**Exhibit
      10.38**





**AMENDED
      AND RESTATED SECURITY AGREEMENT**





This
      AMENDED AND RESTATED SECURITY AGREEMENT, dated as of March__, 2007 (this
“ Agreement ”),
      is
      among CyberDefender
      Corporation, a California corporation (the
      “ Company ”),
      and,
      if and when the Company creates or acquires any subsidiaries, all of such future
      subsidiaries of the Company pursuant
      to a Joinder Agreement (such subsidiaries ,
      the
“ Guarantors ” and
      together with the Company ,
      the
“ Debtors ”),
      the
      holders of the Company’s 10% Secured Convertible Debentures due September 12,
      2009 and issued on September 12, 2006 in the original aggregate principal amount
      of $3,243,378 (collectively, the “ Debentures ”)
      signatory hereto, their endorsees, transferees and assigns, and the holders
      of
      the Company’s 7.41% Senior Secured Notes due [March] ___, 2008 in the original
      aggregate principal amount of $864,000 (collectively, the “ OID
      Notes ”)
      signatory hereto, their endorsees, transferees and assigns (the holders of
      the
      Debentures and OID Notes collectively, the “ Secured
      Parties ”).  **As
      of the date hereof the Company has no direct or indirect subsidiaries and
      accordingly all references to Guarantors and Debtors other than the Company
      shall be disregarded until such time that Guarantors are added pursuant to
      the
      terms hereof.**





**WITNESSETH:**





WHEREAS,
      pursuant to the Debentures and the OID Notes, the Secured Parties have severally
      agreed to extend the loans to the Company evidenced by the
      Debentures and the
      OID Notes; and





WHEREAS,
      in order to induce the Secured Parties to extend the loans evidenced by the
      Debentures and the OID Notes, each 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 and through the Agent, a security interest in certain
      property of such Debtor to secure the prompt payment, performance and discharge
      in full of all of the Company’s obligations under the Debentures and the OID
      Notes.





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 “account”, “chattel paper”, “commercial
      tort claim”, “deposit account”, “document”, “equipment”, “fixtures”, “general
      intangibles”, “goods”, “instruments”, “inventory”, “investment property”,
“letter-of-credit rights”, “proceeds” and “supporting obligations”) 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 personal property of the
      Debtors, whether presently owned or existing or hereafter acquired or coming
      into existence, wherever situated, 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 ,
      and all
      dividends, interest, cash, notes, securities, equity interest or other property
      at any time and from time to time acquired, receivable or otherwise distributed
      in respect of, or in exchange for, any or all of the Pledged Securities (as
      defined below) :




1




(i)
      All
      goods, including, without limitation, (A) 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 any of the
      foregoing and all other items used and useful in connection with any Debtor’s
      businesses and all improvements thereto; and (B) all inventory;





(ii)  All
      contract rights and other general intangibles, including, without limitation,
      all partnership interests, membership interests, stock or other securities, rights
      under any of the Organizational Documents, agreements related to the Pledged
      Securities, licenses,
      distribution and other agreements, computer software (whether “off-the-shelf”,
      licensed from any third party or developed by any 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, and income tax
      refunds;




(iii)  All
      accounts, 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 account, including any right of
      stoppage in transit;





(iv)  All
      documents, letter-of-credit rights, instruments and chattel paper;





(v)  All
      commercial tort claims;





(vi)  All
      deposit accounts and all cash (whether or not deposited in such deposit
      accounts);





(vii)  All
      investment property;





(viii)  All
      supporting obligations; and




2




(ix)  All
      files, records, books of account, business papers, and computer programs;
      and





(x)  the
      products and proceeds of all of the foregoing Collateral set forth in clauses
      (i)-(ix) above.





Without
      limiting the generality of the foregoing, the “ Collateral ”
shall
      include all investment property and general intangibles respecting ownership
      and/or other equity interests in each Guarantor, including, without limitation,
      the shares of capital stock and the other equity interests listed on Schedule
      H hereto
      (as the same may be modified from time to time pursuant to the terms hereof),
      and any other shares of capital stock and/or other equity interests of any
      other
      direct or indirect subsidiary of any Debtor obtained in the future, and, in
      each
      case, all certificates representing such shares and/or equity interests and,
      in
      each case, all rights, options, warrants, stock, other securities and/or equity
      interests that may hereafter be received, receivable or distributed in respect
      of, or exchanged for, any of the foregoing and all rights arising under or
      in
      connection with the Pledged Securities, including, but not limited to, all
      dividends, interest and cash.




Notwithstanding
      the foregoing, nothing herein shall be deemed to constitute an assignment of
      any
      asset which, in the event of an assignment, becomes void by operation of
      applicable law or the assignment of which is otherwise prohibited by applicable
      law (in each case to the extent that such applicable law is not overridden
      by
      Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law);
      provided, however, that to the extent permitted by applicable law, this
      Agreement shall create a valid security interest in such asset and, to the
      extent permitted by applicable law, this Agreement shall create a valid security
      interest in the proceeds of such asset.





(b)  “ Intellectual
      Property ”
means
      the collective reference to all rights, priorities and privileges relating
      to
      intellectual property, whether arising under United States, multinational or
      foreign laws or otherwise, including, without limitation, (i) all copyrights
      arising under the laws of the United States, any other country or any political
      subdivision thereof, whether registered or unregistered and whether published
      or
      unpublished, all registrations and recordings thereof, and all applications
      in
      connection therewith, including, without limitation, all registrations,
      recordings and applications in the United States Copyright Office, (ii) all
      letters patent of the United States, any other country or any political
      subdivision thereof, all reissues and extensions thereof, and all applications
      for letters patent of the United States or any other country and all divisions,
      continuations and continuations-in-part thereof, (iii) all trademarks, trade
      names, corporate names, company names, business names, fictitious business
      names, trade dress, service marks, logos, domain names and other source or
      business identifiers, and all goodwill associated therewith, now existing or
      hereafter adopted or acquired, all registrations and recordings thereof, and
      all
      applications in connection therewith, whether in the United States Patent and
      Trademark Office or in any similar office or agency of the United States, any
      State thereof or any other country or any political subdivision thereof, or
      otherwise, and all common law rights related thereto, (iv) all trade secrets
      arising under the laws of the United States, any other country or any political
      subdivision thereof, (v) all rights to obtain any reissues, renewals or
      extensions of the foregoing, (vi) all licenses for any of the foregoing, and
      (vii) all causes of action for infringement of the foregoing.




3




(c)  “ Majority
      in Interest ”
means,
      at any time of determination, the majority in interest (based on
      then-outstanding principal amounts of Debentures and OID Notes at the time
      of
      such determination) of the Secured Parties.





(d)  “ Necessary
      Endorsement ”
means
      undated stock powers endorsed in blank or other proper instruments of assignment
      duly executed and such other instruments or documents as the Agent (as that
      term
      is defined below) may reasonably request.





( e )  “ Obligations ”
means
      all of the liabilities
      and obligations (primary, secondary, direct, contingent, sole, joint or several)
      due or to become due, or that are now or may be hereafter contracted or
      acquired, or owing to, of any Debtor to the Secured Parties, including, without
      limitation, all obligations under this Agreement, the Debentures and OID Notes, the Guarantee
      and any other instruments, agreements or other documents executed and/or
      delivered in connection herewith or therewith, 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. Without
      limiting the generality of the foregoing, the term “Obligations” shall include,
      without limitation: (i) principal of, and interest on the Debentures and OID
      Notes and the loans extended pursuant thereto; (ii) any and all other fees,
      indemnities, costs, obligations and liabilities of the Debtors from time to
      time
      under or in connection with this Agreement, the Debentures and OID Notes, the
      Guarantee and any other instruments, agreements or other documents executed
      and/or delivered in connection herewith or therewith; and (iii) all amounts
      (including but not limited to post-petition interest) in respect of the
      foregoing that would be payable but for the fact that the obligations to pay
      such amounts are unenforceable or not allowable due to the existence of a
      bankruptcy, reorganization or similar proceeding involving any
      Debtor.





( f )  “ Organizational
      Documents ”
means
      with respect to any Debtor, the documents by which such Debtor was organized
      (such as a certificate of incorporation, certificate of limited partnership
      or
      articles of organization, and including, without limitation, any certificates
      of
      designation for preferred stock or other forms of preferred equity) and which
      relate to the internal governance of such Debtor (such as bylaws, a partnership
      agreement or an operating, limited liability or members agreement).




4




( g )  “ Pledged
      Securities ”
if
      applicable to this Agreement, shall have the meaning ascribed to such term
      in
      Section 4(i). If Section 4(i) has been intentionally left blank, then all
      references to Pledged Securities shall be disregarded.





(h)  “ UCC ”
means
      the Uniform Commercial Code of the State of New York and or any other applicable
      law of any state or states which has jurisdiction with respect to all, or any
      portion of, the Collateral or this Agreement, from time to time. It is the
      intent of the parties that defined terms in the UCC should be construed in
      their
      broadest sense so that the term “Collateral” will be construed in its broadest
      sense. Accordingly if there are, from time to time, changes to defined terms
      in
      the UCC that broaden the definitions, they are incorporated herein and if
      existing definitions in the UCC are broader than the amended definitions, the
      existing ones shall be controlling.





2.  **Grant
      of Security Interest in Collateral** .
      As an
      inducement for the Secured Parties to extend the loans as evidenced by the
      Debentures and OID Notes and to secure the complete and timely payment,
      performance and discharge in full, as the case may be, of all of the
      Obligations, each Debtor hereby unconditionally and irrevocably pledges, grants
      and hypothecates to the Secured Parties a security interest in and to, a lien
      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 (a
“ Security
      Interest ”
and
      collectively, the “ Security
      Interests ”).





3.  **Delivery
      of Certain Collateral** .
      Contemporaneously or prior to the execution of this Agreement, each Debtor
      shall
      deliver or cause to be delivered to the Agent (a) any and all certificates
      and
      other instruments representing or evidencing the Pledged Securities, and (b)
      any
      and all certificates and other instruments or documents representing any of
      the
      other Collateral, in each case, together with all Necessary Endorsements. The
      Debtors are, contemporaneously with the execution hereof, delivering to Agent,
      or have previously delivered to Agent, a true and correct copy of each
      Organizational Document governing any of the Pledged Securities.





4.   **Representations,
      Warranties, Covenants and Agreements of the Debtors** .
      Except
      as set forth under the corresponding section of the disclosure schedules
      delivered to the Secured Parties concurrently herewith (the “ Disclosure
      Schedules ”),
      which
      Disclosure Schedules shall be deemed a part hereof, each Debtor represents
      and
      warrants to, and covenants and agrees with, the Secured Parties as
      follows:





(a)
      Each
      Debtor has the requisite corporate, partnership, limited liability company
      or
      other power and authority to enter into this Agreement and otherwise to carry
      out its obligations hereunder. The execution, delivery and performance by each
      Debtor of this Agreement and the filings contemplated therein have been duly
      authorized by all necessary action on the part of such Debtor and no further
      action is required by such Debtor. This Agreement has been duly executed by
      each
      Debtor. This Agreement constitutes the legal, valid and binding obligation
      of
      each Debtor, enforceable against each Debtor in accordance with its terms except
      as such enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization and similar laws of general application relating to or affecting
      the rights and remedies of creditors and by general principles of
      equity.




5




(b)  The
      Debtors 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. Except as specifically set forth on Schedule
      A ,
      each
      Debtor is the record owner of the real property where such Collateral is
      located, and there exist no mortgages or other liens on any such real property
      except for Permitted Liens (as defined in the Debentures). Except as disclosed
      on Schedule
      A ,
      none of
      such Collateral is in the possession of any consignee, bailee, warehouseman,
      agent or processor.





(c)  Except
      for Permitted Liens (as defined in the Debentures) and except as set forth
      on Schedule
      B attached
      hereto, the Debtors are the sole owner of the Collateral (except for
      non-exclusive licenses granted by any 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 Interests. Except
      as
      set forth on Schedule
      B attached
      hereto, 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. Except as set forth on Schedule
      B
      attached hereto and except pursuant to this Agreement, as long as this Agreement
      shall be in effect, the Debtors shall not execute and shall not knowingly permit
      to be on file in any such office or agency any other 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
      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 any Debtor's claim of ownership rights in or exclusive rights to
      use
      the Collateral in any jurisdiction or to any 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 any Debtor, threatened before
      any court, judicial body, administrative or regulatory agency, arbitrator or
      other governmental authority.





(e)  Each
      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 recorded and other steps have been taken to perfect the
      Security Interests 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, subject only to Permitted Liens (as defined in the Debentures)
      securing the payment and performance of the Obligations. Upon making the filings
      described in the immediately following paragraph, all security interests created
      hereunder in any Collateral which may be perfected by filing Uniform Commercial
      Code financing statements shall have been duly perfected. Except for the filing
      of the Uniform Commercial Code financing statements referred to in the
      immediately following paragraph, the recordation of the Intellectual Property
      Security Agreement (as defined below) with respect to copyrights and copyright
      applications in the United States Copyright Office referred to in paragraph
      (m), the
      execution and delivery of deposit account control agreements satisfying the
      requirements of Section 9-104(a)(2) of the UCC with respect to each deposit
      account of the Debtors, and the
      delivery of the certificates and other instruments provided in Section
      3, no
      action is necessary to create, perfect or protect the security interests created
      hereunder. Without limiting the generality of the foregoing, except for the
      filing of said financing statements, the recordation of said Intellectual
      Property Security Agreement, and the execution and delivery of said deposit
      account control agreements, no consent of any third parties and no
      authorization, approval or other action by, and no notice to or filing with,
      any
      governmental authority or regulatory body is required for (i) the execution,
      delivery and performance of this Agreement, (ii) the creation or perfection
      of
      the Security Interests created hereunder in the Collateral or (iii) the
      enforcement of the rights of the Agent and the Secured Parties
      hereunder.




6




(g)  Each
      Debtor hereby authorizes the Agent to file one or more financing statements
      under the UCC, with respect to the Security Interests with the proper filing
      and
      recording agencies in any jurisdiction deemed proper by it.





(h)  The
      execution, delivery and performance of this Agreement by the Debtors does not
      (i) violate any of the provisions of any Organizational Documents of any Debtor
      or any judgment, decree, order or award of any court, governmental body or
      arbitrator or any applicable law, rule or regulation applicable to any Debtor
      or
      (ii) 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 any Debtor's debt or otherwise) or other understanding
      to
      which any Debtor is a party or by which any property or asset of any Debtor
      is
      bound or affected. If any, all required consents (including, without limitation,
      from stockholders or creditors of any Debtor) necessary for any Debtor to enter
      into and perform its obligations hereunder have been obtained.




(i)  [Intentionally
      deleted].





(j)  [Intentionally
      deleted].





(k)  Except
      for Permitted Liens (as defined in the Debentures), each Debtor shall at all
      times maintain the liens and Security Interests 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 14 hereof. Each Debtor hereby
      agrees to defend the same against the claims of any and all persons and
      entities. Each Debtor shall safeguard and protect all Collateral for the account
      of the Secured Parties. At the request of the Agent, each Debtor will sign
      and
      deliver to the Agent on behalf of 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 Agent and will pay the cost of filing the same in all public
      offices wherever filing is, or is deemed by the Agent to be, necessary or
      desirable to effect the rights and obligations provided for herein. Without
      limiting the generality of the foregoing, each Debtor shall pay all fees, taxes
      and other amounts necessary to maintain the Collateral and the Security
      Interests hereunder, and each Debtor shall obtain and furnish to the Agent
      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 Interests
      hereunder.




7




( l )  No
      Debtor
      will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose
      of any of the Collateral (except for non-exclusive licenses granted by a Debtor
      in its ordinary course of business and sales of inventory by a Debtor in its
      ordinary course of business) without the prior written consent of a Majority
      in Interest .





( m )  Each
      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.





( n)  Each
      Debtor shall maintain with financially sound and reputable insurers, insurance
      with respect to the Collateral, including Collateral hereafter acquired, against
      loss or damage of the kinds and in the amounts customarily insured against
      by
      entities of established reputation having similar properties similarly situated
      and in such amounts as are customarily carried under similar circumstances
      by
      other such entities and otherwise as is prudent for entities engaged in similar
      businesses but in any event sufficient to cover the full replacement cost
      thereof. Each Debtor shall cause each insurance policy issued in connection
      herewith to provide, and the insurer issuing such policy to certify to the
      Agent
      that (a) the Agent will be named as lender loss payee and additional insured
      under each such insurance policy; (b) if such insurance be proposed to be
      cancelled or materially changed for any reason whatsoever, such insurer will
      promptly notify the Agent and such cancellation or change shall not be effective
      as to the Agent for at least thirty (30) days after receipt by the Agent of
      such
      notice, unless the effect of such change is to extend or increase coverage
      under
      the policy; and (c) the Agent will have the right (but no obligation) at its
      election to remedy any default in the payment of premiums within thirty (30)
      days of notice from the insurer of such default. If no Event of Default (as
      defined in the Debentures) exists and if the proceeds arising out of any claim
      or series of related claims do not exceed $100,000, loss payments in each
      instance will be applied by the applicable Debtor to the repair and/or
      replacement of property with respect to which the loss was incurred to the
      extent reasonably feasible, and any loss payments or the balance thereof
      remaining, to the extent not so applied, shall be payable to the applicable
      Debtor, provided, however, that payments received by any Debtor after an Event
      of Default occurs and is continuing or in excess of $100,000 for any occurrence
      or series of related occurrences shall be paid to the Agent on behalf of the
      Secured Parties and, if received by such Debtor, shall be held in trust for
      the
      Secured Parties and immediately paid over to the Agent unless otherwise directed
      in writing by the Agent. Copies of such policies or the related certificates,
      in
      each case, naming the Agent as lender loss payee and additional insured shall
      be
      delivered to the Agent at least annually and at the time any new policy of
      insurance is issued.




8




(o)  Each
      Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the
      Secured Parties promptly, in sufficient detail, of any material adverse 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, through the Agent, therein.





( p )  Each
      Debtor shall promptly execute and deliver to the Agent such further deeds,
      mortgages, assignments, security agreements, financing statements or other
      instruments, documents, certificates and assurances and take such further action
      as the Agent may from time to time request and may in its sole discretion deem
      necessary to perfect, protect or enforce the Secured Parties’ 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 reasonably acceptable to the Agent, which Intellectual
      Property Security Agreement, other than as stated therein, shall be subject
      to
      all of the terms and conditions hereof.





( q )  Each
      Debtor shall permit the Agent and its representatives and agents to inspect
      the
      Collateral during normal business hours and upon reasonable prior notice, and
      to
      make copies of records pertaining to the Collateral as may be reasonably
      requested by the Agent from time to time.





( r )  Each
      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.





( s )  Each
      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 such
      Debtor that may materially affect the value of the Collateral, the Security
      Interest or the rights and remedies of the Secured Parties
      hereunder.





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




9




( u )  The
      Debtors 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.





( v )  No
      Debtor
      will change its name, type of organization, jurisdiction of organization,
      organizational identification number (if it has one), legal or corporate
      structure, or identity, or add any new fictitious name unless it provides at
      least 30 days prior written notice to the 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 the perfection
      of the Security Interests granted and evidenced by this Agreement.





( w )  Except
      in
      the ordinary course of business, no Debtor may 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 the
      Agent
      which shall not be unreasonably withheld.





( x )  No
      Debtor
      may 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, such Debtor provides any financing
      statements or fixture filings necessary to perfect and continue the perfection
      of the Security Interests granted and evidenced by this Agreement.





( y )  Each
      Debtor was organized and remains organized solely under the laws of the state
      set forth next to such Debtor’s name in Schedule
      D attached
      hereto, which Schedule
      D sets
      forth each Debtor’s organizational identification number or, if any Debtor does
      not have one, states that one does not exist.





( z )  (i) The
      actual name of each Debtor is the name set forth in Schedule
      D attached
      hereto; (ii) no Debtor has any trade names except as set forth on Schedule
      E attached
      hereto; (iii) no Debtor has used any name other than that stated in the preamble
      hereto or as set forth on Schedule
      E for the
      preceding five years; and (iv) no entity has merged into any Debtor or been
      acquired by any Debtor within the past five years except as set forth on Schedule
      E .





( aa )  At
      any
      time and from time to time that any Collateral consists of instruments,
      certificated securities or other items that require or permit possession by
      the
      secured party to perfect the security interest created hereby, the applicable
      Debtor shall deliver such Collateral to the Agent.





(bb)  [Intentionally
      Deleted].




( cc )  Each
      Debtor shall cause all tangible chattel paper constituting Collateral to be
      delivered to the Agent, or, if such delivery is not possible, then to cause
      such
      tangible chattel paper to contain a legend noting that it is subject to the
      security interest created by this Agreement. To the extent that any Collateral
      consists of electronic chattel paper, the applicable Debtor shall cause the
      underlying chattel paper to be “marked” within the meaning of Section 9-105 of
      the UCC (or successor section thereto).




10




( dd )  If
      there
      is any investment property or deposit account included as Collateral that can
      be
      perfected by “control” through an account control agreement, the applicable
      Debtor shall cause such an account control agreement, in form and substance
      in
      each case satisfactory to the Agent, to be entered into and delivered to the
      Agent for the benefit of the Secured Parties.





( ee )  To
      the
      extent that any Collateral consists of letter-of-credit rights, the applicable
      Debtor shall cause the issuer of each underlying letter of credit to consent
      to
      an assignment of the proceeds thereof to the Secured Parties.





( ff )  To
      the
      extent that any Collateral is in the possession of any third party, the
      applicable Debtor shall join with the Agent in notifying such third party of
      the
      Secured Parties’ security interest in such Collateral and shall use its best
      efforts to obtain an acknowledgement and agreement from such third party with
      respect to the Collateral, in form and substance reasonably satisfactory to
      the
      Agent.





( gg )  If
      any
      Debtor shall at any time hold or acquire a commercial tort claim, such Debtor
      shall promptly notify the Secured Parties in a writing signed by such Debtor
      of
      the particulars thereof and grant to the Secured Parties 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 Agent.





( hh )   Each
      Debtor shall immediately provide written notice to the Secured Parties of any
      and all accounts which arise out of contracts with any governmental authority
      and, to the extent necessary to perfect or continue the perfected status of
      the
      Security Interests in such accounts and proceeds thereof, shall execute and
      deliver to the Agent an assignment of claims for such accounts and cooperate
      with the Agent in taking any other steps required, in its judgment, under the
      Federal Assignment of Claims Act or any similar federal, state or local statute
      or rule to perfect or continue the perfected status of the Security Interests
      in
      such accounts and proceeds thereof.





( ii )  Each
      Debtor shall cause each subsidiary of such
      Debtor to immediately become a party hereto (an “ Additional
      Debtor ”),
      by
      executing and delivering an Additional Debtor Joinder in substantially the
      form
      of Annex A attached hereto and comply with the provisions hereof applicable
      to
      the Debtors. Concurrent therewith, the Additional Debtor shall deliver
      replacement schedules for, or supplements to all other Schedules to (or referred
      to in) this Agreement, as applicable, which replacement schedules shall
      supersede, or supplements shall modify, the Schedules then in effect. The
      Additional Debtor shall also deliver such opinions of counsel, authorizing
      resolutions, good standing certificates, incumbency certificates, organizational
      documents, financing statements and other information and documentation as
      the
      Agent may reasonably request. Upon delivery of the foregoing to the Agent,
      the
      Additional Debtor shall be and become a party to this Agreement with the same
      rights and obligations as the Debtors, for all purposes hereof as fully and
      to
      the same extent as if it were an original signatory hereto and shall be deemed
      to have made the representations, warranties and covenants set forth herein
      as
      of the date of execution and delivery of such Additional Debtor Joinder, and
      all
      references herein to the “Debtors” shall be deemed to include each Additional
      Debtor.




11




( jj)  Each
      Debtor shall vote the Pledged Securities to comply with the covenants and
      agreements set forth herein and in the Debentures and OID Notes.





(kk)  Each
      Debtor shall register the pledge of the applicable Pledged Securities on the
      books of such Debtor. Each Debtor shall notify each issuer of Pledged Securities
      to register the pledge of the applicable Pledged Securities in the name of
      the
      Secured Parties on the books of such issuer. Further, except with respect to
      certificated securities delivered to the Agent, the applicable Debtor shall
      deliver to Agent an acknowledgement of pledge (which, where appropriate, shall
      comply with the requirements of the relevant UCC with respect to perfection
      by
      registration) signed by the issuer of the applicable Pledged Securities, which
      acknowledgement shall confirm that: (a) it has registered the pledge on its
      books and records; and (b) at any time directed by Agent during the continuation
      of an Event of Default, such issuer will transfer the record ownership of such
      Pledged Securities into the name of any designee of Agent, will take such steps
      as may be necessary to effect the transfer, and will comply with all other
      instructions of Agent regarding such Pledged Securities without the further
      consent of the applicable Debtor.





(ll) In
      the
      event that, upon an occurrence of an Event of Default, Agent shall sell all
      or
      any of the Pledged Securities to another party or parties (herein called the
      “ Transferee ”)
      or
      shall purchase or retain all or any of the Pledged Securities, each Debtor
      shall, to the extent applicable: (i) deliver to Agent or the Transferee, as
      the
      case may be, the articles of incorporation, bylaws, minute books, stock
      certificate books, corporate seals, deeds, leases, indentures, agreements,
      evidences of indebtedness, books of account, financial records and all other
      Organizational Documents and records of the Debtors and their direct and
      indirect subsidiaries; (ii) use its best efforts to obtain resignations of
      the
      persons then serving as officers and directors of the Debtors and their direct
      and indirect subsidiaries, if so requested; and (iii) use its best efforts
      to
      obtain any approvals that are required by any governmental or regulatory body
      in
      order to permit the sale of the Pledged Securities to the Transferee or the
      purchase or retention of the Pledged Securities by Agent and allow the
      Transferee or Agent to continue the business of the Debtors and their direct
      and
      indirect subsidiaries.




(mm )  Without
      limiting the generality of the other obligations of the Debtors hereunder,
      each
      Debtor shall promptly (i) cause to be registered at the United States Copyright
      Office all of its material copyrights, (ii) cause the security interest
      contemplated hereby with respect to all Intellectual Property registered at
      the
      United States Copyright Office or United States Patent and Trademark Office
      to
      be duly recorded at the applicable office, and (iii) give the Agent notice
      whenever it acquires (whether absolutely or by license) or creates any
      additional material Intellectual Property.




12




( nn )  Each
      Debtor will from time to time, at the joint and several expense of the Debtors,
      promptly execute and deliver all such further instruments and documents, and
      take all such further action as may be necessary or desirable, or as the Agent
      may reasonably request, in order to perfect and protect any security interest
      granted or purported to be granted hereby or to enable the Secured Parties
      to
      exercise and enforce their rights and remedies hereunder and with respect to
      any
      Collateral or to otherwise carry out the purposes of this
      Agreement.





( oo )  Schedule
      F attached
      hereto lists all of the patents, patent applications, trademarks, trademark
      applications, registered copyrights, and domain names owned by any of the
      Debtors as of the date hereof. Schedule
      F lists
      all material licenses in favor of any Debtor for the use of any patents,
      trademarks, copyrights and domain names as of the date hereof. All material
      patents and trademarks of the Debtors have been duly recorded at the United
      States Patent and Trademark Office and all material copyrights of the Debtors
      have been duly recorded at the United States Copyright Office.





( pp )  Except
      as
      set forth on Schedule
      G attached
      hereto, none of the account debtors or other persons or entities obligated
      on
      any of the Collateral is a governmental authority covered by the Federal
      Assignment of Claims Act or any similar federal, state or local statute or
      rule
      in respect of such Collateral.





5.  **Effect
      of Pledge on Certain Rights** . **** If
      any of
      the Collateral subject to this Agreement consists of nonvoting equity or
      ownership interests (regardless of class, designation, preference or rights)
      that may be converted into voting equity or ownership interests upon the
      occurrence of certain events (including, without limitation, upon the transfer
      of all or any of the other stock or assets of the issuer), it is agreed that
      the
      pledge of such equity or ownership interests pursuant to this Agreement or
      the
      enforcement of any of Agent’s rights hereunder shall not be deemed to be the
      type of event which would trigger such conversion rights notwithstanding any
      provisions in the Organizational Documents or agreements to which any Debtor
      is
      subject or to which any Debtor is party.





6.  **Defaults** .
      The
      following events shall be “ Events
      of Default ”:





(a)
      The
      occurrence of an Event of Default (as defined in the Debentures and the OID
      Notes) under the Debentures or OID Notes;





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





(c)
      The
      failure by any Debtor to observe or perform any of its obligations hereunder
      for
      five (5) days after delivery to such Debtor of notice of such failure by or
      on
      behalf of a Secured Party unless such default is capable of cure but cannot
      be
      cured within such time frame and such Debtor is using best efforts to cure
      same
      in a timely fashion; or




13




(d)
      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 any Debtor, or a proceeding shall be commenced by any Debtor, or by any
      governmental authority having jurisdiction over any Debtor, seeking to establish
      the invalidity or unenforceability thereof, or any Debtor shall deny that any
      Debtor has any liability or obligation purported to be created under this
      Agreement.





7.   **Duty
      To Hold In Trust** .





(a)  Upon
      the
      occurrence of any Event of Default and at any time thereafter, each Debtor
      shall, upon receipt of any revenue, income ,
      dividend, interest or other
      sums subject to the Security Interests, whether payable pursuant to the
      Debentures, the OID Notes 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 respective then-currently outstanding principal amount
      of
      Debentures and OID Notes for application to the satisfaction of the Obligations
      (and if any Debenture or OID Note is not outstanding, pro-rata in proportion
      to
      the initial purchases of the remaining Debentures and OID Notes).





(b)  If
      any
      Debtor shall become entitled to receive or shall receive any securities or
      other
      property (including, without limitation, shares of Pledged Securities or
      instruments representing Pledged Securities acquired after the date hereof,
      or
      any options, warrants, rights or other similar property or certificates
      representing a dividend, or any distribution in connection with any
      recapitalization, reclassification or increase or reduction of capital, or
      issued in connection with any reorganization of such Debtor or any of its direct
      or indirect subsidiaries) in respect of the Pledged Securities (whether as
      an
      addition to, in substitution of, or in exchange for, such Pledged Securities
      or
      otherwise), such Debtor agrees to (i) accept the same as the agent of the
      Secured Parties; (ii) hold the same in trust on behalf of and for the benefit
      of
      the Secured Parties; and (iii) to deliver any and all certificates or
      instruments evidencing the same to Agent on or before the close of business
      on
      the fifth business day following the receipt thereof by such Debtor, in the
      exact form received together with the Necessary Endorsements, to be held by
      Agent subject to the terms of this Agreement as Collateral.





8.   **Rights
      and Remedies Upon Default** .





(a)  Upon
      the
      occurrence of any Event of Default and at any time thereafter, the Secured
      Parties, acting through the Agent, shall have the right to exercise all of
      the
      remedies conferred hereunder and under the Debentures and OID Notes, and the
      Secured Parties shall have all the rights and remedies of a secured party under
      the UCC. Without limitation, the Agent, for the benefit of the Secured Parties,
      shall have the following rights and powers:





( i )
      The
      Agent 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 each Debtor shall assemble the Collateral and make it available to the
      Agent
      at places which the Agent shall reasonably select, whether at such Debtor's
      premises or elsewhere, and make available to the Agent, without rent, all of
      such Debtor’s respective premises and facilities for the purpose of the Agent
      taking possession of, removing or putting the Collateral in saleable or
      disposable form.




14




( ii)  Upon
      notice to the Debtors by Agent, all rights of each Debtor to exercise the voting
      and other consensual rights which it would otherwise be entitled to exercise
      and
      all rights of each Debtor to receive the dividends and interest which it would
      otherwise be authorized to receive and retain, shall cease. Upon such notice,
      Agent shall have the right to receive, for the benefit of the Secured Parties,
      any interest, cash dividends or other payments on the Collateral and, at the
      option of Agent, to exercise in such Agent’s discretion all voting rights
      pertaining thereto. Without limiting the generality of the foregoing, Agent
      shall have the right (but not the obligation) to exercise all rights with
      respect to the Collateral as it were the sole and absolute owner thereof,
      including, without limitation, to vote and/or to exchange, at its sole
      discretion, any or all of the Collateral in connection with a merger,
      reorganization, consolidation, recapitalization or other readjustment concerning
      or involving the Collateral or any Debtor or any of its direct or indirect
      subsidiaries.





(iii )
      The
      Agent shall have the right to operate the business of each 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
      Agent 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 any 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 Agent, for the benefit of 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 any Debtor, which are hereby waived and
      released.





( iv )  The
      Agent
      shall have the right (but not the obligation) to notify any account debtors
      and
      any obligors under instruments or accounts to make payments directly to the
      Agent, on behalf of the Secured Parties, and to enforce the Debtors’ rights
      against such account debtors and obligors.





( v )  The
      Agent, for the benefit of the Secured Parties, may (but is not obligated to)
      direct any financial intermediary or any other person or entity holding any
      investment property to transfer the same to the Agent, on behalf of the Secured
      Parties, or its designee.




15




( vi )  The
      Agent
      may (but is not obligated to) transfer any or all Intellectual Property
      registered in the name of any Debtor at the United States Patent and Trademark
      Office and/or Copyright Office into the name of the Secured Parties or any
      designee or any purchaser of any Collateral.





(b)  The
      Agent
      shall comply with any applicable law in connection with a disposition of
      Collateral and such compliance will not be considered adversely to affect the
      commercial reasonableness of any sale of the Collateral. The Agent may sell
      the
      Collateral without giving any warranties and may specifically disclaim such
      warranties. If the Agent sells any of the Collateral on credit, the Debtors
      will
      only be credited with payments actually made by the purchaser. In addition,
      each
      Debtor waives any and all rights that it may have to a judicial hearing in
      advance of the enforcement of any of the Agent’s rights and remedies hereunder,
      including, without limitation, its right following an Event of Default to take
      immediate possession of the Collateral and to exercise its rights and remedies
      with respect thereto.




(c)  For
      the
      purpose of enabling the Agent to further exercise rights and remedies under
      this
      Section 8 or elsewhere provided by agreement or applicable law, each Debtor
      hereby grants to the Agent, for the benefit of the Agent and the Secured
      Parties, an irrevocable, nonexclusive license (exercisable without payment
      of
      royalty or other compensation to such Debtor) to use, license or sublicense
      following an Event of Default, any Intellectual Property now owned or hereafter
      acquired by such Debtor, and wherever the same may be located, and including
      in
      such license access to all media in which any of the licensed items may be
      recorded or stored and to all computer software and programs used for the
      compilation or printout thereof.





9.   **Applications
      of Proceeds** .
      The
      proceeds of any such sale, lease or other disposition of the Collateral
      hereunder or from payments made on account of any insurance policy insuring
      any
      portion of the Collateral 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 Agent in enforcing the Secured Parties’ 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 (based on then-outstanding principal amounts of Debentures
      and
      OID Notes at the time of any such determination), 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 Debtors
      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, each
      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 solely to the gross negligence or willful misconduct of the Secured
      Parties as determined by a final judgment (not subject to further appeal) of
      a
      court of competent jurisdiction.




16





10.  **Securities
      Law Provision** .
      Each
      Debtor recognizes that Agent may be limited in its ability to effect a sale
      to
      the public of all or part of the Pledged Securities by reason of certain
      prohibitions in the Securities Act of 1933, as amended, or other federal or
      state securities laws (collectively, the “ Securities
      Laws ”),
      and
      may be compelled to resort to one or more sales to a restricted group of
      purchasers who may be required to agree to acquire the Pledged Securities for
      their own account, for investment and not with a view to the distribution or
      resale thereof. Each Debtor agrees that sales so made may be at prices and
      on
      terms less favorable than if the Pledged Securities were sold to the public,
      and
      that Agent has no obligation to delay the sale of any Pledged Securities for
      the
      period of time necessary to register the Pledged Securities for sale to the
      public under the Securities Laws. Each Debtor shall cooperate with Agent in
      its
      attempt to satisfy any requirements under the Securities Laws (including,
      without limitation, registration thereunder if requested by Agent) applicable
      to
      the sale of the Pledged Securities by Agent.




11.   **Costs
      and Expenses** .
      Each
      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 Agent. The Debtors
      shall
      also pay all other claims and charges which in the reasonable opinion of the
      Agent is reasonably likely to prejudice, imperil or otherwise affect the
      Collateral or the Security Interests therein. The Debtors will also, upon
      demand, pay to the Agent 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 Agent, for the benefit of 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 or OID Notes. Until so paid, any fees
      payable hereunder shall be added to the principal amount of the Debentures
      and
      OID Notes and shall bear interest at the Default Rate.





12.   **Responsibility
      for Collateral** .
      The
      Debtors assume all liabilities and responsibility in connection with all
      Collateral, and the Obligations shall 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. Without limiting the generality of the foregoing,
      (a) neither the Agent nor any Secured Party (i) has any duty (either before
      or
      after an Event of Default) to collect any amounts in respect of the Collateral
      or to preserve any rights relating to the Collateral, or (ii) has any obligation
      to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor
      shall remain obligated and liable under each contract or agreement included
      in
      the Collateral to be observed or performed by such Debtor thereunder. Neither
      the Agent nor any Secured Party shall 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 Agent or any Secured Party of any payment relating to any of
      the
      Collateral, nor shall the Agent or any Secured Party be obligated in any manner
      to perform any of the obligations of any Debtor under or pursuant to any such
      contract or agreement, to make inquiry as to the nature or sufficiency of any
      payment received by the Agent or any Secured Party 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 Agent or to which the Agent or any Secured Party may be entitled
      at any time or times.




17




13.   **Security
      Interests Absolute** .
      All
      rights of the Secured Parties and all obligations of the Debtors hereunder,
      shall be absolute and unconditional, irrespective of: (a) any lack of validity
      or enforceability of this Agreement, the Debentures, the OID Notes 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, the OID Notes 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 guarantee, 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 Interests 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. Each 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, each 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. Each Debtor waives all right to require the Secured Parties
      to proceed against any other person or entity
      or to
      apply
      any Collateral which the Secured Parties may hold at any time, or to marshal
      assets, or to pursue any other remedy. Each Debtor waives any defense arising
      by
      reason of the application of the statute of limitations to any obligation
      secured hereby.




14.  **Term
      of Agreement** .
      This
      Agreement and the Security Interests shall terminate on the date on which all
      payments under the Debentures and OID Notes have been indefeasibly paid in
      full
      and all other Obligations have been paid or discharged; provided , however ,
      that
      all indemnities of the Debtors contained in this Agreement (including, without
      limitation, Annex B hereto) shall survive and remain operative and in full
      force
      and effect regardless of the termination of this Agreement.





15.  **Power
      of Attorney; Further Assurances** .





(a)  Each
      Debtor authorizes the Agent, and does hereby make, constitute and appoint the
      Agent and its officers, agents, successors or assigns with full power of
      substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in
      the name of the Agent or such 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 Agent; (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; (v) to transfer any
      Intellectual Property or provide licenses respecting any Intellectual Property;
      and (vi) generally, at the option of the Agent, and at the expense of the
      Debtors, at any time, or from time to time, to execute and deliver any and
      all
      documents and instruments and to do all acts and things which the Agent deems
      necessary to protect, preserve and realize upon the Collateral and the Security
      Interests granted therein in order to effect the intent of this Agreement and
      the Debentures and OID Notes all as fully and effectually as the Debtors might
      or could do; and each 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. The
      designation set forth herein shall be deemed to amend and supersede any
      inconsistent provision in the Organizational Documents or other documents or
      agreements to which any Debtor is subject or to which any Debtor is a party. Without
      limiting the generality of the foregoing, after the occurrence and during the
      continuance of an Event of Default, each Secured Party is specifically
      authorized to execute and file any applications for or instruments of transfer
      and assignment of any patents, trademarks, copyrights or other Intellectual
      Property with the United States Patent and Trademark Office and the United
      States Copyright Office.




18




(b)  On
      a
      continuing basis, each 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 Agent, to
      perfect the Security Interests granted hereunder and otherwise to carry out
      the
      intent and purposes of this Agreement, or for assuring and confirming to the
      Agent the grant or perfection of a perfected security interest in all the
      Collateral under the UCC.





(c)  Each
      Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact,
      with full authority in the place and instead of such Debtor and in the name
      of
      such Debtor, from time to time in the Agent’s discretion, to take any action and
      to execute any instrument which the Agent 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 such Debtor
      where permitted by law, which financing statements may (but need not) describe
      the Collateral as “all assets” or “all personal property” or words of like
      import, and ratifies all such actions taken by the Agent. 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.




19




16.   **Notices** .
      All
      notices, requests, demands and other communications hereunder shall be subject
      to the notice provision of each Purchase Agreement (as such term is defined
      in
      the Debentures and OID Notes).





17.   **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 Agent 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.





18.   **Appointment
      of Agent** . The
      Secured Parties hereby appoint Bushido Capital Master Fund L.P. to act as their
      agent (“ Bushido ”
or
      “ Agent ”)
      for
      purposes of exercising any and all rights and remedies of the Secured Parties
      hereunder. Such appointment shall continue until revoked in writing by a Majority
      in Interest, at which time a Majority in Interest shall
      appoint a new Agent, provided that Bushido may not be removed as Agent unless
      Bushido shall then hold less than $10,000 in principal amount of
      Debentures . The
      Agent
      shall have the rights, responsibilities and immunities set forth in Annex
      B hereto.




19.   **Miscellaneous** .





(a)  No
      course
      of dealing between the Debtors 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 or OID Notes 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 OID Notes or by any other
      agreements, instruments or documents or by law shall be cumulative and may
      be
      exercised singly or concurrently.





(c)  This
      Agreement ,
      together with the exhibits and schedules hereto, contain the entire
      understanding of the parties with respect to the subject matter hereof and
      supersede all prior agreements and understandings, oral or written, with respect
      to such matters, which the parties acknowledge have been merged into this
      Agreement and the exhibits and schedules hereto . No
      provision of this Agreement may be waived, modified, supplemented or amended
      except in a written instrument signed, in the case of an amendment, by the
      Debtors and the Agent or, in the case of a waiver, by the party against whom
      enforcement of any such waived provision is sought. Additional Secured Parties
      (“ Additional
      Secured Parties ”)
      may be
      added as parties to this Agreement with the written consent of the Agent and
      the
      Company. Each
      Additional Secured Party shall comply with the provisions hereof applicable
      to
      the Secured Parties. An Additional Secured Party shall have the same rights
      and
      obligations as the Secured Parties, for all purposes hereof as fully and to
      the
      same extent as if it were an original signatory hereto and shall be deemed
      to
      have made the representations, warranties and covenants set forth herein, and
      all references herein to the “Secured Parties” shall be deemed to include each
      Additional Secured Party.





20





(d)  If
      any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.





(e)  No
      waiver
      of any default with respect to any provision, condition or requirement of this
      Agreement shall be deemed to be a continuing waiver in the future or a waiver
      of
      any subsequent default or a waiver of any other provision, condition or
      requirement hereof, nor shall any delay or omission of any party to exercise
      any
      right hereunder in any manner impair the exercise of any such
      right.





(f)  This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company and the Guarantors may
      not
      assign this Agreement or any rights or obligations hereunder without the prior
      written consent of each Secured Party (other than by merger). Any Secured Party
      may assign any or all of its rights under this Agreement to any Person to whom
      such Secured Party assigns or transfers any Securities, provided such transferee
      agrees in writing to be bound, with respect to the transferred Securities,
      by
      the provisions of this Agreement that apply to the “Secured
      Parties.”





(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 Debtor agrees that all proceedings
      concerning the interpretations, enforcement and defense of the transactions
      contemplated by this Agreement and the Debentures and OID Notes (whether brought
      against a party hereto or its respective affiliates, directors, officers,
      shareholders, partners, members, employees or agents) shall be commenced
      exclusively in the state and federal courts sitting in the City of New York,
      Borough of Manhattan. Each Debtor 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 any 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 attorney’s fees and other costs and expenses incurred with the
      investigation, preparation and prosecution of such proceeding.




21




(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.





(j)  All
      Debtors shall jointly and severally be liable for the obligations of each Debtor
      to the Secured Parties hereunder.





(k)  Each
      Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured
      Parties and their respective partners, members, shareholders, officers,
      directors, employees and agents (and any other persons with other titles that
      have similar functions) (collectively, “ Indemnitees ”)
      from
      and against any and all losses, claims, liabilities, damages, penalties, suits,
      costs and expenses, of any kind or nature, (including fees relating to the
      cost
      of investigating and defending any of the foregoing) imposed on, incurred by
      or
      asserted against such Indemnitee in any way related to or arising from or
      alleged to arise from this Agreement or the Collateral, except any such losses,
      claims, liabilities, damages, penalties, suits, costs and expenses which result
      from the gross negligence or willful misconduct of the Indemnitee as determined
      by a final, nonappealable decision of a court of competent jurisdiction. This
      indemnification provision is in addition to, and not in limitation of, any
      other
      indemnification provision in the Debentures, OID Notes and each Purchase
      Agreement (as such term is defined in the Debentures and OID Notes) or any
      other
      agreement, instrument or other document executed or delivered in connection
      herewith or therewith.





(l)  Nothing
      in this Agreement shall be construed to subject Agent or any Secured Party
      to
      liability as a partner in any Debtor or any if its direct or indirect
      subsidiaries that is a partnership or as a member in any Debtor or any of its
      direct or indirect subsidiaries that is a limited liability company, nor shall
      Agent or any Secured Party be deemed to have assumed any obligations under
      any
      partnership agreement or limited liability company agreement, as applicable,
      of
      any such Debtor or any if its direct or indirect subsidiaries or otherwise,
      unless and until any such Secured Party exercises its right to be substituted
      for such Debtor as a partner or member, as applicable, pursuant
      hereto.





(m)  To
      the
      extent that the grant of the security interest in the Collateral and the
      enforcement of the terms hereof require the consent, approval or action of
      any
      partner or member, as applicable, of any Debtor or any direct or indirect
      subsidiary of any Debtor or compliance with any provisions of any of the
      Organizational Documents, the Debtors hereby grant such consent and approval
      and
      waive any such noncompliance with the terms of said documents.





[SIGNATURE
      PAGES FOLLOW]


22


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




**CYBERDEFENDER
                CORPORATION**By:Name:
            Gary
                GuseinovTitle:
            Chief
                Executive Officer




[SIGNATURE
      PAGE OF HOLDERS FOLLOWS]


23


[SIGNATURE
      PAGE OF HOLDERS TO CYBER AMENDED AND RESTATED 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]**


24




**SCHEDULE
      A**




Principal
      Place of Business of Debtors:





Locations
      Where Collateral is Located or Stored:





**SCHEDULE
      B**





**SCHEDULE
      C**





**SCHEDULE
      D**


Legal
      Names and Organizational Identification Numbers





**SCHEDULE
      E**


Names;
      Mergers and Acquisitions





**SCHEDULE
      F**


Intellectual
      Property





**SCHEDULE
      G**


Account
      Debtors





**SCHEDULE
      H**


Pledged
      Securities


25




**ANNEX
      A**


**to**


**AMENDED
      AND RESTATED SECURITY** **AGREEMENT**





**FORM
      OF ADDITIONAL DEBTOR JOINDER**





Amended
      and Restated Security Agreement dated as of March ___, 2007 made by


CyberDefender
      Corporation


and
      its
      subsidiaries party thereto from time to time, as Debtors


to
      and in
      favor of


the
      Secured Parties identified therein (the “ Security
      Agreement ”)





Reference
      is made to the Security Agreement as defined above; capitalized terms used
      herein and not otherwise defined herein shall have the meanings given to such
      terms in, or by reference in, the Security Agreement.





The
      undersigned hereby agrees that upon delivery of this Additional Debtor Joinder
      to the Secured Parties referred to above, the undersigned shall (a) be an
      Additional Debtor under the Security Agreement, (b) have all the rights and
      obligations of the Debtors under the Security Agreement as fully and to the
      same
      extent as if the undersigned was an original signatory thereto and (c) be deemed
      to have made the representations and warranties set forth in Section 4 therein
      as of the date of execution and delivery of this Additional Debtor Joinder.
      WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY
      GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE
      FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE
      WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.





Attached
      hereto are supplemental and/or replacement Schedules to the Security Agreement,
      as applicable.





An
      executed copy of this Joinder shall be delivered to the Secured Parties, and
      the
      Secured Parties may rely on the matters set forth herein on or after the date
      hereof. This Joinder shall not be modified, amended or terminated without the
      prior written consent of the Secured Parties.










IN
      WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in
      the
      name and on behalf of the undersigned.





[Name
                of Additional Debtor]By:Name:Title:Address:





Dated:







[ **ANNEX
      B**


**to**


**AMENDED
      AND RESTATED SECURITY** **AGREEMENT**





**THE
      AGENT**





1. **Appointment** . ** The
      Secured Parties (all capitalized terms used herein and not otherwise defined
      shall have the respective meanings provided in the Security Agreement to which
      this Annex B is attached (the " Agreement ")),
      by
      their acceptance of the benefits of the Agreement, hereby designate Bushido
      Capital Master Fund L.P. (“ Bushido ”
or
      “ Agent ”)
      as the
      Agent to act as specified herein and in the Agreement. Each Secured Party shall
      be deemed irrevocably to authorize the Agent to take such action on its behalf
      under the provisions of the Agreement and any other Transaction Document (as
      such term is defined in the Debentures and OID Notes) and to exercise such
      powers and to perform such duties hereunder and thereunder as are specifically
      delegated to or required of the Agent by the terms hereof and thereof and such
      other powers as are reasonably incidental thereto. The Agent may perform any
      of
      its duties hereunder by or through its agents or employees.





2. **Nature
      of Duties** *.* The
      Agent shall have no duties or responsibilities except those expressly set forth
      in the Agreement. Neither the Agent nor any of its partners, members,
      shareholders, officers, directors, employees or agents shall be liable for
      any
      action taken or omitted by it as such under the Agreement or hereunder or in
      connection herewith or therewith, be responsible for the consequence of any
      oversight or error of judgment or answerable for any loss, unless caused solely
      by its or their gross negligence or willful misconduct as determined by a final
      judgment (not subject to further appeal) of a court of competent jurisdiction.
      The duties of the Agent shall be mechanical and administrative in nature; the
      Agent shall not have by reason of the Agreement or any other Transaction
      Document a fiduciary relationship in respect of any Debtor or any Secured Party;
      and nothing in the Agreement or any other Transaction Document, expressed or
      implied, is intended to or shall be so construed as to impose upon the Agent
      any
      obligations in respect of the Agreement or any other Transaction Document except
      as expressly set forth herein and therein.





3. **Lack
      of Reliance on the Agent** .
      Independently and without reliance upon the Agent, each Secured Party, to the
      extent it deems appropriate, has made and shall continue to make (i) its own
      independent investigation of the financial condition and affairs of the Company
      and its subsidiaries in connection with such Secured Party’s investment in the
      Debtors, the creation and continuance of the Obligations, the transactions
      contemplated by the Transaction Documents, and the taking or not taking of
      any
      action in connection therewith, and (ii) its own appraisal of the
      creditworthiness of the Company and its subsidiaries, and of the value of the
      Collateral from time to time, and the Agent shall have no duty or
      responsibility, either initially or on a continuing basis, to provide any
      Secured Party with any credit, market or other information with respect thereto,
      whether coming into its possession before any Obligations are incurred or at
      any
      time or times thereafter. The Agent shall not be responsible to the Debtors
      or
      any Secured Party for any recitals, statements, information, representations
      or
      warranties herein or in any document, certificate or other writing delivered
      in
      connection herewith, or for the execution, effectiveness, genuineness, validity,
      enforceability, perfection, collectibility, priority or sufficiency of the
      Agreement or any other Transaction Document, or for the financial condition
      of
      the Debtors or the value of any of the Collateral, or be required to make any
      inquiry concerning either the performance or observance of any of the terms,
      provisions or conditions of the Agreement or any other Transaction Document,
      or
      the financial condition of the Debtors, or the value of any of the Collateral,
      or the existence or possible existence of any default or Event of Default under
      the Agreement, the Debentures, the OID Notes or any of the other Transaction
      Documents.









4. **Certain
      Rights of the Agent** .
      The
      Agent shall have the right to take any action with respect to the Collateral,
      on
      behalf of all of the Secured Parties. To the extent practical, the Agent shall
      request instructions from the Secured Parties with respect to any material
      act
      or action (including failure to act) in connection with the Agreement or any
      other Transaction Document, and shall be entitled to act or refrain from acting
      in accordance with the instructions of Secured Parties holding a majority in
      principal amount of Debentures and OID Notes (based on then-outstanding
      principal amounts of Debentures and OID Notes at the time of any such
      determination); if such instructions are not provided despite the Agent’s
      request therefor, the Agent shall be entitled to refrain from such act or taking
      such action, and if such action is taken, shall be entitled to appropriate
      indemnification from the Secured Parties in respect of actions to be taken
      by
      the Agent; and the Agent shall not incur liability to any person or entity
      by
      reason of so refraining. Without limiting the foregoing, (a) no Secured Party
      shall have any right of action whatsoever against the Agent as a result of
      the
      Agent acting or refraining from acting hereunder in accordance with the terms
      of
      the Agreement or any other Transaction Document, and the Debtors shall have
      no
      right to question or challenge the authority of, or the instructions given
      to,
      the Agent pursuant to the foregoing and (b) the Agent shall not be required
      to
      take any action which the Agent believes (i) could reasonably be expected to
      expose it to personal liability or (ii) is contrary to this Agreement, the
      Transaction Documents or applicable law.





5. **Reliance** .
      The
      Agent shall be entitled to rely, and shall be fully protected in relying, upon
      any writing, resolution, notice, statement, certificate, telex, teletype or
      telecopier message, cablegram, radiogram, order or other document or telephone
      message signed, sent or made by the proper person or entity, and, with respect
      to all legal matters pertaining to the Agreement and the other Transaction
      Documents and its duties thereunder, upon advice of counsel selected by it
      and
      upon all other matters pertaining to this Agreement and the other Transaction
      Documents and its duties thereunder, upon advice of other experts selected
      by
      it. Anything to the contrary notwithstanding, the Agent shall have no obligation
      whatsoever to any Secured Party to assure that the Collateral exists or is
      owned
      by the Debtors or is cared for, protected or insured or that the liens granted
      pursuant to the Agreement have been properly or sufficiently or lawfully
      created, perfected, or enforced or are entitled to any particular priority.
      Additionally, in determining whether to agree to an amendment to any Transaction
      Document, waive any rights thereunder or add Secured Parties, such determination
      shall be in the Agents sole discretion and the Agent shall have no fiduciary
      duty or liability to the other Secured Parties in making such
      determinations.









6. **Indemnification** *.* To the
      extent that the Agent is not reimbursed and indemnified by the Debtors, the
      Secured Parties will jointly and severally reimburse and indemnify the Agent,
      in
      proportion to their initially purchased respective principal amounts of
      Debentures and OID Notes, from and against any and all liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, expenses or
      disbursements of any kind or nature whatsoever which may be imposed on, incurred
      by or asserted against the Agent in performing its duties hereunder or under
      the
      Agreement or any other Transaction Document, or in any way relating to or
      arising out of the Agreement or any other Transaction Document except for those
      determined by a final judgment (not subject to further appeal) of a court of
      competent jurisdiction to have resulted solely from the Agent's own gross
      negligence or willful misconduct. Prior to taking any action hereunder as Agent,
      the Agent may require each Secured Party to deposit with it sufficient sums
      as
      it determines in good faith is necessary to protect the Agent for costs and
      expenses associated with taking such action.





7. **Resignation
      by the Agent** ***.*** ****




(a)
      The
      Agent may resign from the performance of all its functions and duties under
      the
      Agreement and the other Transaction Documents at any time by giving 30 days'
      prior written notice (as provided in the Agreement) to the Debtors and the
      Secured Parties. Such resignation shall take effect upon the appointment of
      a
      successor Agent pursuant to clauses (b) and (c) below.





(b)
      Upon
      any such notice of resignation, the Secured Parties, acting by a  Majority
      in Interest ,
      shall
      appoint a successor Agent hereunder.





(c)
      If a
      successor Agent shall not have been so appointed within said 30-day period,
      the
      Agent shall then appoint a successor Agent who shall serve as Agent until such
      time, if any, as the Secured Parties appoint a successor Agent as provided
      above. If a successor Agent has not been appointed within such 30-day period,
      the Agent may petition any court of competent jurisdiction or may interplead
      the
      Debtors and the Secured Parties in a proceeding for the appointment of a
      successor Agent, and all fees, including, but not limited to, extraordinary
      fees
      associated with the filing of interpleader and expenses associated therewith,
      shall be payable by the Debtors on demand.





8. **Rights
      with respect to Collateral** *.* Each
      Secured Party agrees with all other Secured Parties and the Agent (i) that
      it
      shall not, and shall not attempt to, exercise any rights with respect to its
      security interest in the Collateral, whether pursuant to any other agreement
      or
      otherwise (other than pursuant to this Agreement), or take or institute any
      action against the Agent or any of the other Secured Parties in respect of
      the
      Collateral or its rights hereunder (other than any such action arising from
      the
      breach of this Agreement) and (ii) that such Secured Party has no other rights
      with respect to the Collateral other than as set forth in this Agreement and
      the
      other Transaction Documents. Upon the acceptance of any appointment as Agent
      hereunder by a successor Agent, such successor Agent shall thereupon succeed
      to
      and become vested with all the rights, powers, privileges and duties of the
      retiring Agent and the retiring Agent shall be discharged from its duties and
      obligations under the Agreement.  After any retiring Agent’s resignation or
      removal hereunder as Agent, the provisions of the Agreement including this
      Annex
      B shall inure to its benefit as to any actions taken or omitted to be taken
      by
      it while it was Agent.