Document:

FORM OF SECURITY AGREEMENT

      This SECURITY AGREEMENT, dated as of February 9, 2007 (as the same may be
supplemented, modified, amended, restated or replaced from time to time in the
manner provided herein, this "Agreement"), is by and among Star Energy
Corporation, a Nevada corporation (the "Company"), all of the Subsidiaries of
the Company listed on the signature pages hereto (each a "Guarantor" and
collectively the "Guarantors", and together with the Company, each a "Debtor"
and collectively the "Debtors"), the Holders (as hereinafter defined) and
_________, as Collateral Agent (the "Agent", and together with the Holders, each
a "Secured Party" and collectively the "Secured Parties", and together with the
Debtors, each a "party" and collectively the "parties").

                                   WITNESSETH:

      WHEREAS, the Company is a party to the Securities Purchase Agreement dated
as of February 9, 2007 (as the same may be supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein, the
"Purchase Agreement"), with the "Purchasers" who are signatories thereto (as
such term is defined therein), pursuant to which such Purchasers (together with
their respective successors and permitted assigns under the Debentures (as
defined below), each a "Holder" and collectively the "Holders") severally agreed
to extend the loans to the Company evidenced by the Company's 8% Secured
Convertible Debentures due February ___, 2010, in the original aggregate
principal amount of $[_____] and severally issued by the Company to the Holders
on February __, 2007 (as the same may be issued, supplemented, modified,
amended, restated or replaced from time to time in the manner provided therein,
each a "Debenture" and collectively, the "Debentures");

      WHEREAS, the Guarantors have jointly and severally agreed to guarantee and
act as surety for payment of such Debentures pursuant to a certain Subsidiary
Guarantee dated as of the date hereof (as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein, the "Guarantee"); and

      WHEREAS, in order to induce the Secured Parties to extend the loans
evidenced by the Debentures, each Debtor has agreed to execute and deliver to
the Secured Parties this Agreement and to grant each Secured Party, pari passu
with each other Secured Party, which Secured Parties are acting through the
Agent as their collateral agent, a security interest in certain personal
property of each such Debtor to secure the prompt payment, performance and
discharge in full of all of the Company's obligations under the Debentures and
the Guarantors' respective obligations under the Guarantee.

      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:

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            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. Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement or
other applicable Transaction Document (as such term is defined in the Purchase
Document).

            (a) "Collateral" means all of the personal assets and personal
      property of each Debtor, including (without limitation) the following
      personal property of each Debtor, in each case whether presently owned or
      existing or hereafter acquired or created, 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)):

      (i)   All goods, including, without limitation, (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 goods used and
            useful in connection with any Debtor's businesses and all
            improvements thereto; and (B) all inventory;

      (ii)  All financial assets, security entitlements and 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, and income tax refunds;

      (iii) All accounts, together with all instruments evidencing such
            accounts, all documents of title representing any merchandising,
            goods, equipment, motor vehicles and trucks, 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;

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<PAGE>

      (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;

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

      (x)   All Intellectual Property; and

      (xi)  the products and proceeds of all of the foregoing Collateral set
            forth in clauses (i)-(x) 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 issued by each
      Guarantor, issued to or owned by any Debtor, 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 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 that, 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 fullest extent permitted by applicable law, this
      Agreement shall create a valid security interest in such asset and the
      products and proceeds thereof.

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<PAGE>

            (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.

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

            (d) "Necessary Endorsement" means undated stock powers endorsed in
      blank or other proper instruments of assignment duly executed and such
      other instruments or documents as the Agent (as that term is defined
      below) may reasonably request.

            (e) "Lien" shall have the meaning assigned to such term in the
      Purchase Agreement.

            (f) "Obligations" means all of the liabilities and obligations
      (primary, secondary, direct, contingent, sole, joint or several) due or to
      become due, or that are now or may be hereafter contracted or acquired, or
      owing, from any Debtor to the Secured Parties, including, without
      limitation, all obligations under this Agreement, the Purchase Agreement,
      the Debentures, the Guarantee 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
      Debentures 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 Purchase
      Agreement, the Debentures, the Guarantee 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.

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<PAGE>

            (g) "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), in each case as the same may be supplemented, modified,
      amended, restated or replaced from time to time in the manner provided
      therein.

            (h) "Permitted Lien" shall have the meaning assigned to such term in
      the Debenture.

            (i) "Pledged Securities" shall have the meaning ascribed to such
      term in Section 4(i).

            (j) "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 Security Interest in Collateral. As an inducement for the
Secured Parties to extend the loans as evidenced by the Debentures and to secure
the complete and timely payment, performance and discharge in full, as the case
may be, of all of the Obligations, each Debtor hereby unconditionally and
irrevocably pledges, grants and hypothecates to each Secured Party and to the
Agent (for the benefit of the Secured Parties) a continuing 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
(a "Security Interest" and collectively, the "Security Interests").

      3. Delivery of Certain Collateral. Contemporaneously or prior to the
execution of this Agreement, each Debtor shall deliver or cause to be delivered
to the Agent (a) any and all certificates and other instruments representing or
evidencing ownership of the Pledged Securities, and (b) any and all title
certificates and other instruments or documents representing ownership any of
the other Collateral, in each case, together with all Necessary Endorsements.
The Debtors are, contemporaneously with the execution hereof, delivering to
Agent, or have previously delivered to Agent, a true and correct copy of each
Organizational Document governing the issuer of any of the Pledged Securities.

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<PAGE>

      4. Representations, Warranties, Covenants and Agreements of the Debtors.
Except as otherwise set forth in the corresponding section of the disclosure
schedules delivered to the Secured Parties concurrently herewith (the
"Disclosure Schedules"), which Disclosure Schedules shall be deemed a part
hereof and incorporated herein by reference, each Debtor represents and warrants
to, and covenants and agrees with, the Secured Parties as follows as of the date
hereof (unless otherwise indicated) and solely with respect to itself:

(a)   Each Debtor has the requisite corporate, partnership, limited liability
      company or other entity power and authority to enter into this Agreement
      and otherwise to carry out its obligations hereunder. The execution,
      delivery and performance by each 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 each Debtor. This Agreement
      constitutes the legal, valid and binding obligation of each Debtor,
      enforceable against each Debtor in accordance with its terms, except (i)
      as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general
      application affecting enforcement of creditors' rights generally, (ii) as
      limited by laws relating to the availability of specific performance,
      injunctive relief or other equitable remedies, (iii) insofar as
      indemnification and contribution provisions contained herein may be
      limited by applicable law, and (iv) insofar as certain elections, waivers
      and agreements to vary statutory provisions may be impermissible under the
      UCC and other applicable law (clauses (i) through (iv) may be referred to
      collectively as the "Enforceability Limits").

(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, each Debtor is the named
      leasehold tenant or record owner of the real property where such
      Collateral is located. Except as disclosed on Schedule A, none of such
      Collateral is in the possession of any consignee, bailee, warehouseman,
      agent or processor.

(c)   Except for Permitted Liens and 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
      Interests. Except as set forth on Schedule B attached hereto or in
      connection with the Permitted Liens, the Debtors have not authorized the
      filing of an effective financing statement, security agreement, collateral
      assignment or any notice of any of the foregoing (other than those that
      will be filed in favor of the Secured Parties or Agent pursuant to this
      Agreement) covering or affecting any of the Collateral in any United
      States governmental or regulatory authority, agency or recording office.
      Except as set forth on Schedule B attached hereto and except pursuant to
      this Agreement, as long as this Agreement shall be in effect, the Debtors
      shall not execute and shall not knowingly permit to be on file in any such
      authority, agency or recording office any other financing statement or
      other document or instrument (except to the extent filed or recorded with
      respect to a Permitted Lien or in favor of the Secured Parties pursuant to
      the terms of this Agreement).

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<PAGE>

(d)   No written claim has been received by any Debtor that any Collateral or
      such 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 knowledge of any Debtor, threatened before any court,
      judicial body, administrative or regulatory agency, arbitrator or other
      governmental authority.

(e)   Each 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
      to any location not listed on such Schedule 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 if such Collateral were previously located 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 Interests to
      create in favor of the Secured Parties a valid, perfected and continuing
      perfected first priority lien in the Collateral.

(f)   This Agreement creates in favor of the Secured Parties an effective
      security interest in the Collateral, subject only to Permitted Liens
      securing the payment and performance of the Obligations. Upon making the
      filings described in the immediately following paragraph, all Security
      Interests that may be perfected within the United States by filing UCC
      financing statements shall have been duly perfected. Except for the filing
      of UCC financing statements, the execution and delivery of deposit account
      and securities account control agreements satisfying the requirements of
      the UCC with respect to each deposit account and securities account of the
      Debtors located or deemed located within the United States, the delivery
      of the certificates and other instruments provided in Section 3, the
      delivery of other Collateral perfected through possession (such as money),
      and the Enforceability Limits noted above, (i) no authorization, approval
      or other action by, and no notice to or filing with, any governmental
      authority or regulatory body is required, (ii) no consent of any other
      third parties is required, and (iii) no other action on the part of the
      Company or Secured Parties is required for (A) the execution, delivery and
      performance of this Agreement, (B) the creation or perfection under the
      UCC of the Security Interests created hereunder in the Collateral located
      or deemed located in the United States, or (C) the enforcement of the
      rights of the Agent and the Secured Parties hereunder in the Collateral
      located or deemed located in the United States.

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<PAGE>

(g)   Each Debtor hereby authorizes the Agent to file from time to time one or
      more financing statements, continuation statements and amendments thereto
      under the UCC with respect to the Security Interests with the proper
      filing and recording agencies in any United States jurisdiction deemed
      proper by it and ratifies the authority of the Agent to have made any such
      filing made prior to the date hereof. Each Debtor acknowledges and agrees
      that such financing statements will be filed without the signature of such
      Debtor where required or permitted by applicable law and may (but need
      not) describe the Collateral as "all assets" or "all personal property" or
      words of like import.

(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) 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 commercially reasonable right of termination, material
      amendment, acceleration or cancellation (with or without notice, lapse of
      time or both) of, any agreement, credit facility, debt or other instrument
      or enforceable understanding evidencing any Debtor's material debt or
      other material obligations to which any Debtor is a party or by which any
      material property or asset of any Debtor is bound or affected. If any, all
      required consents under such agreement, credit facility, debt or other
      instrument or enforceable understanding (including, without limitation,
      from stockholders or creditors of any Debtor) necessary for any Debtor to
      enter into and perform its obligations hereunder have been obtained.

(i)   The capital stock and other equity interests listed on Schedule H hereto
      (the "Pledged Securities") represent all of the capital stock and other
      equity interests in each of the direct and indirect subsidiaries of the
      Company, each of whom is one of the Guarantors, and 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 (which with respect to any non-U.S. Subsidiary is to the
      best knowledge of the Company and such non-U.S. Subsidiary), 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 other Permitted
      Liens.

(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)   Except for Permitted Liens and Permitted Dispositions (as hereinafter
      defined), each Debtor shall at all times maintain the liens and Security
      Interests provided for hereunder as valid and perfected first 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 [or released] pursuant to Section 14 hereof. Each Debtor hereby
      agrees to defend the same against the claims of any and all persons and
      entities, and to safeguard and protect all Collateral for the account of
      the Secured Parties, other than from those with Permitted Liens and from
      Permitted Dispositions. At the request of the Agent, each Debtor will
      sign, if necessary, and deliver to the Agent on behalf of 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 Agent and will
      pay the cost of filing the same in all public offices wherever filing is,
      or is deemed by the Agent to be, necessary or desirable to effect the
      rights and obligations provided for herein. Without limiting the
      generality of the foregoing, each Debtor shall pay all fees, taxes and
      other amounts necessary to maintain the Collateral and the Security
      Interests hereunder, and each Debtor shall obtain and furnish to the Agent
      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 Interests required hereunder.

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(l)   No Debtor will transfer, pledge, hypothecate, encumber, license, sell or
      otherwise dispose of any of the Collateral without the prior written
      consent of a Majority in Interest, except for (i) the Permitted Liens,
      (ii) non-exclusive licenses granted by the Debtors in the ordinary course
      of business, (iii) the sale, lease, consumption or other disposition of
      inventory, equipment or other goods by the Debtors in the ordinary course
      of business, (iv) the collection and reasonable compromise and settlement
      of accounts, indebtedness, insurance claims, tort liability and
      contractual claims, and other obligations owed to one or more of them by
      the Debtors in an amount less than $_____, and (v) the receipt,
      possession, retention and use of all proceeds of the foregoing and other
      money and financial assets in the possession or accounts of the Debtors in
      the ordinary course of business (clauses (ii) through (v) will be referred
      to collectively as the "Permitted Dispositions").

(m)   Each Debtor shall keep and preserve its equipment, inventory and other
      tangible Collateral in good condition, repair and order, ordinary wear and
      tear and reasonable retirement excepted, other than as such assets may
      have been consumed or disposed of in accordance with this Agreement, and
      shall not operate or locate any such Collateral (or cause to be operated
      or located) in any area excluded from the applicable insurance coverage.

(n)   Each Debtor shall maintain with financially sound and reputable insurers,
      insurance with respect to the Collateral, including Collateral hereafter
      acquired, 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. Each
      Debtor shall cause each insurance policy issued in connection herewith to
      provide, and the insurer issuing such policy to certify to the Agent that:
      (a) the Agent will be named as loss payee and an additional insured under
      each such insurance policy [(as its interest may appear)]; (b) if such
      insurance be proposed to be cancelled or materially changed for any reason
      whatsoever, such insurer will promptly notify the Agent and such
      cancellation or change shall not be effective as to the Agent for at least
      thirty (30) days after receipt by the Agent of such notice, unless the
      effect of such change is to extend or increase coverage under the policy;
      and (c) the Agent 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 Debentures) exists and if the proceeds arising out of any
      claim or series of related claims do not exceed $300,000, loss payments in
      each instance (to the extent received) will be delivered by the Agent to
      the applicable Debtor and 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, may be retained by the
      applicable Debtor, provided, however, that payments received by any Debtor
      after an Event of Default occurs and is continuing without being waived by
      the Holder or cured by the Company or in excess of $300,000 for any
      occurrence or series of related occurrences shall be paid to the Agent on
      behalf of the Secured Parties, and if received by such Debtor, shall be
      held in trust for the Secured Parties and immediately paid over to the
      Agent unless otherwise directed in writing by the Agent. Copies of such
      policies or the related certificates, in each case, naming the Agent as
      loss payee and additional insured [(as its interest may appear)] shall be
      delivered to the Agent at least annually and at the time any new policy of
      insurance is issued.

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(o)   Each Debtor shall, within ten (10) days of obtaining knowledge thereof,
      promptly advise the Secured Parties, in sufficient detail, of any material
      adverse 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 Security Interests therein.

(p)   Except as otherwise provided in this Agreement, each Debtor shall promptly
      execute and deliver to the Agent such further assignments, security
      agreements, financing statements or other instruments, documents,
      certificates and assurances and take such further action as the Agent may
      from time to time request and may in its sole discretion deem necessary to
      perfect, protect or enforce the Security Interests as contemplated
      hereunder, including, without limitation, if applicable, the execution and
      delivery of a separate security agreement with respect to each item of
      each Debtor's Intellectual Property having material value (as the same may
      be executed and thereafter supplemented, modified, amended, restated or
      replaced from time to time in the manner provided therein, an
      "Intellectual Property Security Agreement") in which the Secured Parties
      have been granted a Security Interest hereunder, substantially in a form
      reasonably acceptable to the Agent, which Intellectual Property Security
      Agreement, other than as stated therein, shall be subject to all of the
      terms and conditions hereof.

(q)   Each Debtor shall permit the Agent and its representatives and agents to
      inspect the Collateral during normal business hours and upon reasonable
      prior notice, and to make copies of records pertaining to the Collateral
      as may be reasonably requested by the Agent from time to time.

(r)   Each 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 other than
      with respect to Permitted Liens and Permitted Dispositions.

(s)   Each 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 material part of the Collateral and of
      any other information received by such Debtor that could reasonably be
      expected to materially affect (i) the value of the Collateral, (ii) the
      existence, perfection or priority of the Security Interests contemplated
      hereunder or (iii) the rights and remedies of the Agent or Secured Parties
      hereunder.

                                       10
<PAGE>

(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,
      and shall be, accurate and complete in all material respects as of the
      date indicated, or if no date is indicated, as of the date furnished (it
      being understood that the most recent such information supersedes prior
      information as to the same matters).

(u)   The Debtors 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
      structure or identity, or add any new fictitious name, unless it provides
      at least 30 days prior written notice to the Agent 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 the
      perfection of the Security Interests granted and evidenced by this
      Agreement.

(w)   Except in the ordinary course of business or as required by applicable
      law, 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 the Agent, which shall
      not be unreasonably withheld.

(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 the perfection of the Security Interests granted
      and evidenced by this Agreement.

(y)   Each Debtor was organized and remains organized solely under the laws of
      the state or other jurisdiction set forth next to such Debtor's name in
      Schedule D attached hereto, which Schedule D sets forth each Debtor's
      organizational identification number or, if any Debtor does not have one,
      specifies that one does not exist.

(z)   (i) The actual and complete legal name of each Debtor is the name set
      forth in Schedule D attached hereto; (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 or consolidated into any Debtor or been acquired by any Debtor
      within the past five years except as set forth on Schedule E.

(aa)  At any time and from time to time that any Collateral consists of
      instruments, certificated securities or other items that require
      possession under applicable law by the secured party in order to perfect
      the Security Interest therein, the applicable Debtor shall deliver such
      Collateral to the Agent, excluding those items subject to any of the
      Permitted Liens or Permitted Dispositions.

                                       11
<PAGE>

(bb)  Each Debtor, in its capacity as an issuer of Pledged Securities, hereby
      agrees to comply with any and all orders and instructions of Agent
      regarding the Pledged Securities issued by it 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, each
      Debtor agrees that it shall not enter into a similar agreement (or an
      agreement that would confer "control" within the meaning of Article 8 of
      the UCC) with any other person or entity.

(cc)  Each Debtor shall cause all tangible chattel paper constituting Collateral
      to be delivered to the Agent, or if such delivery is not practical, then
      to cause such tangible chattel paper to contain a legend noting that it is
      subject to the Security Interest. To the extent that any Collateral
      consists of electronic chattel paper, the applicable Debtor shall cause
      the underlying chattel paper to be "marked" respecting such Security
      Interest 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, all upon the terms of this Agreement, in form and substance in
      each case reasonably satisfactory to the Agent, to be entered into and
      delivered to the Agent for the benefit of the Secured Parties. Such
      agreements shall expressly permit the applicable Permitted Dispositions
      unless and until the Agent gives the holder and Debtors specific written
      notice to the contrary during the continuance of an Event of Default.

(ee)  To the extent that any Collateral consists of letter-of-credit rights, the
      applicable Debtor shall use its reasonable best efforts to 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 material Collateral is in the possession of any
      third party, the applicable Debtor shall promptly provide notice to the
      Agent of such possession and shall join with the Agent 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
      of the Security Interest therein from such third party with respect to the
      Collateral, all upon the terms of this Agreement, in form and substance
      satisfactory to the Agent.

(gg)  If any Debtor shall at any time hold or acquire a commercial tort claim,
      such Debtor shall promptly notify the Agent in a writing signed by such
      Debtor of the particulars thereof and (at the Agent's request) 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 reasonably satisfactory to the Agent.

                                       12
<PAGE>

(hh)  Each Debtor shall immediately provide written notice to the Secured
      Parties of any and all material accounts that arise out of contracts with
      any governmental authority and, to the extent necessary to perfect or
      continue the perfected status of the Security Interests in such accounts
      and proceeds thereof, shall execute and deliver to the Agent a collateral
      assignment of claims for such accounts, all upon the terms of this
      Agreement, and cooperate with the Agent in taking any other steps
      required, in its 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 Interests in such accounts and
      proceeds thereof.

(ii)  Each Debtor shall cause each subsidiary of such Debtor that becomes a
      Guarantor to also immediately become a party hereto (an "Additional
      Debtor"), by executing and delivering an Additional Debtor Joinder in
      substantially the form of Annex A attached hereto and comply with the
      provisions hereof applicable to the Debtors. Concurrent therewith, the
      Additional Debtor shall deliver replacement schedules for, or supplements
      to, all other Schedules to (or referred to in) this Agreement, as
      applicable, which replacement schedules shall supersede, or supplements
      shall modify, the Schedules then in effect. The Additional Debtor shall
      also deliver such opinions of counsel, authorizing resolutions, good
      standing certificates, incumbency certificates, organizational documents,
      financing statements and other information and documentation as the Agent
      may reasonably request. Upon delivery of the foregoing to the Agent, the
      Additional Debtor shall be and become a party to this Agreement with the
      same rights and obligations as the Debtors, for all purposes hereof as
      fully and to the same extent as if it were an original signatory hereto
      and shall be deemed to have made the representations, warranties and
      covenants set forth herein as of the date of execution and delivery of
      such Additional Debtor Joinder, and all references herein to the "Debtor"
      or "Debtors" shall be deemed to include each Additional Debtor.

(jj)  Each Debtor agrees to not vote its ownership interests in the Pledged
      Securities, to the extent matters are presented to it from time to time,
      in such a manner as to cause an Event of Default under this Agreement or
      the Debentures, provided that such agreement shall not require the Debtor
      or its representatives to breach any fiduciary duty to another Person.

(jj)  Each Debtor shall register the pledge of the applicable Pledged Securities
      on the books of such Debtor. Each Debtor hereby notifies each other Debtor
      that is the 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 Debtor that is an issuer of Pledged Securities. Further,
      except with respect to certificated securities delivered to the Agent,
      each issuing Debtor hereby acknowledges such pledge and confirms that: (a)
      it has registered the pledge on its books and records; and (b) at any time
      directed by Agent during the continuation of an Event of Default, such
      issuer (with the understanding and agreement of the Secured Parties that
      such Pledged Securities will continue to constitute Collateral subject to
      this Agreement and applicable law notwithstanding any of the following)
      will transfer the record ownership of such Pledged Securities into the
      name of any designee of Agent for perfection and protection purposes, will
      take such steps as may be necessary to effect the transfer, and will
      comply with all other instructions of Agent regarding such Pledged
      Securities without the further consent of the applicable Debtor.

                                       13
<PAGE>

(kk)  In the event that, upon an occurrence of an Event of Default, Agent shall
      sell all or any of the Pledged Securities to another party or parties
      (herein called the "Transferee"), or any Secured Party shall purchase or
      retain all or any of the Pledged Securities, in each case in accordance
      with this Agreement and applicable law, each Debtor shall, to the extent
      applicable: (i) deliver to Agent 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 issuer of such Pledged
      Securities and its direct and indirect subsidiaries; (ii) use its best
      efforts to obtain resignations of the persons then serving as officers and
      directors of the issuer of such Pledged Securities 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 Agent
      and allow the Transferee or Agent to continue the business of the issuer
      of the Pledged Securities and its direct and indirect subsidiaries.

(mm)  Without limiting the generality of the other obligations of the Debtors
      hereunder, each Debtor shall promptly (i) if any Security Interest has
      been granted hereunder in any material copyright for which registration
      under the federal laws of the United States is available, cause to be
      registered at the United States Copyright Office an Intellectual Property
      Security Agreement (as defined above) respecting the Security Interest
      created hereunder in all of its material copyrights, for which
      registration under the federal laws of the United States is available,
      (ii) if any Security Interest has been granted hereunder in any material
      patent or trademark for which registration under the federal laws of the
      United States is available, cause to be registered at the United States
      Patent and Trademark Office an Intellectual Property Security Agreement
      respecting the Security Interest created hereunder in all of its material
      patents and trademarks for which registration under the federal laws of
      the United States is available, and (iii) give the Agent notice whenever
      it acquires (whether absolutely or by recordable and transferable license)
      or creates any additional material Intellectual Property for which
      registration under the federal laws of the United States is available.

(nn)  Each Debtor will from time to time, at the joint and several expense of
      the Debtors, promptly execute and deliver all such further instruments and
      documents, and take all such further action as may be necessary, or as the
      Agent may reasonably request, in order to perfect and protect, all upon
      the terms of this Agreement, 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 in accordance herewith 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 material patents, patent
      applications, trademarks, trademark applications, registered copyrights,
      and domain names owned by any of the Debtors 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 Debtors for which
      registration under the federal laws of the United States of America is
      available have been duly recorded at the United States Patent and
      Trademark Office and all material copyrights of the Debtors for which
      registration under the federal laws of the United States is available have
      been duly recorded at the United States Copyright Office.

                                       14
<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 of the United
      States 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 Agent's 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 and continuance of an Event of Default (as
      defined in the Debentures) that is not waived by the Holder or cured by
      the Company under the Debentures;

            (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) Business 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 reasonable best efforts to cure same in a timely
      fashion; or

            (d) If any material 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.

                                       15
<PAGE>

            7. Duty To Hold In Trust.

            (a) Upon the occurrence and continuance of any Event of Default that
      is not waived by the Holder or cured by the Company, each Debtor shall,
      upon receipt of any revenue, income, dividend, interest or other sums
      subject to the Security Interests, whether payable pursuant to the
      Debentures 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 Agent, who in turn
      shall remit the same to the Secured Parties, pro rata in proportion to
      their respective then-currently outstanding principal amount of the
      remaining Debentures, for application to the satisfaction of the
      Obligations (and if any Debentures are not outstanding, pro rata in
      proportion to the initial purchases of the remaining Debentures).

            (b) If any Debtor shall become entitled to receive or shall receive
      any securities or other investment 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) hold the same in trust
      on behalf of and for the benefit of the Secured Parties; and (ii) to
      deliver any and all certificates or instruments evidencing the same to
      Agent 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 Agent subject to
      the terms of this Agreement as Collateral.

            8. Rights and Remedies Upon Default.

            (a) Upon the occurrence and continuance of any Event of Default that
      is not waived by the Holder or cured by the Company, the Agent (for the
      benefit of the Secured Parties) shall have the right to exercise all of
      the remedies conferred on the Agent and Holders under this Agreement and
      the Debentures (whether or not such rights are assigned specifically to a
      "Holder", "Secured Party" or "Agent"), and shall have all the rights and
      remedies of a secured party under the UCC. Without limitation, the Agent,
      for the benefit of the Secured Parties, shall have the following rights
      and powers to the fullest extent permitted by applicable law:

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

                                       16
<PAGE>

(ii)  Upon notice to the Debtors by Agent, all rights of each Debtor to exercise
      the voting and other consensual rights which it would otherwise be
      entitled to exercise and all rights of each Debtor to receive the
      dividends and interest which it would otherwise be authorized to receive
      and retain, shall cease. Upon such notice, Agent shall have the right to
      receive, for the benefit of the Secured Parties, any interest, cash
      dividends or other payments on the Collateral and, at the option of Agent,
      to exercise in such Agent's discretion all voting rights pertaining
      thereto. Without limiting the generality of the foregoing, Agent shall
      have the right (but not the obligation) to exercise all rights with
      respect to the Collateral as it were the sole and absolute owner 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 Agent shall have the right to operate the business of each 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 Agent shall 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 Agent, for the benefit of the Secured Parties, may,
      unless prohibited by any applicable law that cannot be waived in this
      Agreement, 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 Agent 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 Agent, on behalf of the Secured Parties, and to
      enforce the Debtors' rights against such account debtors and obligors.

(v)   The Agent, for the benefit of the Secured Parties, may (but is not
      obligated to) direct any financial intermediary or any other person or
      entity holding any investment property to transfer the same to the Agent,
      on behalf of the Secured Parties, or its designee to hold as Collateral
      pursuant hereto.

(vi)  The Agent may (but is 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 any
      purchaser of any Collateral.

            (b) The Agent shall 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 Agent may sell the Collateral as provided herein
      without giving any warranties and may specifically disclaim such
      warranties. The Agent may sell the Collateral as provided herein on
      commercially reasonable credit terms, and if the Agent sells any of the
      Collateral on credit, the Debtors will only be credited with payments
      actually made by the purchaser. In addition, each Debtor waives any and
      all rights that it may have to a judicial hearing in advance of the
      enforcement of any of the Agent's 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.

                                       17
<PAGE>

            (c) For the purpose of enabling the Agent to further exercise rights
      and remedies under this Section 8 or elsewhere provided by agreement or
      applicable law, each Debtor hereby grants to the Agent, for the benefit of
      the Agent and 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. The proceeds of any sale, lease or
other disposition of the Collateral and from payments and other amounts received
by the Agent or any other Secured Party pursuant to Section 8 hereof (including,
without limitation, payments made on account of any insurance policy insuring
any portion of the Collateral) shall be applied in the following order (i) 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, (ii) to the
reasonable attorneys' fees and expenses incurred by the Agent in enforcing the
Secured Parties' rights hereunder and in connection with collecting, storing and
disposing of the Collateral, (iii) to satisfaction of the Obligations pro rata
among the Secured Parties (based on then-outstanding principal amounts of their
respective Debentures at the time of any such determination), (iv) to the
payment of any other amounts required by applicable law, and (v) finally, if any
surplus remains, 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 Debtors will be liable for (A)
such deficiency, together with interest thereon, at the rate of 18% per annum or
the lesser amount permitted by applicable law (the "Default Rate"), and (B) the
reasonable fees of any attorneys employed by the Secured Parties to collect such
deficiency. To the extent permitted by applicable law, each 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 bad faith, 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.

            10. Securities Law Provision. Each Debtor recognizes that Agent may
be limited in its 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. Each 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 Agent has 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. Each Debtor shall cooperate
with Agent in its attempt to satisfy any requirements under the Securities Laws
(including, without limitation, registration thereunder if requested by Agent)
applicable to the sale of the Pledged Securities by Agent.

                                       18
<PAGE>

            11. Costs and Expenses. Each 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 Agent. The Debtors shall also pay all other claims
and charges (other than (i) Permitted Liens and (ii) Permitted Indebtedness)
that in the reasonable opinion of the Agent is reasonably likely to prejudice,
imperil or otherwise affect the Collateral or the Security Interests therein
contemplated hereunder. The Debtors will also, upon demand, pay to the Agent 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 Agent, for the
benefit of 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
Debentures. Until so paid, any fees payable hereunder shall be added to the
principal amount of the Debentures and shall bear interest at the Default Rate.

            12. Responsibility for Collateral. The Debtors assume 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, to the fullest
extent permitted by applicable law, (a) neither the Agent nor any 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, (b) each Debtor shall remain obligated and liable under
each contract or agreement included in the Collateral to be observed or
performed by such Debtor thereunder; (c) neither the Agent nor any 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 the Agent or any
Secured Party of any payment relating to any of the Collateral; and (d) neither
the Agent nor any Secured Party shall 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 the Agent or 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 the Agent or to which the Agent or any Secured Party may be entitled
at any time or times.

                                       19
<PAGE>

            13. Security Interests Absolute. All rights of the Secured Parties
and all obligations of the Debtors hereunder shall be absolute and unconditional
in accordance with the terms of this Agreement, irrespective of: (a) any lack of
validity or enforceability of any provision of this Agreement, the Debentures or
any agreement entered into in connection with the foregoing; (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 Debentures 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 guarantee, 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 Interests 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 to the
fullest extent permitted by applicable law. Each Debtor expressly waives
[acceptance], presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance under this Agreement and the other
Transaction Documents. In the event that at any time any transfer of any
Collateral in accordance herewith or any application of 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, each 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. Each 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. Each Debtor waives any defense arising by reason of the
application of the statute of limitations to any obligations secured hereby.

            14. Term of Agreement; Releases and Subordinations of Certain
Security Interests. (a) This Agreement and the Security Interests shall
terminate on the date on which all payments under the Debentures have been
indefeasibly paid in full in cash and all other Obligations (other than any
contingent indemnification, defense or similar obligation that by its express
terms extends beyond such payment) have been paid in cash or discharged;
provided, however, that all indemnities of the Debtors contained in this
Agreement (including, without limitation, Annex B hereto) shall survive and
remain operative and in full force and effect in accordance with their
respective terms regardless of the termination of this Agreement.

            15. Power of Attorney; Further Assurances.

                                       20
<PAGE>

            (a) Each Debtor authorizes the Agent, and does hereby make,
      constitute and appoint the Agent, its successors and permitted assigns and
      their respective officers with full power of substitution, as such
      Debtor's true and lawful attorney-in-fact, with power, in the name of the
      Agent or such Debtor, after the occurrence and during the continuance of
      an Event of Default that is not waived by the Holder or cured by the
      Company: (i) to 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 Agent; (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 Agent, and at the expense of the Debtors, 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 Agent deems necessary
      to protect, preserve and realize upon the Collateral and the Security
      Interests granted therein in order to effect the intent of this Agreement
      and the Debentures all as fully and effectually as the Debtors might or
      could do; and each 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 Any Event of Default
      that is not waived by the Holder or cured by the Company, each Secured
      Party is specifically authorized to execute and file any applications for
      or instruments of transfer and assignment to any purchaser thereof in
      accordance herewith of any patents, trademarks, copyrights or other
      Intellectual Property with the United States Patent and Trademark Office
      and the United States Copyright Office.

            (b) On a continuing basis, each Debtor will make, execute,
      acknowledge, deliver, file and record, as the case may be, with the proper
      filing and recording agencies all such instruments in any jurisdiction
      within the United States including, without limitation, the jurisdictions
      indicated on Schedule C attached hereto, and will use commercially
      reasonable best efforts to make, execute, acknowledge, deliver, file and
      record all such instruments with the proper filing and recording agencies
      in any other jurisdiction, and will take all such other actions as may
      reasonably be necessary, or as reasonably requested by the Agent, in order
      (i) to create or perfect the Security Interests as contemplated hereunder,
      (ii) to otherwise to carry out the intent and purposes of this Agreement,
      or (iii) to reasonable assure and confirm such perfection of the Security
      Interests to the Agent.

            (c) Each Debtor hereby irrevocably appoints the Agent, its
      successors and permitted assigns and their respective officers 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
      Agent's discretion, to take any action and to execute any instrument which
      the Agent 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 Agent. 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.

                                       21
<PAGE>

            16. Notices. All notices, requests, demands and other communications
hereunder shall be subject to the notice provision of the Purchase Agreement.

            17. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral from any person other
than the Debtors or by the guarantee, endorsement or property of any other
person, firm, corporation or other entity (other than the Debtors), then the
Agent shall have the right, in its sole discretion, to release, relinquish,
subordinate or take any other similar action with respect to the Collateral or
Obligations, without in any way modifying or affecting any of the Secured
Parties' rights and remedies hereunder.

            18. Appointment of Agent. The Secured Parties hereby appoint the
Agent to act as their agent for purposes of receiving the grant of the Security
Interests for their benefit and exercising any and all rights and remedies of
the Secured Parties hereunder. Such appointment shall continue until revoked in
writing by a Majority in Interest, at which time a Majority in Interest shall
appoint a new Agent, provided that the current Agent may not be removed unless
such Agent shall then hold less than $_____ in principal amount of Debentures;
provided, further, that such removal may occur only if each of the other Secured
Parties shall then hold not less than an aggregate of $______ in principal
amount of Debentures. The Agent shall have the rights, responsibilities and
immunities set forth in Annex B hereto. However, nothing in Annex B is intended,
or shall be deemed or construed, to in any way confer on the Agent any right,
power, privilege, remedy or interest under any Transaction Document not
conferred on the Agent, Holder, Purchaser or Secured Party (as applicable) under
applicable law or the express terms of the applicable Transaction Document.

            19. Miscellaneous.

            (a) No course of dealing between or among the parties, nor any
      failure to exercise, nor any delay in exercising, on the part of any of
      the parties, any right, power or privilege hereunder or under the
      Debentures 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.

            (b) All of the rights and remedies of the parties with respect to
      the Collateral, whether established by this Agreement, by the Debentures,
      by any other agreements, instruments or documents among the parties, or by
      applicable law, shall be cumulative and not alternatives and may be
      exercised singly or concurrently.

            (c) This Agreement, together with the exhibits and schedules hereto,
      contain the entire understanding of the parties with respect to the
      subject matter hereof and supersede all prior agreements and
      understandings, oral or written, with respect to such matters, which the
      parties acknowledge have been merged into this Agreement and the exhibits
      and schedules hereto. No provision of this Agreement may be waived,
      modified, supplemented or amended except in a written instrument signed,
      in the case of an amendment, by the Debtors and the Secured Parties or, in
      the case of a waiver, by the party against whom enforcement of any such
      waived provision is sought. By accepting this Agreement, whether or not a
      signatory hereto, each Holder acknowledges and agrees that the Holder (A)
      is a "Secured Party", one of the "Secured Parties", a "party" and one of
      the "parties" for the purposes of this Agreement and (A) is contractually
      bound by the provisions hereof applicable to it as such a Secured Party,
      one of the Secured Parties, a party or one of the parties.

                                       22
<PAGE>

            (d) If any term, provision, covenant or restriction of this
      Agreement is held by a court of competent jurisdiction to be invalid,
      illegal, void or unenforceable, the remainder of the terms, provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected, impaired or invalidated, and the
      parties hereto shall use their commercially reasonable efforts to find and
      employ an alternative means to achieve the same or substantially the same
      result as that contemplated by such term, provision, covenant or
      restriction. It is hereby stipulated and declared to be the intention of
      the parties that they would have executed the remaining terms, provisions,
      covenants and restrictions without including any of such that may be
      hereafter declared invalid, illegal, void or unenforceable.

            (e) No waiver of any default with respect to any provision,
      condition or requirement of this Agreement shall be deemed to be a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall
      any delay or omission of any party to exercise any right hereunder in any
      manner impair the exercise of any such right.

            (f) This Agreement shall be binding upon and inure to the benefit of
      the parties and their successors and permitted assigns. The Debtors may
      not assign this Agreement or any rights or obligations hereunder without
      the prior written consent of each Secured Party (other than by merger or
      joinder of an additional Debtor as contemplated herein). Any Secured Party
      may assign any or all of its rights under this Agreement to any Person to
      whom such Secured Party also assigns or transfers any Debentures in
      accordance with the terms thereof and of the Purchase Agreement, provided
      such transferee agrees in writing to be bound, with respect to the
      transferred Debentures and corresponding interests in the other
      Transaction Documents, by the provisions of this Agreement, the
      Debentures, the Guarantee and the Purchase Agreement that apply to the
      "Purchasers", "Secured Parties" and the "Holders" hereunder and
      thereunder.

            (g) Each party shall take such further action and execute and
      deliver such further documents as may be reasonably requested by the other
      parties as necessary or appropriate in order to carry out (and provided
      the same are not inconsistent with) the provisions and purposes of this
      Agreement.

                                       23
<PAGE>

            (h) All questions concerning the construction, validity, enforcement
      and interpretation of this Agreement shall, to the fullest extent
      permitted by applicable law, be governed by and construed and enforced in
      accordance with the internal laws of the State of New York, and the
      federal laws of the United States of America, without regard to any
      principles of conflicts of law thereof that would defer to the substantive
      laws of any other jurisdiction. Each Debtor agrees that all proceedings
      concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Agreement and the Debentures (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. Each 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. The preceding consents to New York governing law
      and jurisdiction and venue in New York State's Supreme Court have been
      made by the parties in reliance (at least in part) on Sections 5-1401 and
      5-1402 of the General Obligations Law of the State of New York, as amended
      (as and to the extent applicable), and other applicable law. 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. 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.

            (i) This Agreement may be executed in any number of counterparts of
      the entire document or of the signature pages hereto, any of which may be
      delivered by telecopy, email or other electronic means, and 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, e-mail, pdf or
      similar format data file or other electronic means, 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, ".pdf" or electronically transmitted signature page
      were an original thereof.

            (j) All Debtors shall jointly and severally be liable for the
      obligations of each Debtor to the Secured Parties hereunder to the same
      extent as if set forth in the Guarantee.

                                       24
<PAGE>

            (k) Each Debtor shall indemnify, reimburse and hold harmless the
      Agent and the Secured Parties and their respective partners, members,
      shareholders, officers, directors, employees and agents (and any other
      persons with other titles that have similar functions) (each an
      "Indemnitee" and collectively the "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 to the
      extent any such losses, claims, liabilities, damages, penalties, suits,
      costs and expenses result from any act, omission or other conduct by any
      Indemnitee that constitute fraud, gross negligence, willful misconduct or
      malfeasance 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
      Debentures, the Purchase Agreement (as such term is defined in the
      Debentures) or any other agreement, instrument or other document executed
      or delivered in connection herewith or therewith. Claims for
      indemnification and defense by each Indemnitee shall be made as provided
      in the Purchase Agreement.

            (l) Nothing in this Agreement shall be construed to subject Agent or
      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 Agent or 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 hereunder as a purchaser 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 Debtor as shareholder, partner or member, as
      applicable, of any other Debtor or any direct or indirect subsidiary of
      any Debtor or compliance with any provisions of any of the Organizational
      Documents, each Debtor hereby grants such consent and approval and waives
      any such noncompliance with the terms of said documents.

            (n) This Agreement is the Security Agreement referred to in the
      Purchase Agreement and other Transaction Documents. All of the applicable
      provisions of the Purchase Agreement, including (without limitation) any
      provision for limiting the maximum rate of interest payable hereunder, are
      incorporated herein by reference and made a part hereof. In the event that
      any specific provision of this Agreement conflicts or is inconsistent with
      any specific term or provision contained in the Purchase Agreement, the
      specific term or provision of the Purchase Agreement shall control and be
      given effect. However, this Agreement contains provisions that are in
      addition to those contained in the Purchase Agreement, which each are
      cumulative with and not alternatives to each other, and which shall not be
      deemed or construed to be in conflict or inconsistent with the Purchase
      Agreement because they are not contained in it.

                                       25
<PAGE>

            (o) No party has (directly or indirectly) offered, made, accepted or
      acknowledged any representation, warranty, promise, assurance or other
      agreement or understanding (whether written, oral, express, implied or
      otherwise) to, with or for the benefit of any other party, any of their
      respective Affiliates or representatives respecting any of the matters
      contained in this Agreement except for those expressly set forth in this
      Agreement. This Agreement, together with the exhibits and schedules
      hereto, contain the entire understanding of the parties with respect to
      the subject matter hereof and supersede all prior representations,
      warranties, promises, assurances and other agreements and understandings
      (whether written, oral, express, implied or otherwise) with respect to
      such matters, which the parties acknowledge have been merged into this
      Agreement and its exhibits and schedules.

            (p) The headings herein are for convenience only, do not constitute
      a part of this Agreement and shall not be deemed to limit or affect any of
      the provisions hereof

            (q) In any action, suit or proceeding in any jurisdiction brought by
      any party against any other party, the parties each knowingly and
      intentionally, to the greatest extent permitted by applicable law, hereby
      absolutely, unconditionally, irrevocably and expressly waives forever
      trial by jury.

                             SIGNATURE PAGES FOLLOW

                                       26
<PAGE>

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

STAR ENERGY CORPORATION

By:___________________________
   Name:
   Title:

[INSERT NAMES OF SUBSIDIARIES]

By:___________________________
   Name:
   Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       27
<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO SERG SA]

Name of Investing Entity:______________________________________________________

Signature of Authorized Signatory of Investing entity:_________________________

Name of Authorized Signatory:__________________________________________________

Title of Authorized Signatory:_________________________________________________

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       28
<PAGE>

                                   SCHEDULE A

Principal Place of Business of Debtors:

Locations Where Collateral is Located or Stored:

                                   SCHEDULE B

                                   SCHEDULE C

                                   SCHEDULE D
              Legal Names and Organizational Identification Numbers

                                   SCHEDULE E
                         Names; Mergers and Acquisitions

                                   SCHEDULE F
                              Intellectual Property

                                   SCHEDULE G
                                 Account Debtors

                                   SCHEDULE H
                               Pledged Securities

                                       29
<PAGE>

                                     ANNEX A
                                       to
                                    SECURITY
                                    AGREEMENT

                        FORM OF ADDITIONAL DEBTOR JOINDER

            Security Agreement dated as of February ___, 2007 made by
                             Star Energy Corporation
        and its subsidiaries party thereto from time to time, as Debtors
                               to and in favor of
           the Secured Parties identified therein (as the same may be
           supplemented, modified, amended, restated or replaced from
   time to time in the manner provided therein, the """Security Agreement""")

      Reference is made to the Security Agreement as defined above; capitalized
terms used herein and not otherwise defined herein shall have the meanings given
to such terms in, or by reference in, the Security Agreement.

      The undersigned hereby agrees that upon delivery of this Additional Debtor
Joinder to the Secured Parties referred to above, the undersigned shall (a) be
an Additional Debtor under the Security Agreement, (b) have all the rights and
obligations of the Debtors under the Security Agreement as fully and to the same
extent as if the undersigned was an original signatory thereto and (c) be deemed
to have made the representations and warranties set forth therein as of the date
of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE
SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN
THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL
AS SET FORTH THEREIN.

      Attached hereto are supplemental and/or replacement Schedules to the
Security Agreement, as applicable.

      An executed copy of this Joinder shall be delivered to the Secured
Parties, and the Secured Parties may rely on the matters set forth herein on or
after the date hereof. This Joinder shall not be modified, amended or terminated
without the prior written consent of the Secured Parties.

<PAGE>

      IN WITNESS WHEREOF, the undersigned has caused this Joinder to be executed
in the name and on behalf of the undersigned.

                                                    [Name of Additional Debtor]

                                                    By:

                                                    Name:
                                                    Title:

                                                    Address:

Dated:

<PAGE>

                                     ANNEX B
                                       to
                                    SECURITY
                                    AGREEMENT

                                    THE AGENT

      1. Appointment. The Secured Parties (all capitalized terms used herein and
not otherwise defined shall have the respective meanings provided in the
Security Agreement (as the same may be supplemented, modified, amended, restated
or replaced from time to time in the manner provided therein, the "Agreement")
to which this Annex B is attached), by their acceptance of the benefits of the
Agreement, hereby designate _____ ("____" or "Agent") as the Agent to act as
specified herein and in the Agreement. Each Secured Party shall be deemed
irrevocably to authorize the Agent to take such action on its behalf under, and
in accordance with, the provisions of the Agreement and any other Transaction
Document (as such term is defined in the Purchase Agreement) and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
may perform any of its duties hereunder by or through its agents or employees.

      2. Nature of Duties. The Agent shall have no duties or responsibilities
except those expressly set forth in the Agreement. Neither the Agent nor any of
its partners, members, shareholders, officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such under the
Agreement or hereunder or in connection herewith or therewith, be responsible
for the consequence of any oversight or error of judgment or answerable for any
loss, unless caused solely by its or their gross negligence or willful
misconduct as determined by a final judgment (not subject to further appeal) of
a court of competent jurisdiction. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of the
Agreement or any other Transaction Document a fiduciary relationship in respect
of any Debtor or any Secured Party; and nothing in the Agreement or any other
Transaction Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of the
Agreement or any other Transaction Document except as expressly set forth herein
and therein.

<PAGE>

      3. Lack of Reliance on the Agent. Independently and without reliance upon
the Agent, each Secured Party, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of the Company and its subsidiaries in connection with
such Secured Party's investment in the Debtors, the creation and continuance of
the Obligations, the transactions contemplated by the Transaction Documents, and
the taking or not taking of any action in connection therewith, and (ii) its own
appraisal of the creditworthiness of the Company and its subsidiaries, and of
the value of the Collateral from time to time, and the Agent shall have no duty
or responsibility, either initially or on a continuing basis, to provide any
Secured Party with any credit, market or other information with respect thereto,
whether coming into its possession before any Obligations are incurred or at any
time or times thereafter. The Agent shall not be responsible to the Debtors or
any Secured Party for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith, or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Agreement or any other Transaction Document, or for the financial condition of
the Debtors or the value of any of the Collateral, or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of the Agreement or any other Transaction Document, or
the financial condition of the Debtors, or the value of any of the Collateral,
or the existence or possible existence of any default or Event of Default under
the Agreement, the Debentures or any of the other Transaction Documents.

      4. Certain Rights of the Agent. The Agent shall have the right to take any
action with respect to the Collateral, on behalf of all of the Secured Parties.
To the extent practical, the Agent shall request instructions from the Secured
Parties with respect to any material act or action (including failure to act),
in connection with the Agreement or any other Transaction Document, and shall be
entitled to act or refrain from acting in accordance with the instructions of
Secured Parties holding a majority in principal amount of Debentures (based on
then-outstanding principal amounts of Debentures at the time of any such
determination); if such instructions are not provided despite the Agent's
request therefor, the Agent shall be entitled to refrain from such act or taking
such action, and if such action is taken, shall be entitled to appropriate
indemnification from the Secured Parties in respect of actions to be taken by
the Agent; and the Agent shall not incur liability to any person or entity by
reason of so refraining. Without limiting the foregoing, (a) no Secured Party
shall have any right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting hereunder in accordance with the terms of
the Agreement or any other Transaction Document, and the Debtors shall have no
right to question or challenge the authority of, or the instructions given to,
the Agent pursuant to the foregoing and (b) the Agent shall not be required to
take any action which the Agent believes (i) could reasonably be expected to
expose it to personal liability or (ii) is contrary to this Agreement, the
Transaction Documents or applicable law.

<PAGE>

      5. Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by the proper person
or entity, and, with respect to all legal matters pertaining to the Agreement
and the other Transaction Documents and its duties thereunder, upon advice of
counsel selected by it and upon all other matters pertaining to this Agreement
and the other Transaction Documents and its duties thereunder, upon advice of
other experts selected by it. Anything to the contrary notwithstanding, the
Agent shall have no obligation whatsoever to any Secured Party to assure that
the Collateral exists or is owned by the Debtors or is cared for, protected or
insured or that the liens granted pursuant to the Agreement have been properly
or sufficiently or lawfully created, perfected, or enforced or are entitled to
any particular priority.

      6. Indemnification. To the extent that the Agent is not reimbursed and
indemnified by the Debtors, the Secured Parties will jointly and severally
reimburse and indemnify the Agent, in proportion to their initially purchased
respective principal amounts of Debentures, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in performing its duties
hereunder or under the Agreement or any other Transaction Document, or in any
way relating to or arising out of the Agreement or any other Transaction
Document except for those determined by a final judgment (not subject to further
appeal) of a court of competent jurisdiction to have resulted solely from the
Agent's own gross negligence or willful misconduct. Prior to taking any action
hereunder as Agent, the Agent may require each Secured Party to deposit with it
sufficient sums as it determines in good faith is necessary to protect the Agent
for costs and expenses associated with taking such action.

      7. Resignation by the Agent.

            (a) The Agent may resign from the performance of all its functions
      and duties under the Agreement and the other Transaction Documents at any
      time by giving 30 days' prior written notice (as provided in the
      Agreement) to the Debtors and the Secured Parties. Such resignation shall
      take effect upon the appointment of a successor Agent pursuant to clauses
      (b) and (c) below.

            (b) Upon any such notice of resignation, the Secured Parties, acting
      by a Majority in Interest, shall appoint a successor Agent hereunder.

            (c) If a successor Agent shall not have been so appointed within
      said 30-day period, the Agent shall then appoint a successor Agent who
      shall serve as Agent until such time, if any, as the Secured Parties
      appoint a successor Agent as provided above. If a successor Agent has not
      been appointed within such 30-day period, the Agent may petition any court
      of competent jurisdiction or may interplead the Debtors and the Secured
      Parties in a proceeding for the appointment of a successor Agent, and all
      fees, including, but not limited to, extraordinary fees associated with
      the filing of interpleader and expenses associated therewith, shall be
      payable by the Debtors on demand.

      8. Rights with respect to Collateral. Each Secured Party agrees with all
other Secured Parties and the Agent (i) that it shall not, and shall not attempt
to, exercise any rights with respect to its security interest in the Collateral,
whether pursuant to any other agreement or otherwise (other than pursuant to
this Agreement), or take or institute any action against the Agent or any of the
other Secured Parties in respect of the Collateral or its rights hereunder
(other than any such action arising from the breach of this Agreement) and (ii)
that such Secured Party has no other rights with respect to the Collateral other
than as set forth in this Agreement and the other Transaction Documents. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations under the Agreement.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of the Agreement including this Annex B shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent.FORM OF SUBSIDIARY GUARANTEE

      SUBSIDIARY GUARANTEE, dated as of February 9, 2007 (as the same may be
supplemented, modified, amended, restated or replaced from time to time in the
manner provided herein, (this "Guarantee"), made by each of the signatories
hereto (together with any other entity that may become a party hereto as
provided herein, (each a "Guarantor" and collectively the "Guarantors"), in
favor of the "Purchasers" signatory thereto (as such term is defined therein) to
that certain Securities Purchase Agreement, dated as of the date hereof, between
Star Energy Corporation, a Nevada corporation (the "Company") and the Purchasers
(as the same may be supplemented, modified, amended, restated or replaced from
time to time in the manner provided herein, the "Purchase Agreement"). Each of
the Guarantors and each of the Purchasers may be referred to herein as a "party"
and collectively as the "parties".

                                   WITNESSETH:

      WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to
sell and issue to the Purchasers (together with their respective successors and
permitted assigns under the following Debentures, each a "Holder" and
collectively, the "Holders"), and the Purchasers have severally agreed to extend
the loans to the Company evidenced by the Company's 8% Secured Convertible
Debentures, due February __, 2010 in the original aggregate maximum principal
amount of $[_______] and severally issued by the Company to the Holders on
February __, 2007 (as the same may be supplemented, modified, amended, restated
or replaced from time to time in the manner provided herein, each a "Debenture"
and collectively, the "Debentures"), subject to the terms and conditions set
forth therein; and

      WHEREAS, each Guarantor will directly benefit from the extension of credit
to the Company represented by the issuance of the Debentures; and

      NOW, THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Purchase Agreement and to carry out the
transactions contemplated thereby, each Guarantor hereby agrees with the
Purchasers as follows:

      1. Definitions. Unless otherwise defined herein, capitalized terms not
otherwise defined herein shall have the meanings set forth in the Purchase
Agreement or other applicable Transaction Document (as such term is defined in
the Purchase Agreement. The words "hereof," "herein," "hereto" and "hereunder"
and words of similar import when used in this Guarantee shall refer to this
Guarantee as a whole and not to any particular provision of this Guarantee, and
Section and Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The following
terms shall have the following meanings:

<PAGE>

            "Guarantee" shall have the meaning set forth in the first paragraph
      above.

            "Indebtedness" means (a) any liabilities for borrowed money or
      similar amounts owed in excess of $50,000 (other than trade accounts
      payable incurred in the ordinary course of business and inter-company
      advances among the Company and the Guarantors), (b) all guaranties,
      endorsements and other contingent obligations in respect of indebtedness
      of others, whether or not the same are or should be reflected in the
      Guarantors' balance sheet (or the notes thereto), except for (i)
      guaranties by endorsement of negotiable instruments for deposit or
      collection or similar transactions in the ordinary course of business and
      (ii) guaranties of the indebtedness or other obligations of the Company or
      any Guarantor or the Company; and (c) the present value of any lease
      payments in excess of $50,000 due under leases required to be capitalized
      in accordance with GAAP.

            "Obligations" means in addition to all other costs and expenses of
      collection incurred by Purchasers in enforcing any of such Obligations
      and/or this Guarantee, all of the liabilities and obligations (primary,
      secondary, direct, contingent, sole, joint or several) due or to become
      due, or that are now or may be hereafter contracted or acquired, or owing
      from any Debtor to the Secured Parties, including, without limitation, all
      obligations under the Security Agreement, the Purchase Agreement, the
      Debentures, this Guarantee 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
      Debentures 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 the Security Agreement, the
      Debentures, this Guarantee 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.

                                        2
<PAGE>

            . "Permitted Indebtedness" means (a) the Indebtedness existing on
      the date hereof and set forth on Schedule 3.1(aa) attached to the Purchase
      Agreement, (b) capital lease obligations, construction or improvement
      financing and purchase money indebtedness incurred in connection with the
      acquisition, construction or improvement of capital assets and capital
      lease obligations with respect to newly acquired, improved or leased
      assets (provided, that immediately following any such transaction, the pro
      forma consolidated total Indebtedness of the Company and its subsidiaries
      to their consolidated Total Asset ratio is not more than 0.75 to 1); (c)
      up to $[___________ of additional Indebtedness, in the aggregate, incurred
      by the Company and the Guarantors in connection with raising capital for
      the acquisition of another entity which is, itself or through its
      subsidiaries, an operating company in a business synergistic with the
      business of the Company (by merger, consolidation, the acquisition of all
      or substantially of the assets of such entity or similar transaction)
      provided that any Indebtedness incurred under this clause (c) is expressly
      subordinate to the Debentures pursuant to a written subordination
      agreement with the Holders that is acceptable to each Holder; (d) the
      Indebtedness evidenced by other Debentures, provided that the aggregate
      original principal amount of all Debentures (whenever issued) shall not
      exceed $___________; (e) up to $ _________ of additional senior
      Indebtedness, in the aggregate, incurred by the Guarantors from a
      strategic commercial lender pursuant to a strategic commercial agreement;
      or (f) any continuation, extension, renewal, modification, refinancing or
      replacement of any such Permitted Indebtedness on overall terms that are
      generally no less favorable than those applicable to the existing
      Permitted Indebtedness.

            "Permitted Lien" means the individual and collective reference to
      the following: (a) Liens (as defined in the Purchase Agreement) for taxes,
      assessments and other governmental charges or levies not yet due or Liens
      for taxes, assessments and other governmental charges or levies being
      contested in good faith and by appropriate proceedings for which adequate
      reserves (in the good faith judgment of the management of the applicable
      Guarantor) have been established in accordance with GAAP; (b) Liens
      imposed by law and incurred in the ordinary course of the applicable
      Guarantor's business, such as carriers', warehousemen's and mechanics'
      Liens, statutory landlords' Liens, Liens consisting of easements,
      right-of-way, restrictions, covenants or other agreements of record or
      similar charges or encumbrances, and other similar Liens arising in the
      ordinary course of the applicable Guarantor's business, and which (x) do
      not individually or in the aggregate materially detract from the value of
      such property or assets or materially impair the use thereof in the
      operation of the business of such Guarantor and its consolidated
      Subsidiaries or (y) are being contested in good faith by appropriate
      proceedings, which proceedings have the effect of preventing for the
      foreseeable future the forfeiture or sale of the property or asset subject
      to such Lien; and (c) Liens incurred in connection with Permitted
      Indebtedness under clause (b) thereunder, provided that such Liens are not
      secured by assets of the any of the Guarantors other than the assets so
      acquired, constructed, improved or leased (and the products and proceeds
      thereof, insurance therefor and warranty and other contract rights related
      thereto); (d) Liens incurred in respect of judgments and awards discharged
      within 30 days from the making thereof; (e) any cash deposits made or
      bonds or letters of credit posted in the ordinary course to secure
      performance under any contract or applicable law; (f) in the case of any
      account, intangible, instrument, lease, agreement or document, any
      contractual right, power, privilege, remedy, interest, defect,
      restriction, covenant, claim, counterclaim, right of recoupment,
      abatement, reduction or setoff, or defense of any account debtor or other
      party thereto, whether now existing or hereafter arising, and whether
      pursuant to the applicable contractual provisions or applicable law; (g)
      Liens existing on the Original Issue Date and set forth on Schedule 3.1(n)
      attached to the Purchase Agreement; or (h) any renewal, continuation,
      extension or replacement of any such Permitted Lien, provided that the
      scope of the assets encumbered thereby shall not be thereby increased.

                                        3
<PAGE>

            "Security Agreement" shall mean that certain Security Agreement,
      dated as of February __, 2007, by and among the Company, the Guarantors,
      the Holders, and the Agent (as defined therein) as the same may be
      supplemented, modified, amended, restated or replaced from time to time in
      the manner provided herein.

            "Secured Party" and "Secured Parties" shall mean each of the Holders
      and the Agent (as defined in the Security Agreement).

      2. Guarantee.

            (a) Guarantee.

                  (i)   The Guarantors hereby, jointly and severally,
                        unconditionally and irrevocably, guarantee to the
                        Purchasers and their respective successors, indorsees,
                        transferees and assigns, the prompt and complete payment
                        and performance by the Company when due (whether at the
                        stated maturity, by acceleration or otherwise) of the
                        Obligations.

                  (ii)  The Purchasers in their sole and absolute discretion
                        shall be entitled to demand payment of the Obligations
                        (in whole at any time, or in part from time to time)
                        from the Guarantors (or any of them) under this
                        Guarantee upon the occurrence and continuation of any
                        Event of Default that is not waived by the Holder or
                        cured by the Company. If the Purchasers make such a
                        demand: (a) any and all principal, interest and other
                        Obligations outstanding or accrued under any Debenture
                        and/or any other Transaction Document shall be deemed to
                        be immediately due and payable in full (or for the
                        item(s) in the amount(s) demanded if a partial demand
                        was made), all without presentment, protest, demand or
                        notice of any kind, all of which are hereby absolutely,
                        unconditionally, irrevocably and expressly waived
                        forever by each Guarantor (and in the case of a partial
                        demand, without in any way affecting any of the
                        Guarantors' Obligations with respect to the balance of
                        the Obligations not demanded); and (b) each Guarantor
                        (on a joint and several basis with the other Guarantors)
                        shall immediately pay to the Lender the amount demanded
                        in full.

                                        4
<PAGE>

                  (iii) Anything herein or in any other Transaction Document to
                        the contrary notwithstanding, the maximum liability of
                        each Guarantor hereunder and under the other Transaction
                        Documents shall in no event exceed the amount which can
                        be guaranteed by such Guarantor under applicable federal
                        and state laws, including laws relating to the
                        insolvency of debtors, fraudulent conveyance or transfer
                        or laws affecting the rights of creditors generally
                        (after giving effect to the right of contribution
                        established in Section 2(b)).

                  (iv)  Each Guarantor agrees that the Obligations may at any
                        time and from time to time exceed the amount of the
                        liability of such Guarantor hereunder without impairing
                        the guarantee contained in this Section 2 or affecting
                        the rights and remedies of the Purchasers hereunder.

                  (v)   The guarantee contained in this Section 2 shall remain
                        in full force and effect until all the Obligations and
                        the obligations of each Guarantor under the guarantee
                        contained in this Section 2 shall have been satisfied by
                        payment in full.

                  (vi)  No payment made by the Company, any of the Guarantors,
                        any other guarantor or any other Person or received or
                        collected by the Purchasers from the Company, any of the
                        Guarantors, any other guarantor or any other Person by
                        virtue of any action or proceeding or any set-off or
                        appropriation or application at any time or from time to
                        time in reduction of or in payment of the Obligations
                        shall be deemed to modify, reduce, release or otherwise
                        affect the liability of any Guarantor hereunder which
                        shall, notwithstanding any such payment (other than any
                        payment made by such Guarantor in respect of the
                        Obligations or any payment received or collected from
                        such Guarantor in respect of the Obligations), remain
                        liable for the Obligations up to the maximum liability
                        of such Guarantor hereunder until the Obligations are
                        paid in full.

                                        5
<PAGE>

                  (vii) Notwithstanding anything to the contrary in Guarantee,
                        with respect to any defaulted non-monetary Obligations
                        the specific performance of which by the Guarantors is
                        not reasonably possible (e.g. the issuance of the
                        Company's Common Stock), the Guarantors shall only be
                        liable for making the Purchasers whole on a monetary
                        basis for the Company's failure to perform such
                        Obligations in accordance with the Transaction
                        Documents.

            (b) Right of Contribution. Each Guarantor hereby agrees that to the
      extent that a Guarantor shall have paid more than its proportionate share
      of any payment made hereunder, such Guarantor shall be entitled to seek
      and receive contribution from and against any other Guarantor hereunder
      which has not paid its proportionate share of such payment. Each
      Guarantor's right of contribution shall be subject to the terms and
      conditions of Section 2(c). The provisions of this Section 2(b) shall in
      no respect limit the obligations and liabilities of any Guarantor to the
      Purchasers, and each Guarantor shall remain liable to the Purchasers for
      the full amount guaranteed by such Guarantor hereunder.

            (c) Subordination of Subrogation Rights. Notwithstanding any payment
      made by any Guarantor hereunder or any set-off or application of funds of
      any Guarantor by the Purchasers, no Guarantor shall be entitled to
      exercise or enforce any rights of subrogation against the Company or any
      other Guarantor or any collateral security or guarantee or right of offset
      held by the Purchasers for the payment of the Obligations, nor shall any
      Guarantor seek or be entitled to seek any contribution or reimbursement
      from the Company or any other Guarantor in respect of payments made by
      such Guarantor hereunder, until all amounts owing to the Purchasers by the
      Company on account of the Obligations are paid in full. If any amount
      shall be paid to any Guarantor on account of such subrogation rights at
      any time when all of the Obligations shall not have been paid in full,
      such amount shall be held by such Guarantor in trust for the Purchasers,
      segregated from other funds of such Guarantor, and shall, forthwith upon
      receipt by such Guarantor, be turned over to the Purchasers in the exact
      form received by such Guarantor (duly indorsed by such Guarantor to the
      Purchasers, if required), to be applied against the Obligations, whether
      matured or unmatured, in such order as the Purchasers may determine.

            (d) Amendments, Etc. With Respect to the Obligations. Each Guarantor
      shall remain obligated hereunder notwithstanding that, without any
      reservation of rights against any Guarantor and without notice to or
      further assent by any Guarantor, any demand for payment of any of the
      Obligations made by the Purchasers may be rescinded by the Purchasers and
      any of the Obligations continued, and the Obligations, or the liability of
      any other Person upon or for any part thereof, or any collateral security
      or guarantee therefor or right of offset with respect thereto, may, from
      time to time, in whole or in part, be renewed, extended, amended,
      modified, accelerated, compromised, waived, surrendered or released by the
      Purchasers, and the Purchase Agreement and the other Transaction Documents
      and any other documents executed and delivered in connection therewith may
      be amended, modified, supplemented or terminated, in whole or in part, as
      the Purchasers may deem advisable from time to time, and any collateral
      security, guarantee or right of offset at any time held by the Purchasers
      for the payment of the Obligations may be sold, exchanged, waived,
      surrendered or released. The Purchasers shall have no obligation to
      protect, secure, perfect or insure any Lien at any time held by them as
      security for the Obligations or for the guarantee contained in this
      Section 2 or any property subject thereto.

                                        6
<PAGE>

            (e) Guarantee Absolute and Unconditional. Each Guarantor waives any
      and all notice of (i) the creation, renewal, extension or accrual of any
      of the Obligations, (ii) the execution and delivery of this Guarantee or
      any Transaction Document, (iii) the performance or non-performance of the
      Obligations under any Transaction Document, (iv) any change in or making,
      repayment or remaking or remaking of any loan, advance or other extension
      of credit at any time under this Guarantee or any other Transaction
      Document, (v) any Material Adverse Effect with respect to the Company, any
      Obligor or any Collateral, (vi) any extension, stay, moratorium or statute
      of limitations or similar time constraint under any applicable law, (vii)
      any investigation, analysis or evaluation by the Purchasers or their
      respective designees of the assets, business, cash flow, expenses, income,
      liabilities, operations, properties, prospects, reputation or condition
      (financial or otherwise) of the Company or any Guarantor or any other
      person, (viii) any application to the Obligations of any payments from any
      person not specifically designated for application to the Obligations or
      any proceeds of collateral from such person other than from the
      Collateral, (ix) any sale, conveyance, assignment, participation or other
      transfer by the Purchasers (in whole or in part) to any other person of
      any one or more of this Guarantee or any of the Transaction Documents, or
      any one ore more of the rights, powers, privileges, remedies or interests
      of the Purchasers herein or therein, (x) notice of or proof of reliance by
      the Purchasers upon the guarantee contained in this Section 2 or
      acceptance of the guarantee contained in this Section 2, and (xi) any
      other proof, notice or demand of any kind whatsoever with respect to any
      or all of the Obligations or promptness in making any claim or demand
      under this Guarantee or any other Transaction Document. The Obligations,
      and any of them, shall conclusively be deemed to have been created,
      contracted or incurred, or renewed, extended, amended or waived, in
      reliance upon the guarantee contained in this Section 2; and all dealings
      between the Company and any of the Guarantors, on the one hand, and the
      Purchasers, on the other hand, likewise shall be conclusively presumed to
      have been had or consummated in reliance upon the guarantee contained in
      this Section 2. Each Guarantor waives to the extent permitted by law
      acceptance, diligence, presentment, protest, demand for payment, dishonor
      and notice of default or nonpayment to or upon the Company or any of the
      Guarantors with respect to the Obligations and notice of any of the
      foregoing. Each Guarantor understands and agrees that the guarantee
      contained in this Section 2 shall be construed as a continuing, absolute
      and unconditional guarantee of payment without regard to (a) the validity,
      legality, non-binding effect or enforceability of the Purchase Agreement
      or any other Transaction Document, any of the Obligations or any other
      collateral security therefor or guarantee or right of offset with respect
      thereto at any time or from time to time held by the Purchasers, (b) any
      defense, set-off or counterclaim (other than a defense of payment or
      performance or fraud or misconduct by Purchasers) which may at any time be
      available to or be asserted by the Company or any other Person against the
      Purchasers, or (c) any other circumstance whatsoever (with or without
      notice to or knowledge of the Company or such Guarantor) which
      constitutes, or might be construed to constitute, an equitable or legal
      discharge of the Company for the Obligations, or of such Guarantor under
      the guarantee contained in this Section 2, in bankruptcy or in any other
      instance. When making any demand hereunder or otherwise pursuing its
      rights and remedies hereunder against any Guarantor, the Purchasers may,
      but shall be under no obligation to, make a similar demand on or otherwise
      pursue such rights and remedies as they may have against the Company, any
      other Guarantor or any other Person or against any collateral security or
      guarantee for the Obligations or any right of offset with respect thereto,
      and any failure by the Purchasers to make any such demand, to pursue such
      other rights or remedies or to collect any payments from the Company, any
      other Guarantor or any other Person or to realize upon any such collateral
      security or guarantee or to exercise any such right of offset, or any
      release of the Company, any other Guarantor or any other Person or any
      such collateral security, guarantee or right of offset, shall not relieve
      any Guarantor of any obligation or liability hereunder, and shall not
      impair or affect the rights and remedies, whether express, implied or
      available as a matter of law, of the Purchasers against any Guarantor. For
      the purposes hereof, "demand" shall include the commencement and
      continuance of any legal proceedings.

                                        7
<PAGE>

            (f) Reinstatement. The guarantee contained in this Section 2 shall
      continue to be effective, or be reinstated, as the case may be, if at any
      time payment, or any part thereof, of any of the Obligations is rescinded
      or must otherwise be restored or returned by the Purchasers upon the
      insolvency, bankruptcy, dissolution, liquidation or reorganization of the
      Company or any Guarantor, or upon or as a result of the appointment of a
      receiver, intervenor or conservator of, or trustee or similar officer for,
      the Company or any Guarantor or any substantial part of its property, or
      otherwise, all as though such payments had not been made, provided that
      the Guarantor's rights of contribution pursuant to Section 2(b) above
      shall similarly continue to be effective or be reinstated, as the case may
      be.

            (g) Payments. Each Guarantor hereby guarantees that payments
      hereunder will be paid to the Purchasers without set-off or counterclaim
      in U.S. dollars at the address set forth or referred to in the Purchase
      Agreement.

      3. Representations and Warranties. Each Guarantor hereby makes the
following representations and warranties to Purchasers as of the date hereof:

                                        8
<PAGE>

            (a) Organization and Qualification. The Guarantor is a corporation,
      limited liability company, or limited liability society, duly incorporated
      or organized, validly existing and in good standing under the laws of the
      applicable jurisdiction set forth on Schedule 1, with the requisite
      corporate or other entity power and authority to own and use its
      properties and assets and to carry on its business as currently conducted.
      The Guarantor has no subsidiaries other than those identified as such on
      the Disclosure Schedules to the Purchase Agreement. The Guarantor is duly
      qualified to do business and is in good standing as a foreign corporation
      in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could
      not, individually or in the aggregate, (x) adversely affect the legality,
      validity or enforceability of any of this Guaranty in any material
      respect, (y) have a material adverse effect on the results of operations,
      assets, or financial condition of the Company and the Guarantors taken as
      a whole or (z) adversely impair in any material respect the Guarantor's
      ability to perform fully on a timely basis its obligations under this
      Guaranty (a "Material Adverse Effect").

            (b) Authorization; Enforcement. The Guarantor has the requisite
      corporate or other entity power and authority to enter into and to
      consummate the transactions contemplated by this Guaranty, and otherwise
      to carry out its obligations hereunder. The execution and delivery of this
      Guaranty by the Guarantor and the consummation by it of the transactions
      contemplated hereby have been duly authorized by all requisite corporate
      action on the part of the Guarantor. This Guaranty has been duly executed
      and delivered by the Guarantor and constitutes the valid and binding
      obligation of the Guarantor enforceable against the Guarantor in
      accordance with its terms, except (i) as may be limited by general
      equitable principles and applicable bankruptcy, insolvency,
      reorganization, moratorium, affecting enforcement of, creditors' rights
      generally, (ii) as limited by laws relating to the availability of
      specific performance, injunctive relief or other equitable remedies, (iii)
      insofar as indemnification and contribution provisions may be limited by
      applicable law, and (iv) insofar as certain elections, waivers and
      agreements to vary statutory provisions may be impermissible under the UCC
      (as defined in the Security Agreement) and other applicable law (clauses
      (i) through (iv) may be referred to collectively as the "Enforceability
      Limits").

            (c) No Conflicts. The execution, delivery and performance of this
      Guaranty by the Guarantor and the consummation by the Guarantor of the
      transactions contemplated thereby do not and will not (i) violate any
      provision of its Organizational Documents (as defined in the Security
      Agreement) or (ii) constitute a default (or an event which with notice or
      lapse of time or both would become a default) in any material respect
      under, or give to others any commercially reasonable right of termination,
      material amendment, acceleration or cancellation of, any agreement,
      indenture or instrument to which the Guarantor is a party, or (iii) result
      in a violation of any law, rule, regulation, order, judgment, injunction,
      decree or other restriction of any court or governmental authority to
      which the Guarantor is subject (including Federal and state securities
      laws and regulations), or by which any material property or asset of the
      Guarantor is bound or affected, except in the case of each of clauses (ii)
      and (iii), such conflicts, defaults, terminations, amendments,
      accelerations, cancellations and violations as could not, individually or
      in the aggregate, have or result in a Material Adverse Effect. The
      business of the Guarantor is not being conducted in violation of any law,
      ordinance or regulation of any governmental authority, except for
      violations which, individually or in the aggregate, do not have a Material
      Adverse Effect.

                                        9
<PAGE>

            (d) Consents and Approvals. The Guarantor is not required to obtain
      any authorization, approval or other action by, and no notice to or filing
      with, any governmental authority or regulatory body is required, no
      consent of any other third parties is required, and no other action on the
      party of the Guarantor is required in connection with the execution,
      delivery and performance by the Guarantor of this Guaranty.

            (e) Purchase Agreement. The representations and warranties of the
      Company set forth in the Purchase Agreement as they relate to such
      Guarantor, each of which is hereby incorporated herein by reference, are
      true and correct as of each time such representations are deemed to be
      made pursuant to such Purchase Agreement, and the Purchasers shall be
      entitled to rely on each of them as if they were fully set forth herein,
      provided, that each reference in each such representation and warranty to
      the Company's knowledge shall, for the purposes of this Section 3, be
      deemed to be a reference to such Guarantor's knowledge.

      4. Covenants.

            (a) Each Guarantor covenants and agrees with the Purchasers that,
      from and after the date of this Guarantee until the Obligations shall have
      been paid in full, such Guarantor shall take, and/or shall refrain from
      taking, as the case may be, each commercially reasonable action that is
      necessary to be taken or not taken, as the case may be, so that no Event
      of Default is caused by the failure to take such action or to refrain from
      taking such action by such Guarantor.

            (b) So long as any of the Obligations are outstanding, unless
      Purchasers holding at least 51% of the aggregate principal amount of the
      then outstanding Debentures, shall otherwise consent in writing, and
      except as any such action or non action may be permitted by the Purchase
      Agreement, Debenture, or Security Agreement, each Guarantor will not
      directly or indirectly on or after the date of this Guarantee:

                                       10
<PAGE>

                  i. enter into, create, incur, assume or suffer to exist any
            Indebtedness other than Permitted Indebtedness;

                  ii. enter into, create, incur, assume or suffer to exist any
            liens other than Permitted Liens;

                  iii. amend its Organizational Documents so as to adversely
            affect any rights of the Holders hereunder; or

                  iv. repay, repurchase or offer to repay, repurchase or
            otherwise acquire more than a de minimis number of shares of its
            securities or debt obligations;

                  v. pay cash dividends on any equity securities of the Company;

                  vi. enter into any transaction with any Affiliate of the
            Guarantor which would be required to be disclosed in any public
            filing of the Company with the Commission, unless such transaction
            is made on an arm's-length basis and expressly approved by a
            majority of the disinterested directors of the Company (even if less
            than a quorum otherwise required for board approval); or

                  vii. enter into any agreement with respect to any of the
            foregoing.

      5. Miscellaneous.

            (a) Amendments in Writing. This Guarantee may not be supplemented,
      modified, amended, restated, waived, extended, discharged or terminated
      orally. This Agreement may only be (i) supplemented, modified, amended or
      restated in a writing signed by the Guarantors and Purchasers (or
      consented to in a separate writing by the Purchasers if they elect not to
      sign such document) and (ii) waived, extended, discharged or terminated in
      a writing signed by the party or parties against whom such waiver,
      extension, discharge or termination would have to be enforced. By
      accepting this Agreement, whether or not a signatory hereto, each
      Purchaser acknowledges and agrees that the Purchaser is a "party" and one
      of the "parties" for the purposes of this Guarantee and (A) is
      contractually bound by the provisions hereof applicable to it as such a
      party or one of the parties. .

            (b) Notices. All notices, requests and demands to or upon the
      Purchasers or any Guarantor hereunder shall be effected in the manner
      provided for in the Purchase Agreement, provided that any such notice,
      request or demand to or upon any Guarantor shall be addressed to such
      Guarantor at its notice address set forth on Schedule 5(b).

                                       11
<PAGE>

            (c) No Waiver By Course Of Conduct; Cumulative Remedies. The
      Purchasers shall not by any act (except by a written instrument pursuant
      to Section 5(a)), delay, indulgence, omission or otherwise be deemed to
      have waived any right or remedy hereunder or to have acquiesced in any
      default under the Transaction Documents or Event of Default. No failure to
      exercise, nor any delay in exercising, on the part of any of the parties,
      any right, power or privilege hereunder shall operate as a waiver thereof.
      No single or partial exercise of any right, power or privilege hereunder
      shall preclude any other or further exercise thereof or the exercise of
      any other right, power or privilege. A waiver by the Purchasers of any
      right or remedy hereunder on any one occasion shall not be construed as a
      bar to any right or remedy which the Purchasers would otherwise have on
      any future occasion. The rights and remedies of the parties herein
      provided are cumulative and not alternatives, may be exercised singly or
      concurrently and are not exclusive of any other rights or remedies
      provided by law.

            (d) Enforcement Expenses; Indemnification.

                  (i)   Each Guarantor agrees to pay, or reimburse the
                        Purchasers for, all its costs and expenses incurred in
                        collecting against such Guarantor under the guarantee
                        contained in Section 2 hereof or otherwise enforcing or
                        preserving any rights under this Guarantee and the other
                        Transaction Documents to which such Guarantor is a
                        party, including, without limitation, the reasonable
                        fees and disbursements of counsel to the Purchasers.

                  (ii)  Each Guarantor agrees to pay, and to save the Purchasers
                        harmless from, any and all liabilities with respect to,
                        or resulting from any delay in paying, any and all
                        stamp, excise, sales or other taxes which may be payable
                        or determined to be payable in connection with any of
                        the transactions contemplated by this Guarantee.

                  (iii) Each Guarantor agrees to pay, and to save the Purchasers
                        harmless from, any and all liabilities, obligations,
                        losses, damages, penalties, actions, judgments, suits,
                        costs, expenses or disbursements of any kind or nature
                        whatsoever with respect to the execution, delivery,
                        enforcement, performance and administration of this
                        Guarantee to the extent the Company would be required to
                        do so pursuant to the Purchase Agreement, except to the
                        extent any such losses, damages, penalties, actions,
                        judgments, suits, costs, expenses or disbursements
                        result from any act, omission or other conduct by any
                        Purchaser or its representatives that constitute fraud,
                        gross negligence, willful misconduct or malfeasance as
                        determined by a final, non appealable decision of a
                        court of competent jurisdiction. Claims for
                        indemnification and defense by each Purchaser shall be
                        made as provided in the Purchase Agreement.

                                       12
<PAGE>

                  (iv)  The agreements in this Section shall survive, in
                        accordance with their respective terms, the repayment of
                        the Obligations and all other amounts payable under the
                        Purchase Agreement and the other Transaction Documents.

            (e) Successor and Assigns. This Guarantee shall be binding upon and
      inure to the benefit of the Purchasers and their respective successors and
      assigns; provided that no Guarantor may assign, transfer or delegate any
      of its rights or obligations under this Guarantee without the prior
      written consent of the Purchasers (other than by merger or joinder of an
      additional Guarantor as contemplated herein). Any Purchaser may assign any
      or all of its rights under this Guarantee to any Person to whom such
      Purchaser also assigns or transfers any Debentures in accordance with the
      terms thereof and of the Purchase Agreement, provided such transferee
      agrees in writing to be bound, with respect to the transferred Debentures
      and corresponding interests in the other Transaction Documents, by the
      provisions of this Guarantee, the Debentures, the Security Agreement and
      the Purchase Agreement that apply to the "Purchasers", "Secured Parties"
      and the "Holders" hereunder and thereunder.

            (f) Set-Off. Each Guarantor hereby irrevocably authorizes the
      Purchasers at any time and from time to time while an Event of Default
      under any of the Transaction Documents shall have occurred and is
      continuing without being waived by the Holder or cured by the Company,
      without notice to such Guarantor or any other Guarantor, any such notice
      being expressly waived by each Guarantor, to set-off and appropriate and
      apply any and all deposits, credits, indebtedness or claims, in any
      currency, in each case whether direct or indirect, absolute or contingent,
      matured or unmatured, at any time held or owing by the Purchasers to or
      for the credit or the account of such Guarantor, or any part thereof in
      such amounts as the Purchasers may elect, against and on account of the
      obligations and liabilities of such Guarantor to the Purchasers hereunder
      and claims of every nature and description of the Purchasers against such
      Guarantor, in any currency, whether arising hereunder, under the Purchase
      Agreement, any other Transaction Document or otherwise, as the Purchasers
      may elect, whether or not the Purchasers have made any demand for payment
      and although such obligations, liabilities and claims may be contingent or
      unmatured. The Purchasers shall notify such Guarantor promptly of any such
      set-off and the application made by the Purchasers of the proceeds
      thereof, provided that the failure to give such notice shall not affect
      the validity of such set-off and application. The rights of the Purchasers
      under this Section are in addition to other rights and remedies(including,
      without limitation, other rights of set-off) which the Purchasers may
      have.

                                       13
<PAGE>

            (g) Counterparts. This Guarantee may be executed in one or more
      counterparts of the entire document or of the signature pages hereto, any
      of which may be delivered by telecopy, email or other electronic means,
      and each of which when so executed shall be deemed to be an original, and
      all which when taken together shall constitute one and the same Guarantee.
      In the event that any signature is delivered by facsimile transmission,
      e-mail, .pdf or similar format data file or other electronic means, 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, ".pdf" or electronically
      transmitted signature page were an original thereof.

            (h) Severability. If any term, provision, covenant or restriction of
      this Guarantee is held by a court of competent jurisdiction to be invalid,
      illegal, void or unenforceable, the remainder of the terms, provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected, impaired or invalidated, in each
      case unless the absence of the invalid, illegal, void or unenforceable
      term, provision, covenant or restriction would impair the practical
      realization of the applicable party's principal rights and benefits
      hereunder, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term,
      provision, covenant or restriction. It is hereby stipulated and declared
      to be the intention of the parties that they would have executed the
      remaining terms, provisions, covenants and restrictions without including
      any of such that may be hereafter declared invalid, illegal, void or
      unenforceable, in each case unless it absence of the invalid, illegal,
      void or unenforceable term, provision, covenant or restriction would
      impair the practical realization of the applicable party's principal
      rights and benefits hereunder.

            (i) Section Headings. The Section headings used in this Guarantee
      are for convenience, only, do not constitute part of this Guarantee, and
      shall not be deemed to limit or affect any of the provisions hereof.

            (j) Integration. This Guarantee is the Guarantee referred to in the
      Purchase Agreement and other Transaction Documents. All of the applicable
      provisions of the Purchase Agreement and other Transaction Documents. All
      of the applicable provisions of the Purchase Agreement, including (without
      limitation) any provision for limiting the maximum rate of interest
      payable hereunder, are incorporated herein by reference and made a part
      hereof. In the event that any specific provision of this Guarantee
      conflicts or is inconsistent with any specific term or provision contained
      in the Purchase Agreement shall control and be given effect. However, this
      Guarantee contains provisions that are in addition to those contained in
      the Purchase Agreement, which each are cumulative with and not
      alternatives to each other, and which shall not be deemed or constructed
      to be in conflict or inconsistent with the Purchase Agreement because they
      are not contained in it.

                                       14
<PAGE>

            (k) Entire Understanding. No party has (directly or indirectly)
      offered, made, accepted or acknowledged any representation, warranty,
      promise, assurance or other agreement or understanding (whether written,
      oral, express, implied or otherwise) to, with or for the benefit of any
      other party any of their respective Affiliates or representatives
      respecting any of the matters contained in this Guarantee except for those
      expressly set forth in this Guarantee. This Guarantee, together with the
      exhibits and schedules hereto, contain the entire understanding of the
      parties with respect to the subject matter hereof and supersede all prior
      representations, warranties, promises, assurances and other agreements and
      understandings (whether written, oral, express, implied or otherwise) with
      respect to such matters, which the parties acknowledge have been merged
      into this Agreement and its exhibits and schedules.

            (l) Governing Law. THIS GUARANTEE SHALL BE, TO THE GREATEST EXTENT
      PERMITTED BY APPLICABLE LAW, BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
      ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND THE
      FEDERAL LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO ANY
      PRINCIPLES OF CONFLICTS OF LAW THEROF THAT WOULD DEFER TO THE SUBSTANTIVE
      LAWS OF ANY OTHER JURISDICTION..

            (m) Submission to Jurisdictional; Waiver. Each party hereby
      irrevocably and unconditionally:

                  (i)   agrees that all proceedings concerning the
                        interpretations, enforcement and defense of the
                        transactions contemplated by this Guarantee and the
                        Debentures (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. Each 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.;

                                       15
<PAGE>

                  (ii)  consents that any such action or proceeding may be
                        brought in such courts and waives any objection that it
                        may now or hereafter have to the venue of any such
                        action or proceeding in any such court or that such
                        action or proceeding was brought in an inconvenient
                        court and agrees not to plead or claim the same;

                  (iii) 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 Guarantee and agrees that such service shall
                        constitute good and sufficient service of process and
                        notice thereof; and

                  (iv)  agrees that nothing herein shall affect the right to
                        effect service of process in any other manner permitted
                        by law or shall limit the right to sue in any other
                        jurisdiction;

                  (v)   waives, to the maximum extent not prohibited by law, any
                        right it may have to claim or recover in any legal
                        action or proceeding referred to in this Section any
                        special, exemplary, punitive or consequential damages.

The preceding consents to New York governing law and jurisdiction and venue in
New York State's Supreme Court have been made by the Parties in reliance (at
least in part) on Sections 5-1401 and 5-1402 of the General Obligations Law of
the State of New York, as amended (as and to the extent applicable), and other
applicable law.

            (n) Acknowledgements. Each Guarantor hereby acknowledges that:

                  (i)   it has been advised by counsel in the negotiation,
                        execution and delivery of this Guarantee and the other
                        Transaction Documents to which it is a party;

                  (ii)  the Purchasers have no fiduciary relationship with or
                        duty to any Guarantor arising out of or in connection
                        with this Guarantee or any of the other Transaction
                        Documents, and the relationship between the Guarantors,
                        on the one hand, and the Purchasers, on the other hand,
                        in connection herewith or therewith is solely that of
                        debtor and creditor; and

                                       16
<PAGE>

                  (iii) no joint venture is created hereby or by the other
                        Transaction Documents or otherwise exists by virtue of
                        the transactions contemplated hereby among the
                        Guarantors and the Purchasers.

            (o) Additional Guarantors. The Company (pursuant to the terms of the
      Purchase Agreement and the other Transaction Documents) shall cause each
      of its subsidiaries formed or acquired on or subsequent to the date hereof
      to become a Guarantor for all purposes of this Guarantee by executing and
      delivering an Assumption Agreement in the form of Annex 1 hereto.

            (p) Release of Guarantors. Subject to Section 2(f), each Guarantor
      will be released from all liability hereunder concurrently with the
      repayment in full of all amounts owed under the Purchase Agreement, the
      Debentures and the other Transaction Documents.

            (q) Seniority. The Obligations of each of the Guarantors hereunder
      rank senior in priority to any other Indebtedness (as defined in the
      Purchase Agreement) of such Guarantor.

            (r) Waiver of Jury Trial. IN ANY ACTION, SUIT OR PROCEEDING IN ANY
      JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, EACH GUARANTOR
      AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY
      ABSOLUTELY, IRREVOCABLY, UNCONDITIONALLY AND EXPRESSLY WAIVE FOREVER TRIAL
      BY JURY.

                                       17
<PAGE>

      IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to
be duly executed and delivered as of the date first above written.

                                                          [SUBSIDIARY]

                                                          By:__________________
                                                             Name:
                                                             Title:

                                       18
<PAGE>

                                   SCHEDULE 1

                                   GUARANTORS

      The following are the names, notice addresses and jurisdiction of
organization of each Guarantor.

                                            COMPANY
                       JURISDICTION OF      OWNED BY
                       INCORPORATION        PERCENTAGE
                       -------------        ----------

                                       19
<PAGE>

                                   Annex 1 to
                              SUBSIDIARY GUARANTEE

ASSUMPTION AGREEMENT, dated as of ____ __, ______ made by
______________________________, a ______________ corporation (the "Additional
Guarantor"), in favor of the Purchasers pursuant to the Purchase Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Purchase Agreement.

                                   WITNESSETH:

      WHEREAS, Star Energy Corporation, a Nevada corporation (the "Company") and
the Purchasers have entered into a Securities Purchase Agreement, dated as of
January ___, 2007 (as amended, supplemented or otherwise modified from time to
time, the "Purchase Agreement");

      WHEREAS, in connection with the Purchase Agreement, the Company and its
Subsidiaries (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of February ____, 2007 (as the same may have been
hereafter may be, supplemented, modified, amended, restated or replaced from
time to time, in the manner provided herein, the "Guarantee") in favor of the
Purchasers;

      WHEREAS, the Purchase Agreement requires the Additional Guarantor to
become a party to the Guarantee; and

      WHEREAS, the Additional Guarantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee;

                          NOW, THEREFORE, IT IS AGREED:

      1. Guarantee. By executing and delivering this Assumption Agreement, the
Additional Guarantor, as provided in Section 5(n) of the Guarantee, hereby
becomes a party to the Guarantee as a Guarantor thereunder with the same force
and effect as if originally named therein as a Guarantor and, without limiting
the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Guarantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedule 1 to the
Guarantee. The Additional Guarantor hereby represents and warrants that each of
the representations and warranties contained in Section 3 of the Guarantee is
true and correct on and as the date hereof as to such Additional Guarantor
(after giving effect to this Assumption Agreement) as if made on and as of such
date.

      2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE, TO THE GREATEST
EXTENT PERMITTED BY APPLICABLE LAW, BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE FEDERAL LAWS OF THE
UNITED STATES OF AMERICA, WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW
THEREOF THAT WOULD DEFER TO THE SUBSTANTIVE LAWS OF ANY OTHER JURISDICTION.

                                       20
<PAGE>

      IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
to be duly executed and delivered as of the date first above written.

                                                          [ADDITIONALGUARANTOR]

                                                          By:__________________
                                                          Name:
                                                          Title:

                                       21

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