referred to
in the proviso to the immediately preceding sentence, (A) all amounts and
proceeds (including Instruments) received by any Grantor in respect of the
Accounts shall be received in trust for the benefit of the Collateral Agent
hereunder, shall be segregated from other funds of any Grantor and shall be
forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary endorsement) to be applied as specified in Section 7(b)
hereof, and (B) no Grantor will adjust, settle or compromise the amount or
payment of any Account or release wholly or partly any account debtor or obligor
thereof or allow any credit or discount thereon. In addition, upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent may (in its sole and absolute discretion) direct any or all of the banks
and financial institutions with which any Grantor either maintains a Deposit
Account or a lockbox or deposits the proceeds of any Accounts to send
immediately to the Collateral Agent by wire transfer (to such account as the
Collateral Agent shall specify, or in such other manner as the Collateral Agent
shall direct) all or a portion of such securities, cash, investments and other
items held by such institution. Any such securities, cash, investments and other
items so received by the Collateral Agent shall be applied as specified in
accordance with Section 7(b) hereof.

(iii)     Upon the occurrence and during the continuance of any breach or
default under any material License referred to in Schedule II hereto by any
party thereto other than any Grantor, each Grantor party thereto will, promptly
after obtaining knowledge thereof, give the Collateral Agent written notice of
the nature and duration thereof, specifying what action, if any, it has taken
and proposes to take with respect thereto and thereafter will take reasonable
steps to protect and preserve its rights and remedies in respect of such breach
or default, or will obtain or acquire an appropriate substitute License.

(iv)     Each Grantor will, at its expense, promptly deliver to the Collateral
Agent a copy of each notice or other communication received by it by which any
other party to any material License referred to in Schedule II hereto purports
to exercise any of its rights or affect any of its obligations thereunder,
together with a copy of any reply by such Grantor thereto.

(v)     Each Grantor will exercise promptly and diligently each and every right
which it may have under each material License (other than any right of
termination) and will duly perform and observe in all respects all of its
obligations under each material License and will take all action reasonably
necessary to maintain such Licenses in full force and effect. No Grantor will,
without the prior written consent of the Collateral Agent, cancel, terminate,
amend or otherwise modify in any respect, or waive any provision of, any
material License referred to in Schedule II hereto.

(g)     Transfers and Other Liens.

(i)     Subject to Section 6(c) hereof, no Grantor will sell, assign (by
operation of law or otherwise), lease, license, exchange or otherwise transfer
or dispose of any of the Collateral, except (A) Inventory in the ordinary course
of business, (B) worn out or obsolete Equipment, not necessary to the business
and (C) Fundamental Transactions (as defined in the Debentures) so long as the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Debentures and the Warrants.

(ii)     No Grantor will create, suffer to exist or grant any Lien upon or with
respect to any Collateral other than a Permitted Lien.

(h)     Intellectual Property.

(i)      If applicable, any Grantor shall, upon the Collateral Agent's written
request, duly execute and deliver the applicable Assignment for Security in the
form attached hereto as Exhibit A. Each Grantor (either itself or through
licensees) will, and will cause each licensee thereof to, take all action
necessary to maintain all of the Intellectual Property in full force and effect,
including, without limitation, using the proper statutory notices and markings
and using the Trademarks on each applicable trademark class of goods in order to
so maintain the Trademarks in full force and free from any claim of abandonment
for non-use, and each Grantor will not (nor permit any licensee thereof to) do
any act or knowingly omit to do any act whereby any Intellectual Property may
become invalidated; provided, however, that so long as no Event of Default has
occurred and is continuing, no Grantor shall have an obligation to use or to
maintain any Intellectual Property (A) that relates solely to any product or
work, that has been, or is in the process of being, discontinued, abandoned or
terminated, (B) that is being replaced with Intellectual Property substantially
similar to the Intellectual Property that may be abandoned or otherwise become
invalid, so long as the failure to use or maintain such Intellectual Property
does not materially adversely affect the validity of such replacement
Intellectual Property and so long as such replacement Intellectual Property is
subject to the Lien created by this Agreement or (C) that is substantially the
same as another Intellectual Property that is in full force, so long the failure
to use or maintain such Intellectual Property does not materially adversely
affect the validity of such replacement Intellectual Property and so long as
such other Intellectual Property is subject to the Lien and security interest
created by this Agreement. Each Grantor will cause to be taken all necessary
steps in any proceeding before the United States Patent and Trademark Office and
the United States Copyright Office or any similar office or agency in any other
country or political subdivision thereof to maintain each registration of the
Intellectual Property (other than the Intellectual Property described in the
proviso to the immediately preceding sentence), including, without limitation,
filing of renewals, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and payment of maintenance
fees, filing fees, taxes or other governmental fees. If any Intellectual
Property (other than Intellectual Property described in the proviso to the first
sentence of subsection (i) of this clause (h)) is infringed, misappropriated,
diluted or otherwise violated in any material respect by a third party, each
Grantor shall (x) upon learning of such infringement, misappropriation, dilution
or other violation, promptly notify the Collateral Agent and (y) to the extent
any Grantor shall deem appropriate under the circumstances, promptly sue for
infringement, misappropriation, dilution or other violation, seek injunctive
relief where appropriate and recover any and all damages for such infringement,
misappropriation, dilution or other violation, or take such other actions as
such Grantor shall deem appropriate under the circumstances to protect such
Intellectual Property. Each Grantor shall furnish to the Collateral Agent from
time to time upon its request statements and schedules further identifying and
describing the Intellectual Property and Licenses and such other reports in
connection with the Intellectual Property and Licenses as the Collateral Agent
may reasonably request, all in reasonable detail and promptly upon request of
the Collateral Agent, following receipt by the Collateral Agent of any such
statements, schedules or reports, each Grantor shall modify this Agreement by
amending Schedule II hereto, as the case may be, to include any Intellectual
Property and License, as the case may be, which becomes part of the Collateral
under this Agreement and shall execute and authenticate such documents and do
such acts as shall be necessary or, in the reasonable judgment of the Collateral
Agent, desirable to subject such Intellectual Property and Licenses to the Lien
and security interest created by this Agreement. Notwithstanding anything herein
to the contrary, upon the occurrence and during the continuance of an Event of
Default, no Grantor may abandon or otherwise permit any Intellectual Property to
become invalid without the prior written consent of the Collateral Agent, and if
any Intellectual Property is infringed, misappropriated, diluted or otherwise
violated in any material respect by a third party, each Grantor will take such
action as the Collateral Agent shall deem appropriate under the circumstances to
protect such Intellectual Property.

(ii)      In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for the registration of any
Trademark or Copyright or the issuance of any Patent with the United States
Patent and Trademark Office or the United States Copyright Office, as
applicable, or in any similar office or agency of the United States or any
country or any political subdivision thereof unless it gives the Collateral
Agent prior written notice thereof. Upon request of the Collateral Agent, any
Grantor shall execute, authenticate and deliver any and all assignments,
agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's security interest
hereunder in such Intellectual Property and the General Intangibles of any
Grantor relating thereto or represented thereby, and each Grantor hereby
appoints the Collateral Agent its attorney-in-fact to execute and/or
authenticate and file all such writings for the foregoing purposes, all acts of
such attorney being hereby ratified and confirmed, and such power (being coupled
with an interest) shall be irrevocable until the indefeasible payment in full in
cash of all of the Obligations in full.

(i)      Deposit, Commodities and Securities Accounts. Upon the Collateral
Agent's written request each Grantor shall cause each bank and other financial
institution where an account referred to in Schedule IV hereto is maintained to
execute and deliver to the Collateral Agent a control agreement, in form and
substance reasonably satisfactory to the Collateral Agent, duly executed by each
Grantor and such bank or financial institution, or enter into other arrangements
in form and substance satisfactory to the Collateral Agent, pursuant to which
such institution shall irrevocably agree, inter alia, that (i) it will comply at
any time with the instructions originated by the Collateral Agent to such bank
or financial institution directing the disposition of cash, Commodity Contracts,
securities, Investment Property and other items from time to time credited to
such account, without the consent of the applicable Grantor, which instructions
the Collateral Agent will not give to such bank or other financial institution
in the absence of a continuing Event of Default, (ii) all Commodity Contracts,
securities, Investment Property and other items of each Grantor deposited with
such institution shall be subject to a perfected, first priority security
interest in favor of the Collateral Agent, (iii) any right of set off (other
than recoupment of standard fees), banker's Lien or other similar Lien, security
interest or encumbrance shall be fully waived as against the Collateral Agent,
and (iv) upon receipt of written notice from the Collateral Agent during the
continuance of an Event of Default, such bank or financial institution shall
immediately send to the Collateral Agent by wire transfer (to such account as
the Collateral Agent shall specify, or in such other manner as the Collateral
Agent shall direct) all such cash, the value of any Commodity Contracts,
securities, Investment Property and other items held by it. Without the prior
written consent of the Collateral Agent, each Grantor shall not make or maintain
any Deposit Account, Commodity Account or Securities Account except for the
accounts set forth in Schedule IV hereto. The provisions of this paragraph 5(i)
shall not apply to (i) Deposit Accounts for which the Collateral Agent is the
depositary and (ii) Deposit Accounts specially and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of each Grantor's salaried or hourly employees.

(j)     Motor Vehicles.

(i)     Upon the Collateral Agent's written request, each Grantor shall deliver
to the Collateral Agent originals of the certificates of title or ownership for
all motor vehicles with a value in excess of $50,000, owned by it with the
Collateral Agent listed as lienholder, for the benefit of itself and the
Purchasers.

(ii)      Each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact, effective the date hereof and terminating upon the termination
of this Agreement, for the purpose of (A) executing on behalf of such Grantor
title or ownership applications for filing with appropriate state agencies to
enable motor vehicles now owned or hereafter acquired by such Grantor to be
retitled and the Collateral Agent listed as lienholder thereof, (B) filing such
applications with such state agencies, and (C) executing such other documents
and instruments on behalf of, and taking such other action in the name of, such
Grantor as the Collateral Agent may deem necessary or advisable to accomplish
the purposes hereof (including, without limitation, for the purpose of creating
in favor of the Collateral Agent a perfected Lien on the motor vehicles and
exercising the rights and remedies of the Collateral Agent hereunder). This
appointment as attorney-in-fact is coupled with an interest and is irrevocable
until all of the Obligations are indefeasibly paid in full in cash.

(iii)     Any certificates of title or ownership delivered pursuant to the terms
hereof shall be accompanied by odometer statements for each motor vehicle
covered thereby.

(iv)   So long as no Event of Default shall have occurred and be continuing,
upon the request of any Grantor, the Collateral Agent shall execute and deliver
to any Grantor such instruments as any Grantor shall reasonably request to
remove the notation of the Collateral Agent as lienholder on any certificate of
title for any motor vehicle; provided, however, that any such instruments shall
be delivered, and the release effective, only upon receipt by the Collateral
Agent of a certificate from any Grantor stating that such motor vehicle is to be
sold or has suffered a casualty loss (with title thereto in such case passing to
the casualty insurance company therefor in settlement of the claim for such
loss) and the amount that any Grantor will receive as sale proceeds or insurance
proceeds. Any proceeds of such sale or casualty loss shall be paid to the
Collateral Agent hereunder immediately upon receipt, to be applied to the
Obligations then outstanding.

(k)     Control. Each Grantor hereby agrees to take any or all action that may
be necessary or that the Collateral Agent may reasonably request in order for
the Collateral Agent to obtain control in accordance with Sections 9-105 - 9-107
of the Code with respect to the following Collateral: (i) Electronic Chattel
Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.

(l)      Inspection and Reporting. Each Grantor shall permit the Collateral
Agent, or any agent or representatives thereof or such professionals or other
Persons as the Collateral Agent may designate, during normal business hours,
after reasonable notice in the absence of an Event of Default and not more than
three times a year in the absence of an Event of Default at Grantor's expense,
(i) to examine and make copies of and abstracts from any Grantor's records and
books of account, (ii) to visit and inspect its properties, (iii) to verify
materials, leases, Instruments, Accounts, Inventory and other assets of any
Grantor from time to time, (iii) to conduct audits, physical counts, appraisals
and/or valuations, examinations at the locations of any Grantor. Each Grantor
shall also permit the Collateral Agent, or any agent or representatives thereof
or such professionals or other Persons as the Collateral Agent may designate to
discuss such Grantor's affairs, finances and accounts with any of its directors,
officers, managerial employees, independent accountants or any of its other
representatives.

(m)      Future Subsidiaries. If any Grantor shall hereafter create or acquire
any Subsidiary other than a Foreign Subsidiary, simultaneously with the creation
or acquisition of such Subsidiary, such Grantor shall (i) cause such Subsidiary
to become a party to this Agreement as an additional "Grantor" hereunder, (ii)
such Grantor shall deliver to Collateral Agent revised Schedules to this
Agreement, as appropriate, (iii) shall duly execute and deliver a guaranty of
the Obligations in favor of the Collateral Agent in form and substance
reasonably acceptable to the Collateral Agent, and (iv) shall duly execute
and/or deliver such opinions of counsel and other documents, in form and
substance reasonably acceptable to the Collateral Agent, as the Collateral Agent
shall reasonably request with respect thereto, provided that any Grantor that
acquires a subsidiary on or within two days after the Closing Date shall have 10
Business Days in which to satisfy the requirements of this Section 5(m).

Section 6.     Additional Provisions Concerning the Collateral.

(a)      To the maximum extent permitted by applicable law, and for the purpose
of taking any action that the Collateral Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes
the Collateral Agent to execute any agreements, instruments or other documents
in such Grantor's name and to file such agreements, instruments or other
documents in such Grantor's name and in any appropriate filing office, (ii)
authorizes the Collateral Agent at any time and from time to time to file, one
or more financing or continuation statements, and amendments thereto, relating
to the Collateral (including, without limitation, any such financing statements
that (A) describe the Collateral as "all assets" or "all personal property" (or
words of similar effect) or that describe or identify the Collateral by type or
in any other manner as the Collateral Agent may determine regardless of whether
any particular asset of such Grantor falls within the scope of Article 9 of the
Uniform Commercial Code or whether any particular asset of such Grantor
constitutes part of the Collateral, and (B) contain any other information
required by Part 5 of Article 9 of the Code for the sufficiency or filing office
acceptance of any financing statement, continuation statement or amendment,
including, without limitation, whether such Grantor is an organization, the type
of organization and any organizational identification number issued to such
Grantor) and (iii) ratifies such authorization to the extent that the Collateral
Agent has filed any such financing or continuation statements, or amendments
thereto, prior to the date hereof. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.

(b)      Each Grantor hereby irrevocably appoints the Collateral Agent as its
attorney-in-fact and proxy, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, from time to time in the
Collateral Agent's discretion, so long as an Event of Default shall have
occurred and is continuing, to take any action and to execute any instrument
which the Collateral Agent may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement (subject to the rights of each Grantor
under Section 5 hereof), including, without limitation, (i) to obtain and adjust
insurance required to be paid to the Collateral Agent pursuant to Section 5(e)
hereof, (ii) to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (iii) to receive, endorse, and collect any drafts or
other Instruments, Documents and Chattel Paper in connection with clause (i) or
(ii) above, (iv) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for the
collection of any Collateral or otherwise to enforce the rights of the
Collateral Agent and the Purchasers with respect to any Collateral, and (v) to
execute assignments, licenses and other documents to enforce the rights of the
Collateral Agent and the Purchasers with respect to any Collateral. This power
is coupled with an interest and is irrevocable until all of the Obligations are
indefeasibly paid in full in cash.

(c)      For the purpose of enabling the Collateral Agent to exercise rights and
remedies hereunder, at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Grantor hereby grants to the Collateral Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to any Grantor) to use, assign, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, wherever
the same may be located, including in such license reasonable access to all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof. Notwithstanding
anything contained herein to the contrary, but subject to the provisions of the
Transaction Documents that limit the right of any Grantor to dispose of its
property and Section 5(h) hereof, so long as no Event of Default shall have
occurred and be continuing, any Grantor may exploit, use, enjoy, protect,
license, sublicense, assign, sell, dispose of or take other actions with respect
to the Intellectual Property in the ordinary course of its business. In
furtherance of the foregoing, unless an Event of Default shall have occurred and
be continuing, the Collateral Agent shall from time to time, upon the request of
any Grantor, execute and deliver any instruments, certificates or other
documents, in the form so requested, which such Grantor shall have certified are
appropriate (in such Grantor's judgment) to allow it to take any action
permitted above (including relinquishment of the license provided pursuant to
this clause (c) as to any Intellectual Property). Further, upon the indefeasible
payment in full in cash of all of the Obligations, the Collateral Agent (subject
to Section 10(e) hereof) shall release and reassign to any Grantor all of the
Collateral Agent's right, title and interest in and to the Intellectual
Property, and the Licenses, all without recourse, representation or warranty
whatsoever. The exercise of rights and remedies hereunder by the Collateral
Agent shall not terminate the rights of the holders of any licenses or
sublicenses theretofore granted by each Grantor in accordance with the second
sentence of this clause (c). Each Grantor hereby releases the Collateral Agent
from any claims, causes of action and demands at any time arising out of or with
respect to any actions taken or omitted to be taken by the Collateral Agent
under the powers of attorney granted herein other than actions taken or omitted
to be taken through the Collateral Agent's gross negligence or willful
misconduct, as determined by a final determination of a court of competent
jurisdiction.

(d)     If any Grantor fails to perform any agreement or obligation contained
herein, the Collateral Agent may itself perform, or cause performance of, such
agreement or obligation, in the name of such Grantor or the Collateral Agent,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by such Grantor pursuant to Section 8 hereof and shall be secured by
the Collateral.

(e)     The powers conferred on the Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.

(f)     Anything herein to the contrary notwithstanding (i) each Grantor shall
remain liable under the Licenses and otherwise with respect to any of the
Collateral to the extent set forth therein to perform all of its obligations
thereunder to the same extent as if this Agreement had not been executed, (ii)
the exercise by the Collateral Agent of any of its rights hereunder shall not
release any Grantor from any of its obligations under the Licenses or otherwise
in respect of the Collateral, and (iii) the Collateral Agent shall not have any
obligation or liability by reason of this Agreement under the Licenses or with
respect to any of the other Collateral, nor shall the Collateral Agent be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.

Section 7.     Remedies Upon Event of Default. If any Event of Default shall
have occurred and be continuing:

(a)      The Collateral Agent may exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party upon default
under the Code (whether or not the Code applies to the affected Collateral) or
other applicable Uniform Commercial Code and any other applicable law, and also
may (i) take absolute control of the Collateral, including, without limitation,
transfer into the Collateral Agent's name or into the name of its nominee or
nominees (to the extent the Collateral Agent has not theretofore done so) and
thereafter receive, for the benefit of the Collateral Agent, all payments made
thereon, give all consents, waivers and ratifications in respect thereof and
otherwise act with respect thereto as though it were the outright owner thereof,
(ii) require each Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Collateral Agent forthwith,assemble all or part
of its respective Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place or places to be designated by the
Collateral Agent that is reasonably convenient to both parties, and the
Collateral Agent may enter into and occupy any premises owned or leased by any
Grantor where the Collateral or any part thereof is located or assembled for a
reasonable period in order to effectuate the Collateral Agent's rights and
remedies hereunder or under law, without obligation to any Grantor in respect of
such occupation, and (iii) without notice except as specified below and without
any obligation to prepare or process the Collateral for sale, (A) sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Collateral Agent's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
the Collateral Agent may deem commercially reasonable and/or (B) lease, license
or dispose of the Collateral or any part thereof upon such terms as the
Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to
the extent notice of sale or any other disposition of its respective Collateral
shall be required by law, at least ten (10) days' notice to any Grantor of the
time and place of any public sale or the time after which any private sale or
other disposition of its respective Collateral is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make any
sale or other disposition of any Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against the Collateral Agent
and the Purchasers arising by reason of the fact that the price at which its
respective Collateral may have been sold at a private sale was less than the
price which might have been obtained at a public sale or was less than the
aggregate amount of the Obligations, even if the Collateral Agent accepts the
first offer received and does not offer such Collateral to more than one
offeree, and waives all rights that any Grantor may have to require that all or
any part of such Collateral be marshaled upon any sale (public or private)
thereof. Each Grantor hereby acknowledges that (i) any such sale of its
respective Collateral by the Collateral Agent shall be made without warranty,
(ii) the Collateral Agent may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like, and (iii) such actions set forth in
clauses (i) and (ii) above shall not adversely affect the commercial
reasonableness of any such sale of Collateral. In addition to the foregoing, (1)
upon written notice to any Grantor from the Collateral Agent after and during
the continuance of an Event of Default, such Grantor shall cease any use of the
Intellectual Property or any trademark, patent or copyright similar thereto for
any purpose described in such notice; (2) the Collateral Agent may, at any time
and from time to time after and during the continuance of an Event of Default,
upon 10 days' prior notice to such Grantor, license, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any of the
Intellectual Property, throughout the universe for such term or terms, on such
conditions, and in such manner, as the Collateral Agent shall in its sole
discretion determine; and (3) the Collateral Agent may, at any time, pursuant to
the authority granted in Section 6 hereof (such authority being effective upon
the occurrence and during the continuance of an Event of Default), execute and
deliver on behalf of such Grantor, one or more instruments of assignment of the
Intellectual Property (or any application or registration thereof), in form
suitable for filing, recording or registration in any country.

(b)     Any cash held by the Collateral Agent as Collateral and all Cash
Proceeds received by the Collateral Agent in respect of any sale of or
collection from, or other realization upon, all or any part of the Collateral
shall be applied (after payment of any amounts payable to or for the benefit of
the Collateral Agent pursuant to Section 8 hereof) by the Collateral Agent
against, all or any part of the Obligations in such order as the Collateral
Agent shall elect, consistent with Section 4.12 of the Securities Purchase
Agreement. Any surplus of such cash or Cash Proceeds held by the Collateral
Agent and remaining after the indefeasible payment in full in cash of all of the
Obligations shall be paid over to whomsoever shall be lawfully entitled to
receive the same or as a court of competent jurisdiction shall direct.

(c)     In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Collateral Agent
and the Purchasers are legally entitled, each Grantor shall be liable for the
deficiency, together with interest thereon at the highest rate specified in the
Debentures for interest on overdue principal thereof or such other rate as shall
be fixed by applicable law, together with the costs of collection and the
reasonable fees, costs, expenses and other client charges of any attorneys or
agents employed by the Collateral Agent to collect such deficiency.

(d)     Each Grantor hereby acknowledges that if the Collateral Agent complies
with any applicable state, provincial, or federal law requirements in connection
with a disposition of the Collateral, such compliance will not adversely affect
the commercial reasonableness of any sale or other disposition of the
Collateral.

(e) The Collateral Agent shall not be required to marshal any present or future
collateral security (including, but not limited to, this Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of the Collateral Agent's rights hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that any Grantor lawfully may, each Grantor hereby agrees that it
will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of the Collateral Agent's rights under
this Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, each Grantor hereby irrevocably waives the
benefits of all such laws.

(f)     Collateral Agent has no obligation to clean-up or otherwise prepare the
Collateral for sale.

(g)     Collateral Agent has no obligation to attempt to satisfy the Obligations
by collecting them from any other Person liable for them and Collateral Agent
may release, modify or waive any collateral provided by any other Person to
secure any of the Obligations, all without affecting Collateral Agent's rights
against Grantors. Each Grantor waives any right it may have to require Agent or
Purchaser to pursue any third Person for any of the Obligations.

(h)     In the event the Collateral Agent seeks to take possession of all or any
portion of the Collateral by judicial process, each Grantor irrevocably waives
(i) the posting of any bond, surety or security with respect thereto which might
otherwise be required, (ii) any demand for possession prior to the commencement
of any suit or action to recover the Collateral, and (iii) any requirement that
the Collateral Agent retain possession and not dispose of any Collateral until
after trial or final judgment.

(i)     The enumeration of the foregoing rights and remedies is not intended to
be exclusive, and such rights and remedies are in addition to and not by way of
limitation of any other rights or remedies the Collateral Agent or the
Purchasers may have under the UCC or other applicable law or any of the
Transaction Documents. The Collateral Agent shall have the right, in its sole
discretion, to determine which rights and remedies, and in which order any of
the same, are to be exercised, and to determine which Collateral is to be
proceeded against and in which order and the exercise of any right or remedy
shall not preclude the exercise of any others, all of which shall be cumulative.

Section 8.     Indemnity and Expenses.

(a)     Each Grantor agrees, jointly and severally, to defend, protect,
indemnify and hold the Collateral Agent and each of the Purchasers, jointly and
severally, harmless from and against any and all claims, damages, losses,
liabilities, obligations, penalties, fees, costs and expenses (including,
without limitation, reasonable legal fees, costs, expenses, and disbursements of
such Person's counsel) to the extent that they arise out of or otherwise result
from this Agreement or any other Security Document (including, without
limitation, enforcement of this Agreement or any other Security Document),
except to the extent resulting from such Person's gross negligence or willful
misconduct, as determined by a final judgment of a court of competent
jurisdiction.

(b)     Each Grantor agrees, jointly and severally, to pay to the Collateral
Agent upon demand the amount of any and all costs and expenses, including the
reasonable fees, costs, expenses and disbursements of counsel for the Collateral
Agent and of any experts and agents (including, without limitation, any
collateral trustee which may act as agent of the Collateral Agent), which the
Collateral Agent may incur in connection with (i) the recordation,
administration, amendment, waiver or other modification or termination of this
Agreement or any other Security Document, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent hereunder or any other Security Document, or (iv) the failure
by any Grantor to perform or observe any of the provisions hereof or any other
Security Document.

Section 9.     Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be given in accordance with the
requirements of the Securities Purchase Agreement and shall be effective on the
terms set forth therein, if to any Grantor, to it at the address specified for
the Company in the Securities Purchase Agreement, if to the Collateral Agent to
it, at its address specified on the signature pages below; or as to any such
Person, at such other address as shall be designated by such Person in a written
notice to all other parties hereto complying as to delivery with the terms of
this Section 9.

Section 10.     Miscellaneous.

(a)     No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by each Grantor and the Collateral Agent, and
no waiver of any provision of this Agreement, and no consent to any departure by
each Grantor therefrom, shall be effective unless it is in writing and signed by
each Grantor and the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

(b)     No failure on the part of the Collateral Agent to exercise, and no delay
in exercising, any right hereunder or under any of the other Transaction
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies of the Collateral Agent or
any Purchaser provided herein and in the other Transaction Documents are
cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Collateral Agent or any Purchaser under any
of the other Transaction Documents against any party thereto are not conditional
or contingent on any attempt by such Person to exercise any of its rights under
any of the other Transaction Documents against such party or against any other
Person, including but not limited to, any Grantor.

(c)     Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction or with respect to any Grantor shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction or with respect to
any other Grantor.

(d)      This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the indefeasible
payment in full in cash of the Obligations, and (ii) be binding on each Grantor
and all other Persons who become bound as debtor to this Agreement in accordance
with Section 9-203(d) of the Code and shall inure, together with all rights and
remedies of the Collateral Agent and the Purchasers hereunder, to the benefit of
the Collateral Agent and the Purchasers and their respective permitted
successors, transferees and assigns. Without limiting the generality of clause
(ii) of the immediately preceding sentence, without notice to any Grantor, the
Collateral Agent and the Purchasers may assign or otherwise transfer their
rights and obligations under this Agreement and any of the other Transaction
Documents, to any other Person and such other Person shall thereupon become
vested with all of the benefits in respect thereof granted to the Collateral
Agent and the Purchasers herein or otherwise. Upon any such assignment or
transfer, all references in this Agreement to the Collateral Agent or any such
Purchaser shall mean the assignee of the Collateral Agent or such Purchaser.
None of the rights or obligations of any Grantor hereunder may be assigned or
otherwise transferred without the prior written consent of the Collateral Agent,
and any such assignment or transfer without the consent of the Collateral Agent
shall be null and void.

(e)      Upon (x) the indefeasible repayment in full in cash and/or complete
conversion to equity securities of the Company of all indebtedness obligations
owed by the Company to the Purchasers under the Debentures (including, without
limitation, all principal, interest and attorneys and other fees and expenses
related to or under the Debentures) and (y) repayment of all obligations
(including, without limitation, attorneys and other fees and expenses) under the
Security Documents (other than inchoate indemnity obligations not yet due and
payable), (i) this Agreement and the security interests created hereby shall
terminate and all rights to the Collateral shall revert to the respective
Grantor that granted such security interests hereunder, and (ii) the Collateral
Agent will, upon any Grantor's request and at such Grantor's expense, (A) return
to such Grantor such of the Collateral as shall not have been sold or otherwise
disposed of or applied pursuant to the terms hereof, and (B) execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination, all without any representation, warranty or recourse
whatsoever.

(f)     PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THIS
AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW
AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND
THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
REQUIRED TO BE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.

(g)      ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND, PURSUANT TO SECTION
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT.

(h)     EACH GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT)
THE COLLATERAL AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, ORAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES
HERETO.

(i)     Each Grantor irrevocably consents to the service of process of any of
the aforesaid courts in any such action, suit or proceeding by the mailing of
copies thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to any Grantor at its address provided herein,
such service to become effective 10 days after such mailing.

(j)     Nothing contained herein or any other Transaction Document shall affect
the right of the Collateral Agent to serve process in any other manner permitted
by law or commence legal proceedings or otherwise proceed against any Grantor or
any property of any Grantor in any other jurisdiction.

(k)     Each Grantor irrevocably and unconditionally waives any right it may
have to claim or recover in any legal action, suit or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.

(l)     Section headings herein are included for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.

(m)     This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together constitute one in the same
Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized, as of the date first above
written.

 

CARRINGTON LABORATORIES, INC.

     

By:_________________________________
      Name:
      Title:
      Address: 2001 Walnut Hill Lane
                     Irving, Texas 75038
                     Attn: Bob Schnitzius
      Facsimile: (972) 518-1020

     

CARRINGTON LABORATORIES INTERNATIONAL, INC.

     

By:_________________________________
      Name:
      Title:
      Address:
      Facsimile:

     

HILCOA CORPORATION

     

By:_________________________________
      Name:
      Title:
      Address:
      Facsimile:

     

CARALOE, INC.

     

By:_________________________________
      Name:
      Title:
      Address:
      Facsimile

     

CARNTECH, INC.

     

By:___________________________________
      Name:
      Title:
      Address:
      Facsimile:

     

DELSITE BIOTECHNOLOGIES, INC.

     

By:___________________________________
      Name:
      Title:
      Address:
      Facsimile:

 

--------------------------------------------------------------------------------

 

 

ACCEPTED BY

:

ROCKMORE INVESTMENT MASTER FUND LTD.,
as Collateral Agent

By: _____________________________
Name:
Title:

Address: c/o Rockmore Capital
              150 East 58th Street
              28th Floor
              New York, New York 10155

Facsimile:

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SCHEDULE I

LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS;
STATE OR JURISDICTION OF ORGANIZATIONS

Grantor's Name

State of Organization

Federal
Employer I.D.

Organizational I.D.

Predecessor Names, Acquisitions; Mergers within Last 5 Years

                             

 

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SCHEDULE II

INTELLECTUAL PROPERTY

Trademarks

Grantor

Country

Trademark

Application or Registration No.

Filing Date

Registration Date

Assignees

                                                       

Patents

 

 

Copyrights

 

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SCHEDULE III

LOCATIONS

Grantor's Name

Chief Executive Office

Chief Place of Business

Books and Records

Location of Inventory, Equipment, Etc.

                                                                               
         

 

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SCHEDULE IV

PROMISSORY NOTES, SECURITIES, DEPOSIT ACCOUNTS,
SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS

Securities

Grantor

Name of Issuer

Number of Shares

Class

Certificate
No.(s)

                                                                               
                   

Deposit Accounts, Securities Accounts and Commodities Accounts

Grantor

Name and Address of Institution

Purpose of the Account

Account No.

                                               

 

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SCHEDULE V

EXISTING FINANCING STATEMENTS

 

--------------------------------------------------------------------------------

SCHEDULE VI

FINANCING STATEMENTS

Grantor

Jurisdictions For Filing Financing Statements

               

 

--------------------------------------------------------------------------------

SCHEDULE VII

COMMERCIAL TORT CLAIMS

 

--------------------------------------------------------------------------------

 

SCHEDULE VIII

OWNED REAL PROPERTY

 

 

 

LEASED REAL PROPERTY

 

Landlord Name Address and Contact Information:

Property Address:

Approximate Dollar Value of Assets at Location:

 

--------------------------------------------------------------------------------

 

EXHIBIT A

ASSIGNMENT FOR SECURITY

[TRADEMARKS] [PATENTS] [COPYRIGHTS]

WHEREAS, ______________________________ (the "Assignor") [has adopted, used and
is using, and holds all right, title and interest in and to, the trademarks and
service marks listed on the annexed Schedule 1A, which trademarks and service
marks are registered or applied for in the United States Patent and Trademark
Office (the "Trademarks")] [holds all right, title and interest in the letter
patents, design patents and utility patents listed on the annexed Schedule 1A,
which patents are issued or applied for in the United States Patent and
Trademark Office (the "Patents")] [holds all right, title and interest in the
copyrights listed on the annexed Schedule 1A, which copyrights are registered in
the United States Copyright Office (the "Copyrights")];

WHEREAS, the Assignor has entered into a Security Agreement, dated as of April
25, 2007 (as amended, restated, supplemented or as otherwise modified or
replaced from time to time, the "Security Agreement"), in favor of Rockmore
Investment Master Fund Ltd. as collateral agent for certain purchasers (the
"Assignee");

WHEREAS, pursuant to the Security Agreement, the Assignor has assigned to the
Assignee and granted to the Assignee for the benefit of the Purchasers (as
defined in the Security Agreement) a continuing security interest in all right,
title and interest of the Assignor in, to and under the [Trademarks, together
with, among other things, the good-will of the business symbolized by the
Trademarks] [Patents] [Copyrights] and the applications and registrations
thereof, and all proceeds thereof, including, without limitation, any and all
causes of action which may exist by reason of infringement thereof and any and
all damages arising from past, present and future violations thereof (the
"Collateral"), to secure the payment, performance and observance of the
"Obligations" (as defined in the Security Agreement);

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Assignor does hereby pledge, convey, sell,
assign, transfer and set over unto the Assignee and grants to the Assignee for
the benefit of the Purchasers a continuing security interest in the Collateral
to secure the prompt payment, performance and for the benefit of the Purchasers
observance of the Obligations.

The Assignor does hereby further acknowledge and affirm that the rights and
remedies of the Assignee with respect to the Collateral are more fully set forth
in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.

IN WITNESS WHEREOF, the Assignor has caused this Assignment to be duly executed
by its officer thereunto duly authorized as of _____________, 20__

 

[GRANTORS]

 

By:_________________________________
Name:
Title:

STATE OF ____________
ss.:
COUNTY OF __________

On this ____ day of _______________, 20__, before me personally came
________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that s/he is the
________________ of ______________________, a ____________________, and that
s/he executed the foregoing instrument in the firm name of
_______________________________________, and that s/he had authority to sign the
same, and s/he acknowledged to me that he executed the same as the act and deed
of said firm for the uses and purposes therein mentioned.

 

--------------------------------------------------------------------------------

SCHEDULE 1A TO ASSIGNMENT FOR SECURITY

[Trademarks and Trademark Applications]
[Patent and Patent Applications]
[Copyright and Copyright Applications]
Owned by ______________________________