SECURITY
      AGREEMENT

     

    SECURITY
      AGREEMENT, dated as of October 30, 2007 (this “Agreement”),
      between FUTURE NOW GROUP, INC., a Nevada corporation (the “Company),
      and
      the lenders identified on the signature page hereto (the “Lenders”).

     

    WHEREAS,
      the Company
      and the
      Lenders are party to that certain Securities Purchase Agreement dated the date
      hereof (the "SPA”); 

     

    WHEREAS,
      it is intended
      hereby
      that all obligations of the Company to the Lenders under the Transaction
      Documents (as defined in the SPA) and other agreements to which the Company
      and
      Lenders are from time to time party be secured by all of the personal property
      assets of the Company; 

     

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

     

    1.  Definitions.
      

     

    (a)  Capitalized
      terms used herein without definition (by cross-reference or otherwise) shall
      have the meanings provided for such terms (by cross-reference or otherwise)
      in
      the SPA.

     

    (b)  The
      following capitalized terms, when used herein, shall have the meanings provided
      for such terms in Article 9 of the NYUCC (as hereafter defined): Accession,
      Account, Cash Proceeds, Certificate of Title, Chattel Paper, Commercial Tort
      Claim, Commodity Account, Commodity Contract, Commodity Intermediary, Deposit
      Account, Document, Electronic Chattel Paper, Equipment, Farm Products, General
      Intangible, Goods, Health-Care-Insurance Receivable, Instrument, Inventory,
      Investment Property, Letter-of-Credit Right, Non-Cash Proceeds, Payment
      Intangible, Proceeds, Promissory Note, Software, Supporting Obligation, and
      Tangible Chattel Paper. Such terms (and those in the following clauses of this
      Section 1) shall include in the singular number the plural and in the plural
      number the singular. Nothing contained in this subsection
      (b)
      or
      otherwise in this Agreement shall be construed to mean that uncapitalized terms
      used herein which are defined in the UCC or the NYUCC shall not have the
      meanings ascribed to such terms in such statutes.

     

    (c)  The
      following capitalized terms, when used herein and not defined in Article 9
      of
      the NYUCC, shall have the meanings provided therefor elsewhere in the NYUCC:
      Certificated Security, Letter of Credit, Securities Intermediary and
      Uncertificated Security.

     

    (d)  As
      used
      herein, the following capitalized terms shall have the following
      meanings:

     

    “Event
      of Default”
means
      any of the following: (i) any failure by the Company to pay, when due, any
      amount payable by it under any Transaction Document, (ii) any other
      material breach by the Company of any provision of any Transaction Document
      which is not cured within 30 days, (iii) any representation or warranty made
      by
      the Company in any Transaction Document, or otherwise in writing in connection
      with any such document, or in any certificate or statement furnished pursuant
      to
      or in connection with any such document, shall be breached or shall prove to
      be
      untrue in any material respect on the date as of which made; (iv) the occurrence
      of an Insolvency Event with respect to the Company; or (v) any other Event
      of
      Default (as defined in any Transaction Document).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Government
      Authority”
shall
      mean any nation or government, any state or political subdivision thereof and
      any entity exercising executive, legislative, judicial, regulatory or
      administrative functions of or pertaining to government.

     

    “Insolvency
      Event”
means
      the occurrence of any of the following with respect to the Company or another
      Person: such Person shall make an assignment for the benefit of, or composition
      with, creditors or shall become insolvent or be unable, or generally fail,
      to
      pay its debts when due; or any bankruptcy, insolvency or other proceeding for
      the relief of financially distressed debtors shall be commenced with respect
      to
      such Person, or a receiver, liquidator, custodian or trustee shall be appointed
      for such Person or a substantial part of its assets, and, if any of the same
      shall occur involuntarily as to such Person, it shall not be dismissed, stayed
      or discharged within 60 days; or if any order for relief shall be entered
      against such Person under Title 11 of the United States Code entitled
“Bankruptcy”; or such Person shall take any action to effect, or which indicates
      its acquiescence in, any of the foregoing; in each of the foregoing situations,
      whether under the laws of the United States or the analogous laws of any foreign
      jurisdiction.

     

    “Loan
      Agreement”
means
      each agreement (if, as and when executed by the Company and the Lenders)
      pursuant to or in connection with which any financial accommodation is extended
      by the Lenders to or on behalf of the Company, including, without limitation,
      the Debentures. 

     

    “NYUCC”
means
      the Uniform Commercial Code of the State of New York (as currently in effect
      and
      as the same may from time to time hereafter be amended).

     

    “Patents”
means
      (i) all United States or other patents which the Company may from time to time
      possess or be otherwise entitled to use, and all licenses of United States
      or
      other patents which the Company may from time to time possess or be otherwise
      entitled to use (including without limitation the patents described in Section
      8(f)
      hereof),
      (ii) all re-issues, divisions, continuations, renewals, extensions and
      continuations-in-part thereof, (iii) the right to sue for past, present and
      future infringements of the foregoing, and (iv) all rights corresponding to
      all
      of the foregoing throughout the world.

     

    “Payment
      Default”
means
      the failure by the Company to make any payment required to be made by it
      pursuant to any Transaction Document to which it is a party at the time when
      same is due (after giving effect to any applicable grace period).

     

    “Person”
shall
      mean and include an individual, a partnership, a corporation (including a
      business trust), a joint stock company, a limited liability company, a
      not-for-profit corporation or other not-for-profit entity, a trust, an
      unincorporated association, a joint venture or other entity or a Government
      Authority.

     

    
      
        
        

      

      
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    “Secured
      Obligations”
means
      all of the indebtedness, obligations and liabilities of the Company to the
      Lenders, individually or collectively, whether direct or indirect, joint or
      several, absolute or contingent, due or to become due, now existing or hereafter
      arising, pursuant to one or more of the Transaction Documents.

     

    “State”
means
      the State of New York.

     

    “Trademarks”
means
      (i) all United States or other trademarks which the Company may from time to
      time possess or be otherwise entitled to use, together with the goodwill of
      the
      business connected with the use of, and symbolized by, such trademarks (together
      with the trademarks described in Section 8(f)
      hereof),
      (ii) all re-issues, divisions, continuations, renewals, extensions and
      continuations-in-part thereof, (iii) the right to sue for past, present and
      future infringements of the foregoing, and (iv) all rights corresponding to
      all
      of the foregoing throughout the world (excluding intent-to-use United States
      applications prior to their conversion into use-based
      applications).

     

    (e)  Unless
      otherwise specified, each reference in this Agreement or in any other
      Transaction Document to a Transaction Document shall mean such Transaction
      Document as the same may from time to time be amended, restated, replaced,
      supplemented or otherwise modified from time to time with the consent of the
      Lenders.

     

    (f)  As
      used
      in this Agreement, the terms "including," "including without limitation" and
      "such as" (and like terms) are illustrative and not limitative. No difference
      shall be imputed to the use in some places herein of “including” and in others
      of “including without limitation.” Phrases such as "hereof" and "herein" refer
      to the entire Agreement and not just the section or other portion in which
      said
      reference appears.

     

    2.  Grant
      of Security Interest.
      The
      Company hereby grants to the Lenders, to secure the payment and performance
      in
      full of all of the Secured Obligations, a security interest in and so pledges
      and assigns to the Lenders the following properties, assets and rights of the
      Company, wherever located, whether now owned or hereafter acquired or arising,
      and all Proceeds and products thereof (all of the same being hereinafter called
      the “Collateral”):
      all
      personal and fixture property of every kind and nature including without
      limitation all Goods (including Inventory, Equipment and any Accessions
      thereto), Instruments (including Promissory Notes), Documents, Accounts, Chattel
      Paper (whether Tangible Chattel Paper or Electronic Chattel Paper), Deposit
      Accounts, Letter-of-Credit Rights (whether or not the Letter of Credit is
      evidenced by a writing), Commercial Tort Claims, Investment Property, Supporting
      Obligations, any other contract rights or rights to the payment of money,
      insurance claims and proceeds, tort claims, and all General Intangibles
      (including all Payment Intangibles). The Lenders acknowledge that the attachment
      of its security interest in any Commercial Tort Claim as original collateral
      is
      subject to the Company’s compliance with Section 4(g).

     

    3.  Authorization
      to File Financing Statements.
      The
      Company hereby irrevocably authorizes the Lenders at any time and from time
      to
      time to file in any Uniform Commercial Code jurisdiction any initial Financing
      Statements and amendments thereto that (a) indicate the Collateral
      (i) as all assets of the Company or words of similar effect, regardless of
      whether any particular asset included in the Collateral falls within the scope
      of Article 9 of the NYUCC, or (ii) as being of an equal or lesser scope or
      with greater detail, and (b) contain any other information required by part
      5 of Article 9 of the NYUCC for the sufficiency or filing office acceptance
      of
      any Financing Statement or amendment, including (i) whether the Company is
      an organization, the type of organization and any organization identification
      number issued to the Company and, (ii) in the case of a Financing Statement
      filed as a fixture filing or indicating Collateral as as-extracted collateral
      or
      timber to be cut, a sufficient description of real property to which the
      Collateral relates. The Company agrees to furnish any such information to the
      Lenders promptly upon request. To the extent the Lenders have previously filed
      any Financing Statement with respect to any Collateral, the Company ratifies,
      confirms and approves the filing of same by the Lenders.

     

    
      
        
        

      

      
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    4.  Other
      Actions.
      To
      further insure the attachment, perfection and first priority of, and the ability
      of the Lenders to enforce the Lenders’ security interest in the Collateral, the
      Company agrees, in each case at the Company’s own expense, to take the following
      actions with respect to the following Collateral:

     

    (a)  Promissory
      Notes and Tangible Chattel Paper.
      If the
      Company shall at any time hold or acquire any Promissory Notes or Tangible
      Chattel Paper, the Company shall (when an Event of Default exists, unless
      required otherwise by another Loan Document) forthwith endorse, assign and
      deliver the same to the Lenders, accompanied by such instruments of transfer
      or
      assignment duly executed in blank as the Lenders may from time to time
      specify.

     

    (b)  Deposit
      Accounts.
      For
      each Deposit Account that the Company at any time opens or maintains, the
      Company shall, at the Lenders’ request made at any time while an Event of
      Default exists, pursuant to an agreement in form and substance satisfactory
      to
      the Lenders, either (1) cause the depositary bank to agree to comply at any
      time with instructions from the Lenders to such depositary bank directing the
      disposition of funds from time to time credited to such Deposit Account, without
      further consent of the Company, or (2) arrange for the Lenders to become
      the customers of the depositary bank with respect to the Deposit Account, with
      the Company being permitted, only with the consent of the Lenders, to exercise
      rights to withdraw funds from such Deposit Account. The Lenders agree with
      the
      Company that the Lenders shall not give any such instructions or withhold any
      withdrawal rights from the Company unless a Payment Default exists (or would
      exist after giving effect to any such withdrawal).
      The
      provisions of this paragraph shall not apply to (i) any Deposit Account for
      which the Company, the depositary bank and the Lenders have entered into a
      cash
      collateral or “control” agreement specially negotiated among the Company, the
      depositary bank and the Lenders for the purpose set forth herein,
      (ii) Deposit Accounts for which the Lenders are the depositary and
      (iii) Deposit Accounts specially and exclusively used for payroll, payroll
      taxes and other employee wage and benefit payments to or for the benefit of
      the
      Company’s salaried employees.

     

    (c)  Investment
      Property.
      If the
      Company shall at any time hold or acquire any Certificated Securities, the
      Company shall forthwith endorse, assign and deliver the same to the Lenders,
      accompanied by such instruments of transfer or assignment duly executed in
      blank
      as the Lenders may from time to time specify. If any securities now or hereafter
      acquired by the Company are uncertificated and are issued to the Company or
      its
      nominee directly by the issuer thereof, the Company shall immediately notify
      the
      Lenders thereof and, at the Lenders’ request and option, pursuant to an
      agreement in form and substance satisfactory to the Lenders, cause the issuer
      to
      agree to comply with instructions from the Lenders as to such securities,
      without further consent of the Company or such nominee. If any securities,
      whether certificated or uncertificated, or other Investment Property now or
      hereafter acquired by the Company are held by the Company or its nominee through
      a Securities Intermediary or Commodity Intermediary, the Company shall
      immediately notify the Lenders thereof and, at the Lenders’ request and option,
      pursuant to an agreement in form and substance satisfactory to the Lenders,
      either (i) cause such Securities Intermediary or (as the case may be)
      Commodity Intermediary to agree to comply with entitlement orders or other
      instructions from the Lenders to such Securities Intermediary as to such
      securities or other Investment Property, or (as the case may be) to apply any
      value distributed on account of any commodity contract as directed by the
      Lenders to such Commodity Intermediary, in each case without further consent
      of
      the Company or such nominee, or (ii) in the case of financial assets or
      other Investment Property held through a Securities Intermediary, arrange for
      the Lenders to become the entitlement holder with respect to such Investment
      Property, with the Company being permitted, only with the consent of the
      Lenders, to exercise rights to withdraw or otherwise deal with such Investment
      Property. The Lenders agree with the Company that the Lenders shall not give
      any
      such entitlement orders or instructions or directions to any such issuer,
      Securities Intermediary or Commodity Intermediary, and shall not withhold its
      consent to the exercise of any withdrawal or dealing rights by the Company,
      unless an Event of Default exists (or would exist after giving effect to any
      such investment or withdrawal). The provisions of this paragraph shall not
      apply
      to any financial assets credited to a securities account for which the Lenders
      is the Securities Intermediary. 

     

    
      
        
        

      

      
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    (d)  Collateral
      in the Possession of a Bailee.
      If any
      goods are at any time in the possession of a bailee, the Company shall promptly
      notify the Lenders thereof and, if requested by the Lenders, shall promptly
      obtain an acknowledgment from the bailee, in form and substance satisfactory
      to
      the Lenders, that the bailee holds such Collateral for the benefit of the
      Lenders and shall act upon the instructions of the Lenders, without the further
      consent of the Company. 

     

    (e)  Electronic
      Chattel Paper and Transferable Records.
      If the
      Company at any time holds or acquires an interest in any Electronic Chattel
      Paper or any “transferable record,” as that term is defined in Section 201 of
      the federal Electronic Signatures in Global and National Commerce Act, or in
§16
      of the Uniform Electronic Transactions Act as in effect in any relevant
      jurisdiction, the Company shall promptly notify the Lenders thereof and, at
      the
      request of the Lenders, shall take such action as the Lenders may reasonably
      request to vest in the Lenders control, under §9-105 of the NYUCC, of such
      Electronic Chattel Paper or control under Section 201 of the federal Electronic
      Signatures in Global and National Commerce Act or, as the case may be, §16 of
      the Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
      of such transferable record. 

     

    (f)  Letter-of-Credit
      Rights.
      If the
      Company is at any time a beneficiary under a letter of credit now or hereafter
      issued in favor of the Company, the Company shall promptly notify the Lenders
      thereof and, at the request and option of the Lenders at any time when an Event
      of Default exists, the Company shall, pursuant to an agreement in form and
      substance satisfactory to the Lenders, either (i) arrange for the issuer
      and any confirmer of such letter of credit to consent to an assignment to the
      Lenders of the proceeds of any drawing under the letter of credit or
      (ii) arrange for the Lenders to become the transferee beneficiaries of the
      letter of credit, with the Lenders agreeing, in each case, that the proceeds
      of
      any drawing under the letter to credit shall be held as collateral for the
      Secured Obligations.

     

    (g)  Commercial
      Tort Claims.
      If the
      Company shall at any time hold or acquire a Commercial Tort Claim, the Company
      shall immediately notify the Lenders in a writing signed by the Company of
      the
      brief details thereof and grant to the Lenders in such writing a security
      interest therein and in the proceeds thereof, all upon the terms of this
      Agreement, with such writing to be in form and substance satisfactory to the
      Lenders. 

     

    
      
        
        

      

      
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    (h)  Other
      Actions as to any and all Collateral.
      The
      Company further agrees to take any other action reasonably requested by the
      Lenders to insure the attachment, perfection and first priority of, and the
      ability of the Lenders to enforce, the Lenders’ security interest in any and all
      of the Collateral including, without limitation, (1) executing, delivering
      and, where appropriate, filing Financing Statements and amendments relating
      thereto under the Uniform Commercial Code, to the extent, if any, that the
      Company’s signature thereon is required therefor, (2) causing the Lenders’
name to be noted as secured party on any certificate of title for a titled
      good
      if such notation is a condition to attachment, perfection or priority of, or
      ability of the Lenders to enforce, the Lenders’ security interest in such
      Collateral, (3) complying with any provision of any statute, regulation or
      treaty of the United States or any foreign jurisdiction to any Collateral if
      compliance with such provision is a condition to attachment, perfection or
      priority of (or comparable concepts under the laws of the United States or
      any
      foreign jurisdiction), or ability of the Lenders to enforce, the Lenders’
security interest in such Collateral, (4) making such filings in the United
      States Copyright Office and the United States Patent and Trademark Office as
      the
      Lenders shall request to register, file or otherwise confirm Lenders’ security
      interest in intellectual property, or rights therein, held by the Company,
      (5) obtaining governmental and other third party consents and approvals,
      including without limitation any consent of any licensor, lessor or other person
      obligated on Collateral, (6) obtaining waivers from mortgagees and
      landlords in form and substance satisfactory to the Lenders and (7) 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.

     

    5.  Conflicts;
      Other Jurisdictions.
      In
      the
      case of any direct conflict between the provisions of this Agreement and any
      other Transaction Document, whether governed by the laws of the United States,
      any state therein or any other jurisdiction, those provisions shall control
      which afford to the Secured Party the greater rights, security and
      indemnification. Without limiting the generality of the foregoing, the parties
      hereto acknowledge that the inclusion of supplemental rights or remedies in
      favor of the Secured Party with respect to any Collateral in any such
      Transaction Document shall not be deemed a conflict with this
      Agreement. 

     

    6.  Representations
      and Warranties.
      The
      Company hereby makes the following representations and warranties to the
      Lenders, which representations and warranties shall survive the execution,
      delivery and performance of this Agreement and the other Transaction
      Documents:

     

    (a)  The
      Company is the owner of, or has other rights in, the Collateral, free from
      any
      adverse lien, security interest or other encumbrance, except for the security
      interest created by this Agreement and other liens permitted by the Transaction
      Documents.

     

    (b)  None
      of
      the Collateral constitutes, or is the proceeds of, Farm Products. 

     

    (c)  None
      of
      the account debtors or other persons obligated on any of the Collateral is
      a
      governmental authority subject to the Federal Assignment of Claims Act or like
      federal, state or local statute or rule in respect of such
      Collateral.

     

    (d)  The
      Company holds no Commercial Tort Claim.

     

    (e)  The
      Company has at all times operated its business in compliance with all applicable
      provisions of the federal Fair Labor Standards Act, as amended, and with all
      applicable provisions of federal, state and local statutes and ordinances
      dealing with the control, shipment, storage or disposal of hazardous materials
      or substances.

     

    
      
        
        

      

      
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    (f)  On
      the
      date hereof, the Company does not hold or have any interest in (directly or
      through a nominee or through a Securities Intermediary or Commodity
      Intermediary) any Investment Property (whether Certificated Securities,
      Uncertificated Securities or otherwise).

     

    (g)  On
      the
      date hereof: 

     

    (i)  the
      Company does not hold or otherwise have any interest in any Electronic Chattel
      Paper or any such transferable record.

     

    (ii)  the
      Company is not a beneficiary under a letter of credit issued in favor of the
      Company.

     

    (iii)  the
      Company possesses no rights in any material or significant copyrights,
      regardless of whether same have been registered with the United States Copyright
      Office or not.

     

    7.  Grant
      of License to Use Patent and Trademark Collateral.
      For the
      purpose of enabling the Lenders to exercise rights and remedies hereunder at
      such time (after the occurrence of an Event of Default) as the Lenders, without
      regard to this Section 7,
      shall
      be lawfully entitled to exercise such rights and remedies, the Company hereby
      grants to the Lenders (effective upon the occurrence of an Event of Default)
      an
      irrevocable, non-exclusive license (exercisable without payment of royalty
      or
      other compensation to the Company) to use, license or sublicense any Patent
      or
      Trademark now owned or hereafter acquired by the Company (or as to which Company
      is now or hereafter a licensee) and wherever the same may be located, and
      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 and automatic
      machinery software and programs used for the compilation or printout
      thereof.

     

    8.  Special
      Provisions Concerning Trademarks and Patents.

     

    (a)  The
      Company (either itself or through licensees) will, for each Patent, not do
      any
      act, or omit to do any act, whereby any Patent which is material to the conduct
      of the Company’s business may become abandoned or dedicated.

     

    (b)  The
      Company shall notify the Lenders immediately if it knows or has reason to know
      that any application or registration relating to any Patent or Trademark which
      is material to the conduct of the Company’s business may become abandoned or
      dedicated, or of any adverse determination or development (including, without
      limitation, the institution of, or any such determination or development in,
      any
      proceeding in the United States Patent and Trademark Office or any court)
      regarding the Company’s ownership of any Patent or Trademark which is material
      to the Company’s business, its right to register the same, or to keep and
      maintain the same. 

     

    (c)  In
      no
      event shall the Company, either itself or through any agent, employee, licensee
      or designee, file an application for the registration of any Patent or Trademark
      with the United States Patent and Trademark Office or any similar office or
      agency in any other country or any political subdivision thereof, unless it
      promptly informs the Lenders, and, upon request of the Lenders, executes and
      delivers any and all agreements, instruments, documents, and papers as the
      Lenders may request to evidence the Lenders’ security interest in such Patent or
      Trademark and the goodwill and general intangibles of the Company relating
      thereto or represented thereby, and the Company hereby constitutes the Lenders
      its attorney-in-fact after an Event of Default has occurred to execute and
      file
      all such writings for the foregoing purposes, all acts of such attorney being
      hereby ratified and confirmed; such power, being coupled with an interest,
      is
      irrevocable until the Secured Obligations are paid in full. 

     

    
      
        
        

      

      
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    (d)  The
      Company will take all necessary steps that are consistent with good business
      practices in any proceeding before the United States Patent and Trademark Office
      or any similar office or agency in any other country or any political
      subdivision thereof, to maintain and pursue each application relating to the
      Patents (and to obtain the relevant registration) and to maintain each
      registration of each of the Patents which is material to the conduct of the
      Company’s business, including, without limitation, filing of applications for
      renewal, affidavits of use, affidavits of incontestability and opposition,
      interference and cancellation proceedings. 

     

    (e)  In
      the
      event that any Collateral consisting of a Patent is infringed, misappropriated
      or diluted by a third party, the Company shall notify the Lenders within (30)
      days after it learns thereof and shall, if consistent with good business
      practice, promptly sue for infringement, misappropriation or dilution and to
      recover any and all damages for such infringement, misappropriation or dilution,
      and take such other actions as are appropriate under the circumstances to
      protect such Collateral consisting of a Patent. 

     

    (f)  If,
      before the Secured Obligations have been satisfied in full, the Company obtains
      rights to any new trademark material to its business or new patent, or becomes
      entitled to the benefit of any trademark material to its business or patent
      application or patent for any reissue, division, continuation, renewal,
      extension, or continuation-in-part of any Patent, or any improvement on any
      Patent, or any Trademark, the provisions of Section 2
      hereof
      shall automatically apply thereto and the Company shall give the Lenders prompt
      notice thereof in writing. 

     

    (g)  The
      Company shall have the duty, through counsel reasonably acceptable to the
      Lenders, to prosecute diligently any patent or trademark application pending
      as
      of the date of this Agreement or thereafter until the Secured Obligations have
      been paid in full, to make application on unpatented but patentable inventions
      and to preserve and maintain all rights in patent and trademark applications;
      provided,
      however,
      that
      the Company shall have no obligation to make application on any unpatented
      but
      patentable inventions if making such application would be unnecessary or
      imprudent in the good faith business judgment of the Company. Any expenses
      incurred in connection with such an application shall be borne by the Company.
      

     

    (h)  The
      Lenders shall have the right but shall in no way be obligated to bring suit
      in
      its own name to enforce the Patents and Trademarks and any license thereunder,
      in which event the Company shall, at the request of the Lenders, do any and
      all
      lawful acts and execute any and all proper documents required by the Lenders
      in
      aid of such enforcement action and indemnify the Lenders for all costs and
      expenses incurred by the Lenders in the exercise of its rights under this
      Section (h). 

     

    (i)  The
      Company represents and warrants that (x) it has no Patents or Trademarks which
      are material to the business or operations of the Company or otherwise important
      to the Company except such as are listed on Schedule 12 to the Perfection
      Certificate, and (y) it is not the holder, owner or licensee of any copyright
      (i) material to its business or (ii) which has been registered with the United
      States Copyright Office. 

     

    
      
        
        

      

      
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    (j)  Until
      the
      occurrence of an Event of Default, the Lenders hereby grant to the Company
      the
      exclusive, nontransferable right and license to use the Trademarks and to make,
      have made, use and sell the inventions disclosed and claimed in the Patents
      for
      the Company’s benefit and account and for none other. The Company agrees not to
      sell or assign its interest in, or grant any sublicense under, the license
      granted to the Company in this clause (j)
      without
      the prior written consent of the Lenders, which consent will not be unreasonably
      withheld. 

     

    9.  Covenants
      Concerning Company’s Legal Status.
      The
      Company covenants with the Lenders as follows: (a) without providing at
      least 60 days prior written notice to the Lenders, the Company will not change
      its name, its place of business or, if more than one, chief executive office,
      or
      its mailing address or organizational identification number if it has one,
      (b) if the Company does not have an organizational identification number
      and later obtains one, the Company shall forthwith notify the Lenders of such
      organizational identification number, and (c) the Company will not change
      its type of organization, jurisdiction of organization or other legal
      structure.

     

    10.  Covenants
      Concerning Collateral, Etc.
      The
      Company further covenants with the Lenders as follows:

     

    (a)  The
      Collateral, to the extent not delivered to the Lenders pursuant to Section
      4,
      will be
      kept at those locations listed on Schedule 10 hereto, and the Company will
      not
      remove the Collateral from such locations (except for the sale of Inventory
      in
      the ordinary course of the Company’s business) without providing at least 60
      days (or such lesser number of days agreed to at the relevant time by the
      Lenders) prior written notice to the Lenders.

     

    (b)  Except
      for the security interest herein granted and liens permitted by the Transaction
      Documents: (1) the Company is and shall be the owner of or have other rights
      in
      the Collateral free from any lien, security interest or other encumbrance,
      and
      (2) the Company shall defend the same against all claims and demands of all
      persons at any time claiming the same or any interests therein adverse to the
      Lenders.

     

    (c)  The
      Company shall not pledge, mortgage or create, or suffer to exist a security
      interest in the Collateral in favor of any person other than the Lenders except
      for liens permitted by the Transaction Documents.

     

    (d)  The
      Company will keep the Collateral in good order and repair (reasonable wear
      and
      tear excepted) and will not use the same in violation of law or any policy
      of
      insurance thereon.

     

    (e)  The
      Company will permit the Lenders, or its designee, to inspect the Collateral
      (wherever located) at any reasonable time.

     

    (f)  The
      Company will pay promptly when due all taxes, assessments, governmental charges
      and levies upon the Collateral or incurred in connection with the use or
      operation of such Collateral or incurred in connection with this Agreement
      (except for taxes, assessments and government charges which are being contested
      in good faith and by appropriate proceedings diligently conducted and the
      Company has set aside on its books adequate reserves therefor in accordance
      with
      generally accepted accounting principles). 

     

    
      
        
        

      

      
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    (g)  The
      Company will continue to operate its business in compliance with all applicable
      provisions of the federal Fair Labor Standards Act, as amended, and with all
      applicable provisions of federal, state and local statutes and ordinances
      dealing with the control, shipment, storage or disposal of hazardous materials
      or substances.

     

    (h)  The
      Company will not sell or otherwise dispose, or offer to sell or otherwise
      dispose, of the Collateral or any interest therein except for (1) sales and
      leases of Inventory, and licenses of general intangibles, in the ordinary course
      of the Company’s business and (2) sales or other dispositions of
      obsolescent items of equipment in the ordinary course of business consistent
      with the Company’s past practices except to the extent same is prohibited by the
      Note.

     

    (i)  The
      Company will, whenever the Company acquires or otherwise possesses any
      significant or material copyrights or any rights or interests therein, provide
      to the Lenders a list thereof, identified (to the extent applicable) by title,
      author and Copyright Office registration number and date.

     

    11.  Insurance.
      The
      Company will maintain with financially sound and reputable insurers insurance
      with respect to its properties and business against loss and damage by fire
      and
      other risks, casualties and contingencies in such manner and to the extent
      that
      like properties are customarily so insured by other corporations engaged in
      the
      same or similar business similarly situated. In the event of failure by the
      Company to provide and maintain insurance as herein provided, the Lenders may,
      at its option, provide such insurance and charge the amount thereof to the
      Company. Lenders, to the extent applicable to the type of policy, shall be
      named
      as a loss payee (“as its interests may appear” or like language); to the extent
      applicable and Lenders are not so named, such will be done no later than ten
      days following the Company’s execution hereof. Certificates of insurance naming
      Lenders as loss payee shall be promptly delivered to Lenders; such certificate
      shall also state, as to the policies referenced therein, that none of such
      policies shall be cancelled by the insurer without at least 30 days prior
      written notice to Lenders.

     

    12.  Collateral
      Protection Expenses; Preservation of Collateral.

     

    (a)  Expenses
      Incurred by Lenders.
      In its
      discretion, the Lenders may discharge taxes and other encumbrances at any time
      levied or placed on any of the Collateral, make repairs thereto and pay any
      necessary filing fees or, if the Company fails to do so, insurance premiums.
      The
      Company agrees to reimburse the Lenders on demand for any and all expenditures
      so made. The Lenders shall have no obligation to the Company to make any such
      expenditures, nor shall the making thereof relieve the Company of any
      default.

     

    (b)  Lenders’
      Obligations and Duties.
      Anything herein to the contrary notwithstanding, the Company shall remain liable
      for its obligations under each contract or agreement included in the Collateral.
      The Lenders shall not have any obligation or liability under any such contract
      or agreement by reason of or arising out of this Agreement or the receipt by
      the
      Lenders of any payment relating to any of the Collateral, nor shall the Lenders
      be obligated in any manner to perform any of the obligations of the Company
      under or pursuant to any such contract or agreement, to make inquiry as to
      the
      nature or sufficiency of any payment received by the Lenders in respect of
      the
      Collateral or as to the sufficiency of any performance by any party under any
      such contract or agreement, to present or file any claim, to take any action
      to
      enforce any performance or to collect the payment of any amounts which may
      have
      been assigned to the Lenders or to which the Lenders may be entitled at any
      time
      or times. The Lenders’ sole duty with respect to the custody, safe keeping and
      physical preservation of the Collateral in its possession, under §9-207 of the
      NYUCC of the State or otherwise, shall be to deal with such Collateral in the
      same manner as the Lenders deals with similar property for its own
      account.

     

    
      
        
        

      

      
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    13.  Notification
      to Account Debtors and Other Persons Obligated on Collateral. Whenever
      an Event of Default exists, the Company shall, at the request of the Lenders,
      notify account debtors and other persons obligated on any of the Collateral
      of
      the security interest of the Lenders in any Account, Chattel Paper, General
      Intangible, Instrument or other Collateral and that payment thereof is to be
      made directly to the Lenders or to any financial institution designated by
      the
      Lenders as the Lenders’ agent therefor, and the Lenders may themselves whenever
      an Event of Default exists, without
      notice to or demand upon the Company, so notify account debtors and other
      persons obligated on Collateral. After the making of such a request or the
      giving of any such notification, the Company shall hold as trustee for the
      Lenders any Proceeds of collection of Accounts, Chattel Paper, General
      Intangibles, Instruments and other Collateral received by the Company without
      commingling the same with other funds of the Company and shall turn the same
      over to the Lenders in the identical form received, together with any necessary
      endorsements or assignments. The Lenders, at their option, shall apply the
      Proceeds of collection of Accounts, Chattel Paper, General Intangibles,
      Instruments and other Collateral received by the Lenders to the Secured
      Obligations, such Proceeds to be immediately entered after final payment in
      cash
      or other immediately available funds of the items giving rise to them, or hold
      such Proceeds as collateral for the Secured Obligations.

     

    14.  Power
      of Attorney.

     

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

     

    (i)  whenever
      an Event of Default exists, generally to sell, transfer, pledge, make any
      agreement with respect to or otherwise deal with any of the Collateral in such
      manner as is consistent with the NYUCC and as fully and completely as though
      the
      Lenders were the absolute owner thereof for all purposes, and to do at the
      Company’s expense, at any time, or from time to time, all acts and things which
      the Lenders deem necessary to protect, preserve or realize upon the Collateral
      and the Lenders’ security interest therein, in order to effect the intent of
      this Agreement, all as fully and effectively as the Company might do, including,
      without limitation, (i) the filing and prosecuting of registration and
      transfer applications with the appropriate federal or local agencies or
      authorities with respect to trademarks, copyrights and patentable inventions
      and
      processes, and (ii) the execution, delivery and recording, in connection
      with any sale or other disposition of any Collateral, of the endorsements,
      assignments or other instruments of conveyance or transfer with respect to
      such
      Collateral; and

     

    
      
        
        

      

      
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    (ii)  to
      the
      extent that the Company’s authorization given in Section 3
      is not
      sufficient, to file such Financing Statements with respect hereto, with or
      without the Company’s signature, or a photocopy of this Agreement in
      substitution for a Financing Statement, as the Lenders may deem appropriate
      and
      to execute in the Company’s name such Financing Statements and amendments
      thereto and continuation statements which may require the Company’s
      signature.

     

    (b)  Ratification
      by Company.
      To the
      extent permitted by law, the Company hereby ratifies all that said attorneys
      shall lawfully do or cause to be done by virtue of this Agreement. This power
      of
      attorney is a power coupled with an interest and shall be
      irrevocable.

     

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

     

    15.  Remedies.
      Whenever an Event of Default exists, the Lenders may, without notice to or
      demand upon the Company, declare this Agreement to be in default, and the
      Lenders shall thereafter have in any jurisdiction in which enforcement hereof
      is
      sought, in addition to all other rights and remedies, the rights and remedies
      of
      a secured party under the NYUCC or of any other jurisdiction in which Collateral
      is located, including, without limitation, the right to take possession of
      the
      Collateral, and for that purpose the Lenders may, so far as the Company can
      give
      authority therefor, enter upon any premises on which the Collateral may be
      situated and remove the same therefrom. The Lenders may in their discretion
      require the Company to assemble all or any part of the Collateral at such
      location or locations within the jurisdiction(s) of the Company’s principal
      office(s) or at such other locations as the Lenders may reasonably designate.
      Unless the Collateral is perishable or threatens to decline speedily in value
      or
      is of a type customarily sold on a recognized market, the Lenders shall give
      to
      the Company at least five Business Days prior written notice of the time and
      place of any public sale of Collateral or of the time after which any private
      sale or any other intended disposition is to be made. The Company hereby
      acknowledges that five Business Days prior written notice of such sale or sales
      shall be reasonable notice. In addition, the Company waives any and all rights
      that it may have to a judicial hearing in advance of the enforcement of any
      of
      the Lenders’ rights hereunder, including, without limitation, the Lenders’ right
      following an Event of Default to take immediate possession of the Collateral
      and
      to exercise its rights with respect thereto.

     

    16.  Standards
      for Exercising Remedies.
      To the
      extent that applicable law imposes duties on the Lenders to exercise remedies
      in
      a commercially reasonable manner, the Company acknowledges and agrees that
      it is
      not commercially unreasonable for the Lenders (a) to incur or fail to incur
      expenses reasonably deemed necessary by the Lenders to prepare Collateral for
      disposition or otherwise to complete raw material or work in process into
      finished goods or other finished products for disposition, (b) to fail to
      obtain third party consents for access to Collateral to be disposed of, or
      to
      obtain or (if not required by other law) to fail to obtain governmental or
      third
      party consents for the collection or disposition of Collateral to be collected
      or disposed of, (c) to fail to exercise collection remedies against account
      debtors or other persons obligated on Collateral or to fail to remove liens
      or
      encumbrances on or any adverse claims against Collateral, (d) to exercise
      collection remedies against account debtors and other persons obligated on
      Collateral directly or through the use of collection agencies and other
      collection specialists, (e) to advertise dispositions of Collateral through
      publications or media of general circulation, whether or not the Collateral
      is
      of a specialized nature, (f) to contact other persons, whether or not in
      the same business as the Company, for expressions of interest in acquiring
      all
      or any portion of the Collateral, (g) to hire or fail to hire one or more
      professional auctioneers to assist in the disposition of Collateral, whether
      or
      not the collateral is of a specialized nature, (h) to dispose of Collateral
      by utilizing Internet sites that provide for the auction of assets of the types
      included in the Collateral or that have the reasonable capability of doing
      so,
      or that match buyers and sellers of assets, (i) to dispose of assets in
      wholesale rather than retail markets, (j) to disclaim disposition
      warranties, (k) to purchase insurance or credit enhancements to insure the
      Lenders against risks of loss, collection or disposition of Collateral or to
      provide to the Lenders a guaranteed return from the collection or disposition
      of
      Collateral, or (l) to the extent deemed appropriate by the Lenders, to
      obtain the services of other brokers, investment bankers, consultants and other
      professionals to assist the Lenders in the collection or disposition of any
      of
      the Collateral. The
      Company acknowledges that the purpose of this Section 16
      is to
      provide non-exhaustive indications of what actions or omissions by the Lenders
      would not be commercially unreasonable in the Lenders’ exercise of remedies
      against the Collateral and that other actions or omissions by the Lenders shall
      not be deemed commercially unreasonable solely on account of not being indicated
      in this Section 16.
      Without
      limitation upon the foregoing, nothing contained in this Section 16
      shall be
      construed to grant any rights to the Company or to impose any duties on the
      Lenders that would not have been granted or imposed by this Agreement or by
      applicable law in the absence of this Section 16.

     

    
      
        
        

      

      
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    17.  No
      Waiver by Lenders, etc.
      The
      Lenders shall not be deemed to have waived any of its rights upon or under
      the
      Secured Obligations or the Collateral unless such waiver shall be in writing
      and
      signed by the Lenders and any other person or entity required by the Note to
      sign such waiver. No delay or omission on the part of the Lenders in exercising
      any right shall operate as a waiver of such right or any other right. A waiver
      on any one occasion shall not be construed as a bar to or waiver of any right
      on
      any future occasion. All rights and remedies of the Lenders with respect to
      the
      Secured Obligations or the Collateral, whether evidenced hereby or by any other
      instrument or papers, shall be cumulative and may be exercised singularly,
      alternatively, successively or concurrently at such time or at such times as
      the
      Lenders deems expedient.

     

    18.  Suretyship
      Waivers by Company.
      The
      Company waives demand, notice, protest, notice of acceptance of this Agreement,
      notice of loans made, credit extended, Collateral received or delivered or
      other
      action taken in reliance hereon and all other demands and notices of any
      description. With respect to both the Secured Obligations and the Collateral,
      the Company assents to any extension or postponement of the time of payment
      or
      any other indulgence, to any substitution, exchange or release of or failure
      to
      perfect any security interest in any Collateral, to the addition or release
      of
      any party or person primarily or secondarily liable, to the acceptance of
      partial payment thereon and the settlement, compromising or adjusting of any
      thereof, all in such manner and at such time or times as the Lenders may deem
      advisable. The Lenders shall have no duty as to the collection or protection
      of
      the Collateral or any income thereon, nor as to the preservation of rights
      against prior parties, nor as to the preservation of any rights pertaining
      thereto beyond the safe custody thereof as set forth in Section 12(b).
      The
      Company further waives any and all other suretyship defenses.

     

    19.  Marshalling.
      The
      Lenders 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 Secured Obligations or any of them or
      to
      resort to such collateral security or other assurances of payment in any
      particular order, and all of its 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
      it
      lawfully may, the Company hereby agrees that it will not invoke any law relating
      to the marshalling of collateral which might cause delay in or impede the
      enforcement of the Lenders’ rights under this Agreement or under any other
      instrument creating or evidencing any of the Secured Obligations or under which
      any of the Secured Obligations is outstanding or by which any of the Secured
      Obligations is secured or payment thereof is otherwise assured, and, to the
      extent that it lawfully may, the Company hereby irrevocably waives the benefits
      of all such laws.

     

    
      
        
        

      

      
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    20.  Proceeds
      of Dispositions; Expenses.
      The
      Company shall pay to the Lenders on demand any and all expenses, including
      reasonable attorneys’ fees and disbursements, incurred or paid by the Lenders in
      protecting, preserving or enforcing the Lenders’ rights under or in respect of
      any of the Secured Obligations or any of the Collateral, or otherwise in
      connection with this Agreement. After deducting all of said expenses, the
      residue of any proceeds of collection or sale of the Secured Obligations or
      Collateral shall, to the extent actually received in cash, be applied to the
      payment of the Secured Obligations in such order or preference as the Lenders
      may determine or held by it as otherwise provided in the Note,
      proper
      allowance and provision being made for any Secured Obligations not then due.
      Upon the final payment and satisfaction in full of all of the Secured
      Obligations and after making any payments required by Sections 9-608(a)(1)(C)
      or
      9-615(a)(3) of the NYUCC or other applicable law, any excess shall be returned
      to the Company, and the Company shall remain liable for any deficiency in the
      payment of the Secured Obligations.

     

    21.  Overdue
      Amounts.
      Until
      paid, all amounts due and payable by the Company hereunder shall be a debt
      secured by the Collateral and shall bear, whether before or after judgment,
      interest (to the fullest extent permitted by applicable law) at the rate of
      eighteen percent (18%) per annum.

     

    22.  Governing
      Law.
      THIS
      AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
      CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
      YORK WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE THAT WOULD RESULT IN THE
      APPLICATION OF THE LAWS OF ANOTHER JURISDICTION, except to the extent that
      matters of title or procedural issues of foreclosure are required to be governed
      by the laws of the state in which the Collateral, or part thereof, is
      located.

     

    23.  Jurisdiction.
      The
      Company hereby agrees that ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY
      WITH RESPECT TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT MAY BE BROUGHT
      IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
      THE SOUTHERN DISTRICT OF NEW YORK AS THE LENDERS MAY ELECT, AND BY EXECUTION
      AND
      DELIVERY OF THIS AGREEMENT THE COMPANY ACCEPTS AND CONSENTS FOR ITSELF AND
      IN
      RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
      THE
      AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE, unless
      waived by the Lenders in writing, with respect to any action or proceeding
      brought by the Company against the Lenders, and further consents (to the extent
      permitted by applicable law) to the service of process in any such action or
      proceeding being made upon the Company by mail at the address stated alongside
      its name on the signature page hereof or at such other address as the Lenders
      are notified of in accordance with Section 24(g)
      hereof.
      The Company hereby waives any objection that it may now or hereafter have to
      the
      venue of any such suit or any such court or that such suit is brought in an
      inconvenient court. Nothing herein shall limit the right of the Lenders to
      bring
      proceedings against the Company in the courts of any other jurisdiction. The
      Company covenants that it is and will remain subject to service of process
      in
      the State of New York so long as any of the Secured Obligations is outstanding.
      Nothing
      herein shall affect the right of the Lenders to serve process in any other
      manner permitted by law.

     

    
      
        
        

      

      
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    24.  Miscellaneous.

     

    (a)  No
      Waiver.
      No
      delay on the part of the Lenders in exercising any of their rights, remedies,
      powers and privileges hereunder or partial or single exercise thereof, shall
      constitute a waiver thereof. None of the terms and conditions of this Agreement
      may be changed, waived, modified or varied in any manner whatsoever unless
      in
      writing duly signed by the Company and the Lenders. No notice to or demand
      on
      the Company in any case shall entitle the Company to any other or further notice
      or demand in similar or other circumstances or constitute a waiver of any of
      the
      rights of the Lenders to any other or further action in any circumstances
      without notice or demand.

     

    (b)  Binding
      Effect.
      The
      obligations of the Company hereunder shall remain in full force and effect
      without regard to, and shall not be impaired by, (i) any bankruptcy, insolvency,
      reorganization, arrangement, readjustment, composition, liquidation or the
      like
      of the Company; (ii) any exercise or non-exercise, or any waiver of, any right,
      remedy, power or privilege under or in respect of this Agreement or any of
      the
      other Transaction Documents, any other agreement executed in connection with
      any
      of the foregoing whereby the Company has granted any Lien to the Lenders or
      any
      other agreement executed in connection with any of the foregoing, the Secured
      Obligations or any security for any of the Secured Obligations; or (iii) any
      amendment to or modification of any of the foregoing; whether or not the Company
      shall have notice or knowledge of any of the foregoing. The rights and remedies
      of the Lenders herein provided are cumulative and not exclusive of any rights
      or
      remedies which the Lenders would otherwise have.

     

    (c)  No
      Violation.
      All
      rights, remedies and powers provided by this Agreement may be exercised only
      to
      the extent that the exercise thereof does not violate any applicable provision
      of law, and the provisions hereof are intended to be subject to all applicable
      mandatory provisions of law that may be controlling and to be limited to the
      extent necessary so that they will not render this Agreement invalid,
      unenforceable in whole or in part or not entitled to be recorded, registered
      or
      filed under the provisions of any applicable law.

     

    (d)  No
      Obligation of Lenders.
      It is
      expressly agreed, anything herein, in the Transaction Documents or in any other
      agreement or instrument executed by the Company in connection with any of the
      Transaction Documents to the contrary notwithstanding, that the Company shall
      remain liable to perform all of the obligations, if any, assumed by it with
      respect to the Collateral and the Lenders shall not have any obligations or
      liabilities with respect to any Collateral by reason of or arising out of this
      Agreement, nor shall the Lenders be required or obligated in any manner to
      perform or fulfill any of the obligations of the Company under or pursuant
      to
      any or in respect of any Collateral.

     

    (e)  Successors.
      This
      Agreement shall be binding upon the Company and its successors and assigns
      and
      shall inure to the benefit of the Lenders and their respective successors and
      assigns, except that the Company may not transfer or assign any of its
      obligations, rights or interest hereunder without the prior written consent
      of
      the Lenders and any such purported assignment by the Company shall be void.
      All
      agreements, representations and warranties made herein shall survive the
      execution, delivery and performance of this Agreement.

     

    
      
        
        

      

      
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    (f)  Headings;
      Amendments.
      The
      descriptive headings of the several sections of this Agreement are inserted
      for
      convenience only and shall not in any way affect the meaning or construction
      of
      any provision of this Agreement. No provision of this Agreement shall be waived,
      amended or supplemented except by a written instrument executed by the Company
      and the Lenders.

     

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

     

    (h)  Notices.
      Any
      notice or demand upon the Company pursuant to this Agreement or any other
      Transaction Document shall be deemed to have been sufficiently given or served
      for all purposes thereof when mailed, postage prepaid, by registered or
      certified mail, return receipt requested, or when telegraphed, telecopied,
      telexed or sent by messenger or by Federal Express (or similar overnight express
      or courier service), to the Company at its address set forth below or at such
      other address as the Company may designate in a writing delivered to the
      Lenders, provided that in the case where the Lenders are required to give only
      five days’ notice of a proposed sale of the Collateral such notice shall not be
      deemed given until delivered to the chief executive office of the Company (or
      the latest such chief executive office of which the Lenders have been notified
      in accordance with the provisions hereof). All notices to the Lenders under
      this
      Agreement shall be deemed to have been given when delivered by mail, telegraph,
      telecopy, telex, messenger or Federal Express (or similar overnight express
      or
      courier service) to the Lenders at their respective addresses set forth below
      or
      at such other address as the Lenders may designate in a writing delivered to
      the
      Company.

     

    (i)  Counterparts.
      This
      Agreement may be executed in any number of counterparts and by the different
      parties hereto on separate counterparts, each of which when so executed and
      delivered shall be an original, but all of which counterparts taken together
      shall be deemed to constitute one and the same instrument. Telecopied signatures
      hereto shall be of the same force and effect as an original of a manually signed
      copy.

     

    25.  Waiver
      of Jury Trial.
      EACH OF
      THE COMPANY AND THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
      WAIVE ANY AND ALL RIGHTS EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
      LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
      AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
      DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE LENDERS,
      THE
      COMPANY OR ANY OTHER PERSON. Except
      as
      prohibited by law, the Company waives any other right which it may have to
      claim
      or recover in any litigation referred to in the preceding sentence any special,
      exemplary, punitive or consequential damages or any damages other than, or
      in
      addition to, actual damages. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
      as of
      the date first above written.

     

    
      	
               

            	
              FUTURE
                NOW GROUP, INC.

               

              By: 

              
                
Name:
                

              Title:
                

              Address: 

               

            
	 	 
	
              Accepted:

               

              PROFESSIONAL
                OFFSHORE OPPORTUNITY 

              FUND,
                LTD.

               

              By:
                

              

              Name:
                

              Title:
                

               

              Address:

               

               

              PROFESSIONAL
                TRADERS FUND, 

              LLC

               

              By:

              
                

              

              Name:
                

              Title:

               

              Address: 

            	
               

            


    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    Schedule
      10

    


    Location
      of Collateral

    


    55
      Washington Street, Suite 419

    Brooklyn,
      NY 11201

     

    
      
        
        

      

      
        18