Document:

EXECUTED
      COPY

     

    SECURITY
      AGREEMENT

     

    This
      SECURITY AGREEMENT, dated as of September 22, 2005 (the “Agreement”)
      is by
      and among American United Global, Inc., a corporation duly organized and validly
      existing under the laws of the State of Delaware (the “Company”),
      the
      Purchasers identified on the signature pages hereto (each, a “Purchaser”
      and
      collectively, the “Purchasers”)
      and
      Iroquois Master Fund Ltd., as agent for the Purchasers (in such capacity,
      together with its successors in such capacity, the “Purchaser
      Representative”).

     

    The
      Company and each of the Purchasers are parties to a Securities Purchase
      Agreement dated as of September 21, 2005 (as modified and supplemented and
      in
      effect from time to time, the “Purchase
      Agreement”),
      that
      provides, subject to the terms and conditions thereof, for the issuance and
      sale
      by the Company to each of the Purchasers, severally and not jointly, Notes
      and
      Common Stock as more fully described in the Purchase Agreement. 

     

    To
      induce
      each of the Purchasers to enter into the Purchase Agreement, and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the Company has agreed to pledge and grant a security interest
      in
      the Collateral (as hereinafter defined) as security for the Secured Obligations
      (as hereinafter defined). Accordingly, the parties hereto agree as
      follows:

     

    Section
      1.  Definitions.
      Each
      capitalized term used herein and not otherwise defined shall have the meaning
      assigned to such term in the Purchase Agreement. In addition, as used
      herein:

     

    “Accounts”
      shall
      have the meaning ascribed thereto in Section 3(d) hereof.

     

    “Business”
      shall
      mean the businesses from time to time, now or hereafter, conducted by the
      Company and its Subsidiaries.

     

    “Collateral”
      shall
      have the meaning ascribed thereto in Section 3 hereof.

     

    “Copyright
      Collateral”
      shall
      mean all Copyrights, whether now owned or hereafter acquired by the Company,
      that are associated with the Business.

     

    “Copyrights”
      shall
      mean all copyrights, copyright registrations and applications for copyright
      registrations, including, without limitation, all renewals and extensions
      thereof, the right to recover for all past, present and future infringements
      thereof, and all other rights of any kind whatsoever accruing thereunder or
      pertaining thereto.

     

    “Documents”
      shall
      have the meaning ascribed thereto in Section 3(j) hereof.

     

    “Equipment”
      shall
      have the meaning ascribed thereto in Section 3(h) hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Event
      of Default”
      shall
      have the meaning ascribed thereto in Section 8 of the Notes.

     

    “Excluded
      Collateral”
      shall
      mean the assets of the Company which secure the Permitted Indebtedness and
      the
      assets listed on Annex
      2
      hereto.

     

    “Instruments”
      shall
      have the meaning ascribed thereto in Section 3(e) hereof.

     

    “Intellectual
      Property”
      shall
      mean, collectively, all Copyright Collateral, all Patent Collateral and all
      Trademark Collateral, together with (a) all inventions, processes, production
      methods, proprietary information, know-how and trade secrets used or useful
      in
      the Business; (b) all licenses or user or other agreements granted to the
      Company with respect to any of the foregoing, in each case whether now or
      hereafter owned or used including, without limitation, the licenses or other
      agreements with respect to the Copyright Collateral, the Patent Collateral
      or
      the Trademark Collateral; (c) all customer lists, identification of suppliers,
      data, plans, blueprints, specifications, designs, drawings, recorded knowledge,
      surveys, manuals, materials standards, processing standards, catalogs, computer
      and automatic machinery software and programs, and the like pertaining to the
      operation by the Company of the Business; (d) all sales data and other
      information relating to sales now or hereafter collected and/or maintained
      by
      the Company that pertain to the Business; (e) all accounting information which
      pertains to the Business and all media in which or on which any of the
      information or knowledge or data or records which pertain to the Business may
      be
      recorded or stored and all computer programs used for the compilation or
      printout of such information, knowledge, records or data; (f) all licenses,
      consents, permits, variances, certifications and approvals of governmental
      agencies now or hereafter held by the Company pertaining to the operation by
      the
      Company and its Subsidiaries of the Business; and (g) all causes of action,
      claims and warranties now or hereafter owned or acquired by the Company in
      respect of any of the items listed above.

     

    “Inventory”
      shall
      have the meaning ascribed thereto in Section 3(f) hereof.

     

    “Issuers”
      shall
      mean, collectively, the respective entities identified on Annex
      1
      hereto,
      and all other entities formed by the Company or entities in which the Company
      owns or acquires any capital stock or similar interest.

     

    “Lien”
      shall
      mean any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
      arrangement, lien, charge, claim, security interest, easement or encumbrance,
      or
      preference, priority or other security agreement or preferential arrangement
      of
      any kind or nature whatsoever (including any lease or title retention agreement,
      any financing lease having substantially the same economic effect as any of
      the
      foregoing, and the filing of, or agreement to give, any financing statement
      perfecting a security interest under the Uniform Commercial Code or comparable
      law of any jurisdiction).

     

    “Motor
      Vehicles”
      shall
      mean motor vehicles, tractors, trailers and other like property, whether or
      not
      the title thereto is governed by a certificate of title or
      ownership.

     

    “Patent
      Collateral”
      shall
      mean all Patents, whether now owned or hereafter acquired by the Company that
      are associated with the Business.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Patents”
      shall
      mean all patents and patent applications, including, without limitation, the
      inventions and improvements described and claimed therein together with the
      reissues, divisions, continuations, renewals, extensions and
      continuations-in-part thereof, all income, royalties, damages and payments
      now
      or hereafter due and/or payable under and with respect thereto, including,
      without limitation, damages and payments for past or future infringements
      thereof, the right to sue for past, present and future infringements thereof,
      and all rights corresponding thereto throughout the world.

     

    “Permitted
      Indebtedness”
      shall
      mean the Company’s existing indebtedness, liabilities and obligations as
      disclosed on Annex
      5
      hereto
      and any future capitalized leases, purchase money indebtedness and the
      Notes.

     

    “Pledged
      Stock”
      shall
      have the meaning ascribed thereto in Section 3(a) hereof.

     

    “Real
      Estate”
      shall
      have the meaning ascribed thereto in Section 3(l) hereof.

     

    “Secured
      Obligations”
      shall
      mean, collectively, (a) the principal of and interest on the Notes issued or
      issuable (as applicable) by the Company and held by the applicable Purchaser
      and
      all other amounts from time to time owing to such Purchasers by the Company
      under the Purchase Agreement and the Notes and (b) all obligations of the
      Company to such Purchasers thereunder.

     

    “Stock
      Collateral”
      shall
      mean, collectively, the Collateral described in clauses (a) through (c) of
      Section 3 hereof and the proceeds of and to any such property and, to the extent
      related to any such property or such proceeds, all books, correspondence, credit
      files, records, invoices and other papers.

     

    “Trademark
      Collateral”
      shall
      mean all Trademarks, whether now owned or hereafter acquired by the Company,
      that are associated with the Business. Notwithstanding the foregoing, the
      Trademark Collateral does not and shall not include any Trademark which would
      be
      rendered invalid, abandoned, void or unenforceable by reason of its being
      included as part of the Trademark Collateral.

     

    “Trademarks”
      shall
      mean all trade names, trademarks and service marks, logos, trademark and service
      mark registrations, and applications for trademark and service mark
      registrations, including, without limitation, all renewals of trademark and
      service mark registrations, all rights corresponding thereto throughout the
      world, the right to recover for all past, present and future infringements
      thereof, all other rights of any kind whatsoever accruing thereunder or
      pertaining thereto, together, in each case, with the product lines and goodwill
      of the business connected with the use of, and symbolized by, each such trade
      name, trademark and service mark.

     

    “Uniform
      Commercial Code”
      or
“UCC”
      shall
      mean the Uniform Commercial Code as in effect in the State of New York from
      time
      to time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      2.  Representations
      and Warranties.
      The
      Company represents and warrants to each of the Purchasers that:

     

    
      	a.  	
              the
                Company is the sole beneficial owner of the Collateral and no Lien
                exists
                or will exist upon any Collateral at any time (and, with respect
                to the
                Stock Collateral, no right or option to acquire the same exists in
                favor
                of any other Person) and the pledge and security interest in favor
                of each
                of the Purchasers created or provided for herein which pledge and
                security
                interest constitutes a first priority perfected pledge and security
                interest in and to all of the Collateral (except such Collateral
                as may be
                subject to a Permitted Lien, in which case, a second priority perfected
                security interest), assuming applicable financing statements are
                been duly
                and properly filed (other than Intellectual Property registered or
                otherwise located outside of the United States of
                America);

            

    

     

    
      	b.  	
              the
                Pledged Stock directly or indirectly owned by the Company in the
                entities
                identified in Annex
                1
                hereto is, and all other Pledged Stock, whether issued now or in
                the
                future, will be, duly authorized, validly issued, fully paid and
                nonassessable, free and clear of all Liens and none of such Pledged
                Stock
                is or will be subject to any contractual restriction, preemptive
                and
                similar rights, or any restriction under the charter or by-laws of
                the
                respective Issuers of such Pledged Stock, upon the transfer of such
                Pledged Stock (except for any such restriction contained
                herein);

            

    

     

    
      	c.  	
              the
                Pledged Stock directly or indirectly owned by the Company in the
                entities
                identified in Annex
                1
                hereto constitutes all of the issued and outstanding shares of capital
                stock of any class of such Issuers beneficially owned by the Company
                on
                the date hereof (whether or not registered in the name of the Company)
                and
                said Annex
                1
                correctly identifies, as at the date hereof, the respective Issuers
                of
                such Pledged Stock;

            

    

     

    
      	d.  	
              the
                Company owns and possesses the right to use, and has done nothing
                to
                authorize or enable any other Person to use, all of its Copyrights,
                Patents and Trademarks, and all registrations of its material Copyrights,
                Patents and Trademarks are valid and in full force and effect. Except
                as
                may be set forth in said Annex
                3,
                the Company owns and possesses the right to use all material Copyrights,
                Patents and Trademarks, necessary for the operation of the
                Business;

            

    

     

    
      	e.  	
              to
                the Company’s knowledge, (i) except as set forth in Annex
                3
                hereto, there is no violation by others of any right of the Company
                with
                respect to any material Copyrights, Patents or Trademarks, respectively,
                and (ii) the Company is not, in connection with the Business, infringing
                in any respect upon any Copyrights, Patents or Trademarks of any
                other
                Person; and no proceedings have been instituted or are pending against
                the
                Company or, to the Company’s knowledge, threatened, and no claim against
                the Company has been received by the Company, alleging any such violation,
                except as may be set forth in said Annex
                3;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	f.  	
              the
                Company does not own any material Trademarks registered in the United
                States of America to which the last sentence of the definition of
                Trademark Collateral applies; and

            

    

     

    Section
      3.  Collateral.
      As
      collateral security for the prompt payment in full when due (whether at stated
      maturity, by acceleration or otherwise) of the Secured Obligations, the Company
      hereby pledges, grants, assigns, hypothecates and transfers to the Purchaser
      Representative on behalf of the Purchasers as hereinafter provided, a security
      interest in and Lien upon all of the Company’s right, title and interest in, to
      and under all personal property and other assets of the Company, whether now
      owned or hereafter acquired by or arising in favor of the Company, whether
      now
      existing or hereafter coming into existence, whether owned or consigned by
      or to
      the Company, or leased from or to the Company and regardless of wherever
      located, except for the Excluded Collateral, (all being collectively referred
      to
      herein as “Collateral”)
      including:

     

    
      	a.  	
              the
                Company’s direct or indirect ownership interest in the respective shares
                of capital stock of the Issuers and all other shares of capital stock
                of
                whatever class of the Issuers, now or hereafter owned by the Company,
                together with in each case the certificates evidencing the same
                (collectively, the “Pledged
                Stock”);

            

    

     

    
      	b.  	
              all
                shares, securities, moneys or property representing a dividend on
                any of
                the Pledged Stock, or representing a distribution or return of capital
                upon or in respect of the Pledged Stock, or resulting from a split-up,
                revision, reclassification or other like change of the Pledged Stock
                or
                otherwise received in exchange therefor, and any subscription warrants,
                rights or options issued to the holders of, or otherwise in respect
                of,
                the Pledged Stock;

            

    

     

    
      	c.  	
              without
                affecting the obligations of the Company under any provision prohibiting
                such action hereunder or under the Purchase Agreement or the Notes,
                in the
                event of any consolidation or merger in which any Issuer is not the
                surviving corporation, all shares of each class of the capital stock
                of
                the successor corporation (unless such successor corporation is the
                Company itself) formed by or resulting from such consolidation or
                merger
                (the Pledged Stock, together with all other certificates, shares,
                securities, properties or moneys as may from time to time be pledged
                hereunder pursuant to clause (a) or (b) above and this clause (c)
                being
                herein collectively called the “Stock
                Collateral”);

            

    

     

    
      	d.  	
              all
                accounts and general intangibles (each as defined in the Uniform
                Commercial Code) of the Company constituting any right to the payment
                of
                money, including (but not limited to) all moneys due and to become
                due to
                the Company in respect of any loans or advances for the purchase
                price of
                Inventory or Equipment or other goods sold or leased or for services
                rendered, all moneys due and to become due to the Company under any
                guarantee (including a letter of credit) of the purchase price of
                Inventory or Equipment sold by the Company and all tax refunds (such
                accounts, general intangibles and moneys due and to become due being
                herein called collectively “Accounts”);

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	e.  	
              all
                instruments, chattel paper or letters of credit (each as defined
                in the
                Uniform Commercial Code) of the Company evidencing, representing,
                arising
                from or existing in respect of, relating to, securing or otherwise
                supporting the payment of, any of the Accounts, including (but not
                limited
                to) promissory notes, drafts, bills of exchange and trade acceptances
                (herein collectively called “Instruments”);

            

    

     

    
      	f.  	
              all
                inventory (as defined in the Uniform Commercial Code) of the Company
                and
                all goods obtained by the Company in exchange for such inventory
                (herein
                collectively called “Inventory”);

            

    

     

    
      	g.  	
              all
                Intellectual Property and all other accounts or general intangibles
                of the
                Company not constituting Intellectual Property or
                Accounts;

            

    

     

    
      	h.  	
              all
                equipment (as defined in the Uniform Commercial Code) of the Company
                (herein collectively called “Equipment”);

            

    

     

    
      	i.  	
              each
                contract and other agreement of the Company relating to the sale
                or other
                disposition of Inventory or
                Equipment;

            

    

     

    
      	j.  	
              all
                documents of title (as defined in the Uniform Commercial Code) or
                other
                receipts of the Company covering, evidencing or representing Inventory
                or
                Equipment (herein collectively called “Documents”);

            

    

     

    
      	k.  	
              all
                rights, claims and benefits of the Company against any Person arising
                out
                of, relating to or in connection with Inventory or Equipment purchased
                by
                the Company, including, without limitation, any such rights, claims
                or
                benefits against any Person storing or transporting such Inventory
                or
                Equipment;

            

    

     

    
      	l.  	
              all
                estates in land together with all improvements and other structures
                now or
                hereafter situated thereon, together with all rights, privileges,
                tenements, hereditaments, appurtenances, easements, including, but
                not
                limited to, rights and easements for access and egress and utility
                connections, and other rights now or hereafter appurtenant thereto
                ("Real
                Estate");

            

    

     

    
      	m.  	
              all
                other tangible or intangible property of the Company, including,
                without
                limitation, all proceeds, products and accessions of and to any of
                the
                property of the Company described in clauses (a) through (l) above
                in this
                Section 3 (including, without limitation, any proceeds of insurance
                thereon), and, to the extent related to any property described in
                said
                clauses or such proceeds, products and accessions, all books,
                correspondence, credit files, records, invoices and other papers,
                including without limitation all tapes, cards, computer runs and
                other
                papers and documents in the possession or under the control of the
                Company
                or any computer bureau or service company from time to time acting
                for the
                Company.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      4.  Further
      Assurances; Remedies.
      In
      furtherance of the grant of the pledge and security interest pursuant to Section
      3 hereof, the Company hereby agrees with the Purchaser Representative and each
      of the Purchasers as follows:

     

    4.01  Delivery
      and Other Perfection.
      The
      Company shall:

     

    
      	a.  	
              if
                any of the above-described shares, securities, monies or property
                required
                to be pledged by the Company under clauses (a), (b) and (c) of Section
                3
                hereof are received by the Company, forthwith either (x) transfer
                and
                deliver to the Purchaser Representative such shares or securities
                so
                received by the Company (together with the certificates for any such
                shares and securities duly endorsed in blank or accompanied by undated
                stock powers duly executed in blank) all of which thereafter shall
                be held
                by the Purchaser Representative, pursuant to the terms of this Agreement,
                as part of the Collateral or (y) take such other action as the Purchaser
                Representative shall reasonably deem necessary or appropriate to
                duly
                record the Lien created hereunder in such shares, securities, monies
                or
                property referred to in said clauses (a), (b) and (c) of Section
                3;

            

    

     

    
      	b.  	
              deliver
                and pledge to the Purchaser Representative, at the Purchaser
                Representative's request, any and all Instruments, endorsed and/or
                accompanied by such instruments of assignment and transfer in such
                form
                and substance as the Purchaser Representative may request; provided,
                that
                so long as no Event of Default shall have occurred and be continuing,
                the
                Company may retain for collection in the ordinary course any Instruments
                received by it in the ordinary course of
                business;

            

    

     

    
      	c.  	
              give,
                execute, deliver, file and/or record any financing statement, notice,
                instrument, document, agreement or other papers that may be necessary
                or
                desirable (in the reasonable judgment of the Purchaser Representative)
                to
                create, preserve, perfect or validate any security interest granted
                pursuant hereto or to enable the Purchaser Representative to exercise
                and
                enforce their rights hereunder with respect to such security interest,
                including, without limitation, causing any or all of the Stock Collateral
                to be transferred of record into the name of the Purchaser Representative
                or its nominee (and the Purchaser Representative agrees that if any
                Stock
                Collateral is transferred into its name or the name of its nominee,
                the
                Purchaser Representative will thereafter promptly give to the Company
                copies of any notices and communications received by it with respect
                to
                the Stock Collateral), provided that notices to account debtors in
                respect
                of any Accounts or Instruments shall be subject to the provisions
                of
                Section 4.09 below;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	d.  	
              upon
                the acquisition after the date hereof by the Company of any Equipment
                covered by a certificate of title or ownership cause the Purchaser
                Representative to be listed as the lienholder on such certificate
                of title
                and within 120 days of the acquisition thereof deliver evidence of
                the
                same to the Purchaser
                Representative;

            

    

     

    
      	e.  	
              keep
                accurate books and records relating to the Collateral, and stamp
                or
                otherwise mark such books and records in such manner as the Purchaser
                Representative may reasonably require in order to reflect the security
                interests granted by this
                Agreement;

            

    

     

    
      	f.  	
              furnish
                to the Purchaser Representative from time to time (but, unless an
                Event of
                Default shall have occurred and be continuing, no more frequently
                than
                quarterly) statements and schedules further identifying and describing
                the
                Copyright Collateral, the Patent Collateral and the Trademark Collateral,
                respectively, and such other reports in connection with the Copyright
                Collateral, the Patent Collateral and the Trademark Collateral, as
                the
                Purchaser Representative may reasonably request, all in reasonable
                detail;

            

    

     

    
      	g.  	
              permit
                representatives of the Purchaser Representative, upon reasonable
                notice,
                at any time during normal business hours to inspect and make abstracts
                from its books and records pertaining to the Collateral, and permit
                representatives of the Purchaser Representative to be present at
                the
                Company’s place of business to receive copies of all communications and
                remittances relating to the Collateral, and forward copies of any
                notices
                or communications by the Company with respect to the Collateral,
                all in
                such manner as the Purchaser Representative may reasonably require;
                and

            

    

     

    
      	h.  	
              upon
                the occurrence and during the continuance of any Event of Default,
                upon
                request of the Purchaser Representative, promptly notify each account
                debtor in respect of any Accounts or Instruments that such Collateral
                has
                been assigned to the Purchaser Representative hereunder, and that
                any
                payments due or to become due in respect of such Collateral are to
                be made
                directly to the Purchaser
                Representative.

            

    

     

    4.02  Other
      Financing Statements and Liens.
      Except
      with respect to Permitted Indebtedness, without the prior written consent of
      the
      Purchaser Representative, the Company shall not file or suffer to be on file,
      or
      authorize or permit to be filed or to be on file, in any jurisdiction, any
      financing statement or like instrument with respect to the Collateral in which
      the Purchaser Representative is not named as the sole secured party for the
      benefit of each of the Purchasers.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.03  Preservation
      of Rights.
      The
      Purchaser Representative shall not be required to take steps necessary to
      preserve any rights against prior parties to any of the Collateral.

     

    4.04  Special
      Provisions Relating to Certain Collateral.

     

    
      	a.  	
              Stock
                Collateral.

            

    

     

    
      	(1)  	
              The
                Company will cause the Stock Collateral to constitute at all times
                100% of
                the total number of shares of each class of capital stock of each
                Issuer
                then outstanding that is owned directly or indirectly by the Company.
                

            

    

     

    
      	(2)  	
              So
                long as no Event of Default shall have occurred and be continuing,
                the
                Company shall have the right to exercise all voting, consensual and
                other
                powers of ownership pertaining to the Stock Collateral for all purposes
                not inconsistent with the terms of this Agreement, the Purchase Agreement,
                the Notes or any other instrument or agreement referred to herein
                or
                therein, provided that the Company agrees that it will not vote the
                Stock
                Collateral in any manner that is inconsistent with the terms of this
                Agreement, the Purchase Agreement, the Notes or any such other instrument
                or agreement; and the Purchaser Representative shall execute and
                deliver
                to the Company or cause to be executed and delivered to the Company
                all
                such proxies, powers of attorney, dividend and other orders, and
                all such
                instruments, without recourse, as the Company may reasonably request
                for
                the purpose of enabling the Company to exercise the rights and powers
                which it is entitled to exercise pursuant to this Section
                4.04(a)(2).

            

    

     

    
      	(3)  	
              Unless
                and until an Event of Default has occurred and is continuing, the
                Company
                shall be entitled to receive and retain any dividends on the Stock
                Collateral paid in cash out of earned
                surplus.

            

    

     

    
      	(4)  	
              If
                any Event of Default shall have occurred, then so long as such Event
                of
                Default shall continue, and whether or not the Purchaser Representative
                exercises any available right to declare any Secured Obligations
                due and
                payable or seeks or pursues any other relief or remedy available
                to it
                under applicable law or under this Agreement, the Purchase Agreement,
                the
                Notes or any other agreement relating to such Secured Obligations,
                all
                dividends and other distributions on the Stock Collateral shall be
                paid
                directly to the Purchaser Representative and retained by it as part
                of the
                Stock Collateral, subject to the terms of this Agreement, and, if
                the
                Purchaser Representative shall so request in writing, the Company
                agrees
                to execute and deliver to the Purchaser Representative appropriate
                additional dividend, distribution and other orders and documents
                to that
                end, provided that if such Event of Default is cured, any such dividend
                or
                distribution theretofore paid to the Purchaser Representative shall,
                upon
                request of the Company (except to the extent theretofore applied
                to the
                Secured Obligations) be returned by the Purchaser Representative
                to the
                Company.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	b.  	
              Intellectual
                Property.

            

    

     

    
      	(1)  	
              For
                the purpose of enabling the Purchaser Representative to exercise
                rights
                and remedies under Section 4.05 hereof at such time as the Purchaser
                Representative shall be lawfully entitled to exercise such rights
                and
                remedies, and for no other purpose, the Company hereby grants to
                the
                Purchaser Representative, to the extent assignable, an irrevocable,
                non-exclusive license (exercisable without payment of royalty or
                other
                compensation to the Company) to use, assign, license or sublicense
                any of
                the Intellectual Property (other than the Trademark Collateral or
                goodwill
                associated therewith) now owned or hereafter acquired by the Company,
                wherever the same may be located, including in such license reasonable
                access to all media in which any of the licensed items may be recorded
                or
                stored and to all computer programs used for the compilation or printout
                thereof.

            

    

     

    
      	(2)  	
              Notwithstanding
                anything contained herein to the contrary, so long as no Event of
                Default
                shall have occurred and be continuing, the Company will be permitted
                to
                exploit, use, enjoy, protect, license, sublicense, assign, sell,
                dispose
                of or take other actions with respect to the Intellectual Property
                in the
                ordinary course of the business of the Company. In furtherance of
                the
                foregoing, unless an Event of Default shall have occurred and is
                continuing, the Purchaser Representative shall from time to time,
                upon the
                request of the Company, execute and deliver any instruments, certificates
                or other documents, in the form so requested, which the Company shall
                have
                certified are appropriate (in its judgment) to allow it to take any
                action
                permitted above (including relinquishment of the license provided
                pursuant
                to clause (1) immediately above as to any specific Intellectual Property).
                Further, upon the payment in full of all of the Secured Obligations
                or
                earlier expiration of this Agreement or release of the Collateral,
                the
                Purchaser Representative shall grant back to the Company the license
                granted pursuant to clause (1) immediately above. The exercise of
                rights
                and remedies under Section 4.05 hereof by the Purchaser Representative
                shall not terminate the rights of the holders of any licenses or
                sublicenses theretofore granted by the Company in accordance with
                the
                first sentence of this clause (2).

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.05  Events
      of Default, etc.
      During
      the period during which an Event of Default shall have occurred and be
      continuing:

     

    
      	a.  	
              the
                Company shall, at the request of the Purchaser Representative, assemble
                the Collateral owned by it at such place or places, reasonably convenient
                to both the Purchaser Representative and the Company, designated
                in its
                request;

            

    

     

    
      	b.  	
              the
                Purchaser Representative may make any reasonable compromise or settlement
                deemed desirable with respect to any of the Collateral and may extend
                the
                time of payment, arrange for payment in installments, or otherwise
                modify
                the terms of, any of the
                Collateral;

            

    

     

    
      	c.  	
              the
                Purchaser Representative shall have all of the rights and remedies
                with
                respect to the Collateral of a secured party under the Uniform Commercial
                Code (whether or not said Code is in effect in the jurisdiction where
                the
                rights and remedies are asserted) and such additional rights and
                remedies
                to which a secured party is entitled under the laws in effect in
                any
                jurisdiction where any rights and remedies hereunder may be asserted,
                including, without limitation, the right, to the maximum extent permitted
                by law, to exercise all voting, consensual and other powers of ownership
                pertaining to the Collateral as if the Purchaser Representative were
                the
                sole and absolute owner thereof (and the Company agrees to take all
                such
                action as may be appropriate to give effect to such
                right);

            

    

     

    
      	d.  	
              the
                Purchaser Representative in its discretion may, in its name or in
                the name
                of the Company or otherwise, demand, sue for, collect or receive
                any money
                or property at any time payable or receivable on account of or in
                exchange
                for any of the Collateral, but shall be under no obligation to do
                so;
                and

            

    

     

    
      	e.  	
              the
                Purchaser Representative may, upon 10 Business Days, prior written
                notice
                to the Company of the time and place, with respect to the Collateral
                or
                any part thereof which shall then be or shall thereafter come into
                the
                possession, custody or control of the Purchaser Representative, or
                any of
                its respective agents, sell, lease, assign or otherwise dispose of
                all or
                any of such Collateral, at such place or places as the Purchaser
                Representative deems best, and for cash or on credit or for future
                delivery (without thereby assuming any credit risk), at public or
                private
                sale, without demand of performance or notice of intention to effect
                any
                such disposition or of time or place thereof (except such notice
                as is
                required above or by applicable statute and cannot be waived) and
                the
                Purchaser Representative or anyone else may be the purchaser, lessee,
                assignee or recipient of any or all of the Collateral so disposed
                of at
                any public sale (or, to the extent permitted by law, at any private
                sale),
                and thereafter hold the same absolutely, free from any claim or right
                of
                whatsoever kind, including any right or equity of redemption (statutory
                or
                otherwise), of the Company, any such demand, notice or right and
                equity
                being hereby expressly waived and released. In the event of any sale,
                assignment, or other disposition of any of the Trademark Collateral,
                the
                goodwill of the Business connected with and symbolized by the Trademark
                Collateral subject to such disposition shall be included, and the
                Company
                shall supply to the Purchaser Representative or its designee, for
                inclusion in such sale, assignment or other disposition, all Intellectual
                Property relating to such Trademark Collateral. The Purchaser
                Representative may, without notice or publication, adjourn any public
                or
                private sale or cause the same to be adjourned from time to time
                by
                announcement at the time and place fixed for the sale, and such sale
                may
                be made at any time or place to which the same may be so
                adjourned.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      proceeds of each collection, sale or other disposition under this Section 4.05,
      including by virtue of the exercise of the license granted to the Purchaser
      Representative in Section 4.04(b)(1) hereof, shall be applied in accordance
      with
      Section 4.09 hereof. 

     

    The
      Company recognizes that, by reason of certain prohibitions contained in the
      Securities Act of 1933, as amended, and applicable state securities laws, the
      Purchaser Representative may be compelled, with respect to any sale of all
      or
      any part of the Collateral, to limit purchasers to those who will agree, among
      other things, to acquire the Collateral for their own account, for investment
      and not with a view to the distribution or resale thereof. The Company
      acknowledges that any such private sales to an unrelated third party in an
      arm’s
      length transaction may be at prices and on terms less favorable to the Purchaser
      Representative than those obtainable through a public sale without such
      restrictions, and, notwithstanding such circumstances, agrees that any such
      private sale shall be deemed to have been made in a commercially reasonable
      manner and that the Purchaser Representative shall have no obligation to engage
      in public sales and no obligation to delay the sale of any Collateral for the
      period of time necessary to permit the respective Issuer thereof to register
      it
      for public sale.

     

    4.06  Deficiency.
      If the
      proceeds of sale, collection or other realization of or upon the Collateral
      pursuant to Section 4.05 hereof are insufficient to cover the costs and expenses
      of such realization and the payment in full of the Secured Obligations, the
      Company shall remain liable for any deficiency.

     

    4.07  Removals,
      etc.
      Without
      at least 30 days’ prior written notice to the Purchaser Representative, the
      Company shall not (i) maintain any of its books or records with respect to
      the
      Collateral at any office or maintain its chief executive office or its principal
      place of business at any place, or permit any Inventory or Equipment to be
      located anywhere other than at the address indicated for the Company in the
      Purchase Agreement or at one of the locations identified in Annex
      4
      hereto
      or in transit from one of such locations to another or (ii) change its corporate
      name, or the name under which it does business, from the name shown on the
      signature page hereto.

     

    4.08  Private
      Sale.
      The
      Purchaser Representative shall incur no liability as a result of the sale of
      the
      Collateral, or any part thereof, at any private sale to an unrelated third
      party
      in an arm’s length transaction pursuant to Section 4.05 hereof conducted in a
      commercially reasonable manner. The Company hereby waives any claims against
      the
      Purchaser Representative arising by reason of the fact that the price at which
      the Collateral may have been sold at such a private sale was less than the
      price
      which might have been obtained at a public sale or was less than the aggregate
      amount of the Secured Obligations, even if the Purchaser Representative accepts
      the first offer received and does not offer the Collateral to more than one
      offeree.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.09  Application
      of Proceeds.
      Except
      as otherwise herein expressly provided, the proceeds of any collection, sale
      or
      other realization of all or any part of the Collateral pursuant hereto, and
      any
      other cash at the time held by the Purchaser Representative under this Section
      4, shall be applied by the Purchaser Representative:

     

    First,
      to the
      payment of the costs and expenses of such collection, sale or other realization,
      including reasonable out-of-pocket costs and expenses of the Purchaser
      Representative and the fees and expenses of its agents and counsel, and all
      expenses, and advances made or incurred by the Purchaser Representative in
      connection therewith;

     

    Next,
      to the
      payment in full of the Secured Obligations in each case equally and ratably
      in
      accordance with the respective amounts thereof then due and owing to each of
      the
      Purchasers; and

     

    Finally,
      to the
      payment to the Company, or its successors or assigns, or as a court of competent
      jurisdiction may direct, of any surplus then remaining.

     

    As
      used
      in this Section 4, “proceeds”
      of
      Collateral shall mean cash, securities and other property realized in respect
      of, and distributions in kind of, Collateral, including any thereof received
      under any reorganization, liquidation or adjustment of debt of the Company
      or
      any issuer of or obligor on any of the Collateral.

     

    4.10  Attorney-in-Fact.
      Without
      limiting any rights or powers granted by this Agreement to the Purchaser
      Representative while no Event of Default has occurred and is continuing, upon
      the occurrence and during the continuance of any Event of Default, the Purchaser
      Representative is hereby appointed the attorney-in-fact of the Company for
      the
      purpose of carrying out the provisions of this Section 4 and taking any action
      and executing any instruments which the Purchaser Representative may deem
      necessary or advisable to accomplish the purposes hereof, which appointment
      as
      attorney-in-fact is irrevocable and coupled with an interest. Without limiting
      the generality of the foregoing, so long as the Purchasers shall be entitled
      under this Section 4 to make collections in respect of the Collateral, the
      Purchaser Representative shall have the right and power to receive, endorse
      and
      collect all checks made payable to the order of the Company representing any
      dividend, payment, or other distribution in respect of the Collateral or any
      part thereof and to give full discharge for the same.

     

    4.11  Perfection.
      (i)
      Prior to or concurrently with the execution and delivery of this Agreement,
      the
      Company shall file or deliver to Purchaser Representative for filing such
      financing statements and other documents in such offices as the Purchaser
      Representative may request to perfect the security interests granted by Section
      3 of this Agreement, and (ii) at any time requested by the Purchaser
      Representative, the Company shall deliver to the Purchaser Representative all
      share certificates of capital stock directly or indirectly owned by the Company
      in the entities identified in Annex
      1
      hereto,
      accompanied by undated stock powers duly executed in blank. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.12  Termination.
      When
      all Secured Obligations shall have been paid in full under the Purchase
      Agreement, this Agreement shall terminate, and the Purchaser Representative
      shall forthwith cause to be assigned, transferred and delivered, against receipt
      but without any recourse, warranty or representation whatsoever, any remaining
      Collateral and money received in respect thereof, to or on the order of the
      Company and to be released and cancelled all licenses and rights referred to
      in
      Section 4.04(b)(1) hereof. The Purchaser Representative shall also execute
      and
      deliver to the Company upon such termination such Uniform Commercial Code
      termination statements, certificates for terminating the Liens on the Motor
      Vehicles and such other documentation as shall be reasonably requested by the
      Company to effect the termination and release of the Liens on the
      Collateral.

     

    4.13  Expenses.
      The
      Company agrees to pay to the Purchaser Representative all out-of-pocket expenses
      (including reasonable expenses for legal services of every kind) of, or incident
      to, the enforcement of any of the provisions of this Section 4, or performance
      by the Purchaser Representative of any obligations of the Company in respect
      of
      the Collateral which the Company has failed or refused to perform upon
      reasonable notice, or any actual or attempted sale, or any exchange,
      enforcement, collection, compromise or settlement in respect of any of the
      Collateral, and for the care of the Collateral and defending or asserting rights
      and claims of the Purchaser Representative in respect thereof, by litigation
      or
      otherwise, including expenses of insurance, and all such expenses shall be
      Secured Obligations to the Purchaser Representative secured under Section 3
      hereof.

     

    4.14  Further
      Assurances.
      The
      Company agrees that, from time to time upon the written request of the Purchaser
      Representative, the Company will execute and deliver such further documents
      and
      do such other acts and things as the Purchaser Representative may reasonably
      request in order fully to effect the purposes of this Agreement.

     

    4.15  Indemnity.
      Each of
      the Purchasers hereby jointly and severally covenants and agrees to reimburse,
      indemnify and hold the Purchaser Representative harmless from and against any
      and all claims, actions, judgments, damages, losses, liabilities, costs,
      transfer or other taxes, and expenses (including, without limitation, reasonable
      attorneys’ fees and expenses) incurred or suffered without any bad faith or
      willful misconduct by the Purchaser Representative, arising out of or incident
      to this Agreement or the administration of the Purchaser Representative’s duties
      hereunder, or resulting from its actions or inactions as Purchaser
      Representative.

     

    Section
      5.  Miscellaneous.

     

    5.01  No
      Waiver.
      No
      failure on the part of the Purchaser Representative or any of its agents to
      exercise, and no course of dealing with respect to, and no delay in exercising,
      any right, power or remedy hereunder shall operate as a waiver thereof; nor
      shall any single or partial exercise by the Purchaser Representative or any
      of
      its agents of any right, power or remedy hereunder preclude any other or further
      exercise thereof or the exercise of any other right, power or remedy. The
      remedies herein are cumulative and are not exclusive of any remedies provided
      by
      law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.02  Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the law of
      the
      State of New York.

     

    5.03  Notices.
      All
      notices, requests, consents and demands hereunder shall be in writing and
      facsimile (facsimile confirmation required) or delivered to the intended
      recipient at its address or telex number specified pursuant to Section 7.4
      of
      the Purchase Agreement and shall be deemed to have been given at the times
      specified in said Section 7.4.

     

    5.04  Waivers,
      etc.
      The
      terms of this Agreement may be waived, altered or amended only by an instrument
      in writing duly executed by the Company and the Purchaser Representative. Any
      such amendment or waiver shall be binding upon each of the Purchasers and the
      Company.

     

    5.05  Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the respective
      successors and assigns of the Company and each of the Purchasers (provided,
      however, that the Company shall not assign or transfer its rights hereunder
      without the prior written consent of the Purchaser Representative).

     

    5.06  Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which together
      shall constitute one and the same instrument and any of the parties hereto
      may
      execute this Agreement by signing any such counterpart.

     

    5.07  Purchaser
      Representative.
      Each
      Purchaser agrees to appoint Iroquois Master Fund, Ltd. as its Purchaser
      Representative for purposes of this Agreement. The Purchaser Representative
      may
      employ agents and attorneys-in-fact in connection herewith and shall not be
      responsible for the negligence or misconduct of any such agents or
      attorneys-in-fact selected by it in good faith.

     

    5.08  Severability.
      If any
      provision hereof is invalid and unenforceable in any jurisdiction, then, to
      the
      fullest extent permitted by law, (i) the other provisions hereof shall remain
      in
      full force and effect in such jurisdiction and shall be liberally construed
      in
      favor of the Purchasers in order to carry out the intentions of the parties
      hereto as nearly as may be possible and (ii) the invalidity or unenforceability
      of any provision hereof in any jurisdiction shall not affect the validity or
      enforceability of such provision in any other jurisdiction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	COMPANY: 	AMERICAN
              UNITED GLOBAL, INC.
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
              

            
	 	Title 

    

     

    
      	 	 	 
	AGENT: IROQUOIS
              MASTER FUND LTD. 	IROQUOIS
              MASTER FUND LTD.
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
              

            
	 	Title 

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	 	 
	PURCHASERS:  	IROQUOIS
                MASTER FUND LTD. 
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
                

              
	 	Title 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	OTHER
              PURCHASERS
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
              

            
	 	Title 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ANNEX
      1

     

    ENTITIES
      IN WHICH THE COMPANY IS PLEDGING ITS CAPITAL STOCK

     

     

    
      	
               Entity

            	 	
               Approximate Percentage
                Interest

            
	 	 	 
	 	 	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ANNEX
      2

     

    EXCLUDED
      COLLATERAL

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ANNEX
      3

     

    EXCEPTIONS
      FOR COPYRIGHTS, PATENTS AND TRADEMARKS

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ANNEX
      4

     

    LIST
      OF
      LOCATIONS

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ANNEX
      5

    
 

    EXISTING
      INDEBTEDNESS

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ANNEX
      6

     

    

    EXISTING
      LIENSGUARANTY
        OF PAYMENT

       

      To
        induce
        each of the signatories identified below (the “Purchasers”) to loan American
        United Global, Inc. (the “Company”) an aggregate of $525,000 pursuant to those
        certain Senior Secured Convertible Notes dated September 22, 2005 issued
        by the
        Company (the “Notes”) in the names of the Purchasers, Robert Rubin (“Rubin”),
        hereby irrevocably and unconditionally guarantees on behalf of the Company,
        the
        payment and performance of all obligations and sums of money which may now
        or
        hereafter be or become due or owing by the Company to Purchasers as set forth
        in
        the Notes, together with any costs or expenses (including reasonable attorneys'
        fees and expenses) which Purchasers or its assigns may incur in enforcing
        such
        payment or performance or the provisions of this Guaranty; provided, however,
        in
        the event that Rubin is required to make any payments in satisfaction of
        the
        Notes, the Purchasers hereby agree to assign all rights and responsibilities
        under the Notes to Rubin. 

      

      Rubin
        agrees that Purchasers may, without notice to, or further consent of, Rubin
        and
        without in any way affecting his liability hereunder, renew, extend, modify,
        release or transfer any or all of such obligations and sums of money and
        any
        collateral security therefor, any other guaranty thereof and any refrain
        from
        exercising any right of Purchasers thereunder or provided by law. 

      

      This
        Guaranty is made under and shall be governed by and construed in accordance
        with
        the laws of the State of New York. 

       

      
        	 	 	 
	 	 
	 
 	 
 	 
 
	Dated:
                September 22, 2005	By:  	/s/ Robert
                Rubin
	 	
                
Robert
                Rubin
	 	 

        	 	 	 
	 	PURCHASERS:  
	 	IROQUOIS
                MASTER FUND LTD.
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                

              
	 	Title 

      

       

      
        	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                

              
	 	Title 

      

      
         

        
          	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                  

                
	 	Title

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