Exhibit
      10.3

     

    SECURITY AGREEMENT

    


    THIS
      SECURITY AGREEMENT (the “Agreement”) is made as of _________, 2007 by and
      between Odyne Corporation (“Odyne Delaware”) ), a Delaware corporation having
      its chief executive office located at 89 Cabot Drive, Suite L, Hauppauge, New
      York 11788, Odyne Corporation, a New York corporation and wholly owned
      subsidiary of Odyne Delaware, having its chief executive office located at
      89
      Cabot Drive, Suite L, Hauppauge, New York 11788 (“Odyne New York”)(Odyne
      Delaware and Odyne New York are hereinafter collectively referred to as the
      “Debtor”), the subscribers listed on Schedule A and the signature page hereto
      (collectively, the “Subscribers”) and ______________ (the “Secured Party”), as
      collateral agent for the Subscribers who are holders of certain 10% Senior
      Secured Convertible Debentures of the Debtor (the “Debentures”) and any
      subsequent holder(s) of the Debentures assigned in accordance with terms of
      the
      Debentures. Capitalized terms used and not otherwise defined herein shall have
      the meanings given such terms in the Subscription Agreement (as defined
      below). 

    


    WITNESSETH:

    


    WHEREAS,
      concurrently with the execution of this Agreement, Odyne Delaware executed
      that
      certain Securities Subscription Agreement (the “Subscription Agreement”)
      pursuant to which Odyne Delaware shall issue Debentures in an aggregate
      principal amount of up to $3,500,000 (the “Loan”); and

    


    WHEREAS,
      in order to induce the Subscribers to make the Loan evidenced by the Debentures,
      the Debtor has agreed to grant to the Secured Party, as collateral agent, a
      first priority lien and security interest in all of the Debtor’s Collateral (as
      defined in Section 2 of this Agreement), pursuant to the terms and conditions
      of
      the Debentures, the Subscription Agreement and this Agreement; and

    


    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Debtor, Subscribers and the Secured Party
      hereby agree as follows:

    


    1.    DEFINITIONS.

    


    (a)    All
      terms
      used herein which are defined in Article 1 or Article 9 of the Uniform
      Commercial Code (the “UCC” or “Code”) shall have the meanings given therein
      unless otherwise defined in this Agreement. All references to the plural herein
      shall also mean the singular and to the singular shall also mean the plural.
      All
      references to the Secured Party and the Debtor pursuant to the definitions
      set
      forth in the recitals hereto, or to any other person herein, shall include
      their
      respective heirs, executors, administrators, personal representatives,
      successors and permitted assigns. 

    


    (b)    In
      addition to those capitalized terms defined elsewhere in this Agreement, the
      following terms shall have the following meanings:

    


    “Accounts”
      shall have such meaning as such term is defined in Article 9 of the UCC, shall
      include, without limitation, each of the following, whether now owned or
      hereafter acquired by the Debtor: (a) all present and future rights of the
      Debtor to payment for goods sold or leased or services rendered, whether or
      not
      earned by performance, (b) all accounts receivable, contract rights, book debts,
      notes, drafts and other obligations or indebtedness owing to the Debtor,
      including that arising from the sale, lease or exchange of goods or property
      by
      it and/or the performance of services by it (including, without limitation,
      any
      such obligation that might be characterized as an account, contract right,
      or
      general intangible under the UCC in effect in any jurisdiction) and all of
      the
      Debtor’s rights in, to, and


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    under
      all
      purchase orders for goods, services, or other property, and all of the Debtor’s
      rights to any goods, services, or other property represented by any of the
      foregoing and all monies due to or to become due to the Debtor under all
      contracts for the sale, lease, or exchange of goods or other property and/or
      the
      performance of services by it (whether or not earned by performance on the
      part
      of the Debtor), in each case whether now in existence or hereafter arising
      or
      acquired, including, without limitation, the right to receive the proceeds
      of
      these purchase orders and contracts of the Debtor, (c) all rights of the Debtor
      to receive any payment of money or other form of consideration, (d) all security
      pledged, assigned or granted to or held by the Debtor to secure any of the
      foregoing, (e) all guaranties of. or indemnifications with respect to, any
      of
      the foregoing, and (f) all rights of the Debtor as an unpaid seller of goods
      or
      services, including, but not limited to, all rights of stoppage in transit,
      replevin, rescission, reclamation and resale.

    


    “Assigned
      Agreements” shall mean all rights of the Debtor under any agreement, now owned
      or hereafter acquired by the Debtor (together with any collateral or other
      security therefor existing at any time, the “Assigned Agreements”), including,
      without limitation, (1) all rights of the Debtor to receive moneys due and
      to
      become due under or pursuant to the Assigned Agreements, (2) all rights of
      the
      Debtor to receive proceeds of any insurance, indemnity, warranty, or guaranty
      with respect to the Assigned Agreements, (3) all claims of the Debtor for
      damages arising out of or for breach of or default under the Assigned
      Agreements, and (4) all rights of the Debtor to enforce and terminate the
      Assigned Agreements, to performance by all obligors thereunder and to compel
      performance and otherwise exercise all rights and remedies
      thereunder.

    


    “Collateral”
      shall have the meaning set forth in Section 2 below.

    


    “Copyrights”
      shall mean all of the following: (1) all copyrights, works protectable by
      copyright, copyright registrations, and copyright applications of the Debtor,
      if
      any; (2) all renewals, extensions, and modifications thereof; (3) all income,
      royalties, damages, profits, and payments relating to or payable under any
      of
      the foregoing; (4) the right to sue for past, present, or future infringements
      of any of the foregoing; (5) all other rights and benefits relating to any
      of
      the foregoing throughout the world: and (6) all goodwill associated with and
      symbolized by any of the foregoing; in each case, whether now owned or hereafter
      acquired by the Debtor. 

    


    “Documents”
      shall have such meaning as such term is defined in Article 9 of the UCC, and
      shall include, without limitation, all documents of title and all receipts
      covering, evidencing or representing goods now owned or hereafter acquired
      by
      the Debtor.

    


    “Equipment”
      shall have such meaning as such term is defined in Article 9 of the UCC, and,
      shall include, without limitation, each of the following whether now owned
      or
      hereafter acquired by the Debtor: all machinery, equipment, computers, computer
      hardware and software (whether owned or licensed), furniture, fixtures, tools,
      trade fixtures, trailers, rolling stock and vehicles and any and all additions,
      substitutions, and replacements of any of the foregoing, wherever located,
      all
      existing and future leasehold interests therein, together with all attachments,
      components, parts, equipment, and accessories installed thereon or affixed
      thereto. 

    


    “Event
      of
      Default” shall mean any failure to pay, perform or observe any covenant,
      provision, term or agreement of the Transaction Documents.

    


    “General
      Intangibles” shall have such meaning as such term is defined in Article 9 of the
      UCC, and, shall include, and without limitation, each of the following, whether
      now owned or hereafter acquired by the Debtor: (1) all of the Debtor࿖s
      Trademarks, as defined herein, Patents, as defined herein,


    
      
        
        

      

      
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    Copyrights,
      as defined herein, Assigned Agreements, as defined herein, trade secrets,
      registrations, goodwill, processes, drawings, blueprints, franchises, licenses,
      whether as licensor or licensee (to the extent the granting of the Secured
      Party࿖s lien and Security Interest therein will not cause violate or constitute
      a default under or a termination of such licenses or result in the loss of
      the
      benefit of such licenses to the Debtor), permits, proprietary information,
      customer lists, designs, and inventions; (2) all of the Debtor࿖s books, records,
      data, plans, manuals, computer software, computer tapes, computer disks,
      computer programs, source codes, object codes, and all rights of the Debtor
      to
      retrieve data and other information from third parties; (3) all of the Debtor࿖s
      contract rights, partnership interests, joint venture interests, securities,
      deposit accounts, investment accounts and certificates of deposit; (4) all
      rights of the Debtor to payment under letters of credit and similar agreements;
      (5)
      all
      tax refunds and tax refund claims of the Debtor, (6) all choses in action and
      causes of action of the Debtor (whether arising in contract, tort or otherwise
      and whether or not currently in litigation) and all judgments in favor of the
      Debtor. (7) all rights and claims of the Debtor under warranties and
      indemnities, (8) all rights of the Debtor under any insurance, surety, or
      similar contract or arrangement, and (9) existing and future leasehold interests
      in equipment, real estate and fixtures, and the right to sue for infringement
      and/or unauthorized use of any intangibles, chattel paper, documents,
      instruments, letters of credit, bankers࿖ acceptances and
      guaranties.

    


    “Inventory”
      shall have such meaning, as such term is defined in Article 9 of the UCC, and
      shall include, without limitation, each of the following, whether now owned
      or
      hereafter acquired by the Debtor: (1) all goods and other personal property
      of
      the Debtor that are held for sale or lease or to be furnished under any contract
      of service; (2) all raw materials, work-in-process, finished goods, inventory,
      supplies and materials of the Debtor; (3) all wrapping, packaging, advertising,
      and shipping materials of the Debtor; (4) all goods that have been returned
      to,
      repossessed by or stopped in transit by the Debtor; and (5) all documents
      evidencing any of the foregoing.

    


    “Miscellaneous
      Collateral” shall mean (a) all shares of stock acquired by the Debtor in any
      manner, and the certificates and all dividends, cash, instruments, and other
      property from time to time received, receivable or otherwise distributed in
      respect of or in exchange for any or all of such shares, in each case, whether
      now owned or hereafter acquired by the Debtor, (b) all indebtedness from time
      to
      time owed to the Debtor by any subsidiaries of the Debtor and the instruments
      evidencing such indebtedness, and all interest, cash, instruments, and other
      property from time to time received, receivable or otherwise distributed or
      distributable in respect of or in exchange for any or all of such indebtedness,
      in each case, whether now owned or hereafter acquired by the Debtor, (c) all
      deposit accounts or bank accounts owned or hereafter acquired by the Debtor,
      in
      each case, whether now owned or hereafter acquired by the Debtor, (d) all other
      goods and personal property of the Debtor of any kind or character, whether
      tangible or intangible and all interest of every kind and description held
      or
      possessed by Debtor in any real property or improvements to real property,
      including, without limitation, all fee ownership and/or leasehold interests
      (to
      the extent not prohibited by or requiring consent under Debtor' leases) in
      real
      property or improvements thereto, and (e) in each case, all such property
      whether now owned or hereafter acquired by the Debtor.

    


    “Patents”
      shall mean all of the following: (1) all registered and unregistered patents,
      patent applications, and patentable inventions of the Debtor, if any, and all
      of
      the inventions and improvements described and claimed therein; (2) all
      continuations, divisions, renewals, extensions, modifications, substitutions,
      continuations-in-part, or reissues of any of the foregoing; (3) all income,
      royalties, profits, damages, awards, and payments relating to or payable under
      any of the foregoing; (4) the right to sue for past, present, and future
      infringements of any of the foregoing; (5) all other rights and benefits
      relating to any of the foregoing throughout the world; (6) all goodwill
      associated with any of the foregoing; in each case, whether now owned or
      hereafter acquired by the Debtor.


    
      
        
        

      

      
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    “Proceeds”
      shall mean, as such term is defined in Section 9.306 of the UCC, in cash or
      otherwise, and, in any event, shall include, but not be limited to: (1) any
      and
      all proceeds of any insurance, indemnity, warranty, or guaranty payable to
      the
      Debtor from time to time with respect to any of the property described herein,
      (2) any and all payments (in any form whatsoever) made or due and payable to
      the
      Debtor from time to time in connection with any requisition, confiscation,
      condemnation, seizure, or forfeiture of all or any part of the property
      described herein by any governmental authority (or any person or entity acting,
      or purporting to act, for or on behalf of any governmental authority); (3)
      any
      and all proceeds arising from the collection, sale, lease, exchange, assignment,
      licensing or other disposition of, or realization upon, Collateral, including,
      without limitation, all claims of the Debtor against third parties for loss
      of,
      damage to or destruction of the property; (4) any and all other amounts from
      time to time paid or payable under or in connection with any of the property
      described herein and all products of the property described herein; and
(5)
      all,
      liens security, rights, remedies and claims of the Debtor with respect
      thereto.

    


    “Records”
      shall mean all of the Debtor's present and future books of account of every
      kind
      or nature, purchase and sale agreements, customer lists, marketing information,
      price lists, operating records, vendor and supplier price lists, sales
      literature, computer programs, print outs, computer data, invoices, ledger
      cards, bills of lading and other shipping evidence, statements, correspondence,
      memoranda, credit files and other data relating to the Collateral or any account
      debtor, together with the tapes, disks, diskettes and other data and software
      storage media and devices, file cabinets or containers in or on which the
      foregoing are stored (including any rights of the Debtor with respect to the
      foregoing maintained with or by any other Person).

    


    “Security
      Interests” shall have the meaning set forth in Section 2 below.

    


    “Secured
      Obligations” shall mean the collective reference to all obligations (except as
      limited herein) of the Debtor to the Secured Party under or in respect of the
      Debentures and related transactions, whether currently existing or hereafter
      incurred or created, including without limitation (1) due and punctual payment
      and performance of the Debentures, this Agreement and any other of the Loan
      Documents (exclusive of the Warrants and non-monetary obligations under the
      Registration Rights Agreement) including all principal, interest, collection
      costs, expenses and other amounts owing or payable from time to time under
      any
      such Loan Documents, (2) any additional or further amounts which, pursuant
      to
      the Loan Documents, may be deemed part of and/or added to the Secured
      Obligations,; and (3) the reimbursement of all reasonable costs incurred by
      the
      Secured Party to maintain, preserve and enforce such Loan Documents, collect
      these Secured Obligations and maintain and preserve the Collateral, including
      without limitation, the Secured Party’࿖s reasonable attorneys fees,
      disbursements and legal expenses, and all expenditures by Secured Party for
      taxes, insurance and repairs to and maintenance of the Collateral, in each
      case,
      whether arising before or after the commencement of any case with respect to
      the
      Debtor under the United States Bankruptcy Code or any similar statute
      (including, without limitation, the payment of interest and other amounts which
      would accrue and become due but for the commencement of such case). The above
      shall be equally applicable to any renewals, reinstatements, restatements,
      modifications, amendments or extensions of any of the foregoing.

    


    “Trademarks”
      shall mean all of the following: (1) all of the Debtor’s owned trademarks, trade
      names, mask words, corporate names, business names, fictitious business names,
      trade styles, service marks, logos, other business identifiers, prints and
      labels on which any of the foregoing have appeared or appear, all registrations
      and recordings thereof, and all applications in connection therewith including
      registrations, recordings, and applications 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; (2)
      all
      reissues, extensions and renewals thereof; (3) all income, royalties,
      damages,


    
      
        
        

      

      
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    and
      payments now or hereafter relating to or payable under any of the foregoing
      including damages or payments for past or future infringements of any of the
      foregoing; (4) the right to sue for past, present and future infringements
      of
      any of the foregoing; (5) all rights corresponding to any of the foregoing
      throughout the world; and (6) all goodwill associated with and symbolized by
      any
      of the foregoing; in each case, whether now owned or hereafter acquired by
      the
      Debtor.

    


    “Transaction
      Documents” shall mean the Debentures, the Subscription Agreement, the Warrant,
      the Registration Rights Agreement and this Agreement, together with any and
      all
      documents related thereto, including Financing Statements.

     

    “UCC”
      means the Uniform Commercial Code as in effect in the State of New York;
provided, however,
      that if
      by mandatory provisions of law, the perfection or effect of perfection or
      non-perfection of the Security Interest in any Collateral to which this
      Financing Statement relates is governed by the Uniform Commercial Code as in
      effect on or after the date hereof in any other jurisdiction, UCC means the
      Uniform Commercial Code as in effect in such other jurisdiction for purposes
      of
      the provisions hereof relating to such perfection or the effect of perfection
      or
      non-perfection.

    


    2.    THE
      SECURITY INTEREST. In order to secure the due and punctual payment and
      performance of all Secured Obligations owing to the Secured Party from time
      to
      time, the Debtor hereby grants, hypothecates, assigns, pledges, transfers and
      delivers to the Secured Party, a continuing lien and security interest in,
      and
      hereby assigns to the Secured Party, as collateral security, including that
      acquired with the proceeds of the Loan and the following described property
      and
      interests of the Debtor, whether now owned or hereafter acquired or existing,
      and all proceeds thereof and all substitutes, replacements and accessions
      thereto, wherever located: 

     

    (a)    all
      Accounts;

     

    (b)    all
      Assigned Agreements;

     

    (c)    all
      General Intangibles;

     

    (d)    all
      Inventory;

    


    (e)    all
      Equipment;

    


    (f)    all
      Miscellaneous Collateral;

    


    (g)    all
      Records;

    


    (h)    all
      Documents; 

    


    (i)    all
      Proceeds;

     

    (j)    all
      Copyrights;

    


    (k)    all
      Patents;
      and 

    


    (l)    all
      Trademarks (the “Collateral”).

    


    The
      pledge of the Collateral shall be referred to herein as the “Security
      Interest.”


    
      
        
        

      

      
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    3.    FILING;
      FURTHER ASSURANCES. The Debtor shall, at its expense, execute, file, record
      and
      deliver to Secured Party (in such manner and form as the Secured Party shall
      reasonably require) any financing statements and any other documents, necessary
      or appropriate to preserve, perfect, validate or protect the security interest
      granted to Secured Party hereunder against the claims of third parties. and
      shall cooperate with the Secured Party to cause the same to be duly filed in
      all
      places necessary to perfect the security interest of Secured Party in the
      Collateral. This shall include (a) all financing statements, (b) all carbon,
      photographic or other reproductions of financing statements or this Agreement
      (which shall be sufficient as a financing statement hereunder), (c) all
      endorsements to title to any vehicles or other Collateral as may be required
      in
      order to perfect the Security Interest therein, and (d) all specific assignments
      or other papers that may be necessary, or that the Secured Party may reasonably
      request, in order to create, preserve, perfect or validate any Security Interest
      or to enable the Secured Party to exercise and enforce its rights hereunder
      with
      respect to any of the Collateral. In the event that any recording or re-filing
      thereof (or filing of any statements of continuation or assignment of any
      financing statement) is required to protect and preserve such Security Interest,
      the Debtor, at its own cost and expense, shall cause the same to be re-recorded
      and/or re-filed at the time and in the manner requested by the Secured Party.
      The Debtor hereby authorizes the Secured Party to file or re-file any financing
      statements, continuation statements, and/or amended statements with respect
      to
      the Security Interest granted pursuant to this Agreement which at any time
      may
      be required or appropriate, although the same may have been executed only by
      Secured Party, and to execute such financing statement on behalf of the Debtor.
      In addition, in the event and to the extent that any of Collateral consists
      of
      or is represented by instruments or other evidences of ownership such as would
      require physical possession of same in order to perfect the Security Interest
      therein, the Debtor will promptly, at its expense, deliver same to the Secured
      Party, with any necessary endorsements thereon or powers annexed
      thereto.

    


    4.    REPRESENTATIONS
      AND WARRANTIES OF THE DEBTOR. The Debtor hereby represents and warrants as
      follows:

    


    (a)    The
      Debtor is not in default under any indenture, mortgage, deed of trust, agreement
      or other instrument to which it is a party or by which it may be bound. Neither
      the execution nor the delivery of this Agreement, nor the consummation of the
      transactions herein contemplated, nor compliance with the provisions hereof,
      will violate any law or regulation, or any order or decree of any court or
      governmental authority, or will conflict with, or result in the breach of,
      or
      constitute a default under, any indenture, mortgage, deed of trust, agreement
      or
      other instrument to which the Debtor is a party or by which the Debtor may
      be
      bound, or result in the creation or imposition of any lien, claim or encumbrance
      upon any property of Debtor.

    


    (b)    The
      Debtor has the power to execute, deliver and perform the provisions of this
      Agreement and all instruments and documents delivered or to be delivered
      pursuant hereto, and has taken or caused to be taken all necessary or
      appropriate actions to authorize the execution, delivery and performance of
      this
      Agreement and all such instruments and documents.

     

    (c)    The
      Debtor is the legal and equitable owner of the Collateral, subject to the
      interest therein granted to the Secured Party. The ownership by the Debtor
      of
      the Collateral is free and clear of all security interests, liens, claims and
      encumbrances of every kind and nature, except as otherwise disclosed herein
      and
      in the schedules to the Subscription Agreement and/or the Debentures, and except
      for security deposits, statutory liens, bankers’ liens and other immaterial
      encumbrances not securing indebtedness for borrowed money. The Debtor has taken
      all actions necessary under the UCC to perfect its interest in any accounts
      purchased by it or in which it otherwise has an interest, as against its
      assignors or creditors or its assigns.


    
      
        
        

      

      
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    (d)    No
      material default exists, and no event which with notice or the passage of time
      or both, would constitute a default under the Collateral by any party thereto,
      and there are no material offsets, claims or defenses against the obligations
      evidenced by the Collateral.

    


    (e)    The
      Security Interest constitutes a valid and, upon delivery and filing of documents
      necessary to perfect the Secured Party’s security interest in the Collateral,
      perfected security interest in the Collateral securing the payment and
      performance of the Secured Obligations, in each case prior to all other liens
      and rights of others (except for permitted liens as described
      above).

    


    (f)    That
      no
      financing statement covering the Collateral is on file in any public office,
      other than (i) financing statements in respect of any indebtedness which is
      being repaid out of the proceeds of the Loan (which financing statements are
      being terminated and released simultaneously with the funding of the Loan to
      the
      Debtor), and (ii) financing statements filed pursuant to this
      Agreement.

    


    All
      representations and warranties of the Debtor contained herein shall survive
      the
      closing of this Agreement until termination of this Agreement under Section
      14.

    


    5.    COVENANTS
      OF THE DEBTOR. The Debtor hereby covenants and agrees as follows:

    


    (a)    Protection
      of the Collateral. The Debtor shall defend the title to the Collateral against
      all claims and demands whatsoever. The Debtor shall keep the respective
      Collateral free and clear of all liens and security interests (except for the
      lien created herein and permitted liens as described above), charges,
      encumbrances, taxes and assessments, and shall pay all taxes, assessments and
      fees relating to the Collateral. Upon request by Secured Party, Debtor, at
      the
      Debtor’s expense, shall furnish further assurances of title, execute any further
      instruments and documents, and do any other acts, that Secured Party may
      reasonably request, necessary to effectuate the purposes and provisions of
      this
      Agreement, including, in order to perfect and protect the Security Interest
      granted or purported to be granted hereby or to enable the Secured Party to
      exercise and enforce the rights and remedies hereunder with respect to any
      Collateral.

    


    Debtor
      shall not further sell, exchange, assign, transfer or otherwise dispose of
      the
      Collateral. and shall not further encumber, hypothecate, mortgage, create a
      lien
      on or security interest in the Collateral, without the prior written consent
      of
      Secured Party in each instance except as otherwise permitted under the
      Debentures, the Subscription Agreement and/or this Agreement. The risk of loss
      of the Collateral at all times shall be borne by the Debtor.

    


    (b)    The
      Debtor’s Obligation to Pay. The Debtor shall pay and perform the Debentures and
      the Debtor shall perform all of its Secured Obligations as the same may become
      due according to their terms. The Debtor shall reimburse to Secured Party,
      all
      expenses, including reasonable attorneys࿖ fees, incurred or paid in connection
      with establishing, perfecting, maintaining, protecting or enforcing any of
      the
      Secured Party’s rights and remedies hereunder, including in retaking, holding,
      preparing for sale or lease, or selling and leasing, and the like, the
      Collateral.

    


    (c)    Place
      of
      Business. The Debtor will not, without giving the Secured Party 30 days prior
      written notice, change (i) the locations of its places of business and its
      chief
      executive office, or (ii) the locations where it keeps or holds any Collateral
      or records relating thereto, or (iii) its name, identity, or corporate structure
      in any manner. If any such change occurs, the Debtor shall, at
      its


    
      
        
        

      

      
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    cost
      and
      expense, cooperate with the Secured Party and cause to be filed or recorded
      additional financing statements, amendments, or supplements to existing
      financing statements, continuation statements. or other documents required
      to be
      recorded or filed in order to perfect and protect the Security
      Interests.

    


    (d)    Additional
      Documents. The Debtor will, from time to time, at its expense, execute, deliver,
      file, and record any statement, assignment, instrument, document, agreement,
      or
      other paper and take any other action (including, without limitation, any
      filings of financing or continuation statements under the UCC) that the Secured
      Party may from time to time reasonably determine to be necessary or desirable
      in
      order to create, preserve, perfect, confirm, or validate the Security Interests
      or to enable the Secured Party to obtain the full benefits of this Agreement,
      or
      to enable the Secured Party to exercise and enforce any of its rights, powers,
      and remedies hereunder with respect to any of the Collateral. To the extent
      permitted by law, the Debtor hereby authorizes the Secured Party to execute
      and
      file financing statements or continuation statements without the Debtor’s
      signature appearing thereon. The Debtor agrees that a carbon, photographic,
      or
      other reproduction of this Security Agreement or of a financing statement is
      sufficient as a financing statement. The Debtor shall pay the costs of or
      incidental to, any recording or filing of any financing or continuation
      statements concerning the Collateral.

    


    (e)    Books/Records.
      The Debtor shall keep complete and accurate books and records relating to the
      Collateral, and stamp or otherwise mark such books and records in such manner
      as
      the Secured Party may reasonably request in order to reflect the Security
      Interests.

    


    (f)    Maintain
      Accounts. The Debtor shall use its commercially reasonable efforts to cause
      to
      be collected from its account debtors, as and when due, any and all amounts
      owing under or on account of each Account (including, without limitation,
      delinquent Accounts, such Accounts to be collected in accordance with lawful
      collection procedures and the Debtor’s standard procedures) and apply forthwith
      upon receipt thereof all such amounts as are so collected to the outstanding
      balance of such Account, except that, unless an Event of Default has occurred
      and is continuing and the Secured Party is exercising its rights hereunder
      to
      collect Accounts, the Debtor may allow in the ordinary course of business as
      adjustments to amounts owing under its Accounts (i) an extension or renewal
      of
      the time or times of payment, or settlement for less than the total unpaid
      balance, which the Debtor finds appropriate in accordance with prudent business
      judgment and (ii) a refund or credit due as a result of returned or damaged
      merchandise, all in accordance with the Debtor’s ordinary course of business
      consistent with its historical practices. The costs and expenses (including,
      without limitation, attorney’s fees) of collection, whether incurred by the
      Debtor or the Secured Party, shall be borne by the Debtor.

    


    (g)    Notice
      of
      Default. Upon the occurrence and during the continuance of any Event of Default,
      upon the request of the Secured Party, the Debtor will promptly notify (and
      the
      Debtor hereby authorizes the Secured Party so to notify) each account debtor
      in
      respect of any Account or Instrument that such Collateral has been assigned
      to
      the Secured Party hereunder, and that any payments due or to become due in
      respect of such Collateral are to be made directly to the Secured Party or
      any
      designee specified by the Secured Party.

    


    (h)    Additional
      Information. The Debtor will, promptly upon request, provide to the Secured
      Party all information and evidence it may reasonably request concerning the
      Collateral, and in particular the Accounts, to enable the Secured Party to
      enforce the provisions of this Agreement.

    


    (i)    Taxes
      and
      Assessments. The Debtor will promptly pay any and all taxes, assessments and
      governmental charges upon the Collateral prior to the date that penalties
      may


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    


    attach
      thereto or same become a lien on any of the Collateral, except to the extent
      that such taxes, assessments and charges shall be contested by the Debtor in
      good faith and through appropriate proceedings.

    


    (j)    Material
      Loss. The Debtor will immediately notify the Secured Party of any event causing
      a material loss or diminution in the value of the Collateral, and the amount
      (or
      the Debtor’s best estimate of the amount) of such loss or
      diminution.

    


    (k)    Applicable
      Law. The Debtor will not use any of the Collateral in violation of any
      applicable law.

    


    (l)    Impairment
      of Collateral. Except to the extent permitted by this Agreement, Debtor shall
      not cause any reduction in the value of the Collateral or take any action which
      would reasonably be expected to imperil the prospect of the full performance
      or
      satisfaction of the Secured Obligations.

    


    6.    RECORDS
      RELATING TO COLLATERAL. The Debtor will keep and maintain complete and accurate
      records concerning the Collateral, including the Accounts and all chattel paper
      included in the Accounts, at its principal executive office or at such other
      place(s) of business as the Secured Party may approve in writing. The Debtor
      will (a) faithfully hold and preserve such records and chattel paper, (b) permit
      representatives of the Secured Party, at any time during normal business hours,
      upon reasonable notice, and without undue material disruption of the Debtor’s’
business, to examine and inspect the Collateral and to make copies and abstracts
      of such records and chattel paper, and (c) furnish to the Secured Party such
      information and reports regarding the Collateral as the Secured Party may from
      time to time reasonably request.

    


    7.    RELEASE
      OF COLLATERAL. The Debtor shall not sell, transfer, license or otherwise dispose
      of the Collateral, or any part thereof or any interest therein except in the
      ordinary course of business for fair value or as otherwise provided in the
      Subscription Agreement or the Debentures. If the Collateral, or any part
      thereof; is sold or otherwise disposed of in violation of these provisions,
      the
      Security Interest of the Secured Party shall continue in such Collateral or
      any
      part thereof notwithstanding such sale or other disposition, and Debtor will
      deliver any proceeds thereof to the Secured Party to be, at the option of the
      Secured Party, held as Collateral hereunder, and/or be applied to the Secured
      Obligations.

    


    8.    GENERAL
      AUTHORITY.

    


    (a)    In
      the
      event that the Secured Party shall at any time be required to take action to
      defend the Security Interests, or the Debtor shall fail to satisfy its
      obligations under this Agreement, then the Secured Party shall have the right,
      but shall not be obligated, to take such steps and make such payments as may
      be
      required in order to effect compliance, and the Secured Party shall have the
      right either to demand and receive immediate reimbursement from the Debtor
      for
      all costs and expenses incurred by the Secured Party in connection therewith,
      and/or to add such costs and expenses to the Secured Obligations.

    


    (b)    The
      Debtor hereby irrevocably appoints the Secured Party the true and lawful
      attorney for the Debtor, with full power of substitution, in the name of the
      Debtor, the Secured Party or otherwise, for the sole use and benefit of the
      Secured Party, but at the Debtor’s’ expense, to the extent permitted by law to
      exercise, at any time and from time to time during the continuance of an Event
      of Default, any or all of the following powers with respect to any or all of
      the
      Collateral (which powers


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    


    shall
      be
      in addition and supplemental to any powers, rights and remedies of the Secured
      Party described herein):

    


    (i)    to
      demand, sue for, collect, receive and give acquittance for any and all monies
      due or to become due upon or by virtue thereof; and

    


    (ii)    to
      receive, take, endorse, assign and deliver any and all checks, drafts, documents
      and other negotiable and non-negotiable instruments and chattel paper taken
      or
      received by the Secured Party in connection therewith; and

    


    (iii)    to
      settle, compromise, discharge, extend, compound, prosecute or defend any action
      or proceeding with respect thereto; and

    


    (iv)    to
      sell,
      transfer, assign or otherwise deal in or with same, or the proceeds or avails
      thereof, or any goods securing the Accounts, as fully and effectually as if
      the
      Secured Party were the absolute owner thereof; and

    


    (v)    to
      extend
      the time of payment of any or all thereof and to make any allowance and other
      adjustments with reference thereto; and

    


    (vi)    to
      discharge any taxes, liens, security interests or other encumbrances at any
      time
      placed thereon.

    


    Anything
      hereinabove contained to the contrary notwithstanding, the Secured Party shall
      give the Debtor not less than ten (10) days࿖ prior written notice of the time
      and place of any sale or other intended disposition of any of the Collateral,
      except any Collateral which is perishable or threatens to decline speedily
      in
      value or is of a type customarily sold on a recognized market. The Secured
      Party
      and the Debtor hereby agree that such notice constitutes “reasonable
      notification” within the meaning of Section 9-610 of the Code.

    


    9.    REMEDIES
      UPON EVENT OF DEFAULT.

    


    (a)    If
      any
      Event of Default shall have occurred and be continuing, the Secured Party may
      exercise all of the rights and remedies of a secured party under the Code
      (whether or not the Code is in effect in the jurisdiction where such rights
      and
      remedies are exercised) and, in addition, the Secured Party may, without being
      required to give any notice, except as herein provided or as may be required
      by
      mandatory provisions of law, (a) apply the cash, if any, then held by it as
      Collateral in the manner specified in Section 11 hereof, and (b) if there shall
      be no such cash or if such cash shall be insufficient to pay all of the Secured
      Obligations in full, sell the Collateral, or any part thereof, at public or
      private sale or at any broker’s board or on any securities exchange, for cash,
      upon credit or for future delivery, and at such price or prices as the Secured
      Party may deem satisfactory. The Secured Party may require the Debtor to
      assemble all or any part of the Collateral and make it available to the Secured
      Party at a place to be designated by the Secured Party. Any holder of a Secured
      Obligation may be the purchaser of any or all of the Collateral so sold at
      any
      public sale (or, if the Collateral is of a type customarily sold on a recognized
      market or is of a type which is the subject of widely distributed standard
      price
      quotations, at any private sale) and thereafter hold same, absolutely free
      from
      any right or claim of the Debtor of whatsoever kind. The Secured Party is
      authorized, at any such sale, if it reasonably deems same to be advisable,
      to
      restrict the prospective bidders or purchasers of any of the Collateral which
      could be subject to federal or state securities laws to persons who will
      represent and agree that they are purchasing for their own account for
      investment and not with a view to the distribution or sale of any
      of


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


    such
      Collateral; and the Debtor hereby acknowledges that such restriction may result
      in a lower price being obtained for the subject Collateral, and the Debtor
      hereby waives any claim arising therefrom. Upon any such sale, the Secured
      Party
      shall have the right to deliver, assign and transfer to the purchaser thereof
      the Collateral so sold. 

    


    (b)    Each
      purchaser at any such sale shall hold the Collateral so sold absolutely, free
      from any claim or right of the Debtor of whatsoever kind (except for the rights
      of the Secured Party), including any equity or right of redemption of the
      Debtor. To the extent permitted by law, the Debtor hereby specifically waives
      all rights of redemption, stay or appraisal which it has or may have under
      any
      rule of law or statute now existing or hereafter adopted. and waives any
      requirement for the marshaling of any Collateral. The Secured Party shall give
      the Debtor not less than ten (10) days࿖ prior written notice of its intention to
      make any such public or private sale or sales at a broker’s board or on a
      securities exchange. Such notice, in case of a public sale, shall state the
      time
      and place fixed for such sale, and in case of sale at a broker’s board or on a
      securities exchange, shall state the board or exchange at which such sale is
      to
      be made and the day on which the Collateral, or the portion thereof being sold,
      will first be offered for sale at such board or exchange. Any such public sale
      shall be held at such time or times within ordinary business hours and at such
      place or places as the Secured Party may fix in the notice of such sale. At
      any
      such sale, the Collateral may be sold in one lot as an entirety or in separate
      parcels, as the Secured Party may determine. The Secured Party shall not be
      obligated to make such sale pursuant to any such notice. The Secured Party
      may,
      without notice or publication, adjourn any public or private sale or cause
      the
      same to be adjourned from time to time by announcement at the time and place
      fixed for the sale. and such sale may be made at any time or place to which
      the
      same may be adjourned. In case of any࿖ sale of all or any part of the Collateral
      on credit or for future delivery, the Collateral so sold may be retained by
      the
      Secured Party until the selling price is paid by the purchaser thereof; but
      the
      Secured Party shall not incur any liability in the case of the failure of such
      purchaser to take up and pay for the Collateral so sold and, in case of any
      such
      failure, such Collateral may again be sold upon like notice.

    


    (c)    The
      Secured Party, instead of exercising the power of sale herein conferred upon
      it,
      may proceed by a suit or suits at law or in equity to foreclose the Security
      Interests and sell the Collateral, or any portion thereof; under a judgment
      or
      decree of a court or courts of competent jurisdiction.

    


    (d)    In
      the
      event that the Secured Party, after the occurrence of an Event of Default,
      does
      not exercise his/her/its rights under this Agreement within thirty (30) days
      thereof, then Subscribers representing a majority in interest of the total
      aggregate principal amount of the Loan shall have the right, upon five (5)
      days
      written notice to the Debtor, to appoint a substitute secured party at which
      time the Secured Party’s rights under this Agreement shall automatically be
      assigned to the new secured party without any further action of the Secured
      Party, the Subscribers and/or the Debtor. Upon the appointment of the substitute
      secured party, then the Secured Party executing this Agreement shall no longer
      have authority to enforce the provisions of this Agreement. For purposes of
      this
      Section 9(d), the Secured Party shall be excluded for purposes of calculating
      a
      majority in interest of the aggregate amount of the Loan. 

    


    10.    RIGHT
      OF
      SECURED PARTY TO USE AND OPERATE COLLATERAL. Upon the occurrence and during
      the
      continuance of any Event of Default and to the extent permitted by law, the
      Secured Party shall have the right and power, with or without legal process,
      to
      enter upon any or all of the Debtor’s premises. to take possession of all or any
      part of the Collateral, and to exclude the Debtor and all persons claiming
      under
      the Debtor wholly or partly therefrom, and thereafter to sell same in accordance
      herewith and/or hold, store, and/or use, operate, manage and control the same.
      Upon any


    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    


    such
      taking of possession, the Secured Party may, from time to time, at the expense
      of the Debtor, make all such repairs, replacements, alterations, additions
      and
      improvements to the Collateral as the Secured Party may deem proper. In such
      case, the Secured Party shall have the right to manage and control the
      Collateral and to carry on the business and to exercise all rights and powers
      of
      the Debtor in respect thereof as the Secured Party shall deem proper, including
      the right to enter into any and all such agreements with respect to the leasing
      and/or operation of the Collateral or any part thereof as the Secured Party
      may
      see fit; and the Secured Party shall be entitled to collect and receive all
      profits, fees, revenues and other income of the same and every part thereof.
      Such profits, fees, revenues and other income shall be applied to pay the
      expenses of holding the Collateral and of conducting the business thereof,
      and
      of all alterations, additions and improvements, and to make all payments which
      the Secured Party may be required or may elect to make, if any, for taxes,
      assessments, insurance and other charges upon the Collateral or any part
      thereof; and all other payments which the Secured Party may be required or
      authorized to make under any provision of this Agreement (including legal costs
      and reasonable attorneys fees). The remainder of such profits. fees, revenues
      and other income shall be applied in accordance with Section 11 below, and,
      unless otherwise provided or required by law or by a court of competent
      jurisdiction, any surplus shall be paid over to the Debtor.

    


    11.    APPLICATION
      OF COLLATERAL AND PROCEEDS. The proceeds of any sale of, or other realization
      upon, all or any part of the Collateral shall be applied in the following
      order:

    


    (a)    First,
      to
      the costs and expenses of the sale;

    


    (b)    Second,
      to the reasonable attorneys’ fees and expenses incurred by the Secured Party
with
      respect to the enforcement of its rights under this Agreement; 

    


    (c)    Third,
      to
      the payment of the Secured Obligations; and

     

    (d)    Fourth,
      the
      surplus proceeds, if any, to the Debtor or whomever shall be lawfully entitled
      to receive the same or as a court of competent jurisdiction shall
      direct.

    


    12.    EXPENSE;
      SECURED PARTY’S LIEN. The Debtor will forthwith pay:

    


    (a)    the
      amount of any taxes or other charges which the Secured Party may have been
      required to pay by reason of the Security Interests (including any applicable
      transfer taxes) or to free any of the Collateral from any lien thereon;
      and

    


    (b)    the
      amount of any and all reasonable out-of-pocket expenses, including the
      reasonable fees and disbursements of its counsel and of any agents not regularly
      in its employ, which the Secured Party may incur in connection with (i) the
      collection, sale or other disposition of any of the Collateral, (ii) the
      exercise by the Secured Party of any of the powers conferred upon it hereunder,
      and/or (iii) any default on the Debtor’s’ part hereunder.

    


    13.    SECURITY
      INTEREST ABSOLUTE. All rights of the Secured Party hereunder, and all
      obligations of Debtor hereunder, shall be absolute and unconditional
      irrespective of:

    


    (a)    any
      lack
      of validity or enforceability of the Transaction Documents or the Secured
      Obligations or any other agreement or instrument relating to the Transaction
      Documents or the Secured Obligations;


    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    


    (b)    any
      change in the time, manner or place of payment of. or in any other term of;
      the
      Transaction Documents or the Secured Obligations, or any renewal, modification,
      reinstatement, restatement or extension of the Transaction Documents or the
      Secured Obligations or any other amendment or waiver of or any consent to any
      departure from this Agreement or any other agreement or instrument;

    


    (c)    any
      sale,
      exchange, release or non-perfection of any of the Collateral; or

    


    (d)    any
      other
      circumstance that might otherwise constitute a defense available to, or a
      discharge of the Debtor in respect of any Transaction Documents or the Secured
      Obligations.

    


    14.    TERMINATION
      OF SECURITY INTERESTS; RELEASE OF COLLATERAL. Upon the indefeasible payment
      in
      full of all Secured Obligations (other then indemnity obligations as to which
      no
      claim has theretofore been asserted), the Security Interests shall terminate
      and
      all rights in the Collateral shall revert to the Debtor. Upon any such
      termination of the Security Interests or release of Collateral, the Secured
      Party will, at the Debtor’s expense, execute and deliver to the Debtor such
      termination statements and other documents as the Debtor shall reasonably
      request to evidence and give effect to the termination of the Security Interests
      or the release of such Collateral, as the case may be.

     

    15.    NOTICES.
      All notices, demands and other communications hereunder shall be given or made
      to the Debtor, the Subscribers and the Secured Party in the manner set forth
      in
      the Subscription Agreement.

    


    16.    AMENDMENTS
      AND WAIVERS. The Transaction Documents represent the final agreement agreed
      to
      by the parties. No amendment or waiver of any provision of the Transaction
      Documents, and no consent by Secured Party or Subscribers to any breach thereof
      by Debtor shall in any event be effective unless the same shall be in writing
      and signed by the Secured Party, Subscribers, Debtor and, if appropriate, any
      guarantor of any Secured Obligation, and then such waiver or consent shall
      be
      effective only for the specific purpose for which given. No course of dealing
      between Debtor, any guarantor of any Secured Obligation and Secured Party in
      exercising any rights or remedies in the Transaction Documents shall operate
      as
      a waiver or preclude the exercise of any other rights or remedies in the
      Transaction Documents. All such rights and remedies shall continue unimpaired,
      notwithstanding any delay, extension of time renewal, compromise or other
      indulgence granted with respect to any of the Secured Obligations. Debtor hereby
      waives all notice of any such delay, extension of time, renewal, compromise
      or
      indulgence, and consents to be bound thereby as fully and effectually as if
      Debtor expressly had agreed thereto in advance. The Debentures may be negotiated
      without releasing Debtor or the Collateral. The remedies in this Agreement
      are
      cumulative and are not exclusive of any other remedies provided by law, in
      equity or otherwise.

    


    17.    GOVERNING
      LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.

    


    (a)    This
      Agreement shall (irrespective of where it is executed, delivered and/or
      performed) be governed by and construed in accordance with the laws of the
      State
      of New York (without giving effect to principles of conflicts of law) as applied
      to contracts executed and performed in the State of New York, 

    


    (b)    The
      Debtor hereby consents to the jurisdiction of all courts sitting in the State
      of
      New York, and of all courts from which an appeal therefrom may be taken, with
      respect to any


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    


    action
      or
      proceeding relating to this Agreement or any related transactions. THE DEBTOR
      HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING,
      AND
      CONSENTS THAT THE SECURED PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY
      COURT
      AS WRITTEN EVIDENCE OF THE CONSENT OF THE DEBTOR WITH RESPECT TO JURISDICTION
      AND THE WAIVER OF THE RIGHT TO JURY TRIAL.

    


    18.    NO
      WAIVER; CUMULATIVE REMEDIES. No failure on the part of the Secured Party to
      exercise, and no delay in exercising, any right, power or remedy hereunder
      shall
      operate as a waiver thereof, nor shall any single or partial exercise of any
      such right, power or remedy by the Secured Party preclude any other or further
      exercise thereof or the exercise of any other right, power or remedy. All
      remedies hereunder are cumulative and are not exclusive of any other remedies
      provided by law.

    


    19.    BINDING
      EFFECT. This Agreement shall be binding upon and inure to the benefit of the
      parties hereto and their respective heirs, executors, administrators, successors
      and permitted assigns. The Secured Party may assign this Agreement, and if
      assigned, the assignee shall be entitled, upon notifying Debtor. to the payment
      and performance of all of the agreements of Debtor hereunder and to all of
      the
      rights and remedies of Secured Party hereunder. The gender and number used
      in
      this Agreement are used for reference term only and shall apply with the same
      effect whether the parties are masculine, feminine, neuter, singular or
      plural.

    


    20.    CONTINUING
      SECURITY INTEREST; ASSIGNMENTS. This Agreement shall create a continuing
      security interest in the Collateral and shall (i) remain in full force and
      effect until termination as provided herein, (ii) be binding upon Debtor, the
      Secured Party and their respective successors and assigns. and (iii) inure,
      together with the rights, powers and remedies of Debtor and the Secured Party
      hereunder, to the benefit of Debtor, the Secured Party and their respective
      successors, transferees and permitted assigns, as the case may be.

    


    21.    USURY.
      All agreements between Debtor and the Secured Party, whether now existing or
      hereafter arising and whether written or oral; are hereby limited so that in
      no
      contingency, whether by reason of acceleration of the final maturity date,
      as
      that term is defined in the Debentures, or otherwise, shall the interest
      contracted for, charged, received, paid or agreed to be paid to the Secured
      Party exceed the maximum amount permissible under the laws of the State of
      New
      York (hereinafter the “Applicable Law࿖). If, from any circumstance whatsoever,
      interest would otherwise be payable in excess of the maximum amount permissible
      under the Applicable Law, the interest payable shall be reduced to the maximum
      amount permissible under the Applicable Law, and if from any circumstance the
      Secured Party or any holder of Debentures shall ever receive anything of value
      deemed interest by the Applicable Law in excess of the maximum amount
      permissible under the Applicable Law, an amount equal to the excessive interest
      shall be applied to the reduction of the principal of the Secured Obligations
      and not to the payment of interest, or if such excessive amount of interest
      exceeds the unpaid balance of principal of the Secured Obligations, such excess
      shall be refunded to the party making such payment. All interest paid or agreed
      to be paid to the Secured Party shall, to the extent permitted by the Applicable
      Law, be amortized, prorated, allocated and spread throughout the full period
      (including any renewal or extension) until payment in full of the principal
      so
      that the interest hereon for such full period shall not exceed the maximum
      amount permissible under the Applicable Law. The Secured Party expressly
      disavows any intent to contract for, charge or receive interest in an amount
      which exceeds the maximum amount permissible under the Applicable Law. This
      paragraph shall control all agreements between Debtor and the Secured
      Party.


    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    


    22.    MULTIPLE
      COUNTERPARTS. This Agreement may be executed in separate or multiple
      counterparts by the parties. and all of such counterparts shall be considered
      as
      one and the same instrument notwithstanding the fact that various counterparts
      are signed by only one or more of the parties, and all of such Agreements shall
      be deemed but one and the same Agreement.

    


    23.    SEVERABILITY.
      If any provision hereof is held invalid or unenforceable in any jurisdiction,
      such provision shall (for purposes of enforcement in such jurisdiction only)
      be
      reduced in scope and effect to the extent necessary to render same enforceable,
      and the other provisions hereof shall remain in full force and effect in such
      jurisdiction and shall be liberally construed in favor of the Secured
      Party.

    


    24.    HEADINGS.
      The captions and Section headings in this Agreement are for convenience of
      reference only, and shall not limit or otherwise affect the meaning or
      interpretation of any provision hereof.

    


    25.    ASSIGNMENT.
      Except as set forth in Section 9(d), this Agreement may not be assigned by
      the
      Debtor without the Secured Party’s prior written consent, but shall otherwise be
      binding upon and inure to the benefit of the parties hereto and their respective
      heirs, executors, administrators, personal representatives, successors and
      assigns.

    


    26.    CONTROLLING
      INSTRUMENT. In the event any provision of this Agreement conflicts with any
      provision of the Debentures, the provision of the Debentures shall be
      controlling.

     

     

    [Signatures
      on following page]

    

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      



    IN
      WITNESS WHEREOF, this Security Agreement has been executed by the parties hereto
      as of the date first set forth above.

    


    SECURED
      PARTY:

     

     

    By:
      
      
        

      

    

    Name:

     

     

    SUBSCRIBER:

     

     

    By:
      
      
        

      

    

    Name:

     

     

    DEBTOR:

     

    ODYNE
      CORPORATION

    a
      Delaware corporation

     

    By:
      
      
        

      

    

    Name:

    Title:

     

     

    ODYNE
      CORPORATION

    a
      New
      York corporation

     

     

    By:
      
      
        

      

    

    Name:

    Title:

     

    
      
        
        

      

      -16-