Document:

bancroft8k113007ex10-3.htm

    
      

      

    

    Exhibit 10.3

    EXHIBIT
      B

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (this “Agreement”) is made and entered into
      as of November 30, 2007, between Bancroft Uranium Inc., a Nevada corporation
      (the “Company”) and each of the several purchasers signatory hereto (each
      such purchaser, a “Purchaser” and, collectively, the
“Purchasers”).

    

    This
      Agreement is made pursuant to the Securities Purchase Agreement, dated as of
      the
      date hereof, between the Company and each Purchaser (the “Purchase
      Agreement”).

    

    The
      Company and each Purchaser hereby agrees as follows:

    

    
      	
            	
              1.

            	
              Definitions

            

    

    

    Capitalized
      terms used and not otherwise defined herein that are defined in the Purchase
      Agreement shall have the meanings given such terms in the Purchase
      Agreement. As used in this Agreement, the following terms shall have
      the following meanings:

    

    “Advice”
      shall have the meaning set forth in Section 6(d).

    

    “Effectiveness
      Date” means, with respect to the Initial Registration Statement required to
      be filed hereunder, the 90th calendar
      day
      following the date hereof, and with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the 90th calendar
      day
      following the date on which an additional Registration Statement is required
      to
      be filed hereunder; provided, however, that in the event the
      Company is notified by the Commission that one or more of the above Registration
      Statements will not be reviewed or is no longer subject to further review and
      comments, the Effectiveness Date as to such Registration Statement shall be
      the
      fifth Trading Day following the date on which the Company is so notified if
      such
      date precedes the dates otherwise required above.

    

    “Effectiveness
      Period” shall have the meaning set forth in Section 2(a).

    

    “Event”
      shall have the meaning set forth in Section 2(b).

    

    “Event
      Date” shall have the meaning set forth in Section 2(b).

    

    “Filing
      Date” means, with respect to the Initial Registration Statement required
      hereunder, the 30th calendar
      day
      following the date hereof and, with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the earliest
      practical date on which the Company is permitted by SEC Guidance to file such
      additional Registration Statement related to the Registrable
      Securities.

    

    

    
      
        
           

        

        
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    “Holder”
      or “Holders” means the holder or holders, as the case may be, from time
      to time of Registrable Securities.

    

    “Indemnified
      Party” shall have the meaning set forth in Section 5(c).

    

    “Indemnifying
      Party” shall have the meaning set forth in Section 5(c).

    

    “Initial
      Registration Statement” means the initial Registration Statement filed
      pursuant to this Agreement.

    

    “Initial
      Shares” means a number of Registrable Securities equal to the lesser of (i)
      the total number of Registrable Securities and (ii) one-third of the number
      of
      issued and outstanding shares of Common Stock that are held by non-affiliates
      of
      the Company on the day immediately prior to the filing date of the Initial
      Registration Statement.

    

    “Losses”
      shall have the meaning set forth in Section 5(a).

    

    “Plan
      of Distribution” shall have the meaning set forth in Section
      2(a).

    

    “Prospectus”
      means the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated by the Commission pursuant to the Securities Act), as
      amended or supplemented by any prospectus supplement, with respect to the terms
      of the offering of any portion of the Registrable Securities covered by a
      Registration Statement, and all other amendments and supplements to the
      Prospectus, including post-effective amendments, and all material incorporated
      by reference or deemed to be incorporated by reference in such
      Prospectus.

    

    “Registrable
      Securities” means (i) all of the shares of Common Stock issuable upon
      conversion in full of the Debentures (assuming on the date of determination
      the
      Debentures are converted in full without regard to any conversion limitations
      therein), (ii) all shares of Common Stock issuable as interest or principal
      on
      the Debentures assuming all permissible interest and principal payments are
      made
      in shares of Common Stock and the Debentures are held until maturity, (iii)
      all
      Warrant Shares (assuming on the date of determination the Warrants are exercised
      in full without regard to any exercise limitations therein), (iv) any additional
      shares of Common Stock issuable in connection with any anti-dilution provisions
      in the Debentures or the Warrants (in each case, without giving effect to any
      limitations on conversion set forth in the Debentures or limitations on exercise
      set forth in the Warrants) and (v) any securities issued or issuable upon any
      stock split, dividend or other distribution,  recapitalization or
      similar event with respect to the foregoing.

    

    “Registration
      Statement” means the registration statement required to be filed hereunder
      and any additional registration statements contemplated by Section 3(c),
      including (in each case) the Prospectus, amendments and supplements to such
      registration statement or Prospectus, including pre- and post-effective
      amendments, all exhibits thereto, and all material incorporated by reference
      or
      deemed to be incorporated by reference in such registration
      statement.

    

    

    
      
        
           

        

        
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    “Rule
      415” means Rule 415 promulgated by the Commission pursuant to the Securities
      Act, as such Rule may be amended or interpreted from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same purpose and effect as such Rule.

    

    “Rule
      424” means Rule 424 promulgated by the Commission pursuant to the Securities
      Act, as such Rule may be amended or interpreted from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same purpose and effect as such Rule.

    

    “Selling
      Shareholder Questionnaire” shall have the meaning set forth in Section
      3(a).

    

    “SEC
      Guidance” means (i) any publicly-available written or oral guidance,
      comments, requirements or requests of the Commission staff and (ii) the
      Securities Act.

    

    
      	
            	
              2.

            	
              Shelf
                Registration

            

    

    

    (a)  
           On or prior to each Filing Date, the Company shall
      prepare and file with the Commission a Registration Statement covering the
      resale of all or such maximum portion of the Registrable Securities as permitted
      by SEC Guidance (provided that, the Company shall use diligent efforts to
      advocate with the Commission for the registration of all of the Registrable
      Securities in accordance with the SEC Guidance, including without limitation,
      the Manual of Publicly Available Telephone Interpretations D.29) that are not
      then registered on an effective Registration Statement for an offering to be
      made on a continuous basis pursuant to Rule 415.  The Registration
      Statement shall be on Form S-3 (except if the Company is not then eligible
      to
      register for resale the Registrable Securities on Form S-3, in which case such
      registration shall be on another appropriate form in accordance herewith) and
      shall contain (unless otherwise directed by at least an 85% majority in interest
      of the Holders) substantially the “Plan of Distribution” attached hereto
      as Annex A.  Subject to the terms of this Agreement, the
      Company shall use its best efforts to cause a Registration Statement to be
      declared effective under the Securities Act as promptly as possible after the
      filing thereof, but in any event prior to the applicable Effectiveness Date,
      and
      shall use its best efforts to keep such Registration Statement continuously
      effective under the Securities Act until all Registrable Securities covered
      by
      such Registration Statement have been sold, or may be sold without volume
      restrictions pursuant to Rule 144(k), as determined by the counsel to the
      Company pursuant to a written opinion letter to such effect, addressed and
      acceptable to the Transfer Agent and the affected Holders (the “Effectiveness
      Period”).  For clarity, the Company shall not be required to
      maintain the effectiveness, or file another Registration Statement hereunder
      with respect to any Registrable Securities that may be sold  pursuant
      to Rule 144(k) (or successor thereto) promulgated under the Securities Act
      without regard to volume and manner of sale limitations.  The Company
      shall telephonically request effectiveness of a Registration Statement as of
      5:00 p.m. New York City time on a Trading Day.   The Company
      shall immediately notify the Holders via facsimile or by e-mail of the
      effectiveness of a Registration Statement on the same Trading Day that the
      Company telephonically confirms effectiveness with the Commission, which shall
      be the date requested for effectiveness of such Registration
      Statement.  The Company shall, by 9:30 a.m. New York City time on the
      Trading Day after the effective date of such Registration Statement, file a
      final Prospectus with the Commission as required by Rule 424.  Failure
      to so notify the Holder within 1 Trading Day of such notification of
      effectiveness or failure to file a final Prospectus as foresaid shall be deemed
      an Event under Section 2(b).  Notwithstanding any other provision
      of
      this Agreement and subject to the payment of liquidated
      damages pursuant
      to Section 2(b), if any
      SEC
      Guidance sets forth a
      limitation on the number of
      Registrable Securities permitted to
      be registered on a particular
      Registration Statement (and notwithstanding that the Company used diligent efforts to
      advocate with the Commission for the
      registration of all or a
      greater portion of
      Registrable Securities), unless otherwise directed in writing by a Holder as
      to
      its Registrable Securities, the number of Registrable Securities to be
      registered on such Registration Statement will first be reduced by Registrable
      Securities represented by Warrant Shares (applied, in the case that some Warrant
      Shares may be registered, to the Holders on a pro rata basis based on the total
      number of unregistered Warrant Shares held by such Holders), and second by
      Registrable Securities represented by Conversion Shares (applied,
      in the case that some
Conversion Shares
      may be registered, to the Holders
      on a pro rata basis based on the total number of unregistered Conversion Shares
      held by such Holders); provided,
however,
      that, prior to any reduction in the
      number of Registrable Securities included in a Registration Statement as set
      forth in this sentence, the number of shares of Common Stock set forth on
      Schedule 6(b) hereto which shall have been included on such Registration
      Statement shall be reduced by up to 100%.

    

    

    
      
        
           

        

        
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    (b)        If:
      (i) the Initial Registration Statement is not filed on or prior to its Filing
      Date (if the Company files the Initial Registration Statement without affording
      the Holders the opportunity to review and comment on the same as required by
      Section 3(a) herein, the Company shall be deemed to have not satisfied this
      clause (i)), or (ii) the Company fails to file with the Commission a request
      for
      acceleration of a Registration Statement in accordance with Rule 461 promulgated
      by the Commission pursuant to the Securities Act, within five Trading Days
      of
      the date that the Company is notified (orally or in writing, whichever is
      earlier) by the Commission that such Registration Statement will not be
“reviewed” or will not be subject to further review, or (iii) prior to the
      effective date of a Registration Statement, the Company fails to file a
      pre-effective amendment and otherwise respond in writing to comments made by
      the
      Commission in respect of such Registration Statement within 10 calendar days
      after the receipt of comments by or notice from the Commission that such
      amendment is required in order for such Registration Statement to be declared
      effective, or (iv) as to, in the aggregate among all Holders on a pro-rata
      basis
      based on their purchase of the Securities pursuant to the Purchase Agreement,
      a
      Registration Statement registering for resale all of the Initial Shares is
      not
      declared effective by the Commission by the Effectiveness Date of the Initial
      Registration Statement, or (v) all of the Registrable Securities are not
      registered for resale pursuant to one or more effective Registration Statements
      on or before August 1, 2008, or (vi) after the effective date of a Registration
      Statement, such Registration Statement ceases for any reason to remain
      continuously effective as to all Registrable Securities included in such
      Registration Statement, or the Holders are otherwise not permitted to utilize
      the Prospectus therein to resell such Registrable Securities, for more than
      10
      consecutive calendar days or more than an aggregate of 15 calendar days (which
      need not be consecutive calendar days) during any 12-month period (any such
      failure or breach being referred to as an “Event”, and for purposes of
      clause (i), (iv) and (v) the date on which such Event occurs, and for purpose
      of
      clause (ii) the date on which such five Trading Day period is exceeded, and
      for
      purpose of clause (iii) the date which such 10 calendar day period is exceeded,
      and for purpose of clause (vi) the date on which such 10 or 15 calendar day
      period, as applicable, is exceeded being referred to as “Event Date”),
      then, in addition to any other rights the Holders may have hereunder or under
      applicable law, on each such Event Date and on each monthly anniversary of
      each
      such Event Date (if the applicable Event shall not have been cured by such
      date)
      until the applicable Event is cured, the Company shall pay to each Holder an
      amount in cash, as partial liquidated damages and not as a penalty, equal to
      2%
      of the aggregate purchase price paid by such Holder pursuant to the Purchase
      Agreement for any unregistered Registrable Securities then held by such
      Holder.  If the Company fails to pay any partial liquidated damages
      pursuant to this Section in full within seven days after the date payable,
      the
      Company will pay interest thereon at a rate of 18% per annum (or such lesser
      maximum amount that is permitted to be paid by applicable law) to the Holder,
      accruing daily from the date such partial liquidated damages are due until
      such
      amounts, plus all such interest thereon, are paid in full. The partial
      liquidated damages pursuant to the terms hereof shall apply on a daily pro
      rata
      basis for any portion of a month prior to the cure of an Event.

     

    
      
         

      

      
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    3.         Registration
      Procedures.

    

    In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

    

    (a)        Not
      less than five (5) Trading Days prior to the filing of each Registration
      Statement and not less than one (1) Trading Day prior to the filing of any
      related Prospectus or any amendment or supplement thereto (including any
      document that would be incorporated or deemed to be incorporated therein by
      reference), the Company shall (i) furnish to each Holder copies of all such
      documents proposed to be filed, which documents (other than those incorporated
      or deemed to be incorporated by reference) will be subject to the review of
      such
      Holders, and (ii) cause its officers and directors, counsel and independent
      certified public accountants to respond to such inquiries as shall be necessary,
      in the reasonable opinion of respective counsel to each Holder, to conduct
      a
      reasonable investigation within the meaning of the Securities Act. The Company
      shall not file a Registration Statement or any such Prospectus or any amendments
      or supplements thereto to which the Holders of a majority of the Registrable
      Securities shall reasonably object in good faith, provided that, the Company
      is
      notified of such objection in writing no later than five (5) Trading Days after
      the Holders have been so furnished copies of a Registration Statement or one
      (1)
      Trading Day after the Holders have been so furnished copies of any related
      Prospectus or amendments or supplements thereto. Each Holder agrees to furnish
      to the Company a completed questionnaire in the form attached to this Agreement
      as Annex B (a “Selling Shareholder Questionnaire”) not less than
      two (2) Trading Days prior to the Filing Date or by the end of the fourth
      (4th) Trading
      Day following the date on which such Holder receives draft materials in
      accordance with this Section.

     

     

     

     

     

     

    
 

    

    
      
        
           

        

        
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    (b)        (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to a Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement (subject to the terms of
      this
      Agreement), and, as so supplemented or amended, to be filed pursuant to Rule
      424; (iii) respond as promptly as reasonably possible to any comments received
      from the Commission with respect to a Registration Statement or any amendment
      thereto and provide as promptly as reasonably possible to the Holders true
      and
      complete copies of all correspondence from and to the Commission relating to
      a
      Registration Statement (provided that, the Company may excise any information
      contained therein which would constitute material non-public information as
      to
      any Holder which has not executed a confidentiality agreement with the Company);
      and (iv) comply in all material respects with the provisions of the Securities
      Act and the Exchange Act with respect to the disposition of all Registrable
      Securities covered by a Registration Statement during the applicable period
      in
      accordance (subject to the terms of this Agreement) with the intended methods
      of
      disposition by the Holders thereof set forth in such Registration Statement
      as
      so amended or in such Prospectus as so supplemented.

    

    (c)        If
      during the Effectiveness Period, the number of Registrable Securities at any
      time exceeds 100% of the number of shares of Common Stock then registered in
      a
      Registration Statement, then the Company shall file as soon as reasonably
      practicable, but in any case prior to the applicable Filing Date, an additional
      Registration Statement covering the resale by the Holders of not less than
      the
      number of such Registrable Securities.

    

    (d)        Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (iii) through (vi) hereof, be accompanied by an instruction to
      suspend the use of the Prospectus until the requisite changes have been made)
      as
      promptly as reasonably possible (and, in the case of (i)(A) below, not less
      than
      one Trading Day prior to such filing) and (if requested by any such Person)
      confirm such notice in writing no later than one Trading Day following the
      day
      (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to a Registration Statement is proposed to be filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement; and (C) with respect to a Registration Statement or
      any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the Commission or any other federal or state governmental authority
      for amendments or supplements to a Registration Statement or Prospectus or
      for
      additional information; (iii) of the issuance by the Commission or any other
      federal or state governmental authority of any stop order suspending the
      effectiveness of a Registration Statement covering any or all of the Registrable
      Securities or the initiation of any Proceedings for that purpose; (iv) of the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification or exemption from qualification of any of the Registrable
      Securities for sale in any jurisdiction, or the initiation or threatening of
      any
      Proceeding for such purpose; (v) of the occurrence of any event or passage
      of
      time that makes the financial statements included in a Registration Statement
      ineligible for inclusion therein or any statement made in a Registration
      Statement or Prospectus or any document incorporated or deemed to be
      incorporated therein by reference untrue in any material respect or that
      requires any revisions to a Registration Statement, Prospectus or other
      documents so that, in the case of a Registration Statement or the Prospectus,
      as
      the case may be, it will not contain any untrue statement of a material fact
      or
      omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading; and (vi) of the occurrence or existence of any pending
      corporate development with respect to the Company that the Company believes
      may
      be material and that, in the determination of the Company, makes it not in
      the
      best interest of the Company to allow continued availability of a Registration
      Statement or Prospectus, provided that, any and all of such information shall
      remain confidential to each Holder until such information otherwise becomes
      public, unless disclosure by a Holder is required by law; provided,
further, that notwithstanding each Holder’s agreement to keep such
      information confidential, each such Holder makes no acknowledgement that any
      such information is material, non-public information.

    

    

    
      
        
           

        

        
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    (e)        Use
      its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of (i) any order stopping or suspending the effectiveness of a Registration
      Statement, or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

    

    (f)
              Furnish to each Holder, without
      charge, at least one conformed copy of each such Registration Statement and
      each
      amendment thereto, including financial statements and schedules, all documents
      incorporated or deemed to be incorporated therein by reference to the extent
      requested by such Person, and all exhibits to the extent requested by such
      Person (including those previously furnished or incorporated by reference)
      promptly after the filing of such documents with the Commission; provided,
      that
      any such item which is available on the EDGAR system need not be furnished
      in
      physical form.

    

    (g)        Subject
      to the terms of this Agreement, the Company hereby consents to the use of such
      Prospectus and each amendment or supplement thereto by each of the selling
      Holders in connection with the offering and sale of the Registrable Securities
      covered by such Prospectus and any amendment or supplement thereto, except
      after
      the giving of any notice pursuant to Section 3(d).

    

     

     

     

     

     

     

     

    

    
      
        
           

        

        
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    (h)       
      The Company shall cooperate with any broker-dealer through which a Holder
      proposes to resell its Registrable Securities in effecting a filing with the
      FINRA Corporate Financing Department pursuant to NASD Rule 2710, as requested
      by
      any such Holder, and the Company shall pay the filing fee required by such
      filing within two (2) Business Days of request therefor.

    

    (i)         Prior
      to any resale of Registrable Securities by a Holder, use its commercially
      reasonable efforts to register or qualify or cooperate with the selling Holders
      in connection with the registration or qualification (or exemption from the
      Registration or qualification) of such Registrable Securities for the resale
      by
      the Holder under the securities or Blue Sky laws of such jurisdictions within
      the United States as any Holder reasonably requests in writing, to keep each
      registration or qualification (or exemption therefrom) effective during the
      Effectiveness Period and to do any and all other acts or things reasonably
      necessary to enable the disposition in such jurisdictions of the Registrable
      Securities covered by each Registration Statement; provided, that, the Company
      shall not be required to qualify generally to do business in any jurisdiction
      where it is not then so qualified, subject the Company to any material tax
      in
      any such jurisdiction where it is not then so subject or file a general consent
      to service of process in any such jurisdiction.

    

    (j)         If
      requested by a Holder, cooperate with such Holders to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      to
      be delivered to a transferee pursuant to a Registration Statement, which
      certificates shall be free, to the extent permitted by the Purchase Agreement,
      of all restrictive legends, and to enable such Registrable Securities to be
      in
      such denominations and registered in such names as any such Holder may
      request.

    

    (k)        Upon
      the occurrence of any event contemplated by Section 3(d), as promptly as
      reasonably possible under the circumstances taking into account the Company’s
      good faith assessment of any adverse consequences to the Company and its
      stockholders of the premature disclosure of such event, prepare a supplement
      or
      amendment, including a post-effective amendment, to a Registration Statement
      or
      a supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither a Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading. If
      the Company notifies the Holders in
      accordance with clauses (iii) through (vi) of Section 3(d) above to suspend
      the
      use of any Prospectus until the requisite changes to such Prospectus have been
      made, then the Holders shall suspend use of such Prospectus.  The
      Company will use its best efforts to ensure that the use of the Prospectus
      may
      be resumed as promptly as is practicable.  The Company shall be
      entitled to exercise its right under this Section 3(k) to suspend the
      availability of a Registration Statement and Prospectus, subject to the payment
      of partial liquidated damages otherwise required pursuant to Section 2(b),
      for a
      period not to exceed 60 calendar days (which need not be consecutive days)
      in
      any 12 month period.

    

     

    
 

    
      
        
           

        

        
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    (l)         Comply
      with all applicable rules and regulations of the Commission.

    

    (m)       The
      Company may require each selling Holder to furnish to the Company a certified
      statement as to the number of shares of Common Stock beneficially owned by
      such
      Holder and, if required by the Commission, the natural persons thereof that
      have
      voting and dispositive control over the shares. During any periods that the
      Company is unable to meet its obligations hereunder with respect to the
      registration of the Registrable Securities solely because any Holder fails
      to
      furnish such information within three Trading Days of the Company’s request, any
      liquidated damages that are accruing at such time as to such Holder only shall
      be tolled and any Event that may otherwise occur solely because of such delay
      shall be suspended as to such Holder only, until such information is delivered
      to the Company.

    

    4.         Registration
      Expenses. All fees and expenses incident to the performance of or compliance
      with this Agreement by the Company shall be borne by the Company whether or
      not
      any Registrable Securities are sold pursuant to a Registration Statement. The
      fees and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses of the Company’s counsel and auditors) (A) with respect to
      filings made with the Commission, (B) with respect to filings required to be
      made with any Trading Market on which the Common Stock is then listed for
      trading, (C) in compliance with applicable state securities or Blue Sky laws
      reasonably agreed to by the Company in writing (including, without limitation,
      fees and disbursements of counsel for the Company in connection with Blue Sky
      qualifications or exemptions of the Registrable Securities) and (D) if not
      previously paid by the Company in connection with an Issuer Filing, with respect
      to any filing that may be required to be made by any broker through which a
      Holder intends to make sales of Registrable Securities with the FINRA pursuant
      to NASD Rule 2710, so long as the broker is receiving no more than a customary
      brokerage commission in connection with such sale, (ii) printing expenses
      (including, without limitation, expenses of printing certificates for
      Registrable Securities), (iii) messenger, telephone and delivery expenses,
      (iv)
      fees and disbursements of counsel for the Company, (v) Securities Act liability
      insurance, if the Company so desires such insurance, and (vi) fees and expenses
      of all other Persons retained by the Company in connection with the consummation
      of the transactions contemplated by this Agreement.  In addition, the
      Company shall be responsible for all of its internal expenses incurred in
      connection with the consummation of the transactions contemplated by this
      Agreement (including, without limitation, all salaries and expenses of its
      officers and employees performing legal or accounting duties), the expense
      of
      any annual audit and the fees and expenses incurred in connection with the
      listing of the Registrable Securities on any securities exchange as required
      hereunder.  In no event shall the Company be responsible for any
      broker or similar commissions of any Holder or, except to the extent provided
      for in the Transaction Documents, any legal fees or other costs of the
      Holders.

    

    
      	
            	
              5.

            	
              Indemnification.

            

    

    

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    (a)        Indemnification
      by the Company. The Company shall, notwithstanding any termination of this
      Agreement, indemnify and hold harmless each Holder, the officers, directors,
      members, partners, agents, brokers (including brokers who offer and sell
      Registrable Securities as principal as a result of a pledge or any failure
      to
      perform under a margin call of Common Stock), investment advisors and employees
      (and any other Persons with a functionally equivalent role of a Person holding
      such titles, notwithstanding a lack of such title or any other title) of each
      of
      them, each Person who controls any such Holder (within the meaning of Section
      15
      of the Securities Act or Section 20 of the Exchange Act) and the officers,
      directors, members, shareholders, partners, agents and employees (and any other
      Persons with a functionally equivalent role of a Person holding such titles,
      notwithstanding a lack of such title or any other title) of each such
      controlling Person, to the fullest extent permitted by applicable law, from
      and
      against any and all losses, claims, damages, liabilities, costs (including,
      without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or
      alleged untrue statement of a material fact contained in a Registration
      Statement, any Prospectus or any form of prospectus or in any amendment or
      supplement thereto or in any preliminary prospectus, or arising out of or
      relating to any omission or alleged omission of a material fact required to
      be
      stated therein or necessary to make the statements therein (in the case of
      any
      Prospectus or supplement thereto, in light of the circumstances under which
      they
      were made) not misleading or (2) any violation or alleged violation by the
      Company of the Securities Act, the Exchange Act or any state securities law,
      or
      any rule or regulation thereunder, in connection with the performance of its
      obligations under this Agreement, except to the extent, but only to the extent,
      that (i) such untrue statements or omissions are based solely upon information
      regarding such Holder furnished in writing to the Company by such Holder
      expressly for use therein, or to the extent that such information relates to
      such Holder or such Holder’s proposed method of distribution of Registrable
      Securities and was reviewed and expressly approved in writing by such Holder
      expressly for use in a Registration Statement, such Prospectus or in any
      amendment or supplement thereto (it being understood that the Holder has
      approved Annex A hereto for this purpose) or (ii) in the case of an occurrence
      of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
      Holder of an outdated or defective Prospectus after the Company has notified
      such Holder in writing that the Prospectus is outdated or defective and prior
      to
      the receipt by such Holder of the Advice contemplated in Section
      6(d).  The Company shall notify the Holders promptly of the
      institution, threat or assertion of any Proceeding arising from or in connection
      with the transactions contemplated by this Agreement of which the Company is
      aware.

    

    (b)        Indemnification
      by Holders. Each Holder shall, severally and not jointly, indemnify and hold
      harmless the Company, its directors, officers, agents and employees, each Person
      who controls the Company (within the meaning of Section 15 of the Securities
      Act
      and Section 20 of the Exchange Act), and the directors, officers, agents or
      employees of such controlling Persons, to the fullest extent permitted by
      applicable law, from and against all Losses, as incurred, to the extent arising
      out of or based solely upon: (x) such Holder’s failure to comply with the
      prospectus delivery requirements of the Securities Act or (y) any untrue or
      alleged untrue statement of a material fact contained in any Registration
      Statement, any Prospectus, or in any amendment or supplement thereto or in
      any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein not misleading (i) to the extent, but only to the extent,
      that such untrue statement or omission is contained in any information so
      furnished in writing by such Holder to the Company specifically for inclusion
      in
      such Registration Statement or such Prospectus or (ii) to the extent that such
      information relates to such Holder’s proposed method of distribution of
      Registrable Securities and was reviewed and expressly approved in writing by
      such Holder expressly for use in a Registration Statement (it being understood
      that the Holder has approved Annex A hereto for this purpose), such Prospectus
      or in any amendment or supplement thereto or (ii) in the case of an occurrence
      of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
      Holder of an outdated or defective Prospectus after the Company has notified
      such Holder in writing that the Prospectus is outdated or defective and prior
      to
      the receipt by such Holder of the Advice contemplated in Section 6(d). In no
      event shall the liability of any selling Holder hereunder be greater in amount
      than the dollar amount of the net proceeds received by such Holder upon the
      sale
      of the Registrable Securities giving rise to such indemnification
      obligation.

    

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    (c)        Conduct
      of Indemnification Proceedings. If any Proceeding shall be brought or
      asserted against any Person entitled to indemnity hereunder (an “Indemnified
      Party”), such Indemnified Party shall promptly notify the Person from whom
      indemnity is sought (the “Indemnifying Party”) in writing, and the
      Indemnifying Party shall have the right to assume the defense thereof, including
      the employment of counsel reasonably satisfactory to the Indemnified Party
      and
      the payment of all fees and expenses incurred in connection with defense
      thereof; provided, that, the failure of any Indemnified Party to give such
      notice shall not relieve the Indemnifying Party of its obligations or
      liabilities pursuant to this Agreement, except (and only) to the extent that
      it
      shall be finally determined by a court of competent jurisdiction (which
      determination is not subject to appeal or further review) that such failure
      shall have prejudiced the Indemnifying Party.

    

    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless:  (1) the Indemnifying Party has agreed in writing to pay such
      fees and expenses; (2) the Indemnifying Party shall have failed promptly to
      assume the defense of such Proceeding and to employ counsel reasonably
      satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
      parties to any such Proceeding (including any impleaded parties) include both
      such Indemnified Party and the Indemnifying Party, and counsel to the
      Indemnified Party shall reasonably believe that a material conflict of interest
      is likely to exist if the same counsel were to represent such Indemnified Party
      and the Indemnifying Party (in which case, if such Indemnified Party notifies
      the Indemnifying Party in writing that it elects to employ separate counsel
      at
      the expense of the Indemnifying Party, the Indemnifying Party shall not have
      the
      right to assume the defense thereof and the reasonable fees and expenses of
      no
      more than one separate counsel shall be at the expense of the Indemnifying
      Party).  The Indemnifying Party shall not be liable for any settlement
      of any such Proceeding effected without its written consent, which consent
      shall
      not be unreasonably withheld or delayed.  No Indemnifying Party shall,
      without the prior written consent of the Indemnified Party, effect any
      settlement of any pending Proceeding in respect of which any Indemnified Party
      is a party, unless such settlement includes an unconditional release of such
      Indemnified Party from all liability on claims that are the subject matter
      of
      such Proceeding.

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection with investigating or preparing to defend such Proceeding in
      a
      manner not inconsistent with this Section) shall be paid to the Indemnified
      Party, as incurred, within ten Trading Days of written notice thereof to the
      Indemnifying Party; provided, that, the Indemnified Party shall promptly
      reimburse the Indemnifying Party for that portion of such fees and expenses
      applicable to such actions for which such Indemnified Party is judicially
      determined not to be entitled to indemnification hereunder.

    

    (d)           Contribution.
      If the indemnification under Section 5(a) or 5(b) is unavailable to an
      Indemnified Party or insufficient to hold an Indemnified Party harmless for
      any
      Losses, then each Indemnifying Party shall contribute to the amount paid or
      payable by such Indemnified Party, in such proportion as is appropriate to
      reflect the relative fault of the Indemnifying Party and Indemnified Party
      in
      connection with the actions, statements or omissions that resulted in such
      Losses as well as any other relevant equitable considerations. The relative
      fault of such Indemnifying Party and Indemnified Party shall be determined
      by
      reference to, among other things, whether any action in question, including
      any
      untrue or alleged untrue statement of a material fact or omission or alleged
      omission of a material fact, has been taken or made by, or relates to
      information supplied by, such Indemnifying Party or Indemnified Party, and
      the
      parties’ relative intent, knowledge, access to information and opportunity to
      correct or prevent such action, statement or omission.  The amount
      paid or payable by a party as a result of any Losses shall be deemed to include,
      subject to the limitations set forth in this Agreement, any reasonable
      attorneys’ or other fees or expenses incurred by such party in connection with
      any Proceeding to the extent such party would have been indemnified for such
      fees or expenses if the indemnification provided for in this Section was
      available to such party in accordance with its terms.

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding
      paragraph.  Notwithstanding the provisions of this Section 5(d), no
      Holder shall be required to contribute, in the aggregate, any amount in excess
      of the amount by which the net proceeds actually received by such Holder from
      the sale of the Registrable Securities subject to the Proceeding exceeds the
      amount of any damages that such Holder has otherwise been required to pay by
      reason of such untrue or alleged untrue statement or omission or alleged
      omission.

    
       

       

       

       

       

      
 

      

      
        
          
             

          

          
            12

            
              

            

          

          
             

          

        

      

       

    

    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

    

    
      	
            	
              6.

            	
              Miscellaneous.

            

    

    

    (a)        Remedies.  In
      the event of a breach by the Company or by a Holder of any of their respective
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, shall be entitled to
      specific performance of its rights under this Agreement.  The Company
      and each Holder agree that monetary damages would not provide adequate
      compensation for any losses incurred by reason of a breach by it of any of
      the
      provisions of this Agreement and hereby further agrees that, in the event of
      any
      action for specific performance in respect of such breach, it shall not assert
      or shall waive the defense that a remedy at law would be adequate.

    

    (b)        No
      Piggyback on Registrations; Prohibition on Filing Other Registration
      Statements. Except as set forth on Schedule 6(b) attached hereto,
      neither the Company nor any of its security holders (other than the Holders
      in
      such capacity pursuant hereto) may include securities of the Company in any
      Registration Statements other than the Registrable Securities.  The
      Company shall not file any other registration statements until all Registrable
      Securities are registered pursuant to a Registration Statement that is declared
      effective by the Commission, provided that this Section 6(b) shall not prohibit
      the Company from filing amendments to registration statements filed prior to
      the
      date of this Agreement.

    

    (c)        Compliance.
      Each Holder covenants and agrees that it will comply with the prospectus
      delivery requirements of the Securities Act as applicable to it in connection
      with sales of Registrable Securities pursuant to a Registration
      Statement.

    

    (d)        Discontinued
      Disposition.  By its acquisition of Registrable Securities, each
      Holder agrees that, upon receipt of a notice from the Company of the occurrence
      of any event of the kind described in Section 3(d)(iii) through (vi), such
      Holder will forthwith discontinue disposition of such Registrable Securities
      under a Registration Statement until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus (as it
      may have been supplemented or amended) may be resumed.  The Company
      will use its best efforts to ensure that the use of the Prospectus may be
      resumed as promptly as is practicable.  The Company agrees and
      acknowledges that any periods during which the Holder is required to discontinue
      the disposition of the Registrable Securities hereunder shall be subject to
      the
      provisions of Section 2(b).

    

    (e)        Piggy-Back
      Registrations. If, at any time during the Effectiveness Period, there is not
      an effective Registration Statement covering all of the Registrable Securities
      and the Company shall determine to prepare and file with the Commission a
      registration statement relating to an offering for its own account or the
      account of others under the Securities Act of any of its equity securities,
      other than on Form S-4 or Form S-8 (each as promulgated under the Securities
      Act) or their then equivalents relating to equity securities to be issued solely
      in connection with any acquisition of any entity or business or equity
      securities issuable in connection with the Company’s stock option or other
      employee benefit plans, then the Company shall deliver to each Holder a written
      notice of such determination and, if within fifteen days after the date of
      the
      delivery of such notice, any such Holder shall so request in writing, the
      Company shall include in such registration statement all or any part of such
      Registrable Securities such Holder requests to be registered; provided,
however, that the Company shall not be required to register any
      Registrable Securities pursuant to this Section 6(e) that are eligible for
      resale pursuant to Rule 144(k) promulgated by the Commission pursuant to the
      Securities Act or that are the subject of a then effective Registration
      Statement.

     

    
      

      
        
          
             

          

          
            13

            
              

            

          

          
             

          

        

      

    

     

    (f)         Amendments
      and Waivers. The provisions of this Agreement, including the provisions of
      this sentence, may not be amended, modified or supplemented, and waivers or
      consents to departures from the provisions hereof may not be given, unless
      the
      same shall be in writing and signed by the Company and the Holders of a majority
      of the then outstanding Registrable Securities (including, for this purpose
      any
      Registrable Securities issuable upon exercise or conversion of any
      Security).  If a Registration Statement does not register all of the
      Registrable Securities pursuant to a waiver or amendment done in compliance
      with
      the previous sentence, then the number of Registrable Securities to be
      registered for each Holder shall be reduced pro rata among all Holders and
      each
      Holder shall have the right to designate which of its Registrable Securities
      shall be omitted from such Registration Statement. Notwithstanding the
      foregoing, a waiver or consent to depart from the provisions hereof with respect
      to a matter that relates exclusively to the rights of a Holder or some Holders
      and that does not directly or indirectly affect the rights of other Holders
      may
      be given by such Holder or Holders of all of the Registrable Securities to
      which
      such waiver or consent relates; provided, however, that the
      provisions of this sentence may not be amended, modified, or supplemented except
      in accordance with the provisions of the first  sentence of this
      Section 6(f).

    

    (g)        Notices.
      Any and all notices or other communications or deliveries required or permitted
      to be provided hereunder shall be delivered as set forth in the Purchase
      Agreement.

    

    (h)        Successors
      and Assigns. This Agreement shall inure to the benefit of and be binding
      upon the successors and permitted assigns of each of the parties and shall
      inure
      to the benefit of each Holder. The Company may not assign (except by merger)
      its
      rights or obligations hereunder without the prior written consent of all of
      the
      Holders of the then outstanding Registrable Securities. Each Holder may assign
      their respective rights hereunder in the manner and to the Persons as permitted
      under the Purchase Agreement.

    

    (i)         No
      Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has
      entered, as of the date hereof, nor shall the Company or any of its
      Subsidiaries, on or after the date of this Agreement, enter into any agreement
      with respect to its securities, that would have the effect of impairing the
      rights granted to the Holders in this Agreement or otherwise conflicts with
      the
      provisions hereof.  Except as set forth on Schedule 6(i),
      neither the Company nor any of its Subsidiaries has previously entered into
      any
      agreement granting any registration rights with respect to any of its securities
      to any Person that have not been satisfied in full.

    

    

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    (j) 
             Execution and Counterparts.
      This Agreement may be executed in two or more counterparts, all of which when
      taken together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart.  In the event that any signature is delivered by
      facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
      signature shall create a valid and binding obligation of the party executing
      (or
      on whose behalf such signature is executed) with the same force and effect
      as if
      such facsimile or “.pdf” signature page were an original thereof.

    

    (k)        Governing
      Law.  All questions concerning the construction, validity,
      enforcement and interpretation of this Agreement shall be determined in
      accordance with the provisions of the Purchase Agreement.

    

    (l)         Cumulative
      Remedies. The remedies provided herein are cumulative and not exclusive of
      any other remedies provided by law.

    

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

    

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

    

    (o)   
          Independent Nature of Holders’ Obligations and
      Rights. The obligations of each Holder hereunder are several and not joint
      with the obligations of any other Holder hereunder, and no Holder shall be
      responsible in any way for the performance of the obligations of any other
      Holder hereunder. Nothing contained herein or in any other agreement or document
      delivered at any closing, and no action taken by any Holder pursuant hereto
      or
      thereto, shall be deemed to constitute the Holders as a partnership, an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Holders are in any way acting in concert with respect
      to
      such obligations or the transactions contemplated by this Agreement. Each Holder
      shall be entitled to protect and enforce its rights, including without
      limitation the rights arising out of this Agreement, and it shall not be
      necessary for any other Holder to be joined as an additional party in any
      proceeding for such purpose.

    

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

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    

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

    

    

    

    
      	 	
              BANCROFT
                URANIUM INC.

            
	 	 
	 	 
	 	
              By:__________________________________________

            
	 	
              Name:

            
	 	
              Title:

            

    

    

    

    

    

    

    

    

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

     

     

     

     

     

     

     

     

    

    

    
      
        
           

        

        
          16

          
            

          

        

        
           

        

      

    

    

    [SIGNATURE
      PAGE OF HOLDERS TO BCFT RRA]

    

    

    Name
      of
      Holder: __________________________

    

    Signature
      of Authorized Signatory of Holder: __________________________

    

    Name
      of
      Authorized Signatory: _________________________

    

    Title
      of
      Authorized Signatory: __________________________

    

    

    

    [SIGNATURE
      PAGES CONTINUE]

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    

    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

    

    Annex
      A

    

    Plan
      of Distribution

    

    Each
      Selling Stockholder (the “Selling Stockholders”) of the common stock and
      any of their pledgees, assignees and successors-in-interest may, from time
      to
      time, sell any or all of their shares of common stock on the OTC Bulletin Board
      or any other stock exchange, market or trading facility on which the shares
      are
      traded or in private transactions.  These sales may be at fixed or
      negotiated prices.  A Selling Stockholder may use any one or more of
      the following methods when selling shares:

     

    
      	
               

            	
              ·

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            

    

     

    
      	
               

            	
              ·

            	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

    

     

    
      	
               

            	
              ·

            	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            

    

     

    
      	
               

            	
              ·

            	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

     

    
      	
               

            	
              ·

            	
              privately
                negotiated transactions;

            

    

     

    
      	
               

            	
              ·

            	
              settlement
                of short sales entered into after the effective date of the registration
                statement of which this prospectus is a
                part;

            

    

     

    
      	
               

            	
              ·

            	
              broker-dealers
                may agree with the Selling Stockholders to sell a specified number
                of such
                shares at a stipulated price per
                share;

            

    

     

    
      	
               

            	
              ·

            	
              through
                the writing or settlement of options or other hedging transactions,
                whether through an options exchange or
                otherwise;

            

    

     

    
      	
               

            	
              ·

            	
              a
                combination of any such methods of sale;
                or

            

    

     

    
      	
               

            	
              ·

            	
              any
                other method permitted pursuant to applicable
                law.

            

    

     

    The
      Selling Stockholders may also sell shares under Rule 144 under the Securities
      Act of 1933, as amended (the “Securities Act”), if available, rather than
      under this prospectus.

     

    Broker-dealers
      engaged by the Selling Stockholders may arrange for other brokers-dealers to
      participate in sales.  Broker-dealers may receive commissions or
      discounts from the Selling Stockholders (or, if any broker-dealer acts as agent
      for the purchaser of shares, from the purchaser) in amounts to be negotiated,
      but, except as set forth in a supplement to this Prospectus, in the case of
      an
      agency transaction not in excess of a customary brokerage commission in
      compliance with FINRA NASD Rule 2440; and in the case of a principal transaction
      a markup or markdown in compliance with NASD IM-2440.

     

    

    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

    

    In
      connection with the sale of the common stock or interests therein, the Selling
      Stockholders may enter into hedging transactions with broker-dealers or other
      financial institutions, which may in turn engage in short sales of the common
      stock in the course of hedging the positions they assume.  The Selling
      Stockholders may also sell shares of the common stock short and deliver these
      securities to close out their short positions, or loan or pledge the common
      stock to broker-dealers that in turn may sell these securities.  The
      Selling Stockholders may also enter into option or other transactions with
      broker-dealers or other financial institutions or the creation of one or more
      derivative securities which require the delivery to such broker-dealer or other
      financial institution of shares offered by this prospectus, which shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such
      transaction).

     

    The
      Selling Stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be “underwriters” within the meaning of the
      Securities Act in connection with such sales.  In such event, any
      commissions received by such broker-dealers or agents and any profit on the
      resale of the shares purchased by them may be deemed to be underwriting
      commissions or discounts under the Securities Act.  Each Selling
      Stockholder has informed the Company that it does not have any written or oral
      agreement or understanding, directly or indirectly, with any person to
      distribute the Common Stock. In no event shall any broker-dealer receive fees,
      commissions and markups which, in the aggregate, would exceed eight percent
      (8%).

     

    The
      Company is required to pay certain fees and expenses incurred by the Company
      incident to the registration of the shares.  The Company has agreed to
      indemnify the Selling Stockholders against certain losses, claims, damages
      and
      liabilities, including liabilities under the Securities Act.

     

    Because
      Selling Stockholders may be deemed to be “underwriters” within the meaning of
      the Securities Act, they will be subject to the prospectus delivery requirements
      of the Securities Act including Rule 172 thereunder.  In addition, any
      securities covered by this prospectus which qualify for sale pursuant to Rule
      144 under the Securities Act may be sold under Rule 144 rather than under this
      prospectus.  There is no underwriter or coordinating broker acting in
      connection with the proposed sale of the resale shares by the Selling
      Stockholders.

     

    We
      agreed
      to keep this prospectus effective until the earlier of (i) the date on which
      the
      shares may be resold by the Selling Stockholders without registration and
      without regard to any volume limitations by reason of Rule 144(k) under the
      Securities Act or any other rule of similar effect or (ii) all of the shares
      have been sold pursuant to this prospectus or Rule 144 under the Securities
      Act
      or any other rule of similar effect.  The resale shares will be sold
      only through registered or licensed brokers or dealers if required under
      applicable state securities laws. In addition, in certain states, the resale
      shares may not be sold unless they have been registered or qualified for sale
      in
      the applicable state or an exemption from the registration or qualification
      requirement is available and is complied with.

     

    

    
      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

    

    Under
      applicable rules and regulations under the Exchange Act, any person engaged
      in
      the distribution of the resale shares may not simultaneously engage in market
      making activities with respect to the common stock for the applicable restricted
      period, as defined in Regulation M, prior to the commencement of the
      distribution.  In addition, the Selling Stockholders will be subject
      to applicable provisions of the Exchange Act and the rules and regulations
      thereunder, including Regulation M, which may limit the timing of purchases
      and
      sales of shares of the common stock by the Selling Stockholders or any other
      person.  We will make copies of this prospectus available to the
      Selling Stockholders and have informed them of the need to deliver a copy of
      this prospectus to each purchaser at or prior to the time of the sale (including
      by compliance with Rule 172 under the Securities Act).

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

    Annex
      B

     

    BANCROFT
      URANIUM INC.

     

    Selling
      Securityholder Notice and Questionnaire

     

    The
      undersigned beneficial owner of common stock (the “Registrable
      Securities”) of Bancroft Uranium Inc., a Nevada corporation (the
“Company”), understands that the Company has filed or intends to file
      with the Securities and Exchange Commission (the “Commission”) a
      registration statement (the “Registration Statement”) for the
      registration and resale under Rule 415 of the Securities Act of 1933, as amended
      (the “Securities Act”), of the Registrable Securities, in accordance with
      the terms of the Registration Rights Agreement (the “Registration Rights
      Agreement”) to which this document is annexed.  A copy of the
      Registration Rights Agreement is available from the Company upon request at
      the
      address set forth below.  All capitalized terms not otherwise defined
      herein shall have the meanings ascribed thereto in the Registration Rights
      Agreement.

     

    Certain
      legal consequences arise from being named as a selling securityholder in the
      Registration Statement and the related prospectus.  Accordingly,
      holders and beneficial owners of Registrable Securities are advised to consult
      their own securities law counsel regarding the consequences of being named
      or
      not being named as a selling securityholder in the Registration Statement and
      the related prospectus.

     

    NOTICE

     

    The
      undersigned beneficial owner (the “Selling Securityholder”) of
      Registrable Securities hereby elects to include the Registrable Securities
      owned
      by it in the Registration Statement.

     

     

     

     

     

     

     

     

    

    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

    

    The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate:

     

    QUESTIONNAIRE

     

    
      	
              1.

            	
              Name.

            

    

     

    
      	
               

            	
              (a)

            	
              Full
                Legal Name of Selling Securityholder

            

      	 	 	 

      	 	 	
              

            

    

     

    
      	
               

            	
              (b)

            	
              Full
                Legal Name of Registered Holder (if not the same as (a) above) through
                which Registrable Securities are
                held:

            

    

     

    
      	 	 	
              

            

    

     

    
      	
               

            	
              (c)

            	
              Full
                Legal Name of Natural Control Person (which means a natural person
                who
                directly or indirectly alone or with others has power to vote or
                dispose
                of the securities covered by this
                Questionnaire):

            

    

     

    
      	 	 	
              

            

     

    
      	
              2.

            	
              Address
                for Notices
                to Selling Securityholder:

            

    

    
      
        	 	 
	 	 
	 	 
	
                Telephone:

              	 

      

      
        	
                Fax:

              	
                 

              

      

      
        	
                Contact_Person:

              	 

      

    

    

    
      	
              3.

            	
              Broker-Dealer
                Status:

            

    

     

    
      	
               

            	
              (a)

            	
              Are
                you a broker-dealer?

            

    

     

    Yes       No   

     

    
      	
               

            	
              (b)

            	
              If
                “yes” to Section 3(a), did you receive your Registrable Securities as
                compensation for investment banking services to the
                Company?

            

    

    
       

      Yes       No   

       

    

    
      	
            	
              Note:

            	
              If
                “no” to Section 3(b), the Commission’s staff has indicated that you should
                be identified as an underwriter in the Registration
                Statement.

            

    

     

    

    
      
        
           

        

        
          22

          
            

          

        

        
           

        

      

    

    

    
      	
               

            	
              (c)

            	
              Are
                you an affiliate of a
                broker-dealer?

            

    

     

    
      Yes       No   

       

    

    
      	
               

            	
              (d)

            	
              If
                you are an affiliate of a broker-dealer, do you certify that you
                purchased
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable
                Securities?

            

    

     

    
      Yes       No   

    

     

    
      	
            	
              Note:

            	
              If
                “no” to Section 3(d), the Commission’s staff has indicated that you should
                be identified as an underwriter in the Registration
                Statement.

            

    

     

    
      	
              4.

            	
              Beneficial
                Ownership
                of Securities of the Company Owned by the Selling
                Securityholder.

            

    

     

    Except
      as set forth below in this Item 4, the undersigned is not the beneficial or
      registered owner of any securities of the Company other than the securities
      issuable pursuant to the Purchase Agreement.

     

    
      	
               

            	
              (a)

            	
              Type
                and Amount of other securities beneficially owned by the Selling
                Securityholder:

            

    

    
       

      
        	 	 	
                
                  

                

                 

                
                  

                

              

      

       

       

       

       

       

       

       

       

      
      

    

    

    

     

    

    
      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    

    

    
      	
              5.

            	
              Relationships
                with
                the Company:

            

    

     

    Except
      as set forth below, neither the undersigned nor any of its affiliates, officers,
      directors or principal equity holders (owners of 5% of more of the equity
      securities of the undersigned) has held any position or office or has had any
      other material relationship with the Company (or its predecessors or affiliates)
      during the past three years.

     

    State
      any
      exceptions here:

    
       

      
        	 	 	
                
                  

                

                 

                
                  

                

              

      

       

    

    The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein that may occur subsequent to the date hereof
      at any time while the Registration Statement remains effective.

     

    By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to Items 1 through 5 and the inclusion of such
      information in the Registration Statement and the related prospectus and any amendments or supplements
      thereto.  The undersigned understands that such information
      will be relied upon by the Company in connection with the preparation or
      amendment of the Registration Statement and the related prospectus.

     

    IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
      and Questionnaire to be executed and delivered either in person or by its duly
      authorized agent.

     

    
      	
              Date:
                ________________________

            	
              Beneficial
                Owner: _____________________________

            
	 	 
	 	
              By: ________________________________________

            
	 	
              Name:

            
	 	
              Title:

            

    

    

    PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
      THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    

     

    

     

     

     

     

     

    24bancroft8k113007ex10-4.htm

    
      

      

    

    Exhibit
      10.4

    

    EXHIBIT
E

    

    SECURITY
      AGREEMENT

    

    This
SECURITY
      AGREEMENT, dated as of
November 30,
2007
      (this “Agreement”),
is
among
Bancroft
      Uranium Inc., a Nevada
corporation (the
“Company”),
all
      of the Subsidiaries of the
      Company (such
      subsidiaries,
      the “Guarantors”
      and together with the
      Company, the
“Debtors”)
      and the holders of the Company’s
8%
Original
      Issue Discount Secured Convertible
Debentures
      due November ___, 2009 and
      issued on November ___, 2007 in
      the original aggregate principal amount
      of
      $[_____ (collectively,
the
“Debentures”)
signatory
      hereto, their endorsees,
      transferees and assigns
      (collectively, 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
“Guarantee”),
      the Guarantors
      have jointly and severally agreed
      to
      guarantee and act as
surety
      for payment of such
      Debentures;
      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
      and through the Agent, a 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 Guarantors’
      obligations under the
      Guarantee.

    

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

    

    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 and real property of
      the Debtors, whether presently owned
      or existing or hereafter acquired or coming into existence, wherever situated,
      and all additions and accessions thereto and all substitutions and replacements
      thereof, and all proceeds, products and accounts thereof, including,
      without limitation, all
      proceeds from the sale or transfer of the Collateral and of insurance covering
      the same and of any tort claims in connection therewith, and all dividends,
      interest, cash,
      notes, securities, equity interest or other property at any time and from
      time to time
      acquired, receivable or otherwise distributed in respect of, or in exchange
      for,
      any or all of the Pledged Securities (as defined below):

    

    

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

    

    (i)    
          All
      goods, including, without
      limitation, (A) all
      machinery, equipment, computers, motor vehicles,
      trucks, tanks,
      boats, ships, appliances, furniture, special and general tools, fixtures, test
      and quality control devices and other equipment of every kind and nature and
      wherever situated, together with all documents of title and documents
      representing the same, all
      additions and accessions thereto, replacements therefor, all parts therefor,
      and
      all substitutes for any of the foregoing and all other 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;

    

    (ix)       All
      real and immovable property,
      both freehold and leasehold, and all of the Debtors' right, title and interest
      in mineral rights and claims, now owned or held or hereafter acquired by the
      Debtors; and

    

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    (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)-(x) above.

    

    Without
      limiting the generality of the
      foregoing, the “Collateral”
      shall include all investment property
      and general
      intangibles respecting ownership and/or other equity interests 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 and all rights
      arising under or in connection
      with the Pledged Securities, including, but not limited to, all dividends,
      interest and cash.

     

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

    

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

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

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

    

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

    

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

    

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

    

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

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

    

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

    

    2.         Grant
      of Security
      Interest in
      Collateral. As an
      inducement for the Secured
      Parties to extend the loans as evidenced by the Debentures and to secure the
      complete and timely payment, performance and discharge in full, as the case
      may
      be, of all of the Obligations, each Debtor hereby unconditionally and
      irrevocably
      pledges, grants and hypothecates to
      the Secured Parties a
security
      interest in and to, a lien upon and a
      right of set-off against all of their respective right, title and interest
      of
      whatsoever kind and nature
      in and to, the Collateral (a“Security
      Interest”
      and,
      collectively, the “Security Interests”).

    

    3.         Delivery
      of Certain
      Collateral.  Contemporaneously
      or prior
      to the execution of this Agreement, each Debtor shall deliver or cause to be
      delivered to the Agent (a) any and all certificates and other instruments representing
      or evidencing
      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.
      Except as set forth under
      the
      corresponding section of the disclosure schedules delivered to the Secured
      Parties concurrently herewith (the “Disclosure Schedules”),
      which Disclosure Schedules shall be
      deemed a part hereof, 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.

    

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    (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.

    

    (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
      Interests.  Except
      as set forth on
Schedule
      B attached hereto,
      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.  Except as set forth on Schedule B
      attached hereto and except pursuant to
      this Agreement, as long as
      this Agreement shall be in
      effect, the Debtors shall not execute and shall not knowingly permit to be
      on
      file in any such office or
      agency any other 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
      Interests
      to create in favor of the Secured
      Parties a valid, perfected and continuing perfected first priority lien in
      the
      Collateral.

    

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    (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 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 Agent and the Secured
      Parties
      hereunder.

    

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

    

    (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. If any, all required consents
      (including, without limitation, from
      stockholders or
      creditors of any Debtor)
      necessary for any Debtor to
      enter into and perform its obligations hereunder have been obtained.

    

    (i)         The
      capital stock and other equity
      interests listed on Schedule H
      hereto (the “Pledged
      Securities”)
represent
      all of the capital stock and
      other equity interests 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 Debentures).  

    

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

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

    

    (k)        Except
      for Permitted Liens (as defined in
      the Debentures), each
      Debtor shall at all times maintain the liens and Security Interests
      provided for hereunder as valid and perfected
      first
      priority liens and security interests in the Collateral in favor of the Secured
      Parties until this Agreement and the Security Interest hereunder shall be
      terminated 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 Agent, each Debtor will sign
      and deliver to
the Agent on
      behalf of the
      Secured Parties at any time or from
      time to time one or more financing statements pursuant to the UCC in form
      reasonably satisfactory to
      the Agent and will pay the
      cost of filing the same in all public offices wherever filing is, or is deemed
      by the Agent
      to be, necessary or desirable to effect
      the rights and obligations provided for herein. Without limiting the generality
      of the foregoing, each Debtor shall pay all fees, taxes and other amounts
      necessary to maintain the Collateral and the Security Interests
      hereunder, and each Debtor shall obtain
      and furnish to the Agent
      from time to time, upon demand, such
      releases and/or subordinations of claims and liens which may be required to
      maintain the priority of the Security Interests
      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, including
      Collateral hereafter acquired, against
      loss or damage of the kinds and in
      the amounts customarily insured against by entities of established reputation
      having similar properties similarly situated and in such amounts as are
      customarily carried under similar circumstances by other such entities
      and otherwise as is prudent for
      entities engaged in similar businesses but in any event sufficient to cover
      the
      full replacement cost thereof.  Each Debtor shall cause each insurance
      policy issued in connection herewith to provide, and the insurer issuing
      such policy to certify to the
      Agent,
      that (a) the Agent will be named as
      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
      Debentures)
      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
      on behalf of the Secured
      Parties and, if received by
      such Debtor, shall be held in trust for the Secured Parties and
      immediately paid over to the
      Agent unless
      otherwise directed in writing by the Agent.   Copies of such
      policies or the related certificates, in each case, naming the Agent as 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.

    

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

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

    

    (p)        Each
      Debtor shall promptly execute and
      deliver to the Agent
      such further deeds, mortgages, assignments,
      security
      agreements, financing statements or other instruments, documents, certificates
      and assurances and take such further action as the Agent
      may from time to time request and may
      in its sole discretion deem necessary to perfect, protect or enforce
the
      Secured Parties’
      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 reasonably acceptable
      to the Agent,
      which Intellectual Property Security
      Agreement, other than as stated therein, shall be subject to all of the terms
      and conditions
      hereof.

    

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

    

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

    

    (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.

     

     

    
 

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

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

    

    (w)       Except
      in the ordinary course of
      business, no
      Debtor may consign any of its inventory
      or sell any of its inventory on bill and
      hold, sale or
      return, sale on approval,
      or other conditional terms of sale without the consent of the Agent
      which shall not be unreasonably
      withheld.

    

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

    

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

    

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

    

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    (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).

    

    (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 Agent, to be entered
      into and delivered to the
      Agent for the benefit of 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
      Agent
      in notifying such third party of the
      Secured Parties’
      security interest in such Collateral
      and shall use its best efforts to obtain an acknowledgement and agreement from
      such third party with respect to the Collateral, in form and substance
reasonably satisfactory
      to the Agent.

    

    (gg)       If
      any Debtor shall at any time hold or
      acquire a commercial tort claim, such Debtor shall promptly notify the 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 Agent.

    

    (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
      Interests
      in such accounts and proceeds thereof,
      shall execute and deliver
to
      the Agent an assignment of claims
      for such
      accounts and cooperate with
      the Agent in
      taking any other steps
      required, in its judgment,
      under the Federal Assignment of Claims Act or any similar federal, state or
      local statute or rule to perfect or continue the perfected status
      of the Security
      Interests
      in such accounts and proceeds
      thereof.

    

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    (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 Agent
      may reasonably request.  Upon
      delivery of the foregoing
      to the Agent, the
      Additional Debtor shall be and become a party to this Agreement
      with the
      same rights and obligations as the Debtors, for all purposes hereof as fully
      and
      to the same extent as if it were an original signatory hereto and shall be
      deemed to have made the representations, warranties and covenants
      set forth herein as of the date of
      execution and delivery of such Additional Debtor Joinder, and all references
      herein to the “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.

     

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    (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.

    

    (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 Agent
      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”:

    

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

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

    

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

    

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

    

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

    

    
      	
               

            	
              7.

            	
              Duty
                To Hold In
                Trust.

            

    

    

    (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 Interests,
      whether payable pursuant to
the Debentures
      or otherwise, or of any check, draft,
      note, trade acceptance or other instrument evidencing an obligation to pay
      any
      such sum, hold the same in trust for the Secured Parties and shall forthwith
      endorse and transfer any such sums or instruments, or both, to the Secured
      Parties,
      pro-rata in proportion to their respective then-currently
      outstanding
      principal amount 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.

    

    

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    
      	
               

            	
              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
the Agent,
      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 Agent, for
      the benefit of the Secured
      Parties,
      shall have the following rights and
      powers:

    

    (i)        
      The Agent 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 Agent
      at places which the Agent
      shall reasonably select, whether at
      such Debtor's premises or elsewhere, and make available to the Agent,
      without rent, all of such
      Debtor’s
      respective premises and facilities for
      the purpose of the
      Agent
      taking possession of, removing or
      putting the Collateral in saleable or disposable form.

    

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

    

    (iii)       
      The Agent
      shall have the right to operate the
      business of each Debtor using the Collateral and shall
      have the right to
      assign, sell, lease or otherwise dispose of and deliver all or any part of
      the
      Collateral, at public or private sale or otherwise, either with or without
      special conditions or stipulations, for cash or on credit or for
      future delivery, in such parcel or
      parcels and at such time or times and at such place or places, and upon
      such terms and conditions
      as the Agent 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 Agent, for the benefit
      of 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.

    

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

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

    

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

    

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

    

    (b)        The
      Agent shall comply with any applicable
      law in
      connection with a disposition of Collateral and such compliance will not be
      considered adversely to affect the commercial reasonableness of any
      sale of the
      Collateral.  The Agent may sell the Collateral 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 or from payments
      made on account of any
      insurance policy insuring any portion of the Collateral 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
Agent in enforcing the
      Secured Parties’
      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 18%
      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.

     

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

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

     

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

     

     

     

     

     

     

     

     

    

    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

    

    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.

     

    13.       Security
      Interests 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 guarantee, or any other security, for all or any of
      the
      Obligations; (d) any action by the Secured Parties to obtain, adjust, settle
      and
      cancel in its sole discretion any insurance claims or matters made or arising
      in
      connection with the Collateral; or (e) any other circumstance which might
      otherwise constitute any legal or equitable defense available to a Debtor,
      or a
      discharge of all or any part of the Security Interests granted
      hereby.  Until the Obligations shall have been paid and performed in
      full, the rights of the Secured Parties shall continue even if the Obligations
      are barred for any reason, including, without limitation, the running of the
      statute of limitations or bankruptcy.  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.

     

    

    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

    

    14.       Term
      of
      Agreement. This
      Agreement and the Security Interests
      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 Agent,
      and does hereby make,
      constitute and appoint the
      Agent and its 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
      Agent or such Debtor, to,
      after the occurrence and during the continuance of an Event of Default, (i)
      endorse any note, checks, drafts, money orders or other
      instruments of
      payment (including payments payable under or in respect of any policy of
      insurance) in respect of the Collateral that may come into possession of the Agent;
      (ii) to sign and endorse any financing
      statement pursuant to the
      UCC or any invoice, freight or express bill, bill of lading, storage or
      warehouse receipts, drafts against debtors, assignments, verifications and
      notices in connection with accounts, and other documents relating to the
      Collateral; (iii) to pay or discharge
      taxes, liens, security
      interests or other encumbrances at any time levied or placed on or threatened
      against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
      and sue for monies due in respect of the Collateral; (v) to transfer
      any Intellectual Property or provide
      licenses respecting any Intellectual Property; and (vi) generally, at
      the option of the
      Agent, and at the expense
      of the Debtors, at any time, or from time to time, to execute and deliver any
      and all documents and instruments and to do
      all acts and
things which the
      Agent deems
      necessary to protect, preserve and
      realize upon the Collateral and the Security Interests
      granted therein in order to effect the
      intent of this Agreement and the Debentures all as fully and effectually as the Debtors
      might or could
      do; and each Debtor hereby ratifies all that said attorney shall lawfully do
      or
      cause to be done by virtue hereof.  This power of attorney is coupled
      with an interest and shall be irrevocable for the term of this Agreement
      and thereafter as long as any of
      the Obligations shall be outstanding.  The designation set forth
      herein shall
      be deemed to amend and supersede any inconsistent provision in the
      Organizational Documents or other documents or agreements to which any
      Debtor is subject or to
      which any Debtor is a party.  Without limiting the
      generality of the
      foregoing, after the occurrence and during the continuance of 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 Agent,
      to perfect the Security
      Interests
      granted hereunder and otherwise to
      carry out the intent and purposes of this Agreement, or for assuring and
      confirming
      to the Agent the grant or perfection
      of a perfected
security
      interest in all the Collateral under
      the UCC.

    

    

    
      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

    

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

    

    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
      Agent 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
[Enable
Growth
      Partners
      L.P.] to
      act as their agent (“Enable”
      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 Enable
may
      not be removed as Agent unless
Enable shall
      then hold less than $100,000 in principal
      amount of
      Debentures; provided, further,
      that such removal may occur only if each of the
      other Secured
      Parties shall then hold not
      less than an aggregate of $500,000 in
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.

    

    

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

    (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, together with the
      exhibits and schedules hereto, contain the entire understanding of the parties
      with respect to the subject matter hereof and supersede all prior agreements
      and
      understandings, oral or written, with respect to such matters, which the parties
      acknowledge have been merged into this Agreement and the exhibits and schedules
      hereto. No
      provision of this
      Agreement may be waived, modified, supplemented or amended except in a written
      instrument signed, in the case of an amendment, by the Debtors and the Secured
      Parties or, in the case of a waiver, by the party against whom enforcement
      of
      any such waived provision is sought.

    

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

    

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

    

    (f)       
       This Agreement shall be binding upon and inure to the benefit of the
      parties and their successors and permitted assigns.  The Company and
      the Guarantors may not assign this Agreement or any rights or obligations
      hereunder without the prior written consent of each Secured Party (other than
      by
      merger).  Any Secured Party may assign any or all of its rights under
      this Agreement to any Person to whom such Secured Party assigns or transfers
      any
      Securities, provided such transferee agrees in writing to be bound, with respect
      to the transferred Securities, by the provisions of this Agreement that apply
      to
      the “Secured Parties.”

    

    (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.

    

    

    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

    

    (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 Debentures
      (whether brought against a party hereto
      or its respective affiliates, directors, officers, shareholders, partners,
      members, employees or agents) shall be commenced exclusively in the state
      and federal
      courts sitting in the City of New York, Borough of
      Manhattan. Each Debtor
      hereby irrevocably submits to the exclusive jurisdiction of the state
      and federal courts sitting
      in the City of
      New York, Borough of
      Manhattan for
      the adjudication of any dispute
      hereunder or in connection herewith or with any transaction contemplated hereby
      or discussed herein, and hereby irrevocably waives, and agrees not to assert
      in
      any proceeding, any claim that it is not personally subject to
      the jurisdiction of any such court,
      that such proceeding is improper. 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.

    

    (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 Agent
      and the Secured Parties and
      their respective partners, members, shareholders, officers, directors, employees
      and agents (and any other
      persons with other titles that have similar functions) (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.

    

    

    
      
        
           

        

        
          22

          
            

          

        

        
           

        

      

    

    

    (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]

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    

    

    

    

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

    

    

    BANCROFT
      URANIUM INC.

    

    By:
      __________________________________________

    Name:

    Title:

    

    

    2146281
      ONTARIO LIMITED

    

    

    By:
      __________________________________________

    Name:

    Title:

    

    

    

    

    

    

    

    [SIGNATURE
      PAGE OF HOLDERS
      FOLLOWS]

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

        

        
          24

          
            

          

        

        
           

        

      

    

    

    [SIGNATURE
      PAGE OF HOLDERS TO BCFT
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]

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
      A

    

    

    Principal
      Place of Business of
      Debtors:

    

    Debtors
      maintain a leased office
      location, consisting of a mail forwarding and answering service at 8655 EAST
      VIA
      DE VENTURA, SUITE
      G200, SCOTTSDALE
      AZ 85258.  Other than this location,
      debtors business takes place on their leased mining properties known as the
      Elliot Lake South Project, the Longlac Project and the Monmouth Project, all
      located in Ontario Canada and further described on the Mineral
      Lease
      Agreements attached to the Company’s
      filing on Form 8K with the SEC on
      October 3, 2007 as Exhibits 10.2, 10.3 and 10.4
      respectively.

    

    

    Locations
      Where Collateral is Located or
      Stored:

    Other
      than the above, there are no
      locations.

    

    SCHEDULE
B

    The
      Debtors have payment obligations and
      net mineral royalty obligations to mineral rights holders as described in the
      Mineral Lease Agreements described above in Schedule A.

    

    

    

    SCHEDULE
C

    The
      jurisdictions in which the Debtor
      presently operates are Scottsdale, Arizona and Ontario,
      Canada.

    

    

    

    SCHEDULE
D

    Legal
      Names and Organizational
      Identification Numbers

    

    Bancroft
      Uranium, Inc., A Nevada
      corporation, IRS Tax ID Number
94-3409449.

    2146281
      Ontario Limited, an Ontario
      corporation, no tax ID number.

    

    

    SCHEDULE
E

    Names;
      Mergers and
      Acquisitions

    

    Bancroft
      Uranium, Inc. was formerly
      known as Conscious Intention, Inc.  Bancroft acquired 2146281 Ontario
      Limited in October, 2007.

    

    SCHEDULE
F

    Intellectual
      Property

    

    

    
      
        
           

        

        
          26

          
            

          

        

        
           

        

      

    

    

    Other
      than the Mineral
      Leases, the Company has no
      intellectual property, has no patents and has not filed a trademark on its
      name.

    

    SCHEDULE
G

    Account
      Debtors

    None

    

    

    SCHEDULE
H

    100
      Shares of 2146281 Ontario
      Limited as evidenced by certificate
      CON-02

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

    

    ANNEX
      A

    to

    SECURITY

    AGREEMENT

    

    FORM
      OF ADDITIONAL DEBTOR
      JOINDER

    

    Security
      Agreement dated as of
November ___,
2007
      made by

    Bancroft
      Uranium
      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.

     

     

     

    
 

     

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

               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:

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    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 Enable Growth Partners
L.P.
      (“Enable”
      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, 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. Anything
      to the contrary
      notwithstanding, the Agent shall have no obligation whatsoever to any Secured
      Party to assure that the
      Collateral exists or is owned by the Debtors or is cared for, protected or
      insured or that the liens granted pursuant to the Agreement have been properly
      or sufficiently or lawfully created, perfected, or enforced or are entitled
      to
      any particular priority.

    

    

    

    

    

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

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

    

    7.  Resignation
      by the
      Agent.

    

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

    

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

    

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

    

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

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