Document:

Unassociated Document

    SECURITIES PURCHASE
AGREEMENT

     

    THIS SECURITIES PURCHASE AGREEMENT (this
“Agreement”),
dated as of March 18, 2009, by and among BBM HOLDINGS, INC., a Utah
corporation (the “Company”), and YA GLOBAL INVESTMENTS, L.P., a
Cayman Islands exempt limited partnership (the “Buyer”).

     

    WITNESSETH

     

    WHEREAS, pursuant to that
certain Secured Party’s Bill of Sale of even date herewith between the Company
and the Buyer (the “Bill of Sale”) the
Buyer shall sell, assign and transfer to the Company all of the Buyer’s right,
title, and interest in and to the personal property listed on Exhibit A of the
Bill of Sale (the “Purchased
Assets”);

     

    WHEREAS, pursuant to the Bill
of Sale, the purchase price to be paid by the Company for the Purchased Assets
shall consist of (a) $100,000 in cash, and (b) a convertible secured
non-recourse debenture of the Company with a face value of $500,000 (the “Convertible
Debenture”);

     

    WHEREAS, the parties desire to
enter into this Agreement to set forth the terms and conditions of the issuance
of the Convertible Debenture;

     

    WHEREAS, the Convertible
Debenture is being issued by the Company to the Buyer in reliance upon an
exemption from securities registration pursuant to Section 4(2) and/or
Rule 506 of Regulation D (“Regulation D”) as
promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “Securities
Act”);

     

    WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
shall issue the Buyer, as provided herein, and the Buyer shall accept the
Convertible Debenture in the form attached hereto as “Exhibit A”, in the
original principal amount of $500,000, which shall be convertible into shares of
the Company’s common stock, no par value (the “Common Stock”) (as
converted, the “Conversion
Shares”);

     

    WHEREAS, contemporaneously
with the execution and delivery of this Agreement, (i) the Buyer and the
Company, are executing and delivering a Security Agreement and a Patent Security
Agreement (collectively, the “Security Documents”)
pursuant to which the Company is providing the Buyer a first priority perfected
security interest in the Purchased Assets; and

     

    WHEREAS, the Convertible
Debenture and the Conversion Shares collectively are referred to herein as the
“Securities;”

     

    NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Buyer hereby agree as follows:

     

    1. PURCHASE AND SALE OF
CONVERTIBLE DEBENTURES.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a) Issuance of Convertible
Debenture.  Subject to the satisfaction (or waiver) of the
terms and conditions of this Agreement, the Company agrees to issue to the Buyer
at the Closing the Convertible Debenture in original principal amount of
$500,000.

     

    (b) Closing
Date.  The Closing of the issuance of the Convertible Debenture
shall take place on March 19, 2009, (or such other date as is mutually agreed to
by the Company and the Buyer) (the “Closing
Date”).  The Closing shall occur at the offices of Yorkville
Advisors, LLC, 101 Hudson Street, Suite 3700, Jersey City, New Jersey 07302 (or
such other place as is mutually agreed to by the Company and the
Buyer).

     

    (c) Deliveries by the
Company:  At the Closing, the Company shall deliver to the
Buyer the following:

     

    (i) an
executed original of each of the Transaction Documents;

     

    (ii) an
executed original Convertible Debenture in the face amount of
$500,000;

     

    (iii) an
opinion of counsel from counsel to the Company in a form satisfactory to the
Buyer;

     

    (iv) a true
copy of a certificate of good standing evidencing the formation and good
standing of the Company from the secretary of state (or comparable office) from
the jurisdiction in which the Company is incorporated, as of a date within 10
days of the Closing Date;

     

    (v) a
certificate, executed by the Secretary of the Company and dated as of the
Closing Date, as to (i) the resolutions consistent with Section 3(c) as adopted
by the Company’s Board of Directors in a form reasonably acceptable to the
Buyer, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in
effect at the Closing Date; and

     

    (vi) proof of
filing of a form UCC-1 or such other forms as may be required to perfect the
Buyer’s security interest in the Purchased Assets.

     

    (d) Deliveries by the
Buyer: At the Closing, the Buyer shall deliver to the Company the
following:

     

    (i) an
executed original of each of the Transaction Documents; and

     

    (ii) an
executed original of the Bill of Sale.

     

    2. BUYER’S REPRESENTATIONS AND
WARRANTIES.

     

    Except as
set forth under the corresponding section of the attached Disclosure Schedules
which Disclosure Schedules shall be deemed a part hereof and to qualify any
representation or warranty otherwise made herein to the extent of such
disclosure, the Buyer hereby makes the representations and warranties set forth
below to the Company:

     

    
      
        
        

      

      
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    (a) Investment
Purpose.  Each Buyer is acquiring the Securities for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the Securities Act; provided, however, that
by making the representations herein, the Buyer reserves the right to dispose of
the Securities at any time in accordance with or pursuant to an effective
registration statement covering such Securities or an available exemption under
the Securities Act.  The Buyer does not presently have any agreement
or understanding, directly or indirectly, with any Person to distribute any of
the Securities.

     

    (b) Accredited Investor
Status.  The Buyer is an “Accredited Investor”
as that term is defined in Rule 501(a)(3) of Regulation D of the
SEC.

     

    (c) Reliance on
Exemptions.  The Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.

     

    (d) Information.  The
Buyer and its advisors (and its counsel) have been furnished with all materials
relating to the business, finances and operations of the Company and information
it deemed material to making an informed investment decision regarding its
acceptance of the Securities, which have been requested by the
Buyer.  The Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and its
management.  Neither such inquiries nor any other due diligence
investigations conducted by the Buyer or its advisors, if any, or its
representatives shall modify, amend nor affect such Buyer’s right to rely on the
Company’s representations and warranties contained in Section 3
below.  The Buyer understands that its investment in the Securities
involves a high degree of risk.  The Buyer is in a position regarding
the Company, which, based upon experience, employment, family relationship or
economic bargaining power, enabled and enables the Buyer to obtain information
from the Company in order to evaluate the merits and risks of this
investment.  The Buyer has sought such accounting, legal and tax
advice, as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities.

     

    (e) No Governmental
Review.  Each Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities, or the fairness or
suitability of the investment in the Securities, nor have such authorities
passed upon or endorsed the merits of the offering of the
Securities.

     

    (f) Transfer or
Resale.  The Buyer understands that: (i) the Securities have
not been and are not being registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, (B) the Buyer shall have
delivered to the Company an opinion of counsel, in a generally acceptable form,
to the effect that such Securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration
requirements, or (C) the Buyer provides the Company with reasonable assurances
(in the form of seller and broker representation letters) that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act (or a successor rule thereto)
(collectively, “Rule
144”), in each case following the applicable holding period set forth
therein; (ii) any sale of the Securities made in reliance on Rule 144 may be
made only in accordance with the terms of Rule 144 and further, if Rule 144 is
not applicable, any resale of the Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register the Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.

     

    
      
        
        

      

      
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    (g) Legends.  Each
Buyer agrees to the imprinting, so long as is required by this Section 2(g), of
a restrictive legend in substantially the following form:

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
STATE SECURITIES LAWS.

     

    Certificates
evidencing the Conversion Shares shall not contain any legend (including the
legend set forth above), (i) while a registration statement covering the resale
of such security is effective under the Securities Act, (ii) following any sale
of such Conversion Shares pursuant to Rule 144, (iii) if such Conversion Shares
are eligible for sale under Rule 144, or (iv) if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
SEC).  The Company shall cause its counsel to issue a legal opinion to
the Company’s transfer agent promptly after the effective date (the “Effective Date”) of a
registration statement if required by the Company’s transfer agent to effect the
removal of the legend hereunder.  The Buyer acknowledges that the
Company’s agreement hereunder to remove all legends from Conversion Shares is
not an affirmative statement or representation that such Conversion Shares are
freely tradable.  The Buyer agrees that the removal of the restrictive
legend from certificates representing Securities as set forth in this Section
3(g) is predicated upon the Company’s reliance that the Buyer will sell any
Securities pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a registration statement,
they will be sold in compliance with the plan of distribution set forth
therein.

     

    
      
        
        

      

      
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    (h) Authorization,
Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

     

    (i) Due Formation of Corporate
and Other Buyers.  The Buyer has been formed and validly exists
and has not been organized for the specific purpose of purchasing the Securities
and is not prohibited from doing so.

     

    3. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.

     

    Except as
set forth under the corresponding section of the Disclosure Schedules which
Disclosure Schedules shall be deemed a part hereof and to qualify any
representation or warranty otherwise made herein to the extent of such
disclosure, the Company hereby makes the representations and warranties set
forth below to the Buyer:

     

    (a) Organization and
Qualification.  The Company is a corporation duly organized and
validly existing in good standing under the laws of Utah, and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted.  The Company is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which the nature of
the business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
or reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company, taken as a whole, or (iii) a
material adverse effect on the Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a “Material Adverse
Effect”) and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

     

    (b) Authorization, Enforcement,
Compliance with Other Instruments.  (i) The Company has
the requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Convertible Debenture, the Security
Documents, the Bill of Sale, and each of the other agreements entered into by
the parties hereto in connection with the transactions contemplated by this
Agreement (collectively the “Transaction
Documents”) and to issue the Securities in accordance with the terms
hereof and thereof, (ii) the execution and delivery of the Transaction Documents
by the Company and the consummation by it of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the
Securities, the reservation for issuance and the issuance of the Conversion
Shares, have been duly authorized by the Company’s Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) the Transaction Documents have been duly
executed and delivered by the Company, (iv) the Transaction Documents constitute
the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and
remedies.

     

    
      
        
        

      

      
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    (c) Capitalization.  The
authorized capital stock of the Company consists of 50,000,000 shares of Common
Stock and 10,000,000 shares of Preferred Stock (“Preferred Stock”) of
which 25,247,006 shares of Common Stock and no shares of Preferred Stock are
issued and outstanding.  All of the outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.  Except as
disclosed in Schedule 3(c), the SEC Documents (as defined below) or as
contemplated in this Agreement: (i) none of the Company’s capital stock is
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any capital stock of the Company , or
contracts, commitments, understandings or arrangements by which the
Company  is or may become bound to issue additional capital stock of
the Company  or options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, or exercisable or exchangeable for, any capital stock
of the Company ; (iii) there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing indebtedness of the Company  or by which the
Company  is or may become bound; (iv) there are no financing
statements securing obligations in any material amounts, either singly or in the
aggregate, filed in connection with the Company ; (v) there are no outstanding
securities or instruments of the Company  which contain any redemption
or similar provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company  is or may become bound to redeem
a security of the Company ; (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities; (vii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement; and (viii) the Company has no liabilities or obligations required
to be disclosed in the SEC Documents but not so disclosed in the SEC Documents,
other than those incurred in the ordinary course of the Company’s business and
which, individually or in the aggregate, do not or would not have a Material
Adverse Effect.  The Company has furnished to the Buyers true, correct
and complete copies of the Company’s Certificate of Incorporation, as amended
and as in effect on the date hereof (the “Certificate of
Incorporation”), and the Company’s Bylaws, as amended and as in effect on
the date hereof (the “Bylaws”), and the
terms of all securities convertible into, or exercisable or exchangeable for,
shares of Common Stock and the material rights of the holders thereof in respect
thereto.  No further approval or authorization of any stockholder, the
Board of Directors of the Company or others is required for the issuance and
sale of the Securities.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

     

    
      
        
        

      

      
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    (d) Issuance of
Securities.  The issuance of the Convertible Debenture is duly
authorized and free from all taxes, liens and charges with respect to the issue
thereof.  Upon conversion in accordance with the terms of the
Convertible Debenture the Conversion Shares, when issued, will be validly
issued, fully paid and nonassessable, free from all taxes, liens and charges
with respect to the issue thereof.  The Company has reserved from its
duly authorized capital stock the appropriate number of shares of Common Stock
as set forth in this Agreement.

     

    (e) No
Conflicts.   The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Convertible Debenture and reservation for issuance and
issuance of the Conversion Shares) will not (i) result in a violation of any
certificate of incorporation, certificate of formation, any certificate of
designations or other constituent documents of the Company , any capital stock
of the Company or bylaws of the Company or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including foreign, federal
and state securities laws and regulations) applicable to the Company or by which
any property or asset of the Company is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.  The business of the Company is not being conducted, and shall
not be conducted in violation of any material law, ordinance, or regulation of
any governmental entity.  Except as specifically contemplated by this
Agreement and as required under the Securities Act and any applicable state
securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement in accordance with the terms
hereof or thereof.  All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date
hereof.  The Company is unaware of any facts or circumstance, which
might give rise to any of the foregoing.

     

    (f) SEC Documents; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for
the two years preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (all of the foregoing
filed prior to the date hereof or amended after the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the “SEC Documents”) on
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Document prior to the expiration of any such
extension.  The Company has delivered to the Buyers or their
representatives, or made available through the SEC’s website at
http://www.sec.gov, true and complete copies of the SEC Documents.  As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.  As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other information provided by or on behalf of the
Company to the Buyers which is not included in the SEC Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made and not misleading.

     

    
      
        
        

      

      
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    (g) Absence of
Litigation.  Except as set forth in the SEC Documents, there is
no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
against or affecting the Company or the Common Stock, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect.

     

    (h) Acknowledgment Regarding
Buyer’s Purchase of the Convertible Debentures.  The Company
acknowledges and agrees that the Buyer is acting solely in the capacity of an
arm’s length purchaser with respect to this Agreement and the transactions
contemplated hereby.  The Company further acknowledges that the Buyer
is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Buyer or any of their respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to the Buyer’s purchase of the
Securities.  The Company further represents to the Buyer that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation by the Company and its representatives.

     

    (i) No General
Solicitation.  Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the
Securities.

     

    (j) No Integrated
Offering.  Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of the Securities under the
Securities Act or cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of the Securities Act.

     

    (k) Internal Accounting
Controls.  As set forth in the SEC Documents,the Company’s
system of internal accounting controls may not be sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
and (iii) the recorded amounts for assets are compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.

     

    
      
        
        

      

      
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    (l) No Material Adverse
Breaches, etc.  The Company is not subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation which in the judgment of the Company’s officers has or is expected in
the future to have a Material Adverse Effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company, taken as a whole.  The Company is not in breach of any
contract or agreement which breach, in the judgment of the Company’s officers,
has or is expected to have a Material Adverse Effect on the business,
properties, operations, financial condition, results of operations or prospects
of the Company, taken as a whole.

     

    (m) Tax
Status.  The Company has made and filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the extent that the
Company has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  There
are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

     

    (n) Fees and Rights of First
Refusal.  The Company is not obligated to offer the securities
offered hereunder on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former stockholders of the
Company, underwriters, brokers, agents or other third parties.

     

    (o) Investment Company.
The Company is not, and is not an affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that
it will not become subject to the Investment Company Act.

     

    (p) Private Placement.
Assuming the accuracy of the Buyer’s representations and warranties set forth in
Section 2, no registration under the Securities Act is required for the offer
and sale of the Securities by the Company to the Buyers as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules
and regulations of the Primary Market (as defined below).

     

    (q) Listing and Maintenance
Requirements.  The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to terminate, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the SEC is
contemplating terminating such registration.  The Company has not, in
the twelve (12) months preceding the date hereof, received notice from any
Primary Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Primary Market.  The Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.

     

    
      
        
        

      

      
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    (r) Reporting Status; Shell
Company.  With a view to making available to the Buyer the benefits
of Rule 144 or any similar rule or regulation of the SEC that may at any time
permit the Buyer to sell securities of the Company to the public without
registration, and as a material inducement to the Buyer’s purchase of the
Securities, the Company represents and warrants to the following: (i) the
Company is, and has been for a period of at least 90 days immediately preceding
the date hereof, subject to the reporting requirements of section 13 or 15(d) of
the Exchange Act and (ii) the Company has filed all required reports under
section 13 or 15(d) of the Exchange, as applicable, during the 12 months
preceding the date hereof (or for such shorter period that the Company was
required to file such reports).  The Company is a “Shell Company,” as
defined in paragraph (i)(1)(i) of Rule 144.

     

    (s) Disclosure.  The
Company has made available to the Buyer and its counsel all the information
reasonably available to the Company that the Buyer or its counsel have requested
for deciding whether to acquire the Securities.  No representation or
warranty of the Company contained in this Agreement (as qualified by the
Disclosure Schedule) or any of the other Transaction Documents, and no
certificate furnished or to be furnished to the Buyer at the Closing, or any due
diligence evaluation materials furnished by the Company or on behalf of the
Company, including without limitation, due diligence questionnaires, or any
other documents, presentations, correspondence, or information contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made.

     

    (t) Dilutive
Effect.  The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Convertible
Debenture may increase in certain circumstances.  The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of
the Convertible Debenture in accordance with this Agreement and the Convertible
Debenture is absolute and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interests of other stockholders of the
Company.

     

    (u) Authority.  The
Company has all licenses, permits, and regulatory approvals necessary and
required to take passion of, or title to, the Purchased Assets and to hold the
Purchase Assets in compliance with all Federal, state, and local laws, rules,
and regulations.

     

    4. COVENANTS.

     

    (a) Form
D.  The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing.  The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Securities, or obtain an exemption for the Securities
for sale to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States, and
shall provide evidence of any such action so taken to the Buyers on or prior to
the Closing Date.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b) Reporting
Status.  With a view to making available to the Buyer the
benefits of Rule 144 or any similar rule or regulation of the SEC that may at
any time permit the Buyer to sell securities of the Company to the public
without registration, and as a material inducement to the Buyer’s purchase of
the Securities, the Company represents, warrants, and covenants to the
following:

     

    (i) The
Company is subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act and has filed all required reports under section 13 or 15(d) of the
Exchange Act during the 12 months prior to the date hereof (or for such shorter
period that the issuer was required to file such reports), other than Form 8-K
reports;

     

    (ii) from the
date hereof until all the Securities either have been sold by the Buyer, or may
permanently be sold by the Buyer without any restrictions pursuant to Rule 144,
(the “Registration
Period”) the Company shall file with the SEC in a timely manner all
required reports under section 13 or 15(d) of the Exchange Act and such reports
shall conform to the requirement of the Exchange Act and the SEC for filing
thereunder;

     

    (iii) The
Company shall furnish to the Buyer so long as the Buyer owns Securities,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144(c), (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Buyers to sell such securities pursuant to
Rule 144 without registration subject to the restrictions on Shell Companies;
and

     

    (iv) During
the Registration Period the Company shall not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or the
rules and regulations thereunder would otherwise permit such
termination.

     

    (c) Reservation of
Shares.  On the date hereof, the Company shall reserve for
issuance to the Buyer 1,500,000 shares for issuance upon conversions of the
Convertible Debenture (the “Share
Reserve”).  The Company represents that it has sufficient
authorized and unissued shares of Common Stock available to create the Share
Reserve after considering all other commitments that may require the issuance of
Common Stock.  The Company shall take all action reasonably necessary
to at all times have authorized, and reserved for the purpose of issuance, such
number of shares of Common Stock as shall be necessary to effect the full
conversion of the Convertible Debenture.  If at any time the Share
Reserve is insufficient to effect the full conversion of the Convertible
Debenture the Company shall increase the Share Reserve
accordingly.  If the Company does not have sufficient authorized and
unissued shares of Common Stock available to increase the Share Reserve, the
Company shall call and hold a special meeting of the stockholders within thirty
(30) days of such occurrence, for the sole purpose of increasing the number of
shares authorized.  The Company’s management shall recommend to the
stockholders to vote in favor of increasing the number of shares of Common Stock
authorized.  Management shall also vote all of its shares in favor of
increasing the number of authorized shares of Common Stock.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (d) Listings or
Quotation.  The Company’s Common Stock shall be listed or
quoted for trading on any of (a) New York Stock Exchange, (b) the NYSE Alternext
US (formerly, the American Stock Exchange), (c) the Nasdaq Global Market, (d)
the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board (which does not
include the Pink Sheets LLC) (“OTCBB”) (each, a
“Primary
Market”).  In the event the Company’s Common Stock is listed
with a Primary Market other than OTCBB, the Company shall promptly secure the
listing of all of the Conversion Shares upon each national securities exchange
and automated quotation system, if any, upon which the Common Stock is then
listed (subject to official notice of issuance) and shall maintain such listing
of all Conversion Shares from time to time issuable under the terms of the
Transaction Documents.

     

    (e) Neither
the Buyer nor any of its affiliates have an open short position in the Common
Stock of the Company, and the Buyer agrees that it shall not, and that it will
cause its affiliates not to, engage in any short sales of the Common Stock as
long as the Convertible Debenture remains outstanding.

     

    (f) Escrow.  Within
14 days after closing, the Company shall set aside at least $50,000 in a
segregated escrow account and, without the prior written consent of the Buyer,
shall only use the funds in such account to pay fees owed to the Patent and
Trademark Office related to the Purchased Assets, including office action, for a
period of one year following the Closing.

     

    (g) Piggy-Back
Registrations.  If at any time while the Securities are
outstanding there is not an effective registration statement covering all of the
Securities and the Company shall determine to prepare and file with the SEC a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with the stock option or
other employee benefit plans, then the Company shall send to the Buyer a written
notice of such determination and, if within 15 days after the date of such
notice, the Buyer shall so request in writing, the Company shall include in such
registration statement all or any part of such Securities the Buyer requests to
be registered; provided, however, that, the
Company shall not be required to register any Securities pursuant to this that
are eligible for resale pursuant to Rule 144 or that are the subject of a then
effective registration statement.

     

    (h) Maintenance of
Patents.  The Company shall take all reasonable steps necessary
to maintain the value of the Purchased Assets, including without
limitation:

     

    (i) With
respect to all patents and applications listed on Schedule 4(g) attached hereto,
maintain the effectiveness of all patents and applications, respond to all
office actions, pursue all pending patent applications;

     

    (ii) timely
pay all fees owed to the Patent and Trademark Office related to the Purchased
Assets;

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (iii) not take
any action which would be reasonably expected to harm the value of the Purchased
Assets;

     

    (iv) complete
the efficacy study in Germany; and

     

    (v) maintain
the existing supply of compound in accordance with study rules, including
recertifying the compound as necessary and taking all steps necessary to keep
alive all extracts, compounds, derivative, and strains which are including in
the Purchased Assets.

     

    The
Company shall provide the Buyer with monthly updates on the 15th day of
each month beginning on May 1, 2009 as to the status and progress with respect
to all patents listed on Schedule 4(h) and additionally all patents or
applications listed on the Schedule I to Exhibit A to the Bill of Sale which are
not listed on Schedule 4(h) hereof (the “Additional Patents”),
and furthermore, to provide the Buyer, promptly upon the Buyer’s request, with
evidence of the Company’s compliance with its obligations of this Section
4(h).  Furthermore, with respect to the Additional Patents, the
Company shall use commercially reasonable efforts to perfect the chain of title,
and if any such patents or applications are assigned to the Company, then the
obligations of the Company specifically set forth in Section 4(h)(i) above shall
also apply to those Additional Patents as if they were specifically included on
Schedule 4(h) from and after the time they become assigned to the
Company.  If the Company decides not to maintain any patent for which
it is unable to perfect the chain of title for any Additional Patents within 90
days of the Closing Date, then Buyer shall have the right, but not the
obligation, to have the Company assign what ever rights the Company has to such
Additional Patent where chain of title was not perfected to the Buyer, or its
designees, for consideration consisting of one dollar.

     

    5. INDEMNIFICATION.

     

    (a) In
consideration of the Buyer’s execution and delivery of this Agreement and
acquiring the Convertible Debenture and the Conversion Shares hereunder, and in
addition to all of the Company’s other obligations under this Agreement, the
Company shall defend, protect, indemnify and hold harmless the Buyer, and all of
its officers, directors, employees and agents (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Buyer Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Buyer Indemnitee is a party to the
action for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by the Buyer Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any misrepresentation or breach
of any representation or warranty made by the Company in this Agreement, the
Convertible Debenture or the other Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby executed by
the Company, (b) any breach of any covenant, agreement or obligation of the
Company contained in this Agreement, or the other Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby
executed by the Company, (c) any cause of action, suit or claim brought or made
against such Buyer Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of this Agreement, the other
Transaction Documents or any other instrument, document or agreement executed
pursuant hereto by any of the parties hereto, or (d) any claims arising from or
in connection with the Purchased Assets, including, without limitation, any
clinical trials or any drugs or compounds used in any clinical
trials.  To the extent that the foregoing undertaking by the Company
may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (b) In
consideration of the Company’s execution and delivery of this Agreement, and in
addition to all of the Buyer’s other obligations under this Agreement, the Buyer
shall defend, protect, indemnify and hold harmless the Company and all of its
officers, directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”)
from and against any and all Indemnified Liabilities incurred by the Company
Indemnitees or any of them as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Buyer in this Agreement, or the other Transaction Documents, or any other
certificate, instrument or document contemplated hereby or thereby executed by
the Buyer, (b) any breach of any covenant, agreement or obligation of the Buyer
contained in this Agreement,  the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby executed by
the Buyer, or (c) any cause of action, suit or claim brought or made against
such Company Indemnitee based on material misrepresentations or due to a
material breach and arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement, the Transaction Documents or any
other instrument, document or agreement executed pursuant hereto by any of the
parties hereto.  To the extent that the foregoing undertaking by each
Buyer may be unenforceable for any reason, each Buyer shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

     

    6. GOVERNING LAW:
MISCELLANEOUS.

     

    (a) Governing
Law.  This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New Jersey without regard to the
principles of conflict of laws.  The parties further agree that any
action between them shall be heard in Hudson County, New Jersey, and expressly
consent to the jurisdiction and venue of the Superior Court of New Jersey,
sitting in Hudson County and the United States District Court for the District
of New Jersey sitting in Newark, New Jersey for the adjudication of any civil
action asserted pursuant to this Paragraph.

     

    (b) Counterparts.  This
Agreement may be executed in two or more identical counterparts which may be
delivered by facsimile transmission, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party.

     

    (c) Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

     

    (d) Severability.  If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (e) Entire Agreement,
Amendments.  This Agreement supersedes all other prior oral or
written agreements between the Buyer, the Company, their affiliates and persons
acting on their behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters.  No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party to be charged
with enforcement.

     

    (f) Notices.  Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile; (iii) three (3) days after
being sent by U.S. certified mail, return receipt requested, or (iv) one (1) day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same.  The
addresses and facsimile numbers for such communications shall be:

     

    
      	
              If
      to the Company, to:

            	
              BBM
      Holdings, Inc.

            
	 
      	
              1245
      Brickyard Road, Suite 590

            
	 
      	
              Salt
      Lake City, Utah 84106

            
	 
      	
              Attention: Andrew
      Limpert, Chief Executive Officer

            
	 
      	
              Telephone: 801-433-2000

            
	 
      	
              Facsimile: 801-433-2222

            
	 
      	 
      
	
              With
      a copy to:

            	
              James
      Kardon

            
	 
      	
              Hahn
      & Hessen LLP

            
	 
      	
              488
      Madison Avenue, 14th
      Floor

            
	 
      	
              New
      York, New York 10022

            
	 
      	
              Telephone: 212-478-7250

            
	 
      	
              Facsimile:  212-478-7400

            
	 
      	 
      
	
              If
      to the Buyer, to:

            	
              YA
      Global Investments, L.P.

              101
      Hudson Street, Suite 3700

              Jersey
      City, New Jersey 07302

              Attention: Mark
      Angelo

              Telephone: 201-985-8300

              Facsimile: 201-985-8266

            
	 
      	 
      
	
              With
      a copy to:

            	
              Yorkville
      Advisors, LLC

              101
      Hudson Street, Suite 3700

              Jersey
      City, New Jersey 07302

              Attention: David
      Gonzalez

              Telephone: 201-985-8300

              Facsimile: 201-985-8266

               

            

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Each
party shall provide five (5) days’ prior written notice to the other party of
any change in address or facsimile number.

     

    (g) Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
assigns.  Neither the Company nor any Buyer shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto.

     

    (h) No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.

     

    (i) Survival.  All
agreements, representations and warranties contained in this Agreement or made
in writing by or on behalf of any party in connection with the transactions
contemplated by this Agreement shall survive the execution and delivery of this
Agreement and the Closing.

     

    (j) Publicity.  The
Company and the Buyer shall have the right to approve, before issuance any press
release or any other public statement with respect to the transactions
contemplated hereby made by any party; provided, however, that the Company shall
be entitled, without the prior approval of the Buyer, to issue any press release
or other public disclosure with respect to such transactions required under
applicable securities or other laws or regulations; provided that the Company
shall use its best efforts to consult the Buyer in connection with any such
press release or other public disclosure prior to its release and Buyer shall be
provided with a copy thereof upon release thereof.

     

    (k) Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

     

    (l) No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    

    IN WITNESS WHEREOF, each Buyer and the Company
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.

     

    
      	 
      	COMPANY:
	 
      	 	 
      
	 
      	BBM
      HOLDINGS, INC.
	 
      	 	 
      
	 
      	By: 	
                                                                             

            
	 
      	
              Name:

            	
            
	 
      	
              Title:

            	
            
	 
      	 	 
      

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, each Buyer and the Company
have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.

     

    
      	 
      	BUYERS:
	 
      	 	 
      
	 
      	YA
      GLOBAL INVESTMENTS, L.P.
	 
      	 	 
      
	 
      	By:	
              Yorkville
      Advisors, LLC

            
	 
      	Its:	
              Investment
      Manager

            
	 
      	 	 
      
	 
      	 	 
      
	 
      	
              By:

            	
            
	 
      	 	
              Name:

            
	 
      	 	
              Its:

            

    

     

    
      
        
        

      

      
        18Unassociated Document

    
      

       

      SECURITY
AGREEMENT

       

      THIS SECURITY AGREEMENT (the
“Agreement”), is entered into and made
effective as of March 19, 2009, by and between BBM HOLDINGS, INC., a Utah
corporation with its principal place of business located at 1245 Brickyard Road,
Suite 590, Salt Lake City, Utah 84106 (the “Grantor”) in favor
YA GLOBAL INVESTMENTS,
L.P. (the “Secured
Party”).

       

      WHEREAS, pursuant to that
certain Secured Party’s Bill of Sale of even date herewith between the Company
and the Secured Party (the “Bill of Sale”) the
Secured Party shall sell to the Company all of Advanced Viral Research Corp.’s
and Triad Biotherapeutics, Inc.’s right, title, and interest in and to the
certain personal property;

       

      WHEREAS, in connection with
the Securities Purchase Agreement by and among the Company and the Secured Party
of even date herewith (the “Securities Purchase
Agreement”), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue to the Secured Party a
senior secured convertible debenture (the “Convertible
Debenture”) in the face amount of $500,000, which shall be convertible
into shares of the Company’s Common Stock (the “Conversion Shares”);
and

       

      WHEREAS, it is a condition
precedent to the Secured Party purchasing the Convertible Debenture that the
Grantor shall have executed and delivered to the Secured Party this Agreement
providing for the grant to the Secured Party of a security interest in certain
personal property of the Grantor to secure all of the Company's obligations
under the “Transaction Documents” (as defined in the Securities Purchase
Agreement) (the “Transaction
Documents”);

       

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

       

      ARTICLE
1.

       

      DEFINITIONS AND
INTERPRETATIONS

       

      Section
1.1. Interpretations.
Nothing herein expressed or implied is intended or shall be construed to confer
upon any person other than the Secured Party any right, remedy or claim under or
by reason hereof.

       

      Section
1.2. Definitions.
Reference is hereby made to the Securities Purchase Agreement and the
Convertible Debenture for a statement of the terms thereof.  All
capitalized terms used in this Agreement and the recitals hereto and not defined
herein shall have the meanings set forth in the Securities Purchase Agreement,
the Convertible Debentures, or in Articles 8 or 9 of the Uniform Commercial Code
as in effect from time to time in the State of New Jersey (the "Code").

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Section
1.3. An “Event of Default” shall be deemed to have occurred under this Agreement
upon an Event of Default under and as defined in the Convertible
Debenture.

       

      ARTICLE
2.

       

      PLEDGED
PROPERTY

       

      
           
Section
2.1. Grant of Security
Interest.

      

       

      (a) As
collateral security for all of the Obligations (as defined in Section 2.2 hereof),
the Grantor hereby pledges and assigns to the Secured Party, and grants to the
Secured Party for its benefit, a continuing security interest in and the
personal property described on Exhibit A attached
hereto (collectively, the Pledged Property).

       

      (b)
Simultaneously with the execution and delivery of this Agreement, the Grantor
shall make, execute, acknowledge, file, record and deliver to the Secured Party
such documents, instruments, and agreements, including, without limitation,
financing statements, certificates, affidavits and forms as may, in the Secured
Party’s reasonable judgment, be necessary to effectuate, complete or perfect, or
to continue and preserve, the security interest of the Secured Party in the
Pledged Property.

       

      Section
2.2 Security for
Obligations.  The security interest created hereby in the
Pledged Property constitutes continuing collateral security for the payment by
the Company, as and when due and payable (by scheduled maturity, acceleration,
demand or otherwise), of all amounts from time to time owing by it in respect of
the Convertible Debentures, and other obligations from time to time existing in
respect of any of the Transaction Documents, whether or not now in existence or
hereinafter incurred, including without limitation, with respect to any
conversion rights of the Secured Party under the Convertible
Debenture.

       

      

       

      ARTICLE
3.

       

      ATTORNEY-IN-FACT;
PERFORMANCE

       

      
           
Section
3.1. Secured Party
Appointed Attorney-In-Fact.

      

       

      Upon the
occurrence and during the continuance of an Event of Default, the Grantor hereby
appoint the Secured Party as its attorney-in-fact, with full authority in the
place and stead of the Grantor and in the name of the Grantor or otherwise,
exercisable from time to time in the Secured Party’s discretion to take any
action and to execute any instrument which the Secured Party may reasonably deem
necessary to accomplish the purposes of this Agreement, including, without
limitation, to (a) receive and collect all instruments made payable to the
Grantor representing any payments in respect of the Pledged Property or any part
thereof and to give full discharge for the same; (b) demand, collect, receipt
for, settle, compromise, adjust, sue for, foreclose, or realize on the Pledged
Property as and when the Secured Party may determine, and (c) to facilitate
collection, the Secured Party may notify account debtors and obligors on any
Pledged Property to make payments directly to the Secured Party.  The
foregoing power of attorney is a power coupled with an interest and shall be
irrevocable until all Obligations are paid in full.  The Grantor
agrees that the powers conferred on the Secured Party hereunder are solely to
protect the Secured Party’s interests in the Pledged Property and shall not
impose any duty upon the Secured Party to exercise any such powers.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        Section
3.2. Secured Party May
Perform.

      

       

      If the
Grantor fails to perform any agreement contained in Section 4(h) of the
Securities Purchase Agreement, or upon the occurrence and continuance of an
Event of Default, if the Grantor fails to perform any agreement herein, the
Secured Party, at its option, may itself perform, or cause performance of, such
agreement, and the expenses of the Secured Party incurred in connection
therewith shall be included in the Obligations secured hereby and payable by
such Grantor under Section 8.3.

       

      ARTICLE
4.

       

      REPRESENTATIONS AND
WARRANTIES

       

      
         
  Section
4.1. Authorization;
Enforceability.

      

       

      Each of
the parties hereto represents and warrants that it has taken all action
necessary to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby; and upon execution and delivery, this
Agreement shall constitute a valid and binding obligation of the respective
party, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights or by the principles governing the
availability of equitable remedies.

       

      
         
  Section
4.2. Ownership of
Pledged Property.

      

       

      The
Grantor represents and warrants that it is the legal and beneficial owner of the
Pledged Property free and clear of any lien, security interest, option or other
charge or encumbrance (each, a “Lien”) except for the security interest created
by this Agreement and other Permitted Liens.  For purposes of this
Agreement, “Permitted Liens” means: (1) the security interest created by this
Agreement, (2) existing Liens which have been disclosed by the Company to the
Secured Party on Schedule 4.2 attached hereto; (3) inchoate Liens for taxes,
assessments or governmental charges or levies not yet due, as to which the grace
period, if any, related thereto has not yet expired, or being contested in good
faith and by appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting principles (“GAAP”); (4) Liens of
carriers, materialmen, warehousemen, mechanics and landlords and other similar
Liens which secure amounts which are not yet overdue by more than 60 days or
which are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP; (5) licenses,
sublicenses, leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Company; (6) Liens securing
capitalized lease obligations and purchase money indebtedness incurred solely
for the purpose of financing an acquisition or lease; (7) easements,
rights-of-way, restrictions, encroachments, municipal zoning ordinances and
other similar charges or encumbrances, and minor title deficiencies, in each
case not securing debt and not materially interfering with the conduct of the
business of the Company and not materially detracting from the value of the
property subject thereto; (8) Liens arising out of the existence of judgments or
awards which judgments or awards do not constitute an Event of Default; (9)
Liens incurred in the ordinary course of business in connection with workers
compensation claims, unemployment insurance, pension liabilities and social
security benefits and Liens securing the performance of bids, tenders, leases
and contracts in the ordinary course of business, statutory obligations, surety
bonds, performance bonds and other obligations of a like nature (other than
appeal bonds) incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); (10) Liens in favor
of a banking institution arising by operation of law encumbering deposits
(including the right of set-off) and contractual set-off rights held by such
banking institution and which are within the general parameters customary in the
banking industry and only burdening deposit accounts or other funds maintained
with a creditor depository institution; (11) usual and customary set-off rights
in leases and other contracts; and (12) escrows in connection with acquisitions
and dispositions.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Section
4.3 RESERVED.

       

      Section
4.4 Location, State of
Incorporation and Name of Grantor.

       

      The
Grantor’s principal place of business, state of organization, organization
identification number, and exact legal name is as set forth on each such
Grantor’s signature page to this Agreement.

       

      Section
4.5 Priority of
Security Interest.

       

      The
security interest granted to the Secured Party hereunder shall be a first
priority security interest subject to no other Liens.

       

      ARTICLE
5.

       

      DEFAULT;
REMEDIES

       

      
        Section
5.1 Method of
Realizing Upon the Pledged Property: Other Remedies.

      

       

      If any
Event of Default shall have occurred and be continuing:

       

      (a) The
Secured Party may exercise in respect of the Pledged Property, in addition to
any other rights and remedies provided for herein or otherwise available to it,
all of the rights and remedies of a secured party upon default under the Code
(whether or not the Code applies to the affected Pledged Property), and also may
(i) take absolute control of the Pledged Property, including, without
limitation, transfer into the Secured Party's name or into the name of its
nominee or nominees (to the extent the Secured Party has not theretofore done
so) and thereafter receive, for the benefit of the Secured Party, all payments
made thereon, give all consents, waivers and ratifications in respect thereof
and otherwise act with respect thereto as though it were the outright owner
thereof, (ii) require the Grantor to assemble all or part of the Pledged
Property as directed by the Secured Party and make it available to the Secured
Party at a place or places to be designated by the Secured Party that is
reasonably convenient to both parties, and the Secured Party may enter into and
occupy any premises owned or leased by a Grantor where the Pledged Property or
any part thereof is located or assembled for a reasonable period in order to
effectuate the Secured Party's rights and remedies hereunder or under law,
without obligation to the Grantor in respect of such occupation, and
(iii) without notice except as specified below and without any obligation
to prepare or process the Pledged Property for sale, (A) sell the Pledged
Property or any part thereof in one or more parcels at public or private sale,
at any of the Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as the
Secured Party may deem commercially reasonable and/or (B) lease, license or
dispose of the Pledged Property or any part thereof upon such terms as the
Secured Party may deem commercially reasonable.  The Grantor agrees
that, to the extent notice of sale or any other disposition of the Pledged
Property shall be required by law, at least ten (10) days' notice to the Grantor
of the time and place of any public sale or the time after which any private
sale or other disposition of the Pledged Property is to be made shall constitute
reasonable notification.  The Secured Party shall not be obligated to
make any sale or other disposition of any Pledged Property regardless of notice
of sale having been given.  The Secured Party may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.  The Grantor hereby waives any
claims against the Secured Party arising by reason of the fact that the price at
which the Pledged Property may have been sold at a private sale was less than
the price which might have been obtained at a public sale or was less than the
aggregate amount of the Obligations, even if the Secured Party accepts the first
offer received and does not offer such Pledged Property to more than one
offeree, and waives all rights that the Grantor may have to require that all or
any part of such Pledged Property be marshaled upon any sale (public or private)
thereof.  The Grantor hereby acknowledges that (i) any such sale
of the Pledged Property by the Secured Party may be made without warranty,
(ii) the Secured Party may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like, and (iii) such actions set forth
in clauses (i) and (ii) above shall not adversely affect the commercial
reasonableness of any such sale of Pledged Property.  

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Any
cash held by the Secured Party as Pledged Property and all cash proceeds
received by the Secured Party in respect of any sale of or collection from, or
other realization upon, all or any part of the Pledged Property shall be applied
(after payment of any amounts payable to the Secured Party pursuant to Section
8.3 hereof) by the Secured Party against, all or any part of the Obligations in
such order as the Secured Party shall elect, consistent with the provisions of
the Securities Purchase Agreement.  Any surplus of such cash or cash
proceeds held by the Secured Party and remaining after the indefeasible payment
in full in cash of all of the Obligations shall be paid over to whomsoever shall
be lawfully entitled to receive the same or as a court of competent jurisdiction
shall direct.

       

      (c)  The
Grantor hereby acknowledges that if the Secured Party complies with any
applicable state, provincial, or federal law requirements in connection with a
disposition of the Pledged Property, such compliance will not adversely affect
the commercial reasonableness of any sale or other disposition of the Pledged
Property.

       

      (d) The
Secured Party shall not be required to marshal any present or future collateral
security (including, but not limited to, this Agreement and the Pledged
Property) for, or other assurances of payment of, the Obligations or any of them
or to resort to such collateral security or other assurances of payment in any
particular order, and all of the Secured Party's rights hereunder and in respect
of such collateral security and other assurances of payment shall be cumulative
and in addition to all other rights, however existing or arising.  To
the extent that the Grantor lawfully may, the Grantor hereby agrees that it will
not invoke any law relating to the marshaling of collateral which might cause
delay in or impede the enforcement of the Secured Party's rights under this
Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, the Company hereby irrevocably waives the
benefits of all such laws.

       

      Section
5.2 Duties Regarding
Pledged Property.

       

      The
Secured Party shall have no duty as to the collection or protection of the
Pledged Property or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody and reasonable care of any of the
Pledged Property actually in the Secured Party’s possession.

       

      Section
5.3 Non-Recourse.  As
set forth in the Convertible Debentures, the Obligations are made without
recourse to the Grantor and therefore, in the event that the proceeds of any
sale, collection, or realization of any Pledged Property hereunder are
insufficient to pay all the Obligations the Grantor shall not be liable for any
deficiency.

       

      ARTICLE
6.

       

      AFFIRMATIVE
COVENANTS

       

      So long
as any of the Obligations shall remain outstanding, unless the Secured Party
shall otherwise consent in writing:

       

      
        Section
6.1. Existence,
Properties, Etc.

      

       

      (a) The
Grantor shall do, or cause to be done, all things, or proceed with due diligence
with any actions or courses of action, that may be reasonably necessary
(i) to maintain Grantor’s due organization, valid existence and good
standing under the laws of its state of incorporation, and (ii) to preserve
and keep in full force and effect all qualifications, licenses and registrations
in those jurisdictions in which the failure to do so could have a Material
Adverse Effect (as defined below); and (b) the Grantor shall not do, or
cause to be done, any act impairing the Grantor’s corporate power or authority
(i) to carry on the Grantor’s business as now conducted, and (ii) to
execute or deliver this Agreement or any other document delivered in connection
herewith, including, without limitation, any UCC-1 Financing Statements required
by the Secured Party (which other loan instruments collectively shall be
referred to as the “Loan
Instruments”) to which it is or will be a party, or perform any of
its obligations hereunder or thereunder.  For purpose of this
Agreement, the term “Material Adverse
Effect” shall mean any material and adverse affect as determined by
Secured Party in its reasonable discretion, whether individually or in the
aggregate, upon (a) the Grantor’s assets, business, operations, properties
or condition, financial or otherwise; (b) the Grantor’s ability to make
payment as and when due of all or any part of the Obligations; or (c) the
Pledged Property.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        Section
6.2. Financial
Statements and Reports.

      

       

      The
Grantor shall furnish to the Secured Party within a reasonable time such
financial data as the Secured Party may reasonably request.

       

      Section
6.3. RESERVED.

       

      Section
6.4. Maintenance of
Books and Records; Inspection.

       

      The
Grantor shall maintain its books, accounts and records in accordance with GAAP,
and permit the Secured Party, its officers and employees and any professionals
designated by the Secured Party in writing, at any time during normal business
hours and upon reasonable notice to visit and inspect any of its properties
(including but not limited to the collateral security described in the
Transaction Documents and/or the Loan Instruments), corporate books and
financial records, and to discuss its accounts, affairs and finances with any
employee, officer or director thereof (it being agreed that, unless an Event of
Default shall have occurred and be continuing, there shall be no more than two
(2) such visits and inspections in any calendar year).

       

      
        Section
6.5. Maintenance and
Insurance.

      

       

      (a) The
Grantor shall maintain or cause to be maintained, at its own expense, all of
Pledged Property in good working order and condition, ordinary wear and tear
excepted, making all necessary repairs thereto and renewals and replacements
thereof.

       

      (b) The
Grantor shall maintain or cause to be maintained, at its own expense, insurance
in form, substance and amounts (including deductibles), which the Grantor deems
reasonably necessary with respect to the Pledged Property, (i) adequate to
insure all Pledged Property of a character usually insured by persons engaged in
the same or similar business against loss or damage resulting from fire or other
risks included in an extended coverage policy; (ii) against public
liability and other tort claims that may be incurred by the Grantor;
(iii) as may be required by the Transaction Documents and/or applicable law
and (iv) as may be reasonably requested by Secured Party, all with financially
sound and reputable insurers.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
         Section
6.6. Contracts and
Other Collateral.

      

       

      The
Grantor shall perform all of its obligations under or with respect to each
instrument, receivable, contract and other intangible included in the Pledged
Property to which the Grantor is now or hereafter will be party on a timely
basis and in the manner therein required, including, without limitation, this
Agreement, except to the extent the failure to so perform such obligations would
not reasonably be expected to have a Material Adverse Effect.

       

      
        Section
6.7. Defense of
Collateral, Etc.

      

       

      The
Grantor shall defend and enforce its right, title and interest in and to any
part of:  (a) the Pledged Property; and (b) if not included
within the Pledged Property, those assets and properties whose loss would
reasonably be expected to have a Material Adverse Effect, each against all
manner of claims and demands on a timely basis to the full extent permitted by
applicable law (other than any such claims and demands by holders of Permitted
Liens).

       

      Section
6.8. Taxes and
Assessments.

       

      The
Grantor shall (a) file all material tax returns and appropriate schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency (taking into account any extensions of the original due date),
(b) pay and discharge all material taxes, assessments and governmental
charges or levies imposed upon the Grantor, upon its income and profits or upon
any properties belonging to it, prior to the date on which penalties attach
thereto, and (c) pay all material taxes, assessments and governmental
charges or levies that, if unpaid, might become a lien or charge upon any of its
properties; provided,
however, that the Grantor in good faith may contest any such tax,
assessment, governmental charge or levy described in the foregoing clauses (b)
and (c) so long as appropriate reserves are maintained with respect thereto if
and to the extent required by GAAP.

       

      
         Section
6.9. Compliance with
Law and Other Agreements.

      

       

      The
Grantor shall maintain its business operations and property owned or used in
connection therewith in compliance with (a) all applicable federal, state
and local laws, regulations and ordinances governing such business operations
and the use and ownership of such property, and (b) all agreements,
licenses, franchises, indentures and mortgages to which the Grantor is a party
or by which the Grantor or any of its properties is bound, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        Section
6.10. Notice of
Default.

      

       

      The
Grantor will immediately notify the Secured Party of any event causing a
substantial loss or diminution in the value of all or any material part of the
Pledged Property and the amount or an estimate of the amount of such loss or
diminution and any Event of Default.

       

      
        Section
6.11. Notice of
Litigation.

      

       

      The
Grantor shall give notice, in writing, to the Secured Party of (a) any
actions, suits or proceedings wherein the amount at issue is in excess of
$250,000, instituted by any persons against the Grantor, or affecting any of the
Pledged Property, and (b) any dispute, not resolved within fifteen (15)
days of the commencement thereof, between the Grantor on the one hand and any
governmental or regulatory body on the other hand, which might reasonably be
expected to have a Material Adverse Effect on the Pledged Property.

       

      Section
6.13. Future
Subsidiaries.

       

      If any
Grantor shall hereafter create or acquire any subsidiary to hold any of the
Pledged Property, simultaneously with the creation or acquisition of such
subsidiary, such Grantor shall cause such subsidiary to become a party to this
Agreement as an additional "Grantor" hereunder, and to duly execute and deliver
a guaranty of the Obligations in favor of the Secured Party in form and
substance reasonably acceptable to the Secured Party, and to duly execute and/or
deliver such opinions of counsel and other documents, in form and substance
reasonably acceptable to the Secured Party, as the Secured Party shall
reasonably request with respect thereto.

       

      Section
6.14. Changes to
Identity.

       

      The
Grantor will (a) give the Secured Party at least 30 days' prior written notice
of any change in such Grantor's name, identity or organizational structure, (b)
maintain its jurisdiction of incorporation, organization or formation as set
forth on its respective signature page attached hereto, (C) immediately notify
the Secured Party upon obtaining an organizational identification number, if on
the date hereof such Grantor did not have such identification
number.

       

      Section
6.15. RESERVED.

       

      Section
6.16 Perfection of
Security Interests.

       

      (a) Financing
Statements.   The Grantor hereby irrevocably authorizes
the Secured Party, at the sole cost and expense of the Grantor, at any time and
from time to time to file in any filing office in any jurisdiction any initial
financing statements and amendments thereto that (a) indicate the Pledged
Property (i) as all assets of Grantor set forth on Exhibit A, regardless of
whether any particular asset comprised in the Pledged Property falls within the
scope of Article 9 of the Code of such jurisdiction, or (ii) as being of an
equal or lesser scope or with greater detail, and (b) contain any other
information required by Part 5 of Article 9 of the Code for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i)
whether such Grantor is an organization, the type of organization and any
organization identification number issued to such Grantor, and (ii) in the case
of a financing statement filed as a fixture filing, a sufficient description of
real property to which the Pledged Property relates.  Grantor agrees
to furnish any such information to the Secured Party promptly upon
request.  Grantor also ratify their authorization for the Secured
Party to have filed in any jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof. The Grantor acknowledges
that they are not authorized to file any financing statement or amendment or
termination statement with respect to any financing statement without the prior
written consent of the Secured Party and agree that they will not do so without
the prior written consent of the Secured Party.  The Grantor
acknowledges and agree that this Agreement constitutes an authenticated
record.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Possession.  The
Grantor (i) shall be entitled to have possession of the Pledged Property, except
where expressly otherwise provided in this Agreement or where the Secured Party
is required under the UCC to perfect its security interest by taking possession
in addition to the filing of a financing statement; and (ii) will, where Pledged
Property is in the possession of a third party, join with the Secured Party in
notifying the third party of the Secured Party’s security interest and use
commercially reasonable effort to obtain an acknowledgment from the third party
that it is holding the Pledged Property for the benefit of the Secured
Party.

       

      (c) Control. The Grantor
will cooperate with the Secured Party in obtaining control with respect to the
Pledged Property consisting of (i) Investment Property, (ii) Letters of Credit
and Letter-of-Credit Rights and (iii) electronic Chattel Paper.

       

      (d) Marking of Chattel
Paper. The Grantor will not create any Chattel Paper without placing a
legend on the Chattel Paper acceptable to the Secured Party indicating that the
Secured Party has a security interest in the Chattel Paper.

       

      Section
6.17 RESERVED.

       

      Section
6.18 Location of
Pledged Property.

       

      Within 30
days of the date hereof the Grantor shall given the Secured Party written notice
of the location of all the Pledged Property and shall keep all the Pledged
Property at such disclosed location, and unless otherwise provided herein, the
Grantor shall not remove any Pledged Property from such locations without the
prior written consent of the Secured Party which consent shall not be
unreasonably withheld.

       

      ARTICLE
7.

       

      NEGATIVE
COVENANTS

       

      So long
as any of the Obligations shall remain outstanding, unless the Secured Party
shall otherwise consent in writing the Grantor covenants and agrees that it
shall not:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Section
7.1. Transfers, Liens
and Encumbrances.

       

      (a) Sell,
assign (by operation of law or otherwise), lease, license, exchange or otherwise
transfer or dispose of any of the Pledged Property.

       

      (b)
Directly or indirectly make, create, incur, assume or permit to exist any Lien
in, to or against any part of the Pledged Property other than Permitted
Liens.

       

      Section
7.2. RESERVED

       

      Section
7.3. Incurrence of
Indebtedness.

       

      Directly
or indirectly, incur or guarantee, assume or suffer to exist any indebtedness,
other than the indebtedness evidenced by the Convertible Debentures and other
Permitted Indebtedness.  “Permitted
Indebtedness” means: (i) indebtedness evidenced by Convertible
Debentures; (ii) indebtedness described on the Disclosure Schedule to the
Securities Purchase Agreement; (iii) indebtedness incurred solely for the
purpose of financing the acquisition or lease of any equipment by the Company,
including capital lease obligations with no recourse other than to such
equipment; (iv) indebtedness, the repayment of which has been subordinated to
the payment of the Convertible Debentures, including with regard to interest
payments and repayment of principal; (v) indebtedness solely between the Grantor
and/or one of its domestic subsidiaries, on the one hand, and the Grantor and/or
one of its domestic subsidiaries, on the other which indebtedness is not secured
by any assets of the Grantor or any of its subsidiaries, provided that (x) in
each case a majority of the equity of any such domestic subsidiary is directly
or indirectly owned by the Grantor, such domestic subsidiary is controlled by
the Grantor and such domestic subsidiary has executed a security agreement in
the form of this Agreement and (y) any such loan shall be evidenced by an
intercompany note that is pledged by the Grantor or its subsidiary, as
applicable, as collateral pursuant to this Agreement; (vi) reimbursement
obligations in respect of letters of credit issued for the account of the
Grantor or any of its subsidiaries for the purpose of securing performance
obligations of the Grantor or its subsidiaries incurred in the ordinary course
of business so long as the aggregate face amount of all such letters of credit
does not exceed $500,000 at any one time; (vii) other indebtedness of any type
not to exceed $150,000, and (viii) renewals, extensions and refinancing of any
indebtedness described in clauses (i) or (iii) of this subsection.

       

      Section
7.4. Places of
Business.

       

      Change
the location of its chief place of business, chief executive office or any place
of business disclosed to the Secured Party, unless such change in location is to
a different location within the United States and the Grantor provides notice to
the Secured Party of new location within 10 days’ of such change in
location.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
8.

       

      MISCELLANEOUS

       

      
         
Section
8.1. Notices.

      

       

      Any
notices, consents, waivers or other communications required or permitted to be
given under the terms hereof must be in writing and will be deemed to have been
delivered:  (i) upon delivery, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile; (iii) three (3) days after
being sent by U.S. certified mail, return receipt requested, or (iv) one (1) day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same.  The
addresses and facsimile numbers for such communications shall be:

       

      
        	
                If
      to the Secured Party:

              	
                YA
      Global Investments, L.P.

              
	 
      	
                101
      Hudson Street-Suite 3700

              
	 
      	
                Jersey
      City, New Jersey 07302

              
	 
      	
                Attention:
      Mark Angelo

              
	 
      	
                  Portfolio
      Manager

              
	 
      	
                Telephone:
      (201) 986-8300

              
	 
      	
                Facsimile:
      (201) 985-8266

              
	 
      	 
      
	
                With
      a copy to:

              	
                David
      Gonzalez, Esq.

              
	 
      	
                101
      Hudson Street, Suite 3700

              
	 
      	
                Jersey
      City, NJ 07302

              
	 
      	
                Telephone:
      (201) 985-8300

              
	 
      	
                Facsimile:
      (201) 985-8266

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                If
      to the Company:

              	
                BBM
      Holdings, Inc.

              
	 
      	
                1245
      Brickyard Road, Suite 590

              
	 
      	
                Salt
      Lake City, Utah 84106

              
	 
      	
                Attention:  Chief
      Executive Officer

              
	 
      	
                Telephone:

              
	 
      	
                Facsimile:

              
	 
      	 
      
	
                With
      a copy to:

              	
                James
      Kardon

              
	 
      	
                Hahn
      & Hessen LLP

              
	 
      	
                488
      Madison Ave,  14th Floor

              
	 
      	
                New
      York, NY 10022

              
	 
      	
                Telephone:
      (212) 478-7250

              
	 
      	
                Facsimile:
      (212) 478-7400

              
	 
      	 
      
	
                If
      to any other Grantor

              	
                To
      the address listed on the respective signature pages attached
      hereto

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Any party
may change its address by giving notice to the other party stating its new
address.  Commencing on the tenth (10th) day
after the giving of such notice, such newly designated address shall be such
party’s address for the purpose of all notices or other communications required
or permitted to be given pursuant to this Agreement.

       

      
        Section
8.2. Severability.

      

       

      If any
provision of this Agreement shall be held invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and shall not
in any manner affect or render invalid or unenforceable any other severable
provision of this Agreement, and this Agreement shall be carried out as if any
such invalid or unenforceable provision were not contained herein.

       

      Section
8.3. Expenses.

       

      In the
event of an Event of Default, the Company will pay to the Secured Party the
amount of any and all reasonable out-of-pocket expenses, including the
reasonable fees and expenses of its counsel, which the Secured Party may incur
in connection with:  (i) the custody or preservation of, or the
sale, collection from, or other realization upon, any of the Pledged Property;
(ii) the exercise or enforcement of any of the rights of the Secured Party
hereunder or (iii) the failure by the Grantor to perform or observe any of
the provisions hereof.

       

      Section
8.4. Waivers,
Amendments, Etc.

       

      The
Secured Party’s delay or failure at any time or times hereafter to require
strict performance by Grantor of any undertakings, agreements or covenants shall
not waive, affect, or diminish any right of the Secured Party under this
Agreement to demand strict compliance and performance herewith.  Any
waiver by the Secured Party of any Event of Default shall not waive or affect
any other Event of Default, whether such Event of Default is prior or subsequent
thereto and whether of the same or a different type.  None of the
undertakings, agreements and covenants of the Grantor contained in this
Agreement, and no Event of Default, shall be deemed to have been waived by the
Secured Party, nor may this Agreement be amended, changed or modified, unless
such waiver, amendment, change or modification is evidenced by an instrument in
writing specifying such waiver, amendment, change or modification and signed by
the Secured Party in the case of any such waiver, and signed by the Secured
Party and the Grantor in the case of any such amendment, change or
modification.  Further, no such document, instrument, and/or agreement
purported to be executed on behalf of the Secured Party shall be binding upon
the Secured Party unless executed by a duly authorized representative of the
Secured Party.

       

      
        Section 8.5. Continuing Security
Interest.

      

       

      This
Agreement shall create a continuing security interest in the Pledged Property
and shall: (i) remain in full force and effect so long as any of the
Obligations shall remain outstanding; (ii) be binding upon the Grantor and
its successors and assigns; and (iii) inure to the benefit of the Secured
Party and its successors and assigns.  Upon the payment or
satisfaction in full of the Obligations, this Agreement and the security
interest created hereby shall terminate, and, in connection therewith, the
Grantor shall be entitled to the return, at its expense, of such of the Pledged
Property as shall not have been sold in accordance with Section 5.1 hereof
or otherwise applied pursuant to the terms hereof and the Secured Party shall
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        Section
8.6. Independent
Representation.

      

       

      Each
party hereto acknowledges and agrees that it has received or has had the
opportunity to receive independent legal counsel of its own choice and that it
has been sufficiently apprised of its rights and responsibilities with regard to
the substance of this Agreement.

       

      
        Section
8.7. Applicable
Law:  Jurisdiction.

      

       

      This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New Jersey without regard to the principles of conflict of
laws.  The parties further agree that any action between them shall be
heard in Hudson County, New Jersey, and expressly consent to the jurisdiction
and venue of the Superior Court of New Jersey, sitting in Hudson County and the
United States District Court for the District of New Jersey sitting in Newark,
New Jersey for the adjudication of any civil action asserted pursuant to this
Paragraph, provided, however, that nothing
herein shall prevent the Secured Party from enforcing its rights and remedies
(including, without limitation, by filing a civil action) with respect to the
Pledged Property and/or the Grantor in any other jurisdiction in which the
Pledged Property and/or the Grantor may be located.

       

      
        Section
8.8. Waiver of Jury
Trial.

      

       

      AS A
FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT AND TO
MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS
AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS
TRANSACTION.

       

      Section
8.9 Entire
Agreement.

       

      This
Agreement constitutes the entire agreement among the parties and supersedes any
prior agreement or understanding among them with respect to the subject matter
hereof.

      

      [REMAINDER
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      IN WITNESS WHEREOF, the
parties hereto have executed this Security Agreement as of the date first above
written.

       

      

      
        	 
      	 	
                COMPANY:

              
	 
      	 	
                BBM
      HOLDINGS, INC.

              
	 
      	 	 
      
	 
      	

                By:
      

              	
              
	 
      	Name:	
              
	 
      	

                Title:

              	
              
	 
      	 	 
      
	 
      	 	
                 

                 

                 

                 

                 

                Jurisdiction
      of Incorporation, Organization or Formation:

                 

              
	 
      	 	
                Organizational
      ID:

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, the
parties hereto have executed this Security Agreement as of the date first above
written.

       

      

      
        	 
      	 	 
      
	 
      	 	
                SECURED
      PARTY:

              
	 
      	 	
                YA
      GLOBAL INVESTMENTS, L.P.

              
	 
      	 	 
      
	 
      	 	
                By:
      Yorkville Advisors, LLC

              
	 
      	 	
                Its:
      Investment Manager

              
	 
      	 	 
      
	 
      	

                By:
      

              	
              
	 
      	

                Name:

              	
              
	 
      	

                Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}]]