Document:

EXHIBIT 10.2

                           SECURITY INTEREST AGREEMENT

         SECURITY INTEREST AGREEMENT ("Security Interest Agreement"), dated as
of April 26, 2006, by and among the persons set forth on Schedule 1 (each a
"Secured Party" and collectively, the "Secured Parties"), AMEDIA NETWORKS, INC.,
a Delaware corporation having its principal executive offices at 2 Corbett Way,
Eatontown, New Jersey 07724 (the "Company" or the "Debtor"), and KRIEGER &
PRAGER, LLP, as agent for the Secured. Parties (the "Agent").

                                    RECITALS

         A. Reference is made to (i) that certain Securities Purchase Agreement
of even date herewith (the "Securities Purchase Agreement") to which the Debtor
and the Secured Parties are parties, and (ii) the Transaction Agreements,
including, without limitation, the Debentures and the Registration Rights
Agreement. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the relevant Transaction Agreements.

         B. Pursuant to the Transaction Agreements, the Debtor has certain
obligations to the Secured Parties (all such obligations, the "Obligations"),
including, but not limited to, obligations pursuant to the Securities Purchase
Agreement, the Debentures and the Registration Rights Agreement.

         C. In order to induce the Secured Parties to execute and deliver the
Transaction Agreements and to make the advances to the Debtor contemplated
thereby, and as contemplated by the Securities Purchase Agreement and the
Debenture, the Debtor has agreed to grant to the Secured Parties a security
interest in the Collateral (as defined below) to secure the due and punctual
fulfillment of the Obligations. The Secured Parties are willing to enter into
the Securities Purchase Agreement and the other Transaction Agreements only upon
receiving the Debtor's execution of this Security Interest Agreement.

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

         Section 1.        Grant of Security Interest.

         (a) In order to secure the due and punctual fulfillment of the
Obligations, the Debtor hereby grants, conveys, transfers and assigns to the
Secured Parties (and to each of them based on their respective Allocable Shares,
as defined below) a continuing security interest in the following described
properties, assets and rights of Debtor, wherever located, whether now owned or
hereafter acquired or arising, and all cash and non-cash proceeds and products
thereof (all of the same hereinafter collectively called the "Collateral"):

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         "COLLATERAL" is all right, title and interest of Debtor in and to all
         of the following, whether now owned or hereafter arising or acquired
         and wherever located: All assets of the Debtor, including, but not
         limited to: all personal and fixture property of every kind and nature,
         including without limitation all goods (including inventory, equipment
         and any accessions thereto), instruments (including promissory notes),
         documents, accounts (including accounts receivable), chattel paper
         (whether tangible or electronic), deposit accounts, letter-of-credit
         rights (whether or not the letter of credit is evidenced by a writing),
         commercial tort claims, securities and all other investment property,
         supporting obligations, any other contract rights or rights to the
         payment of money, insurance claims and proceeds, and all general
         intangibles (including all payment intangibles); all Equipment; all
         Intellectual Property; and any and all claims, rights and interests in
         any of the above, and all guaranties and security for any of the above,
         and all substitutions and replacements for, additions, accessions,
         attachments, accessories, and improvements to, and proceeds (including
         proceeds of any insurance policies, proceeds of proceeds and claims
         against third parties) of, any and all of the above, and all Debtor's
         books relating to any and all of the above and includes, without
         limiting the generality of the above, the Equipment (and related IP)
         listed in Exhibit B.

         "CODE" is the Uniform Commercial Code, in effect in the State of New
         York as in effect from time to time.

         "COPYRIGHTS" are all copyrights, copyright rights, applications or
         registrations and like protections in each work or authorship or
         derivative work, whether published or not (whether or not it is a trade
         secret) now or later existing, created, acquired or held.

         "EQUIPMENT" has the meaning set forth in the Code and includes all
         present and future machinery, equipment, tenant improvements,
         furniture, fixtures, vehicles, tools, parts and attachments in which
         Debtor has any interest.

         "INTELLECTUAL PROPERTY" is all present and future (a) Copyrights, (b)
         trade secret rights, including all rights to unpatented inventions and
         know-how, and confidential information; (c) mask work or similar rights
         available for the protection of semiconductor chips; (d) Patents; (e)
         Trademarks; (f) computer software and computer software products; (g)
         designs and design rights; (h) technology; (i) all claims for damages
         by way of past, present and future infringement of any of the rights
         included above; (j) all licenses or other rights to use any property or
         rights of a type described above.

         "PATENTS" are patents, patent applications and like protections,
         including improvements, divisions, continuations, renewals, reissues,
         extensions and continuations-in-part of the same.

         "TRADEMARKS" are trademarks, servicemarks, trade styles, and trade
         names, whether or not any of the foregoing are registered, and all
         applications to register and registrations

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          of the same and like protections, and the entire goodwill of the
          business of Debtor connected with and symbolized by any such
          trademarks.

         (b) The security interests granted pursuant to this Section (the
"Security Interests") are granted as security only and shall not subject the
Secured Party to, or transfer or in any way affect or modify, any obligation or
liability of the Debtor under any of the Collateral or any transaction which
gave rise thereto.

         (c) The term "Allocable Share" means, with respect to each Secured
Party (if there is more than one Secured Party), as of the relevant date, the
fraction equal to (i) the outstanding principal of the Debenture then held by
such Secured Party, divided by (ii) the aggregate outstanding principal of the
Debentures then held by all Secured Parties.

         Section 2.        Filing; Further Assurances.

         (a) The Debtor will, at its expense, cause to be searched the public
records with respect to the Collateral and will execute, deliver, file and
record (in such manner and form as the Secured Party may require), or permit the
Secured Party to file and record, as its attorney in fact for such purpose, any
financing statement, any carbon, photographic or other reproduction of a
financing statement or this Security Interest Agreement (which shall be
sufficient as a financing statement hereunder), any specific assignments or
other paper that may be reasonably necessary or desirable, or that the Secured
Party may request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Secured Party to exercise and enforce its
rights hereunder with respect to any of the Collateral. The Debtor hereby
appoints Secured Party as Debtor's attorney-in-fact to execute in the name and
behalf of Debtor such additional financing statements as Secured Party may
request.

         (b) Each Secured Party has designated an Agent as provided in Section
titled "Agent" below. Among other things, such Agent shall be agent of the
Secured Party for execution of and identification on any financing statement or
similar instrument referring to or describing the Collateral.

         (c) The Agent is authorized to execute and file any and all financing
statements desired to be filed by the Secured Parties to reflect the security
interest in the Collateral in any and all jurisdictions. For such purposes, the
Debtor irrevocably appoints the Agent (acting by Samuel M. Krieger and Ronald
Nussbaum, or either one of them), with full power of substitution to execute and
file such financing statements naming the Debtor as debtor thereon.

         Section 3. Representations and Warranties of Debtor. The Debtor hereby
represents and warrants to the Secured Party (a) that, except as set forth in
Exhibit A attached hereto, the Debtor is, or to the extent that certain of the
Collateral is to be acquired after the date hereof, will be, the owner of the
Collateral free from any adverse lien, security interest or encumbrance; (b)
that except for such financing statements as may be described on Exhibit A
attached hereto and made a part hereof, no financing statement covering the
Collateral is on file in any public office,

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other than the financing statements filed pursuant to this Security Agreement;
and (c) that all additional information, representations and warranties
contained in Exhibit B attached hereto and made a part hereof are true, accurate
and complete on the date hereof.

         Section 4. Covenants of Debtor. The Debtor hereby covenants and agrees
with each Secured Party that the Debtor (a) will, at the Debtor's sole cost and
expense, defend the Collateral against all claims and demands of all persons at
any time claiming any interest therein junior to the Secured Party's interest;
(b) will provide the Secured Party with prompt written notice of (i) any change
in the chief executive officer of the Debtor or the office where the Debtor
maintains its books and records pertaining to the Collateral; (ii) the movement
or location of all or a material part of the Collateral to or at any address
other than as set forth in said Exhibit B; and (iii) any facts which constitute
a Debtor Event of Default (as such term is defined below), or which, with the
giving of notice and/or the passage of time, could or would constitute a Debtor
Event of Default, pursuant to the Section titled "Debtor Events of Default"
herein; (c) will promptly pay any and all taxes, assessments and governmental
charges upon the Collateral prior to the date penalties are attached thereto,
except to the extent that such taxes, assessments and charges shall be contested
in good faith by the Debtor; (d) 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 Collateral and the amount or an estimate of the amount of
such loss or diminution; (e) will have and maintain adequate insurance at all
times with respect to the Collateral, for such other risks as are customary in
the Debtor's industry for the respective items included in the Collateral, such
insurance to be payable to the Secured Party and the Debtor as their respective
interests may appear, and shall provide for a minimum of ten (10) days prior
written notice of cancellation to the Secured Party, and Debtor shall furnish
the Secured Party with certificates or other evidence satisfactory to the
Secured Party of compliance with the foregoing insurance provisions; (f) will
not sell or offer to sell or otherwise assign, transfer or dispose of the
Collateral or any interest therein, without the prior written consent of the
Secured Party, except in the ordinary course of business; (g) will keep the
Collateral free from any adverse lien, security interest or encumbrance (except
for encumbrances specified in Exhibit A attached hereto) and in good order and
repair, reasonable wear and tear excepted, and will not waste or destroy the
Collateral or any part thereof; and (h) will not use the Collateral in material
violation of any statute or ordinance the violation of which could materially
and adversely affect the Debtor's business.

         Section 5. Records Relating To Collateral. The Debtor will keep its
records concerning the Collateral at its offices designated in the caption of
this Security Interest Agreement or at such other place or places of business of
which the Secured Party shall have been notified in writing no less than ten
(10) days prior thereto. The Debtor will hold and preserve such records and
chattel paper and will permit representatives of the Secured Party at any time
during normal business hours upon reasonable notice to examine and inspect the
Collateral and to make abstracts from such records and chattel paper
(collectively, "Audit"), and will furnish to the Secured Party such information
and reports regarding the Collateral as the Secured Party may from time to time
reasonably request. As long as no Event of Default has occurred and is
continuing, such Audits will be conducted not more often than once every twelve

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(12) months. Unless an Event of Default is continuing at the time of the Audit,
the Secured Party shall bear its own costs of the Audit. If an Event of Default
has occurred and is continuing, Secured Party may make Audits more frequently
and the Debtor will be responsible for the related costs.

         Section 6. General Authority. From and during the term of any Debtor
Event of Default, the Debtor hereby appoints the Secured Party the Debtor's
lawful attorney, with full power of substitution, in the name of the Debtor, for
the sole use and benefit of the Secured Party, but at the Debtor's expense, to
exercise, all or any of the following powers with respect to all or any of the
Collateral:

         (a) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due;

         (b) to receive, take, endorse, assign and deliver all checks, notes,
drafts, documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by the Secured Party;

         (c) to settle, compromise, prosecute or defend any action or proceeding
with respect thereto;

         (d) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds thereof or the related goods securing the Collateral, as fully and
effectually as if the Secured Party were the sole and absolute owner thereof;

         (e) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto; and

         (f) to discharge any taxes, liens, security interests or other
encumbrances at any time placed thereon;

provided, however, that the Secured Party shall give the Debtor not less than
ten (10) business days' prior written notice of the time and place of any sale
or other intended disposition of any of the Collateral.

         The exercise by Secured Party or by the Agent of, or failure to so
exercise, any authority granted herein shall in no manner affect Debtor's
liability to Secured Party, and provided, further, that Secured Party and the
Agent shall be under no obligation or duty to exercise any of the powers hereby
conferred upon them and they shall be without liability for any act or failure
to act in connection with the collection of, or the preservation of, any rights
under any of the Collateral.

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         Section 7.        Debtor Events of Default.

         (a) The Debtor shall be in default under this Security Agreement upon
the occurrence of any of the following events (a "Debtor Event of Default"):

                  (i)    if any representation or warranty made by the Debtor
                         in this Security Interest Agreement, in the
                         Securities Purchase Agreement or in any of the other
                         Transaction Agreements shall be false or misleading
                         in any material respect; or

                  (ii)   the occurrence of an Event of Default (as defined in
                         the Debenture) by the Debtor.

         (b) The Debtor hereby irrevocably agrees that, upon the occurrence of a
Debtor Event of Default, the Debtor shall be deemed to have consented to an
immediate conveyance and transfer to the Secured Party of the copyrights and all
other rights the Debtor may have in the software included in the Collateral,
including, but not necessarily limited to, the software identified in Schedule B
attached hereto. In furtherance of the foregoing, and not in limitation thereof,
the Debtor will, upon the occurrence of a Debtor Event of Default, deliver to
the Agent copies of the source code of the relevant software, with accompanying
written assignment of the software to the Secured Parties. Without limiting the
foregoing, such source code and assignment shall be in form sufficient to enable
the Secured Parties to register the software in name of the Secured Parties with
the Copyright Register. The Debtor hereby agrees to take all steps necessary or
appropriate, as requested by each Secured Party or the Agent, to effectuate and
reflect such conveyance and transfer or assignment to Secured Parties. In all
events, such conveyance, transfer or assignment shall be deemed to vest title in
such software in the Secured Parties.

         (c) In furtherance of the foregoing and not in limitation thereof, the
Debtor acknowledges and agrees that a Secured Party may, upon the occurrence of
a Debtor Event of Default, seek the immediate entry of a preliminary injunction
prohibiting the Debtor's use of such software in any shape, way or manner,
including, but not necessarily limited to, through the sale of products that use
any of such software, and the Debtor hereby irrevocably agrees that it will not
contest an application seeking entry of a preliminary injunction and that it
will accept the entry of such injunction.

         Section 8. Remedies Upon Debtor Event of Default. If any Debtor Event
of Default shall have occurred, then in addition to the provisions of Section 7
hereof, a Secured Party may exercise all the rights and remedies of a secured
party under the Code. The Secured Party may require the Debtor to assemble all
or any part of the Collateral and make it available to the Secured Party at a
place to be designated by the Secured Party which is reasonably convenient. The
Secured Party shall give the Debtor ten (10) business days prior written notice
of the Secured Party's intention to make any public or private sale or sale at a
broker's board or on a securities exchange of the Collateral. At any such sale
the Collateral may be sold in one lot as an entirety or in separate parcels, as
the Secured Party, in its sole discretion, may determine. The Secured Party
shall not be obligated to make any such sale pursuant to any such notice.

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The Secured Party may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be adjourned. The Secured Party, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the Security Interests and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.

         Section 9. Application of Collateral and Proceeds. The proceeds of any
sale of, or other realization upon, all or any part of the Collateral shall be
applied in the following order of priorities: (a) first, to pay the reasonable
expenses of such sale or other realization, including, without limitation,
reasonable attorneys' fees, and all expenses, liabilities and advances
reasonably incurred or made by the Secured Party in connection therewith, and
any other unreimbursed expenses for which the Secured Party is to be reimbursed
pursuant to the Section titled "Expenses; Secured Party's Lien" hereof; (b)
second, to the payment of the Obligations in such order of priority as the
Secured Party, in its sole discretion, shall determine; and (c) finally, to pay
to the Debtor, or its successors or assigns, or as a court of competent
jurisdiction may direct, any surplus then remaining from such proceeds.

         Section 10. Expenses; Secured Party's Lien. If any Debtor Event of
Default shall have occurred, the Debtor will forthwith upon demand pay to the
Secured Party: (a) the amount which the Secured Party may have been required to
pay to free any of the Collateral from any lien thereon; and (b) the amount of
any and all reasonable out-of-pocket expenses, including, without limitation,
the reasonable fees and disbursements of its counsel, and of any agents not
regularly in its employ, which the Secured Party may incur in connection with
(i) the preparation of any amendments or modifications of this Security
Agreement, (ii) the collection, sale or other disposition of any of the
Collateral; (iii) the exercise by the Secured Party of any of the powers
conferred upon it hereunder, or (iv) any default by the Debtor hereunder.

         Section 11.  Termination of Security Interests; Release of Collateral.
Upon the earlier of

         (i) the date on which the aggregate principal amount of all outstanding
         Debentures is twenty-five percent (25%) or less of the Closed Aggregate
         Purchase Price, or

         (ii) the payment and performance in full of all the Obligations,

the Security Interests shall terminate and all rights to the Collateral shall
revert to the Debtor. Upon any such termination of the Security Interests or
release of Collateral, the Secured Party will, at the Debtor's expense, to the
extent permitted by law, execute and deliver to the Debtor such documents as the
Debtor shall reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.

         Section 12. Permitted Liens. The Debtor further covenants and agrees
that it will not grant any other lien in the Collateral (howsoever denominated)
as long as any of the Obligations

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remains outstanding other than Permitted Liens (as defined below). The term
"Permitted Liens" means any one or more of the following:

         (a) liens shown on Exhibit A attached hereto, each of which represents
a security interest granted and perfected prior to March 24, 2006;

         (b) liens for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being actively contested in good faith by the
Debtor;

         (c) purchase money liens (i) on equipment acquired or held by the
Debtor, where such lien was created in connection with the financing of the
acquisition of such equipment, or (ii) existing on equipment when such equipment
is or was acquired by the Debtor; provided, in each case that the lien is
limited to the specific item or items of equipment and improvements and proceeds
thereof;

         (d) liens associated with licenses or sublicenses granted by the Debtor
in the ordinary course of its business, and not otherwise prohibited by the
terms of this Agreement, if such liens have no priority over the Security
Interests;

         (e) liens associated with licenses or sublicenses granted to the Debtor
in the ordinary course of its business, in connection with the Debtor's leased
premises or leased property, if such liens have no priority over the Security
Interests;

         (f) leases or subleases granted in the ordinary course of the Debtor's
business, including in connection with the Debtor's leased premises or leased
property; or

         (g) liens incurred in the extension, renewal, or refinancing of the
indebtedness secured by liens described in subparagraphs (a) through and
including (c) above, but any such extension, renewal or replacement lien must be
limited to the property encumbered by the existing lien and the principal amount
of the indebtedness may not increase.

         Section 13. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (a) personally served,
(b) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (c) delivered by reputable air courier service with charges
prepaid, or (d) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (i) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (ii) on the second business day
following the date of mailing by express courier service or on the

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fifth business day after deposited in the mail, in each case, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be for (i) the
Debtor as provided in the Securities Purchase Agreement for notices to the
Company, (ii) for each Secured Party as provided in the Securities Purchase
Agreement for notices to the relevant Buyer and (iii) for the Agent as provided
in the Securities Purchase Agreement for notices to the Escrow Agent. Any party
hereto may from time to time change its address or facsimile number for notices
under this Section in the manner contemplated by the Securities Purchase
Agreement.

         Section 14.  Agent.

         (a) Anything in the other provisions of this Security Interest
Agreement to the contrary notwithstanding, the Secured Party may designate
another entity to act as agent (the "Agent") for the Secured Party with respect
to any one or more of the rights of Secured Party hereunder, including, but not
necessarily limited to, the right to hold the security interest and/or be named
as secured party (as agent for the Secured Party) in any filed financing
statement and to take action in the name and stead of the Secured Party
hereunder. Such designation may be made with or without power of substitution,
Such designation shall remain in effect until canceled by the Secured Party, as
provided herein; provided, however, that such cancellation shall not affect the
validity of any action theretofore taken by such agent pursuant to this Security
Interest Agreement. The Debtor acknowledges and agrees to honor such designation
and acknowledges that the Agent is acting as the agent of the Secured Party and
not as a principal.

         (b) Each Secured Party hereby confirms that the Secured Party has
designated Krieger & Prager, LLP (acting by Samuel M. Krieger and Ronald
Nussbaum, or either one of them), as its initial Agent, with full right of
substitution.

         (c) If there is more than one Secured Party, the Agent shall act as
agent for all Secured Parties. Any revocation of the authority of the Agent or
the designation of an alternate Agent shall be done only by Secured Parties who
represent a Majority in Interest of the Holders at that time; provided that at
all times all Secured Parties shall be represented by one and the same Agent.

         (d) Reference is made to the provisions of Sections 2 through 15,
inclusive of the Joint Escrow Instructions. All such provisions are incorporated
herein by reference as if set forth herein in full, except that, for such
purposes, the references therein to (i) the "Escrow Agent" shall be deemed to be
references to the "Agent" under this Security Interest Agreement, (ii) the
"Company" shall be deemed to be references to the Debtor under this Security
Interest Agreement, and (iii) each "Buyer" shall be deemed to be references to
each Secured Party under this Security Interest Agreement.

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         Section 15.       Miscellaneous.

         (a) No failure on the part of the Secured Party to exercise, and no
delay in exercising, and no course of dealing with respect to, any right, power
or remedy under this Security Interest Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise by the Secured Party of any
right, power or remedy under this Security Interest Agreement preclude the
exercise, in whole or in part, of any other right, power or remedy. The remedies
in this Security Interest Agreement are cumulative and are not exclusive of any
other remedies provided by law. Neither this Security Interest Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally but
only by a statement in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.

         (b) Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code have the meanings therein stated.

         (c) The execution and delivery by Debtor of this Security Interest
Agreement and all documents delivered in connection herewith have been duly and
validly authorized by all necessary corporate action of Debtor and this
Agreement and all documents delivered in connection herewith have been duly and
validly executed and delivered by Debtor. The execution and delivery by Debtor
of this Security Interest Agreement and all documents delivered in connection
herewith will not result in a breach or default of or under the Certificate of
Incorporation, By-laws or any agreement, contract or indenture of Debtor. This
Security Interest Agreement and all documents delivered in connection therewith
are legal, valid and binding obligations of Debtor enforceable against Debtor in
accordance with their terms.

         (e) In the event that any action is taken by Debtor or Secured Party in
connection with the this Security Interest Agreement, or any related document or
matter, the losing party in such legal action, in addition to such other damages
as he or it may be required to pay, shall pay reasonable attorneys' fees to the
prevailing party.

         Section 16. Separability. If any provision hereof shall prove invalid
or unenforceable in any jurisdiction whose laws shall be deemed applicable, the
other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Secured Party.

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         Section 17.       Governing Law.

         (a) This Security Interest Agreement shall be governed by and construed
in accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the exclusive
jurisdiction of the federal courts whose districts encompass any part of the
County of New York or (except with respect to issues relating to the copyright
in and to the software, as contemplated by Section 7 hereof, which shall
exclusively be in the aforesaid federal courts) of the state courts of the State
of New York sitting in the County of New York in connection with any dispute
arising under this Security Interest Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non coveniens, to the bringing of any such proceeding in such jurisdictions or
to any claim that such venue of the suit, action or proceeding is improper. To
the extent determined by such court, the Debtor shall reimburse the Secured
Party for any reasonable legal fees and disbursements incurred by the Secured
Party in enforcement of or protection of any of its rights under this Security
Interest Agreement. Nothing in this Section shall affect or limit any right to
serve process in any other manner permitted by law.

                  (b) The Debtor and the Secured Party acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Security Interest Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Security Interest Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which any of them may be entitled by law or equity.

         Section 18. Jury Trial Waiver. The Debtor and the Secured Party hereby
waive a trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other in respect of any matter arising
out of or in connection with the Debenture or this Security Interest Agreement.

         Section 19. Assignment. Only in connection with the transfer of the
rights under the Transaction Agreements in accordance with their terms, a
Secured Party may assign or transfer the whole or any part of its security
interest granted hereunder, and may transfer as collateral security the whole or
any part of Secured Party's security interest in the Collateral. Any transferee
of the Collateral shall be vested with all of the rights and powers of the
assigning Secured Party hereunder with respect to the Collateral.

                   [Balance of page intentionally left blank]

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         Section 20. Waiver. The Debtor waives any right that it may have to
require Secured Party to proceed against any other person, or proceed against or
exhaust any other security, or pursue any other remedy Secured Party may have.

         IN WITNESS WHEREOF, the Parties have executed this Security Interest
Agreement as of the day, month and year first above written.

         SECURED PARTIES (named in Schedule 1):
         By:  Krieger & Prager LLP, as their agent

         By:_________________________________________

         DEBTOR:
         AMEDIA NETWORKS, INC.

         By:__________________________________________
                                    President

         AGENT:
         KRIEGER & PRAGER, LLP

         By:_________________________________________

                                                                         4/25/06
<PAGE>

                                   SCHEDULE 1

         The Secured Parties are:

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                                                                         4/25/06
<PAGE>

                                    EXHIBIT A
                          EXCEPTIONS TO REPRESENTATIONS

1.   That certain Security Interest Agreement, dated as of December 15, 2005 (as
     permitted by the terms thereof or with the consent of the Secured Parties
     named therein, additional parties or additional interests were added as
     Secured Parties to this Agreement on January 20, 2006, March 1, 2006 and
     March 9, 2006; collectively, "December Security Interest Agreement"), to
     which the Debtor and the Holders of the Senior Specified Notes (as defined
     in Annex IX to the Securities Purchase Agreement) are parties, with such
     December Security Interest Agreement having been executed in connection
     with the transactions (the "Senior Bridge Transactions") as described in
     the respective Bridge Loan Agreements, dated on or about the respective
     dates of the Senior Specified Notes, by and between the Debtor and one or
     more certain individuals and entities named on executed counterpart
     signature pages to such Bridge Loan Agreement, and in connection with which
     a certain financing statement (as heretofore amended) was filed in the
     State of Delaware, which remains in effect. The Senior Specified Notes,
     which were issued in connection with the Senior Bridge Transactions, are
     contemplated to be paid in full as provided in said Annex IX. The security
     interests reflected by the December Security Interest Agreement will be
     released upon such payment in full of the Senior Specified Notes. If any
     such amount is deferred but not subsequently paid to the holders of the
     Senior Specified Notes, the security interest of such holders will continue
     and will have priority over the security interests granted to the Secured
     Parties under this Security Interest Agreement.

2.   That certain Junior Security Interest Agreement, dated as of March 13, 2006
     (as permitted by the terms thereof or with the consent of the Secured
     Parties named therein, additional parties or additional interests were
     added as Secured Parties to this Agreement on April 7, 2006; collectively,
     "March Security Interest Agreement"), to which the Debtor and the Holders
     of the Junior Specified Notes (as defined in Annex IX to the Securities
     Purchase Agreement) are parties, with such March Security Interest
     Agreement having been executed in connection with the transactions (the
     "Junior Bridge Transactions") as described in the respective Bridge Loan
     Agreements, dated on or about the respective dates of the Junior Specified
     Notes, by and between the Debtor and one or more certain individuals and
     entities named on executed counterpart signature pages to such Bridge Loan
     Agreement, and in connection with which a certain financing statement (as
     heretofore amended) was filed in the State of Delaware, which remains in
     effect. The Junior Specified Notes, which were issued in connection with
     the Junior Bridge Transactions, are contemplated to be paid in full as
     provided in said Annex IX. The security interests reflected by the March
     Security Interest Agreement will be released upon such payment in full of
     the Junior Specified Notes. If any such amount is deferred but not
     subsequently paid to the holders of the Junior Specified Notes, the
     security interest of such holders will continue and will have priority over
     the security interests granted to the Secured Parties under this Security
     Interest Agreement.

                                                                         4/25/06
<PAGE>

All of the above exceptions to representations on this Exhibit A shall be
collectively referred to and defined as the "Permitted Liens" and individually
as a "Permitted Lien".

3.   Each Permitted Lien has priority over the security interest granted to the
     Secured Parties named in the current Security Agreement to which this
     Exhibit A is attached.

                                                                         4/25/06EXHIBIT 10.3

                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION RIGHTS AGREEMENT, dated as of April 26, 2006
(this "Agreement"), is made by and between AMEDIA NETWORKS, INC., a Delaware
corporation with headquarters located at 2 Corbett Way, Eatontown, New Jersey
07724 (the "Company"), and each entity named on a signature page hereto (each,
an "Initial Investor") (each agreement with an Initial Investor being deemed a
separate and independent agreement between the Company and such Initial
Investor, except that each Initial Investor acknowledges and consents to the
rights granted to each other Initial Investor under such agreement).

                              W I T N E S S E T H:

                  WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement of even date herewith between the Initial Investor
and the Company (the "Securities Purchase Agreement"; capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement), the Company has agreed to issue and sell to the
Initial Investors the Debentures and the Warrants; and

                  WHEREAS, the Debentures are convertible into shares of Common
Stock (the "Conversion Shares"; which term, for purposes of this Agreement,
shall include shares of Common Stock of the Company issuable in lieu of accrued
interest through the Maturity Date of the Debentures, as that term is defined in
and as contemplated by the Debentures) upon the terms and subject to the
conditions contained in the Debentures; and

                  WHEREAS, the Warrant Shares may be issued upon the exercise of
the Warrants; and

                  WHEREAS, to induce the Initial Investor to execute and deliver
the Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Registrable Securities (as defined
below);

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:

                  1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:

                  "Closing Date" means the Initial Closing Date.

                  "Company Counsel" means Aboudi & Brounstein.

                                                                         4/25/06

                                1
<PAGE>

                  "Effective Date" means the date the SEC declares a
Registration Statement covering Registrable Securities and otherwise meeting the
conditions contemplated hereby to be effective.

                  "Held Shares Value" means, for shares of Common Stock acquired
by the Investor upon a conversion of a Debenture within the thirty (30) days
preceding the Restricted Sale Date, but not yet sold by the Investor, the
principal amount of the Debentures converted into such Conversion Shares;
provided, however, that if the Investor effected more than one such conversion
during such thirty (30) day period and sold less than all of such shares, the
sold shares shall be deemed to be derived first from the conversions in the
sequence of such conversions (that is, for example, until the number of shares
from the first of such conversions have been sold, all shares shall be deemed to
be from the first conversion; thereafter, from the second conversion until all
such shares are sold).

                  "Increased Shares" means the good faith estimate of the number
of shares which the Company anticipates will be issuable to the Holder as a
result of either or both an adjustment to the Conversion Price or the issuance
of Added Warrants resulting from the application of Section 4(g) of the
Securities Purchase Agreement.

                  "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof and who holds Debentures or
Registrable Securities.

                  "Issued Principal Amount" means the original principal amount
of the Debentures (including, prior to an Additional Closing Date Termination,
the Additional Debentures).

                  "Other Issuable Shares" means (i) the Payment Shares, if any,
issued or issuable to the Holder as of the date of the filing of the
Registration Statement and any amendment thereto or any subsequent date, and
(ii) the good faith estimate of the Company of the number of the other Payment
Shares or the Increased Shares, as the case may be, which the Company
anticipates, as of the date of the filing of the Registration Statement and any
amendment thereto, will be issuable to the Holder pursuant to the provisions of
the Transaction Agreements.

                  "Payment Shares" means shares of Common Stock issued by the
Company as provided in Section 2(b) below.

                  "Permitted Selling Shareholders" has the meaning ascribed to
it in Schedule 1 annexed hereto.

                  "Permitted Suspension Period" means one or more periods
aggregating not more than fifty (50) days during any consecutive 12-month period
during which the Holder's right to sell Registrable Securities under the
Registration Statement is suspended, provided, however, that each of such
periods shall neither (i) be for more than twenty (20) days nor (ii) begin less

                                                                         4/25/06

                                2
<PAGE>

than ten (10) Trading Days after the last day of the preceding suspension period
(whether or not such last day was during or after a Permitted Suspension
Period).

                  "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the registration statement would be detrimental to the business and affairs of
the Company; or (ii) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in a registration statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the registration statement would be
materially misleading absent the inclusion of such information.

                  "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the SEC.

                  "Registrable Securities" means, collectively, the Conversion
Shares, the Warrant Shares, and the Other Issuable Shares.

                  "Registration Statement" means a registration statement of the
Company under the Securities Act covering Registrable Securities on Form SB-2,
if the Company is then eligible to file using such form, and if not eligible, on
Form S-1 or other appropriate form.

                  "Required Effective Date" means, initially, the Initial
Required Effective Date or the Increased Required Effective Date (as those terms
are defined below), as the case may be.

                  "Required Filing Date" means the date as soon as practicable
after the Closing Date but no later than the earlier (x) the later of
seventy-five (75) days after the Closing Date or (y) fifteen (15) days after the
Additional Closing Date.

                  "Restricted Sale Date" means the first date, other than a date
during a Permitted Suspension Period (as defined below), on which the Investor
is restricted from making sales of Registrable Securities pursuant to any
previously effective Registration Statement.

                  2. Registration.

                  (a) Mandatory Registration.

                                                                         4/25/06

                                3
<PAGE>

                  (i) The Company shall prepare and file with the SEC, as soon
as practicable after the Closing Date but no later than the Required Filing
Date, a Registration Statement registering for resale by the Investor a
sufficient number of shares of Common Stock for the Initial Investors to sell
the Registrable Securities. Notwithstanding the requirement to register all
Registrable Securities, the Company's obligation to register the Registrable
Securities shall initially be satisfied by the registration of the Initial
Number of Shares to Be Registered (as defined below). The "Initial Number of
Shares to Be Registered" is a number of shares of Common Stock which is at least
equal to the sum of (x) one hundred fifty percent (150%) of the number of shares
into which the Debentures and all interest thereon through their respective
Maturity Dates would be convertible at the time of filing of such Registration
Statement (assuming for such purposes that all Debentures had been eligible to
be converted, and had been converted, into Conversion Shares in accordance with
their terms, whether or not such eligibility, accrual of interest or conversion
had in fact occurred as of such date) based on the Conversion Price(1) in effect
on, or within three (3) Trading Days prior to, the date the Registration
Statement is filed (or subsequently amended), (y) the number of Warrant Shares
covered by the Warrants (assuming for such purposes that all the Warrants,
including Additional Warrants, had been issued, had been eligible to be
exercised and had been exercised for the issuance of Warrant Shares in
accordance with their terms, whether or not such issuance, eligibility or
exercise had in fact occurred as of such date), and (z) the number of Other
Issuable Shares as of the date of the filing of the Registration Statement or
any amendment thereto (provided, however, that for purposes of this provision,
the number of Other Issuable Shares shall not be greater than the number of such
shares which the SEC permits to be included in the Registration Statement).
Unless otherwise specifically agreed to in writing in advance by the Holder, the
Registration Statement (X) shall include only (1) the Registrable Securities,
(2) the shares issuable on exercise of warrants issued to the Placement Agent,
as contemplated by the Transaction Agreements, (3) the shares of the Permitted
Selling Shareholders, if any, (Y) shall not restrict or limit the prices at
which the shares sold by the selling stockholders thereunder may be sold, and
(Z) shall also state that, in accordance with Rule 416 and 457 under the
Securities Act, it also covers such indeterminate number of additional shares of
Common Stock as may become issuable upon conversion of the Debentures, exercise
of the Warrants or issuances of Other Issuable Securities covered by such
Registration Statement to prevent dilution resulting from stock splits, stock
dividends or similar transactions.

                  (ii) The Company will use its reasonable best efforts to cause
such Registration Statement to be declared effective on a date (the "Initial
Required Effective Date") which is no later than the earlier of (X) five (5)
days after oral or written notice by the SEC that it may be declared effective
or (Y) sixty (60) days after the filing of the Registration Statement; provided,
however, that the Initial Required Effective Date shall in no event shall be
later one hundred twenty (120) days after the Closing Date.

--------------------------------
         (1) For all purposes of this Section 2, the Interest Conversion Price
(as that terms is defined in the Debenture) shall be deemed equal to the
Conversion Price.

                                                                         4/25/06

                                4
<PAGE>

                  (iii) If at any time (an "Increased Registered Shares Date"),
the number of shares of Common Stock represented by the Registrable Securities,
issued or to be issued as contemplated by the Transaction Agreements, exceeds
eighty percent (80%) of the aggregate number of shares of Common Stock then
registered or sought to be registered in a Registration Statement which has not
yet been declared effective, the Company shall either

         (X) amend the relevant Registration Statement filed by the Company
         pursuant to the preceding provisions of this Section 2, if such
         Registration Statement has not been declared effective by the SEC at
         that time, to register the Increased Number of Shares to Be Registered
         (as defined below). The "Increased Number of Shares to Be Registered"
         is a number of shares of Common Stock which is at least equal to (A)
         the number of shares theretofore issued on conversion of the Debentures
         (including any interest paid on conversion by the issuance of
         Conversion Shares) and on exercise of the Warrants, plus (B) the sum of
         (x) one hundred fifty percent (150%) of the number of shares into which
         the unconverted Debentures and all interest thereon through their
         respective Maturity Dates would be convertible at the time of filing of
         such Registration Statement or amendment (assuming for such purposes
         that all Debentures, reduced by any previously converted Debentures,
         had been eligible to be converted, and had been converted, into
         Conversion Shares in accordance with their terms, whether or not such
         eligibility, accrual of interest or conversion had in fact occurred as
         of such date) based on the Conversion Price in effect on, or within
         three (3) Trading Days prior to, the date the amendment to the
         Registration Statement is filed, (y) the number of Warrant Shares
         covered by the unexercised Warrants (assuming for such purposes that
         all the Warrants, reduced by any exercised Warrants, had been issued,
         had been eligible to be exercised and had been exercised for the
         issuance of Warrant Shares in accordance with their terms, whether or
         not such issuance, eligibility or exercise had in fact occurred as of
         such date), (z) the number of Other Issuable Shares as of the date of
         the filing of the Registration Statement or any amendment thereto
         (provided, however, that for purposes of this provision, the number of
         Other Issuable Shares shall not be greater than the number of such
         shares which the SEC permits to be included in the Registration
         Statement), or

         (Y) if such Registration Statement has been declared effective by the
         SEC at that time, file with the SEC an additional Registration
         Statement (an "Additional Registration Statement") to register the
         number of shares equal to the excess of the Increased Number of Shares
         to Be Registered (where the number of shares determined by clause (x)
         is based on the Conversion Price in effect on, or within three (3)
         Trading Days prior to, the date the additional Registration Statement
         (or any amendment thereto) is filed, over the aggregate number of
         shares of Common Stock already registered.
The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (each, an "Increased Required
Effective Date") which is no later than

                                                                         4/25/06

                                       5
<PAGE>

(q) with respect to a Registration Statement under clause (X) of this
subparagraph (iii), the Initial Required Effective Date and (r) with respect to
an Additional Registration Statement, the earlier of (I) five (5) days after
notice by the SEC that it may be declared effective or (II) fifty (50) days
after the Increased Registered Shares Date.

                  (b) Payments by the Company.

                  (i) If the Registration Statement covering the Registrable
Securities is not filed as contemplated by this Agreement with the SEC by the
Required Filing Date, the Company will make payment to the Initial Investor in
such amounts and at such times as shall be determined pursuant to this Section
2(b).

                  (ii) If the Registration Statement covering the Registrable
Securities is not effective by the relevant Required Effective Date or if there
is a Restricted Sale Date, then the Company will make payments to the Initial
Investor in such amounts and at such times as shall be determined pursuant to
this Section 2(b).

                  (iii) The amount (the "Periodic Amount") to be paid by the
Company to the Initial Investor shall be determined as of each Computation Date
(as defined below) and such amount shall be equal to the Periodic Amount
Percentage (as defined below) of the Issued Principal Amount of all Debentures
for the period from the date following the relevant Required Filing Date or the
Required Effective Date or a Restricted Sale Date, as the case may be, to the
first relevant Computation Date, and thereafter to each subsequent Computation
Date (each such period, a "Computation Period"). The "Periodic Amount
Percentage" means two percent (2) of the Purchase Price of such Issued Principal
Amount for each Computation Period (and pro rata for any Computation Period
which is less than thirty [30] days). Anything in the preceding provisions of
this paragraph (iii) to the contrary notwithstanding, after the relevant
Effective Date the Issued Principal Amount shall be deemed to refer to the sum
of (X) the principal amount of all such Debentures not yet converted and (Y) the
Held Shares Value for such Debentures. By way of illustration and not in
limitation of the foregoing, if the Registration Statement is filed on or before
the Required Filing Date, but is not declared effective until seventy-five (75)
days after the Initial Required Effective Date, the Periodic Amount will
aggregate five percent (5%) of the Issued Principal Amount (2% for days 1-30,
plus 2% for days 31-60, plus 1% for days 61-75).

                  (iv) Each Periodic Amount, if any, will be payable by the
Company, except as provided in the other provisions of the immediately
succeeding subparagraph (v), in cash or other immediately available funds to the
Investor on the third Trading Day after

         (A) with respect to Periodic Amounts for Computation Periods ending on
         or before the Effective Date, (i) the earlier of the Effective Date or
         the date which is one hundred eighty (180) days after the Initial
         Closing Date (the "First Specified

                                                                         4/25/06

                                       6
<PAGE>

         Periodic Payment Date") and (ii) if relevant, the last day of each
         Computation Period after the First Specified Periodic Payment Date, and

         (B) with respect to all Periodic Amounts accruing after the Effective
         Date, the last day of the relevant Computation Period,

in each case, without requiring demand therefor by the Investor.

                  (v) Notwithstanding the provisions of the immediately
preceding subparagraph (iv),

         (A) at the option of the Company, exercisable in its discretion on the
         date the Periodic Amount is due; provided, however, that the Company
         may exercise this discretion if, but only if the Effective Date is on
         or before the First Specified Periodic Payment Date and the
         Registration Statement covering the Payment Shares is then effective;
         or

         (B) at the option of the Investor, exercisable in its sole and absolute
         discretion by written notice to the Company at any time before the
         Periodic Amount is paid,

all or a portion of the Periodic Amount shall be paid by the issuance of
additional shares of Common Stock to the Investor ("Payment Shares") in an
amount equal to the Periodic Amount being paid thereby divided by the Conversion
Price in effect on the date such option or election is exercised; provided,
further that the "Delivery Date" for the Payment Shares shall be three (3)
Trading Days after the date the Periodic Amount is due (if the option or
election is made by the Company) or after the Investor gives the notice
contemplated by clause (B) of this subparagraph. The provisions of Section
5(b)(i) of the Securities Purchase Agreement shall apply to the delivery of the
certificates of the Payment Shares based on the relevant Periodic Amount.

                  (vi) The parties acknowledge that the damages which may be
incurred by the Investor if the Registration Statement is not filed by the
Required Filing Date or the Registration Statement has not been declared
effective by a Required Effective Date, including if the right to sell
Registrable Securities under a previously effective Registration Statement is
suspended or the shares of the Company's stock are not listed on the Principal
Trading Market, may be difficult to ascertain. The parties agree that, subject
to the provisions of Section 11(k), the amounts payable pursuant to the
foregoing provisions of this Section 2(b) represent a reasonable estimate on the
part of the parties, as of the date of this Agreement, of the amount of such
damages.

                  (vii) Notwithstanding the foregoing, the amounts payable by
the Company pursuant to this provision shall not be payable to the extent any
delay in the filing or effectiveness of the Registration Statement occurs
because of an act of, or a failure to act or to act timely by the Initial
Investor or its counsel.

                                                                         4/25/06

                                       7
<PAGE>

                  (viii) "Computation Date" means (A) the date which is the
earlier of (1) thirty (30) days after the Required Filing Date, the Required
Effective Date or a Restricted Sale Date, as the case may be, or (2) the date
after the Required Filing Date, the Required Effective Date or Restricted Sale
Date on which the Registration Statement is filed (with respect to payments due
as contemplated by Section 2(b)(i) hereof) or is declared effective or has its
restrictions removed or the shares of the Company's stock are listed on the
Principal Trading Market (with respect to payments due as contemplated by
Section 2(b)(ii) hereof), as the case may be, and (B) each date which is the
earlier of (1) thirty (30) days after the previous Computation Date or (2) the
date after the previous Computation Date on which the Registration Statement is
filed (with respect to payments due as contemplated by Section 2(b)(i) hereof)
or is declared effective or has its restrictions removed or the shares of the
Company's stock are listed on the Principal Trading Market (with respect to
payments due as contemplated by Section 2(b)(ii) hereof), as the case may be.

                  3. Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall do each of the
following:

                  (a) Prepare promptly, and file with the SEC by the Required
Filing Date a Registration Statement with respect to not less than the number of
Registrable Securities provided in Section 2(a) above, and thereafter use its
reasonable best efforts to cause such Registration Statement relating to
Registrable Securities to become effective by the Required Effective Date and
keep the Registration Statement effective at all times during the period (the
"Registration Period") continuing until the earlier of (i) the date when the
Investors may sell all Registrable Securities under Rule 144 without volume or
other restrictions or limits or (ii) the date the Investors no longer own any of
the Registrable Securities, which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;

                  (b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;

                  (c) Permit a single firm of counsel designated by the Initial
Investors (which, until further notice, shall be deemed to be Krieger & Prager
LLP, Attn: Samuel Krieger, Esq., which firm has requested to receive such
notification; each, an "Investor's Counsel") to review

                                                                         4/25/06

                                       8
<PAGE>

the Registration Statement and all amendments and supplements thereto a
reasonable period of time (but not less than three (3) Trading Days) prior to
their filing with the SEC, and not file any document in a form to which such
counsel reasonably objects;

                  (d) Notify each Investor (except for provisions marked with an
asterisk (*)) and the Investor's Counsel and any managing underwriters
immediately (and, in the case of (i)(A) below, not less than three (3) Trading
Days prior to such filing) and (if requested by any such person) confirm such
notice in writing no later than one (1) Trading Day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement is proposed to be filed; *(B) whenever the SEC
notifies the Company whether there will be a "review" of such Registration
Statement; *(C) whenever the Company receives (or a representative of the
Company receives on its behalf) any oral or written comments from the SEC in
respect of a Registration Statement (copies or, in the case of oral comments,
summaries of such comments shall be promptly furnished by the Company to the
Investor's Counsel); and (D) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
*(A) amendments or supplements to the Registration Statement or Prospectus, *(B)
additional information not pertaining to the Investors or (C) additional
information pertaining to the Investors; (iii) of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement covering
any or all of the Registrable Securities or the initiation of any proceedings
for that purpose; (iv) if at any time any of the representations or warranties
of the Company contained in any agreement (including any underwriting agreement)
contemplated hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose; and (vi) of the occurrence of any event that to the
best knowledge of the Company makes any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall communicate with the
Investor's Counsel with regard to its proposed written responses to the comments
contemplated in clause (i)(C) of this Section 3(d), so that, to the extent
practicable, the Investor's Counsel shall have the opportunity to comment
thereon;

                  (e) Unless such filing is publicly available on the SEC's
EDGAR system (via the SEC's web site at no additional charge), furnish to each
Investor and to Investor's Counsel (i) promptly after the same is prepared and
publicly distributed, filed with the SEC, or received by the Company, one (1)
copy of the Registration Statement, each preliminary prospectus and prospectus,
and each amendment or supplement thereto, and (ii) such number of copies of a

                                                                         4/25/06

                                       9
<PAGE>

prospectus, and all amendments and supplements thereto and such other documents,
as such Investor may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such Investor;

                  (f) As promptly as practicable after becoming aware thereof,
notify each Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and, unless such filing is
publicly available on the SEC's EDGAR system (via the SEC's web site at no
additional charge), deliver a number of copies of such supplement or amendment
to each Investor as such Investor may reasonably request;

                  (g) As promptly as practicable after becoming aware thereof,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the SEC of a Notice of Effectiveness or any notice of effectiveness or any stop
order or other suspension of the effectiveness of the Registration Statement at
the earliest possible time;

                  (h) As promptly as practicable after becoming aware thereof,
notify each Investor who holds Registrable Securities of the fact that the
ability of the Investor to sell Registrable Securities under the Registration
Statement will soon be unavailable, whether as a result of

         (i) the impending cessation or expiration of the effectiveness of the
         Registration Statement, for which notice should be given at least
         thirty (30) days in advance, except that the Company's obligation under
         this clause shall be satisfied if the Company has previously given
         written notice of such date to such Investor and such date has not
         changed since the date of such written notice; or

         (ii) the fact that the Company has issued Registrable Shares to the
         Investor equal to ninety percent (90%) or more of the shares registered
         for resale by such Investor in the Registration Statement.

                  (i) Comply with Regulation FD or any similar rule or
regulation regarding the dissemination of information regarding the Company, and
in furtherance of the foregoing, and not in limitation thereof, and
notwithstanding anything to the contrary in this Agreement or in any of the
other Transaction Agreements, not disclose to the Investor any non-public
material information regarding the Company;

                                                                         4/25/06

                                       10
<PAGE>

                  (j) Notwithstanding the foregoing, if at any time or from time
to time after the date of effectiveness of the Registration Statement, the
Company notifies the Investors in writing that the effectiveness of the
Registration Statement is suspended for any reason, whether due to a Potential
Material Event or otherwise, the Investors shall not offer or sell any
Registrable Securities, or engage in any other transaction involving or relating
to the Registrable Securities, from the time of the giving of such notice until
such Investor receives written notice from the Company that such the
effectiveness of the Registration Statement has been restored, whether because
the Potential Material Event has been disclosed to the public or it no longer
constitutes a Potential Material Event or otherwise; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period (and the applicable provisions of
Section 2(b) shall apply with respect to any such suspension other than during a
Permitted Suspension Period);

                  (k) Use its reasonable efforts to secure and maintain the
designation of all the Registrable Securities covered by the Registration
Statement on the Principal Trading Market and the quotation of the Registrable
Securities on the Principal Trading Market;

                  (l) Provide a transfer agent ("Transfer Agent") and registrar,
which may be a single entity, for the Registrable Securities not later than the
initial Effective Date;

                  (m) Cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and delivery of
certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as the
Investors may reasonably request, and, within five (5) Trading Days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the Transfer Agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) an appropriate instruction and opinion
of such counsel, which shall include, without limitation, directions to the
Transfer Agent to issue certificates of Registrable Securities(including
certificates for Registrable Securities to be issued after the Effective Date
and replacement certificates for Registrable Securities previously issued)
without legends or other restrictions, subject to compliance with applicable law
and other rules and regulations, including, without limitation, prospectus
delivery requirements;

                  (n) Take all other reasonable administrative steps and actions
(including the participation of Company counsel) necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement; provided, however, that the foregoing does not
require that the Company take any steps whatsoever regarding the identification
or selection of a broker to sell the Registrable Securities, the identification
of buyers of the Registrable Securities, or the negotiation of the sale terms of
the Registrable Securities; and

                                                                         4/25/06

                                       11
<PAGE>

                  (o) Not file any other registration statement (other than the
Registration Statement and amendments thereto and except for (i) registration
statements on Form S-8 and post-effective amendments thereto and (ii)
post-effective amendments to a registration statement effective prior to the
Closing Date) during the period commencing on the Closing Date and ending on the
Effective Date.

                  4. Obligations of the Investors. In connection with the
registration of the Registrable Securities, the Investors shall have the
following obligations:

                  (a) Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company to provide factual
information regarding the Investor as reasonably requested by the Company in
connection with the preparation and filing of the Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable Securities
from the Registration Statement; and

                  (b) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(f),
(g) or (i) above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f), (g) or (i),
and, if so directed by the Company, such Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such Investor's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.

                  5. Expenses of Registration. All reasonable expenses (other
than underwriting discounts and commissions of the Investor) incurred in
connection with registrations, filings or qualifications pursuant to Section 3,
but including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company. In addition, a fee for a single
counsel for the Investors (as a group and not individually) equal to $4,500 for
the review of each Registration Statement and $2,000 for the review of each
post-effective amendment to a Registration Statement shall be borne by the
Company.

                  6. Indemnification. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:

                  (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor, and
each Buyer Control Person (each, an "Indemnified Party"), against any losses,
claims, damages, liabilities or expenses (joint or

                                                                         4/25/06

                                       12
<PAGE>

several) incurred (collectively, "Claims") to which any of them may become
subject under the Securities Act, Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or otherwise, insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations in
the Registration Statement, or any post-effective amendment thereof, or any
prospectus included therein: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively referred to as
"Violations"). Subject to clause (b) of this Section 6, the Company shall
reimburse the Investors, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a) shall not (I) apply to any Claim arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of such
Indemnified Party expressly for use in connection with the preparation of the
Registration Statement, any such amendment thereof or supplement thereto or
prospectus, if such prospectus (or supplement or amendment thereto) was timely
made available by the Company pursuant to Section 3(b) hereof; (II) be available
to the extent such Claim is based on a failure of the Investor to deliver or
cause to be delivered the prospectus made available by the Company or the
amendment or supplement thereto made available by the Company; (III) be
available to the extent such Claim is based on the delivery of a prospectus by
the Investor after receiving notice from the Company under Section 3(f), (g) or
(i) hereof (other than a notice regarding the effectiveness of the Registration
Statement or any amendment or supplement thereto), or (IV) apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed. The Investor will indemnify the Company and its officers, directors
and agents (each, an "Indemnified Party") against any claims arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company, by or on behalf of such
Investor, expressly for use in connection with the preparation of the
Registration Statement or the amendment or supplement thereto, subject to such
limitations and conditions as are applicable to the indemnification provided by
the Company pursuant to this Section 6. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 9.

                                                                         4/25/06

                                       13
<PAGE>

                  (b) Promptly after receipt by an Indemnified Party under this
Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
satisfactory to the indemnifying party (provided such counsel shall not have a
conflict of interest with the Indemnified Party and provided that all defenses
available to the Indemnified Party can be maintained without prejudicing the
rights of the indemnifying party). In case any such action is brought against
any Indemnified Party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, assume the defense thereof, subject to the provisions herein
stated and after notice from the indemnifying party to such Indemnified Party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such Indemnified Party under this Section 6 for any legal or other
reasonable out-of-pocket expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and reasonable out-of-pocket expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel as provided above. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Party under this Section 6, except to the extent
that the indemnifying party is prejudiced in its ability to defend such action.
The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable; provided, however, that the Investor shall not obligated to make any
indemnification payment to the Company under this Section 6 unless and until
there has been a final adjudication of liability on the part of the Investor.

                  7. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) except where the seller has committed fraud (other
than a fraud by reason of the information included or omitted from the
Registration Statement as to which the

                                                                         4/25/06

                                       14
<PAGE>

Company has not given notice as contemplated under Section 3 hereof) or
intentional misconduct, contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

                  8. Reports under Securities Act and Exchange Act. With a view
to making available to Investor the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:

                  (a) make and keep public information available, as those terms
are understood and defined in Rule 144;

                  (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and

                  (c) furnish to the Investor so long as the Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) if not available on the SEC's EDGAR
system, 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 Investor to sell such
securities pursuant to Rule 144 without Registration; and

                  (d) at the request of any Investor holding Registrable
Securities (a "Holder"), give its Transfer Agent instructions (supported by an
opinion of Company Counsel or other counsel to the Company, if required or
requested by the Transfer Agent) to the effect that, upon the Transfer Agent's
receipt from such Holder of

         (i) a certificate (a "Rule 144 Certificate") certifying (A) that the
         Holder's holding period (as determined in accordance with the
         provisions of Rule 144) for the shares of Registrable Securities which
         the Holder proposes to sell (the "Securities Being Sold") is not less
         than (1) year and (B) as to such other matters as may be appropriate in
         accordance with Rule 144 under the Securities Act, and

         (ii) an opinion of counsel acceptable to the Company (for which
         purposes it is agreed that the initial Investor's Counsel shall be
         deemed acceptable if not given by Company Counsel) that, based on the
         Rule 144 Certificate, Securities Being Sold may be sold pursuant to the
         provisions of Rule 144, even in the absence of an effective
         Registration Statement,

the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities

                                                                         4/25/06

                                       15
<PAGE>

Being Sold without any restrictive legend and without recording any restrictions
on the transferability of such shares on the Transfer Agent's books and records
(except to the extent any such legend or restriction results from facts other
than the identity of the Holder, as the seller or transferor thereof, or the
status, including any relevant legends or restrictions, of the shares of the
Securities Being Sold while held by the Holder). If the Transfer Agent
reasonably requires any additional documentation at the time of the transfer,
the Company shall deliver or cause to be delivered all such reasonable
additional documentation as may be necessary to effectuate the issuance of an
unlegended certificate.

                  9. Assignment of the Registration Rights. The rights to have
the Company register Registrable Securities pursuant to this Agreement and the
rights of the Investor under Section 8 hereof shall be automatically assigned by
the Investor to any transferee of the Registrable Securities (excluding any
transfer of such Registrable Securities by a sale pursuant to an effective
Registration Statement or pursuant to Rule 144) or of all or any portion of any
unconverted Debentures or unexercised Warrants, but , only if the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, (b)
the securities with respect to which such registration rights are being
transferred or assigned, and (c) written evidence of the transferee's assumption
of the Investor's obligations under this Agreement.

                  10. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
represent a Majority in Interest of the Holders as of the relevant date. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.

                  11. Miscellaneous.

                  (a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

                  (b) Notices required or permitted to be given hereunder shall
be given in the manner contemplated by the Securities Purchase Agreement, (i) if
to the Company or to the Initial Investor, to their respective address
contemplated by the Securities Purchase Agreement, and (ii) if to any other
Investor, at such address as such Investor shall have provided in writing to the
Company, or at such other address as each such party furnishes by notice given
in accordance with this Section 11(b).

                                                                         4/25/06

                                       16
<PAGE>

                  (c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

                  (d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the exclusive
jurisdiction of the federal courts whose districts encompass any part of the
County of New York or the state courts of the State of New York sitting in the
County of New York in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non coveniens, to the bringing of any
such proceeding in such jurisdictions.

                  (e) The Company and the Investor hereby waive a trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other in respect of any matter arising out of or in
connection with this Agreement or any of the other Transaction Agreements.

                  (f) 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 or the
validity or enforceability of this Agreement in any other jurisdiction.

                  (g) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.

                  (h) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.

                  (i) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.

                  (j) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.

                  (k) The Company acknowledges that any failure by the Company
to perform its obligations under Section 3(a) hereof, or any delay in such
performance, whether or not as a result of the Company's negligence, failure to
act or otherwise, could result in loss to the Investors, and the Company agrees
that, in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by

                                                                         4/25/06

                                       17
<PAGE>

any such failure or delay, unless the same is the result of force majeure.
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL DAMAGES.

                  (l) This Agreement (including to the extent relevant the
provisions of other Transaction Agreements) constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                                                         4/25/06

                                       18
<PAGE>

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.

                                      INITIAL INVESTOR:

                                      ------------------------------------
                                           [Print Name of Initial Investor]

                                      By: _________________________________
                                      Name: ______________________________
                                      Title: _______________________________

                                      COMPANY:
                                      AMEDIA NETWORKS, INC.

                                      By: _________________________________
                                      Name: ______________________________
                                      Title: _______________________________

                                                                         4/25/06
                                       19
<PAGE>

<TABLE>
<CAPTION>
                                   SCHEDULE 1

                                                Shares which may be included in
"Permitted Selling Shareholder"                 Registration Statement
-------------------------------                 ----------------------
-------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>
The following December 2005 through April 2006 Bridge
Lenders:                                                   Shares issuable on exercise of warrants:
--------                                                   ----------------------------------------
  Double U Master Fund LP                                    1,050,000
  Harborview Special Situations Ltd.                           300,000
  Juan A. Mendez                                               150,000
  Marcelino Piz                                                 75,000
  Rene H. Garcia                                                75,000
  Tower Paper Retirement Plan                                  150,000
  Brio Capital L.P.                                             75,000
-------------------------------------------------------------------------------------------------------------------
Double U Master Fund LP                                    333,333 issuable on exercise of warrants issued in
                                                           August 2004
-------------------------------------------------------------------------------------------------------------------
</TABLE>

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