Document:

SECURITY
AGREEMENT

    

    This
SECURITY AGREEMENT, dated as of January ___, 2011 (this “Agreement”), is among
New Generation Biofuels Holdings, Inc., a Florida corporation (the “Company”), located at
5850 Waterloo Road, Suite 140, Columbia, Maryland 21045, the Subsidiaries of the
Company identified on Schedule I herein
(such subsidiaries, the “Guarantors” and
together with the Company, the “Debtors”) and the
holders of the Company’s 8% Secured Convertible Notes due January ___, 2012 and
thereafter and issued on January ___, 2011 and thereafter, in the original
aggregate principal amount of up to $2,000,000 (collectively, the “Notes”) signatory
hereto, their endorsees, transferees and assigns (collectively, the “Secured
Parties”).

    

    WITNESSETH:

    

    WHEREAS, pursuant to the Subscription
Agreement (as defined in the Notes), the Secured Parties have severally agreed
to extend the loans to the Company evidenced and to be evidenced by the
Notes;

    

    WHEREAS, pursuant to a certain
Subsidiary Guaranty, dated as of the date hereof (the “Guaranty”), the
Guarantors have jointly and severally agreed to guarantee and act as surety for
payment of such Notes;

    

    WHEREAS, in order to induce the Secured
Parties to extend the loans evidenced and to be evidenced by the Notes, 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 Collateral Agent (as defined in Section 18), 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 Notes and the Guarantors’ obligations under the Guaranty.

    

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

    

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

    

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

    
      
         

      

      
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    (i)           All
goods, including, without 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 (as defined herein), agreements
related to the Pledged Securities (as defined herein), 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
files, records, books of account, business papers, and computer programs;
and

    

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

    

    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.

    
      
         

      

      
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    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.

    

    (c)           “Majority in Interest”
means, at any time of determination, the holders of not less than seventy
percent (70%) (based on then-outstanding principal amounts of Notes 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 Collateral 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 Subscription Agreement, the Notes and the Guaranty, in each case,
whether now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owned
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from any of the Secured Parties as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time. Without
limiting the generality of the foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the Notes and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities, costs,
obligations and liabilities of the Debtors from time to time under or in
connection with this Agreement, the Notes, the Guaranty and any other
instruments, agreements or other documents executed and/or delivered in
connection herewith or therewith; and (iii) all amounts (including but not
limited to post-petition interest) in respect of the foregoing that would be
payable but for the fact that the obligations to pay such amounts are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Debtor.

    
      
         

      

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

    

    (g)           “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 Notes 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 Collateral Agent for the benefit of 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 Collateral
Agent, any and all certificates and other instruments or documents representing
any of the Collateral, in each case, together with all Necessary
Endorsements.

    

    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.

    

    (b)           Each Debtor’s
chief place of business is located at the address shown at the beginning of this
Agreement.  Each Debtor’s records concerning its accounts and contract
rights are kept at such address.  Each Debtor will give at least 30
days’ advance written notice to Secured Party of any change in such Debtor’s
jurisdiction of organization or chief place of business and any change in or
addition of any Collateral location.

    
      
         

      

      
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    (c)           Except
for Permitted Liens (as defined in the Subscription Agreement), 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.

    

    (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,
except as otherwise permitted hereby.

    

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

    

    (g)           Each
Debtor hereby authorizes the Collateral 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 and
authorizes Collateral Agent to take any other action in Collateral Agent’s
absolute discretion to effectuate, memorialize and protect Secured Parties’
interest and rights under this Agreement.

    
      
         

      

      
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    (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.

    

    (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, 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.  Upon request of the Collateral Agent, each Debtor will sign
and deliver to the Collateral 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 Collateral Agent and will pay the cost of
filing the same in all public offices wherever filing is, or is deemed by the
Collateral 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 Collateral 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)           Other
than with respect to Permitted Liens, 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, sales of inventory by a Debtor in its ordinary
course of business and/or the other disposition of any Collateral in the
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.

    
      
         

      

      
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    (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
Collateral Agent, that (a) the Collateral Agent will be named as lender loss
payee and additional insured under each such insurance policy; and (b) if such
insurance is proposed to be cancelled or materially changed for any reason
whatsoever, such insurer or the Company will promptly notify the Collateral
Agent. In addition, the Collateral 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 Company or the insurer of any such default. If no
Event of Default (as defined in the Notes) 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 Collateral 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 Collateral Agent unless otherwise
directed in writing by the Collateral Agent. Copies of such policies or the
related certificates, in each case, naming the Collateral Agent as lender loss
payee and additional insured shall be delivered to the Collateral Agent at least
annually and at the time any new policy of insurance is issued.

    

    (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 Collateral Agent, therein.

    

    (p)           Each
Debtor shall promptly execute and deliver to the Collateral Agent such further
deeds, mortgages, assignments, security agreements, financing statements or
other instruments, documents, certificates and assurances and take such further
action as the Collateral 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, one or more
deposit account control agreements, and 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, all substantially in forms reasonably acceptable to
the Collateral Agent, which Intellectual Property Security Agreement, and other
such documents and agreements other than as stated therein, shall be subject to
all of the terms and conditions hereof.

    

    (q)           Each
Debtor shall permit the Collateral 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 Collateral Agent from time to time.

    

    (r)           Each
Debtor shall take commercially reasonable steps 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.

    
      
         

      

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

    

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

    

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

    

    (v)           No
Debtor will change its name, type of organization, jurisdiction of organization,
organizational identification number (if it has one), legal or corporate
structure, or identity, or add any new fictitious name unless it provides at
least 10 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 Collateral Agent
which shall not be unreasonably withheld.

    

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

    

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

    

    
      
         

      

      
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    (bb)        Each
Debtor, in its capacity as issuer, hereby agrees to comply with any and all
reasonable orders and instructions of Collateral 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 Collateral 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)        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.

    

    (ee)         To
the extent that any Collateral is in the possession of any third party, the
applicable Debtor shall join with the Collateral 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 Collateral Agent.

    

    (ff)          If
any Debtor shall at any time hold or acquire a commercial tort claim having a
value of $50,000 or more, 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 Collateral Agent.

    

    (gg)        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 Collateral Agent an assignment of claims for such accounts and
cooperate with the Collateral 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.

    

    (hh)        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 Collateral
Agent may reasonably request. Upon delivery of the foregoing to the Collateral
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.

    
      
         

      

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

    

    (jj)           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 Collateral Agent, the applicable Debtor
shall deliver to Collateral 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 Collateral
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
Collateral Agent, will take such steps as may be necessary to effect the
transfer, and will comply with all other instructions of Collateral Agent
regarding such Pledged Securities without the further consent of the applicable
Debtor.

    

    (kk)         In
the event that, upon an occurrence of an Event of Default, Collateral 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
Collateral 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 Collateral Agent and allow the Transferee or Collateral
Agent to continue the business of the Debtors and their direct and indirect
subsidiaries.

    

    (ll)           Without
limiting the generality of the other obligations of the Debtors hereunder, each
Debtor shall (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 Collateral Agent notice
whenever it acquires (whether absolutely or by license) or creates any
additional material Intellectual Property.

    

    (mm)       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 reasonably necessary or desirable, or as
the Collateral 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.

    

    (nn)        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.

    
      
         

      

      
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    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 Collateral Agent’s rights hereunder shall not be deemed to
be the type of event which would trigger such conversion rights notwithstanding
any provisions in the Organizational Documents or agreements to which any Debtor
is subject or to which any Debtor is party.

    

    6.           Defaults. The following events
shall be “Events of
Default”:

    

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

    

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

    

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

    

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

    

    7.           Duty to Hold In
Trust.

    

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

    

    (b)           If
any Debtor shall become entitled to receive or shall receive any securities or
other property (including, without limitation, shares of Pledged Securities or
instruments representing Pledged Securities acquired after the date hereof, or
any options, warrants, rights or other similar property or certificates
representing a dividend, or any distribution in connection with any
recapitalization, reclassification or increase or reduction of capital, or
issued in connection with any reorganization of such Debtor or any of its direct
or indirect subsidiaries) in respect of the Pledged Securities (whether as an
addition to, in substitution of, or in exchange for, such Pledged Securities or
otherwise), such Debtor agrees to (i) accept the same as the Collateral 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 Collateral 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 Collateral Agent subject to the terms of this Agreement as
Collateral.

    
      
         

      

      
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    8.           Rights and Remedies Upon
Default.

    

    (a)           After
the occurrence and during the continuance of any Event of Default, the Secured
Parties, acting through the Collateral Agent, shall have the right to exercise
all of the remedies conferred hereunder and under the Notes, and the Secured
Parties shall have all the rights and remedies of a secured party under the UCC.
Without limitation, the Collateral Agent, for the benefit of the Secured
Parties, shall have the following rights and powers:

    

    (i)           The
Collateral 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, so long as the same can be accomplished without breach of the peace and
otherwise in compliance with applicable law, and each Debtor shall assemble the
Collateral and make it available to the Collateral Agent at places which the
Collateral Agent shall reasonably select, whether at such Debtor’s premises or
elsewhere, and make available to the Collateral Agent, without rent, all of such
Debtor’s respective premises and facilities for the purpose of the Collateral
Agent taking possession of, removing or putting the Collateral in saleable or
disposable form.

    

    (ii)           Upon
notice to the Debtors by Collateral 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, Collateral 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 Collateral Agent, to exercise in such
Collateral Agent’s discretion all voting rights pertaining thereto. Without
limiting the generality of the foregoing, Collateral 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
Collateral 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 are commercially reasonable.  Upon each such
sale, lease, assignment or other transfer of Collateral, the Collateral 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.

    

    (iv)           The
Collateral 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 Collateral Agent, on behalf of the Secured Parties, and to
enforce the Debtors’ rights against such account debtors and
obligors.

    
      
         

      

      
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    (v)           The
Collateral 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 Collateral Agent, on
behalf of the Secured Parties, or its designee.

       

    (vi)           The
Collateral 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
Collateral 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
Collateral Agent may sell the Collateral without giving any warranties and may
specifically disclaim such warranties. If the Collateral 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
Collateral 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 Collateral 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 Collateral Agent, for the benefit of the
Collateral 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 for so long as such
Event of Default continues, 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 Collateral 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 Notes at the
time of any such determination), and to the payment of any other amounts
required by applicable law, after which the Secured Parties shall pay to the
applicable Debtor any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are insufficient to pay all
amounts to which the Secured Parties are legally entitled, the Debtors will be
liable for the deficiency, together with interest thereon, at the rate of 15%
per annum or the lesser amount permitted by applicable law (the “Default Rate”),
and the reasonable fees of any attorneys employed by the Secured Parties to
collect such deficiency. To the extent permitted by applicable law, each Debtor
waives all claims, damages and demands against the Secured Parties arising out
of the repossession, removal, retention or sale of the Collateral, unless due
solely to the gross negligence or willful misconduct of the Secured Parties as
determined by a final judgment (not subject to further appeal) of a court of
competent jurisdiction.

    

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

    
      
         

      

      
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    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 Collateral Agent. The
Debtors shall also pay all other claims and charges which in the reasonable
opinion of the Collateral 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 Collateral 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 Collateral 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
Notes.  Until so paid, any fees payable hereunder shall be added to
the principal amount of the Notes and shall bear interest at the Default
Rate.

    

    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 Collateral 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 Collateral 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 Collateral Agent or any
Secured Party of any payment relating to any of the Collateral, nor shall the
Collateral 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 Collateral 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 Collateral Agent or to which the Collateral Agent or any
Secured Party may be entitled at any time or times.

    

    
      
         

      

      
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    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 Notes or any agreement entered into in
connection with the foregoing, or any portion hereof or thereof; (b) any change
in the time, manner or place of payment or performance of, or in any other term
of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Notes or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or non-perfection 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.

    

    14.           Term of Agreement and Release.
The Security Interests granted pursuant to this Agreement shall terminate on (i)
the announcement of the Qualified Offering as described in Section 14 of the
Subscription Agreement, or (ii) the date on which fifty-one percent (51%) of the
Obligations are no longer outstanding.  At such time, the Collateral
Agent, at the request and sole expense of the Debtors, will execute and deliver
to the Debtors the proper instruments (including UCC termination statements)
acknowledging the termination of the Security Interest and duly assign, transfer
and deliver to the Debtors, without recourse, representation or warranty of any
kind whatsoever, such of the Collateral, as may be in the possession of the
Collateral Agent.

    

    15.           Power of Attorney; Further
Assurances.

    

    (a)           Each
Debtor authorizes the Collateral Agent, and does hereby make, constitute and
appoint the Collateral 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 Collateral 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, without limitation, payments payable under or in respect
of any policy of insurance) in respect of the Collateral that may come into
possession of the Collateral 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 Collateral 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 Collateral
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 Notes 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.

    
      
         

      

      
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    (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
Collateral 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 Collateral Agent the grant or perfection of a
perfected security interest in all the Collateral under the UCC.

    

    (c)           Each
Debtor hereby irrevocably appoints the Collateral 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 Collateral Agent’s
discretion, to take any action and to execute any instrument which the
Collateral 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 Collateral 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 Subscription Agreement (as such term is defined in the
Notes).  Copies of all notices that are required or actually given to
the Secured Parties or Debtors must also be given to the Collateral
Agent.

    

    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 Collateral 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 Collateral
Agent. The Secured Parties hereby appoint Alpha Capital Anstalt to act as
their agent (“Collateral 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
Collateral Agent. The Collateral 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 Notes shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
       

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

    (c)           This
Agreement, 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.

    

    (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 Notes (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York, Borough of Manhattan.
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.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (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 Collateral 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 Notes, the Subscription Agreement (as such term
is defined in the Notes) or any other agreement, instrument or other document
executed or delivered in connection herewith or therewith.

    

    (l)           Nothing
in this Agreement shall be construed to subject Collateral 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
Collateral 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]

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

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

    

    
      
        
          	
                  NEW
      GENERATION BIOFUELS HOLDINGS, INC.

                
	 
      	 
      
	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                
	 
      	 
      
	
                  NEW
      GENERATION BIOFUELS, INC.

                
	 
      	 
      
	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                
	 
      
	
                  NGB
      MARKETING LLC

                
	 
      
	
                  By:

                
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

    

    
      
        
          
            	
                    COLLATERAL
      AGENT

                  
	 
      
	
                    ALPHA
      CAPITAL ANSTALT

                  
	 
      	 
      
	
                    By:

                  	 
      
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

    

    

    [Signature
Page to Security Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    [SIGNATURE
PAGE OF HOLDERS TO NEW GENERATION BIOFUELS HOLDINGS, INC. SECURITY
AGREEMENT]

    

    Name of
Investing Entity: ALPHA CAPITAL
ANSTALT

    

    Signature of Authorized Signatory of
Investing entity: ________________________________

    

    Name of
Authorized Signatory:
__________________________________________________

    

    Title of
Authorized Signatory:
___________________________________________________

    

    [Signature Page to Security
Agreement]

     

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    [SIGNATURE
PAGE OF HOLDERS TO NEW GENERATION BIOFUELS HOLDINGS, INC. SECURITY
AGREEMENT]

    Name of
Investing Entity: ________________________________________________

    

    Signature of Authorized Signatory of
Investing entity: ________________________________

    

    Name of
Authorized Signatory:
__________________________________________________

    

    Title of
Authorized Signatory:
___________________________________________________

    

    [Signature
Page to Security Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    ANNEX
A

    to

    SECURITY

    AGREEMENT

    

    
      FORM
OF ADDITIONAL DEBTOR JOINER

    

    

    Security
Agreement dated as of January ___, 2011 made by

    New
Generation Biofuels Holdings, 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 Joiner 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 Joiner. 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 Joiner 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 Joiner shall not be modified, amended or terminated without the
prior written consent of the Secured Parties.

    

    IN
WITNESS WHEREOF, the undersigned has caused this Joiner 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
COLLATERAL 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 Alpha Capital
Anstalt (“Collateral
Agent”) as the Collateral Agent to act as specified herein and in the
Agreement. Each Secured Party shall be deemed irrevocably to authorize the
Collateral 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
Notes) and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Collateral Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Collateral Agent may perform any of its duties hereunder
by or through its agents or employees.

    

    2. Nature of Duties. The Collateral Agent shall
have no duties or responsibilities except those expressly set forth in the
Agreement. Neither the Collateral 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 Collateral Agent shall be mechanical and administrative in
nature; the Collateral 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 Collateral 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 Collateral
Agent. Independently and without reliance upon the Collateral 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 Collateral 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 Collateral 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,
collectiability, 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 Notes or any of the other Transaction Documents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Certain Rights of the Collateral
Agent. The Collateral 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 Collateral 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 Notes
(based on then-outstanding principal amounts of Notes at the time of any such
determination); if such instructions are not provided despite the Collateral
Agent’s request therefor, the Collateral 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 Collateral Agent; and the Collateral 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 Collateral Agent as a result of the Collateral 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
Collateral Agent pursuant to the foregoing and (b) the Collateral Agent shall
not be required to take any action which the Collateral 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 Collateral
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 Collateral 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
Collateral Agent is not reimbursed and indemnified by the Debtors, the Secured
Parties will jointly and severally reimburse and indemnify the Collateral Agent,
in proportion to their initially purchased respective principal amounts of
Notes, 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 Collateral 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 Collateral Agent’s own
gross negligence or willful misconduct. Prior to taking any action hereunder as
Collateral Agent, the Collateral Agent may require each Secured Party to deposit
with it sufficient sums as it determines in good faith is necessary to protect
the Collateral Agent for costs and expenses associated with taking such
action.

    

    7. Resignation by the Collateral
Agent.

    

    (a) The
Collateral 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 5
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 Collateral 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 Collateral Agent hereunder.

    

    (c) If a
successor Collateral Agent shall not have been so appointed within said 5-day
period, the Collateral Agent shall then appoint a successor Collateral Agent who
shall serve as Collateral Agent until such time, if any, as the Secured Parties
appoint a successor Collateral Agent as provided above. If a successor
Collateral Agent has not been appointed within such 5-day period, the Collateral
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 Collateral 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 Collateral 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 Collateral 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 Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent and
the retiring Collateral Agent shall be discharged from its duties and
obligations under the Agreement.  After any retiring Collateral
Agent’s resignation or removal hereunder as Collateral 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 Collateral
Agent.Exhibit 10.1
    

    
      TOMI
      Environmental Solutions Enters into a Joint Venture Agreement with Zera
      Investments PTE. LTD.
    

    
      BEVERLY HILLS, Calif.--(BUSINESS WIRE)--February 7, 2011--TOMI
      Environmental Solutions, Inc. (“TOMI”) (OTCBB:TOMZ), a global green
      leader in infectious disease control and surface and air remediation,
      announced today a joint venture agreement with Zera Investments PTE. LTD
      (“Zera Investments”), a Singapore private investment company.
    

    
      Zera Investments is an investment holding company whose directors have
      expertise and background in the indoor environmental field. Zera
      Investments has the ability to assist TOMI with its capital raising
      activities and can distribute TOMI products to key members of the
      environmental industry in the Asian-Pacific Rim (Zera Investments also
      possesses the background and expertise in the indoor environmental field
      to assist TOMI with future sales).
    

    
      Discussing the benefits of this joint venture agreement, Dr. Halden
      Shane, TOMI’s Chief Executive Officer, stated, “I have just returned
      from the Asian–Pacific Rim and I am extremely impressed with their
      concerns over the control of Infectious Disease and their desire to
      live, work and play in clean indoor environments. After making several
      presentations to government and private sector industries, TOMI expects
      to benefit from this activity and has already received orders for its
      exclusive suite of products. TOMI could not have found a better partner
      than Zera Investments for the Singapore and Asian-Pacific markets.
      Singapore is a world leader in understanding the global indoor
      contamination risk and being at the forefront of mitigating that risk.”
    

    
      Zera Investment’s three Directors are key to the success of TOMI’s
      Singapore-based strategy and are as follows:
    

    
      Mr. Wee Ah Kee, a Director with over 20 years experience in the
      investment banking industry and a long history of building listed
      companies in the Asian-Pacific Region. Mr. Kee states, “I am very
      impressed with the products that TOMI has and, as reported, have taken a
      major position in owning its stock. I also feel that the reception among
      the environmental field experts during Dr. Shane’s visit has been
      extremely encouraging.” Mr. Wee has also been appointed as a Director
      and Board member of TOMI-Singapore.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      Andrew Leong is the former head of the Counter-Hacking Unit in
      Singapore’s Internal Security Department (the “ISD”). He began his
      career with the ISD as a systems engineer and quickly rose to become the
      head of the Counter-Hacking Unit. Mr. Leong, a Director of the Singapore
      subsidiary of TOMI-Singapore, states, “I have never been so confident
      and excited about the success of a technology like TOMI’s since 2005,
      when the project I was working on (a biometric (facial and fingerprint)
      automated travel and immigration solution for Singapore Airlines (SIA),
      the Civil Aviation Authority of Singapore (CAAS) and Immigration and
      Checkpoints Authority (ICA)) won international recognition from the Harvard
      Business Review and was the 'Breakthrough Idea for 2005.'”
    

    
      Michael Lim Tiong Hoe has also been appointed on the Board of
      TOMI Environmental Solutions-Singapore PTE. LTD. Mr. Lim brings years of
      experience in the Environmental and Cleaning Industry and has been a
      Founding Board Member of the Centre for Cleaning Technology, President
      of the Environmental Management Association of Singapore, Chairman for
      the Cleaning Skills Standards Committee and was instrumental in setting
      the Performance Standards for Commercial Premises and Public Residential
      Estates in Singapore. He was also a member of the Singapore Government’s
      Economic Review Sub-Committee for Environmental Services and Domestic 21
      Committee. Mr. Lim states that “the air remediation industry in
      Singapore and across Asia is not well developed. The technology and
      methodology seen in TOMI’s products and protocols will set new
      benchmarks for these markets. The need for better indoor air quality is
      seen across a wide spectrum of residential and commercial premises
      including hospitals, nursing homes, hotels, entertainment centers and
      also in residential homes. TOMI’s products will raise the standards in
      these countries, allowing everyone to enjoy better living in a cleaner
      indoor environment.”
    

    
      About Zera Investments PTE. LTD.
    

    
      Zera Investments PTE. LTD. is a Singapore Private Investment company
      with the ability to assist TOMI with its capital raising activities and
      to introduce TOMI to key members of the environmental industry in the
      Asian-Pacific Rim. Zera Investments also possesses the background and
      expertise in the indoor environmental field to assist TOMI with future
      sales.
    

    
      About TOMI Environmental Solutions, Inc.
    

    
      TOMI Environmental Solutions, Inc. (OTCBB:TOMZ) is a leading provider of
      environmental services that are using UV ozone, activated hydrogen
      peroxide and UVGI-Filtration to achieve a safe and healthy indoor
      environment. TOMI’s equipment will treat issues that involve infectious
      disease control. Compared to other existing methods of air remediation
      and purification, TOMI’s systems produce by-product-free ozone and
      activated hydrogen peroxide mist with a high degree of safety and
      industry expertise. The Company offers its non-ozone producing UV
      germicidal accessories, the "Terminator," that can be permanently
      installed to maintain clean indoor air. For more product information,
      visit www.tomiesinc.com
    

    
      Safe Harbor Statement under the Private Securities Litigation Reform
      Act of 1995
    

    
      Certain written and oral statements made by us may constitute
      “forward-looking statements” as defined in the Private Securities
      Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking
      statements are identified by such words and phrases as “we expect,”
      “expected to,” “estimates,” “estimated,” “current outlook,” “we look
      forward to,” “would equate to,” “projects,” “projections,” “projected to
      be,” “anticipates,” “anticipated,” “we believe,” “could be,” and other
      similar phrases. All statements addressing operating performance,
      events, or developments that we expect or anticipate will occur in the
      future, including statements relating to revenue growth, earnings,
      earnings-per-share growth, or similar projections, are forward-looking
      statements within the meaning of the Reform Act. Because they are
      forward-looking, they should be evaluated in light of important risk
      factors that could cause our actual results to differ materially from
      our anticipated results. The information provided in this document is
      based upon the facts and circumstances known at this time. We undertake
      no obligation to update these forward-looking statements after the date
      of this release.
    

    
      CONTACT:
TOMI Environmental Solutions, Inc.
Dr. Halden Shane,
      Chairman of the Board & CEO
310-275-2255
or
Syndicated
      Capital, Inc.
Faith Lee, President
310-255-4482

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