Unassociated Document


    Green
      Screen Interactive Software, Inc.

     

    Senior
      Secured Note

     

     

    
      	
              Issuance
                Date: July 7, 2008

            


    

    


    FOR
      VALUE RECEIVED,
      Green
      Screen Interactive Software, Inc., a Delaware corporation (the "Company"),
      hereby promises to pay to the order of Driftwood Ventures, Inc. or its
      registered assigns ("Holder")
      the
      principal sum of Seven Million Dollars ($7,000,000) or, if less, the aggregate
      unpaid principal amount of the Loan (as hereinafter defined) (the “Principal”)
      when
      due, whether upon the Maturity Date (as defined below), on acceleration or
      otherwise (in each case in accordance with the terms hereof) and to pay interest
      ("Interest")
      on any
      outstanding Principal at the rate of ten percent (10.00%) per annum (the
      "Interest
      Rate"),
      from
      the date set out above as the Issuance Date (the "Issuance Date")
      until
      the same becomes due and payable, whether upon the Maturity Date, acceleration
      or otherwise (in each case in accordance with the terms hereof). This Senior
      Secured Note, (including all Senior Secured Notes issued in exchange, transfer
      or replacement hereof) is hereinafter referred to as this "Note".
      Certain capitalized terms used herein are defined in Section 28. All advances
      made by Holder to the Company hereunder and all payments made to Holder on
      account of Principal hereof shall be noted by Holder on the schedule of advances
      and payments of principal that is attached as Exhibit
      A
      hereto
      and hereby made a part hereof; provided, however,
      that any
      error or omission by Holder in this regard shall not affect the obligation
      of
      the Company to pay the full amount of the Principal and Interest on all advances
      made to the Company by Holder. All advances to be made by Holder to the Company
      shall be made in accordance with Section 1 of the Securities Purchase
      Agreement.

     

    (1) PAYMENTS
      OF PRINCIPAL.
      On
      the
      Maturity Date, the Company shall pay to the Holder an amount in cash
      representing all outstanding Principal, accrued and unpaid Interest and accrued
      and unpaid Late Charges on such Principal and interest. The
      "Maturity Date"
      shall
      be September 30, 2008, as may be extended at the option of the Holder (i) in
      the
      event that, and for so long as, an Event of Default (as defined in Section
      4(a))
      shall have occurred and be continuing on the Maturity Date (as may be extended
      pursuant to this Section 1) or any event that shall have occurred and be
      continuing that with the passage of time and the failure to cure would result
      in
      an Event of Default and (ii) through the date that is ten (10) Business Days
      after the consummation of a Change of Control. Notwithstanding anything to
      the
      contrary contained herein, this Note and any and all amounts due hereunder,
      shall be automatically extinguished upon the consummation and closing of the
      transactions contemplated by that certain Agreement and Plan of Merger, by
      and
      among Holder, DFTW Merger Sub, Inc. and the Company, dated as of the date
      hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (2) INTEREST;
      INTEREST RATE.
      Interest on this Note shall commence accruing on the Issuance Date and shall
      be
      computed on the basis of a 365-day year and actual days elapsed and shall be
      payable in arrears on, and including, the Maturity Date (each, an "Interest Date").
      From
      and after the occurrence and during the continuance of an Event of Default,
      the
      Interest Rate shall be increased to fifteen percent (15.00%). In the event
      that
      such Event of Default is subsequently cured, the adjustment referred to in
      the
      preceding sentence shall cease to be effective as of the date of such cure.
      

     

    (3) [INTENTIONALLY
      LEFT BLANK].
      

     

    (4) RIGHTS
      UPON EVENT OF DEFAULT.

     

    (a) Event
      of Default.
      Each of
      the following events shall constitute an "Event
      of Default":

     

    (i) the
      Company's failure to pay to the Holder any amount of Principal, Interest, Late
      Charges or other amounts when and as due under this Note or any other
      Transaction Document (as defined in the Securities Purchase Agreement) or any
      other agreement, document, certificate or other instrument delivered in
      connection with the transactions contemplated hereby and thereby to which the
      Holder is a party, except, in the case of a failure to pay Interest and Late
      Charges when and as due, in which case only if such failure continues for a
      period of at least five (5) Business Days after written notice
      thereof;

     

    (ii) any
      default under or acceleration prior to maturity of any Indebtedness of the
      Company or any of its Subsidiaries (as defined in Section 3(a) of the Securities
      Purchase Agreement);

     

    (iii) the
      Company or any of its Subsidiaries, pursuant to or within the meaning of Title
      11, U.S. Code, or any similar Federal, foreign or state law for the relief
      of
      debtors (collectively, "Bankruptcy
      Law"),
      (A)
      commences a voluntary case, (B) consents to the entry of an order for relief
      against it in an involuntary case, (C) consents to the appointment of a
      receiver, trustee, assignee, liquidator or similar official (a "Custodian"),
      (D)
      makes a general assignment for the benefit of its creditors or (E) admits in
      writing that it is generally unable to pay its debts as they become
      due;

     

    (iv) a
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that (A) is for relief against the Company or any of its Subsidiaries in an
      involuntary case, (B) appoints a Custodian of the Company or any of its
      Subsidiaries or (C) orders the liquidation of the Company or any of its
      Subsidiaries;

     

    (v) a
      final
      judgment or judgments for the payment of money aggregating in excess of $250,000
      are rendered against the Company or any of its Subsidiaries and which judgments
      are not, within sixty (60) days after the entry thereof, bonded, discharged
      or
      stayed pending appeal, or are not discharged within sixty (60) days after the
      expiration of such stay; provided, however, that any judgment which is covered
      by insurance or an indemnity from a credit worthy party shall not be included
      in
      calculating the $250,000 amount set forth above so long as the Company provides
      the Holder a written statement from such insurer or indemnity provider (which
      written statement shall be reasonably satisfactory to the Holder) to the effect
      that such judgment is covered by insurance or an indemnity and the Company
      will
      receive the proceeds of such insurance or indemnity within thirty (30) days
      of
      the issuance of such judgment;

     

    
      
        
        

      

      
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    (vi) the
      Company breaches any representation, warranty, covenant or other term or
      condition of any Transaction Document, except, in the case of a breach of a
      covenant which is curable, only if such breach continues for a period of at
      least ten (10) consecutive Business Days after written notice thereof;
      or

     

    (vii) any
      breach or failure in any respect to comply with Section 14 of this Note, where
      such failure continues for a period of at least five (5) Business Days after
      written notice thereof;

     

    (5) RIGHTS
      UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.

     

    (a) Assumption.
      The
      Company shall not enter into or be party to a Fundamental Transaction with
      any
      party other than the Holder or its affiliates unless the Successor Entity
      assumes in writing all of the obligations of the Company under this Note and
      the
      other Transaction Documents in accordance with the provisions of this Section
      5(a) pursuant to written agreements in form and substance satisfactory to the
      Holder and approved by the Holder prior to such Fundamental Transaction,
      including agreements to deliver to the Holder in exchange for its Note a
      security of the Successor Entity evidenced by a written instrument substantially
      similar in form and substance to the Note, including, without limitation, having
      a principal amount and interest rate equal to the principal amounts then
      outstanding and the interest rates of the Note and having similar ranking to
      the
      Note, and satisfactory to the Holder. Upon the occurrence of any Fundamental
      Transaction with any party other than the Holder or its affiliates, the
      Successor Entity shall succeed to, and be substituted for (so that from and
      after the date of such Fundamental Transaction, the provisions of this Note
      referring to the "Company" shall refer instead to the Successor Entity), and
      may
      exercise every right and power of the Company and shall assume all of the
      obligations of the Company under this Note with the same effect as if such
      Successor Entity had been named as the Company herein. The provisions of this
      Section shall apply similarly and equally to successive Fundamental
      Transactions.

     

    (6) [INTENTIONALLY
      LEFT BLANK].

     

    (7) 
      [INTENTIONALLY LEFT BLANK].

     

    (8) [INTENTIONALLY
      LEFT BLANK].
      

     

    (9) SECURITY.
      This
      Note is secured to the extent and in the manner set forth in the Security
      Documents (as defined in the Securities Purchase Agreement).

     

    (10) NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Certificate of Incorporation, Bylaws or through any reorganization, transfer
      of assets, consolidation, merger, scheme of arrangement, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Note, and will at all
      times in good faith carry out all of the provisions of this Note and take all
      action as may be required to protect the rights of the Holder of this Note.
      

     

    
      
        
        

      

      
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    (11) [INTENTIONALLY
      LEFT BLANK].

     

    (12) [INTENTIONALLY
      LEFT BLANK].

     

    (13) VOTING
      RIGHTS.
      The
      Holder shall have no voting rights as the holder of this Note, except as
      required by law, including, but not limited to, the General Corporation Law
      of
      the State of Delaware and as expressly provided in this Note or any other
      Transaction Document.

     

    (14) COVENANTS.

     

    (a) Rank. All
      payments due under this Note shall be senior to all other Indebtedness of the
      Company and its Subsidiaries other than the Existing Indebtedness.

     

    (b) Incurrence
      of Indebtedness.
      So long
      as this Note is outstanding, the Company shall not, and the Company shall not
      permit any of its Subsidiaries to, directly or indirectly, incur or guarantee,
      assume or suffer to exist any Indebtedness, other than (i) the Indebtedness
      evidenced by this Note and (ii) Permitted Indebtedness.

     

    (c) Existence
      of Liens.
      So long
      as this Note is outstanding, the Company shall not, and the Company shall not
      permit any of its Subsidiaries to, directly or indirectly, allow or suffer
      to
      exist any mortgage, lien, pledge, charge, security interest or other encumbrance
      upon or in any property or assets (including accounts and contract rights)
      owned
      by the Company or any of its Subsidiaries (collectively, "Liens")
      other
      than Permitted Liens.

     

    (d) Restricted
      Payments.
      The
      Company shall not, and the Company shall not permit any of its Subsidiaries
      to,
      directly or indirectly, redeem, defease, repurchase, repay or make any payments
      in respect of, by the payment of cash or cash equivalents (in whole or in part,
      whether by way of open market purchases, tender offers, private transactions
      or
      otherwise), all or any portion of any Permitted Indebtedness, whether by way
      of
      payment in respect of principal of (or premium, if any) or interest on such
      Indebtedness, if at the time such payment is due or is otherwise made or, after
      giving effect to such payment, an event constituting, or that with the passage
      of time and without being cured would constitute, an Event of Default has
      occurred and is continuing; provided that notwithstanding the foregoing, no
      principal (or any portion thereof) of any Subordinated Indebtedness may be
      paid
      (whether upon maturity, redemption, acceleration or otherwise) so long as this
      Note is outstanding.

     

    (e) Restriction
      on Redemption and Cash Dividends.
      Until
      the Note has been satisfied in accordance with its terms, the Company shall
      not,
      directly or indirectly, redeem, repurchase or declare or pay any cash dividend
      or distribution on its capital stock without the prior express written consent
      of the Holder.

     

    (15) [INTENTIONALLY
      LEFT BLANK]

     

    (16) [INTENTIONALLY
      LEFT BLANK]

     

    
      
        
        

      

      
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    (17) TRANSFER.
      This
      Note may be offered, sold, assigned or transferred by the Holder without the
      consent of the Company, subject only to the provisions of Section 2(f) of the
      Securities Purchase Agreement.

     

    (18) REISSUANCE
      OF THIS NOTE.

     

    (a) Transfer.
      If this
      Note is to be transferred, the Holder shall surrender this Note to the Company,
      whereupon the Company will forthwith issue and deliver upon the order of the
      Holder a new Note (in accordance with Section 18(d)), registered as the Holder
      may request, representing the outstanding Principal being transferred by the
      Holder and, if less then the entire outstanding Principal is being transferred,
      a new Note (in accordance with Section 18(d)) to the Holder representing the
      outstanding Principal not being transferred. 

     

    (b) Lost,
      Stolen or Mutilated Note.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Note, and, in the case of loss,
      theft or destruction, of any indemnification undertaking by the Holder to the
      Company in customary form and, in the case of mutilation, upon surrender and
      cancellation of this Note, the Company shall execute and deliver to the Holder
      a
      new Note (in accordance with Section 18(d)) representing the outstanding
      Principal.

     

    (c) Note
      Exchangeable for Different Denominations.
      This
      Note is exchangeable, upon the surrender hereof by the Holder at the principal
      office of the Company, for a new Note or Notes (in accordance with Section
      18(d)
      and in principal amounts of at least $100,000) representing in the aggregate
      the
      outstanding Principal of this Note, and each such new Note will represent such
      portion of such outstanding Principal as is designated by the Holder at the
      time
      of such surrender.

     

    (d) Issuance
      of New Notes.
      Whenever the Company is required to issue a new Note pursuant to the terms
      of
      this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall
      represent, as indicated on the face of such new Note, the Principal remaining
      outstanding (or in the case of a new Note being issued pursuant to Section
      18(a)
      or Section 18(c), the Principal designated by the Holder which, when added
      to
      the principal represented by the other new Notes issued in connection with
      such
      issuance, does not exceed the Principal remaining outstanding under this Note
      immediately prior to such issuance of new Notes), (iii) shall have an issuance
      date, as indicated on the face of such new Note, which is the same as the
      Issuance Date of this Note, (iv) shall have the same rights and conditions
      as
      this Note, and (v) shall represent accrued and unpaid Interest and Late Charges
      on the Principal and Interest of this Note, if any, from the Issuance
      Date.

     

    (19) REMEDIES,
      CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
      RELIEF.
      The
      remedies provided in this Note shall be cumulative and in addition to all other
      remedies available under this Note and any of the other Transaction Documents
      at
      law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the Holder's right to pursue
      actual and consequential damages for any failure by the Company to comply with
      the terms of this Note. Amounts set forth or provided for herein with respect
      to
      payments and the like (and the computation thereof) shall be the amounts to
      be
      received by the Holder and shall not, except as expressly provided herein,
      be
      subject to any other obligation of the Company (or the performance thereof).
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Holder and that the remedy at law for any such breach
      may be inadequate. The Company therefore agrees that, in the event of any such
      breach or threatened breach, the Holder shall be entitled, in addition to all
      other available remedies, to an injunction restraining any breach, without
      the
      necessity of showing economic loss and without any bond or other security being
      required.

     

    
      
        
        

      

      
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    (20) PAYMENT
      OF COLLECTION, ENFORCEMENT AND OTHER COSTS.
      If (a)
      this Note is placed in the hands of an attorney for collection or enforcement
      or
      is collected or enforced through any legal proceeding or the Holder otherwise
      takes action to collect amounts due under this Note or to enforce the provisions
      of this Note or (b) there occurs any bankruptcy, reorganization, receivership
      of
      the Company or other proceedings affecting Company creditors' rights and
      involving a claim under this Note, then the Company shall pay the reasonable
      costs incurred by the Holder for such collection, enforcement or action or
      in
      connection with such bankruptcy, reorganization, receivership or other
      proceeding, including, but not limited to, attorneys' fees and
      disbursements.

     

    (21) CONSTRUCTION;
      HEADINGS.
      This
      Note shall be deemed to be jointly drafted by the Company and the Holder and
      shall not be construed against any person as the drafter hereof. The headings
      of
      this Note are for convenience of reference and shall not form part of, or affect
      the interpretation of, this Note.

     

    (22) FAILURE
      OR INDULGENCE NOT WAIVER.
      No
      failure or delay on the part of the Holder in the exercise of any power, right
      or privilege hereunder shall operate as a waiver thereof, nor shall any single
      or partial exercise of any such power, right or privilege preclude other or
      further exercise thereof or of any other right, power or privilege.

     

    (23) [INTENTIONALLY
      LEFT BLANK]

     

    (24) NOTICES;
      PAYMENTS.

     

    (a) Notices.
      Whenever notice is required to be given under this Note, unless otherwise
      provided herein, such notice shall be given in accordance with Section 9(f)
      of
      the Securities Purchase Agreement. The Company shall provide the Holder with
      prompt written notice of all actions taken pursuant to this Note, including
      in
      reasonable detail a description of such action and the reason therefore. Without
      limiting the generality of the foregoing, the Company will give written notice
      to the Holder at least twenty (20) days prior to the date on which the Company
      closes its books or takes a record (i) with respect to any dividend or
      distribution upon the Common Stock, (ii) with respect to any pro rata
      subscription offer to holders of Common Stock or (iii) for determining rights
      to
      vote with respect to any Fundamental Transaction, dissolution or liquidation,
      provided in each case that such information shall be made known to the public
      prior to or in conjunction with such notice being provided to the
      Holder.

     

    
      
        
        

      

      
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    (b) Payments.
      Whenever any payment of cash is to be made by the Company to any Person pursuant
      to this Note, such payment shall be made in lawful money of the United States
      of
      America by a check drawn on the account of the Company and sent via overnight
      courier service to such Person at such address as previously provided to the
      Company in writing (which address, in the case of each of the Purchasers, shall
      initially be as set forth on the Schedule of Buyers attached to the Securities
      Purchase Agreement); provided that the Holder may elect to receive a payment
      of
      cash via wire transfer of immediately available funds by providing the Company
      with prior written notice setting out such request and the Holder's wire
      transfer instructions. Whenever any amount expressed to be due by the terms
      of
      this Note is due on any day which is not a Business Day, the same shall instead
      be due on the next succeeding day which is a Business Day and, in the case
      of
      any Interest Date which is not the date on which this Note is paid in full,
      the
      extension of the due date thereof shall not be taken into account for purposes
      of determining the amount of Interest due on such date. Any amount of Principal
      or other amounts due under the Transaction Documents, other than Interest,
      which
      is not paid when due shall result in a late charge being incurred and payable
      by
      the Company in an amount equal to interest on such amount at the rate of fifteen
      percent (15.0%) per annum from the date such amount was due until the same
      is
      paid in full ("Late
      Charge").

     

    (25) CANCELLATION.
      After
      all Principal, accrued Interest and other amounts at any time owed on this
      Note
      have been paid in full, this Note shall automatically be deemed canceled, shall
      be surrendered to the Company for cancellation and shall not be
      reissued.

     

    (26) WAIVER
      OF NOTICE.
      To the
      extent permitted by law, the Company hereby waives demand, notice, protest and
      all other demands and notices in connection with the delivery, acceptance,
      performance, default or enforcement of this Note and the Securities Purchase
      Agreement.

     

    (27) GOVERNING
      LAW; JURISDICTION;
      SEVERABILITY; JURY TRIAL.
      This
      Note shall be construed and enforced in accor-dance with, and all questions
      concerning the construction, validity, interpretation and performance of this
      Note shall be governed by, the internal laws of the State of New York, without
      giving effect to any choice of law or conflict of law provision or rule (whether
      of the State of New York or any other jurisdictions) that would cause the
      application of the laws of any jurisdictions other than the State of New York.
      The Company 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 suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper. Nothing contained herein
      shall be deemed to limit in any way any right to serve process in any manner
      permitted by law. In the event that any provision of this Note is invalid or
      unenforceable under any applicable statute or rule of law, then such provision
      shall be deemed inoperative to the extent that it may conflict therewith and
      shall be deemed modified to conform with such statute or rule of law. Any such
      provision which may prove invalid or unenforceable under any law shall not
      affect the validity or enforceability of any other provision of this Note.
      Nothing contained herein shall be deemed or operate to preclude the Holder
      from
      bringing suit or taking other legal action against the Company in any other
      jurisdiction to collect on the Company's obligations to the Holder, to realize
      on any collateral or any other security for such obligations, or to enforce
      a
      judgment or other court ruling in favor of the Holder. THE
      COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
      HEREBY.

     

    
      
        
        

      

      
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    (28) CERTAIN
      DEFINITIONS.
      For
      purposes of this Note, the following terms shall have the following
      meanings:

     

    (a) "Approved
      Stock Plan"
      means
      any employee benefit plan which has been approved by the Board of Directors
      of
      the Company, pursuant to which the Company's securities may be issued to any
      employee, officer or director for services provided to the Company.

     

    (b) "Business
      Day"
      means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    (c) "Change
      of Control"
      means
      any Fundamental Transaction other than (A) any reorganization, recapitalization
      or reclassification of Common Stock, in which holders of the Company's voting
      power immediately prior to such reorganization, recapitalization or
      reclassification continue after such reorganization, recapitalization or
      reclassification to hold publicly traded securities and, directly or indirectly,
      the voting power of the surviving entity or entities necessary to elect a
      majority of the members of the board of directors (or their equivalent if other
      than a corporation) of such entity or entities, or (B) pursuant to a migratory
      merger effected solely for the purpose of changing the jurisdiction of
      incorporation of the Company.

     

    (d) "Contingent
      Obligation"
      means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto.

     

    (e) "Existing
      Indebtedness"
      means
      the Indebtedness set forth on Schedule 28(h) attached hereto. 

     

    (f) "Fundamental
      Transaction"
      means
      that the Company shall, directly or indirectly, in one or more related
      transactions, (i) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person or Persons, or (ii) sell, assign,
      transfer, convey or otherwise dispose of all or substantially all of the
      properties or assets of the Company to another Person, or (iii) allow another
      Person to make a purchase, tender or exchange offer that is accepted by the
      holders of more than the 50% of the outstanding shares of Voting Stock (not
      including any shares of Voting Stock held by the Person or Persons making or
      party to, or associated or affiliated with the Persons making or party to,
      such
      purchase, tender or exchange offer), or (iv) consummate a stock purchase
      agreement or other business combination (including, without limitation, a
      reorganization, recapitalization, spin-off or scheme of arrangement) with
      another Person whereby such other Person acquires more than the 50% of the
      outstanding shares of Voting Stock (not including any shares of Voting Stock
      held by the other Person or other Persons making or party to, or associated
      or
      affiliated with the other Persons making or party to, such stock purchase
      agreement or other business combination), (v) reorganize, recapitalize or
      reclassify its Common Stock or (vi) any "person" or "group" (as these terms
      are
      used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall
      become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
      Act),
      directly or indirectly, of 50% of the aggregate ordinary voting power
      represented by issued and outstanding Common Stock.

     

    
      
        
        

      

      
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    (g) "GAAP"
      means
      United States generally accepted accounting principles, consistently
      applied.

     

    (h) "Indebtedness"
      of any
      Person means, without duplication (i) all indebtedness for borrowed money,
      (ii)
      all obligations issued, undertaken or assumed as the deferred purchase price
      of
      property or services, including (without limitation) "capital leases" in
      accordance with generally accepted accounting principles (other than trade
      payables entered into in the ordinary course of business), (iii) all
      reimbursement or payment obligations with respect to letters of credit, surety
      bonds and other similar instruments, (iv) all obligations evidenced by notes,
      bonds, debentures or similar instruments, including obligations so evidenced
      incurred in connection with the acquisition of property, assets or businesses,
      (v) all indebtedness created or arising under any conditional sale or other
      title retention agreement, or incurred as financing, in either case with respect
      to any property or assets acquired with the proceeds of such indebtedness (even
      though the rights and remedies of the seller or bank under such agreement in
      the
      event of default are limited to repossession or sale of such property), (vi)
      all
      monetary obligations under any leasing or similar arrangement which, in
      connection with generally accepted accounting principles, consistently applied
      for the periods covered thereby, is classified as a capital lease, (vii) all
      indebtedness referred to in clauses (i) through (vi) above secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, and (viii) all Contingent Obligations in respect of
      indebtedness or obligations of others of the kinds referred to in clauses (i)
      through (vii) above.

     

    (i) "Parent
      Entity"
      of a
      Person means an entity that, directly or indirectly, controls the applicable
      Person and whose common stock or equivalent equity security is quoted or listed
      on an Eligible Market, or, if there is more than one such Person or Parent
      Entity, the Person or Parent Entity with the largest public market
      capitalization as of the date of consummation of the Fundamental
      Transaction.

     

    (j) "Permitted
      Indebtedness"
      means
      (i) Indebtedness incurred by the Company that is made expressly subordinate
      in
      right of payment to the Indebtedness evidenced by this Note, as reflected in
      a
      written agreement acceptable to the Holder and approved by the Holder in
      writing, (such Indebtedness, the "Subordinated
      Indebtedness"),
      (ii)
      Existing Indebtedness, (iii) Indebtedness secured by Permitted Liens, (iv)
      Indebtedness to trade creditors incurred in the ordinary course of business,
      and
      (v) extensions,
      refinancings and renewals of any items of Permitted Indebtedness, provided
      that
      the principal amount is not increased or the terms modified to impose more
      burdensome terms upon the Company or its Subsidiary, as the case may
      be.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (k) "Permitted
      Liens"
      means
      (i) any Lien for taxes not yet due or delinquent or being contested in good
      faith by appropriate proceedings for which adequate reserves have been
      established in accordance with GAAP, (ii) any statutory Lien arising in the
      ordinary course of business by operation of law with respect to a liability
      that
      is not yet due or delinquent, (iii) any Lien created by operation of law, such
      as materialmen's liens, mechanics' liens and other similar liens, arising in
      the
      ordinary course of business with respect to a liability that is not yet due
      or
      delinquent or that are being contested in good faith by appropriate proceedings,
      (iv) Liens securing the Company's obligations under the Notes; (v) Liens (A)
      upon or in any equipment (as defined in the Security Agreement) acquired or
      held
      by the Company or any of its Subsidiaries to secure the purchase price of such
      equipment or indebtedness incurred solely for the purpose of financing the
      acquisition or lease of such equipment, or (B) existing on such equipment at
      the
      time of its acquisition, provided that the Lien is confined solely to the
      property so acquired and improvements thereon, and the proceeds of such
      equipment, (vi) Liens incurred in connection with the extension, renewal or
      refinancing of the indebtedness secured by Liens of the type described in
      clauses (i) and (v) above, provided that any extension, renewal or replacement
      Lien shall be limited to the property encumbered by the existing Lien and the
      principal amount of the Indebtedness being extended, renewed or refinanced
      does
      not increase, (vii) Liens securing the Company's obligations under the Existing
      Indebtedness; (viii) leases or subleases and licenses and sublicenses granted
      to
      others in the ordinary course of the Company's business, not interfering in
      any
      material respect with the business of the Company and its Subsidiaries taken
      as
      a whole, (ix) Liens in favor of customs and revenue authorities arising as
      a matter of law to secure payments of custom duties in connection with the
      importation of goods, and (x)
      Liens
      arising from judgments, decrees or attachments in circumstances not constituting
      an Event of Default under Section 4(a)(ix).

     

    (l) "Person"
      means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization, any other entity and
      a
      government or any department or agency thereof. 

     

    (m) "Securities
      Purchase Agreement"
      means
      that certain securities purchase agreement dated as of the Subscription Date
      by
      and among the Company and the Holders pursuant to which the Company issued
      the
      Notes. 

     

    (n) "Subscription
      Date"
      means
      July 7, 2008.

     

    (o) "Successor
      Entity"
      means
      the Person, which may be the Company, formed by, resulting from or surviving
      any
      Fundamental Transaction or the Person with which such Fundamental Transaction
      shall have been made, provided that if such Person is not a publicly traded
      entity whose common stock or equivalent equity security is quoted or listed
      for
      trading on an Eligible Market, Successor Entity shall mean such Person's Parent
      Entity.

     

    (p) "Voting
      Stock"
      of a
      Person means capital stock of such Person of the class or classes pursuant
      to
      which the holders thereof have the general voting power to elect, or the general
      power to appoint, at least a majority of the board of directors, managers or
      trustees of such Person (irrespective of whether or not at the time capital
      stock of any other class or classes shall have or might have voting power by
      reason of the happening of any contingency).

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    


    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed as of
      the
      Issuance Date set out above.

     

    


    
      	 	
              GREEN
                SCREEN INTERACTIVE SOFTWARE, INC.

            
	 	 
	 	 
	 	
              By:
                /s/
                Ron Chaimowitz

            
	 	
              Name:
                Ron
                Chaimowitz

            
	 	
              Title:
                Chief Executive Officer

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      A

    


    ADVANCES
      AND PAYMENTS OF PRINCIPAL

    


    
      	
               

               

               

              Date

            	
               

               

              Amount
                of

              Advance

            	
               

               

              Amount
                of

              Principal
                Paid

            	
               

               

              Unpaid
                Principal Balance

            	
               

               

              Notation

              Made
                by

            
	
               

              7/7/08

            	
               

              $3,028,888.89