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                                                                    Exhibit 4.16

                                                                       EXHIBIT E

                               SECURITY AGREEMENT

     SECURITY AGREEMENT, dated as of August 29, 2005 (this "Agreement"), among
Edentify, Inc., a Delaware corporation (the "Debtor") and the holder or holders
of the 6% Debtor's Secured Convertible Debenture in the original principal
amount of $1,000,000 (the "Debenture"), signatory hereto, their endorsees,
transferees and assigns (collectively referred to as, the "Secured Parties").
[IF SUBSIDIARIES EXIST, ALSO REQUIRE A SECURITY AGREEMENT AND GUARANTEE FOR EACH
SUBSIDIARY MODIFIED ACCORDINGLY]

                                   WITNESSETH:

     WHEREAS, pursuant to the Debenture, the Secured Parties have severally
agreed to extend the loans to the Debtor evidenced by the Debenture; and

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

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

     1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.

          (a) "Collateral" means the collateral in which the Secured Parties are
     granted a security interest by this Agreement and which shall include the
     following, whether presently owned or existing or hereafter acquired or
     coming into existence, and all additions and accessions thereto and all
     substitutions and replacements thereof, and all proceeds, products and
     accounts thereof, including, without limitation, all proceeds from the sale
     or transfer of the Collateral and of insurance covering the same and of any
     tort claims in connection therewith:

               (i) All Goods of the Debtor, including, without limitations, all
          machinery, equipment, computers, motor vehicles, trucks, tanks, boats,
          ships, appliances, furniture, special and general tools, fixtures,
          test and quality control devices and other equipment of every kind and
          nature and wherever situated, together with all documents of title and
          documents representing the same, all additions and accessions thereto,
          replacements therefor, all parts therefor, and all substitutes for


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          any of the foregoing and all other items used and useful in connection
          with the Debtor's businesses and all improvements thereto
          (collectively, the "Equipment"); and

               (ii) All Inventory of the Debtor; and

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

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

               (v) All of the Debtor's documents, instruments and chattel paper,
          files, records, books of account, business papers, computer programs
          and the products and proceeds of all of the foregoing Collateral set
          forth in clauses (i)-(iv) above.

          (b) "Obligations" means all of the Debtor's obligations under this
     Agreement and the Debentures, in each case, whether now or hereafter
     existing, voluntary or involuntary, direct or indirect, absolute or
     contingent, liquidated or unliquidated, whether or not jointly owed with
     others, and whether or not from time to time decreased or extinguished and
     later increased, created or incurred, and all or any portion of such
     obligations or liabilities that are paid, to the extent all or any part of
     such payment is avoided or recovered directly or indirectly from any of the
     Secured Parties as a preference, fraudulent transfer or otherwise as such
     obligations may be amended, supplemented, converted, extended or modified
     from time to time.

          (c) "UCC" means the Uniform Commercial Code and or any other
     applicable law of any jurisdiction (including, without limitation, the
     state of California) as to any Collateral located therein.

     2. GRANT OF PERFECTED FIRST PRIORITY SECURITY INTEREST. As an inducement
for the Secured Parties to extend the loans as evidenced by the Debentures and
to secure the complete and timely payment, performance and discharge in full, as
the case may be, of all of the Obligations, the Debtor hereby unconditionally
and irrevocably pledges, grants and hypothecates to the Secured Parties a
continuing and perfected first priority security interest in and to, a lien


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upon and a right of set-off against all of their respective right, title and
interest of whatsoever kind and nature in and to, the Collateral (the "Security
Interest").

     3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE DEBTOR. The
Debtor represents and warrants to, and covenants and agrees with, the Secured
Parties as follows:

          (a) The Debtor has the requisite corporate power and authority to
     enter into this Agreement and otherwise to carry out its obligations
     hereunder. The execution, delivery and performance by the Debtor of this
     Agreement and the filings contemplated therein have been duly authorized by
     all necessary action on the part of the Debtor and no further action is
     required by the Debtor.

          (b) The Debtor represents and warrants that they have no place of
     business or offices where their respective books of account and records are
     kept (other than temporarily at the offices of its attorneys or
     accountants) or places where Collateral is stored or located, except as set
     forth on Schedule A attached hereto.

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

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

          (e) The Debtor shall at all times maintain its books of account and
     records relating to the Collateral at its principal place of business and
     its Collateral at the locations set forth on Schedule A attached hereto and
     may not relocate such books of account and records or tangible Collateral
     unless it delivers to the Secured Parties at least 30 days prior to such
     relocation (i) written notice of such relocation and the new location
     thereof (which must be within the United States) and (ii) evidence that
     appropriate financing statements under the UCC and other necessary
     documents have been filed and


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     recorded and other steps have been taken to perfect the Security Interest
     to create in favor of the Secured Parties a valid, perfected and continuing
     perfected first priority lien in the Collateral.

          (f) This Agreement creates in favor of the Secured Parties a valid
     security interest in the Collateral securing the payment and performance of
     the Obligations and, upon making the filings described in the immediately
     following sentence, a perfected first priority security interest in such
     Collateral.

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

          (h) The execution, delivery and performance of this Agreement by the
     Debtor does not conflict with, or constitute a default (or an event that
     with notice or lapse of time or both would become a default) under, or give
     to others any rights of termination, amendment, acceleration or
     cancellation (with or without notice, lapse of time or both) of, any
     agreement, credit facility, debt or other instrument (evidencing Debtor's
     debt or otherwise) or other understanding to which Debtor is a party or by
     which any property or asset of the Debtor is bound or affected. No consent
     (including, without limitation, from stockholders or creditors of the
     Debtor) is required for the Debtor to enter into and perform its
     obligations hereunder.

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

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


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

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

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

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

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

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

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

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

          (s) The Debtor will not change its name, corporate structure, or
     identity, or add any new fictitious name unless it provides at least 30
     days prior written notice to the


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     Secured Parties of such change and, at the time of such written
     notification, such Debtor provides any financing statements or fixture
     filings necessary to perfect and continue perfected the perfected first
     priority Security Interest granted and evidenced by this Agreement.

          (t) The Debtor may not consign any of its Inventory or sell any of its
     Inventory on bill and hold, sale or return, sale on approval, or other
     conditional terms of sale without the consent of a majority in interest of
     the Secured Parties which shall not be unreasonably withheld..

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

     4. DEFAULTS. The following events shall be "Events of Default":

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

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

          (c) The failure by Debtor to observe or perform any of its obligations
     hereunder for five (5) days after delivery to Debtor of notice of such
     failure by or on behalf of a Secured Party;

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

     5. Duty To Hold In Trust. Upon the occurrence of any Event of Default and
at any time thereafter, the Debtor shall, upon receipt of any revenue, income or
other sums subject to the Security Interest, whether payable pursuant to the
Debenture or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in trust
for the Secured Parties and shall forthwith endorse and transfer any such sums
or instruments, or both, to the Secured Parties, pro-rata in proportion to their
initial purchases of Debentures for application to the satisfaction of the
Obligations (and if any Debenture is not outstanding, pro-rata in proportion to
the initial purchases of the remaining Debentures).

     6. Rights and Remedies Upon Default. Upon the occurrence of any Event of
Default and at any time thereafter, the Secured Parties shall have the right to
exercise all of the remedies


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conferred hereunder and under the Debentures, and the Secured Parties shall have
all the rights and remedies of a secured party under the UCC. Without
limitation, the Secured Parties shall have the following rights and powers:

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

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

     7. Applications of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral hereunder shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and
the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Parties in enforcing their
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations pro rata among the
Secured Parties, and to the payment of any other amounts required by applicable
law, after which the Secured Parties shall pay to the applicable Debtor any
surplus proceeds. If, upon the sale, license or other disposition of the
Collateral, the proceeds thereof are insufficient to pay all amounts to which
the Secured Parties are legally entitled, the Debtor will be liable for the
deficiency, together with interest thereon, at the rate of 10% per annum or the
lesser amount permitted by applicable law (the "Default Rate"), and the
reasonable fees of any attorneys employed by the Secured Parties to collect such
deficiency. To the extent permitted by applicable law, the Debtor waives all
claims, damages and demands against the Secured Parties arising out of the
repossession, removal, retention or sale of the Collateral, unless due to the
gross negligence or willful misconduct of the Secured Parties.


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

     9. Responsibility for Collateral. The Debtor assumes all liabilities and
responsibility in connection with all Collateral, and the Obligations in no way
be affected or diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its unavailability for any reason.

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


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Parties may hold at any time, or to marshal assets, or to pursue any other
remedy. The Debtor waives any defense arising by reason of the application of
the statute of limitations to any obligation secured hereby.

     11. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debentures have been made
in full or have been satisfied and all other Obligations have been paid or
discharged. Upon such termination, the Secured Parties, at the request and at
the expense of the Debtor, will join in executing any termination statement with
respect to any financing statement executed and filed pursuant to this
Agreement.

     12. Power of Attorney; Further Assurances.

          (a) The Debtor authorizes the Secured Parties, and does hereby make,
     constitute and appoint the Secured Parties and their respective officers,
     agents, successors or assigns with full power of substitution, as the
     Debtor's true and lawful attorney-in-fact, with power, in the name of the
     various Secured Parties or the Debtor, to, after the occurrence and during
     the continuance of an Event of Default, (i) endorse any note, checks,
     drafts, money orders or other instruments of payment (including payments
     payable under or in respect of any policy of insurance) in respect of the
     Collateral that may come into possession of the Secured Parties; (ii) to
     sign and endorse any financing statement pursuant to the UCC or any
     invoice, freight or express bill, bill of lading, storage or warehouse
     receipts, drafts against debtors, assignments, verifications and notices in
     connection with accounts, and other documents relating to the Collateral;
     (iii) to pay or discharge taxes, liens, security interests or other
     encumbrances at any time levied or placed on or threatened against the
     Collateral; (iv) to demand, collect, receipt for, compromise, settle and
     sue for monies due in respect of the Collateral; and (v) generally, to do,
     at the option of the Secured Parties, and at the expense of the Debtor, at
     any time, or from time to time, all acts and things which the Secured
     Parties deem necessary to protect, preserve and realize upon the Collateral
     and the Security Interest granted therein in order to effect the intent of
     this Agreement and the Debentures all as fully and effectually as the
     Debtor might or could do; and the Debtor hereby ratifies all that said
     attorney shall lawfully do or cause to be done by virtue hereof. This power
     of attorney is coupled with an interest and shall be irrevocable for the
     term of this Agreement and thereafter as long as any of the Obligations
     shall be outstanding.

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


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          (c) The Debtor hereby irrevocably appoints the Secured Parties as the
     Debtor's attorney-in-fact, with full authority in the place and instead of
     the Debtor and in the name of the Debtor, from time to time in the Secured
     Parties' discretion, to take any action and to execute any instrument which
     the Secured Parties may deem necessary or advisable to accomplish the
     purposes of this Agreement, including the filing, in its sole discretion,
     of one or more financing or continuation statements and amendments thereto,
     relative to any of the Collateral without the signature of the Debtor where
     permitted by law.

     13. Notices. All notices, requests, demands and other communications
hereunder shall be subject to the notice provision of the Purchase Agreement.

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

     15. Miscellaneous.

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

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

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

          (d) In the event any provision of this Agreement is held to be
     invalid, prohibited or unenforceable in any jurisdiction for any reason,
     unless such provision is narrowed by judicial construction, this Agreement
     shall, as to such jurisdiction, be construed as if such invalid, prohibited
     or unenforceable provision had been more narrowly drawn so as not to be
     invalid, prohibited or unenforceable. If, notwithstanding the foregoing,
     any provision of this Agreement is held to be invalid, prohibited or
     unenforceable in any jurisdiction, such provision, as to such jurisdiction,
     shall be ineffective to the extent of such invalidity,


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     prohibition or unenforceability without invalidating the remaining portion
     of such provision or the other provisions of this Agreement and without
     affecting the validity or enforceability of such provision or the other
     provisions of this Agreement in any other jurisdiction.

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

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

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

          (h) All questions concerning the construction, validity, enforcement
     and interpretation of this Agreement shall be governed by and construed and
     enforced in accordance with the internal laws of the State of New York,
     without regard to the principles of conflicts of law thereof. Each party
     agrees that all proceedings concerning the interpretations, enforcement and
     defense of the transactions contemplated by this Agreement and the
     Debenture (whether brought against a party hereto or its respective
     affiliates, directors, officers, shareholders, employees or agents) shall
     be commenced exclusively in the state and federal courts sitting in the
     City of New York, Borough of Manhattan. Each party hereto hereby
     irrevocably submits to the exclusive jurisdiction of the state and federal
     courts sitting in the City of New York, Borough of Manhattan for the
     adjudication of any dispute hereunder or in connection herewith or with any
     transaction contemplated hereby or discussed herein, and hereby irrevocably
     waives, and agrees not to assert in any proceeding, any claim that it is
     not personally subject to the jurisdiction of any such court, that such
     proceeding is improper. Each party hereto hereby irrevocably waives
     personal service of process and consents to process being served in any
     such proceeding by mailing a copy thereof via registered or certified mail
     or overnight delivery (with evidence of delivery) to such party at the
     address in effect for notices to it under this Agreement and agrees that
     such service shall constitute good and sufficient service of process and
     notice thereof. Nothing contained herein shall be deemed to limit in any
     way any right to serve process in any manner permitted by law. Each party
     hereto hereby irrevocably waives, to the fullest extent permitted by
     applicable law, any and all right to trial by jury in any legal proceeding
     arising out of or relating to this Agreement or the transactions
     contemplated hereby. If either party shall commence a proceeding to enforce
     any provisions of this Agreement, then the prevailing party in such
     proceeding shall be reimbursed by the other party for its reasonable
     attorneys fees and other costs and expenses incurred with the
     investigation, preparation and prosecution of such proceeding.


                                       11

<PAGE>

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

                            [SIGNATURE PAGES FOLLOW]


                                       12

<PAGE>

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

                                        EDENTIFY, INC.


                                        By:
                                            ------------------------------------
                                        Name: Terrence DeFranco
                                        Title: President

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]


                                       13

<PAGE>

                   [SIGNATURE PAGE OF HOLDERS TO EDENTIFY SA]

Name of Investing Entity:
                          --------------------------


Signature of Authorized Signatory of Investing entity:
                                                       -------------------------
Name of Authorized Signatory:
                              --------------------------
Title of Authorized Signatory:
                               -------------------------

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]


                                       14

<PAGE>

                                   SCHEDULE A

Principal Place of Business of Debtor:
                                       -----------------------------------------

Locations Where Collateral is Located or Stored:
                                                 -------------------------------


                                       15

<PAGE>

                                   SCHEDULE B


                                       16

<PAGE>

                                   SCHEDULE C


                                       17