bancroft8k113007ex10-4.htm


    
      

      

    

    Exhibit
      10.4

    


    EXHIBIT
E

    


    SECURITY
      AGREEMENT

    


    This
SECURITY
      AGREEMENT, dated as of
November 30,
2007
      (this “Agreement”),
is
among
Bancroft
      Uranium Inc., a Nevada
corporation (the
“Company”),
all
      of the Subsidiaries of the
      Company (such
      subsidiaries,
      the “Guarantors”
      and together with the
      Company, the
“Debtors”)
      and the holders of the Company’s
8%
Original
      Issue Discount Secured Convertible
Debentures
      due November ___, 2009 and
      issued on November ___, 2007 in
      the original aggregate principal amount
      of
      $[_____ (collectively,
the
“Debentures”)
signatory
      hereto, their endorsees,
      transferees and assigns
      (collectively, the
“Secured
      Parties”).

    


    W
      I T N E S S E T
      H:

    


    WHEREAS,
      pursuant to the Purchase Agreement (as
      defined in the
Debentures),
      the Secured Parties have severally agreed to extend
      the loans to
      the Company evidenced by the Debentures;

    


    WHEREAS,
      pursuant to a certain Subsidiary
      Guarantee, dated
      as of the date hereof (the
“Guarantee”),
      the Guarantors
      have jointly and severally agreed
      to
      guarantee and act as
surety
      for payment of such
      Debentures;
      and

    


    WHEREAS,
      in order to induce the Secured
      Parties to extend the loans evidenced by the Debentures, 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 Guarantors’
      obligations under the
      Guarantee.

    


    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 and real 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;

    


    (ix)       All
      real and immovable property,
      both freehold and leasehold, and all of the Debtors' right, title and interest
      in mineral rights and claims, now owned or held or hereafter acquired by the
      Debtors; 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)-(x) 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 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,
      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 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,
      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”
      shall have the meaning ascribed
      to such term in Section
      4(i).

    


    (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 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.

    


    


    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    


    (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.

    


    (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)         The
      capital stock and other equity
      interests listed on Schedule H
      hereto (the “Pledged
      Securities”)
represent
      all of the capital stock and
      other equity interests of the Guarantors, and represent all capital stock and
      other equity interests owned, directly or indirectly, by the
      Company.  All of the Pledged Securities are validly issued, fully
      paid and nonassessable,
      and
      the Company is the legal and beneficial owner of the Pledged Securities, free
      and clear of any lien, security interest or other encumbrance except for the
      security interests created by this Agreement and other Permitted Liens
      (as
      defined in the Debentures).  

    


    


    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    


    (j)         The
      ownership and other equity interests
      in partnerships and limited liability companies (if any) included in the Collateral
      (the “Pledged Interests”)
      by their express terms do not provide
      that they are securities governed by Article 8 of the
      UCC and are not
      held in a securities account or by any financial
      intermediary.

    


    (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 11 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.

    


    (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.

     

     

    
 

    


    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    


    (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.

    


    (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.

    


    


    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    


    (bb)      Each
      Debtor, in its capacity as issuer,
      hereby agrees to comply with any and all orders and instructions of Agent
      regarding the Pledged Interests consistent with the terms of this Agreement
      without the further consent
      of any Debtor as contemplated by Section 8-106 (or any successor section) of
      the
      UCC.  Further, each Debtor agrees that it shall not enter into a
      similar agreement (or one that would confer “control”
      within the meaning of Article 8 of the
      UCC) with any other
      person or
      entity.

     

    (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).

    


    (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.

    


    


    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    


    (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.

    


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

    


    (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.

     

    


    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    


    (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.

    


    (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”:

    


    


    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    


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

    


    (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

    


    (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
      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 for application to the satisfaction of the Obligations (and if any
      Debenture is not outstanding, pro-rata in proportion to the initial purchases
      of the
      remaining Debentures).

    


    (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.

    


    


    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    


    
      	
               

            	
              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 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.

    


    (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.

    


    


    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    


    (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.

    


    (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 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 18%
      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. Until so paid, any fees payable hereunder shall be added to the
      principal amount of the Debentures and shall bear interest at the Default
      Rate.

     

     

     

     

     

     

     

     

    


    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

    


    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.

     

    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 or any agreement entered into in connection with the foregoing,
      or any portion hereof or thereof; (b) any change in the time, manner or place
      of
      payment or performance of, or in any other term of, all or any of the
      Obligations, or any other amendment or waiver of or any consent to any departure
      from the Debentures or any other agreement entered into in connection with
      the
      foregoing; (c) any exchange, release or nonperfection of any of the Collateral,
      or any release or amendment or waiver of or consent to departure from any other
      collateral for, or any 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.

     

    


    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

    


    14.       Term
      of
      Agreement. This
      Agreement and the Security Interests
      shall terminate on the date on which
      all payments under the Debentures 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 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.

    


    (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.

    


    


    
      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

    


    (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.

    


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

    


    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
[Enable
Growth
      Partners
      L.P.] to
      act as their agent (“Enable”
      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 Enable
may
      not be removed as Agent unless
Enable shall
      then hold less than $100,000 in principal
      amount of
      Debentures; provided, further,
      that such removal may occur only if each of the
      other Secured
      Parties shall then hold not
      less than an aggregate of $500,000 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 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.

    


    


    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    


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

    


    (c)        This
      Agreement, 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 Secured
      Parties or, in the case of a waiver, by the party against whom enforcement
      of
      any such waived provision is sought.

    


    (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.

    


    


    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

    


    (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
      (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.

    


    (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, the Purchase Agreement (as such term is defined in the Debentures)
      or any other agreement, instrument or other document executed or delivered
      in
      connection herewith or therewith.

    


    


    
      
        
           

        

        
          22

          
            

          

        

        
           

        

      

    

    


    (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]

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    

    


    


    


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

    


    


    BANCROFT
      URANIUM INC.

    


    By:
      __________________________________________

    Name:

    Title:

    


    


    2146281
      ONTARIO LIMITED

    


    


    By:
      __________________________________________

    Name:

    Title:

    


    


    


    


    


    


    


    [SIGNATURE
      PAGE OF HOLDERS
      FOLLOWS]

    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
           

        

        
          24

          
            

          

        

        
           

        

      

    

    


    [SIGNATURE
      PAGE OF HOLDERS TO BCFT
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]

    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

    


    SCHEDULE
      A

    


    


    Principal
      Place of Business of
      Debtors:

    


    Debtors
      maintain a leased office
      location, consisting of a mail forwarding and answering service at 8655 EAST
      VIA
      DE VENTURA, SUITE
      G200, SCOTTSDALE
      AZ 85258.  Other than this location,
      debtors business takes place on their leased mining properties known as the
      Elliot Lake South Project, the Longlac Project and the Monmouth Project, all
      located in Ontario Canada and further described on the Mineral
      Lease
      Agreements attached to the Company’s
      filing on Form 8K with the SEC on
      October 3, 2007 as Exhibits 10.2, 10.3 and 10.4
      respectively.

    


    


    Locations
      Where Collateral is Located or
      Stored:

    Other
      than the above, there are no
      locations.

    


    SCHEDULE
B

    The
      Debtors have payment obligations and
      net mineral royalty obligations to mineral rights holders as described in the
      Mineral Lease Agreements described above in Schedule A.

    


    


    


    SCHEDULE
C

    The
      jurisdictions in which the Debtor
      presently operates are Scottsdale, Arizona and Ontario,
      Canada.

    


    


    


    SCHEDULE
D

    Legal
      Names and Organizational
      Identification Numbers

    


    Bancroft
      Uranium, Inc., A Nevada
      corporation, IRS Tax ID Number
94-3409449.

    2146281
      Ontario Limited, an Ontario
      corporation, no tax ID number.

    


    


    SCHEDULE
E

    Names;
      Mergers and
      Acquisitions

    


    Bancroft
      Uranium, Inc. was formerly
      known as Conscious Intention, Inc.  Bancroft acquired 2146281 Ontario
      Limited in October, 2007.

    


    SCHEDULE
F

    Intellectual
      Property

    


    


    
      
        
           

        

        
          26

          
            

          

        

        
           

        

      

    

    


    Other
      than the Mineral
      Leases, the Company has no
      intellectual property, has no patents and has not filed a trademark on its
      name.

    


    SCHEDULE
G

    Account
      Debtors

    None

    


    


    SCHEDULE
H

    100
      Shares of 2146281 Ontario
      Limited as evidenced by certificate
      CON-02

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

    


    ANNEX
      A

    to

    SECURITY

    AGREEMENT

    


    FORM
      OF ADDITIONAL DEBTOR
      JOINDER

    


    Security
      Agreement dated as of
November ___,
2007
      made by

    Bancroft
      Uranium
      Inc.

    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 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

    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 Enable Growth Partners
L.P.
      (“Enable”
      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 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 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 (based on then-outstanding principal amounts of Debentures 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.

    


    


    


    


    


    


    


    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    


    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,
      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.