Document:

Execution
      Copy

     

    SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT (the
      “Agreement”),
      is
      entered into and made effective as of January 30, 2008, by and between
AIRBEE
      WIRELESS, INC.,
      a
      Delaware corporation with its principal place of business located at 9400 Key
      West Avenue Rockville, MD (the “Company”),
      and
      the BUYER(S)
      listed
      on Schedule I
      attached
      to the Purchase Agreement dated the date hereof (the “Secured
      Party”).

     

    WHEREAS,
      the
      Company shall issue and sell to the Secured Party, as provided in the Debenture
      and Warrant Purchase Agreement of even date herewith between the Company and
      the
      Secured Party (the “Purchase
      Agreement”),
      and
      the Secured Party shall purchase up to One Million Four Hundred One Thousand
      One
      Hundred and Fifty Seven and 0/100 Dollars ($1,401,157.00) of secured convertible
      debentures (the “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value
      $0.00004 (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”)
      in the
      respective amounts set forth opposite each Buyer(s) name on Schedule I
      attached to the Purchase Agreement;

     

    WHEREAS,
      to
      induce
      the Secured Party to enter into the transaction contemplated by the Purchase
      Agreement, the Convertible Debentures and Warrants of even date herewith between
      the Company and the Secured Party (collectively referred to as the “Transaction
      Documents”),
      the
      Company hereby grants to the Secured Party a security interest in and to the
      pledged property identified on Exhibit A
      hereto
      (collectively referred to as the “Pledged
      Property”)
      until
      the satisfaction of the Obligations, as defined herein below.

     

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

     

    ARTICLE
      1.

     

    DEFINITIONS
      AND INTERPRETATIONS

     

    Section
      1.1. Recitals.

     

    The
      above
      recitals are true and correct and are incorporated herein, in their entirety,
      by
      this reference.

     

    Section
      1.2. Interpretations.

     

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

     

    Section
      1.3. Obligations
      Secured.

     

    The
      obligations secured hereby are any and all obligations of the Company now
      existing or hereinafter incurred to the Secured Party, whether oral or written
      and whether arising before, on or after the date hereof including, without
      limitation, those obligations of the Company to the Secured Party under this
      Agreement, the Transaction Documents, and any other amounts now or hereafter
      owed to the Secured Party by the Company thereunder or hereunder (collectively,
      the “Obligations”).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      2.

     

    PLEDGED
      PROPERTY, ADMINISTRATION OF COLLATERAL

    AND
      TERMINATION OF SECURITY INTEREST

     

    Section
      2.1. Pledged
      Property.

     

    (a) Company
      hereby pledges to the Secured Party, and creates in the Secured Party for its
      benefit, a security interest for such time until the Obligations are paid in
      full, in and to all of the property of the Company as set forth in Exhibit “A”
      attached
      hereto and the products thereof and the proceeds of all such items
      (collectively, the “Pledged
      Property”):

     

    (b) Simultaneously
      with the execution and delivery of this Agreement, the Company shall make,
      execute, acknowledge, file, record and deliver to the Secured Party any
      documents reasonably requested by the Secured Party to perfect its security
      interest in the Pledged Property. Simultaneously with the execution and delivery
      of this Agreement, the Company shall make, execute, acknowledge and deliver
      to
      the Secured Party such documents and instruments, including, without limitation,
      intellectual property security agreements, financing statements, certificates,
      affidavits and forms as may, in the Secured Party’s reasonable judgment, be
      necessary to effectuate, complete or perfect, or to continue and preserve,
      the
      security interest of the Secured Party in the Pledged Property, and the Secured
      Party shall hold such documents and instruments as secured party, subject to
      the
      terms and conditions contained herein.

     

    Section
      2.2. Rights;
      Interests; Etc.

     

    (a) So
      long
      as no Event of Default (as hereinafter defined) shall have occurred and be
      continuing:

     

    (i) the
      Company shall be entitled to exercise any and all rights pertaining to the
      Pledged Property or any part thereof for any purpose not inconsistent with
      the
      terms hereof; and

     

    (ii) the
      Company shall be entitled to receive and retain any and all payments paid or
      made in respect of the Pledged Property.

     

    (b) Upon
      the
      occurrence and during the continuance of an Event of Default:

     

    (i) All
      rights of the Company to exercise the rights which it would otherwise be
      entitled to exercise pursuant to Section 2.2(a)(i) hereof and to receive
      payments which it would otherwise be authorized to receive and retain pursuant
      to Section 2.2(a)(ii) hereof shall be suspended, and all such rights shall
      thereupon become vested in the Secured Party who shall thereupon have the sole
      right to exercise such rights and to receive and hold as Pledged Property such
      payments; provided,
      however,
      that if
      the Secured Party shall become entitled and shall elect to exercise its right
      to
      realize on the Pledged Property pursuant to Article 5 hereof, then all cash
      sums
      received by the Secured Party, or held by Company for the benefit of the Secured
      Party and paid over pursuant to Section 2.2(b)(ii) hereof, shall be applied
      against any outstanding Obligations; and

     

    (ii) All
      interest, dividends, income and other payments and distributions which are
      received by the Company contrary to the provisions of Section 2.2(b)(i)
      hereof shall be received
      in trust for the benefit of the Secured Party, shall be segregated from other
      property of the Company and shall be forthwith paid over to the Secured Party;
      or 

     

    
      
        
        

      

      
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    (iii) The
      Secured Party in its sole discretion shall be authorized to sell any or all
      of
      the Pledged Property at public or private sale in order to recoup all of the
      outstanding principal plus accrued interest owed pursuant to the Convertible
      Debenture as described herein

     

    (c) An
      “Event
      of Default”
shall
      be deemed to have occurred under this Agreement upon an Event of Default under
      the Convertible Debentures or upon the Company’s failure to timely perform any
      obligation or covenant contained in this Agreement.

     

    ARTICLE
      3.

     

    ATTORNEY-IN-FACT;
      PERFORMANCE

     

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

     

    The
      Company hereby irrevocably appoints the Secured Party as its attorney-in-fact,
      with full authority in the place and stead of the Company and in the name of
      the
      Company or otherwise, upon the occurrence of an Event of Default, and from
      time
      to time thereafter in the Secured Party’s discretion to take any action and to
      execute any instrument which the Secured Party may deem necessary to accomplish
      the purposes of this Agreement, including, without limitation, to receive and
      collect all instruments made payable to the Company representing any payments
      in
      respect of the Pledged Property or any part thereof and to give full discharge
      for the same. The above power of attorney is irrevocable and coupled with an
      interest. The Secured Party may demand, collect, receipt for, settle,
      compromise, adjust, sue for, foreclose, or realize on the Pledged Property
      as
      and when the Secured Party may determine. To facilitate collection, the Secured
      Party may notify account debtors and obligors on any Pledged Property to make
      payments directly to the Secured Party.

     

    Section
      3.2. Secured
      Party May Perform.

     

    If
      the
      Company fails to perform any agreement contained herein, the Secured Party,
      at
      its option, may itself perform, or cause performance of, such agreement, and
      the
      expenses of the Secured Party incurred in connection therewith shall be included
      in the Obligations secured hereby and payable by the Company under
      Section 7.3.

     

    ARTICLE
      4.

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      4.1. Authorization;
      Enforceability.

     

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

    
      
        
        

      

      
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    Section
      4.2. Ownership
      of Pledged Property.

     

    The
      Company warrants and represents that it is the legal and beneficial owner of
      the
      Pledged Property free and clear of any lien, security interest, option or other
      charge or encumbrance except for the security interest created by this Agreement
      and those disclosed on Schedule
      4.2
      attached
      hereto.

     

    ARTICLE
      5.

     

    DEFAULT;
      REMEDIES; SUBSTITUTE COLLATERAL

     

    Section
      5.1. Default
      and Remedies.

     

    (a) If
      an
      Event of Default occurs, then in each such case the Secured Party may declare
      the Obligations to be due and payable immediately, by a notice in writing to
      the
      Company, and upon any such declaration, the Obligations shall become immediately
      due and payable; provided, however, that the Obligations shall become
      immediately due and payable without the requirement of the giving of any notice
      upon an Event of Default occurring as the result of
      the
      Company being dissolved or liquidated (or any judgment, order or decree therefor
      shall be entered); or if a creditors’ committee shall have been appointed for
      the business of the Company; or if the Company shall have made a general
      assignment for the benefit of creditors or shall have been adjudicated bankrupt
      and if not an adjudication based on a filing by the Company, it shall not have
      been dismissed within thirty (30) days, or shall have filed a voluntary petition
      in bankruptcy or for reorganization or to effect a plan or arrangement with
      creditors or shall fail to pay its debts generally as such debts become due
      in
      the ordinary course of business (except as contested in good faith and for
      which
      adequate reserves are made in such party’s financial statements); or shall file
      an answer to a creditor’s petition or other petition filed against it, admitting
      the material allegations thereof for an adjudication in bankruptcy or for
      reorganization; or shall have applied for or permitted the appointment of a
      receiver or trustee or custodian for any of its property or assets; or such
      receiver, trustee or custodian shall have been appointed for any of its property
      or assets (otherwise than upon application or consent of the Company) and shall
      not have been removed within thirty (30) days; or if an order shall be entered
      approving any petition for reorganization of the Company and shall not have
      been
      reversed or dismissed within thirty (30) days; or if the Company shall take
      any
      action (corporate or other) authorizing or in furtherance any of the actions
      described above in this subsection.

     

    (b) Upon
      the
      occurrence of an Event of Default, the Secured Party shall: (i) be entitled
      to receive all distributions with respect to the Pledged Property, (ii) to
      cause the Pledged Property to be transferred into the name of the Secured Party
      or its nominee, (iii) to dispose of the Pledged Property, and (iv) to
      realize upon any and all rights in the Pledged Property then held by the Secured
      Party.

     

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

     

    Upon
      the
      occurrence of an Event of Default, in addition to any rights and remedies
      available at law or in equity, the following provisions shall govern the Secured
      Party’s right to realize upon the Pledged Property:

     

    
      
        
        

      

      
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    (a) Any
      item
      of the Pledged Property may be sold for cash or other value in any number of
      lots at brokers board, public auction or private sale and may be sold without
      demand, advertisement
      or notice (except that the Secured Party shall give the Company ten (10) days’
prior written notice of the time and place or of the time after which a private
      sale may be made (the “Sale
      Notice”)),
      which notice period is hereby agreed to be commercially reasonable. At any
      sale
      or sales of the Pledged Property, the Company may bid for and purchase the
      whole
      or any part of the Pledged Property and, upon compliance with the terms of
      such
      sale, may hold, exploit and dispose of the same without further accountability
      to the Secured Party. The Company will execute and deliver, or cause to be
      executed and delivered, such instruments, documents, assignments, waivers,
      certificates, and affidavits and supply or cause to be supplied such further
      information and take such further action as the Secured Party reasonably shall
      require in connection with any such sale.

     

    (b) Any
      cash
      being held by the Secured Party as Pledged Property and all cash proceeds
      received by the Secured Party in respect of, sale of, collection from, or other
      realization upon all or any part of the Pledged Property shall be applied as
      follows:

     

    (i) to
      the
      payment of all amounts due the Secured Party for the expenses reimbursable
      to it
      hereunder or owed to it pursuant to Section 7.3 hereof;

     

    (ii) to
      the
      payment of the Obligations then due and unpaid.

     

    (iii) the
      balance, if any, to the person or persons entitled thereto, including, without
      limitation, the Company.

     

    (c) In
      addition to all of the rights and remedies which the Secured Party may have
      pursuant to this Agreement, the Secured Party shall have all of the rights
      and
      remedies provided by law, including, without limitation, those under the Uniform
      Commercial Code.

     

    (i) If
      the
      Company fails to pay such amounts due upon the occurrence of an Event of Default
      which is continuing, then the Secured Party may institute a judicial proceeding
      for the collection of the sums so due and unpaid, may prosecute such proceeding
      to judgment or final decree and may enforce the same against the Company and
      collect the monies adjudged or decreed to be payable in the manner provided
      by
      law out of the property of Company, wherever situated.

     

    (ii) The
      Company agrees that it shall be liable for any reasonable fees, expenses and
      costs incurred by the Secured Party in connection with enforcement, collection
      and preservation of the Transaction Documents, including, without limitation,
      reasonable legal fees and expenses, and such amounts shall be deemed included
      as
      Obligations secured hereby and payable as set forth in Section 7.3
      hereof.

     

    Section
      5.3. Proofs
      of Claim.

     

    In
      case
      of the pendency of any receivership, insolvency, liquidation, bankruptcy,
      reorganization, arrangement, adjustment, composition or other judicial
      proceeding relating to the Company or the property of the Company or of such
      other obligor or its creditors, the Secured Party (irrespective of whether
      the
      Obligations shall then be due and payable as therein expressed or by declaration
      or otherwise and irrespective of whether the Secured Party shall have made
      any
      demand on the Company for the payment of the Obligations), subject to the rights
      of prior security holders, shall be entitled and empowered, by intervention
      in
      such proceeding or otherwise:

    
      
        
        

      

      
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    (i) to
      file
      and prove a claim for the whole amount of the Obligations and to file such
      other
      papers or documents as may be necessary or advisable in order to have the claims
      of the Secured Party (including any claim for the reasonable legal fees and
      expenses and other expenses paid or incurred by the Secured Party permitted
      hereunder and of the Secured Party allowed in such judicial proceeding),
      and

     

    (ii) to
      collect and receive any monies or other property payable or deliverable on
      any
      such claims and to distribute the same; and any custodian, receiver, assignee,
      trustee, liquidator, sequestrator or other similar official in any such judicial
      proceeding is hereby authorized by the Secured Party to make such payments
      to
      the Secured Party and, in the event that the Secured Party shall consent to
      the
      making of such payments directed to the Secured Party, to pay to the Secured
      Party any amounts for expenses due it hereunder.

     

    Section
      5.4. Duties
      Regarding Pledged Property.

     

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

     

    ARTICLE
      6.

     

    AFFIRMATIVE
      COVENANTS

     

    The
      Company covenants and agrees that, from the date hereof and until the
      Obligations have been fully paid and satisfied, unless the Secured Party shall
      consent otherwise in writing (as provided in Section 7.4
      hereof):

     

    Section
      6.1. Existence,
      Properties, Etc.

     

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

    
      
        
        

      

      
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    Section
      6.2. Contracts
      and Other Collateral.

     

    The
      Company shall perform all of its obligations under or with respect to each
      instrument, receivable, contract and other intangible included in the Pledged
      Property to which the Company is now or hereafter will be party on a timely
      basis and in the manner therein required, including, without limitation, this
      Agreement.

     

    Section
      6.3. Defense
      of Collateral, Etc.

     

    The
      Company shall defend and enforce its right, title and interest in and to any
      part of: (a) the Pledged Property; and (b) if not included within the
      Pledged Property, those assets and properties whose loss could have a Material
      Adverse Effect, the Company shall defend the Secured Party’s right, title and
      interest in and to each and every part of the Pledged Property, each against
      all
      manner of claims and demands on a timely basis to the full extent permitted
      by
      applicable law.

     

    Section
      6.4. Payment
      of Debts, Taxes, Etc.

     

    The
      Company shall pay, or cause to be paid, all of its indebtedness and other
      liabilities and perform, or cause to be performed, all of its obligations in
      accordance with the respective terms thereof, and pay and discharge, or cause
      to
      be paid or discharged, all taxes, assessments and other governmental charges
      and
      levies imposed upon it, upon any of its assets and properties on or before
      the
      last day on which the same may be paid without penalty, as well as pay all
      other
      lawful claims (whether for services, labor, materials, supplies or otherwise)
      as
      and when due.

     

    Section
      6.5. Taxes
      and Assessments; Tax Indemnity.

     

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

     

    Section
      6.6. Compliance
      with Law and Other Agreements.

     

    The
      Company shall maintain its business operations and property owned or used in
      connection therewith in compliance with (a) all applicable federal, state
      and local laws, regulations and ordinances governing such business operations
      and the use and ownership of such property, and (b) all agreements,
      licenses, franchises, indentures and mortgages to which the Company is a party
      or by which the Company or any of its properties is bound. Without limiting
      the
      foregoing, the Company shall pay all of its indebtedness promptly in accordance
      with the terms thereof.

     

    Section
      6.7. Notice
      of Default.

     

    The
      Company shall give written notice to the Secured Party of the occurrence of
      any
      default or Event of Default under this Agreement, the Transaction Documents
      or
      any other Loan Instrument or any other agreement of Company for the payment
      of
      money, promptly upon the occurrence thereof.

     

    
      
        
        

      

      
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    Section
      6.8. Notice
      of Litigation.

     

    The
      Company shall give notice, in writing, to the Secured Party of (a) any
      actions, suits or proceedings wherein the amount at issue is in excess of
$50,000,
      instituted by any persons against the Company, or affecting any of the assets
      of
      the Company, and (b) any dispute, not resolved within fifteen (15) days of
      the commencement thereof, between the Company on the one hand and any
      governmental or regulatory body on the other hand, which might reasonably be
      expected to have a Material Adverse Effect on the business operations or
      financial condition of the Company.

     

    Section
      6.9. Maintenance
      and Insurance.

     

    (a) The
      Company shall maintain or cause to be maintained, at its own expense, all of
      its
      assets and properties in good working order and condition, making all necessary
      repairs thereto and renewals and replacements thereof.

     

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

     

    ARTICLE
      7.

     

    NEGATIVE
      COVENANTS

     

    The
      Company covenants and agrees that, from the date hereof until the Obligations
      have been fully paid and satisfied, the Company shall not, unless the Secured
      Party shall consent otherwise in writing: 

     

    Section
      7.1. Indebtedness.

     

    The
      Company shall not directly or indirectly permit, create, incur, assume, permit
      to exist, increase, renew or extend on or after the date hereof any indebtedness
      on its part, including commitments, contingencies and credit availabilities,
      or
      apply for or offer or agree to do any of the foregoing, except in the normal
      course of its business.

     

    Section
      7.2. Lien
      and Encumbrances.

     

    The
      Company shall not directly or indirectly make, create, incur, assume or permit
      to exist any assignment, transfer, pledge, mortgage, security interest or other
      lien or encumbrance of any nature in, to or against any part of the Pledged
      Property or of the Company’s capital stock, or offer or agree to do so, or own
      or acquire or agree to acquire any asset or property of any character subject
      to
      any of the foregoing encumbrances (including any conditional sale contract
      or
      other title retention agreement), or assign, pledge or in any way transfer
      or
      encumber its right to receive any income or other
      distribution or proceeds from any part of the Pledged Property or the Company’s
      capital stock; or enter into any sale-leaseback financing respecting any part
      of
      the Pledged Property as lessee, or cause or assist the inception or continuation
      of any of the foregoing. 

     

    
      
        
        

      

      
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    Section
      7.3. Management;
      Ownership.

     

    (a) Without
      the prior written consent of the Secured Party, the Company shall not: (a)
      amend
      its Certificate of Incorporation or By-Laws; (b) issue or sell its stock,
      stock options, bonds, notes or other corporate securities or obligations;
      (c) be a party to any merger, consolidation or corporate reorganization,
      (d) purchase or otherwise acquire all or substantially all of the assets or
      stock of, or any partnership or joint venture interest in, any other person,
      firm or entity, (e) sell, transfer, convey, grant a security interest in or
      lease all or any substantial part of its assets, nor (f) create any
      subsidiaries nor convey any of its assets to any subsidiary.

     

    (b) The
      Company shall not materially change its ownership, executive staff or management
      without the prior written consent of the Secured Party. The ownership, executive
      staff and management of the Company are material factors in the Secured Party’s
      willingness to institute and maintain a lending relationship with the Company.
      

     

    Section
      7.4. Dividends;
      Etc.

     

    The
      Company shall not declare or pay any dividend of any kind, in cash or in
      property, on any class of its capital stock, nor purchase, redeem, retire or
      otherwise acquire for value any shares of such stock, nor make any distribution
      of any kind in respect thereof, nor make any return of capital to shareholders,
      nor make any payments in respect of any pension, profit sharing, retirement,
      stock option, stock bonus, incentive compensation or similar plan (except as
      required or permitted hereunder), without the prior written consent of the
      Secured Party. 

     

    Section
      7.5. Guarantees;
      Loans.

     

    The
      Company shall not guarantee nor be liable in any manner, whether directly or
      indirectly, or become contingently liable after the date of this Agreement
      in
      connection with the obligations or indebtedness of any person or persons, except
      for (i) the indebtedness currently secured by the liens identified on the
      Pledged Property identified on Schedule
      7.5
      attached
      hereto, and (ii) the endorsement of negotiable instruments payable to the
      Company for deposit or collection in the ordinary course of business. The
      Company shall not make any loan, advance or extension of credit to any person
      other than in the normal course of its business.

     

    Section
      7.6. Debt.

     

    The
      Company shall not create, incur, assume or suffer to exist any additional
      indebtedness of any description whatsoever in an aggregate amount in excess
      of
      $25,000 (excluding any indebtedness of the Company to the Secured Party, trade
      accounts payable and accrued expenses incurred in the ordinary course of
      business and the endorsement of negotiable instruments payable to the Company,
      respectively for deposit or collection in the ordinary course of business).
      

     

    Section
      7.7. Conduct
      of Business.

     

    The
      Company will continue to engage, in an efficient and economical manner, in
      a
      business of the same general type as conducted by it on the date of this
      Agreement. 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Section
      7.8. Place
      of Business.

     

    The
      location of the Company’s chief place of business is 9400 Key West Avenue
      Rockville, MD. The Company shall not change the location of its chief place
      of
      business, chief executive office or any place of business disclosed to the
      Secured Party or move any of the Pledged Property from its current location
      without thirty (30) days’ prior written notice to the Secured Party in each
      instance. 

     

    ARTICLE
      8.

     

    MISCELLANEOUS

     

    Section
      8.1. Notices.

     

    All
      notices or other communications required or permitted to be given pursuant
      to
      this Agreement shall be in writing and shall be considered as duly given on:
      (a) the date of delivery, if delivered in person, by nationally recognized
      overnight delivery service or (b) five (5) days after mailing if mailed
      from within the continental United States by certified mail, return receipt
      requested to the party entitled to receive the same:

     

    
      	
              If
                to the Secured Party:

            	 	
              John
                W. Bartman and Thomas F. Bartman

            
	 	 	
              11777
                San Vicente Blvd Suite 600

            
	 	 	
              Los
                Angeles, California 90049

            
	 	 	
              Facsimile:
                310 826-8477

            
	 	 	 
	
              with
                copies to:

            	 	
              Samuel
                W. Halper, Esq.

            
	 	 	
              10866
                Wilshire Blvd., Suite 400

            
	 	 	
              Los
                Angeles, CA 90024

            
	 	 	
              Facsimile:
                424 901-8399

            
	 	 	 
	 	 	
              and

            
	 	 	 
	 	 	
              Allen
                & Associates LLC

            
	 	 	
              12400
                Wilshire Blvd Suite 1080

            
	 	 	
              Los
                Angeles, California 90025

            
	 	 	
              Facsimile:
                310 371-7272

            
	 	 	 
	
              And
                if to the Company:

            	 	
              Airbee
                Wireless, Inc.

            
	 	 	
              9400
                Key West Avenue

            
	 	 	
              Rockville,
                MD

            
	 	 	
              Attention: Sundaresan
                Raja

            
	 	 	
              Telephone: (301)
                517-1860

            
	 	 	
              Facsimile: (301)
                517-1861

            
	 	 	 
	
              with
                copies to:

            	 	
              Stradling
                Yocca Carlson & Rauth

            
	 	 	
              660
                Newport Center Drive Suite 1600

            
	 	 	
              Newport
                Beach, California 92660

            
	 	 	
              Attention: Shivbir
                S. Grewal, Esq.

            
	 	 	
              Telephone: (949)
                725-4000

            
	 	 	
              Facsimile: (949)
                725-4100

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              and

            
	 	 	 
	 	 	
              Allen
                & Associates LLC

            
	 	 	
              12400
                Wilshire Blvd Suite 1080

            
	 	 	
              Los
                Angeles, California 90025

            
	 	 	
              Facsimile:
                310 371-7272

            

    

     

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

     

    Section
      8.2. Severability.

     

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

     

    Section
      8.3. Expenses.

     

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

     

    Section
      8.4. Waivers,
      Amendments, Etc.

     

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

     

    Section
      8.5. Continuing
      Security Interest.

     

    This
      Agreement shall create a continuing security interest in the Pledged Property
      and shall: (i) remain in full force and effect until payment in full of the
      Obligations; and (ii) be binding upon the Company and its successors and
      heirs and (iii) inure to the benefit of the Secured Party and its
      successors and assigns. Upon the payment or satisfaction in full of the
      Obligations, the Company shall
      be
      entitled to the return, at its expense, of such of the Pledged Property as
      shall
      not have been sold in accordance with Section 5.2 hereof or otherwise
      applied pursuant to the terms hereof.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      8.6. Independent
      Representation.

     

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

     

    Section
      8.7. Applicable
      Law.

     

    This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of New York without regard to the principles of conflict of laws.
      

     

    Waiver
      of Jury Trial.

     

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

     

    Section
      8.8. Entire
      Agreement.

     

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

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

     

     

    

     

    
      	COMPANY:
	 
	
              AIRBEE
                WIRELESS, INC.

            
	 	 
	
              By:

            	
              /s/
                E. Eugene Sharer

            
	
              Name:

            	
              E.
                Eugene Sharer

            
	
              Title:

            	
              President

            

    

     

    
      	 	SECURED
              PARTY:
	 	 
	 	
              BARTFAM,
                a California limited partnership

            
	 	 
	
              By:

            	
              /s/
                Thomas F. Bartman

            
	
              Name:

            	
              Thomas
                F. Bartman

            
	
              Title:

            	
              General
                Partner

            
	 	 
	 	
              Thomas
                F. Bartman, as Managing Trustee of The William S. Bartman Marital
                Trust

            
	 	 
	 	
              /s/
                Thomas F. Bartman

            
	 	 
	 	
              Cecile
                Citron Bartman, as Trustee of the Cecile Citron Bartman
                Trust

            
	 	 
	 	
              /s/
                Cecile Citron Bartman

            
	 	 
	 	
              Judith
                A. Fiskin, as Trustee of the Judith A. Fiskin Trust dated April 16,
                1996

            
	 	 
	 	
              /s/
                Judith A. Fiskin 

            
	 	 
	 	
              /s/
                John W. Bartman

            
	 	
              John
                W. Bartman

            

    

    

    Signature
      Page to Security Agreement

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    
      	 	
              /s/
                David A. Bartman 

            
	 	
              David
                A. Bartman

            
	 	 
	 	
              /s/
                Michael T. Bartman

            
	 	
              Michael
                T. Bartman

            

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    EXHIBIT A

    DEFINITION
      OF PLEDGED PROPERTY

     

    For
      the
      purpose of securing prompt and complete payment and performance by the Company
      of all of the Obligations, the Company unconditionally and irrevocably hereby
      grants to the Secured Party a continuing security interest in and to, and lien
      upon, the following Pledged Property of the Company:

     

    (a) all
      goods
      of the Company, including, without limitation, machinery, equipment, furniture,
      furnishings, fixtures, signs, lights, tools, parts, supplies and motor vehicles
      of every kind and description, now or hereafter owned by the Company or in
      which
      the Company may have or may hereafter acquire any interest, and all
      replacements, additions, accessions, substitutions and proceeds thereof, arising
      from the sale or disposition thereof, and where applicable, the proceeds of
      insurance and of any tort claims involving any of the foregoing;

     

    (b) all
      inventory of the Company, including, but not limited to, all goods, wares,
      merchandise, parts, supplies, finished products, other tangible personal
      property, including such inventory as is temporarily out of Company’s custody or
      possession and including any returns upon any accounts or other proceeds,
      including insurance proceeds, resulting from the sale or disposition of any
      of
      the foregoing;

     

    (c) all
      contract rights and general intangibles of the Company, including, without
      limitation, goodwill, trademarks, trade styles, trade names, leasehold
      interests, partnership. limited liability company, or joint venture interests,
      patents and patent applications, copyrights, deposit accounts whether now owned
      or hereafter created;

     

    (d) all
      documents, warehouse receipts, instruments and chattel paper of the Company
      whether now owned or hereafter created;

     

    (e) all
      accounts and other receivables, instruments or other forms of obligations and
      rights to payment of the Company (herein collectively referred to as
“Accounts”),
      together with the proceeds thereof, all goods represented by such Accounts
      and
      all such goods that may be returned by the Company’s customers, and all proceeds
      of any insurance thereon, and all guarantees, securities and liens which the
      Company may hold for the payment of any such Accounts including, without
      limitation, all rights of stoppage in transit, replevin and reclamation and
      as
      an unpaid vendor and/or lienor, all of which the Company represents and warrants
      will be bona fide and existing obligations of its respective customers, arising
      out of the sale of goods by the Company in the ordinary course of
      business;

     

    (f) to
      the
      extent assignable, all of the Company’s rights under all present and future
      authorizations, permits, licenses and franchises issued or granted in connection
      with the operations of any of its facilities;

     

    (g) all
      products and proceeds (including, without limitation, insurance proceeds) from
      the above-described Pledged Property.

     

    
      
        
        

      

      
        A-1THE
      SECURITIES REPRESENTED BY THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
      ANY
      TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT
      UNDER THE ACT AND AS REQUIRED BY BLUE SKY LAWS IS IN EFFECT AS TO SUCH TRANSFER
      OR IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY SUCH REGISTRATION
      IS
      UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND BLUE SKY
      LAWS.

     

    Airbee
      Wireless, Inc.

     

    12%
      SECURED CONVERTIBLE DEBENTURE

     

    Debenture
      No. ABEW2008 - I - 

     

    
      	
              $____________

            	
              _______________
                __, 2008

            

    

     

    FOR
      VALUE
      RECEIVED, subject to the terms and conditions of this 12% Secured Convertible
      Debenture (the “Debenture”),
      AIRBEE
      WIRELESS, INC.,
      a
      Delaware corporation with its principal offices located at 9400 Key West Avenue,
      Rockville, Maryland 20850 (the “Company”),
      hereby promises to pay to the order of [___________________] (the “Holder”),
      the
      principal sum of _________________ U.S. Dollars ($_____________) (the
“Face
      Amount”),
      or
      such lesser amount as below, upon demand made by the Holder at any time on
      or
      after the date which is two (2) years from the date of this Debenture, in lawful
      money of the United States and in immediately available funds (the “Maturity
      Date”).
      This
      Debenture is being issued pursuant to that certain Debenture and Warrant
      Purchase Agreement of even date herewith (the “Purchase
      Agreement”)
      entered into by the Holder with the Company and this Debenture is subject to
      that Purchase Agreement, which, together with this Debenture, sets forth the
      respective rights and obligations of the Holder and the Company with respect
      to
      this Debenture.

     

    1. Interest.
      Subject
      to the terms and conditions of this Debenture, the Company also promises to
      pay
      to the Holder interest accrued on the outstanding unpaid principal amount hereof
      until such principal amount is paid at the rate of twelve percent (12%) per
      annum. Accrued but unpaid interest shall be paid in quarter-annual installments,
      commencing on the last day of the calendar quarter ending March 31, 2008, and
      on
      the last day of each calendar quarter thereafter, until this Debenture has
      been
      paid in full in accordance with the terms hereof. Interest may be paid, at
      the
      option of the Company, in cash or in shares of common stock of the Company,
      par
      value $0.00004 per share (“Common
      Stock”),
      at a
      price per share of Common Stock equal to 80% of the average of the volume
      weighted average price of the Common Stock for the preceding five (5) days
      on
      which the Common Stock is traded on the trading market on which the Common
      Stock
      is then listed or quoted for trading (for example, the OTC Bulletin Board,
      Pink
      Sheets published by Pink Sheets, LLC, the American Stock Exchange, or the Nasdaq
      National Market) as reported by a generally accepted reporting service such
      as
      Bloomberg, LP. This Debenture is secured by a security interest in all of the
      assets of the Company as described more fully in that certain Security Agreement
      executed by the Company, the Holder and certain other parties thereto dated
      as
      of the date hereof.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    2. Prepayment.
      The
      Company may not prepay the Debenture in whole or in part prior to the Maturity
      Date without the prior written consent of the Holder, which may be given or
      withheld in Holder’s sole discretion.

     

    3. Conversion.

     

    3.1 Conversion
      Mechanics.
      Upon
      any conversion of this Debenture pursuant to Section 3.2, this Debenture will
      convert into the number of shares of Common Stock obtaining by dividing (x)
      that
      portion of the Face Amount being converted, and all accrued and unpaid interest
      thereon as of the date of conversion, by (y) $0.02 (the “Conversion
      Price”).
      The
      Conversion Price shall be subject to adjustment as set forth in Section 4
      below.

     

    3.2 Holder’s
      Option to Convert.
      The
      Holder shall have the right, but not the obligation, from time to time to
      convert all or any portion of the issued and outstanding Face Amount and accrued
      but unpaid interest thereon into fully paid and nonassessable shares of Common
      Stock at the Conversion Price.

     

    3.3 Mechanics
      of Holder’s Conversion.
      In the
      event that the Holder elects to convert all or any part of this Debenture into
      Common Stock, the Holder shall give notice of such election by delivering an
      executed and completed notice of conversion in substantially the form attached
      hereto as Exhibit
      A (the
      “Notice
      of Conversion”)
      to the
      Company on or before each Conversion Date (as defined below) and such Notice
      of
      Conversion shall provide a breakdown in reasonable detail the Face Amount and
      accrued but unpaid interest thereon that are being converted. In addition,
      concurrently with providing In addition, concurrently with providing the Notice
      of Conversion to the Company, and in accordance with its Notice of Conversion,
      the Holder shall make the appropriate reduction to the outstanding Face Amount
      and accrued and unpaid interest thereon as entered in its records and shall
      provide written notice of such adjustment to the Company. Each date on which
      a
      Notice of Conversion is delivered or telecopied to the Company in accordance
      with the provisions hereof shall be deemed a Conversion Date (the “Conversion
      Date”).
      Pursuant to the terms of the Notice of Conversion, the Company will issue,
      within two (2) business days following a Conversion Date, instructions to the
      transfer agent, accompanied by an opinion of counsel, to issue to the Holder
      certificates representing the Conversion Shares (as hereinafter defined) and
      shall cause the transfer agent to transmit the certificates representing the
      Conversion Shares to the Holder within five (5) business days thereafter. In
      the
      case of the exercise of the conversion rights set forth herein, the conversion
      privilege shall be deemed to have been exercised and the Conversion Shares
      issuable upon such conversion shall be deemed to have been issued upon the
      date
      of receipt by the Company of the Notice of Conversion. The Holder shall be
      treated for all purposes as the record holder of the Conversion Shares, unless
      the Holder provides the Company written instructions to the
      contrary.

     

    3.4 Reservation
      of Shares.
      During
      the period the conversion right exists, the Company will reserve from its
      authorized and unissued Common Stock a sufficient number of shares to provide
      for the issuance of Common Stock upon the conversion of all or any part of
      this
      Debenture (the “Conversion
      Shares”).

     

    3.5 No
      Fractional Shares.
      No
      fractional shares of Common Stock will be issued upon conversion of this
      Debenture. In lieu of any fractional shares to which the Holder would otherwise
      be entitled, the Company will pay the Holder in cash the amount of the
      unconverted Face Amount and accrued and unpaid interest, if any, that would
      otherwise be converted into such fractional shares.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    3.6 Release.
      Upon
      full conversion of this Debenture and payment of all cash amounts due to the
      Holder as provided in this Debenture, if any, the Company will forever be
      released from all of its payment obligations relating to the Face Amount of
      this
      Debenture and any accrued and unpaid interest thereon.

     

    4. Conversion
      Price Adjustment.
      The
      Conversion Price shall be subject to adjustment from time to time as
      follows:

     

    4.1 Subdivisions,
      Combinations and Other Issuances.
      If the
      Company shall at any time after the date hereof but prior to the Maturity Date
      subdivide its outstanding securities as to which purchase rights under this
      Debenture exist, by split-up or otherwise, or combine its outstanding securities
      as to which purchase rights under this Debenture exist, or declare a cash
      dividend, the number of Shares as to which this Debenture is convertible as
      of
      the date of such subdivision, split-up or combination shall forthwith be
      proportionately increased in the case of a subdivision or payment of a cash
      dividend, or proportionately decreased in the case of a combination. Appropriate
      adjustments shall also be made to the purchase price payable per Share, so
      that
      the aggregate purchase price payable for the total number of shares of Common
      Stock purchasable under this Debenture as of such date shall remain the
      same.

     

    4.2 Reclassification,
      Reorganization, Consolidation, Merger and Other Changes.
      In case
      of any reclassification, capital reorganization or change in the Common Stock
      of
      the Company (other than as a result of a subdivision, combination, or stock
      dividend provided for in Section 4.1), or consolidation or merger of the Company
      with or into another corporation, or the sale of all or substantially all of
      its
      assets to another corporation shall be effected in such a way that holders
      of
      the Company’s Common Stock shall be entitled to receive stock, securities or
      assets with respect to or in exchange for such Common Stock (a “Change”),
      then,
      as a condition of Change, lawful provision shall be made, and duly executed
      documents evidencing the same from the Company or its successor shall be
      delivered to the Holder, so that the Holder shall have the right at any time
      prior to the Maturity Date to receive upon conversion of this Debenture, the
      kind and amount of shares of stock and other securities and property receivable
      in connection with such Change that a holder of Common Stock would be entitled
      to receive in such Change. In any such case appropriate provisions shall be
      made
      with respect to the rights and interest of the Holder so that the provisions
      hereof shall thereafter be applicable with respect to any shares of stock or
      other securities and property deliverable upon conversion including adjustment
      of the Conversion Price.

     

    5. Registration.
      Pursuant
      to the terms and conditions of the Registration Rights Agreement to be executed
      as set forth in the Purchase Agreement, the Holder will have certain
      registration rights with respect to the Conversion Shares.

     

    6. Events
      of Default.
      

     

    6.1 An
      “Event
      of Default”,
      wherever used herein, means any one of the following events:

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (a) Any
      default in the payment of the principal of, interest on or other charges in
      respect of this Debenture, free of any claim of subordination, as and when
      the
      same shall become due and payable;

     

    (b) The
      Company shall fail to observe or perform any other covenant, agreement or
      warranty contained in, or otherwise commit any breach or default of any
      provision of this Debenture, the Purchase Agreement or the Security Agreement
      which is not cured with in the time prescribed;

     

    (c) The
      Company shall commence, or there shall be commenced against the Company under
      any applicable bankruptcy or insolvency laws, or the Company commences any
      other
      proceeding under any reorganization, arrangement, adjustment of debt, relief
      of
      debtors, dissolution, insolvency or liquidation or similar law of any
      jurisdiction relating to the Company or there is commenced against the Company
      any such bankruptcy, insolvency or other proceeding which remains undismissed
      for a period of 31 days; or the Company is adjudicated insolvent or
      bankrupt; or the Company makes a general assignment for the benefit of
      creditors; or the Company shall fail to pay its debts generally as they become
      due;

     

    (d) The
      Company shall default in any of its obligations under any other debenture or
      any
      mortgage, credit agreement or other facility, or other instrument under which
      there may be issued, or by which there may be secured or evidenced any
      indebtedness for borrowed money or money due under any long term leasing
      arrangement of the Company in an amount exceeding $100,000, whether such
      indebtedness now exists or shall hereafter be created and such default shall
      result in such indebtedness becoming or being declared due and payable prior
      to
      the date on which it would otherwise become due and payable; or

     

    (e) The
      Common Stock shall cease to be quoted for trading or listed for trading on
      either the Nasdaq OTC Bulletin Board (“OTC”),
      Nasdaq SmallCap Market, New York Stock Exchange, American Stock Exchange or
      the
      Nasdaq National Market and shall not again be quoted or listed for trading
      thereon within ten (10) trading days of such delisting.

     

    6.2 During
      the time that any portion of this Debenture is outstanding, if any Event of
      Default has occurred, the full principal amount of this Debenture, together
      with
      interest and other amounts owing in respect thereof, to the date of acceleration
      shall become at the Holder’s election, immediately due and payable in cash. In
      addition to any other remedies, the Holder shall have the right (but not the
      obligation) to convert this Debenture at any time after (x) an Event of
      Default or (y) the Maturity Date at the Conversion Price then in-effect.
      The Holder need not provide and the Company hereby waives any presentment,
      demand, protest or other notice of any kind.

     

    7. General
      Matters.

     

    7.1 Applicable
      Law; Venue.
      This
      Debenture shall be governed by the internal laws (and not the law of conflicts)
      of the State of New York.

     

    7.2 Fees
      and Expenses.
      In the
      event that any suit or action is instituted to enforce any provision under
      this
      Debenture, the prevailing party in such dispute shall be entitled to recover
      from the losing party all fees, costs and expenses of enforcing any right of
      such prevailing party under or with respect to this Agreement, including without
      limitation, such reasonable fees and expenses of attorneys and accountants,
      which shall include, without limitation, all fees, costs and expenses of
      appeals.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    7.3 Amendment
      or Waiver.
      Any
      term of this Debenture may be amended, and the observance of any term of this
      Debenture may be waived (either generally or in a particular instance and either
      retroactively or prospectively) only by the written consent of the
      Holder.

     

    7.4 Headings.
      The
      headings in this Debenture are for purposes of convenience of reference only,
      and shall not be deemed to constitute a part of this Debenture.

     

    7.5 Notices.
      All
      notices, requests, consents and other communications required or permitted
      hereunder shall be in writing (including telecopy or similar writing) and shall
      be sent to the address of the parties set forth below in this Section 7.5.
      Any
      notice, request, consent or other communication hereunder shall be deemed to
      have been given and received on the day on which it is delivered (by any means
      including personal delivery, overnight air courier, United States mail) or
      telecopied (or, if such day is not a business day or if the notice, request,
      consent or communication is not telecopied during business hours of the intended
      recipient, at the place of receipt, on the next following business day). Any
      of
      the parties hereto may, by notice given hereunder, designate any further or
      different address and/or number to which subsequent notices or other
      communications shall be sent. Unless and until such written notice is received,
      the addresses and numbers as provided herein shall be deemed to continue in
      effect for all purposes hereunder.

     

    Addresses
      for Notices to Company:

     

    Airbee
      Wireless, Inc.

    9400
      Key
      West Avenue

    Rockville,
      MD 20850

    Attention:
      Eugene Sharer, President

    Facsimile:
      (301) 517-186

     

    With
      copies to:

     

    Stradling
      Yocca Carlson & Rauth

    660
      Newport Center Drive

    Suite
      1600

    Newport
      Beach, California 92660

    Attention:
      Shivbir S. Grewal, Esq.

    Facsimile:
      (949) 725-4100

     

    and

     

    Allen
      & Associates LLC

    12400
      Wilshire Blvd Suite 1080

    Los
      Angeles, California 90025

    Facsimile:
      310 371-7272

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    Address
      for Notices to Holder:

     

    John
      W.
      Bartman and Thomas F. Bartman

    11777
      San
      Vicente Blvd Suite 600

    Los
      Angeles, California 90049

    Facsimile:
      310 826-8477

     

    With
      copies to:

     

    Samuel
      W.
      Halper, Esq.

    10866
      Wilshire Blvd., Suite 400

    Los
      Angeles, CA 90024

    Facsimile:
      424 901-8399

     

    and

     

    Allen
      & Associates LLC

    12400
      Wilshire Blvd Suite 1080

    Los
      Angeles, California 90025

    Facsimile:
      310 371-7272

     

    7.6 Usury
      Limitation.
      In no
      event shall the amount paid or agreed to be paid to the Holder for the use
      or
      forbearance of money to be advanced hereunder exceed the highest lawful rate
      permissible under the then applicable usury laws. If it is hereafter determined
      by a court of competent jurisdiction that the interest payable hereunder is
      in
      excess of the amount which the Holder may legally collect under the then
      applicable usury laws, such amount which would be excessive interest shall
      be
      applied to the payment of the unpaid principal balance due hereunder and not
      to
      the payment of interest or, if all principal shall previously have been paid,
      promptly repaid by the Holder to the Company.

     

    7.7 Severability.
      Every
      provision of this Debenture is intended to be severable. If any term or
      provision hereof is declared by a court of competent jurisdiction to be illegal
      or invalid, such illegal or invalid term or provision shall not affect the
      balance of the terms and provisions hereof, which terms and provisions shall
      remain binding and enforceable.

     

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Debenture to be executed as of
      the
      day and year first above written.

     

    
      	
              AIRBEE
                WIRELESS, INC.,

            
	
              a
                Delaware corporation

            
	 	 
	
              By:

            	
              /s/
                E. Eugene Sharer

            
	
              Name:
                

            	
              E.
                Eugene Sharer

            
	
              Title:
                

            	
              President

            

    

     

     

    Signature
      Page to Debenture ABEW2008 - I -

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    NOTICE
      OF
      CONVERSION

     

    (To
      be
      executed by the Holder in order to convert all or part of the 12% Convertible
      Debenture)

     

    Airbee
      Wireless, Inc.

     

    9400
      Key
      West Avenue

     

    Rockville,
      Maryland 20850

     

    Attention:
      E. Eugene Sharer, President

     

    The
      undersigned hereby converts $ ______________ of the Face Amount and accrued
      and
      unpaid interest due and payable on January 31, 2010 under that certain 12%
      Secured Convertible Debenture dated as of January 31, 2008 (the “Debenture”),
      into the number of shares of Common Stock of the Company set forth below
      (“Shares”) on and subject to the conditions set forth in the
      Debenture.

     

    
      	
              Date
                of Conversion

            	 	 
	 	 	 
	
              Shares
                to be Delivered

            	 	 

    

     

    
      	
              [HOLDER]

            
	 	 
	
              By:
                

            	 
	
              Name:
                

            	 
	
              Title:
                

            	 

    

    

    
      
         

      

      
        A-1

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