Document:

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EXHIBIT 10.5

                               SECURITY AGREEMENT

            SECURITY AGREEMENT, dated as of April 26, 2006 (this "AGREEMENT"),
among Armor Electric Inc., a Florida corporation (the "COMPANY") and all of the
Subsidiaries of the Company (such subsidiaries, the "Guarantors") (the Company
and Guarantors are collectively referred to as the "DEBTORS") and the holder or
holders of the Company's [___% Secured Convertible Debentures (the
"DEBENTURES"), signatory hereto, their endorsees, transferees and assigns
(collectively referred to as, the "SECURED PARTIES").

                              W I T N E S S E T H:

         WHEREAS, pursuant to the Purchase Agreement (as defined in the
Debentures), the Secured Parties have severally agreed to extend the loans to
the Company evidenced by the Debentures;

         WHEREAS, pursuant to a certain Subsidiary Guarantee dated as of the
date hereof (the "GUARANTY"), the Guarantors have jointly and severally agreed
to guaranty and act as surety for payment of such loans; 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 the Secured Parties, PARI PASSU
with each other Secured Party, a perfected security interest in certain property
of such Debtor to secure the prompt payment, performance and discharge in full
of all of the Company's obligations under the Debentures and the other Debtor's
obligations under the Guaranty.

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

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

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

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

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

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

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

                           (v) All commercial tort claims;

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

                           (vii) All investment property;

                            (viii) All supporting obligations; and

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

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

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

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

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

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                  (c) "MAJORITY IN INTEREST" shall mean, 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" shall mean 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) "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 to, of any Debtor to the Secured Parties, including,
         without limitation, all obligations under this Agreement, the
         Debentures, the Guaranty 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 Debentures, the Guaranty and any
         other instruments, agreements or other documents executed and/or
         delivered in connection herewith or therewith; and (iii) all amounts
         (including but not limited to post-petition interest) in respect of the
         foregoing that would be payable but for the fact that the obligations
         to pay such amounts are unenforceable or not allowable due to the
         existence of a bankruptcy, reorganization or similar proceeding
         involving any Debtor.

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

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

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         2. GRANT OF PERFECTED FIRST PRIORITY SECURITY INTEREST. 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 the
Secured Parties a continuing and perfected security interest in and to, a lien
upon and a right of set-off against all of their respective right, title and
interest of whatsoever kind and nature in and to, the Collateral (the "SECURITY
INTEREST").

         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 the Pledged Securities, and (b) any and all certificates and other
instruments or documents representing any of the other Collateral, in each case,
together with all Necessary Endorsements. The Debtors are, contemporaneously
with the execution hereof, delivering to Agent, or have previously delivered to
Agent, a true and correct copy of each Organizational Document governing any of
the Pledged Securities.

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

                  (a) Each Debtor has the requisite corporate, partnership,
         limited liability company or other power and authority to enter into
         this Agreement and otherwise to carry out its obligations hereunder.
         The execution, delivery and performance by 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 as such enforceability may be
         limited by applicable bankruptcy, insolvency, reorganization and
         similar laws of general application relating to or affecting the rights
         and remedies of creditors and by general principles of equity.

                   (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 record owner of the real property where such Collateral
         is located, and there exist no mortgages or other liens on any such
         real property except for Permitted Liens (as defined in the
         Debentures). Except as disclosed on SCHEDULE A, none of such Collateral
         is in the possession of any consignee, bailee, warehouseman, agent or
         processor.

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                  (c) Except for Permitted Liens (as defined in the Debentures)
         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 Interest. There is not
         on file in any governmental or regulatory authority, agency or
         recording office an effective financing statement, security agreement,
         license or transfer or any notice of any of the foregoing (other than
         those that will be filed in favor of the Secured Parties pursuant to
         this Agreement) covering or affecting any of the Collateral. So long as
         this Agreement shall be in effect, the Debtors shall not execute and
         shall not knowingly permit to be on file in any such office or agency
         any such financing statement or other document or instrument (except to
         the extent filed or recorded in favor of the Secured Parties pursuant
         to the terms of this Agreement).

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

                  (e) 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 unless it delivers to the Secured Parties at
         least 30 days prior to such relocation (i) written notice of such
         relocation and the new location thereof (which must be within the
         United States) and (ii) evidence that appropriate financing statements
         under the UCC and other necessary documents have been filed and
         recorded and other steps have been taken to perfect the Security
         Interest to create in favor of the Secured Parties a valid, perfected
         and continuing perfected first priority lien in the Collateral.

                  (f) This Agreement creates in favor of the Secured Parties a
         valid, security interest in the Collateral, subject only to Permitted
         Liens (as defined in the Debentures) securing the payment and
         performance of the Obligations. Upon making the filings described in
         the immediately following paragraph, all security interests created
         hereunder in any Collateral which may be perfected by filing Uniform
         Commercial Code financing statements shall have been duly perfected.
         Except for the filing of the Uniform Commercial Code financing
         statements referred to in the immediately following paragraph, the
         recordation of the Intellectual Property Security Agreement (as defined
         below) with respect to copyrights and copyright applications in the
         United States Copyright Office referred to in paragraph (m), the
         execution and delivery of deposit account control agreements satisfying
         the requirements of Section 9-104(a)(2) of the UCC with respect to each
         deposit account of the Debtors, and the delivery of the certificates

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         and other instruments provided in Section 3, no action is necessary to
         create, perfect or protect the security interests created hereunder.
         Without limiting the generality of the foregoing, except for the filing
         of said financing statements, the recordation of said Intellectual
         Property Security Agreement, and the execution and delivery of said
         deposit account control agreements, no consent of any third parties and
         no authorization, approval or other action by, and no notice to or
         filing with, any governmental authority or regulatory body is required
         for (i) the execution, delivery and performance of this Agreement, (ii)
         the creation or perfection of the Security Interests created hereunder
         in the Collateral or (iii) the enforcement of the rights of the Secured
         Parties hereunder.

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

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

                   (i) The capital stock and other equity interests listed on
         SCHEDULE H hereto represent all of the capital stock and other equity
         interests 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, 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 (as defined in the Debenture).

                  (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) Each Debtor shall at all times maintain the liens and
         Security Interest 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 pursuant to Section 11 hereof. Each
         Debtor hereby agrees to defend the same against the claims of any and
         all persons and entities. Each Debtor shall safeguard and protect all
         Collateral for the account of the Secured Parties. At the request of
         the Secured Parties, each Debtor will sign and deliver to the Secured
         Parties at any time or from time to time one or more financing
         statements pursuant to the UCC in form reasonably satisfactory to the

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         Secured Parties and will pay the cost of filing the same in all public
         offices wherever filing is, or is deemed by the Secured Parties to be,
         necessary or desirable to effect the rights and obligations provided
         for herein. Without limiting the generality of the foregoing, each
         Debtor shall pay all fees, taxes and other amounts necessary to
         maintain the Collateral and the Security Interest hereunder, and each
         Debtor shall obtain and furnish to the Secured Parties from time to
         time, upon demand, such releases and/or subordinations of claims and
         liens which may be required to maintain the priority of the Security
         Interest hereunder.

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

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

                  (n) Each Debtor shall maintain with financially sound and
         reputable insurers, insurance with respect to the Collateral against
         loss or damage of the kinds and in the amounts customarily insured
         against by entities of established reputation having similar properties
         similarly situated and in such amounts as are customarily carried under
         similar circumstances by other such entities and otherwise as is
         prudent for entities engaged in similar businesses but in any event
         sufficient to cover the full replacement cost thereof. 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 lender loss payee and additional
         insured under each such insurance policy; (b) if such insurance be
         proposed to be cancelled or materially changed for any reason
         whatsoever, such insurer will promptly notify the 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 Debenture) exists
         and if the proceeds arising out of any claim or series of related
         claims do not exceed $100,000, loss payments in each instance will be
         applied by the applicable Debtor to the repair and/or replacement of
         property with respect to which the loss was incurred to the extent
         reasonably feasible, and any loss payments or the balance thereof
         remaining, to the extent not so applied, shall be payable to the
         applicable Debtor, provided, however, that payments received by any
         Debtor after an Event of Default occurs and is continuing or in excess
         of $100,000 for any occurrence or series of related occurrences shall
         be paid to the Agent and, if received by such Debtor, shall be held in
         trust for 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 lender loss
         payee and additional insured 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, advise the Secured Parties promptly, in sufficient
         detail, of any substantial change in the Collateral, and of the
         occurrence of any event which would have a material adverse effect on
         the value of the Collateral or on the Secured Parties' security
         interest therein.

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

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

                  (r) 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.

                  (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 Collateral and of
         any other information received by such Debtor that may materially
         affect the value of the Collateral, the Security Interest or the rights
         and remedies of the Secured Parties hereunder.

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

                  (u) The 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 or corporate structure, or identity, or add any new
         fictitious name unless it provides at least 30 days prior written
         notice to the Secured Parties of such change and, at the time of such
         written notification, such Debtor provides any financing statements or
         fixture filings necessary to perfect and continue perfected the
         perfected security Interest granted and evidenced by this Agreement.

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

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

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

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

                  (aa) At any time and from time to time that any Collateral
         consists of instruments, certificated securities or other items that
         require or permit possession by the secured party to perfect the
         security interest created hereby, the applicable Debtor shall deliver
         such Collateral to the Agent.

                  (bb) Each Debtor, in its capacity as issuer, hereby agrees to
         comply with any and all orders and instructions of Agent regarding the
         Pledged Interests consistent with the terms of this Agreement without
         the further consent of any Debtor as contemplated by Section 8-106 (or
         any successor section) of the UCC. Further, each Debtor agrees that it
         shall not enter into a similar agreement (or one that would confer
         "control" within the meaning of Article 8 of the UCC) with any other
         person or entity.

                  (cc) Each Debtor shall cause all tangible chattel paper
         constituting Collateral to be delivered to the Agent, or, if such
         delivery is not possible, then to cause such tangible chattel paper to
         contain a legend noting that it is subject to the security interest
         created by this Agreement. To the extent that any Collateral consists
         of electronic chattel paper, the applicable Debtor shall cause the
         underlying chattel paper to be "marked" within the meaning of Section
         9-105 of the UCC (or successor section thereto).

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

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

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

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

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

                   (ii) Each Debtor shall cause each subsidiary of such Debtor
         to 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 Secured Parties may reasonably request. Upon delivery of the
         foregoing to the Secured Parties, the Additional Debtor shall be and

                                       11

<PAGE>

         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 "Debtors" shall be deemed to
         include each Additional Debtor.

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

                  (kk) Each Debtor shall register the pledge of the applicable
         Pledged Securities on the books of such Debtor. Each Debtor shall
         notify each issuer of Pledged Securities to register the pledge of the
         applicable Pledged Securities in the name of the Secured Parties on the
         books of such issuer. Further, except with respect to certificated
         securities delivered to the Agent, the applicable Debtor shall deliver
         to Agent an acknowledgement of pledge (which, where appropriate, shall
         comply with the requirements of the relevant UCC with respect to
         perfection by registration) signed by the issuer of the applicable
         Pledged Securities, which acknowledgement shall confirm that: (a) it
         has registered the pledge on its books and records; and (b) at any time
         directed by Agent during the continuation of an Event of Default, such
         issuer will transfer the record ownership of such Pledged Securities
         into the name of any designee of Agent, 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.

                  (ll) 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 shall
         purchase or retain all or any of the Pledged Securities, 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 Debtors and their direct and indirect subsidiaries; (ii) use its
         best efforts to obtain resignations of the persons then serving as
         officers and directors of the Debtors 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 Debtors
         and their direct and indirect subsidiaries.

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

                                       12

<PAGE>

                   (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 desirable, or as the Secured Parties may reasonably
         request, in order to perfect and protect any security interest granted
         or purported to be granted hereby or to enable the Secured Parties to
         exercise and enforce their rights and remedies hereunder and with
         respect to any Collateral or to otherwise carry out the purposes of
         this Agreement.

                  (oo) SCHEDULE F attached hereto lists all of the patents,
         patent applications, trademarks, trademark applications, registered
         copyrights, and domain names owned by 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
         have been duly recorded at the United States Patent and Trademark
         Office and all material copyrights of the Debtors have been duly
         recorded at the United States Copyright Office.

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

         5. EFFECT OF PLEDGE ON CERTAIN RIGHTS. If any of the Collateral subject
to this Agreement consists of nonvoting equity or ownership interests
(regardless of class, designation, preference or rights) that may be converted
into voting equity or ownership interests upon the occurrence of certain events
(including, without limitation, upon the transfer of all or any of the other
stock or assets of the issuer), it is agreed that the pledge of such equity or
ownership interests pursuant to this Agreement or the enforcement of any of
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 of an Event of Default (as defined in the
         Debenture) under the Debenture;

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

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

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

                                       13

<PAGE>

         7. DUTY TO HOLD IN TRUST.

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

                  (b) If any Debtor shall become entitled to receive or shall
         receive any securities or other property (including, without
         limitation, shares of Pledged Securities or instruments representing
         Pledged Securities acquired after the date hereof, or any options,
         warrants, rights or other similar property or certificates representing
         a dividend, or any distribution in connection with any
         recapitalization, reclassification or increase or reduction of capital,
         or issued in connection with any reorganization of such Debtor or any
         of its direct or indirect subsidiaries) in respect of the Pledged
         Securities (whether as an addition to, in substitution of, or in
         exchange for, such Pledged Securities or otherwise), such Debtor agrees
         to (i) accept the same as the agent of the Secured Parties; (ii) hold
         the same in trust on behalf of and for the benefit of the Secured
         Parties; and (iii) to deliver any and all certificates or instruments
         evidencing the same to 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 of any Event of Default and at any
         time thereafter, the Secured Parties, acting through any agent
         appointed by them for such purpose, shall have the right to exercise
         all of the remedies conferred hereunder and under the Debentures, and
         the Secured Parties shall have all the rights and remedies of a secured
         party under the UCC. Without limitation, the Secured Parties shall have
         the following rights and powers:

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

                                       14

<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 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 owners thereof, including, without
                  limitation, to vote and/or to exchange, at its sole
                  discretion, any or all of the Collateral in connection with a
                  merger, reorganization, consolidation, recapitalization or
                  other readjustment concerning or involving the Collateral or
                  any Debtor or any of its direct or indirect subsidiaries.

                           (iii) The Secured Parties shall have the right to
                  operate the business of 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 Secured Parties may deem commercially
                  reasonable, all without (except as shall be required by
                  applicable statute and cannot be waived) advertisement or
                  demand upon or notice to any Debtor or right of redemption of
                  a Debtor, which are hereby expressly waived. Upon each such
                  sale, lease, assignment or other transfer of Collateral, the
                  Secured Parties may, unless prohibited by applicable law which
                  cannot be waived, purchase all or any part of the Collateral
                  being sold, free from and discharged of all trusts, claims,
                  right of redemption and equities of any Debtor, which are
                  hereby waived and released.

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

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

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

                                       15

<PAGE>

                  (b) The Agent may comply with any applicable law in connection
         with a disposition of Collateral and such compliance will not be
         considered adversely to affect the commercial reasonableness of any
         sale of the Collateral. The Agent may sell the Collateral without
         giving any warranties and may specifically disclaim such warranties. 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.

                  (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 such sale, lease or
other disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Parties in enforcing their
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations pro rata among the
Secured Parties (based on then-outstanding principal amounts of Debentures at
the time of any such determination), and to the payment of any other amounts
required by applicable law, after which the Secured Parties shall pay to the
applicable Debtor any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are insufficient to pay all
amounts to which the Secured Parties are legally entitled, the Debtors will be
liable for the deficiency, together with interest thereon, at the rate of 10%
per annum or the lesser amount permitted by applicable law (the "Default Rate"),
and the reasonable fees of any attorneys employed by the Secured Parties to
collect such deficiency. To the extent permitted by applicable law, 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 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

                                       16

<PAGE>

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.

         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 Secured Parties. The Debtors shall also pay all other
claims and charges which in the reasonable opinion of the Secured Parties might
prejudice, imperil or otherwise affect the Collateral or the Security Interest
therein. The Debtors will also, upon demand, pay to the Secured Parties the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Secured Parties
may incur in connection with (i) the enforcement of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Secured Parties under the 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, (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, and (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. 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, nor shall the
Agent or any Secured Party be obligated in any manner to perform any of the
obligations of any Debtor under or pursuant to any such contract or agreement,
to make inquiry as to the nature or sufficiency of any payment received by 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.

                                       17

<PAGE>

         13. SECURITY INTEREST ABSOLUTE. All rights of the Secured Parties and
all obligations of the Debtors hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures or any agreement entered into in connection with the foregoing,
or any portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the 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 guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance which might
otherwise constitute any legal or equitable defense available to a Debtor, or a
discharge of all or any part of the Security Interest granted hereby. Until the
Obligations shall have been paid and performed in full, the rights of the
Secured Parties shall continue even if the Obligations are barred for any
reason, including, without limitation, the running of the statute of limitations
or bankruptcy. Each Debtor expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance. In the event
that at any time any transfer of any Collateral or any payment received by the
Secured Parties hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise due to any party other than the Secured Parties, then, in any such
event, 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 obligation secured hereby.

         14. TERM OF AGREEMENT. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debentures have been
indefeasibly paid in full and all other Obligations have been paid 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 regardless of the termination of
this Agreement.

         15. POWER OF ATTORNEY; FURTHER ASSURANCES.

                   (a) Each Debtor authorizes the Secured Parties, and does
         hereby make, constitute and appoint the Secured Parties and their
         respective officers, agents, successors or assigns with full power of
         substitution, as such Debtor's true and lawful attorney-in-fact, with
         power, in the name of the various Secured Parties or such Debtor, to,
         after the occurrence and during the continuance of an Event of Default,
         (i) endorse any note, checks, drafts, money orders or other instruments
         of payment (including payments payable under or in respect of any
         policy of insurance) in respect of the Collateral that may come into

                                       18

<PAGE>

         possession of the Secured Parties; (ii) to sign and endorse any
         financing statement pursuant to the UCC or any invoice, freight or
         express bill, bill of lading, storage or warehouse receipts, drafts
         against debtors, assignments, verifications and notices in connection
         with accounts, and other documents relating to the Collateral; (iii) to
         pay or discharge taxes, liens, security interests or other encumbrances
         at any time levied or placed on or threatened against the Collateral;
         (iv) to demand, collect, receipt for, compromise, settle and sue for
         monies due in respect of the Collateral; (v) to transfer any
         Intellectual Property or provide licenses respecting any Intellectual
         Property; and (vi) generally, at the option of the Secured Parties, and
         at the expense of the 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 Secured Parties deem necessary to protect,
         preserve and realize upon the Collateral and the Security Interest
         granted therein in order to effect the intent of this Agreement and the
         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 an Event of Default, each Secured Party is specifically
         authorized to execute and file any applications for or instruments of
         transfer and assignment of any patents, trademarks, copyrights or other
         Intellectual Property with the United States Patent and Trademark
         Office and the United States Copyright Office.

                   (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 in any jurisdiction, including,
         without limitation, the jurisdictions indicated on SCHEDULE C attached
         hereto, all such instruments, and take all such action as may
         reasonably be deemed necessary or advisable, or as reasonably requested
         by the Secured Parties, to perfect the Security Interest granted
         hereunder and otherwise to carry out the intent and purposes of this
         Agreement, or for assuring and confirming to the Secured Parties the
         grant or perfection of a perfected security interest in all the
         Collateral under the UCC.

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

                                       19

<PAGE>

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

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

         18. APPOINTMENT OF AGENT. The Secured Parties hereby appoint [_____ to
act as their agent ("[_____" or "AGENT") for purposes of 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 [_____ may not be
removed as Agent unless __________________ shall then hold less than
$____________ 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 $______________ principal amount of Debentures. The Agent shall have the
rights, responsibilities and immunities set forth in ANNEX B hereto.

         19. MISCELLANEOUS.

                  (a) No course of dealing between the Debtors and the Secured
         Parties, nor any failure to exercise, nor any delay in exercising, on
         the part of the Secured Parties, any right, power or privilege
         hereunder or under the 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 Secured Parties with
         respect to the Collateral, whether established hereby or by the
         Debentures or by any other agreements, instruments or documents or by
         law shall be cumulative and may be exercised singly or concurrently.

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

                  (d) In the event any provision of this Agreement is held to be
         invalid, prohibited or unenforceable in any jurisdiction for any
         reason, unless such provision is narrowed by judicial construction,
         this Agreement shall, as to such jurisdiction, be construed as if such
         invalid, prohibited or unenforceable provision had been more narrowly
         drawn so as not to be invalid, prohibited or unenforceable. If,
         notwithstanding the foregoing, any provision of this Agreement is held

                                       20

<PAGE>

         to be invalid, prohibited or unenforceable in any jurisdiction, such
         provision, as to such jurisdiction, shall be ineffective to the extent
         of such invalidity, prohibition or unenforceability without
         invalidating the remaining portion of such provision or the other
         provisions of this Agreement and without affecting the validity or
         enforceability of such provision or the other provisions of this
         Agreement in any other jurisdiction.

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

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

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

                  (h) All questions concerning the construction, validity,
         enforcement and interpretation of this Agreement shall be governed by
         and construed and enforced in accordance with the internal laws of the
         State of New York, without regard to the principles of conflicts of law
         thereof. Each Debtor agrees that all proceedings concerning the
         interpretations, enforcement and defense of the transactions
         contemplated by this Agreement and the Debenture (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. Each party hereto hereby
         irrevocably waives personal service of process and consents to process
         being served in any such proceeding by mailing a copy thereof via
         registered or certified mail or overnight delivery (with evidence of
         delivery) to such party at the address in effect for notices to it
         under this Agreement and agrees that such service shall constitute good
         and sufficient service of process and notice thereof. Nothing contained
         herein shall be deemed to limit in any way any right to serve process
         in any manner permitted by law. Each party hereto hereby irrevocably
         waives, to the fullest extent permitted by applicable law, any and all
         right to trial by jury in any legal proceeding arising out of or
         relating to this Agreement or the transactions contemplated hereby. If
         any party shall commence a proceeding to enforce any provisions of this
         Agreement, then the prevailing party in such proceeding shall be
         reimbursed by the other party for its reasonable attorney's fees and
         other costs and expenses incurred with the investigation, preparation
         and prosecution of such proceeding.

                                       21

<PAGE>

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

                  (j) All Debtors shall jointly and severally be liable for the
         obligations of each Debtor to the Secured Parties hereunder.

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

                  (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 to be
         substituted for such Debtor as a partner or member, as applicable,
         pursuant hereto.

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

                            [SIGNATURE PAGES FOLLOW]

                                       22

<PAGE>

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

ARMOR ELECTRIC INC.

By:__________________________________________
     Name:
     Title:

[SUBSIDIARY]

By:__________________________________________
     Name:
     Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       23

<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO ARME 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]

                                       24

<PAGE>

                                   SCHEDULE A

Principal Place of Business of Debtors:

Locations Where Collateral is Located or Stored:

                                       25

<PAGE>

                                   SCHEDULE B

                                       26

<PAGE>

                                   SCHEDULE C

                                       27

<PAGE>

                                   SCHEDULE D

                      Organizational Identification Numbers

                                       28

<PAGE>

                                   SCHEDULE E

                         Names; Mergers and Acquisitions

                                       29

<PAGE>

                                   SCHEDULE F

                              Intellectual Property

                                       30

<PAGE>

                                   SCHEDULE G

                                 Account Debtors

                                       31

<PAGE>

                                   SCHEDULE H

                               Pledged Securities

                                       32

<PAGE>

                                     ANNEX A
                                       TO
                                    SECURITY
                                    AGREEMENT

                        FORM OF ADDITIONAL DEBTOR JOINDER

             Security Agreement dated as of April ___, 2006 made by
                               Armor Electric Inc.
        and its subsidiaries party thereto from time to time, as Debtors
                               to and in favor of
        the Secured Parties identified 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 PROVISIONS 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 to which this Annex B is attached (the "AGREEMENT")), 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 the provisions of the Agreement and any
other Transaction Document (as such term is defined in the Debentures) 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.

         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,

<PAGE>

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.

         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.

         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

<PAGE>

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.<PAGE>

EXHIBIT 10.6

                              SUBSIDIARY GUARANTEE

         SUBSIDIARY GUARANTEE, dated as of April 26, 2006 (this "GUARANTEE"),
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, (the "GUARANTORS"), in favor of the
purchasers signatory (the "PURCHASERS") to that certain Securities Purchase
Agreement, dated as of the date hereof, between Armor Electric Inc., a Florida
corporation (the "COMPANY") and the Purchasers.

                              W I T N E S S E T H:

         WHEREAS, pursuant to that certain Securities Purchase Agreement, dated
as of the date hereof, by and between the Company and the Purchasers (the
"PURCHASE AGREEMENT"), the Company has agreed to sell and issue to the
Purchasers, and the Purchasers have agreed to purchase from the Company the
Company's Secured Convertible Debentures (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, terms defined in the
Purchase Agreement and used herein shall have the meanings given to them 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:

                  "GUARANTEE" means this Subsidiary Guarantee, as the same may
         be amended, supplemented or otherwise modified from time to time.

                      "OBLIGATIONS" means the collective reference to all
         obligations and undertakings of the Company of whatever nature,
         monetary or otherwise, under the Debentures, the Purchase Agreement,
         the Security Agreement, the Warrants, the Registration Rights Agreement
         or any other future agreement or obligations undertaken by the Company
         to the Purchasers, together with all reasonable attorneys' fees,
         disbursements and all other costs and expenses of collection incurred
         by Purchasers in enforcing any of such Obligations and/or this
         Guarantee.

                                       1

<PAGE>

         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)     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)).

                           (iii)    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.

                           (iv)     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.

                           (v)      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

                                       2

<PAGE>

                                    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.

                           (vi)     Notwithstanding anything to the contrary in
                                    this Agreement, 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) NO SUBROGATION. 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 be
         subrogated to any of the rights of the Purchasers 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.

                                       3

<PAGE>

                  (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.

                  (e) GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor
         waives any and all notice of the creation, renewal, extension or
         accrual of any of the Obligations and 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; 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 diligence, presentment, protest, demand for
         payment and notice of default or nonpayment to or upon the Company or
         any of the Guarantors with respect to the Obligations. 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 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

                                       4

<PAGE>

         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.

                  (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.

                  (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:

                  (a) ORGANIZATION AND QUALIFICATION. The Guarantor is a
         corporation, duly incorporated, validly existing and in good standing
         under the laws of the applicable jurisdiction set forth on Schedule 1,
         with the requisite corporate 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,
         prospects, or financial condition of the Guarantor 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").

                                       5

<PAGE>

                  (b) AUTHORIZATION; ENFORCEMENT. The Guarantor has the
         requisite corporate 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 as such
         enforceability may be limited by applicable bankruptcy, insolvency,
         reorganization, moratorium, liquidation or similar laws relating to, or
         affecting generally the enforcement of, creditors' rights and remedies
         or by other equitable principles of general application.

                  (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) conflict
         with or violate any provision of its Certificate of Incorporation or
         By-laws or (ii) conflict with, constitute a default (or an event which
         with notice or lapse of time or both would become a default) under, or
         give to others any rights of termination, amendment, acceleration or
         cancellation 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.

                  (d) CONSENTS AND APPROVALS. The Guarantor is not required to
         obtain any consent, waiver, authorization or order of, or make any
         filing or registration with, any court or other federal, state, local,
         foreign or other governmental authority or other person 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.

                                       6

<PAGE>

                  (f) FOREIGN LAW. Each Guarantor has consulted with appropriate
         foreign legal counsel with respect to any of the above representations
         for which non-U.S. law is applicable. Such foreign counsel have advised
         each applicable Guarantor that such counsel knows of no reason why any
         of the above representations would not be true and accurate. Such
         foreign counsel were provided with copies of this Subsidiary Guarantee
         and the Transaction Documents prior to rendering their advice.

         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, each
         Guarantor will not directly or indirectly on or after the date of this
         Guarantee:

                           i. except with the prior written consent of the Agent
                  (as defined in the Security Agreement), enter into, create,
                  incur, assume or suffer to exist any indebtedness for borrowed
                  money of any kind, including but not limited to, a guarantee,
                  on or with respect to any of its property or assets now owned
                  or hereafter acquired or any interest therein or any income or
                  profits therefrom that is senior to, or pari passu with, in
                  any respect, such Guarantor's obligations hereunder;

                           ii. enter into, create, incur, assume or suffer to
                  exist any liens of any kind, on or with respect to any of its
                  property or assets now owned or hereafter acquired or any
                  interest therein or any income or profits therefrom that is
                  senior to, in any respect, such Guarantor's obligations
                  hereunder;

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

                           iv. repay, repurchase or offer to repay, repurchase
                  or otherwise acquire more than a de minimis number of shares
                  of its Common Stock or Common Stock Equivalents;

                                       7

<PAGE>

                           v. enter into any agreement with respect to any of
                  the foregoing; or

                           vi. pay cash dividends on any equity securities of
                  the Company.

         5. MISCELLANEOUS.

                  (a) AMENDMENTS IN WRITING. None of the terms or provisions of
         this Guarantee may be waived, amended, supplemented or otherwise
         modified except in writing by the Purchasers.

                  (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).

                  (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 the Purchasers, 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 herein provided are cumulative, 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 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.

                                       8

<PAGE>

                           (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.

                           (iv) The agreements in this Section shall survive
                  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 the successors and assigns of each Guarantor and shall 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.

                  (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 be
         continuing, 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.

                                       9

<PAGE>

                  (g) COUNTERPARTS. This Guarantee may be executed by one or
         more of the parties to this Guarantee on any number of separate
         counterparts (including by telecopy), and all of said counterparts
         taken together shall be deemed to constitute one and the same
         instrument.

                  (h) SEVERABILITY. Any provision of this Guarantee which is
         prohibited or unenforceable in any jurisdiction shall, as to such
         jurisdiction, be ineffective to the extent of such prohibition or
         unenforceability without invalidating the remaining provisions hereof,
         and any such prohibition or unenforceability in any jurisdiction shall
         not invalidate or render unenforceable such provision in any other
         jurisdiction.

                  (i) SECTION HEADINGS. The Section headings used in this
         Guarantee are for convenience of reference only and are not to affect
         the construction hereof or be taken into consideration in the
         interpretation hereof.

                  (j) INTEGRATION. This Guarantee and the other Transaction
         Documents represent the agreement of the Guarantors and the Purchasers
         with respect to the subject matter hereof and thereof, and there are no
         promises, undertakings, representations or warranties by the Purchasers
         relative to subject matter hereof and thereof not expressly set forth
         or referred to herein or in the other Transaction Documents.

                  (k) GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
         CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
         NEW YORK WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS.

                  (l) SUBMISSION TO JURISDICTIONAL; WAIVER. Each Guarantor
         hereby irrevocably and unconditionally:

                           (i)      submits for itself and its property in any
                                    legal action or proceeding relating to this
                                    Guarantee and the other Transaction
                                    Documents to which it is a party, or for
                                    recognition and enforcement of any judgment
                                    in respect thereof, to the non-exclusive
                                    general jurisdiction of the Courts of the
                                    State of New York, located in New York
                                    County, New York, the courts of the United
                                    States of America for the Southern District
                                    of New York, and appellate courts from any
                                    thereof;

                                       10

<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)    agrees that service of process in any such
                                    action or proceeding may be effected by
                                    mailing a copy thereof by registered or
                                    certified mail (or any substantially similar
                                    form of mail), postage prepaid, to such
                                    Guarantor at its address referred to in the
                                    Purchase Agreement or at such other address
                                    of which the Purchasers shall have been
                                    notified pursuant thereto;

                           (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;
                                    and

                           (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.

                  (m) 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

                           (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.

                  (n) ADDITIONAL GUARANTORS. The Company 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.

                                       11

<PAGE>

                  (o) RELEASE OF GUARANTORS. Subject to Section 2.6, 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.

                  (p) SENIORITY. The Obligations of each of the Guarantors
         hereunder rank senior in priority to any other unsecured Debt (as
         defined in the Debentures) of such Guarantor.

                  (q) WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF
         THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND
         UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
         RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

                                       12

<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:

                                       13

<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
                                      -------------          ----------

                                       14

<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.

                              W I T N E S S E T H :

         WHEREAS, Armor Electric Inc., a Florida corporation (the "COMPANY") and
the Purchasers have entered into a Securities Purchase Agreement, dated as of
April ___, 2006 (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 April 26, 2006 (as amended, supplemented or
otherwise modified from time to time, 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 GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                                       15

<PAGE>

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

                                           [ADDITIONAL GUARANTOR]

                                            By:___________________________
                                            Name:
                                            Title:

                                       16

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