Document:

Unassociated Document

    
      

    

    EXHBIT
10.4 – FORM OF SECURITY AGREEMENT

    

    SECURITY
AGREEMENT

    

    SECURITY
AGREEMENT (this “Agreement”), dated as
of February 25, 2008, by and among Admiralty Holding Corporation, a Colorado
corporation (“Parent”), Admiralty
Corporation, a Georgia corporation and Admiralty Marine Operations, Ltd., a
Bahamas corporation (collectively the “Subsidiary”)(hereinafter
the Parent and the Subsidiary shall collectively be referred to as the “Company”) and the
secured parties signatory hereto and their respective endorsees, transferees and
assigns  (collectively, the “Secured
Party”).

    

    W I T N E
S S E T H:

    

    WHEREAS,
pursuant to a Securities Purchase Agreement, dated the date hereof, between
Parent and the Secured Party (the “Purchase Agreement”),
Parent has agreed to issue to the Secured Party and the Secured Party has agreed
to purchase from Parent certain of Parent’s 8% Callable Secured Convertible
Notes, due three years from the date of issue (the “Notes”), which are
convertible into shares of Company’s Common Stock, par value $.001 per share
(the “Common
Stock”).  In connection therewith, Parent shall issue the
Secured Party certain Common Stock purchase warrants (the “Warrants”);
and

    

    WHEREAS,
the Parent and the Subsidiary have been, and are now, engaged principally in the
business of locating and recovering valuable cargoes from historic shipwrecks.
The company also continues to evaluate the technology for assisting domestic
governmental agencies in locating and retrieving unexploded marine ordinances
and weapons. Operating business is principally conducted through Admiralty
Corporation. It has undertaken to fund and conduct research to develop ATLIS, a
remote sensing nonferrous metal detection device. Admiralty Marine Operations,
Ltd. is the title and registration holder of the ship, the M. V. New World
Legacy. In the past, as now, the Parent has provided financing for the
Subsidiary, and the Subsidiary has relied upon the Parent to provide such
financing.  In addition, it is anticipated that, if the Subsidiary
executes and delivers this , the Parent will continue to provide such financing
to the Subsidiary, and that the proceeds of the Purchase Agreement and
Notes will be used,
in part, for the general working capital purposes of the Subsidiary;
and

    

    WHEREAS,
the Subsidiary constitutes all of the subsidiaries of the Parent and it is in
the best interest of the Subsidiary as subsidiaries of the Parent and the
indirect beneficiaries of the Purchase Agreement and Notes, that the Secured
Party enter into the Purchase Agreement and purchase the Notes to the Company;
and

    

    WHEREAS,
in order to induce the Secured Party to purchase the Notes, Company has agreed
to execute and deliver to the Secured Party this Agreement for the benefit of
the Secured Party and to grant to it a first priority security interest in
certain property of Company to secure the prompt payment, performance and
discharge in full of all of Company’s obligations under the Notes and exercise
and discharge in full of Company’s obligations under the Warrants;
and

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    WHEREAS,
in light of the foregoing, the Company expects to derive substantial benefit
from the Purchase Agreement and sale of the Notes and the transactions
contemplated thereby and, in furtherance thereof, has agreed to execute and
deliver this .

    

    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 “general
intangibles” and “proceeds”) shall have
the respective meanings given such terms in Article 9 of the UCC.

    

    (a)        
   “Collateral” means the
collateral in which the Secured Party is granted a security interest by this
Agreement and which shall include the following, whether presently owned or
existing or hereafter acquired or coming into existence, 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:

    

    (i)         
   All Goods of the Company, including, without limitations, 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 the Company’s businesses and all improvements
thereto (collectively, the “Equipment”);
and

    

    (ii)       
    All Inventory of the Company; and

    

    (iii)           All
of the Company’s contract rights and general intangibles, including, without
limitation, all partnership interests, stock or other securities, licenses,
distribution and other agreements, 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, deposit accounts, and income tax refunds
(collectively, the “General
Intangibles”); and

    

    (iv)           All
Receivables of the Company including all insurance proceeds, and rights to
refunds or indemnification whatsoever owing, 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 Receivable, including any right of stoppage in transit;
and

    
      
         

      

      
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    (v)           All
of the Company’s documents, instruments and chattel paper, files, records, books
of account, business papers, computer programs and the products and proceeds of
all of the foregoing Collateral set forth in clauses (i)-(iv)
above.

    

    (b)       
    “Company” shall mean,
collectively, Company and all of the subsidiaries of Company, a list of which is
contained in Schedule
A, attached hereto.

    

    (c)       
    “Obligations” means
all of the Company’s obligations under this Agreement and the Notes, in each
case, whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later decreased, 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 the Secured
Party as a preference, fraudulent transfer or otherwise as such obligations may
be amended, supplemented, converted, extended or modified from time to
time.

    

    (d)        
   “UCC” means the
Uniform Commercial Code, as currently in effect in the State of New
York.

    

    2.          
  Grant of
Security Interest.  As an inducement for the Secured Party to
purchase the Notes and to secure the complete and timely payment, performance
and discharge in full, as the case may be, of all of the Obligations, the
Company hereby, unconditionally and irrevocably, pledges, grants and
hypothecates to the Secured Party, a continuing security interest in, a
continuing first lien upon, an unqualified right to possession and disposition
of and a right of set-off against, in each case to the fullest extent permitted
by law, all of the Company’s right, title and interest of whatsoever kind and
nature in and to the Collateral (the “Security
Interest”).

    

    3.         
   Representations, Warranties,
Covenants and Agreements of the Company.  The Company
represents and warrants to, and covenants and agrees with, the Secured Party as
follows:

    

    (a)        
   The Company has the requisite corporate power and authority to
enter into this Agreement and otherwise to carry out its obligations
thereunder.  The execution, delivery and performance by the Company of
this Agreement and the filings contemplated therein have been duly authorized by
all necessary action on the part of the Company and no further action is
required by the Company.  This Agreement constitutes a legal, valid
and binding obligation of the Company enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor’s rights generally.

    

    (b)       
    The Company represents and warrants that it has no place
of business or offices where its respective books of account and records are
kept (other than temporarily at the offices of its attorneys or accountants) or
places where Collateral is stored or located, except as set forth on Schedule A attached
hereto;

    

    (c)       
    The Company is the sole owner of the Collateral (except
for non-exclusive licenses granted by the Company in the ordinary course of
business), free and clear of any liens, security interests, encumbrances, rights
or claims, and is fully authorized to grant the Security Interest in and to
pledge the Collateral.  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 have been filed in favor of the Secured Party
pursuant to this Agreement) covering or affecting any of
the  Collateral.  So long as this Agreement shall be in
effect, the Company shall not execute and shall not knowingly permit to be on
file in any such office or agency any such financing statement or other document
or instrument (except to the extent filed or recorded in favor of the Secured
Party pursuant to the terms of this Agreement).

    
      
         

      

      
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    (d)         
  No part of the Collateral has been judged invalid or
unenforceable.  No written claim has been received that any Collateral
or the Company’s use of any Collateral violates the rights of any third party.
There has been no adverse decision to the Company’s claim of ownership rights in
or exclusive rights to use the Collateral in any jurisdiction or to the
Company’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 the Company, threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental
authority.

    

    (e)        
   The Company 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 Party 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 and other necessary documents have been filed
and recorded and other steps have been taken to perfect the Security Interest to
create in favor of the Secured Party valid, perfected and continuing first
priority liens in the Collateral.

    

    (f)         
  This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and performance of the
Obligations and, upon making the filings described in the immediately following
sentence, a perfected first priority security interest in such
Collateral.  Except for the filing of financing statements on Form-1
under the UCC with the jurisdictions indicated on Schedule B, attached
hereto, no authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either (i) for the grant
by the Company of, or the effectiveness of, the Security Interest granted hereby
or for the execution, delivery and performance of this Agreement by the Company
or (ii) for the perfection of or exercise by the Secured Party of its rights and
remedies hereunder.

    

    (g)       
    On the date of execution of this Agreement, the Company
will deliver to the Secured Party one or more executed UCC financing statements
on Form-1 with respect to the Security Interest for filing with  the
jurisdictions indicated on Schedule B, attached
hereto and in such other jurisdictions as may be requested by the Secured
Party.

    

    (h)      
     The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an event that
with or without the passage of time or notice, shall constitute a breach or
default, under any agreement to which the Company is a party or by which the
Company is bound.  No consent (including, without limitation, from
stock holders or creditors of the Company) is required for the Company to enter
into and perform its obligations hereunder.

    
      
         

      

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

    

    (j)         
   The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.

    

    (k)       
    The Company 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.

    

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

    

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

    
      
         

      

      
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    (n)       
    The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to make
copies of records pertaining to the Collateral as may be requested by the
Secured Party from time to time.

    

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

    

    (p)       
    The Company shall promptly notify the Secured Party 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 the Company that may materially affect the value of the
Collateral, the Security Interest or the rights and remedies of the Secured
Party hereunder.

    

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

    

    (r)         
   Schedule A attached
hereto contains a list of all of the subsidiaries of Company.

    

    4.        
    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 the Company in this
Agreement or in the Intellectual Property Security Agreement shall prove to have
been incorrect in any material respect when made;

    

    (c)        
   The failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security Agreement for ten
(10) days after receipt by the Company of notice of such failure from the
Secured Party; and

    

    (d)         
  Any breach of, or default under, the Warrants.

    

    5.          
  Duty To
Hold In Trust.  Upon the occurrence of any Event of Default and
at any time thereafter, the Company shall, upon receipt by it of any revenue,
income or other sums subject to the Security Interest, whether payable pursuant
to the Notes or otherwise, or of any check, draft, note, trade acceptance or
other instrument evidencing an obligation to pay any such sum, hold the same in
trust for the Secured Party and shall forthwith endorse and transfer any such
sums or instruments, or both, to the Secured Party for application to the
satisfaction of the Obligations.

    

    6.         
   Rights and Remedies Upon
Default.  Upon occurrence of any Event of Default and at any
time thereafter, the Secured Party shall have the right to exercise all of the
remedies conferred hereunder and under the Notes, and the Secured Party shall
have all the rights and remedies of a secured party under the UCC and/or any
other applicable law (including the Uniform Commercial Code of any jurisdiction
in which any Collateral is then located).  Without limitation, the
Secured Party shall have the following rights and powers:

    
      
         

      

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

    

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

    

    7.           
 Applications of
Proceeds.  The proceeds of any such sale, lease or other
disposition of the Collateral hereunder shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and
the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable
attorneys’ fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Secured Party
shall pay to the Company 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 Party is legally entitled,
the Company will be liable for the deficiency, together with interest thereon,
at the rate of 15% per annum (the “Default Rate”), and
the reasonable fees of any attorneys employed by the Secured Party to collect
such deficiency.  To the extent permitted by applicable law, the
Company waives all claims, damages and demands against the Secured Party arising
out of the repossession, removal, retention or sale of the Collateral, unless
due to the gross negligence or willful misconduct of the Secured
Party.

    

    8.        
    Costs and
Expenses.  The Company agrees to pay all out-of-pocket fees,
costs and expenses incurred in connection with any filing required hereunder,
including without limitation, any financing statements, continuation statements,
partial releases and/or termination statements related thereto or any expenses
of any searches reasonably required by the Secured Party.  The Company
shall also pay all other claims and charges which in the reasonable opinion of
the Secured Party might prejudice, imperil or otherwise affect the Collateral or
the Security Interest therein.  The Company will also, upon demand,
pay to the Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party 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 Party 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.

    
      
         

      

      
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    9.          
  Responsibility for
Collateral.  The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Notes and the Warrants 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.

    

    10.        
   Security Interest
Absolute.  All rights of the Secured Party and all Obligations
of the Company hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the Notes, the
Warrants 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, the Warrants or any other agreement entered into in connection
with the foregoing; (c)  any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the Obligations; (d) any action by the Secured Party 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 the Company, or a discharge of all or any part of the Security
Interest granted hereby.  Until the Obligations shall have been paid
and performed in full, the rights of the Secured Party shall continue even if
the Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy.  The Company
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 Party
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 Party, then, in any such event, the Company’s
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof.  The Company
waives all right to require the Secured Party to proceed against any other
person or to apply any Collateral which the Secured Party may hold at any time,
or to marshal assets, or to pursue any other remedy.  The Company
waives any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.

    

    11.       
    Term of
Agreement.  This Agreement and the Security Interest shall
terminate on the date on which all payments under the Notes have been made in
full and all other Obligations have been paid or discharged.  Upon
such termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this
Agreement.

    
      
         

      

      
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    12.        
   Power of Attorney; Further
Assurances.

    

    (a)        
   The Company authorizes the Secured Party, and does hereby
make, constitute and appoint it, and its respective officers, agents, successors
or assigns with full power of substitution, as the Company’s true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement 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; and (v)
generally, to do, at the option of the Secured Party, and at the Company’s
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement, the Notes and the Warrants, all as fully and
effectually as the Company might or could do; and the Company 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.

    

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

    

    (c)       
    The Company hereby irrevocably appoints the Secured
Party as the Company’s attorney-in-fact, with full authority in the place and
stead of the Company and in the name of the Company, from time to time in the
Secured Party’s discretion, to take any action and to execute any instrument
which the Secured Party 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 the Company where permitted by
law.

    

    13.           Notices.  All
notices, requests, demands and other communications hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested), the next
business day or (iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the U.S.
mails, in each case if delivered to the following addresses:

    
      
         

      

      
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              If
      to the Company:

            	
              Admiralty
      Holding Company

            
	 
      	
              3455
      Peachtree Road, Suite 560

            
	 
      	
              Atlanta,
      GA 30326

            
	 
      	
              Attention:
      Chief Executive Officer

            
	 
      	
              Telephone:  (404)
      995-7010

            
	 
      	
              Facsimile:  (404)
      995-7001

            
	 
      	 
      
	 
      	
              Admiralty
      Corporation

            
	 
      	
              _____________________

            
	 
      	
              _____________________

            
	 
      	
              Attention:
      _____________

            
	 
      	
              Telephone:
      ____________

            
	 
      	
              Facsimile:
      _____________

            
	 
      	 
      
	 
      	
              Admiralty
      Marine Operations, Ltd.

            
	 
      	
              _____________________

            
	 
      	
              _____________________

            
	 
      	
              Attention:
      _____________

            
	 
      	
              Telephone:
      ____________

            
	 
      	
              Facsimile:
      _____________

            
	 
      	 
      
	
              With
      copies to:

            	 
      

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
              If
      to the Secured Party:

            	
              AW
      Partners, LLC

            
	 
      	
              AJW
      Master Fund, Ltd.

            
	 
      	
              New
      Millennium Capital Partners II, LLC

            
	 
      	
              1044
      Northern Boulevard

            
	 
      	
              Suite
      302

            
	 
      	
              Roslyn,
      New York 11576

            
	 
      	
              Attention:  Corey
      Ribotsky

            
	 
      	
              Facsimile:  516-739-7115

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              With
      copies to:

            	
              Ballard
      Spahr Andrews & Ingersoll, LLP

            
	 
      	
              1735
      Market Street

            
	 
      	
              51st
      Floor

            
	 
      	
              Philadelphia,
      Pennsylvania  19103

            
	 
      	
              Attention:  Gerald
      J. Guarcini, Esq.

            
	 
      	
              Telephone:  215-865-8625

            
	 
      	
              Facsimile:  215-864-8999

            

    

    

    14.           Other
Security.  To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party 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 Party’s rights and
remedies hereunder.

    

    15.           Miscellaneous.

    

    (a)           No
course of dealing between the Company and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Party, 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.

    

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

    

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

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

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

    

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

    

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

    

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

    

    (h)           This
Agreement shall be construed in accordance with the laws of the State of New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Collateral which are governed by
a jurisdiction other than the State of New York in which case such law shall
govern.  Each of the parties hereto irrevocably submit to the
exclusive jurisdiction of any New York State or United States Federal court
sitting in Manhattan county over any action or proceeding arising out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York State or Federal court.  The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  The parties hereto further waive any
objection to venue in the State of New York and any objection to an action or
proceeding in the State of New York on the basis of forum non
conveniens.

    

    (i)           EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO
THE SUBJECT MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY
WAIVES ITS RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATION.  THIS
WAIVER IS IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.  IN THE EVENT OF A LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (j)           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.

    

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

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

    

    
      	 
      	
              COMPANY

            
	 
      	 
      	 
      
	 
      	
              ADMIRALTY
      HOLDING COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              ________________________________

            
	 
      	 
      	
              Herbert
      C. Leeming

            
	 
      	 
      	
              CEO

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              ADMIRALTY
      CORPORATION

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              ________________________________

            
	 
      	 
      	
              Herbert
      C. Leeming

            
	 
      	 
      	
              CEO

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              ADMIRALTY
      MARINE OPERATIONS, LTD.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              ________________________________

            
	 
      	 
      	
              Herbert
      C. Leeming

            
	 
      	 
      	
              CEO

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	 
      	
              SECURED
      PARTY:

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              AJW
      PARTNERS, LLC

            
	 
      	
              By:
      SMS Group, LLC

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              _____________________________________

            
	 
      	 
      	
              Corey
      S. Ribotsky

            
	 
      	 
      	
              Manager

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              AJW
      MASTER FUND, LTD.

            
	 
      	
              By:  First
      Street Manager II, LLC

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              _____________________________________

            
	 
      	 
      	
              Corey
      S. Ribotsky

            
	 
      	 
      	
              Manager

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              NEW
      MILLENNIUM CAPITAL PARTNERS II, LLC

            
	 
      	
              By:  First
      Street Manager II, LLC

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              _____________________________________

            
	 
      	 
      	
              Corey
      S. Ribotsky

            
	 
      	 
      	
              Manager

            

    

    

     

    2Unassociated Document

    
      

    

    EXHIBIT
10.5 – FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

     

     

    INTELLECTUAL
PROPERTY SECURITY AGREEMENT

     

    INTELLECTUAL
PROPERTY SECURITY AGREEMENT (this “Agreement”), dated as
of February 25, 2008, by and among Admiralty Holding Company, a Colorado
corporation (“Parent”), Admiralty
Corporation, a Georgia corporation and Admiralty Marine Operations, Ltd., a
Bahamas corporation (collectively the “Subsidiary”)(hereinafter
the Parent and the Subsidiary shall collectively be referred to as the “Company”) and the
secured parties signatory hereto and their respective endorsees, transferees and
assigns  (collectively, the “Secured
Party”).

     

    W I T N E
S S E T H :

     

    WHEREAS,
pursuant to a Securities Purchase Agreement, dated the date hereof, between
Parent and the Secured Party (the “Purchase Agreement”),
Parent has agreed to issue to the Secured Party and the Secured Party has agreed
to purchase from Parent certain of Parent’s 8% Callable Secured Convertible
Notes, due three years from the date of issue (the “Notes”), which are
convertible into shares of Company’s Common Stock, par value $.001 per share
(the “Common
Stock”).  In connection therewith, Parent shall issue the
Secured Party certain Common Stock purchase warrants (the “Warrants”);
and

     

    WHEREAS,
the Parent and the Subsidiary have been, and are now engaged principally in the
business of locating and recovering valuable cargoes from historic shipwrecks.
The company also continues to evaluate the technology for assisting domestic
governmental agencies in locating and retrieving unexploded marine ordinances
and weapons. Operating business is principally conducted through Admiralty
Corporation. It has undertaken to fund and conduct research to develop ATLIS, a
remote sensing nonferrous metal detection device. Admiralty Marine Operations,
Ltd. is the title and registration holder of the ship, the M. V. New World
Legacy. In the past, as now, the Parent has provided financing for the
Subsidiary, and the Subsidiary has relied upon the Parent to provide such
financing.  In addition, it is anticipated that, if the Subsidiary
executes and delivers this Agreement, the Parent will continue to provide such
financing to the Subsidiary, and that the proceeds of the Purchase Agreement and
Notes will be used,
in part, for the general working capital purposes of the Subsidiary;
and

     

    WHEREAS,
the Subsidiary constitutes all of the subsidiaries of the Parent and it is in the best
interest of the Subsidiary as subsidiaries of the Parent and the indirect
beneficiaries of the Purchase Agreement and Notes, that the Secured Party enter
into the Purchase Agreement and purchase the Notes to the Company;
and

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    WHEREAS,
in order to induce the Secured Party to purchase the Notes, Company has agreed
to execute and deliver to the Secured Party this Agreement for the benefit of
the Secured Party and to grant to it a first priority security interest in
certain Intellectual Property (defined below) of Company to secure the prompt
payment, performance and discharge in full of all of Company’s obligations under
the Notes and exercise and discharge in full of Company’s obligations under the
Warrants; and

     

    WHEREAS,
in light of the foregoing, the Company expects to derive substantial benefit
from the Purchase Agreement and sale of the Notes and the transactions
contemplated thereby and, in furtherance thereof, has agreed to execute and
deliver this Agreement.

     

    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.             
Defined
Terms.  Unless otherwise defined herein, terms which are
defined in the Purchase Agreement and used herein are so used as so defined; and
the following terms shall have the following meanings:

     

    “Software Intellectual
Property”  shall mean:

     

    (a)           all
software programs (including all source code, object code and all related
applications and data files), whether now owned, upgraded, enhanced, licensed or
leased or hereafter acquired by the Company, above;

     

    (b)           all
computers and electronic data processing hardware and firmware associated
therewith;

     

    (c)           all
documentation (including flow charts, logic diagrams, manuals, guides and
specifications) with respect to such software, hardware and firmware described
in the preceding clauses (a) and (b); and

     

    (d)           all
rights with respect to all of the foregoing, including, without limitation, any
and all upgrades, modifications, copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and
substitutions, replacements, additions, or model conversions of any of the
foregoing.

     

    “Copyrights” shall
mean (a) all copyrights, registrations and applications for registration, issued or filed,
including any reissues, extensions or renewals thereof, by or with the United
States Copyright Office or any similar office or agency of the United States,
any state thereof, or any other country or political subdivision thereof, or
otherwise, including, all rights in and to the material constituting the subject
matter thereof, including, without limitation, any referred to in Schedule B hereto,
and (b) any rights in any material which is copyrightable or which is protected
by common law, United States copyright laws or similar laws or any law of any
State, including, without limitation, any thereof referred to in Schedule B
hereto.

     

    “Copyright License”
shall mean any agreement, written or oral, providing for a grant by the Company
of any right in any Copyright, including, without limitation, any thereof
referred to in Schedule B
hereto.

     

    “Intellectual
Property” shall means, collectively, the Software Intellectual Property,
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and Trade Secrets.

     

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

     

    “Obligations” means
all of the Company’s obligations under this Agreement and the Notes, in each
case, whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later decreased, 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 the Secured
Party as a preference, fraudulent transfer or otherwise as such obligations may
be amended, supplemented, converted, extended or modified from time to
time.

     

    “Patents” shall mean
(a) all letters patent of the United States or any other country or any
political subdivision thereof, and all reissues and extensions thereof,
including, without limitation, any thereof referred to in Schedule B hereto,
and (b) all applications for letters patent of the United States and all
divisions, continuations and continuations-in-part thereof or any other country
or any political subdivision, including, without limitation, any thereof
referred to in Schedule B
hereto.

     

    “Patent License” shall
mean all agreements, whether written or oral, providing for the grant by the
Company of any right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any thereof referred to in Schedule B
hereto.

     

    “Security Agreement”
shall mean the a Security Agreement, dated the date hereof between Company and
the Secured Party.

     

    “Trademarks” shall
mean (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and the 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, including, without limitation, any thereof
referred to in Schedule B hereto,
and (b) all reissues, extensions or renewals thereof.

     

    “Trademark License”
shall mean any agreement, written or oral, providing for the grant by the
Company of any right to use any Trademark, including, without limitation, any
thereof referred to in Schedule B
hereto.

     

    “Trade Secrets” shall
mean common law and statutory trade secrets and all other confidential or
proprietary or useful information and all know-how obtained by or used in or
contemplated at any time for use in the business of the Company (all of the
foregoing being collectively called a “Trade Secret”),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in Schedule B hereto,
and including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

     

    2.           Grant of Security
Interest.  In accordance with Section 3(m) of the Security
Agreement, to secure the complete and timely payment, performance and discharge
in full, as the case may be, of all of the Obligations, the Company hereby,
unconditionally and irrevocably, pledges, grants and hypothecates to the Secured
Party, a continuing security interest in, a continuing first lien upon, an
unqualified right to possession and disposition of and a right of set-off
against, in each case to the fullest extent permitted by law, all of the
Company’s right, title and interest of whatsoever kind and nature in and to the
Intellectual Property (the “Security
Interest”).

     

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

     

    3.             
Representations and
Warranties.  The Company hereby represents and warrants, and
covenants and agrees with, the Secured Party as follows:

     

    (a)           The
Company has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations thereunder.  The
execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the
Company.  This Agreement constitutes a legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditor’s rights
generally.

     

    (b)           The
Company represents and warrants that it has no place of business or offices
where its respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or places where the
Intellectual Property is stored or located, except as set forth on Schedule A attached
hereto;

     

    (c)           The
Company is the sole owner of the Intellectual Property (except for non-exclusive
licenses granted by the Company in the ordinary course of business), free and
clear of any liens, security interests, encumbrances, rights or claims, and is
fully authorized to grant the Security Interest in and to pledge the
Intellectual Property.  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 have been filed in favor of the Secured Party
pursuant to this Agreement) covering or affecting any of the Intellectual
Property.  So long as this Agreement shall be in effect, the Company
shall not execute and shall not knowingly permit to be on file in any such
office or agency any such financing statement or other document or instrument
(except to the extent filed or recorded in favor of the Secured Party pursuant
to the terms of this Agreement), except for a financing statement covering
assets acquired by the Company after the date hereof, provided that the value of
the Intellectual Property covered by this Agreement along with the Collateral
(as defined in the Security Agreement) is equal to at least 150% of the
Obligations.

     

    (d)           The
Company shall at all times maintain its books of account and records relating to
the Intellectual Property at its principal place of business and its
Intellectual Property at the locations set forth on Schedule A attached
hereto and may not relocate such books of account and records unless it delivers
to the Secured Party 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 the necessary documents have been
filed and recorded and other steps have been taken to perfect the Security
Interest to create in favor of the Secured Party valid, perfected and continuing
first priority liens in the Intellectual Property to the extent they can be
perfected through such filings.

     

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

     

    (e)           This
Agreement creates in favor of the Secured Party a valid security interest in the
Intellectual Property securing the payment and performance of the Obligations
and, upon making the filings required hereunder, a perfected first priority
security interest in such Intellectual Property to the extent that it can be
perfected through such filings.

     

    (f)           
Upon request of the Secured Party, the Company shall execute and deliver any and
all agreements, instruments, documents, and papers as the Secured Party may
request to evidence the Secured Party’s security interest in the Intellectual
Property and the goodwill and general intangibles of the Company relating
thereto or represented thereby, and the Company hereby appoints the Secured
Party its attorney-in-fact to execute and file all such writings for the
foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable until the
Obligations have been fully satisfied and are paid in full.

     

    (g)           The
execution, delivery and performance of this Agreement does not conflict with or
cause a breach or default, or an event that with or without the passage of time
or notice, shall constitute a breach or default, under any agreement to which
the Company is a party or by which the Company is bound.  No consent
(including, without limitation, from stock holders or creditors of the Company)
is required for the Company to enter into and perform its obligations
hereunder.

     

    (h)           The
Company shall at all times maintain the liens and Security Interest provided for
hereunder as valid and perfected first priority liens and security interests in
the Intellectual Property to the extent they can be perfected by filing in favor
of the Secured Party until this Agreement and the Security Interest hereunder
shall terminate pursuant to Section 11.  The Company hereby agrees to
defend the same against any and all persons.  The Company shall
safeguard and protect all Intellectual Property for the account of the Secured
Party.  Without limiting the generality of the foregoing, the Company
shall pay all fees, taxes and other amounts necessary to maintain the
Intellectual Property and the Security Interest hereunder, and the Company shall
obtain and furnish to the Secured Party from time to time, upon demand, such
releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.

     

    (i)           The
Company will not transfer, pledge, hypothecate, encumber, license (except for
non-exclusive licenses granted by the Company in the ordinary course of
business), sell or otherwise dispose of any of the Intellectual Property without
the prior written consent of the Secured Party.

     

    (j)           The
Company shall, within ten (10) days of obtaining knowledge thereof, advise the
Secured Party promptly, in sufficient detail, of any substantial change in the
Intellectual Property, and of the occurrence of any event which would have a
material adverse effect on the value of the Intellectual Property or on the
Secured Party’s security interest therein.

     

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    (k)           The
Company shall permit the Secured Party and its representatives and agents to
inspect the Intellectual Property at any time, and to make copies of records
pertaining to the Intellectual Property as may be requested by the Secured Party
from time to time.

     

    (l)           
The Company will take all steps reasonably necessary to diligently pursue and
seek to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Intellectual Property.

     

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

     

    (n)           All
information heretofore, herein or hereafter supplied to the Secured Party by or
on behalf of the Company with respect to the Intellectual Property is accurate
and complete in all material respects as of the date furnished.

     

    (o)           Schedule A attached
hereto contains a list of all of the subsidiaries of Company.

     

    (p)           Schedule B attached
hereto includes all Licenses, and all Patents and Patent Licenses, if any, owned
by the Company in its own name as of the date hereof.  Schedule B hereto
includes all Trademarks and Trademark Licenses, if any, owned by the Company in
its own name as of the date hereof.  Schedule B hereto
includes all Copyrights and Copyright Licenses, if any, owned by the Company in
its own name as of the date hereof.  Schedule B hereto
includes all Trade Secrets and Trade Secret Licenses, if any, owned by the
Company as of the date hereof.  To the best of the Company’s
knowledge, each License, Patent, Trademark, Copyright and Trade Secret is valid,
subsisting, unexpired, enforceable and has not been abandoned.  Except
as set forth in Schedule B, none of
such Licenses, Patents, Trademarks, Copyrights and Trade Secrets is the subject
of any licensing or franchise agreement.  To the best of the Company’s
knowledge, no holding, decision or judgment has been rendered by any
Governmental Body which would limit, cancel or question the validity of any
License, Patent, Trademark, Copyright and Trade Secrets .  No action
or proceeding is pending (i) seeking to limit, cancel or question the validity
of any License, Patent, Trademark, Copyright or Trade Secret, or (ii) which, if
adversely determined, would have a material adverse effect on the value of any
License, Patent, Trademark, Copyright or Trade Secret.  The Company
has used and will continue to use for the duration of this Agreement, proper
statutory notice in connection with its use of the Patents, Trademarks and
Copyrights and consistent standards of quality in products leased or sold under
the Patents, Trademarks and Copyrights.

     

    (q)           With
respect to any Intellectual Property:

     

    
      	
               
      

            	
              (i)

            	
              such
      Intellectual Property is subsisting and has not been adjudged invalid or
      unenforceable, in whole or in part;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              such
      Intellectual Property is valid and
enforceable;

            

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Company has made all necessary filings and recordations to protect its
      interest in such Intellectual Property, including, without limitation,
      recordations of all of its interests in the Patents, Patent Licenses,
      Trademarks and Trademark Licenses in the United States Patent and
      Trademark Office and in corresponding offices throughout the world and its
      claims to the Copyrights and Copyright Licenses in the United States
      Copyright Office and in corresponding offices throughout the
      world;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              other
      than as set forth in Schedule B, the
      Company is the exclusive owner of the entire and unencumbered right, title
      and interest in and to such Intellectual Property and no claim has been
      made that the use of such Intellectual Property infringes on the asserted
      rights of any third party; and

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      Company has performed and will continue to perform all acts and has paid
      all required fees and taxes to maintain each and every item of
      Intellectual Property in full force and effect throughout the world, as
      applicable.

            

    

     

    (r)           
Except with respect to any Trademark or Copyright that the
Company  shall reasonably determine is of negligible economic value to
the Company, the Company shall:

     

    (i)           
maintain each Trademark and Copyright in full force free from any claim of
abandonment for non-use, maintain as in the past the quality of products and
services offered under such Trademark or Copyright;  employ such
Trademark or Copyright with the appropriate notice of registration; not adopt or
use any mark which is confusingly similar or a colorable imitation of such
Trademark or Copyright unless the Secured Party shall obtain a perfected
security interest in such mark pursuant to this Agreement; and not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby any Trademark or Copyright may become
invalidated;

     

    (ii)           
not, except with respect to any Patent that it shall reasonably determine is of
negligible economic value to it, do any act, or omit to do any act, whereby any
Patent may become abandoned or dedicated; and

     

    (iii)           notify
the Secured Party immediately if it knows, or has reason to know, that any
application or registration relating to any Patent, Trademark or Copyright may
become abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
United States Copyright Office or any court or tribunal in any country)
regarding its ownership of any Patent, Trademark or Copyright or its right to
register the same or to keep and maintain the same.

     

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

     

    (s)           Whenever
the Company, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office,
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof or acquire rights to any new
Patent, Trademark or Copyright whether or not registered, report such filing to
the Secured Party within five business days after the last day of the fiscal
quarter in which such filing occurs.

     

    (t)           The
Company shall take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Patents, Trademarks and Copyrights, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.

     

    (u)           In
the event that any Patent, Trademark or Copyright included in the Intellectual
Property is infringed, misappropriated or diluted by a third party, promptly
notify the Secured Party after it learns thereof and shall, unless it shall
reasonably determine that such Patent, Trademark or Copyright is of negligible
economic value to it, which determination it shall promptly report to the
Secured Party, promptly sue for infringement, misappropriation or dilution, to
seek injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or take such other actions as
it shall reasonably deem appropriate under the circumstances to protect such
Patent, Trademark or Copyright.  If the Company lacks the financial
resources to comply with this Section 3(t), the Company shall so notify the
Secured Party and shall cooperate fully with any enforcement action undertaken
by the Secured Party on behalf of the Company.

     

    4.           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 the Company in this Agreement or in the Security
Agreement shall prove to have been incorrect in any material respect when
made;

     

    (c)           The
failure by the Company to observe or perform any of its obligations hereunder or
in the Security Agreement for ten (10) days after receipt by the Company of
notice of such failure from the Secured Party; and

     

    (d)           Any
breach of, or default under, the Warrants.

     

    5.           Duty To Hold In
Trust.  Upon the occurrence of any Event of Default and at any
time thereafter, the Company shall, upon receipt by it of any revenue, income or
other sums subject to the Security Interest, whether payable pursuant to the
Notes or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in trust
for the Secured Party and shall forthwith endorse and transfer any such sums or
instruments, or both, to the Secured Party for application to the satisfaction
of the Obligations.

     

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

     

    6.            
Rights and Remedies
Upon Default.  Upon occurrence of any Event of Default and at
any time thereafter, the Secured Party shall have the right to exercise all of
the remedies conferred hereunder and under the Notes, and the Secured Party
shall have all the rights and remedies of a secured party under the UCC and/or
any other applicable law (including the Uniform Commercial Code of any
jurisdiction in which any Intellectual Property is then
located).  Without limitation, the Secured Party shall have the
following rights and powers:

     

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

     

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

     

    7.           Applications of
Proceeds.  The proceeds of any such sale, lease or other
disposition of the Intellectual Property hereunder shall be applied first, to
the expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Intellectual Property, to the
reasonable attorneys’ fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Intellectual Property, and then to satisfaction of the
Obligations, and to the payment of any other amounts required by applicable law,
after which the Secured Party shall pay to the Company any surplus
proceeds.  If, upon the sale, license or other disposition of the
Intellectual Property, the proceeds thereof are insufficient to pay all amounts
to which the Secured Party is legally entitled, the Company will be liable for
the deficiency, together with interest thereon, at the rate of 15% per annum
(the “Default
Rate”), and the reasonable fees of any attorneys employed by the Secured
Party to collect such deficiency.  To the extent permitted by
applicable law, the Company waives all claims, damages and demands against the
Secured Party arising out of the repossession, removal, retention or sale of the
Intellectual Property, unless due to the gross negligence or willful misconduct
of the Secured Party.

     

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

     

    8.           Costs and
Expenses.  The Company agrees to pay all out-of-pocket fees,
costs and expenses incurred in connection with any filing required hereunder,
including without limitation, any financing statements, continuation statements,
partial releases and/or termination statements related thereto or any expenses
of any searches reasonably required by the Secured Party.  The Company
shall also pay all other claims and charges which in the reasonable opinion of
the Secured Party might prejudice, imperil or otherwise affect the Intellectual
Property or the Security Interest therein.  The Company will also,
upon demand, pay to the Secured Party the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, which the Secured Party 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 Intellectual
Property, or (iii) the exercise or enforcement of any of the rights of the
Secured Party 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.

     

    9.           Responsibility for
Intellectual Property.  The Company assumes all liabilities and
responsibility in connection with all Intellectual Property, and the obligations
of the Company hereunder or under the Notes and the Warrants shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Intellectual Property or its unavailability for any
reason.

     

    10.           Security Interest
Absolute.  All rights of the Secured Party and all Obligations
of the Company hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the Notes, the
Warrants 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, the Warrants  or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Intellectual Property, or any release or amendment or waiver of or
consent to departure from any other Intellectual Property for, or any guaranty,
or any other security, for all or any of the Obligations; (d) any action by the
Secured Party to obtain, adjust, settle and cancel in its sole discretion any
insurance claims or matters made or arising in connection with the Intellectual
Property; or (e) any other circumstance which might otherwise constitute any
legal or equitable defense available to the Company, or a discharge of all or
any part of the Security Interest granted hereby.  Until the
Obligations shall have been paid and performed in full, the rights of the
Secured Party shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations or
bankruptcy.  The Company 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 Intellectual Property or any payment
received by the Secured Party 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 Party,
then, in any such event, the Company’s obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof.  The Company waives all right to require the
Secured Party to proceed against any other person or to apply any Intellectual
Property which the Secured Party may hold at any time, or to marshal assets, or
to pursue any other remedy.  The Company waives any defense arising by
reason of the application of the statute of limitations to any obligation
secured hereby.

     

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

     

    11.           Term of
Agreement.  This Agreement and the Security Interest shall
terminate on the date on which all payments under the Notes have been made in
full and all other Obligations have been paid or discharged.  Upon
such termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

     

    12.           Power of Attorney; Further
Assurances.

     

    (a)           The
Company authorizes the Secured Party, and does hereby make, constitute and
appoint it, and its respective officers, agents, successors or assigns with full
power of substitution, as the Company’s true and lawful attorney-in-fact, with
power, in its own name or in the name of the Company, to, after the occurrence
and during the continuance of an Event of Default, (i) endorse any notes,
checks, drafts, money orders, or other instruments of payment (including
payments payable under or in respect of any policy of insurance) in respect of
the Intellectual Property that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement 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 Intellectual Property; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or
placed on or threatened against the Intellectual Property; (iv) to demand,
collect, receipt for, compromise, settle and sue for monies due in respect of
the Intellectual Property; and (v) generally, to do, at the option of the
Secured Party, and at the Company’s expense, at any time, or from time to time,
all acts and things which the Secured Party deems necessary to protect, preserve
and realize upon the Intellectual Property and the Security Interest granted
therein in order to effect the intent of this Agreement, the Notes and the
Warrants, all as fully and effectually as the Company might or could do; and the
Company 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.

     

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

     

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

     

    (c)           The
Company hereby irrevocably appoints the Secured Party as the Company’s
attorney-in-fact, with full authority in the place and stead of the Company and
in the name of the Company, from time to time in the Secured Party’s discretion,
to take any action and to execute any instrument which the Secured Party 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
Intellectual Property without the signature of the Company where permitted by
law.

     

    13.           Notices.  All
notices, requests, demands and other communications hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested), the next
business day or (iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the U.S.
mails, in each case if delivered to the following addresses:

     

    
      	
              If
      to the Company:

            	
              Admiralty
      Holding Company

            
	 
      	
              3455
      Peachtree Road, Suite 560

            
	 
      	
              Atlanta,
      GA 30326

            
	 
      	
              Attention:
      Chief Executive Officer

            
	 
      	
              Telephone:  (404)
      995-7010

            
	 
      	
              Facsimile:  (404)
      995-7001

            
	 
      	
              Admiralty
      Corporation

            
	 
      	
              _____________________

            
	 
      	
              _____________________

            
	 
      	
              Attention:_____________

            
	 
      	
              Telephone:
      ____________

            
	 
      	
              Facsimile:
      ____________

            
	 
      	
              Admiralty
      Marine Operations, Ltd.

            
	 
      	
              _____________________

            
	 
      	
              _____________________

            
	 
      	
              Attention:_____________

            
	 
      	
              Telephone:
      ____________

            
	 
      	
              Facsimile:
      ____________

            
	 	 
	
              With
      copies to:

            	 
      

    

    
      
        
          PHL_A #1956691 v2
                                                                  

        

         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
              If
      to the Secured Party:

            	
              AJW
      Partners, LLC

            
	 
      	
              AJW
      Master Fund, Ltd.

            
	 
      	
              New
      Millennium Capital Partners II, LLC

            
	 
      	
              1044
      Northern Boulevard

            
	 
      	
              Suite
      302

            
	 
      	
              Roslyn,
      New York 11576

            
	 
      	
              Attention:  Corey
      Ribotsky

            
	 
      	
              Facsimile:  516-739-7115

            
	 	 
	
              With
      copies to:

            	
              Ballard
      Spahr Andrews & Ingersoll, LLP

            
	 
      	
              1735
      Market Street

            
	 
      	
              51st
      Floor

            
	 
      	
              Philadelphia,
      Pennsylvania  19103

            
	 
      	
              Attention:  Gerald
      J. Guarcini, Esq.

            
	 
      	
              Telephone:  215-865-8625

            
	 
      	
              Facsimile:  215-864-8999

            

    

    

     

    14.           Other
Security.  To the extent that the Obligations are now or
hereafter secured by property other than the Intellectual Property or by the
guarantee, endorsement or property of any other person, firm, corporation or
other entity, then the Secured Party 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 Party’s rights and remedies hereunder.

     

    15.           Miscellaneous.

     

    (a)           No
course of dealing between the Company and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Party, 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.

     

    (b)           All
of the rights and remedies of the Secured Party with respect to the Intellectual
Property, 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 and the Security Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and is intended to supersede
all prior negotiations, understandings and agreements with respect
thereto.  Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by the parties
hereto.

     

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

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    (h)           This
Agreement shall be construed in accordance with the laws of the State of New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Intellectual Property which are
governed by a jurisdiction other than the State of New York in which case such
law shall govern.  Each of the parties hereto irrevocably submit to
the exclusive jurisdiction of any New York State or United States Federal court
sitting in Manhattan county over any action or proceeding arising out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York State or Federal court.  The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  The parties hereto further waive any
objection to venue in the State of New York and any objection to an action or
proceeding in the State of New York on the basis of forum non
conveniens.

     

    (i)           EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO
THE SUBJECT MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY
WAIVES ITS RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATION.  THIS
WAIVER IS IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.  IN THE EVENT OF A LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (j)           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.

     

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

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

     

    
      
        	 
      	
                COMPANY

              
	 
      	 
      	 
      
	 
      	
                ADMIRALTY
      HOLDING COMPANY

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                 

              
	 
      	 
      	
                Herbert
      C. Leeming

              
	 
      	 
      	
                Chief
      Executive Officer

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                ADMIRALTY
      CORPORATION

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Herbert
      C. Leeming

              
	 
      	 
      	
                CEO

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                ADMIRALTY
      MARINE OPERATIONS, LTD.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                 

              
	 
      	 
      	
                Herbert
      C Leeming

              
	 
      	 
      	
                CEO

              

      

    

    

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

    

     

    
      	 
      	
              SECURED
      PARTY:

            
	 
      	 
      
	 
      	 
      
	 
      	
              AJW
      PARTNERS, LLC

            
	 
      	
              By:

            	
              SMS
      Group, LLC

            
	 	 	 
	 	 	 
	 
      	
              By:

            	
               

            
	 
      	 
      	
              Corey
      S. Ribotsky

            
	 
      	 
      	
              Manager

            
	 
      	 
      	 
      

    

     

    
      	 
      	
              AJW
      MASTER FUND, LTD.

            
	 
      	
              By:

            	
              First
      Street Manager II, LLC

            
	 	 	 
	 	 	 
	 
      	
              By:

            	
               

            
	 
      	 
      	
              Corey
      S. Ribotsky

            
	 
      	 
      	
              Manager

            
	 
      	 
      	 
      
	 
      	 
      	 
      

    

     

    
      	 
      	
              NEW
      MILLENNIUM CAPITAL PARTNERS II, LLC

            
	 
      	
              By:

            	
              First
      Street Manager II, LLC

            
	 	 	 
	 	 	 
	 
      	
              By:

            	
               

            
	 
      	 
      	
              Corey
      S. Ribotsky

            
	 
      	 
      	
              Manager

            

    

    

    17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}]]