Document:

EXHIBIT 4.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THIS  SECURITY  MAY BE PLEDGED IN  CONNECTION  WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: December 15, 2004

                                                                     $275,000.00

             12% SENIOR SUBORDINATED SECURED NOTE DUE JUNE 15, 2005

      THIS NOTE is one of a series of duly  authorized  and  issued  12%  Senior
Subordinated Secured Notes of Knobias,  Inc., a Delaware  corporation,  having a
principal  place of business at 875 Northpark  Drive,  Ridgeland,  MS 39157 (the
"Company"), designated as its 12% Senior Subordinated Secured Note, due June 15,
2005 (the "Note(s)").

      FOR VALUE RECEIVED, the Company promises to pay to DCOFI MASTER LDC or its
registered assigns (the "Holder"),  the principal sum of $275,000.00 on June 15,
2005 or such earlier date as the Notes are required or permitted to be repaid as
provided  hereunder (the "Maturity Date"),  and to pay interest to the Holder on
the aggregate  unconverted and then outstanding principal amount of this Note in
accordance  with the  provisions  hereof.  This Note is subject to the following
additional provisions:

      Section 1. Definitions.  For the purposes hereof, in addition to the terms
defined  elsewhere in this Note:  (a)  capitalized  terms not otherwise  defined
herein have the meanings given to such terms in the Purchase Agreement,  and (b)
the following terms shall have the following meanings:

            "Alternate  Consideration"  shall  have  the  meaning  set  forth in
      Section 4(c).

            "Balance"  means the difference  between  $500,000 and the aggregate
      amount of the Company's 12% Secured Notes due June 15, 2005 outstanding.

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            "Business  Day"  means any day except  Saturday,  Sunday and any day
      which shall be a federal  legal  holiday in the United  States or a day on
      which  banking  institutions  in the State of New York are  authorized  or
      required by law or other government action to close.

            "Change of Control  Transaction"  means the occurrence of any of (i)
      an  acquisition  after the date hereof by an individual or legal entity or
      "group" (as described in Rule 13d-5(b)(1)  promulgated  under the Exchange
      Act) of effective  control (whether through legal or beneficial  ownership
      of capital stock of the Company, by contract or otherwise) of in excess of
      33% of the voting securities of the Company,  or (ii) a replacement at one
      time or within a three year period of more than one-half of the members of
      the  Company's  board of directors  which is not approved by a majority of
      those  individuals  who are members of the board of  directors on the date
      hereof (or by those individuals who are serving as members of the board of
      directors  on any date  whose  nomination  to the board of  directors  was
      approved by a majority of the  members of the board of  directors  who are
      members on the date  hereof),  or (iii) the execution by the Company of an
      agreement  to which  the  Company  is a party  or by  which  it is  bound,
      providing for any of the events set forth above in (i) or (ii).

            "Common  Stock"  means the common  stock,  $ .01 par  value,  of the
      Company and stock of any other class into which such shares may  hereafter
      have been reclassified or changed.

            "Event of Default" shall have the meaning set forth in Section 8.

            "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
      amended.

            "Fundamental  Transaction"  shall  have  the  meaning  set  forth in
      Section 4(c) hereof.

            "Late Fees" shall have the meaning set forth in the second paragraph
      to this Note.

            "Mandatory  Prepayment  Amount" for any Notes shall equal the sum of
      (i) (A) 100% of the  principal  amount  of Notes to be  prepaid,  plus all
      accrued and unpaid interest  thereon if such prepayment  shall occur on or
      before ninety (90) days from the date hereof, or (B) 105% of the principal
      amount  of Notes to be  prepaid,  plus all  accrued  and  unpaid  interest
      thereon if such  prepayment  shall occur  after  ninety (90) days from the
      date  hereof and prior to the  Maturity  Date and (ii) all other  amounts,
      costs, expenses and liquidated damages due in respect of such Notes.

            "Original  Issue Date" shall mean the date of the first  issuance of
      the Notes regardless of the number of transfers of any Note and regardless
      of the number of instruments which may be issued to evidence such Note.

            "Penalty  Shares"  means 100,000  shares of registered  Common Stock
      issuable to the Holder in accordance with the terms herein.

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            "Person"  means  a  corporation,   an  association,  a  partnership,
      organization,  a  business,  an  individual,  a  government  or  political
      subdivision thereof or a governmental agency.

            "Purchase Agreement" means the Securities Purchase Agreement,  dated
      as of December 15, 2004, to which the Company and the original  Holder are
      parties,  as  amended,  modified  or  supplemented  from  time  to time in
      accordance with its terms.

            "Securities  Act" means the Securities Act of 1933, as amended,  and
      the rules and regulations promulgated thereunder.

            "Subsidiary"  shall  have  the  meaning  given  to such  term in the
      Purchase Agreement.

            "Trading  Day" means a day on which the Common  Stock is traded on a
      Trading Market.

            "Trading  Market" means the following  markets or exchanges on which
      the Common  Stock is listed or quoted for trading on the date in question:
      the Nasdaq  SmallCap  Market,  the American Stock  Exchange,  the New York
      Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

            "Transaction  Documents"  shall  have the  meaning  set forth in the
      Purchase Agreement.

      Section 2. Interest and Prepayments.

            a) Payment of Interest in Cash.  The Company  shall pay  interest to
      the Holder on the aggregate and outstanding  principal amount of this Note
      at the rate of 12% per annum,  payable monthly in cash on the first day of
      each month, beginning on the first such date after the Original Issue Date
      and on the Maturity  Date (except that, if any such date is not a Business
      Day, then such payment shall be due on the next succeeding Business Day).

            b) Payment of Unused Line Fee.  The Company  shall pay a fee in cash
      to the Holder equal to 4% per annum on the Balance  until such time as the
      Purchaser  delivers the Balance to the Company.  This fee shall be payable
      monthly on the first day of each month,  beginning  on the first such date
      after the Original  Issue Date and on the Maturity  Date (except  that, if
      any such date is not a Business Day, then such payment shall be due on the
      next succeeding Business Day).

            c) Late Fee.  All  overdue  accrued  and unpaid  interest to be paid
      hereunder  shall  entail a late fee at the rate of 20% per  annum (or such
      lower maximum amount of interest  permitted to be charged under applicable
      law) ("Late Fee") which will accrue daily,  from the date such interest is
      due hereunder through and including the date of payment.

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            d) Optional Prepayment.  The Company shall have the right to prepay,
      in  cash,  all or a  portion  of the  Notes  for an  amount  equal to such
      percentage  of the  principal  amount to be repaid as set forth in (i) and
      (ii) below, plus all accrued and unpaid interest thereon:

                  (i) In the event  that the Notes  are  prepaid  on or prior to
      ninety (90) days from the date hereof, the prepayment shall be 100%.

                  (ii) In the event  that the Notes are  prepaid  after o ninety
      (90) days from the date hereof, the prepayment shall be 105%.

            e)  Mandatory  Prepayment.  In the  event  that the  Company  or its
      Subsidiaries  sell  debt or  equity  securities  of any kind  and  receive
      proceeds in excess of $2,000,000 from such sale (regardless of whether the
      proceeds are received through one or more transactions),  upon the closing
      of any such transaction,  the Company shall be required to repay, in cash,
      all of the Notes in such  percentages as set forth in Sections 2(d)(i) and
      (ii) above, plus all accrued and unpaid interest thereon.

      Section 3. Registration of Transfers and Exchanges.

            a) Different  Denominations.  This Note is exchangeable for an equal
      aggregate principal amount of Notes of different authorized denominations,
      as requested by the Holder  surrendering  the same. No service charge will
      be made for such registration of transfer or exchange.

            b) Investment Representations.  This Note has been issued subject to
      certain investment representations of the original Holder set forth in the
      Purchase  Agreement and may be transferred or exchanged only in compliance
      with the Purchase  Agreement and applicable  federal and state  securities
      laws and regulations.

            c)  Reliance  on Note  Register.  Prior  to due  presentment  to the
      Company  for  transfer  of this  Note,  the  Company  and any agent of the
      Company may treat the Person in whose name this Note is duly registered on
      the Note Register as the owner hereof for the purpose of receiving payment
      as herein provided and for all other purposes, whether or not this Note is
      overdue,  and  neither the Company nor any such agent shall be affected by
      notice to the contrary.

      Section 4. Certain Adjustments.

            a) Stock  Dividends  and Stock Splits.  If the Company,  at any time
      while the  Notes  are  outstanding:  (A)  shall  pay a stock  dividend  or
      otherwise make a  distribution  or  distributions  on shares of its Common
      Stock or any other  equity  or equity  equivalent  securities  payable  in
      shares of Common Stock, (B) subdivide  outstanding  shares of Common Stock
      into a larger number of shares,  (C) combine  (including by way of reverse
      stock split)  outstanding  shares of Common Stock into a smaller number of
      shares, or (D) issue by reclassification of shares of the Common Stock any
      shares of capital stock of the Company,  then the Penalty  Shares shall be
      adjusted  accordingly.  Any adjustment made pursuant to this Section shall
      become effective  immediately  after the record date for the determination
      of  stockholders  entitled to receive such  dividend or  distribution  and
      shall become effective immediately after the effective date in the case of
      a subdivision, combination or re-classification.

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<PAGE>

            b) Calculations. All calculations under this Section 4 shall be made
      to the nearest cent or the nearest 1/100th of a share, as the case may be.
      The number of shares of Common Stock  outstanding  at any given time shall
      not include  shares of Common Stock owned or held by or for the account of
      the Company,  and the description of any such shares of Common Stock shall
      be  considered  one issue or sale of Common  Stock.  For  purposes of this
      Section  4, the number of shares of Common  Stock  deemed to be issued and
      outstanding as of a given date shall be the sum of the number of shares of
      Common Stock (excluding treasury shares, if any) issued and outstanding.

            c)  Fundamental  Transaction.  If,  at any time  while  this Note is
      outstanding,  (A) the Company effects any merger or  consolidation  of the
      Company  with or into  another  Person,  other  than the  Merger,  (B) the
      Company effects any sale of all or substantially  all of its assets in one
      or a series of  related  transactions,  (C) any tender  offer or  exchange
      offer (whether by the Company or another Person) is completed  pursuant to
      which  holders of Common Stock are  permitted to tender or exchange  their
      shares for other securities,  cash or property, or (D) the Company effects
      any  reclassification of the Common Stock or any compulsory share exchange
      pursuant  to which  the  Common  Stock is  effectively  converted  into or
      exchanged  for other  securities,  cash or property  (in any such case,  a
      "Fundamental Transaction"),  then upon issuance of the Penalty Shares, the
      Holder shall have the right to receive,  for each Penalty Share that would
      have been issuable absent such Fundamental Transaction,  the same kind and
      amount of  securities,  cash or property as it would have been entitled to
      receive upon the  occurrence  of such  Fundamental  Transaction  if it had
      been, immediately prior to such Fundamental Transaction, the holder of one
      share of Common  Stock  (the  "Alternate  Consideration").  If  holders of
      Common Stock are given any choice as to the  securities,  cash or property
      to be  received in a  Fundamental  Transaction,  then the Holder  shall be
      given the same choice as to the Alternate  Consideration  it receives upon
      issuance of the Penalty Shares following such Fundamental Transaction.  To
      the extent necessary to effectuate the foregoing provisions, any successor
      to the Company or surviving entity in such Fundamental  Transaction  shall
      issue to the Holder a new note consistent  with the foregoing  provisions.
      The terms of any agreement pursuant to which a Fundamental  Transaction is
      effected  shall  include terms  requiring any such  successor or surviving
      entity to comply with the  provisions  of this  paragraph (c) and insuring
      that  this  Note  (or any such  replacement  security)  will be  similarly
      adjusted  upon  any  subsequent  transaction  analogous  to a  Fundamental
      Transaction.

      Section 6.  Penalty  Share  Issuance.  In addition to all of the  remedies
available to the Holder  pursuant to Section 8, in the event that the  principal
amount of the Note, together with all accrued, but unpaid,  interest is not paid
within two (2) Trading Days of the Maturity  Date,  the Company  shall issue the
Penalty Shares to the Holder.

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      Section  7.  Negative  Covenants.  So long as any  portion of this Note is
outstanding, the Company will not and will not permit any of its Subsidiaries to
directly or indirectly:

            a) enter  into,  create,  incur,  assume  or  suffer  to  exist  any
      indebtedness  or  liens  of any  kind,  on or with  respect  to any of its
      property or assets now owned or hereafter acquired or any interest therein
      or any income or profits  therefrom that is senior to, or pari passu with,
      in any respect,  the Company's  obligations  under the Notes;

            b) amend its certificate of  incorporation,  bylaws or other charter
      documents so as to adversely affect any rights of the Holder;

            c) repay,  repurchase  or offer to repay,  repurchase  or  otherwise
      acquire  any of  its  Common  Stock,  Preferred  Stock,  or  other  equity
      securities; or

            d) enter into any agreement with respect to any of the foregoing.

      Section 8. Events of Default.

            a) "Event of Default",  wherever  used herein,  means any one of the
      following events (whatever the reason and whether it shall be voluntary or
      involuntary  or effected by operation of law or pursuant to any  judgment,
      decree or order of any court,  or any  order,  rule or  regulation  of any
      administrative or governmental body):

                  i. any default in the payment of (A) the  principal  of amount
            of any Note, or (B) interest (including Late Fees) on, or damages in
            respect   of,  any  Note,   in  each  case  free  of  any  claim  of
            subordination,  as and when the same shall  become  due and  payable
            (whether on the Maturity Date or by acceleration or otherwise) which
            default,  solely in the case of an interest payment or other default
            under clause (B) above, is not cured, within 2 Trading Days;

                  ii. the  Company  shall  fail to observe or perform  any other
            covenant  or  agreement  contained  in this Note or any of the other
            Transaction  Documents  which  failure is not cured,  if possible to
            cure, within the earlier to occur of (A) 5 Trading Days after notice
            of such default sent by the Holder or by any other Holder and (B) 10
            Trading  Days after the Company  shall  become or should have become
            aware of such failure;

                  iii. a default or event of  default  (subject  to any grace or
            cure period  provided for in the applicable  agreement,  document or
            instrument)  shall occur under (A) any of the Transaction  Documents
            other than the Notes,  or (B) any other material  agreement,  lease,
            document or  instrument  to which the Company or any  Subsidiary  is
            bound;

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                  iv. any  representation  or warranty made herein, in any other
            Transaction  Document,  in any written statement  pursuant hereto or
            thereto, or in any other report,  financial statement or certificate
            made or  delivered  to the Holder or any other holder of Notes shall
            be untrue or incorrect  in any material  respect as of the date when
            made or deemed made;

                  v. (i) the Company or any of its Subsidiaries  shall commence,
            or  there  shall  be  commenced  against  the  Company  or any  such
            Subsidiary,  a case under any  applicable  bankruptcy  or insolvency
            laws as now or hereafter in effect or any successor thereto,  or the
            Company or any Subsidiary  commences any other  proceeding under any
            reorganization,  arrangement, adjustment of debt, relief of debtors,
            dissolution,  insolvency  or  liquidation  or  similar  law  of  any
            jurisdiction  whether  now or  hereafter  in effect  relating to the
            Company or any Subsidiary thereof or (ii) there is commenced against
            the  Company  or  any  Subsidiary   thereof  any  such   bankruptcy,
            insolvency  or other  proceeding  which  remains  undismissed  for a
            period of 60 days; or (iii) the Company or any Subsidiary thereof is
            adjudicated  by a  court  of  competent  jurisdiction  insolvent  or
            bankrupt;  or any order of relief or other order  approving any such
            case or proceeding is entered; or (iv) the Company or any Subsidiary
            thereof  suffers any appointment of any custodian or the like for it
            or any substantial part of its property which continues undischarged
            or  unstayed  for a period  of 60 days;  or (v) the  Company  or any
            Subsidiary  thereof  makes a general  assignment  for the benefit of
            creditors;  or (vi) the  Company  shall fail to pay,  or shall state
            that it is  unable  to pay,  or shall be  unable  to pay,  its debts
            generally as they become due; or (vii) the Company or any Subsidiary
            thereof  shall  call a  meeting  of  its  creditors  with a view  to
            arranging a composition,  adjustment or  restructuring of its debts;
            or (viii) the Company or any Subsidiary  thereof shall by any act or
            failure to act  expressly  indicate  its consent to,  approval of or
            acquiescence in any of the foregoing; or (ix) any corporate or other
            action is taken by the  Company or any  Subsidiary  thereof  for the
            purpose of effecting any of the foregoing;

                  vi. the Company or any Subsidiary  shall default in any of its
            obligations under any mortgage,  credit agreement or other facility,
            indenture  agreement,  factoring agreement 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 or  factoring  arrangement  of the  Company in an
            amount exceeding  $150,000,  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;

                  vii. the Common  Stock shall not be eligible for  quotation on
            or quoted  for  trading  on a Trading  Market and shall not again be
            eligible  for and quoted or listed for trading  thereon  within five
            Trading Days;

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                  viii.  the  Company  shall be a party to any Change of Control
            Transaction  or  Fundamental  Transaction,  shall  agree  to sell or
            dispose  of all or in  excess  of 33% of its  assets  in one or more
            transactions  (whether or not such sale would constitute a Change of
            Control  Transaction)  or shall redeem or repurchase  more than a de
            minimis  number of its  outstanding  shares of Common Stock or other
            equity  securities of the Company (other than  repurchases of shares
            of Common Stock or other equity securities of departing officers and
            directors of the Company; provided such repurchases shall not exceed
            $100,000,  in the aggregate,  for all officers and directors  during
            the term of this Note);

            b) Remedies Upon Event of Default.  If any Event of Default  occurs,
      the full principal  amount of this Note,  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. The
      aggregate  amount  payable upon an Event of Default  shall be equal to the
      Mandatory Prepayment Amount. Commencing 5 days after the occurrence of any
      Event of Default that results in the eventual  acceleration  of this Note,
      the interest  rate on this Note shall accrue at the rate of 20% per annum,
      or such lower  maximum  amount of interest  permitted to be charged  under
      applicable law. All Notes for which the full Mandatory  Prepayment  Amount
      hereunder  shall have been paid in accordance  herewith  shall promptly be
      surrendered to or as directed by the Company.  The Holder need not provide
      and the Company hereby waives any  presentment,  demand,  protest or other
      notice of any kind, and the Holder may immediately and without  expiration
      of any  grace  period  enforce  any and  all of its  rights  and  remedies
      hereunder and all other  remedies  available to it under  applicable  law.
      Such declaration may be rescinded and annulled by Holder at any time prior
      to payment hereunder and the Holder shall have all rights as a Note holder
      until such time, if any, as the full payment under this Section shall have
      been  received by it. No such  rescission  or  annulment  shall affect any
      subsequent Event of Default or impair any right consequent thereon.

      Section 9. Miscellaneous.

            a)  Notices.   Any  and  all  notices  or  other  communications  or
      deliveries to be provided by the Holders hereunder shall be in writing and
      delivered  personally,  by  facsimile,  sent  by a  nationally  recognized
      overnight  courier service,  addressed to the Company,  at the address set
      forth  above,  facsimile  number  (601)  978-3675,  ATTN:  E. KEY  RAMSEY,
      PRESIDENT,  or such other  address or facsimile  number as the Company may
      specify for such purposes by notice to the Holders delivered in accordance
      with  this  Section.  Any and  all  notices  or  other  communications  or
      deliveries to be provided by the Company hereunder shall be in writing and
      delivered  personally,  by  facsimile,  sent  by a  nationally  recognized
      overnight  courier  service  addressed  to each  Holder  at the  facsimile
      telephone  number or address of such Holder  appearing on the books of the
      Company,  or if no such facsimile  telephone number or address appears, at
      the  principal  place of  business  of the  Holder.  Any  notice  or other
      communication or deliveries  hereunder shall be deemed given and effective
      on the  earliest  of (i) the  date of  transmission,  if  such  notice  or
      communication is delivered via facsimile at the facsimile telephone number
      specified in this Section  prior to 5:30 p.m.  (New York City time),  (ii)
      the date after the date of  transmission,  if such notice or communication
      is delivered via facsimile at the facsimile  telephone number specified in
      this  Section  later  than 5:30 p.m.  (New York City time) on any date and
      earlier  than  11:59 p.m.  (New York City  time) on such  date,  (iii) the
      second  Business Day following the date of mailing,  if sent by nationally
      recognized  overnight courier service,  or (iv) upon actual receipt by the
      party to whom such notice is required to be given.

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            b) Absolute  Obligation.  Except as expressly  provided  herein,  no
      provision  of this  Note  shall  alter or  impair  the  obligation  of the
      Company,  which is absolute and  unconditional,  to pay the  principal of,
      interest and liquidated damages (if any) on, this Note at the time, place,
      and rate, and in the coin or currency,  herein prescribed.  This Note is a
      direct debt obligation of the Company. This Note ranks pari passu with all
      other Notes now or hereafter issued under the terms set forth herein

            c) Lost or Mutilated  Note. If this Note shall be  mutilated,  lost,
      stolen or destroyed,  the Company  shall execute and deliver,  in exchange
      and substitution for and upon cancellation of a mutilated Note, or in lieu
      of or in substitution for a lost, stolen or destroyed Note, a new Note for
      the principal amount of this Note so mutilated,  lost, stolen or destroyed
      but only upon receipt of evidence of such loss,  theft or  destruction  of
      such Note, and of the ownership hereof, and indemnity,  if requested,  all
      reasonably satisfactory to the Company.

            d)  Security  Interest/Subordination.  This  Note is a  direct  debt
      obligation  of the Company  and,  pursuant to the  Security  Agreement  is
      secured by a second  priority  perfected  security  interest in all of the
      assets of the Company for the benefit of the Holders.  The  obligations of
      the  Company to the Holders  are  subordinated  in right of payment to the
      obligations  owing to the  holders of the 8% Senior  Subordinated  Secured
      Convertible Notes of the Company.

            e)  Governing  Law.  All  questions   concerning  the  construction,
      validity, enforcement and interpretation of this Note shall be governed by
      and  construed  and enforced in  accordance  with the internal laws of the
      State of New York,  without  regard to the  principles of conflicts of law
      thereof.  Each party  agrees  that all legal  proceedings  concerning  the
      interpretations,  enforcement and defense of the transactions contemplated
      by any of the  Transaction  Documents  (whether  brought  against  a party
      hereto or its respective affiliates,  directors,  officers,  shareholders,
      employees or agents)  shall be  commenced in the state and federal  courts
      sitting  in the City of New  York,  Borough  of  Manhattan  (the "New York
      Courts").  Each party hereto hereby  irrevocably  submits to the exclusive
      jurisdiction  of the New York Courts for the  adjudication  of any dispute
      hereunder or in connection  herewith or with any transaction  contemplated
      hereby or discussed  herein  (including with respect to the enforcement of
      any of the Transaction  Documents),  and hereby  irrevocably  waives,  and
      agrees not to assert in any suit, action or proceeding,  any claim that it
      is not personally  subject to the  jurisdiction of any such court, or such
      New York Courts are improper or  inconvenient  venue for such  proceeding.
      Each party  hereby  irrevocably  waives  personal  service of process  and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy  thereof via  registered  or  certified  mail or  overnight
      delivery  (with  evidence  of  delivery)  to such party at the  address in
      effect for  notices to it under  this Note and  agrees  that such  service
      shall  constitute  good and  sufficient  service  of  process  and  notice
      thereof.  Nothing contained herein shall be deemed to limit in any way any
      right to serve  process in any manner  permitted by law. Each party hereto
      hereby  irrevocably  waives, to the fullest extent permitted by applicable
      law,  any and all right to trial by jury in any legal  proceeding  arising
      out of or relating to this Note or the transactions  contemplated  hereby.
      If either  party  shall  commence an action or  proceeding  to enforce any
      provisions  of this  Note,  then the  prevailing  party in such  action or
      proceeding  shall be reimbursed by the other party for its attorneys  fees
      and other costs and expenses incurred with the investigation,  preparation
      and prosecution of such action or proceeding.

                                       9
<PAGE>

            f) Waiver.  Any  waiver by the  Company or the Holder of a breach of
      any  provision  of this Note shall not operate as or be  construed to be a
      waiver of any other breach of such provision or of any breach of any other
      provision of this Note. The failure of the Company or the Holder to insist
      upon strict  adherence  to any term of this Note on one or more  occasions
      shall  not be  considered  a waiver  or  deprive  that  party of the right
      thereafter to insist upon strict  adherence to that term or any other term
      of this Note. Any waiver must be in writing.

            g) Severability.  If any provision of this Note is invalid,  illegal
      or unenforceable,  the balance of this Note shall remain in effect, and if
      any  provision is  inapplicable  to any person or  circumstance,  it shall
      nevertheless remain applicable to all other persons and circumstances.  If
      it shall be found that any  interest or other amount  deemed  interest due
      hereunder violates applicable laws governing usury, the applicable rate of
      interest due hereunder shall automatically be lowered to equal the maximum
      permitted rate of interest.  The Company  covenants (to the extent that it
      may lawfully do so) that it shall not at any time insist upon,  plead,  or
      in any manner  whatsoever  claim or take the benefit or advantage  of, any
      stay,  extension or usury law or other law which would prohibit or forgive
      the Company from paying all or any portion of the principal of or interest
      on this Note as contemplated herein,  wherever enacted, now or at any time
      hereafter in force,  or which may affect the covenants or the  performance
      of this  indenture,  and the Company (to the extent it may lawfully do so)
      hereby  expressly  waives all  benefits or  advantage of any such law, and
      covenants  that it will not, by resort to any such law,  hinder,  delay or
      impeded the execution of any power herein granted to the Holder,  but will
      suffer and permit  the  execution  of every such as though no such law has
      been enacted.

            h) Next  Business  Day.  Whenever  any  payment or other  obligation
      hereunder  shall be due on a day other than a Business  Day,  such payment
      shall be made on the next succeeding Business Day.

            i) Headings. The headings contained herein are for convenience only,
      do not  constitute a part of this Note and shall not be deemed to limit or
      affect any of the provisions hereof.

                              *********************

                                       10
<PAGE>

      IN WITNESS  WHEREOF,  the Company has caused this Note to be duly executed
by a duly authorized officer as of the date first above indicated.

                                          KNOBIAS, INC.

                                          /s/ E. KEY RAMSEY
                                          -----------------
                                          E. Key Ramsey, President

                                       11EXHIBIT 4.3

                               SECURITY AGREEMENT

      SECURITY  AGREEMENT,  dated as of December  15,  2004 (this  "Agreement"),
among Knobias,  Inc., a Delaware corporation (the "Company" or the "Debtor") and
the holder or holders of the Company's 12% Senior Subordinated Secured Notes due
June 15, 2005 in the aggregate principal amount of up to $500,000 (the "Notes"),
signatory  hereto,  their  endorsees,   transferees  and  assigns  (collectively
referred to as, the "Secured Parties").

                              W I T N E S S E T H:

      WHEREAS,  pursuant to the Notes, the Secured Parties have severally agreed
to extend the loans to the Company evidenced by the Notes; and

      WHEREAS,  in order to induce  the  Secured  Parties  to  extend  the loans
evidenced  by the Notes,  the Debtor  has agreed to execute  and  deliver to the
Secured Parties this Agreement and to grant the Secured Parties, pari passu with
each other Secured Party, but subject to the liens granted to the holders of the
8%  Secured  Convertible  Notes of the  Company  due  November  1, 2006 (the "8%
Convertible  Notes") a second priority  perfected  security  interest in certain
property of such Debtor to secure the prompt payment,  performance and discharge
in full of all of the Company's obligations under the Notes.

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

      1. CERTAIN  DEFINITIONS.  As used in this  Agreement,  the following terms
shall  have  the  meanings  set  forth in this  Section  1.  Terms  used but not
otherwise  defined in this  Agreement  that are  defined in Article 9 of the UCC
(such as "account", "chattel paper", "commercial tort claim", "deposit account",
"document",    "equipment",    "fixtures",   "general   intangibles",   "goods",
"instruments",  "inventory",  "investment property",  "letter-of-credit rights",
"proceeds" and  "supporting  obligations")  shall have the  respective  meanings
given such terms in Article 9 of the UCC.

            (a)  "Collateral"  means the collateral in which the Secured Parties
      are granted a security  interest by this Agreement and which shall include
      the following personal property of the Debtors, whether presently owned or
      existing  or  hereafter  acquired  or  coming  into  existence,   wherever
      situated,  and all additions and accessions  thereto and all substitutions
      and replacements thereof, and all proceeds, products and accounts thereof,
      including,  without limitation,  all proceeds from the sale or transfer of
      the Collateral  and of insurance  covering the same and of any tort claims
      in  connection  therewith,  and  all  dividends,  interest,  cash,  notes,
      securities, equity interest or other property at any time and from time to
      time  acquired,  receivable or otherwise  distributed in respect of, or in
      exchange for, any or all of the Pledged Securities (as defined below):

                                       1
<PAGE>

                  (i)  All  goods,  including,   without  limitations,  (A)  all
            machinery,  equipment,  computers,  motor vehicles,  trucks,  tanks,
            boats,  ships,  appliances,  furniture,  special and general  tools,
            fixtures,  test and quality  control  devices and other equipment of
            every kind and  nature  and  wherever  situated,  together  with all
            documents  of  title  and  documents   representing  the  same,  all
            additions and accessions thereto,  replacements  therefor, all parts
            therefor, and all substitutes for any of the foregoing and all other
            items used and useful in connection with any Debtor's businesses and
            all improvements thereto; and (B) all inventory;

                  (ii)  All  contract  rights  and  other  general  intangibles,
            including, without limitation, all partnership interests, membership
            interests,  stock  or  other  securities,  rights  under  any of the
            Organizational   Documents,   agreements   related  to  the  Pledged
            Securities,  licenses,  distribution and other agreements,  computer
            software (whether "off-the-shelf",  licensed from any third party or
            developed  by any Debtor),  computer  software  development  rights,
            leases,  franchises,  customer lists,  quality  control  procedures,
            grants  and  rights,  goodwill,  trademarks,  service  marks,  trade
            styles,  trade  names,  patents,  patent  applications,  copyrights,
            Intellectual Property, and income tax refunds;

                  (iii)  All  accounts,  together  with  all  instruments,   all
            documents of title representing any of the foregoing,  all rights in
            any merchandising, goods, equipment, motor vehicles and trucks which
            any of the same may represent,  and all right,  title,  security and
            guaranties  with  respect to each  account,  including  any right of
            stoppage in transit;

                  (iv) All documents,  letter-of-credit rights,  instruments and
            chattel paper;

                  (v) All commercial tort claims;

                  (vi)  All  deposit  accounts  and  all  cash  (whether  or not
            deposited in such deposit accounts);

                  (vii) All investment property;

                  (viii) All supporting obligations; and

                  (ix) All files,  records,  books of account,  business papers,
            and computer programs; and

                                       2
<PAGE>

                  (x)  the  products  and  proceeds  of  all  of  the  foregoing
            Collateral set forth in clauses (i)-(ix) above.

                  Without   limiting  the  generality  of  the  foregoing,   the
            "Collateral"  shall  include  all  investment  property  and general
            intangibles  respecting  ownership  and/or other equity interests in
            each  Subsidiary,  including,  without  limitation,  the  shares  of
            capital  stock and the other equity  interests  listed on Schedule H
            hereto (as the same may be  modified  from time to time  pursuant to
            the terms  hereof),  and any other  shares of capital  stock  and/or
            other equity interests of any other direct or indirect subsidiary of
            any  Debtor  obtained  in  the  future,   and,  in  each  case,  all
            certificates  representing  such shares and/or equity interests and,
            in each case, all rights, options, warrants, stock, other securities
            and/or equity  interests that may hereafter be received,  receivable
            or distributed in respect of, or exchanged for, any of the foregoing
            (all of the  foregoing  being  referred  to herein  as the  "Pledged
            Securities")  and all rights arising under or in connection with the
            Pledged  Securities,  including,  but not limited to, all dividends,
            interest and cash.

                  Notwithstanding the foregoing,  nothing herein shall be deemed
            to constitute  an assignment of any asset which,  in the event of an
            assignment,  becomes  void by  operation  of  applicable  law or the
            assignment of which is otherwise  prohibited  by applicable  law (in
            each case to the extent that such  applicable  law is not overridden
            by Sections  9-406,  9-407 and/or 9-408 of the UCC or other  similar
            applicable law); provided,  however, that to the extent permitted by
            applicable  law,  this  Agreement  shall  create  a  valid  security
            interest in such asset and, to the extent  permitted  by  applicable
            law, this Agreement  shall create a valid  security  interest in the
            proceeds of such asset.

            (b)  "Intellectual  Property" means the collective  reference to all
      rights,  priorities  and  privileges  relating to  intellectual  property,
      whether  arising  under United  States,  multinational  or foreign laws or
      otherwise, including, without limitation, (i) all copyrights arising under
      the  laws  of the  United  States,  any  other  country  or any  political
      subdivision  thereof,  whether  registered  or  unregistered  and  whether
      published or unpublished,  all registrations and recordings  thereof,  and
      all applications in connection therewith,  including,  without limitation,
      all  registrations,  recordings  and  applications  in the  United  States
      Copyright Office,  (ii) all letters patent of the United States, any other
      country or any political  subdivision thereof, all reissues and extensions
      thereof,  and all  applications for letters patent of the United States or
      any    other    country    and   all    divisions,    continuations    and
      continuations-in-part   thereof,   (iii)  all  trademarks,   trade  names,
      corporate names, company names, business names, fictitious business names,
      trade  dress,  service  marks,  logos,  domain  names and other  source or
      business identifiers,  and all goodwill associated therewith, now existing
      or  hereafter  adopted  or  acquired,  all  registrations  and  recordings
      thereof,  and all  applications  in connection  therewith,  whether in the
      United  States  Patent and  Trademark  Office or in any similar  office or
      agency of the United States, any State thereof or any other country or any
      political  subdivision  thereof,  or otherwise,  and all common law rights
      related  thereto,  (iv) all trade  secrets  arising  under the laws of the
      United States, any other country or any political subdivision thereof, (v)
      all  rights  to  obtain  any  reissues,  renewals  or  extensions  of  the
      foregoing,  (vi) all  licenses  for any of the  foregoing,  and  (vii) all
      causes of action for infringement of the foregoing.

                                       3
<PAGE>

            (c) "Majority in Interest" shall mean, at any time of determination,
      the majority in interest (based on  then-outstanding  principal amounts of
      Notes at the time of such determination) of the Secured Parties.

            (d) "Necessary Endorsement" shall mean undated stock powers endorsed
      in blank or other proper  instruments of assignment duly executed and such
      other  instruments  or  documents  as the Secured  Parties may  reasonably
      request.

            (e) "Obligations"  means all of the Debtors'  obligations under this
      Agreement,  the  Notes  and any  other  instruments,  agreements  or other
      documents  executed and/or delivered in connection  herewith or therewith,
      in each case, whether now or hereafter existing, voluntary or involuntary,
      direct or indirect,  absolute or contingent,  liquidated or  unliquidated,
      whether or not jointly owed with  others,  and whether or not from time to
      time decreased or extinguished and later  increased,  created or incurred,
      and all or any portion of such  obligations or liabilities  that are paid,
      to the  extent all or any part of such  payment  is  avoided or  recovered
      directly or  indirectly  from any of the Secured  Parties as a preference,
      fraudulent  transfer  or  otherwise  as such  obligations  may be amended,
      supplemented,  converted,  extended or modified from time to time. Without
      limiting the generality of the  foregoing,  the term  "Obligations"  shall
      include,  without limitation:  (i) principal of, and interest on the Notes
      and the loans  extended  pursuant  thereto;  (ii) any and all other  fees,
      indemnities,  costs,  obligations and liabilities of the Debtors from time
      to time  under or in  connection  with this  Agreement,  the Notes and any
      other instruments, agreements or other documents executed and/or delivered
      in connection herewith or therewith;  and (iii) all amounts (including but
      not limited to  post-petition  interest) in respect of the foregoing  that
      would be payable but for the fact that the obligations to pay such amounts
      are  unenforceable  or not allowable due to the existence of a bankruptcy,
      reorganization or similar proceeding involving any Debtor.

            (f) "Organizational Documents" means with respect to any Debtor, the
      documents by which such Debtor was  organized  (such as a  certificate  of
      incorporation,   certificate   of  limited   partnership  or  articles  of
      organization,  and including,  without  limitation,  any  certificates  of
      designation  for preferred  stock or other forms of preferred  equity) and
      which relate to the internal  governance of such Debtor (such as bylaws, a
      partnership  agreement  or an  operating,  limited  liability  or  members
      agreement).

                                       4
<PAGE>

            (g) "UCC" means the Uniform Commercial Code of the State of New York
      and  or any  other  applicable  law  of any  state  or  states  which  has
      jurisdiction  with  respect to all, or any portion of, the  Collateral  or
      this  Agreement,  from time to time.  It is the intent of the parties that
      defined  terms in the UCC should be construed in their  broadest  sense so
      that  the term  "Collateral"  will be  construed  in its  broadest  sense.
      Accordingly  if there are, from time to time,  changes to defined terms in
      the UCC that broaden the definitions,  they are incorporated herein and if
      existing  definitions in the UCC are broader than the amended definitions,
      the existing ones shall be controlling.

      2. GRANT OF PERFECTED SECURITY INTEREST.  As an inducement for the Secured
Parties to extend the loans as evidenced by the Notes and to secure the complete
and timely  payment,  performance  and discharge in full, as the case may be, of
all of the  Obligations,  the  Debtor  hereby  unconditionally  and  irrevocably
pledges,  grants  and  hypothecates  to the  Secured  Parties a  continuing  and
perfected  security  interest  in and to, a lien  upon  and a right  of  set-off
against all of their respective right, title and interest of whatsoever kind and
nature in and to, the Collateral, all subject to the first priority lien granted
as security for the 8% Convertible Notes (the "Security Interest").

      3.  DELIVERY OF CERTAIN  COLLATERAL.  Subject to the liens  granted to the
secured parties in connection with the 8% Convertible Notes (and action taken by
the Debtor to perfect such liens),  contemporaneously  or prior to the execution
of this  Agreement,  the Debtor  shall  deliver or cause to be  delivered to the
Secured Parties (a) any and all certificates and other instruments  representing
or evidencing the Pledged Securities, and (b) any and all certificates and other
instruments or documents representing any of the other Collateral, in each case,
together with all  Necessary  Endorsements.  The Debtors are,  contemporaneously
with the execution hereof, delivering to the Secured Parties, or have previously
delivered to the Secured Parties, a true and correct copy of each Organizational
Document governing any of the Pledged Securities.

      4. REPRESENTATIONS,  WARRANTIES,  COVENANTS AND AGREEMENTS OF THE DEBTORS.
The Debtor  represents  and warrants  to, and  covenants  and agrees  with,  the
Secured Parties as follows:

            (a) The Debtor has the  requisite  corporate,  partnership,  limited
      liability  company  or  other  power  and  authority  to enter  into  this
      Agreement  and  otherwise  to carry  out its  obligations  hereunder.  The
      execution,  delivery and  performance  by the Debtor of this Agreement and
      the  filings  contemplated  therein  have  been  duly  authorized  by  all
      necessary  action  on the part of such  Debtor  and no  further  action is
      required by such  Debtor.  This  Agreement  has been duly  executed by the
      Debtor. This Agreement constitutes the legal, valid and binding obligation
      of the Debtor, enforceable against the Debtor in accordance with its terms
      except as such  enforceability  may be limited by  applicable  bankruptcy,
      insolvency,   reorganization  and  similar  laws  of  general  application
      relating  to or  affecting  the rights and  remedies of  creditors  and by
      general principles of equity.

                                       5
<PAGE>

            (b) The Debtors  have no place of  business  or offices  where their
      respective  books of account and records are kept (other than  temporarily
      at the offices of its attorneys or accountants) or places where Collateral
      is stored or located,  except as set forth on Schedule A attached  hereto.
      Except as  specifically  set forth on Schedule A, the Debtor is the record
      owner of the real property  where such  Collateral  is located,  and there
      exist no  mortgages  or other liens on any such real  property.  Except as
      disclosed on Schedule A, none of such  Collateral is in the  possession of
      any consignee, bailee, warehouseman, agent or processor.

            (c) Except as set forth on Schedule B attached  hereto,  the Debtors
      are the sole owner of the Collateral  (except for  non-exclusive  licenses
      granted by any Debtor in the ordinary course of business),  free and clear
      of any liens, security interests,  encumbrances, rights or claims, and are
      fully authorized to grant the Security Interest.  Other than those filings
      made in connection with the 8% Convertible  Notes, there is not on file in
      any  governmental or regulatory  authority,  agency or recording office an
      effective financing statement,  security agreement, license or transfer or
      any notice of any of the foregoing (other than those that will be filed in
      favor of the  Secured  Parties  pursuant  to this  Agreement)  covering or
      affecting any of the  Collateral.  So long as this  Agreement  shall be in
      effect, the Debtors shall not execute and shall not knowingly permit to be
      on file  (other  than  those on file to  evidence  the  liens  granted  in
      connection the 8% Convertible Notes) in any such office or agency any such
      financing  statement or other document or instrument (except to the extent
      filed or recorded in favor of the Secured Parties pursuant to the terms of
      this Agreement).

            (d) No  written  claim  has been  received  that any  Collateral  or
      Debtor's  use of any  Collateral  violates  the rights of any third party.
      There has been no adverse  decision  to any  Debtor's  claim of  ownership
      rights in or exclusive rights to use the Collateral in any jurisdiction or
      to any Debtor's  right to keep and maintain such  Collateral in full force
      and effect,  and there is no proceeding  involving said rights pending or,
      to the best knowledge of any Debtor, threatened before any court, judicial
      body,   administrative   or   regulatory   agency,   arbitrator  or  other
      governmental authority.

            (e) The Debtor shall at all times  maintain its books of account and
      records  relating to the Collateral at its principal place of business and
      its  Collateral at the  locations set forth on Schedule A attached  hereto
      and may not  relocate  such  books of  account  and  records  or  tangible
      Collateral  unless it  delivers  to the  Secured  Parties at least 30 days
      prior to such relocation (i) written notice of such relocation and the new
      location  thereof  (which  must be  within  the  United  States)  and (ii)
      evidence that  appropriate  financing  statements  under the UCC and other
      necessary documents have been filed and recorded and other steps have been
      taken to perfect the  Security  Interest to create in favor of the Secured
      Parties a valid,  perfected and continuing  perfected second priority lien
      in the Collateral.

                                       6
<PAGE>

            (f) This Agreement  creates in favor of the Secured Parties a valid,
      security interest in the Collateral,  securing the payment and performance
      of the Obligations.  Upon making the filings  described in the immediately
      following  paragraph,  all  security  interests  created  hereunder in any
      Collateral  which may be  perfected  by  filing  Uniform  Commercial  Code
      financing statements shall have been duly perfected. Except for the filing
      of the Uniform  Commercial  Code financing  statements  referred to in the
      immediately  following  paragraph,  the  recordation  of the  Intellectual
      Property Security  Agreement (as defined below) with respect to copyrights
      and copyright  applications in the United States Copyright Office referred
      to in paragraph (p), the execution and delivery of deposit account control
      agreements  satisfying the requirements of Section  9-104(a)(2) of the UCC
      with respect to each deposit  account of the Debtors,  and the delivery of
      the certificates and other instruments provided in Section 3, no action is
      necessary  to create,  perfect or protect the security  interests  created
      hereunder.  Without  limiting the generality of the foregoing,  except for
      the  filing  of  said  financing  statements,   the  recordation  of  said
      Intellectual  Property Security Agreement,  and the execution and delivery
      of said  deposit  account  control  agreements,  no  consent  of any third
      parties and no  authorization,  approval or other action by, and no notice
      to or filing  with,  any  governmental  authority  or  regulatory  body is
      required  for  (i)  the  execution,   delivery  and  performance  of  this
      Agreement,  (ii) the  creation or  perfection  of the  Security  Interests
      created hereunder in the Collateral or (iii) the enforcement of the rights
      of the Secured Parties hereunder.

            (g) The Debtor  hereby  authorizes  the Secured  Parties,  or any of
      them, to file one or more financing statements under the UCC, with respect
      to the Security Interest with the proper filing and recording  agencies in
      any jurisdiction deemed proper by them.

            (h) The execution, delivery and performance of this Agreement by the
      Debtors does not (i) violate any of the  provisions of any  Organizational
      Documents  of any Debtor or any  judgment,  decree,  order or award of any
      court,  governmental  body or  arbitrator or any  applicable  law, rule or
      regulation applicable to any Debtor or (ii) conflict with, or constitute a
      default  (or an event  that  with  notice  or lapse of time or both  would
      become a default)  under,  or give to others  any  rights of  termination,
      amendment,  acceleration or cancellation (with or without notice, lapse of
      time or both) of, any agreement, credit facility, debt or other instrument
      (evidencing  any Debtor's  debt or otherwise)  or other  understanding  to
      which  any  Debtor  is a party or by which  any  property  or asset of any
      Debtor is bound or affected.  No consent  (including,  without limitation,
      from  stockholders  or creditors of any Debtor) is required for any Debtor
      to enter into and perform its obligations  hereunder,  other than consents
      that have already been received.

                                       7
<PAGE>

            (i) The capital stock and other equity  interests listed on Schedule
      H hereto  represent  all capital stock and other equity  interests  owned,
      directly or indirectly,  by the Company. All of the Pledged Securities are
      validly issued, fully paid and nonassessable, and the Company is the legal
      and  beneficial  owner of the  Pledged  Securities,  free and clear of any
      lien,  security  interest  or other  encumbrance  except for the  security
      interests  created  by this  Agreement  and the  prior  security  interest
      related  to the 8%  Convertible  Notes  which is  senior  to the  security
      interest created hereunder.

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

            (k) The Debtor  shall at all times  maintain  the liens and Security
      Interest  provided for  hereunder as valid and perfected  second  priority
      liens and  security  interests in the  Collateral  in favor of the Secured
      Parties until this Agreement and the Security Interest  hereunder shall be
      terminated  pursuant  to Section 11 hereof.  The Debtor  hereby  agrees to
      defend the same  against the claims of any and all  persons and  entities.
      The Debtor shall  safeguard and protect all  Collateral for the account of
      the Secured  Parties.  At the request of the Secured  Parties,  the Debtor
      will sign and deliver to the  Secured  Parties at any time or from time to
      time  one  or  more  financing  statements  pursuant  to the  UCC in  form
      reasonably  satisfactory  to the Secured  Parties and will pay the cost of
      filing the same in all public offices  wherever filing is, or is deemed by
      the Secured Parties to be, necessary or desirable to effect the rights and
      obligations  provided for herein.  Without  limiting the generality of the
      foregoing,  the  Debtor  shall  pay all  fees,  taxes  and  other  amounts
      necessary to maintain the Collateral and the Security Interest  hereunder,
      and the Debtor shall  obtain and furnish to the Secured  Parties from time
      to time, upon demand,  such releases and/or  subordinations  of claims and
      liens  which may be  required to  maintain  the  priority of the  Security
      Interest hereunder.

            (l) No Debtor will transfer, pledge, hypothecate, encumber, license,
      sell  or  otherwise   dispose  of  any  of  the  Collateral   (except  for
      non-exclusive  licenses  granted  by a Debtor  in its  ordinary  course of
      business  and sales of  inventory  by a Debtor in its  ordinary  course of
      business) without the prior written consent of a Majority in Interest.

            (m) The Debtor shall keep and preserve its equipment,  inventory and
      other tangible  Collateral in good  condition,  repair and order and shall
      not  operate or locate any such  Collateral  (or cause to be  operated  or
      located) in any area excluded from insurance coverage.

                                       8
<PAGE>

            (n) The Debtor shall maintain with  financially  sound and reputable
      insurers,  insurance with respect to the Collateral against loss or damage
      of the kinds and in the amounts customarily insured against by entities of
      established reputation having similar properties similarly situated and in
      such amounts as are  customarily  carried under similar  circumstances  by
      other such  entities and  otherwise as is prudent for entities  engaged in
      similar  businesses  but  in  any  event  sufficient  to  cover  the  full
      replacement  cost thereof.  The Debtor shall cause each  insurance  policy
      issued in  connection  herewith to provide,  and the insurer  issuing such
      policy to certify to the Secured Parties that (a) the Secured Parties will
      be named as lender  loss  payees and  additional  insured  under each such
      insurance  policy;  (b) if such  insurance  be proposed to be cancelled or
      materially changed for any reason  whatsoever,  such insurer will promptly
      notify the Secured  Parties and such  cancellation  or change shall not be
      effective  as to the Secured  Parties for at least  thirty (30) days after
      receipt by the Secured  Parties of such notice,  unless the effect of such
      change is to extend or increase  coverage  under the  policy;  and (c) the
      Secured Parties will have the right (but no obligation) at its election to
      remedy any default in the payment of premiums  within  thirty (30) days of
      notice  from the  insurer  of such  default.  If no Event of  Default  (as
      defined in the  Debenture)  exists and if the proceeds  arising out of any
      claim or series of related claims do not exceed $50,000,  loss payments in
      each  instance  will be  applied  by the  applicable  Debtor to the repair
      and/or replacement of property with respect to which the loss was incurred
      to the extent  reasonably  feasible,  and any loss payments or the balance
      thereof remaining,  to the extent not so applied,  shall be payable to the
      applicable Debtor, provided, however, that payments received by any Debtor
      after an Event of Default occurs and is continuing or in excess of $50,000
      for any occurrence or series of related  occurrences  shall be paid to the
      Secured  Parties and, if received by such  Debtor,  shall be held in trust
      for and  immediately  paid over to the Secured  Parties  unless  otherwise
      directed in writing by the Secured Parties. Copies of such policies or the
      related  certificates,  in each case, naming the Secured Parties as lender
      loss  payee and  additional  insured  shall be  delivered  to the  Secured
      Parties at least  annually  and at the time any new policy of insurance is
      issued.

            (o) The Debtor  shall,  within ten (10) days of obtaining  knowledge
      thereof, advise the Secured Parties promptly, in sufficient detail, of any
      substantial  change in the Collateral,  and of the occurrence of any event
      which would have a material  adverse effect on the value of the Collateral
      or on the Secured Parties' security interest therein.

            (p) The Debtor  shall  promptly  execute  and deliver to the Secured
      Parties such further deeds, mortgages,  assignments,  security agreements,
      financing  statements or other  instruments,  documents,  certificates and
      assurances  and take such further  action as the Secured  Parties may from
      time to time  request and may in its sole  discretion  deem  necessary  to
      perfect,  protect or  enforce  its  security  interest  in the  Collateral
      including,  without limitation, if applicable,  the execution and delivery
      of a separate security agreement with respect to the Debtor's Intellectual
      Property ("Intellectual Property Security Agreement") in which the Secured
      Parties have been granted a security interest hereunder,  substantially in
      a form  acceptable to the Secured  Parties,  which  Intellectual  Property
      Security Agreement,  other than as stated therein, shall be subject to all
      of the terms and conditions hereof.

                                       9
<PAGE>

            (q)  The  Debtor  shall   permit  the  Secured   Parties  and  their
      representatives  and agents to inspect the  Collateral at any time, and to
      make copies of records pertaining to the Collateral as may be requested by
      a Secured Party from time to time.

            (r)  The  Debtor  shall  take  all  steps  reasonably  necessary  to
      diligently  pursue and seek to  preserve,  enforce and collect any rights,
      claims,  causes  of action  and  accounts  receivable  in  respect  of the
      Collateral.

            (s)  The  Debtor  shall  promptly  notify  the  Secured  Parties  in
      sufficient  detail upon  becoming  aware of any  attachment,  garnishment,
      execution or other legal process  levied against any Collateral and of any
      other  information  received by such Debtor that may materially affect the
      value of the Collateral,  the Security Interest or the rights and remedies
      of the Secured Parties hereunder.

            (t) All information heretofore,  herein or hereafter supplied to the
      Secured  Parties  by or on  behalf  of  any  Debtor  with  respect  to the
      Collateral  is accurate and  complete in all  material  respects as of the
      date furnished.

            (u) The Debtor  shall at all times  preserve  and keep in full force
      and effect their  respective  valid  existence  and good  standing and any
      rights and franchises material to its business.

            (v)  No  Debtor  will  change  its  name,   type  of   organization,
      jurisdiction of organization,  organizational identification number (if it
      has  one),  legal or  corporate  structure,  or  identity,  or add any new
      fictitious  name unless it provides at least 30 days prior written  notice
      to the Secured  Parties of such  change  and, at the time of such  written
      notification,  such Debtor  provides any  financing  statements or fixture
      filings necessary to perfect and continue perfected the perfected Security
      Interest granted and evidenced by this Agreement.

            (w) No Debtor may  consign any of its  Inventory  or sell any of its
      Inventory on bill and hold,  sale or return,  sale on  approval,  or other
      conditional  terms of sale  without  the consent of a Majority in Interest
      which  shall  not be  unreasonably  withheld,  except to the  extent  such
      consignment  or sale does not exceed 15% of the total  value of all of the
      Company's finished goods in Inventory.

            (x) No  Debtor  may  relocate  its chief  executive  office to a new
      location without providing 30 days prior written  notification  thereof to
      the  Secured  Parties  and  so  long  as,  at the  time  of  such  written
      notification,  such Debtor  provides any  financing  statements or fixture
      filings necessary to perfect and continue perfected the perfected security
      Interest granted and evidenced by this Agreement.

                                       10
<PAGE>

            (y) The Debtor was organized and remains  organized solely under the
      laws of the  state  set  forth  next to such  Debtor's  name in the  first
      paragraph  of this  Agreement.  Schedule D attached  hereto sets forth the
      Debtor's  organizational  identification number or, if any Debtor does not
      have one, states that one does not exist.

            (z) (i) The  actual  name of the Debtor is the name set forth in the
      preamble above;  (ii) no Debtor has any trade names except as set forth on
      Schedule E attached  hereto;  (iii) no Debtor has used any name other than
      that stated in the  preamble  hereto or as set forth on Schedule E for the
      preceding  five  years;  and (iv) no entity has merged  into any Debtor or
      been acquired by any Debtor within the past five years except as set forth
      on Schedule E.

            (aa)  Subject  to the  liens  granted  to  the  secured  parties  in
      connection  with the 8% Convertible  Notes (and action taken by the Debtor
      to  perfect  such  liens),  at any  time and  from  time to time  that any
      Collateral consists of instruments, certificated securities or other items
      that  require or permit  possession  by the  secured  party to perfect the
      security interest created hereby, the applicable Debtor shall deliver such
      Collateral to the Secured Parties.

            (bb)  Subject  to the  liens  granted  to  the  secured  parties  in
      connection  with the 8% Convertible  Notes (and action taken by the Debtor
      to perfect such  liens),  the Debtor,  in its  capacity as issuer,  hereby
      agrees to comply with any and all orders and  instructions  of the Secured
      Parties regarding the Pledged Interests  consistent with the terms of this
      Agreement  without the further  consent of any Debtor as  contemplated  by
      Section 8-106 (or any successor  section) of the UCC. Further,  the Debtor
      agrees that it shall not enter into a similar agreement (or one that would
      confer  "control"  within  the  meaning  of Article 8 of the UCC) with any
      other person or entity.

            (cc)  Subject  to the  liens  granted  to  the  secured  parties  in
      connection  with the 8% Convertible  Notes (and action taken by the Debtor
      to perfect such liens),  the Debtor shall cause all tangible chattel paper
      constituting  Collateral  to be delivered to the Secured  Parties,  or, if
      such delivery is not possible,  then to cause such tangible  chattel paper
      to contain a legend  noting  that it is subject to the  security  interest
      created by this Agreement.  To the extent that any Collateral  consists of
      electronic chattel paper, the applicable Debtor shall cause the underlying
      chattel  paper to be "marked"  within the meaning of Section  9-105 of the
      UCC (or successor section thereto).

            (dd) If there is any investment property or deposit account included
      as  Collateral  that can be  perfected  by  "control"  through  an account
      control  agreement,  the  applicable  Debtor  shall  cause such an account
      control agreement,  in form and substance in each case satisfactory to the
      Secured Parties, to be entered into and delivered to the Secured Parties.

                                       11
<PAGE>

            (ee) To the extent that any Collateral  consists of letter-of-credit
      rights,  the applicable  Debtor shall cause the issuer of each  underlying
      letter of credit to consent to an  assignment  of the proceeds  thereof to
      the Secured Parties.

            (ff) To the extent that any  Collateral is in the  possession of any
      third party, the applicable  Debtor shall join with the Secured Parties in
      notifying such third party of the Secured  Parties'  security  interest in
      such   Collateral   and   shall  use  its  best   efforts   to  obtain  an
      acknowledgement  and  agreement  from such third party with respect to the
      Collateral, in form and substance satisfactory to the Secured Parties.

            (gg) If any Debtor  shall at any time hold or  acquire a  commercial
      tort claim,  such Debtor shall  promptly  notify the Secured  Parties in a
      writing signed by such Debtor of the particulars  thereof and grant to the
      Secured  Parties in such  writing a security  interest  therein and in the
      proceeds thereof, all upon the terms of this Agreement,  with such writing
      to be in form and substance satisfactory to the Secured Parties.

            (hh) The Debtor  shall  immediately  provide  written  notice to the
      Secured  Parties of any and all accounts which arise out of contracts with
      any  governmental  authority  and, to the extent  necessary  to perfect or
      continue the  perfected  status of the Security  Interest in such accounts
      and proceeds thereof,  shall execute and deliver to the Secured Parties an
      assignment  of claims for such  accounts  and  cooperate  with the Secured
      Parties in taking any other steps required,  in their judgment,  under the
      Federal  Assignment of Claims Act or any similar  federal,  state or local
      statute  or rule to  perfect  or  continue  the  perfected  status  of the
      Security Interest in such accounts and proceeds thereof.

            (ii) Intentionally Omitted.

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

            (kk) The Debtor shall register the pledge of the applicable  Pledged
      Securities  on the books of such  Debtor.  The Debtor  shall  notify  each
      issuer of Pledged  Securities  to  register  the pledge of the  applicable
      Pledged Securities in the name of the Secured Parties on the books of such
      issuer.  Further, except with respect to certificated securities delivered
      to the Secured  Parties,  if any, the  applicable  Debtor shall deliver to
      Secured Parties an  acknowledgement  of pledge (which,  where appropriate,
      shall  comply with the  requirements  of the  relevant UCC with respect to
      perfection by registration) signed by the issuer of the applicable Pledged
      Securities,   which   acknowledgement  shall  confirm  that:  (a)  it  has
      registered  the  pledge  on its  books  and  records;  and (b) at any time
      directed  by  Secured  Parties  during  the  continuation  of an  Event of
      Default,  subject to the action taken by the secured parties in connection
      with the 8%  Convertible  Notes,  such  issuer  will  transfer  the record
      ownership  of such  Pledged  Securities  into the name of any  designee of
      Secured  Parties,  will take such steps as may be  necessary to effect the
      transfer,  and will comply with all other  instructions of Secured Parties
      regarding  such  Pledged  Securities  without the  further  consent of the
      applicable Debtor.

                                       12
<PAGE>

            (ll) In the event that,  upon an  occurrence  of an Event of Default
      and subject to the action of the secured parties in connection with the 8%
      Convertible  Notes,  the  Secured  Parties  shall  sell  all or any of the
      Pledged  Securities  to  another  party  or  parties  (herein  called  the
      "Transferee")  or  shall  purchase  or  retain  all or any of the  Pledged
      Securities, the Debtor shall, to the extent applicable: (i) deliver to the
      Secured  Parties or the  Transferee,  as the case may be, the  articles of
      incorporation,  bylaws,  minute books, stock certificate books,  corporate
      seals, deeds, leases, indentures,  agreements,  evidences of indebtedness,
      books of account, financial records and all other Organizational Documents
      and records of the Debtor and their direct and indirect subsidiaries; (ii)
      use its best efforts to obtain resignations of the persons then serving as
      officers  and  directors  of the  Debtor  and their  direct  and  indirect
      subsidiaries,  if so  requested;  and (iii) use its best efforts to obtain
      any approvals that are required by any  governmental or regulatory body in
      order to permit the sale of the Pledged  Securities  to the  Transferee or
      the purchase or retention of the Pledged Securities by the Secured Parties
      and allow the  Transferee or the Secured  Parties to continue the business
      of the Debtor and their direct and indirect subsidiaries.

            (mm) Without limiting the generality of the other obligations of the
      Debtor hereunder,  the Debtor shall promptly (i) cause to be registered at
      the United States  Copyright Office all of its material  copyrights,  (ii)
      cause the  security  interest  contemplated  hereby  with  respect  to all
      Intellectual  Property registered at the United States Copyright Office or
      United  States  Patent and  Trademark  Office to be duly  recorded  at the
      applicable  office,  and (iii) give the Secured Parties notice whenever it
      acquires  (whether  absolutely  or by license)  or creates any  additional
      material Intellectual Property.

            (nn) The  Debtor  will from time to time,  at the joint and  several
      expense of the Debtor,  promptly  execute  and  deliver  all such  further
      instruments  and  documents,  and take all such  further  action as may be
      necessary or desirable,  or as the Secured Parties may reasonably request,
      in order to perfect and protect any security interest granted or purported
      to be granted  hereby or to enable the  Secured  Parties to  exercise  and
      enforce  their  rights  and  remedies  hereunder  and with  respect to any
      Collateral or to otherwise carry out the purposes of this Agreement.

            (oo)  Schedule F attached  hereto lists all of the  patents,  patent
      applications,  trademarks, trademark applications,  registered copyrights,
      and domain  names  owned by the Debtor as of the date  hereof.  Schedule F
      lists all  material  licenses  in favor of any  Debtor  for the use of any
      patents,  trademarks,  copyrights  and domain names as of the date hereof.
      All material  patents and trademarks of the Debtor have been duly recorded
      at the  United  States  Patent  and  Trademark  Office  and  all  material
      copyrights  of the Debtor  have been duly  recorded  at the United  States
      Copyright Office.

                                       13
<PAGE>

            (pp) Except as set forth on Schedule G attached hereto,  none of the
      account  debtors or other  persons  or  entities  obligated  on any of the
      Collateral is a governmental  authority covered by the Federal  Assignment
      of Claims Act or any similar  federal,  state or local  statute or rule in
      respect of such Collateral.

      5. EFFECT OF PLEDGE ON CERTAIN RIGHTS. If any of the Collateral subject to
this Agreement consists of nonvoting equity or ownership  interests  (regardless
of class,  designation,  preference or rights) that may be converted into voting
equity or ownership  interests upon the occurrence of certain events (including,
without limitation, upon the transfer of all or any of the other stock or assets
of the  issuer),  it is  agreed  that the  pledge of such  equity  or  ownership
interests  pursuant to this  Agreement or the  enforcement of any of the Secured
Parties'  rights  hereunder  shall not be  deemed to be the type of event  which
would  trigger such  conversion  rights  notwithstanding  any  provisions in the
Organizational  Documents  or  agreements  to which any  Debtor is subject or to
which any Debtor is party.

      6. DEFAULTS. The following events shall be "Events of Default":

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

            (b) Any  representation  or warranty of any Debtor in this Agreement
      shall prove to have been incorrect in any material respect when made;

            (c) The  failure by any  Debtor to  observe  or  perform  any of its
      obligations  hereunder for five (5) days after  delivery to such Debtor of
      notice of such  failure  by or on behalf of a Secured  Party  unless  such
      default is capable of cure but cannot be cured  within such time frame and
      such Debtor is using best efforts to cure same in a timely fashion; or

            (d) If any  provision  of this  Agreement  shall at any time for any
      reason be declared to be null and void, or the validity or  enforceability
      thereof  shall  be  contested  by any  Debtor,  or a  proceeding  shall be
      commenced  by  any  Debtor,  or  by  any  governmental   authority  having
      jurisdiction  over any Debtor,  seeking to  establish  the  invalidity  or
      unenforceability thereof, or any Debtor shall deny that any Debtor has any
      liability or obligation purported to be created under this Agreement.

      7. DUTY TO HOLD IN TRUST.

                                       14
<PAGE>

            (a) Upon the  occurrence  of any  Event of  Default  and at any time
      thereafter,  the  Debtor  shall,  upon  receipt  of any  revenue,  income,
      dividend, interest or other sums subject to the Security Interest, whether
      payable pursuant to the Notes or otherwise,  or of any check, draft, note,
      trade acceptance or other  instrument  evidencing an obligation to pay any
      such  sum,  hold the same in  trust  for the  Secured  Parties  and  shall
      forthwith  endorse and transfer any such sums or instruments,  or both, to
      the Secured Parties,  pro-rata in proportion to their initial purchases of
      Notes for application to the  satisfaction of the Obligations  (and if any
      Debenture  is not  outstanding,  pro-rata  in  proportion  to the  initial
      purchases of the remaining Notes).

            (b) If any Debtor shall become  entitled to receive or shall receive
      any securities or other property (including, without limitation, shares of
      Pledged Securities or instruments representing Pledged Securities acquired
      after the date hereof, or any options,  warrants,  rights or other similar
      property or certificates  representing a dividend,  or any distribution in
      connection  with any  recapitalization,  reclassification  or  increase or
      reduction of capital,  or issued in connection with any  reorganization of
      such Debtor or any of its direct or indirect  subsidiaries)  in respect of
      the Pledged Securities  (whether as an addition to, in substitution of, or
      in exchange for, such Pledged Securities or otherwise), such Debtor agrees
      to (i) accept the same as the agent of the Secured Parties;  (ii) hold the
      same in trust on behalf of and for the benefit of the Secured Parties; and
      (iii) to deliver any and all  certificates  or instruments  evidencing the
      same to the  Secured  Parties  on or before the close of  business  on the
      fifth  business day following the receipt  thereof by such Debtor,  in the
      exact form received together with the Necessary  Endorsements,  to be held
      by the  Secured  Parties  subject  to  the  terms  of  this  Agreement  as
      Collateral.

            (c) Anything to the contrary notwithstanding,  all rights and powers
      of the Secured  Parties  hereunder are subject to the rights and powers of
      the secured parties pursuant to the documents  executed in connection with
      the 8% Convertible Notes.

      8. RIGHTS AND REMEDIES UPON DEFAULT.

            (a) Upon the  occurrence  of any  Event of  Default  and at any time
      thereafter,  the Secured  Parties,  acting through any agent  appointed by
      them for  such  purpose,  shall  have the  right  to  exercise  all of the
      remedies conferred  hereunder and under the Notes, and the Secured Parties
      shall have all the rights and  remedies of a secured  party under the UCC.
      Without  limitation,  the Secured Parties shall have the following  rights
      and  powers,  subject  to the rights  and  powers of the  secured  parties
      pursuant to the documents  executed in connection  with the 8% Convertible
      Notes:

                  (i)  The  Secured   Parties  shall  have  the  right  to  take
            possession of the Collateral and, for that purpose,  enter, with the
            aid and assistance of any person, any premises where the Collateral,
            or any part  thereof,  is or may be placed and remove the same,  and
            the Debtor shall  assemble the  Collateral  and make it available to
            the  Secured  Parties  at places  which the  Secured  Parties  shall
            reasonably  select,  whether at such Debtor's premises or elsewhere,
            and make available to the Secured Parties, without rent, all of such
            Debtor's  respective  premises and facilities for the purpose of the
            Secured  Parties  taking  possession  of,  removing  or putting  the
            Collateral in saleable or disposable form.

                                       15
<PAGE>

                  (ii) Upon  notice to the Debtor by the  Secured  Parties,  all
            rights of the Debtor to  exercise  the  voting and other  consensual
            rights  which it would  otherwise  be entitled  to exercise  and all
            rights of the Debtor to receive the dividends and interest  which it
            would  otherwise be authorized  to receive and retain,  shall cease.
            Upon  such  notice,  the  Secured  Parties  shall  have the right to
            receive  any  interest,  cash  dividends  or other  payments  on the
            Collateral and, at the option of the Secured Parties, to exercise in
            the  Secured  Parties'   discretion  all  voting  rights  pertaining
            thereto.  Without  limiting the  generality  of the  foregoing,  the
            Secured  Parties  shall have the right (but not the  obligation)  to
            exercise  all rights with respect to the  Collateral  as it were the
            sole and absolute owners thereof, including,  without limitation, to
            vote and/or to exchange,  at its sole discretion,  any or all of the
            Collateral   in   connection   with   a   merger,    reorganization,
            consolidation,  recapitalization or other readjustment concerning or
            involving  the  Collateral  or any  Debtor  or any of its  direct or
            indirect subsidiaries.

                  (iii) The Secured  Parties shall have the right to operate the
            business of the Debtor using the Collateral and shall have the right
            to assign,  sell,  lease or otherwise  dispose of and deliver all or
            any part of the Collateral,  at public or private sale or otherwise,
            either with or without special conditions or stipulations,  for cash
            or on credit or for future  delivery,  in such parcel or parcels and
            at such time or times  and at such  place or  places,  and upon such
            terms and  conditions as the Secured  Parties may deem  commercially
            reasonable,  all without  (except as shall be required by applicable
            statute and cannot be waived) advertisement or demand upon or notice
            to any Debtor or right of redemption  of a Debtor,  which are hereby
            expressly waived.  Upon each such sale,  lease,  assignment or other
            transfer of Collateral,  the Secured Parties may, unless  prohibited
            by applicable  law which cannot be waived,  purchase all or any part
            of the  Collateral  being  sold,  free  from and  discharged  of all
            trusts,  claims,  right of  redemption  and  equities of any Debtor,
            which are hereby waived and released.

                  (iv) The  Secured  Parties  shall  have the right (but not the
            obligation)  to notify any account  debtors and any  obligors  under
            instruments  or  accounts to make  payments  directly to the Secured
            Parties and to enforce the  Debtor's  rights  against  such  account
            debtors and obligors.

                                       16
<PAGE>

                  (v) The Secured  Parties may (but are not obligated to) direct
            any financial intermediary or any other person or entity holding any
            investment  property to transfer the same to the Secured  Parties or
            their designee.

                  (vi)  The  Secured  Parties  may (but  are not  obligated  to)
            transfer any or all Intellectual  Property registered in the name of
            any Debtor at the United States  Patent and Trademark  Office and/or
            Copyright  Office  into  the  name  of the  Secured  Parties  or any
            designee or any purchaser of any Collateral.

            (b) The  Secured  Parties  may  comply  with any  applicable  law in
      connection  with a disposition of Collateral and such  compliance will not
      be considered  adversely to affect the  commercial  reasonableness  of any
      sale of the  Collateral.  The  Secured  Parties  may sell  the  Collateral
      without  giving  any  warranties  and  may   specifically   disclaim  such
      warranties.  If the Secured  Parties sell any of the Collateral on credit,
      the  Debtor  will only be  credited  with  payments  actually  made by the
      purchaser.  In addition,  the Debtor waives any and all rights that it may
      have to a judicial  hearing in  advance of the  enforcement  of any of the
      Secured  Parties'  rights  and  remedies  hereunder,   including,  without
      limitation,  its right  following  an Event of Default  to take  immediate
      possession of the  Collateral and to exercise its rights and remedies with
      respect thereto.

            (c) For the  purpose  of  enabling  the  Secured  Parties to further
      exercise rights and remedies under this Section 8 or elsewhere provided by
      agreement  or  applicable  law,  the Debtor  hereby  grants to the Secured
      Parties an irrevocable,  nonexclusive license (exercisable without payment
      of  royalty  or other  compensation  to such  Debtor)  to use,  license or
      sublicense  following an Event of Default,  any Intellectual  Property now
      owned or hereafter  acquired by such Debtor,  and wherever the same may be
      located, and including in such license access to all media in which any of
      the licensed items may be recorded or stored and to all computer  software
      and programs used for the compilation or printout thereof.

      9.  APPLICATIONS  OF  PROCEEDS.  Subject to the  actions and claims of the
secured  parties  pursuant to the documents  executed in connection  with the 8%
Convertible  Notes, the proceeds of any such sale, lease or other disposition of
the Collateral  hereunder  shall be applied first,  to the expenses of retaking,
holding,  storing,  processing  and  preparing for sale,  selling,  and the like
(including,  without  limitation,  any taxes,  fees and other costs  incurred in
connection  therewith) of the Collateral,  to the reasonable attorneys' fees and
expenses incurred by the Secured Parties in enforcing their rights hereunder and
in connection with collecting, storing and disposing of the Collateral, and then
to  satisfaction of the Obligations pro rata among the Secured Parties (based on
then-outstanding   principal   amounts   of  Notes  at  the  time  of  any  such
determination),  and to the payment of any other amounts  required by applicable
law,  after which the Secured  Parties  shall pay to the  applicable  Debtor any
surplus  proceeds.  If,  upon the  sale,  license  or other  disposition  of the
Collateral,  the proceeds  thereof are  insufficient to pay all amounts to which
the  Secured  Parties are  legally  entitled,  the Debtor will be liable for the
deficiency,  together with interest thereon, at the rate of 20% per annum or the
lesser  amount  permitted  by  applicable  law  (the  "Default  Rate"),  and the
reasonable fees of any attorneys employed by the Secured Parties to collect such
deficiency.  To the extent  permitted by  applicable  law, the Debtor waives all
claims,  damages and demands  against  the  Secured  Parties  arising out of the
repossession, removal, retention or sale of the Collateral, unless due solely to
the gross negligence or willful  misconduct of the Secured Parties as determined
by a final  judgment  (not  subject to further  appeal) of a court of  competent
jurisdiction.

                                       17
<PAGE>

      10.  SECURITIES LAW PROVISION.  The Debtor recognizes that Secured Parties
may be limited in their ability to effect a sale to the public of all or part of
the Pledged  Securities by reason of certain  prohibitions in the Securities Act
of 1933, as amended,  or other federal or state  securities laws  (collectively,
the "Securities Laws"), and may be compelled to resort to one or more sales to a
restricted  group of  purchasers  who may be  required  to agree to acquire  the
Pledged Securities for their own account,  for investment and not with a view to
the distribution or resale thereof.  The Debtor agrees that sales so made may be
at prices and on terms less favorable than if the Pledged  Securities  were sold
to the public, and that the Secured Parties have no obligation to delay the sale
of any Pledged  Securities  for the period of time  necessary  to  register  the
Pledged  Securities for sale to the public under the Securities Laws. The Debtor
shall  cooperate  with the  Secured  Parties in their  attempt  to  satisfy  any
requirements   under  the  Securities  Laws  (including,   without   limitation,
registration  thereunder if requested by the Secured Parties)  applicable to the
sale of the Pledged Securities by the Secured Parties.

      11.  COSTS  AND  EXPENSES.   The  Debtor  agrees  to  pay  all  reasonable
out-of-pocket  fees,  costs and expenses  incurred in connection with any filing
required  hereunder,  including  without  limitation,  any financing  statements
pursuant  to  the  UCC,   continuation   statements,   partial  releases  and/or
termination   statements  related  thereto  or  any  expenses  of  any  searches
reasonably required by the Secured Parties.  The Debtor shall also pay all other
claims and charges which in the reasonable  opinion of the Secured Parties might
prejudice,  imperil or otherwise affect the Collateral or the Security  Interest
therein.  The Debtor will also,  upon  demand,  pay to the  Secured  Parties the
amount of any and all reasonable  expenses,  including the  reasonable  fees and
expenses of its counsel and of any experts and agents, which the Secured Parties
may incur in connection  with (i) the  enforcement of this  Agreement,  (ii) the
custody  or  preservation  of,  or  the  sale  of,  collection  from,  or  other
realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Secured  Parties  under the Notes.  Until so paid,  any
fees payable  hereunder shall be added to the principal  amount of the Notes and
shall bear interest at the Default Rate.

                                       18
<PAGE>

      12. RESPONSIBILITY FOR COLLATERAL.  The Debtor assumes all liabilities and
responsibility  in connection with all Collateral,  and the Obligations shall in
no way be affected or diminished by reason of the loss,  destruction,  damage or
theft of any of the  Collateral or its  unavailability  for any reason.  Without
limiting the generality of the foregoing,  (a) no Secured Party (i) has any duty
(either  before or after an Event of  Default) to collect any amounts in respect
of the Collateral or to preserve any rights relating to the Collateral,  or (ii)
has any obligation to clean-up or otherwise prepare the Collateral for sale, and
(b) the Debtor  shall  remain  obligated  and  liable  under  each  contract  or
agreement  included in the Collateral to be observed or performed by such Debtor
thereunder.  No Secured Party shall have any  obligation or liability  under any
such contract or agreement by reason of or arising out of this  Agreement or the
receipt by any Secured Party of any payment  relating to any of the  Collateral,
nor  any  Secured  Party  be  obligated  in any  manner  to  perform  any of the
obligations  of any Debtor under or pursuant to any such  contract or agreement,
to make inquiry as to the nature or sufficiency  of any payment  received by any
Secured  Party in  respect of the  Collateral  or as to the  sufficiency  of any
performance  by any party under any such  contract or  agreement,  to present or
file any claim,  to take any action to enforce any performance or to collect the
payment of any amounts  which may have been  assigned to any Secured Party or to
which any Secured Party may be entitled at any time or times.

      13. SECURITY INTEREST ABSOLUTE.  All rights of the Secured Parties and all
obligations  of the  Debtor  hereunder,  shall be  absolute  and  unconditional,
irrespective of: (a) any lack of validity or  enforceability  of this Agreement,
the Notes or any agreement entered into in connection with the foregoing, or any
portion  hereof or  thereof;  (b) any  change  in the  time,  manner or place of
payment  or  performance  of,  or in  any  other  term  of,  all  or  any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the  Notes or any  other  agreement  entered  into in  connection  with the
foregoing; (c) any exchange,  release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure  from any other
collateral for, or any guaranty,  or any other  security,  for all or any of the
Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection  with the  Collateral;  or (e) any  other  circumstance  which  might
otherwise  constitute any legal or equitable defense available to a Debtor, or a
discharge of all or any part of the Security Interest granted hereby.  Until the
Obligations  shall  have  been paid and  performed  in full,  the  rights of the
Secured  Parties  shall  continue  even if the  Obligations  are  barred for any
reason, including, without limitation, the running of the statute of limitations
or bankruptcy.  The Debtor  expressly  waives  presentment,  protest,  notice of
protest,  demand, notice of nonpayment and demand for performance.  In the event
that at any time any transfer of any  Collateral or any payment  received by the
Secured Parties hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable  preference or fraudulent  conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise  due to any party other than the Secured  Parties,  then,  in any such
event,  the Debtor's  obligations  hereunder shall survive  cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or  cancellation  of this  Agreement,  but shall  remain a valid and binding
obligation  enforceable in accordance with the terms and provisions  hereof. The
Debtor  waives all right to require the Secured  Parties to proceed  against any
other person or entity or to apply any Collateral  which the Secured Parties may
hold at any time,  or to  marshal  assets,  or to pursue any other  remedy.  The
Debtor waives any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.

                                       19
<PAGE>

      14. TERM OF  AGREEMENT.  This  Agreement and the Security  Interest  shall
terminate  on the  date  on  which  all  payments  under  the  Notes  have  been
indefeasibly  paid  in  full  and  all  other  Obligations  have  been  paid  or
discharged;  provided,  however, that all indemnities of the Debtor contained in
this Agreement  shall survive and remain  operative and in full force and effect
regardless of the termination of this Agreement.

      15. POWER OF ATTORNEY; FURTHER ASSURANCES.

            (a) The Debtor authorizes the Secured Parties, and does hereby make,
      constitute and appoint the Secured Parties and their respective  officers,
      agents,  successors  or assigns with full power of  substitution,  as such
      Debtor's true and lawful attorney-in-fact,  with power, in the name of the
      various  Secured  Parties or such  Debtor,  to, after the  occurrence  and
      during the  continuance  of an Event of  Default,  (i)  endorse  any note,
      checks,  drafts,  money orders or other instruments of payment  (including
      payments  payable  under or in  respect  of any  policy of  insurance)  in
      respect of the  Collateral  that may come into  possession  of the Secured
      Parties;  (ii) to sign and endorse any financing statement pursuant to the
      UCC or any invoice,  freight or express bill,  bill of lading,  storage or
      warehouse receipts, drafts against debtors, assignments, verifications and
      notices in connection with accounts,  and other documents  relating to the
      Collateral;  (iii) to pay or discharge taxes, liens, security interests or
      other  encumbrances at any time levied or placed on or threatened  against
      the Collateral;  (iv) to demand, collect, receipt for, compromise,  settle
      and sue for monies due in respect of the  Collateral;  (v) to transfer any
      Intellectual  Property or provide  licenses  respecting  any  Intellectual
      Property; and (vi) generally, at the option of the Secured Parties, and at
      the expense of the Debtor,  at any time,  or from time to time, to execute
      and deliver any and all documents and  instruments  and to do all acts and
      things which the Secured  Parties deem necessary to protect,  preserve and
      realize upon the Collateral and the Security  Interest  granted therein in
      order to effect  the intent of this  Agreement  and the Notes all as fully
      and  effectually  as the Debtor  might or could do; and the Debtor  hereby
      ratifies all that said attorney  shall  lawfully do or cause to be done by
      virtue  hereof.  This power of  attorney is coupled  with an interest  and
      shall be irrevocable for the term of this Agreement and thereafter as long
      as any of the Obligations shall be outstanding.  The designation set forth
      herein shall be deemed to amend and supersede any  inconsistent  provision
      in the Organizational  Documents or other documents or agreements to which
      any Debtor is subject or to which any Debtor is a party.  Without limiting
      the  generality  of the  foregoing,  after the  occurrence  and during the
      continuance  of an Event of Default,  each Secured  Party is  specifically
      authorized  to execute and file any  applications  for or  instruments  of
      transfer and  assignment of any patents,  trademarks,  copyrights or other
      Intellectual  Property with the United States Patent and Trademark  Office
      and the United States Copyright Office.

                                       20
<PAGE>

            (b)  On  a  continuing   basis,  the  Debtor  will  make,   execute,
      acknowledge, deliver, file and record, as the case may be, with the proper
      filing and  recording  agencies in any  jurisdiction,  including,  without
      limitation, the jurisdictions indicated on Schedule C attached hereto, all
      such  instruments,  and take all such action as may  reasonably  be deemed
      necessary or advisable, or as reasonably requested by the Secured Parties,
      to perfect the Security  Interest granted hereunder and otherwise to carry
      out the  intent  and  purposes  of this  Agreement,  or for  assuring  and
      confirming  to the Secured  Parties the grant or perfection of a perfected
      security interest in all the Collateral under the UCC.

            (c) The Debtor hereby  irrevocably  appoints the Secured  Parties as
      such  Debtor's  attorney-in-fact,  with  full  authority  in the place and
      instead of such Debtor and in the name of such  Debtor,  from time to time
      in the Secured Parties' discretion,  to take any action and to execute any
      instrument  which the Secured  Parties may deem  necessary or advisable to
      accomplish the purposes of this  Agreement,  including the filing,  in its
      sole discretion,  of one or more financing or continuation  statements and
      amendments  thereto,  relative  to  any  of  the  Collateral  without  the
      signature  of  such  Debtor  where   permitted  by  law,  which  financing
      statements  may (but need not) describe the  Collateral as "all assets" or
      "all  personal  property" or words of like  import,  and ratifies all such
      actions  taken by the Secured  Parties.  This power of attorney is coupled
      with an interest and shall be  irrevocable  for the term of this Agreement
      and thereafter as long as any of the Obligations shall be outstanding.

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

      17.  OTHER  SECURITY.  To the  extent  that  the  Obligations  are  now or
hereafter  secured by property  other than the  Collateral or by the  guarantee,
endorsement or property of any other person, firm,  corporation or other entity,
then the  Secured  Parties  shall have the  right,  in its sole  discretion,  to
pursue,  relinquish,  subordinate,  modify or take any other action with respect
thereto,  without in any way modifying or affecting any of the Secured  Parties'
rights and remedies hereunder.

      18. INTENTIONALLY OMITTED

      19. MISCELLANEOUS.

            (a) No course of dealing between the Debtor and the Secured Parties,
      nor any failure to exercise,  nor any delay in exercising,  on the part of
      the Secured Parties,  any right, power or privilege hereunder or under the
      Notes shall operate as a waiver  thereof;  nor shall any single or partial
      exercise of any right, power or privilege hereunder or thereunder preclude
      any other or further  exercise thereof or the exercise of any other right,
      power or privilege.

                                       21
<PAGE>

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

            (c) This Agreement  constitutes the entire  agreement of the parties
      with respect to the subject matter hereof and is intended to supersede all
      prior  negotiations,  understandings  and agreements with respect thereto.
      Except as specifically  set forth in this Agreement,  no provision of this
      Agreement  may be  modified  or  amended  except  by a  written  agreement
      specifically referring to this Agreement and signed by the parties hereto.

            (d) In the  event  any  provision  of this  Agreement  is held to be
      invalid,  prohibited or  unenforceable in any jurisdiction for any reason,
      unless such provision is narrowed by judicial construction, this Agreement
      shall,  as  to  such  jurisdiction,  be  construed  as  if  such  invalid,
      prohibited or  unenforceable  provision had been more narrowly drawn so as
      not to be invalid,  prohibited or unenforceable.  If,  notwithstanding the
      foregoing,  any  provision  of  this  Agreement  is  held  to be  invalid,
      prohibited or unenforceable  in any  jurisdiction,  such provision,  as to
      such jurisdiction,  shall be ineffective to the extent of such invalidity,
      prohibition or unenforceability without invalidating the remaining portion
      of such  provision or the other  provisions of this  Agreement and without
      affecting the validity or  enforceability  of such  provision or the other
      provisions of this Agreement in any other jurisdiction.

            (e) No  waiver of any  breach or  default  or any right  under  this
      Agreement  shall be  considered  valid unless in writing and signed by the
      party giving such  waiver,  and no such waiver shall be deemed a waiver of
      any subsequent breach or default or right,  whether of the same or similar
      nature or otherwise.

            (f) This Agreement shall be binding upon and inure to the benefit of
      each party hereto and its successors and assigns.

            (g) Each  party  shall take such  further  action  and  execute  and
      deliver such further documents as may be necessary or appropriate in order
      to carry out the provisions and purposes of this Agreement.

            (h) All questions concerning the construction, validity, enforcement
      and  interpretation  of this Agreement  shall be governed by and construed
      and  enforced in  accordance  with the  internal  laws of the State of New
      York,  without regard to the  principles of conflicts of law thereof.  The
      Debtor  agrees  that  all  proceedings   concerning  the  interpretations,
      enforcement and defense of the transactions contemplated by this Agreement
      and the Notes  (whether  brought  against a party hereto or its respective
      affiliates,   directors,   officers,   shareholders,   partners,  members,
      employees  or  agents)  shall be  commenced  exclusively  in the state and
      federal courts sitting in the City of New York, Borough of Manhattan.  The
      Debtor hereby  irrevocably  submits to the exclusive  jurisdiction  of the
      state and  federal  courts  sitting  in the City of New York,  Borough  of
      Manhattan for the  adjudication of any dispute  hereunder or in connection
      herewith or with any transaction  contemplated hereby or discussed herein,
      and hereby irrevocably waives, and agrees not to assert in any proceeding,
      any claim that it is not  personally  subject to the  jurisdiction  of any
      such court,  that such  proceeding  is improper.  Each party hereto hereby
      irrevocably  waives  personal  service of process and  consents to process
      being  served  in any  such  proceeding  by  mailing  a copy  thereof  via
      registered  or certified  mail or  overnight  delivery  (with  evidence of
      delivery)  to such party at the  address in effect for notices to it under
      this  Agreement  and agrees that such service  shall  constitute  good and
      sufficient service of process and notice thereof. Nothing contained herein
      shall be  deemed  to limit in any way any  right to serve  process  in any
      manner permitted by law. Each party hereto hereby  irrevocably  waives, to
      the fullest extent permitted by applicable law, any and all right to trial
      by  jury  in any  legal  proceeding  arising  out of or  relating  to this
      Agreement  or the  transactions  contemplated  hereby.  If any party shall
      commence a proceeding to enforce any  provisions of this  Agreement,  then
      the prevailing  party in such proceeding  shall be reimbursed by the other
      party for its  reasonable  attorney's  fees and other  costs and  expenses
      incurred  with the  investigation,  preparation  and  prosecution  of such
      proceeding.

                                       22
<PAGE>

            (i) This  Agreement  may be executed in any number of  counterparts,
      each of which when so executed  shall be deemed to be an original and, all
      of which taken together shall  constitute one and the same  Agreement.  In
      the event that any signature is delivered by facsimile transmission,  such
      signature  shall create a valid binding  obligation of the party executing
      (or on whose behalf such  signature  is  executed)  the same with the same
      force and effect as if such facsimile signature were the original thereof.

            (j) Intentionally Omitted.

            (k) The Debtor  shall  indemnify,  reimburse  and hold  harmless the
      Secured  Parties and their  respective  partners,  members,  shareholders,
      officers,  directors,  employees and agents (collectively,  "Indemnitees")
      from  and  against  any  and all  losses,  claims,  liabilities,  damages,
      penalties,  suits, costs and expenses,  of any kind or nature,  (including
      fees  relating  to the  cost of  investigating  and  defending  any of the
      foregoing)  imposed on, incurred by or asserted against such Indemnitee in
      any way related to or arising from or alleged to arise from this Agreement
      or the Collateral,  except any such losses, claims, liabilities,  damages,
      penalties,   suits,  costs  and  expenses  which  result  from  the  gross
      negligence  or willful  misconduct  of the  Indemnitee  as determined by a
      final,  nonappealable decision of a court of competent jurisdiction.  This
      indemnification provision is in addition to, and not in limitation of, any
      other  indemnification  provision in the Notes, the Purchase Agreement (as
      such term is defined in the Notes) or any other  agreement,  instrument or
      other document executed or delivered in connection herewith or therewith.

                                       23
<PAGE>

            (l)  Nothing in this  Agreement  shall be  construed  to subject any
      Secured Party to liability as a partner in any Debtor or any if its direct
      or  indirect  subsidiaries  that is a  partnership  or as a member  in any
      Debtor or any of its  direct or  indirect  subsidiaries  that is a limited
      liability  company,  nor shall any Secured Party be deemed to have assumed
      any  obligations  under any  partnership  agreement  or limited  liability
      company agreement, as applicable,  of any such Debtor or any if its direct
      or indirect  subsidiaries or otherwise,  unless and until any such Secured
      Party  exercises its right to be substituted  for such Debtor as a partner
      or member, as applicable, pursuant hereto.

            (m) To the extent  that the grant of the  security  interest  in the
      Collateral  and the  enforcement  of the terms hereof require the consent,
      approval or action of any partner or member, as applicable,  of any Debtor
      or any direct or indirect  subsidiary of any Debtor or compliance with any
      provisions  of any of the  Organizational  Documents,  the  Debtor  hereby
      grants such consent and approval  and waives any such  noncompliance  with
      the terms of said documents.

                            [SIGNATURE PAGES FOLLOW]

                                       24
<PAGE>

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

KNOBIAS, INC.

/s/ E. KEY RAMSEY
-----------------
E. Key Ramsey, President

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       25
<PAGE>

                    [SIGNATURE PAGE OF HOLDERS TO KNOBIAS SA]

Name of Investing Entity: DCOFI Master LDC
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing entity: /s/ JEFFREY M. HAAS
                                                       -------------------------
Name of Authorized Signatory: Jeffrey M. Haas
                              --------------------------------------------------
Title of Authorized Signatory: Senior Vice-President
                               -------------------------------------------------

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       26

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