Document:

EXHIBIT 10.18

                            MASTER SECURITY AGREEMENT

To:      Laurus Master Fund, Ltd.
         c/o M&C Corporate Services Limited
         P.O. Box 309 GT
         Ugland House
         South Church Street
         George Town
         Grand Cayman, Cayman Islands

Date:  May  31, 2006

To Whom It May Concern:

         1. To secure the payment of all Obligations (as hereafter defined),
Carneros Energy, Inc., a Delaware corporation ("Carneros"), Gotland Oil, Inc., a
Texas corporation ("Gotland"), Carneros Acquisition Corp., a Delaware
corporation ("Holdings", and collectively with Carneros and Gotland, the
"Companies" and each a "Company"), each of the other undersigned parties (other
than Laurus Master Fund, Ltd. ("Laurus")) and each other entity that is required
to enter into this Master Security Agreement (each an "Assignor" and,
collectively, the "Assignors") hereby assigns and grants to Laurus a continuing
security interest in all of the following property now owned or at any time
hereafter acquired by such Assignor, or in which such Assignor now has or at any
time in the future may acquire any right, title or interest:

                  (a) all cash, cash equivalents, accounts, accounts receivable,
         deposit accounts (including, without limitation, (x) any and all
         restricted accounts over which any Company has granted Laurus control
         (collectively, the "Restricted Accounts") and (y) Lockbox Deposit
         Accounts), inventory, equipment, goods, fixtures, documents,
         instruments (including, without limitation, promissory notes), contract
         rights, general intangibles (including, without limitation, payment
         intangibles and an absolute right to license on terms no less favorable
         than those currently in effect among such Assignor's affiliates),
         chattel paper, supporting obligations, investment property (including,
         without limitation, all equity interests owned by any Assignor),
         letter-of-credit rights, all commercial tort claims set forth on
         SCHEDULE A, trademarks, trademark applications, tradestyles, patents,
         patent applications, copyrights, copyright applications and other
         intellectual property in which such Assignor now has or hereafter may
         acquire any right, title or interest, all proceeds and products thereof
         (including, without limitation, proceeds of insurance) and all
         additions, accessions and substitutions thereto or therefor.

                  (b) All of those certain Oil and Gas Leases and Lands (all
         such Oil and Gas Leases and Lands being herein called the "Subject
         Interests", as hereinafter further defined) which are described in
         EXHIBIT A and/or to which reference may be made in EXHIBIT A and/or
         which are covered by any of the leases described on EXHIBIT A hereto;

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                  (c) All rights, titles, interests and estates now owned or
         hereafter acquired by such Assignor in and to (i) any and all
         properties now or hereafter pooled or unitized with any of the Subject
         Interests, and (ii) all presently existing or future operating
         agreements and unitization, communitization and pooling agreements and
         the units operated thereby to the extent the same relate to all or any
         part of the Subject Interests, including, without limitation, all units
         formed under or pursuant to any applicable laws (the rights, titles,
         interests and estates described in this clause (c) also being included
         within the term "Subject Interests" as used herein);

                  (d) All presently existing and future agreements entered into
         between such Assignor and any third party that provide for the
         acquisition by such Assignor of any interest in any of the properties
         or interests specifically described in EXHIBIT A or which relate to any
         of the properties and interests specifically described in EXHIBIT A;

                  (e) The Hydrocarbons (including inventory) which are in,
         under, upon, produced or to be produced from or attributable to the
         Lands;

                  (f) The Accounts and Contract Rights;

                  (g) The Operating Equipment;

                  (h) The Well Data;

                  (i) The rights and security interests of such Assignor held by
         such Assignor to secure the obligation of the first purchaser to pay
         the purchase price of the Hydrocarbons;

                  (j) All surface leases, rights-of-way, franchises, easements,
         servitudes, licenses, privileges, tenements, hereditaments and
         appurtenances now existing or in the future obtained in connection with
         any of the aforesaid, and all other items of value and incident thereto
         which such Assignor may, at any time, have or be entitled; and

                  (k) All and any different and additional rights of any nature,
         of value or convenience in the enjoyment, development, operation or
         production, in any way, of any property or interest included in any of
         the foregoing clauses, and in all revenues, income, rents, issues,
         profits and other benefits arising therefrom or from any contract now
         in existence or hereafter entered into pertaining thereto, and in all
         rights and claims accrued or to accrue for the removal by anyone of
         Hydrocarbons from, or other act causing damage to, any of such
         properties or interests.

         All the aforesaid properties, rights and interests, together with any
and all substitutions, replacements, corrections or amendments thereto, or
renewals, extensions or ratifications thereof, or of any instrument relating
thereto, and together with any additions thereto which may be subjected to
Laurus' Lien, being hereinafter called the "COLLATERAL".

         As used herein, the following terms shall have the following meanings:

         "ACCOUNTS AND CONTRACT RIGHTS" shall mean all accounts (including
accounts in the form of joint interest billings under applicable operating
agreements), contract rights and general intangibles of any Assignor now or
hereafter existing, or hereafter acquired by, or on behalf of, any Assignor, or

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any Assignor's successors in interest, relating to or arising from the
ownership, operation and development of the Collateral and to the production,
processing, treating, sale, purchase, exchange or transportation of Hydrocarbons
(defined below) produced or to be produced from or attributable to the
Collateral or any units or pooled interest units in which all or a portion of
the Collateral forms a part, together with all accounts and proceeds accruing to
any Assignor attributable to the sale of Hydrocarbons produced from the
Collateral or any units or pooled interest units in which all or a portion of
the Collateral forms a part.

         "HYDROCARBONS" shall mean oil, gas, coalbed methane gas, casinghead
gas, drip gasolines, natural gasoline, condensate, distillate, as-extracted
collateral and all other liquid or gaseous hydrocarbons produced or to be
produced in conjunction therewith, and all products, byproducts and all other
substances derived therefrom or the processing thereof, and all other minerals
and substances, including, but not limited to, sulphur, lignite, coal, uranium,
thorium, iron, geothermal steam, water, carbon dioxide, helium and any and all
other minerals, ores, or substances of value and the products and proceeds
therefrom, including, without limitation, all gas resulting from the in-situ
combustion of coal or lignite.

         "LANDS" shall mean the lands described in EXHIBIT A and shall include
any lands, the description of which is contained in EXHIBIT A or incorporated in
EXHIBIT A by reference to another instrument or document, including, without
limitation, all lands described in the Oil and Gas Leases listed on EXHIBIT A
hereto, and shall also include any lands now or hereafter unitized, pooled,
spaced or otherwise combined, whether by statute, order, agreement, declaration
or otherwise, with lands the description of which is contained in EXHIBIT A or
is incorporated in EXHIBIT A by reference.

         "LIEN" shall mean any mortgage, deed of trust, collateral assignment,
lien, pledge, charge, security interest or other encumbrance.

         "OIL AND GAS LEASES" shall mean oil, gas and mineral leases, oil and
gas leases, oil leases, gas leases, other mineral leases, subleases, top leases,
any rights resulting in an ownership interest in Hydrocarbons and all operating
rights relating to any of the foregoing (whether operated by virtue of such
leases, or assignments or applicable operating agreements), and all other
interests pertaining to any of the foregoing, including, without limitation, all
royalty and overriding royalty interests, production payments and net profit
interests, production payments and net profit interests, mineral fee interests,
and all reversionary, remainder, carried and contingent interests relating to
any of the foregoing and all other rights therein which are described and/or to
which reference may be made on EXHIBIT A.

         "OPERATING EQUIPMENT" shall mean all Personal Property and fixtures
affixed or situated upon all or any part of the Collateral, including, without
limitation, all surface or subsurface machinery, equipment, facilities or other
property of whatsoever kind or nature now or hereafter located on any of the
Lands which are useful for the production, treatment, storage or transportation
of oil or gas, including, but not by way of limitation, all oil wells, gas
wells, water wells, injection wells, casing, tubing, rods, pumping units and
engines, Christmas trees, derricks, separators, gun barrels, flow lines, tanks,
gas systems (for gathering, treating and compression), water systems (for
treating, disposal and injection), power plants, poles, lines, transformers,

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starters and controllers, machine shops, tools, storage yards and equipment
stored therein, buildings and camps, telegraph, telephone and other
communication systems, roads, loading racks and shipping facilities.

         "PERSONAL PROPERTY" shall mean that portion of the Collateral that is
personal property.

         "WELL DATA" shall mean all logs, drilling reports, division orders,
transfer orders, operating agreements, contracts and other agreements,
abstracts, title opinions, files, records, seismic data, memoranda and other
information in the possession or control of any Assignor or to which any
Assignor has access relating to the Lands and/or any wells located thereon.

         2. Except as otherwise defined herein, all capitalized terms used
herein shall have the meanings provided such terms in the Securities Purchase
Agreement referred to below. All items of Collateral which are defined in the
UCC shall have the meanings set forth in the UCC. For purposes hereof, the term
"UCC" means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Laurus' security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions of this Master Security Agreement relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions; provided further, that to the extent that the UCC is used to define
any term herein and such term is defined differently in different Articles or
Divisions of the UCC, the definition of such term contained in Article or
Division 9 shall govern.

         3. The term "Obligations" as used herein shall mean and include all
debts, liabilities and obligations owing by each Assignor to Laurus arising
under, out of, or in connection with: (i) that certain Securities Purchase
Agreement dated as of the date hereof by and between the Companies and Laurus
(the "Securities Purchase Agreement"), (ii) the Related Agreements referred to
in the Securities Purchase Agreement, (iii) each guaranty agreement made from
time to time by each Assignor in favor of Laurus (each of the foregoing
documents, instruments and agreements, as each may be amended, modified,
restated or supplemented from time to time, collectively, the "Documents"), and
in connection with any documents, instruments or agreements relating to or
executed in connection with the Documents or any documents, instruments or
agreements referred to therein or otherwise, and in connection with any other
indebtedness, obligations or liabilities of each such Assignor to Laurus,
whether now existing or hereafter arising, direct or indirect, liquidated or
unliquidated, absolute or contingent, due or not due and whether under, pursuant
to or evidenced by a note, agreement, guaranty, instrument or otherwise,
including, without limitation, obligations and indebtedness of each Assignor for
post-petition interest, fees, costs and charges that accrue after the
commencement of any case by or against such Assignor under any bankruptcy,
insolvency, reorganization or like proceeding (collectively, the "Debtor Relief
Laws") in each case, irrespective of the genuineness, validity, regularity or
enforceability of such Obligations, or of any instrument evidencing any of the
Obligations or of any collateral therefor or of the existence or extent of such
collateral, and irrespective of the allowability, allowance or disallowance of
any or all of the Obligations in any case commenced by or against any Assignor
under any Debtor Relief Law.

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         4. Each Assignor hereby jointly and severally represents, warrants and
covenants to Laurus that:

                  (a) it is a corporation, partnership or limited liability
         company, as the case may be, validly existing, in good standing and
         formed under the respective laws of its jurisdiction of formation set
         forth on SCHEDULE B, and each Assignor will provide Laurus thirty (30)
         days' prior written notice of any change in any of its respective
         jurisdiction of formation;

                  (b) its legal name is as set forth in its Certificate of
         Incorporation or other organizational document (as applicable) as
         amended through the date hereof and as set forth on SCHEDULE B, and it
         will provide Laurus thirty (30) days' prior written notice of any
         change in its legal name;

                  (c) its organizational identification number (if applicable)
         is as set forth on SCHEDULE B hereto, and it will provide Laurus thirty
         (30) days' prior written notice of any change in its organizational
         identification number;

                  (d) it is the lawful owner of the Collateral and it has the
         sole right to grant a security interest therein and will defend the
         Collateral against all claims and demands of all persons and entities;

                  (e) it will keep the Collateral free and clear of all
         attachments, levies, taxes, liens, security interests and encumbrances
         of every kind and nature ("Encumbrances"), except (i) Encumbrances
         securing the Obligations and (ii) Encumbrances securing indebtedness of
         each such Assignor not to exceed $50,000 in the aggregate for all such
         Assignors so long as all such Encumbrances are removed or otherwise
         released to Laurus' satisfaction within ten (10) business days of the
         creation thereof, (iii) Encumbrances that arise by operation of law in
         the ordinary course of business and not created in connection with the
         borrowing of money or the obtaining of credit, which do not detract
         materially from the value or reduce the ability to use the property on
         which there is an Encumbrance, so long as the obligations supported by
         the Encumbrance (x) are not overdue by more than ten (10) days or (y)
         if overdue, are being contested continuously and in good faith by
         appropriate proceedings and with respect to which adequate reserves are
         maintained by such Assignor in accordance with GAAP, (iv) Encumbrances
         relating to final judgments or awards or attachments remaining
         undischarged or unstayed for not longer than ten (10) days from
         incurrence so long as they and/or the judgment they are securing do not
         constitute or result in an Event of Default, and (v) Permitted
         Encumbrances (as defined in each Deed of Trust, Security Agreement,
         Financing Statement and Assignment of Production dated the date hereof
         made by Carneros and/or Gotland in favor of Laurus);

                  (f) it will, at its and the other Assignors' joint and several
         cost and expense keep the Collateral in good state of repair (ordinary
         wear and tear excepted) and will not waste or destroy the same or any
         part thereof other than ordinary course discarding of items no longer
         used or useful in its or such other Assignors' business;

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                  (g) it will not, without Laurus' prior written consent, sell,
         exchange, lease or otherwise dispose of any Collateral, whether by
         sale, lease or otherwise, except for the sale of inventory in the
         ordinary course of business and for the disposition or transfer in the
         ordinary course of business during any fiscal year of obsolete and
         worn-out equipment or equipment no longer necessary for its ongoing
         needs, having an aggregate fair market value of not more than $25,000
         and only to the extent that:

                           (i) the proceeds of each such disposition are used to
                  acquire replacement Collateral which is subject to Laurus'
                  first priority perfected security interest, or are used to
                  repay the Obligations or to pay general corporate expenses; or

                           (ii) following the occurrence of an Event of Default
                  which continues to exist, the proceeds of each such
                  disposition are remitted to Laurus to be held as cash
                  collateral for the Obligations;

                  (h) it will insure or cause the Collateral to be insured in
         Laurus' name (as additional insured and loss payee) against loss or
         damage by fire, theft, burglary, pilferage, loss in transit and such
         other hazards as Laurus shall specify in amounts and under policies by
         insurers acceptable to Laurus and all premiums thereon shall be paid by
         such Assignor and the policies delivered to Laurus. If any such
         Assignor fails to do so, Laurus may procure such insurance and the cost
         thereof shall be promptly reimbursed by the Assignors, jointly and
         severally, and shall constitute Obligations;

                  (i) it will at all reasonable times during normal business
         hours and with advance notice to Assignor in accordance with Section 14
         allow Laurus or Laurus' representatives free access to and the right of
         inspection of the Collateral, provided that no such notice shall be
         required to be given in the event Laurus believes such access is
         necessary to preserve or protect the Collateral or following the
         occurrence and during the continuance of an Event of Default;

                  (j) such Assignor (jointly and severally with each other
         Assignor) hereby indemnifies and saves Laurus harmless from all loss,
         costs, damage, liability and/or expense, including reasonable
         attorneys' fees, that Laurus may sustain or incur to enforce payment,
         performance or fulfillment of any of the Obligations and/or in the
         enforcement of this Master Security Agreement or in the prosecution or
         defense of any action or proceeding either against Laurus or any
         Assignor concerning any matter growing out of or in connection with
         this Master Security Agreement, and/or any of the Obligations and/or
         any of the Collateral except to the extent caused by Laurus' own gross
         negligence or willful misconduct (as determined by a court of competent
         jurisdiction in a final and nonappealable decision) In addition, each
         Assignor hereby indemnifies and saves Laurus harmless from any claim,
         cost, expense, liability, obligation, loss or damage (including
         reasonable legal fees) of any nature, incurred by or imposed upon
         Laurus which results, arises out of or is based upon: (i) any
         misrepresentation by any Assignor or breach of any warranty by any
         Assignor in this Agreement or any Document or any agreement between any
         Assignor and Laurus relating hereto or thereto; or (ii) any breach or

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         default in performance by the Assignors of any covenant or undertaking
         to be performed by the Assignors hereunder or under any Document, or
         any other agreement entered into by any Assignor and Laurus relating
         hereto or thereto or (iii) (a) the violation of any local, state or
         federal law, rule or regulation pertaining to environmental regulation,
         contamination or cleanup (collectively, "Environmental Laws"),
         including without limitation, the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980 (42 U.S.C. ss.9601 et seq. and
         40 CFR ss.302.1 et seq.), the Resource Conservation and Recovery Act of
         1976 (42 U.S.C. ss.6901 et seq.), the Federal Water Pollution Control
         Act (33 U.S.C. ss.1251 et seq., and 40 CFR ss.116.1 et seq.), the
         Hazardous Materials Transportation Act (49 U.S.C. ss.1801 et seq.) and
         the regulations promulgated pursuant to said laws, all as amended and
         relating to or affecting any Assignor and/or any Assignor's properties,
         whether or not caused by or within the control of Laurus and/or (b) the
         presence, release or threat of release of any hazardous, toxic or
         harmful substances, wastes, materials, pollutants or contaminants
         (including, without limitation, asbestos, polychlorinated biphenyls,
         petroleum products, flammable explosives, radioactive materials,
         infectious substances or raw materials which include hazardous
         constituents) or any other substances or raw materials which are
         included under or regulated by Environmental Laws on, in, under or
         affecting all or any portion of any property of any Assignor or any
         surrounding areas, regardless of whether or not caused by or within the
         control of Laurus;

                  (k) it will promptly, and in any event within five (5)
         business days after the same is acquired by it, notify Laurus of any
         commercial tort claim acquired by it and unless otherwise consented to
         in writing by Laurus, it shall enter into a supplement to this Master
         Security Agreement granting to Laurus a security interest in such
         commercial tort claim; and

                  (l) Not later than June 30, 2006, each Assignor will (x)
         irrevocably direct all of its present and future Account Debtors (as
         defined below) and other persons or entities obligated to make payments
         constituting Collateral to make such payments directly to the lockboxes
         maintained by such Assignor (the "Lockboxes") with North Fork Bank or
         such other financial institution accepted by Laurus in writing as may
         be selected by the applicable Assignor (the "Lockbox Bank") (each such
         direction pursuant to this clause (x), a "Direction Notice") and (y)
         provide Laurus with copies of each Direction Notice, each of which
         shall be agreed to and acknowledged by the respective Account Debtor.
         Upon receipt of such payments, the Lockbox Bank shall agree to deposit
         the proceeds of such payments in a deposit account (under which Laurus
         has been granted control) maintained at the Lockbox Bank and evidenced
         by the account name of Carneros Energy, Inc., or such other deposit
         account accepted by Laurus in writing (the "Lockbox Deposit Account").
         Not later than June 30, 2006, the applicable Assignor shall and shall
         cause the Lockbox Bank to enter into all such documentation acceptable
         to Laurus pursuant to which, among other things, the Lockbox Bank
         agrees to, following notification by Laurus (which notification Laurus
         shall only give following the occurrence and during the continuance of
         an Event of Default), comply only with the instructions or other
         directions of Laurus concerning the Lockbox and the Lockbox Deposit
         Account. All of each Assignor's invoices, account statements and other
         written or oral communications directing, instructing, demanding or
         requesting payment of any Account (as hereinafter defined) of any such
         Assignor or any other amount constituting Collateral shall

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         conspicuously direct that all payments be made to the Lockbox or such
         other address as Laurus may direct in writing. If, notwithstanding the
         instructions to Account Debtors, any Assignor receives any payments,
         such Assignor shall immediately remit such payments to the Lockbox
         Deposit Account in their original form with all necessary endorsements.
         Until so remitted, the Assignors shall hold all such payments in trust
         for and as the property of Laurus and shall not commingle such payments
         with any of its other funds or property. For the purpose of this Master
         Security Agreement, (x) "Accounts" shall mean all "accounts", as such
         term is defined in the UCC as in effect in the State of New York on the
         date hereof, now owned or hereafter acquired by any Assignor and (y)
         "Account Debtor" shall mean any person or entity who is or may be
         obligated with respect to, or on account of, an Account.

         5. The occurrence of any of the following events or conditions shall
constitute an "Event of Default" under this Master Security Agreement:

                  (a) any covenant or any other term or condition of this Master
         Security Agreement is breached in any material respect and such breach,
         if subject to cure, shall continue for a period of fifteen (15) days
         after the occurrence thereof;

                  (b) any representation or warranty, or statement made or
         furnished to Laurus under this Master Security Agreement by any
         Assignor or on any Assignor's behalf should prove at any time to be
         false or misleading in any material respect;

                  (c) the loss, theft, substantial damage, destruction, sale
         (other than the sale by any Assignor of oil, gas and other hydrocarbons
         and minerals in the ordinary course of its business consistent with
         past practice) or encumbrance (other than in favor of Laurus) to or of
         any of the Collateral or the making of any levy, seizure or attachment
         thereof or thereon except to the extent:

                           (i) such loss is covered by insurance proceeds which
                  are used to replace the item or repay Laurus; or

                           (ii) said levy, seizure or attachment does not secure
                  indebtedness in excess of $100,000 in the aggregate for all
                  Assignors and such levy, seizure or attachment has been
                  removed or otherwise released within ten (10) days of the
                  creation or the assertion thereof;

                  (d) any Assignor shall become insolvent, cease operations,
         dissolve, terminate its business existence (except as to any of the
         foregoing, in connection with a business combination between or among
         Assignors so long as at least one Assignor remains the surviving entity
         of such business combination), make an assignment for the benefit of
         creditors, suffer the appointment of a receiver, trustee, liquidator or
         custodian of all or any part of any Assignor's property;

                  (e) any proceedings under any bankruptcy or insolvency law
         shall be commenced by or against any Assignor and if commenced against
         any Assignor shall not be dismissed within forty-five (45) days;

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                  (f) any Assignor shall repudiate, purport to revoke or fail to
         perform any of its obligations under any Note (after passage of
         applicable cure period, if any) or any document, instrument or
         agreement executed in connection therewith; or

                  (g) an Event of Default (or similar term) shall have occurred
         under and as defined in any Document or any document, instrument or
         agreement entered into in connection therewith.

         6. Upon the occurrence of any Event of Default and at any time
thereafter, Laurus may declare all Obligations immediately due and payable and
Laurus shall have the remedies of a secured party provided in the UCC as in
effect in the State of New York, this Agreement and other applicable law. Upon
the occurrence of any Event of Default and at any time thereafter, Laurus will
have the right to receive one-hundred percent of all accounts receivable of each
Company, whether attributable to oil, gas, other hydrocarbon production or
otherwise, take possession of the Collateral and to maintain such possession on
any Assignor's premises or to remove the Collateral or any part thereof to such
other premises as Laurus may desire. Upon Laurus' request, each Assignor shall
assemble or cause the Collateral to be assembled and make it available to Laurus
at a place designated by Laurus. If any notification of intended disposition of
any Collateral is required by law, such notification, if mailed, shall be deemed
properly and reasonably given if mailed at least ten (10) days before such
disposition, postage prepaid, addressed to the applicable Assignor either at
such Assignor's address shown herein or at any address appearing on Laurus'
records for such Assignor. Any proceeds of any disposition of any of the
Collateral shall be applied by Laurus to the payment of all expenses in
connection with the sale of the Collateral, including reasonable attorneys' fees
and other legal expenses and disbursements and the reasonable expenses of
retaking, holding, preparing for sale, selling, and the like, and any balance of
such proceeds may be applied by Laurus toward the payment of the Obligations in
such order of application as Laurus may elect, and each Assignor shall be liable
for any deficiency. For the avoidance of doubt, following the occurrence and
during the continuance of an Event of Default, Laurus shall have the immediate
right to withdraw any and all monies contained in the Restricted Accounts or any
other deposit accounts in the name of any Assignor and controlled by Laurus and
apply same to the repayment of the Obligations (in such order of application as
Laurus may elect). The parties hereto each hereby agree that the exercise by any
party hereto of any right granted to it or the exercise by any party hereto of
any remedy available to it (including, without limitation, the issuance of a
notice of redemption, a borrowing request and/or a notice of default) shall not
constitute confidential information and no party shall have any duty to the
other party to maintain such information as confidential.

         7. If any Assignor defaults in the performance or fulfillment of any of
the terms, conditions, promises, covenants, provisions or warranties on such
Assignor's part to be performed or fulfilled under or pursuant to this Master
Security Agreement, Laurus may, at its option without waiving its right to
enforce this Master Security Agreement according to its terms, immediately or at
any time thereafter and without notice to any Assignor, perform or fulfill the
same or cause the performance or fulfillment of the same for each Assignor's
joint and several account and at each Assignor's joint and several cost and
expense, and the cost and expense thereof (including reasonable attorneys' fees)
shall be added to the Obligations and shall be payable on demand with interest
thereon at the highest rate permitted by law, or, at Laurus' option, debited by
Laurus from the Restricted Accounts or any other deposit accounts in the name of
any Assignor and controlled by Laurus.

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         8. Each Assignor appoints Laurus, any of Laurus' officers, employees or
any other person or entity whom Laurus may designate as such Assignor's
attorney, with power to execute such documents in each such Assignor's behalf
and to supply any omitted information and correct patent errors in any documents
executed by any Assignor or on any Assignor's behalf; to file financing
statements against such Assignor covering the Collateral (and, in connection
with the filing of any such financing statements, describe the Collateral as
"all assets and all personal property, whether now owned and/or hereafter
acquired" (or any substantially similar variation thereof)); to sign such
Assignor's name on public records related to perfecting its security interest
in, or foreclosing upon the Collateral; and to do all other things Laurus deem
necessary to carry out this Master Security Agreement. Each Assignor hereby
ratifies and approves all acts of the attorney and neither Laurus nor the
attorney will be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision). This power being coupled with an interest,
is irrevocable so long as any of the Obligations remain unpaid.

         9. No delay or failure on Laurus' part in exercising any right,
privilege or option hereunder shall operate as a waiver of such or of any other
right, privilege, remedy or option, and no waiver whatsoever shall be valid
unless in writing, signed by Laurus and then only to the extent therein set
forth, and no waiver by Laurus of any default shall operate as a waiver of any
other default or of the same default on a future occasion. Laurus' books and
records containing entries with respect to the Obligations shall be admissible
in evidence in any action or proceeding, shall, absent manifest error, be
binding upon each Assignor for the purpose of establishing the items therein set
forth and shall constitute prima facie proof thereof. Laurus shall have the
right to enforce any one or more of the remedies available to Laurus,
successively, alternately or concurrently. Each Assignor agrees to join with
Laurus in executing such documents or other instruments to the extent required
by the UCC in form satisfactory to Laurus and in executing such other documents
or instruments as may be required or deemed necessary by Laurus for purposes of
affecting or continuing Laurus' security interest in the Collateral.

         10. The Assignors shall jointly and severally pay all of Laurus'
out-of-pocket costs and expenses, including reasonable fees and disbursements of
in-house or outside counsel and appraisers, in connection with the preparation,
execution and delivery of the Documents, and in connection with the prosecution
or defense of any action, contest, dispute, suit or proceeding concerning any
matter in any way arising out of, related to or connected with any Document. The
Assignors shall also jointly and severally pay all of Laurus' reasonable fees,
charges, out-of-pocket costs and expenses, including fees and disbursements of
counsel and appraisers, in connection with (a) the preparation, execution and
delivery of any waiver, any amendment thereto or consent proposed or executed in
connection with the transactions contemplated by the Documents, (b) Laurus'
obtaining performance of the Obligations under the Documents, including, but not
limited to the enforcement or defense of Laurus' security interests, assignments
of rights and liens hereunder as valid perfected security interests, (c) any
attempt to inspect or verify Collateral, provided, however, that so long as no
Event of Default shall have occurred and then be continuing, Laurus shall not

                                       10

<page>

conduct any such inspections and/or verifications at Assignors' expense more
often than quarterly, (d) any attempt to protect, collect, sell, liquidate or
otherwise dispose of any Collateral, (e) any appraisals or re-appraisals of any
property (real or personal) pledged to Laurus by any Assignor as Collateral for,
or any other Person as security for, the Obligations hereunder, provided,
however, that so long as no Event of Default shall have occurred and then be
continuing, Laurus shall not conduct any such appraisals and/or re-appraisals at
Assignors' expense more often than quarterly and (f) any consultations in
connection with any of the foregoing. The Assignors shall also jointly and
severally pay Laurus' customary bank charges for all bank services (including
wire transfers) performed or caused to be performed by Laurus for any Assignor
at any Assignor's request or in connection with any Assignor's loan account (if
any) with Laurus. All such costs and expenses together with all filing,
recording and search fees, taxes and interest payable by the Assignors to Laurus
shall be payable on demand and shall be secured by the Collateral. If any tax by
any nation or government, any state or other political subdivision thereof, and
any agency, department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
(each, a "Governmental Authority"), other than any tax based on or measured by
Laurus' net income, is or may be imposed on or as a result of any transaction
between any Assignor, on the one hand, and Laurus on the other hand, which
Laurus is or may be required to withhold or pay, the Assignors hereby jointly
and severally indemnify and hold Laurus harmless in respect of such taxes, and
the Assignors will repay to Laurus the amount of any such taxes which shall be
charged to the Assignors' account; and until the Assignors shall furnish Laurus
with indemnity therefor (or supply Laurus with evidence satisfactory to it that
due provision for the payment thereof has been made), Laurus may hold without
interest any balance standing to each Assignor's credit (if any) and Laurus
shall retain its liens in any and all Collateral.

         11. THIS MASTER SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS. All of the rights, remedies, options, privileges and
elections given to Laurus hereunder shall inure to the benefit of Laurus'
successors and assigns. The term "Laurus" as herein used shall include Laurus,
any parent of Laurus', any of Laurus' subsidiaries and any co-subsidiaries of
Laurus' parent, whether now existing or hereafter created or acquired, and all
of the terms, conditions, promises, covenants, provisions and warranties of this
Agreement shall inure to the benefit of each of the foregoing, and shall bind
the representatives, successors and assigns of each Assignor.

         12. Each Assignor hereby consents and agrees that the state or federal
courts located in the County of New York, State of New York shall have exclusive
jurisdiction to hear and determine any claims or disputes between Assignor, on
the one hand, and Laurus, on the other hand, pertaining to this Master Security
Agreement or to any matter arising out of or related to this Master Security
Agreement, provided, that Laurus and each Assignor acknowledges that any appeals
from those courts may have to be heard by a court located outside of the County
of New York, State of New York, and further provided, that nothing in this
Master Security Agreement shall be deemed or operate to preclude Laurus from
bringing suit or taking other legal action in any other jurisdiction to collect,
the Obligations, to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of Laurus.

                                       11

<page>

Each Assignor expressly submits and consents in advance to such jurisdiction in
any action or suit commenced in any such court, and each Assignor hereby waives
any objection which it may have based upon lack of personal jurisdiction,
improper venue or FORUM NON CONVENIENS. Each Assignor hereby waives personal
service of the summons, complaint and other process issues in any such action or
suit and agrees that service of such summons, complaint and other process may be
made by registered or certified mail addressed to such assignor at the address
set forth on the signature lines hereto and that service so made shall be deemed
completed upon the earlier of such Assignor's actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid.

         The parties desire that their disputes be resolved by a judge applying
such applicable laws. Therefore, to achieve the best combination of the benefits
of the judicial system and of arbitration, the parties hereto waive all rights
to trial by jury in any action, suit, or proceeding brought to resolve any
dispute, whether arising in contract, tort, or otherwise between Laurus, and/or
any Assignor arising out of, connected with, related or incidental to the
relationship established between them in connection with this Master Security
Agreement or the transactions related hereto.

         13. It is understood and agreed that any person or entity that desires
to become an Assignor hereunder, or is required to execute a counterpart of this
Master Security Agreement after the date hereof pursuant to the requirements of
any Document, shall become an Assignor hereunder by (x) executing a Joinder
Agreement in form and substance satisfactory to Laurus, (y) delivering
supplements to such exhibits and annexes to such Documents as Laurus shall
reasonably request and (z) taking all actions as specified in this Master
Security Agreement as would have been taken by such Assignor had it been an
original party to this Master Security Agreement, in each case with all
documents required above to be delivered to Laurus and with all documents and
actions required above to be taken to the reasonable satisfaction of Laurus.

         14. Whenever this Master Security Agreement requires or permits any
consent, approval, notice, request or demand from one party to another, such
consent, approval, notice or demand shall, unless otherwise required under
applicable law, be given in accordance with the provisions of the Securities
Purchase Agreement, addressed to the party to be notified at the address stated
below (or such other address as may have been designated in accordance with the
provisions of the Securities Purchase Agreement):

ASSIGNORS                                  LAURUS

c/o Carneros Acquisition Corp.             Laurus Master Fund, Ltd.
1065 West Pier E Street                    c/o M&C Corporate Services Limited
Long Beach, California 90802-1015          PO Box 309 G.T.
Attention:  Darrin Katic, President        Ugland House, South Church Street
Facsimile:  310-937-3583                   George Town
                                           Grand Cayman, Cayman Islands
                                           Attention:____________________
                                           Facsimile:  345-949-8080

                                       12

<page>

WITH A COPY TO:                            WITH COPIES TO:

Rutan & Tucker, LLP
611 Anton Boulevard, 14th Floor            John E. Tucker, Esq.
Costa Mesa, California 92626               825 Third Avenue, 14th Floor
Attention:  Gregg Amber, Esq.              New York, New York 10022
Facsimile:  714-546-9035                   Facsimile:  212-541-4434

                                           Loeb & Loeb LLP
                                           345 Park Avenue
                                           New York, New York 10154
                                           Attention:  Scott J. Giordano, Esq.
                                           Facsimile:  212-407-4990

                [Remainder of this page intentionally left blank]

                                       13

<page>

         15. This Master Security Agreement may be executed by facsimile
signatures and in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one agreement.

                                      Very truly yours,

                                      CARNEROS ENERGY, INC.

                                      By: *
                                         -----------------------------------
                                      Name:
                                      Title:
                                      Address: 1065 West Pier E Street
                                               Long Beach, CA  90802-1015

                                      GOTLAND OIL, INC.

                                      By: *
                                         -----------------------------------
                                      Name:
                                      Title:
                                      Address:

                                      CARNEROS ACQUISITION CORP.

                                      By: /S/ Darren Katic
                                         -----------------------------------
                                      Name: Darren Katic
                                      Title: President
                                      Address: 1065 West Pier E Street
                                               Long Beach, California 90802-1015

                                  ACKNOWLEDGED:

                                      LAURUS MASTER FUND, LTD.

                                      By: /S/ Eugene Grin
                                         -----------------------------------
                                      Name: Eugene Grin
                                      Title: Director
                                      Address: c/o Laurus Capital Management LLC
                                               825 Third Avenue
                                               New York, New York 10022

* See Joinder and Amendment Agreement dated June 29, 2006 among the Company and
Laurus pursuant to which Gotland and Carneros join the Master Security Agreement
as Companies.

                                       14<PAGE>

EXHIBIT 10.19

                             STOCK PLEDGE AGREEMENT
                             ----------------------

         This Stock Pledge Agreement (this "AGREEMENT"), dated as of May 31,
2006, between Laurus Master Fund, Ltd. (the "PLEDGEE"), and Carneros Acquisition
Corp., a Delaware corporation (the "PLEDGOR").

                                   BACKGROUND
                                   ----------

         Pledgor, Carneros Energy, Inc., a Delaware corporation ("CARNEROS"),
and Gotland Oil, Inc., a Texas corporation ("Gotland", and collectively with
Pledgor and Carneros, the "COMPANIES" and each a "COMPANY"), have entered into a
Securities Purchase Agreement with the Pledgee, dated as of the date hereof (as
amended, modified, restated or supplemented from time to time, the "SECURITIES
PURCHASE AGREEMENT"), pursuant to which the Pledgee provides or will provide
certain financial accommodations to the Companies.

         In order to induce the Pledgee to provide or continue to provide the
financial accommodations described in the Securities Purchase Agreement and to
secure the Companies' obligations and indebtedness to Pledgee, Pledgor has
agreed to pledge and grant a security interest in the collateral described
herein to the Pledgee on the terms and conditions set forth herein.

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

         1. DEFINED TERMS. All capitalized terms used herein which are not
defined shall have the meanings given to them in the Securities Purchase
Agreement.

         2. PLEDGE AND GRANT OF SECURITY INTEREST. To secure the full and
punctual payment and performance of (the following clauses (a) and (b),
collectively, the "OBLIGATIONS") (a) the obligations under the Securities
Purchase Agreement and the Related Agreements referred to in the Securities
Purchase Agreement (the Securities Purchase Agreement and the Related
Agreements, as each may be amended, restated, modified and/or supplemented from
time to time, collectively, the "DOCUMENTS") and (b) all other obligations and
liabilities of Carneros, Gotland and the Pledgor to the Pledgee whether now
existing or hereafter arising, direct or indirect, liquidated or unliquidated,
absolute or contingent, due or not due and whether under, pursuant to or
evidenced by a note, agreement, guaranty, instrument or otherwise (in each case,
irrespective of the genuineness, validity, regularity or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral, and
irrespective of the allowability, allowance or disallowance of any or all of
such in any case commenced by or against Carneros, Gotland and/or the Pledgor
under Title 11, United States Code, including, without limitation, obligations
of Carneros, Gotland and the Pledgor for post-petition interest, fees, costs and
charges that would have accrued or been added to the Obligations but for the
commencement of such case), the Pledgor hereby pledges, assigns, hypothecates,
transfers and grants a security interest to Pledgee in all of the following (the
"COLLATERAL"):

<page>

                  (a) the shares of stock set forth on SCHEDULE A annexed hereto
and expressly made a part hereof (together with any additional shares of stock
or other equity interests acquired by Pledgor, the "PLEDGED STOCK"), the
certificates representing the Pledged Stock and all dividends, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Stock;

                  (b) all additional shares of stock of any issuer (each, an
"ISSUER") of the Pledged Stock from time to time acquired by Pledgor in any
manner, including, without limitation, stock dividends or a distribution in
connection with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off or
split-off (which shares shall be deemed to be part of the Collateral), and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and

                  (c) all options and rights, whether as an addition to, in
substitution of or in exchange for any shares of any Pledged Stock and all
dividends, cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all such options and rights.

         3. DELIVERY OF COLLATERAL. All certificates representing or evidencing
the Pledged Stock shall be delivered to and held by or on behalf of Pledgee
pursuant hereto and shall be accompanied by duly executed instruments of
transfer or assignments in blank, all in form and substance satisfactory to
Pledgee. Pledgor hereby authorizes the Issuer upon demand by the Pledgee to
deliver any certificates, instruments or other distributions issued in
connection with the Collateral directly to the Pledgee, in each case to be held
by the Pledgee, subject to the terms hereof. Upon the occurrence and during the
continuance of an Event of Default (as defined below), the Pledgee shall have
the right, during such time in its discretion and without notice to Pledgor, to
transfer to or to register in the name of the Pledgee or any of its nominees any
or all of Pledged Stock. In addition, the Pledgee shall have the right at such
time to exchange certificates or instruments representing or evidencing Pledged
Stock for certificates or instruments of smaller or larger denominations.

         4. REPRESENTATIONS AND WARRANTIES OF PLEDGOR. Pledgor represents and
warrants to the Pledgee (which representations and warranties shall be deemed to
continue to be made until all of the Obligations have been paid in full and each
Document and each agreement and instrument entered into in connection therewith
has been irrevocably terminated) that:

                  (a) the execution, delivery and performance by Pledgor of this
Agreement and the pledge of the Collateral hereunder do not and will not result
in any violation of any agreement, indenture, instrument, license, judgment,
decree, order, law, statute, ordinance or other governmental rule or regulation
applicable to Pledgor;

                                       2

<page>

                  (b) this Agreement constitutes the legal, valid, and binding
obligation of Pledgor enforceable against Pledgor in accordance with its terms;

                  (c) (i) all Pledged Stock owned by Pledgor is set forth on
SCHEDULE A hereto and (ii) Pledgor is the direct and beneficial owner of each
share of the Pledged Stock;

                  (d) all of the shares of the Pledged Stock have been duly
authorized, validly issued and are fully paid and nonassessable;

                  (e) no consent or approval of any person, corporation,
governmental body, regulatory authority or other entity is or will be necessary
for (i) the execution, delivery and performance of this Agreement, (ii) the
exercise by the Pledgee of any rights with respect to the Collateral or (iii)
the pledge and assignment of, and the grant of a security interest in, the
Collateral hereunder;

                  (f) except as set forth on SCHEDULE B hereto, there are no
pending or, to the best of Pledgor's knowledge, threatened actions or
proceedings before any court, judicial body, administrative agency or arbitrator
which may materially adversely affect the Collateral;

                  (g) Pledgor has the requisite power and authority to enter
into this Agreement and to pledge and assign the Collateral to the Pledgee in
accordance with the terms of this Agreement;

                  (h) Pledgor owns each item of the Collateral and, except for
the pledge and security interest granted to Pledgee hereunder, the Collateral
shall be, immediately following the closing of the transactions contemplated by
the Documents, free and clear of any other security interest, pledge, claim,
lien, charge, hypothecation, assignment, offset or encumbrance whatsoever
(collectively, "LIENS");

                  (i) there are no restrictions on transfer of the Pledged Stock
contained in the certificate of incorporation or by-laws (or equivalent
organizational documents) of the Issuer or otherwise which have not otherwise
been enforceably and legally waived by the necessary parties;

                  (j) none of the Pledged Stock has been issued or transferred
in violation of the securities registration, securities disclosure or similar
laws of any jurisdiction to which such issuance or transfer may be subject;

                  (k) the pledge and assignment of the Collateral and the grant
of a security interest under this Agreement vest in the Pledgee all rights of
Pledgor in the Collateral as contemplated by this Agreement; and

                  (l) The Pledged Stock constitutes one hundred percent (100%)
of the issued and outstanding shares of capital stock of each Issuer.

         5. COVENANTS. Pledgor jointly and severally covenants that, until the
Obligations shall be indefeasibly satisfied in full and each Document and each
agreement and instrument entered into in connection therewith is irrevocably
terminated:

                                       3

<page>

                  (a) Pledgor will not sell, assign, transfer, convey, or
otherwise dispose of its rights in or to the Collateral or any interest therein;
nor will Pledgor create, incur or permit to exist any Lien whatsoever with
respect to any of the Collateral or the proceeds thereof other than that created
hereby.

                  (b) Pledgor will, at its expense, defend Pledgee's right,
title and security interest in and to the Collateral against the claims of any
other party.

                  (c) Pledgor shall at any time, and from time to time, upon the
written request of Pledgee, execute and deliver such further documents and do
such further acts and things as Pledgee may reasonably request in order to
effectuate the purposes of this Agreement including, but without limitation,
delivering to Pledgee, upon the occurrence and during the continuance of an
Event of Default, irrevocable proxies in respect of the Collateral in form
satisfactory to Pledgee. Until receipt thereof, upon an Event of Default that
has occurred and is continuing beyond any applicable grace period, this
Agreement shall constitute Pledgor's proxy to Pledgee or its nominee to vote all
shares of Collateral then registered in Pledgor's name.

                  (d) Pledgor will not consent to or approve the issuance of (i)
any additional shares of any class of capital stock or other equity interests of
the Issuer; or (ii) any securities convertible either voluntarily by the holder
thereof or automatically upon the occurrence or nonoccurrence of any event or
condition into, or any securities exchangeable for, any such shares, unless, in
either case, such shares are pledged as Collateral pursuant to this Agreement.

         6. VOTING RIGHTS AND DIVIDENDS. In addition to the Pledgee's rights and
remedies set forth in Section 8 hereof, in case an Event of Default shall have
occurred and be continuing beyond any applicable cure period, the Pledgee shall
(i) be entitled to vote the Collateral, (ii) be entitled to give consents,
waivers and ratifications in respect of the Collateral (each Pledgor hereby
irrevocably constituting and appointing the Pledgee, with full power of
substitution, the proxy and attorney-in-fact of Pledgor for such purposes) and
(iii) be entitled to collect and receive for its own use cash dividends paid on
the Collateral. Pledgor shall not be permitted to exercise or refrain from
exercising any voting rights or other powers if, in the reasonable judgment of
the Pledgee, such action would have a material adverse effect on the value of
the Collateral or any part thereof; and, PROVIDED, FURTHER, that Pledgor shall
give at least five (5) days' written notice of the manner in which Pledgor
intends to exercise, or the reasons for refraining from exercising, any voting
rights or other powers other than with respect to any election of directors and
voting with respect to any incidental matters. Following the occurrence and
during the continuance of an Event of Default, all dividends and all other
distributions in respect of any of the Collateral shall be delivered to the
Pledgee to hold as Collateral and shall, if received by Pledgor, be received in
trust for the benefit of the Pledgee, and be forthwith delivered to the Pledgee
as Collateral in the same form as so received (with any necessary endorsement).

         7. EVENT OF DEFAULT. An Event of Default shall be deemed to have
occurred and may be declared by the Pledgee upon the happening of any of the
following events:

                                       4

<page>

                  (a) An "Event of Default" under any Document or any agreement
or note related to any Document shall have occurred and be continuing beyond any
applicable cure period;

                  (b) Pledgor shall default in the performance of any of its
obligations under any agreement between Pledgor and Pledgee, including, without
limitation, this Agreement, and such default shall not be cured during any
applicable cure period;

                  (c) Any representation or warranty of Pledgor made herein, in
any Document or in any agreement, statement or certificate given in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
or misleading in any material respect;

                  (d) Any portion of the Collateral is subjected to a levy of
execution, attachment, distraint or other judicial process or any portion of the
Collateral is the subject of a claim (other than by the Pledgee) of a Lien or
other right or interest in or to the Collateral and such levy or claim shall not
be cured, disputed or stayed within a period of fifteen (15) business days after
the occurrence thereof; or

                  (e) Pledgor shall (i) apply for, consent to, or suffer to
exist the appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator or other fiduciary of itself or of all or a substantial part
of its property, (ii) make a general assignment for the benefit of creditors,
(iii) commence a voluntary case under any state or federal bankruptcy laws (as
now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v)
file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) acquiesce to, or fail to have dismissed, within
forty-five (45) days, any petition filed against it in any involuntary case
under such bankruptcy laws, or (vii) take any action for the purpose of
effecting any of the foregoing.

         8. REMEDIES. In case an Event of Default shall have occurred and been
declared by the Pledgee, the Pledgee may:

                  (a) Transfer any or all of the Collateral into its name, or
into the name of its nominee or nominees;

                  (b) Exercise all corporate rights with respect to the
Collateral including, without limitation, all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any shares
of the Collateral as if it were the absolute owner thereof, including, but
without limitation, the right to exchange, at its discretion, any or all of the
Collateral upon the merger, consolidation, reorganization, recapitalization or
other readjustment of the Issuer thereof, or upon the exercise by the Issuer of
any right, privilege or option pertaining to any of the Collateral, and, in
connection therewith, to deposit and deliver any and all of the Collateral with
any committee, depository, transfer agent, registrar or other designated agent
upon such terms and conditions as it may determine, all without liability except
to account for property actually received by it; and

                  (c) Subject to any requirement of applicable law, sell, assign
and deliver the whole or, from time to time, any part of the Collateral at the
time held by the Pledgee, at any private sale or at public auction, with or
without demand, advertisement or notice of the time or place of sale or

                                       5

<page>

adjournment thereof or otherwise (all of which are hereby waived, except such
notice as is required by applicable law and cannot be waived), for cash or
credit or for other property for immediate or future delivery, and for such
price or prices and on such terms as the Pledgee in its sole discretion may
determine, or as may be required by applicable law.

                  Pledgor hereby waives and releases any and all right or equity
of redemption, whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, the Pledgee may bid for and purchase the whole or
any part of the Collateral so sold free from any such right or equity of
redemption. All moneys received by the Pledgee hereunder, whether upon sale of
the Collateral or any part thereof or otherwise, shall be held by the Pledgee
and applied by it as provided in Section 10 hereof. No failure or delay on the
part of the Pledgee in exercising any rights hereunder shall operate as a waiver
of any such rights nor shall any single or partial exercise of any such rights
preclude any other or future exercise thereof or the exercise of any other
rights hereunder. The Pledgee shall have no duty as to the collection or
protection of the Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in
accordance with the requirements of Section 10 hereof. The Pledgee may exercise
its rights with respect to property held hereunder without resort to other
security for or sources of reimbursement for the Obligations. In addition to the
foregoing, Pledgee shall have all of the rights, remedies and privileges of a
secured party under the Uniform Commercial Code of New York (the "UCC")
regardless of the jurisdiction in which enforcement hereof is sought.

         9. PRIVATE SALE. Pledgor recognizes that the Pledgee may be unable to
effect (or to do so only after delay which would adversely affect the value that
might be realized from the Collateral) a public sale of all or part of the
Collateral by reason of certain prohibitions contained in the Securities Act,
and may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor agrees that any such private sale may be
at prices and on terms less favorable to the seller than if sold at public sales
and that such private sales shall be deemed to have been made in a commercially
reasonable manner. Pledgor agrees that the Pledgee has no obligation to delay
sale of any Collateral for the period of time necessary to permit the Issuer to
register the Collateral for public sale under the Securities Act.

         10. PROCEEDS OF SALE. The proceeds of any collection, recovery,
receipt, appropriation, realization or sale of the Collateral shall be applied
by the Pledgee as follows:

                  (a) First, to the payment of all reasonable costs, expenses
and charges of the Pledgee and to the reimbursement of the Pledgee for the prior
payment of such reasonable costs, expenses and charges incurred in connection
with the care and safekeeping of the Collateral (including, without limitation,
the reasonable expenses of any sale or any other disposition of any of the
Collateral), reasonable attorneys' fees and expenses, court costs, any other
fees or expenses incurred or expenditures or advances made by Pledgee in the
protection, enforcement or exercise of its rights, powers or remedies hereunder;

                                       6

<page>

                  (b) Second, to the payment of the Obligations, in whole or in
part, in such order as the Pledgee may elect, whether or not such Obligations
are then due;

                  (c) Third, to such persons, firms, corporations or other
entities as required by applicable law including, without limitation, Section
9-615(a)(3) of the UCC; and

                  (d) Fourth, to the extent of any surplus to the Pledgor or as
a court of competent jurisdiction may direct.

                  In the event that the proceeds of any collection, recovery,
receipt, appropriation, realization or sale are insufficient to satisfy the
Obligations, Pledgor shall be liable for the deficiency plus the reasonable
costs and fees of any attorneys employed by Pledgee to collect such deficiency.

         11. WAIVER OF MARSHALING. Pledgor hereby waives any right to compel any
marshaling of any of the Collateral.

         12. NO WAIVER. Any and all of the Pledgee's rights with respect to the
Liens granted under this Agreement shall continue unimpaired, and Pledgor shall
be and remain obligated in accordance with the terms hereof, notwithstanding (a)
the bankruptcy, insolvency or reorganization of Pledgor, (b) the release or
substitution of any item of the Collateral at any time, or of any rights or
interests therein, or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Pledgee in reference to any of the Obligations.
Pledgor hereby waives all notice of any such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consents to be
bound hereby as fully and effectively as if Pledgor had expressly agreed thereto
in advance. No delay or extension of time by the Pledgee in exercising any power
of sale, option or other right or remedy hereunder, and no failure by the
Pledgee to give notice or make demand, shall constitute a waiver thereof, or
limit, impair or prejudice the Pledgee's right to take any action against any
Pledgor or to exercise any other power of sale, option or any other right or
remedy.

         13. EXPENSES. The Collateral shall secure, and Pledgor shall pay to
Pledgee on demand, from time to time, all reasonable costs and expenses,
(including but not limited to, reasonable attorneys' fees and costs, taxes, and
all transfer, recording, filing and other charges) of, or incidental to, the
custody, care, transfer, administration of the Collateral or any other
collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of the Pledgee under this Agreement or
with respect to any of the Obligations.

         14. THE PLEDGEE APPOINTED ATTORNEY-IN-FACT AND PERFORMANCE BY THE
PLEDGEE. Upon the occurrence and during the continuance of an Event of Default,
Pledgor hereby irrevocably constitutes and appoints the Pledgee as Pledgor's
true and lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge and deliver any instruments and to do in Pledgor's name, place and
stead, all such acts, things and deeds for and on behalf of and in the name of
Pledgor, which Pledgor could or might do or which the Pledgee may deem
necessary, desirable or convenient to accomplish the purposes of this Agreement,
including, without limitation, to execute such instruments of assignment or
transfer or orders and to register, convey or otherwise transfer title to the
Collateral into the Pledgee's name. Pledgor hereby ratifies and confirms all
that said attorney-in-fact may so do and hereby declares this power of attorney

                                       7

<page>

to be coupled with an interest and irrevocable. If Pledgor fails to perform any
agreement herein contained, the Pledgee may itself perform or cause performance
thereof, and any costs and expenses of the Pledgee incurred in connection
therewith shall be paid by Pledgor as provided in Section 10 hereof.

         15. WAIVERS. THE PARTIES HERETO DESIRE THAT THEIR DISPUTES BE RESOLVED
BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE BETWEEN PLEDGEE AND/OR ANY PLEDGOR ARISING OUT OF, CONNECTED WITH,
RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION
WITH THIS AGREEMENT, ANY OTHER DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR
THERETO.

         16. RECAPTURE. Notwithstanding anything to the contrary in this
Agreement, if the Pledgee receives any payment or payments on account of the
Obligations, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver, or any other party under the
United States Bankruptcy Code, as amended, or any other federal or state
bankruptcy, reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors' rights generally, common law or
equitable doctrine, then to the extent of any sum not finally retained by the
Pledgee, each Pledgor's obligations to the Pledgee shall be reinstated and this
Agreement shall remain in full force and effect (or be reinstated) until payment
shall have been made to Pledgee, which payment shall be due on demand.

         17. CAPTIONS. All captions in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.

         18. MISCELLANEOUS.

                  (a) This Agreement constitutes the entire and final agreement
among the parties with respect to the subject matter hereof and may not be
changed, terminated or otherwise varied except by a writing duly executed by the
parties hereto.

                  (b) No waiver of any term or condition of this Agreement,
whether by delay, omission or otherwise, shall be effective unless in writing
and signed by the party sought to be charged, and then such waiver shall be
effective only in the specific instance and for the purpose for which given.

                  (c) In the event that any provision of this Agreement or the
application thereof to Pledgor or any circumstance in any jurisdiction governing
this Agreement shall, to any extent, be invalid or unenforceable under any
applicable statute, regulation, or rule of law, such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform to such statute, regulation or rule of law, and the
remainder of this Agreement and the application of any such invalid or

                                       8

<page>

unenforceable provision to parties, jurisdictions, or circumstances other than
to whom or to which it is held invalid or unenforceable shall not be affected
thereby, nor shall same affect the validity or enforceability of any other
provision of this Agreement.

                  (d) This Agreement shall be binding upon Pledgor, and
Pledgor's successors and assigns, and shall inure to the benefit of the Pledgee
and its successors and assigns.

                  (e) Any notice or other communication required or permitted
pursuant to this Agreement shall be given in accordance with the Securities
Purchase Agreement.

                  (f) This Agreement and the other Documents shall be governed
by and construed and enforced in accordance with the laws of the State of New
York applicable to contracts made and performed in such State, without regard to
principles of conflicts of law.

                  (g) PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
PLEDGOR, ON THE ONE HAND, AND THE PLEDGEE, ON THE OTHER HAND, PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS, PROVIDED, THAT PLEDGOR
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER
PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
THE PLEDGEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE PLEDGEE. PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE
TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. PLEDGOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO PLEDGOR
AT THE ADDRESS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT AND THAT SERVICE
SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PLEDGOR'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.

                  (h) It is understood and agreed that any person or entity that
desires to become a Pledgor hereunder, or is required to execute a counterpart
of this Agreement after the date hereof pursuant to the requirements of any
Document, shall become a Pledgor hereunder by (x) executing a Joinder Agreement
in form and substance satisfactory to the Pledgee, (y) delivering supplements to
such exhibits and annexes to such Documents as the Pledgee shall reasonably
request and (z) taking all actions as specified in this Agreement as would have

                                       9

<page>

been taken by such Pledgor had it been an original party to this Agreement, in
each case with all documents required above to be delivered to the Pledgee and
with all documents and actions required above to be taken to the reasonable
satisfaction of the Pledgee.

                  (i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any signature
delivered by a party by facsimile transmission shall be deemed an original
signature hereto.

                  [Remainder of Page Intentionally Left Blank]

                                       10

<page>

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first written above.

                                                     CARNEROS ACQUISITION CORP.

                                                     By: /S/ Darren Katic
                                                         -----------------------
                                                     Name: Darren Katic
                                                     Title: President

                                                     LAURUS MASTER FUND, LTD.

                                                     By: /S/ Eugene Grin
                                                         -----------------------
                                                     Name: Eugene Grin
                                                     Title: Director

                                       11

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