Document:

EXHIBIT 10.4
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                           COLLATERAL PLEDGE AGREEMENT
                           ---------------------------

     This Collateral Pledge Agreement ("Agreement") dated as of December 31,
2004 is made by Global Matrechs, Inc., a Delaware corporation ("Pledgor") in
favor of Mark Allen ("Secured Party").

                                   BACKGROUND
                                   ----------

     A. Secured Party has extended credit to True To Form, Limited ("Debtor") as
evidenced by that certain Secured Note dated as of December 31, 2004 (as
amended, restated, modified, or replaced from time to time, the "Note"), in
connection with the merger of in connection with the merger of True to Form,
Limited , a Massachusetts corporation and TTF Acquisition Corp., a wholly owned
subsidiary of Pledgor. To induce Secured Party to extend credit to Debtor,
Pledgor has guaranteed the Note and executes and delivers this Agreement to
Secured Party. All capitalized terms used herein and not otherwise defined shall
have the same meanings assigned to such terms in the Note or the Security
Agreement, as hereinafter defined.

     B. This Agreement is given and is intended to provide additional security
for the Obligations as defined in the Security Agreement of even date herewith
among Debtor and Secured Party (the "Security Agreement").

     NOW THEREFORE, for other good and sufficient consideration, the receipt of
which is hereby acknowledged, Pledgor, intending to be legally bound hereby,
covenants and agrees as follows:

     1. Pledgor, for the purpose of granting a continuing lien and security
interest to secure the Obligations, does hereby assign, pledge, hypothecate,
deliver and set over to Secured Party, its successors and assigns, 100% of its
interest in all of the shares of capital stock of Debtor , as more specified in
Schedule I, whether now owned or hereafter acquired by Pledgor or in which
Pledgor now or hereafter has any rights, options or warrants, together with all
certificates representing such shares and all rights (but none of the
obligations) under or arising out of the applicable organizational documents of
such corporations, together with any additions, exchanges, replacements and
substitutions therefor, dividends and distributions with respect thereto, and
the proceeds thereof (collectively, the "Pledged Collateral").

     2. The pledge and security interest described herein shall continue in
effect to secure all Obligations from time to time incurred or arising unless
and until all Obligations have been indefeasibly paid and satisfied in full.

     3. Pledgor, severally hereby represents and warrants that:

          (a) Except as pledged herein, Pledgor has not sold, assigned,
transferred, pledged or granted any option or security interest in or otherwise
hypothecated the Pledged Collateral in any manner whatsoever and the Pledged
Collateral is pledged herewith free and clear of any and all liens, security
interests, encumbrances, claims, pledges, restrictions, legends, and options,
except for Permitted Liens, as defined in the Security Agreement.

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          (b) Pledgor has the full power and authority to execute, deliver, and
perform under this Agreement and to pledge the Pledged Collateral hereunder.

          (c) This Agreement constitutes the valid and binding obligation of
Pledgor, enforceable in accordance with its terms, and the pledge of the Pledged
Collateral referred to herein is not in violation of and shall not create any
default under any agreement, undertaking or obligation of Pledgor.

          (d) Pledgor is pledging hereunder all of the Pledgor's interest and
ownership in Debtor.

          (e) Contemporaneously with the execution hereof, Pledgor is delivering
to Secured Party all certificates representing or evidencing the Pledged
Collateral, accompanied by duly executed instruments of transfer or assignments
in blank, to be held by Secured Party in accordance with the terms hereof.

          (f) The Secured Party is authorized to file such UCC financing
statements as it may deem necessary to perfect the pledge anticipated hereby.

     4. If an Event of Default (as defined in the Note) occurs, then Secured
Party may, at its sole option, exercise from time to time with respect to the
Pledged Collateral any and/or all rights and remedies available to it hereunder,
under the Uniform Commercial Code as adopted in the State of Delaware ("UCC"),
or otherwise available to it, at law or in equity, including, without
limitation, the right to dispose of the Pledged Collateral at public or private
sale(s) or other proceedings, and Pledgor agrees that, if permitted by law,
Secured Party or its nominee may become the purchaser at any such sale(s).

     5. (a) In addition to all other rights granted to Secured Party herein or
otherwise available at law or in equity, Secured Party shall have the following
rights, each of which may be exercised at Secured Party's sole discretion (but
without any obligation to do so), at any time following the occurrence of an
Event of Default under the Note, without further consent of Pledgor: (i)
transfer the whole or any part of the Pledged Collateral into the name of itself
or its nominee for the purpose of selling the same, or to conduct a sale of the
Pledged Collateral pursuant to the UCC or pursuant to any other applicable law;
(ii) vote the Pledged Collateral; (iii) notify the persons obligated on any of
the Pledged Collateral to make payment to Secured Party of any amounts due or to
become due thereon; and (iv) release, surrender or exchange any of the Pledged
Collateral at any time, or to compromise any dispute with respect to the same.
Secured Party may proceed against the Pledged Collateral, or any other
collateral securing the Obligations, in any order, and against Pledgor and any
other obligor, jointly and/or severally, in any order to satisfy the
Obligations. Each Pledgor waives and releases any right to require Secured Party
to first collect any of the Obligations secured hereby from any other collateral
of Pledgor, any other Pledgor or any other party securing the Obligations under
any theory of marshalling of assets, or otherwise. All rights and remedies of
Secured Party are cumulative, not alternative.

          (b) Pledgor hereby irrevocably appoints Secured Party its
attorney-in-fact, subject to the terms hereof, following the occurrence of an
Event of Default under the Note, at Secured Party's option, (i) to effectuate
the transfer of the Pledged Collateral on the books of the issuer thereof to the
name of Secured Party or to the name of Secured Party's nominee, designee or

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assignee; (ii) to endorse and collect checks payable to such Pledgor
representing distributions or other payments on the Pledged Collateral; and
(iii) to carry out the terms and provisions hereof.

     6. The proceeds of any Pledged Collateral received by Secured Party at any
time, whether from the sale of Pledged Collateral or otherwise, may be applied
to or on account of the Obligations and in such order as Secured Party may
elect. In addition, Secured Party may, in its discretion, apply any such
proceeds to or on account of the payment of all costs, fees and expenses
(including, without limitation, attorneys' fees) which may be incurred by
Secured Party.

     7. Pledgor recognizes that Secured Party may be unable to effect, or may
effect only after such delay which would adversely affect the value that might
be realized from the Pledged Collateral, a public sale of all or part of the
Pledged Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended ("Securities Act"), and may be compelled to resort to
one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such securities for their own
account, for investment and not with a view to the distribution or resale
thereof. Pledgor agrees that any such private sale may be at prices and on terms
less favorable to Secured Party or the seller than if sold at public sales, and
therefore recognizes and confirms that such private sales shall not be deemed to
have been made in a commercially unreasonable manner solely because they were
made privately. Pledgor agrees that Secured Party has no obligation to delay the
sale of any such securities for the period of time necessary to permit the
issuer of such securities to register such securities for public sale under the
Securities Act.

     8. In the event that any stock dividend, reclassification, readjustment or
other change is made or declared in the capital structure of Debtor or any
option included within the Pledged Collateral is exercised, any and all new,
substituted or additional shares, or other securities, issued by reason of any
such change or exercise, shall be delivered to and held by Secured Party under
the terms hereof in the same manner as the Pledged Collateral originally pledged
hereunder. No distribution may be paid to or retained by Pledgor unless
expressly permitted in writing by the Note.

     9. So long as no Event of Default has occurred under the Note, and, until
Secured Party notifies Pledgor in writing of the exercise of its rights
hereunder, Pledgor shall retain the sole right to vote the Pledged Collateral
and exercise all rights of ownership with respect to all corporate questions for
all purposes not inconsistent with the terms hereof.

     10. Secured Party shall have no obligation to take any steps to preserve,
protect or defend the rights of Pledgor or Secured Party in the Pledged
Collateral against other parties. Secured Party shall have no obligation to sell
or otherwise deal with the Pledged Collateral at any time for any reason,
whether or not upon request of any Pledgor, and whether or not the value of the
Pledged Collateral, in the opinion of Secured Party or Pledgor, is more or less
than the aggregate amount of the Obligations secured hereby, and any such
refusal or inaction by Secured Party shall not be deemed a breach of any duty
which Secured Party may have under law to preserve the Pledged Collateral.
Except as provided by applicable law, no duty, obligation or responsibility of
any kind is intended to be delegated to or assumed by Secured Party at any time
with respect to the Pledged Collateral.

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<PAGE>

     11. To the extent Secured Party is required by law to give Pledgor prior
notice of any public or private sale, or other disposition of the Pledged
Collateral, Pledgor agrees that ten (10) days prior written notice to Pledgor
shall be a commercially reasonable and sufficient notice of such sale or other
intended disposition.

     12. Pledgor shall indemnify, defend and hold harmless Secured Party from
and against any and all claims, losses and liabilities resulting from any breach
by Pledgor of Pledgor's, or any of their, representations and covenants under
this Agreement.

     13. Pledgor, in its capacity as a pledgor hereunder, hereby waives notice
of (a) acceptance of this Agreement and (b) demand and default hereunder.

     14. This Agreement shall remain in full force and effect and shall not be
limited, impaired or otherwise affected in any way by reason of (a) any delay in
making demand on Pledgor for, or delay in enforcing or failure to enforce,
performance or payment of Pledgor's Obligations, (b) any failure, neglect or
omission on Secured Party's part to perfect any lien upon, protect, exercise
rights against, or realize on, any property of Pledgor or any other party
securing the Obligations, (c) any failure to obtain, retain or preserve, or the
lack of prior enforcement of, any rights against any person or persons
(including Pledgor) or in any property, (d) the invalidity or unenforceability
of any Obligations or rights in any collateral, (e) the existence of
nonexistence of any defenses which may be available to Pledgor with respect to
the Obligations, or (f) the commencement of any bankruptcy, reorganization,
liquidation, dissolution or receivership proceeding or case filed by or against
Pledgor.

     15. Pledgor covenants and agrees that Pledgor shall not, without the prior
written consent of Secured Party, sell, encumber or grant any lien, security
interest or option on or with respect to any of the Pledged Collateral.

     16. Pledgor hereby authorizes and instructs each issuer of the Pledged
Collateral to comply with any instruction received by it from Secured Party in
writing that (a) states that an Event of Default has occurred and (b) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from Pledgor, and Pledgor agrees that each such issuer
shall be fully protected in so complying.

     17. Any failure of or delay by Secured Party to exercise any right or
remedy hereunder shall not be construed as a waiver of the right to exercise the
same or any other right or remedy at any other time.

     18. This Agreement constitutes the entire agreement between the parties
hereto regarding the subject matter hereof and may be modified only by a written
instrument signed by Pledgor and Secured Party.

     19. This Agreement is made in and shall be governed by and construed in
accordance with the laws of the State of New York, and the provisions hereof
shall be deemed severable in the event of the invalidity of any provision.
Pledgor irrevocably consents to the exclusive jurisdiction of the federal courts
or the state courts of the State of New York sitting in the Borough of Manhattan

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in connection with any and all actions and proceedings whether arising hereunder
or under any other agreement or undertaking and irrevocably agrees to service of
process to the address of Debtor set forth herein by certified mail, return
receipt requested.

     20. All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered by hand, sent by facsimile transmission with
confirmation of receipt, sent via a reputable overnight courier service with
confirmation of receipt requested, or mailed by registered or certified mail
(postage prepaid and return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice), and shall be deemed given on the date on which delivered by hand or
otherwise on the date of receipt as confirmed:

         To the Pledgor:

                  Global Matrechs, Inc.
                  90 Grove Street, Suite 201
                  Ridgefield, Connecticut 06877
                  Attn:  Michael Sheppard
                  Facsimile: (203) 431-8304

         With a copy to:

                  Foley Hoag LLP
                  155 Seaport Boulevard
                  Boston, Massachusetts  02210
                  Attn: David A Broadwin, Esq.
                  Facsimile: (617) 832-7000
         To the Secured Party:

                  Mark Allen
                  91 French Avenue
                  Braintree, MA 02184
                  PH: 781.848.1174
                  FX: 781.848.1175

         With a copy to:

                  Samuel  Krieger
                  Krieger & Prager LLP
                  39 Broadway
                  New York, NY 10006
                  Facsimile: (212 ) 363-2999

     21. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and assigns.

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<PAGE>

     22. PLEDGOR HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE NOTE, THE OBLIGATIONS OR THE PLEDGED COLLATERAL.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

          Dated as of the date and year first set forth above.

                                             GLOBAL MATRECHS, INC.

                                             By: /s/ Michael Sheppard
                                                 ------------------------
                                             Name: Michael Sheppard
                                             Title: President

Acknowledged and Accepted:

/s/ Mark J. Allen
-----------------------
Mark Allen

                                   SCHEDULE I

Security                        Number of Shares              Certificate Number

True To Form, Limited                 100                             1
Common Stock

                                        7Keefe Promissory Note

         THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED
         UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR ANY STATE
         SECURITIES LAWS  (COLLECTIVELY,  THE "ACTS"),  AND MAY NOT BE
         OFFERED,   SOLD  OR   OTHERWISE   TRANSFERRED,   PLEDGED   OR
         HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER ALL APPLICABLE
         ACTS OR UNLESS AN  OPINION OF  COUNSEL  IS  DELIVERED  TO THE
         ISSUER IN FORM AND  SUBSTANCE  SATISFACTORY  TO THE ISSUER TO
         THE EFFECT THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

                   SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

U.S. $100,000.                                                    August 6, 2004

         FOR VALUE RECEIVED, Earthworks Entertainment, Inc., a Delaware
corporation (the "Company"), hereby promises to pay to the order of Peter Keefe,
a natural person (the "Lender"), or his successors or assigns, subject to this
Note's conversion pursuant to Section 1, on the earlier to occur of (i) (a)
August 6 , 2005 or (b) the "Maturity Date") or (b) an Event of Acceleration (as
hereinafter defined), the principal amount of $100,000 (the "Principal Amount"),
together with any accrued and unpaid interest on the Principal Amount under this
convertible promissory note (this "Note") at the per annum rate of 10%
(calculated on the basis of a 365 day year), compounded daily and payable within
five (5) days of the end of each calendar quarter, for the period beginning on
the date hereof and continuing until the Principal Amount shall have become due
and payable, and thereafter at a per annum rate equal to 15% until such
Principal Amount is paid.

         Except as otherwise expressly provided in Section 3 hereof, all
payments of principal and interest on this Note shall be in cash, in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts. Payments of principal and
interest are to be made by wire transfer to the account designated in writing by
the Lender and provided to the Company not less than three business day prior to
the date payment is due or at such other place as the Lender shall have notified
the Company in writing at least one business day before such payment is due. All
payments under this Note shall be paid by the Company without withholding or
deduction of any tax or other charge. For purposes of this Note, a business day
shall be any day other than a Saturday, Sunday or any day in which the banking
and commercial lending institutions are generally closed to the public.

1.       Conversion.
         ----------

         1.1.     Optional Conversion.
                  --------------------

<PAGE>

         (a)    The outstanding Principal Amount under this Note, plus any
accrued but unpaid interest thereon shall be convertible from time to time, at
Lender's sole option, into shares of the Company's Common Stock, par value
$0.0015 per share (the "Common Stock"), at a conversion price equal to $0.08 per
share (the "Common Stock Conversion Price"), subject to adjustment in accordance
with Section 4 hereof.

         (b)    The Company covenants and agrees that so long as this Note is
outstanding, the Company shall have authorized and reserved a sufficient number
of shares of Common Stock to enable the Lender to convert this Note into Common
Stock. The Company agrees that its issuance of this Note shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares upon the
conversion of this Note.

         (c)    If the Lender effects the conversion of all or part of this
Note, the Common Stock into which this Note or such part of this Note converts
shall have certain registration rights as set forth in the registration rights
agreement attached as Exhibit B hereto. *

         1.2.     Procedure.
                  ----------

         Subject to the terms hereof, the Lender may effect the conversion of
this Note, in whole or in part, at any time, or from time to time, by the
surrender of this Note, together with an executed notice of conversion (the
"Notice of Conversion") in the form attached hereto as Exhibit A, to the Company
at the address set forth in Section 8. The person in whose name any certificate
representing shares or securities shall be issuable upon conversion of this Note
shall be deemed to have become the holder of record of, and shall be treated for
all purposes as the record holder of, the shares or securities issuable
hereunder (and such shares or securities shall be deemed to have been issued)
immediately prior to the close of business on the date or dates upon which such
surrender is made. In the event only a portion of this Note is converted, the
Company shall at its sole expense and as promptly as practicable, issue a
replacement Note in identical form but in a Principal Amount equal to the
portion of the Principal Amount not so converted and deliver such replacement
Note as directed by the Lender. As used in this Note, the term "person" means
any individual or any corporation, partnership, trust, limited liability company
or other entity or organization of any kind.

2.       Prepayment.
         ----------

         2.1.     Optional Prepayment.
                  --------------------

         The Company shall have the right to prepay the Principal Amount and any
accrued interest thereon in whole or in part without penalty or premium at any
time. Prior to making an optional prepayment, the Company shall give Lender
sixty days' prior written notice of its intention to make a prepayment. Upon any
notice of prepayment, Lender shall have the option to convert all but not less
than all of the Principal Amount then outstanding under this Note, plus any
accrued but unpaid interest thereon, into Common Stock pursuant to Section
1.1(a). Any prepayment amount shall be applied first to any accrued but unpaid
interest on the outstanding Principal Amount and then to the Principal Amount.

                                      -2-
<PAGE>

3.       Events of Acceleration.
         ----------------------

         The entire unpaid Principal Amount and accrued interest thereon shall
become immediately due and payable upon the occurrence of one or more of the
following events (each an "Event of Acceleration"):

         (a)    the failure of the Company to pay when due the Principal Amount
or interest accrued thereon within three business days of the date on which such
payment was due;

         (b)    the occurrence of any default or event of default under any
other bond, debenture, note or other indebtedness for borrowed money of the
Company;

         (c)    the beginning of involuntary proceedings against the Company
under federal bankruptcy law or under any applicable federal or state
bankruptcy, insolvency or similar law, or the beginning of proceedings seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
the Company's property, or the beginning of proceedings seeking an order winding
up or liquidating the affairs of the Company and the continuance of such
proceedings for a period of thirty (30) days;

         (d)    the beginning by the Company of a voluntary case under federal
bankruptcy law, or any other applicable federal or state bankruptcy, insolvency
or other similar law, or the consent by the Company to the appointment of, or
taking possession by, a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or for any substantial
part of the Company's property, or the Company making any assignment for the
benefit of creditors, or the failure of the Company generally to pay the
Company's debts as they become due, or the taking of formal action by the
Company in furtherance of any of the foregoing;

         (e)    if any judgment against the Company or any garnishment,
attachment or other levy against the property of the Company for an amount in
excess of Twenty Five Thousand Dollars ($25,000) remains unpaid, unstayed on
appeal, undischarged, unbonded, or undismissed for a period of twenty (20) days,
unless covered by insurance;

         (f)    the closing of (i) an acquisition of the Company by means of any
transaction or series of related transactions (including, without limitation,
any reorganization, merger or consolidation) that results in the transfer of
fifty percent (50%) or more of the outstanding voting power of the Company, (ii)
a sale of a majority of the assets of the Company by means of a single
transaction or a series of related transactions; or

         The Company shall give the Lender written notice of the occurrence of
any of the events set forth above in Sections 3(a) through 3(f) promptly (but in
no event more than one business day) after the occurrence of any of such events.

         In the event of the occurrence of any Event of Acceleration, the
Lender, at its sole option (and without limiting any other remedies available to
it), may elect that any payment of the Principal Amount and accrued interest
thereon required to be made by the Company under this Note to such Lender, be

                                      -3-
<PAGE>

made in the form of payment of shares of Common Stock having an aggregate fair
market value equal to Principal Amount and accrued interest at a conversion
price equal to the Common Stock Conversion Price, in lieu of payment in cash.
The Company shall take all action necessary such that any such shares shall be
duly authorized, fully paid and nonassessable.

4.       Certain Adjustments.
         --------------------
         The conversion price for Common Stock under Section 1.1(a) of this Note
(hereinafter, the "Conversion Price") and the number of Common Stock into which
this Note may be converted under Section 1.1(a) shall be subject to adjustment
in accordance with the following provisions:

         4.1.     Adjustments to Conversion Price.
                  --------------------------------

         (a)    Special Definitions. The following definitions shall apply to
this Section 4:

                  (i)   "Options" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities.

                  (ii)  "Convertible Securities" shall mean any evidences of
indebtedness or other securities directly or indirectly convertible into or
exchangeable for Common Stock.

                  (iii) "Additional Common Stock" shall mean all Common Stock
issued (or, pursuant to Section 4.1(c), deemed to be issued) by the Company
after the date hereof, other than Common Stock issued as a cash dividend or cash
distribution on the outstanding Common Stock or pursuant to any event for which
adjustment is made pursuant to Section 4.2 or 4.3 hereof.

         (b)    No Adjustment of Conversion Price. No adjustment of the
Conversion Price shall be made in an amount less than one cent per share of
Common Stock, provided that any adjustments which are not required to be made by
reason of this sentence shall be carried forward and shall be taken into account
in any subsequent adjustment to the Conversion Price.

         (c)    Deemed Issue of Additional Common Stock. In the event the
Company at any time or from time to time after the date hereof shall issue any
Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of Common Stock (as
set forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number that would result
in an adjustment pursuant to clause (ii) below) issuable upon the exercise of
such Options or, in the case of Convertible Securities and Options therefor, the
conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Common Stock issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record
date, provided that in any such case in which Additional Common Stock are deemed
to be issued:

                                      -4-
<PAGE>

                  (i)   no further adjustment in the Conversion Price shall be
made upon the subsequent issue of Convertible Securities or Common Stock upon
the exercise of such Options or conversion or exchange of such Convertible
Securities, or upon the receipt of payment for any such conversion or exchange;

                  (ii)  if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase or decrease in
the consideration payable to the Company, or increase or decrease in the number
of Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;

                  (iii) upon the expiration of any such Options or any rights of
conversion or exchange under such Convertible Securities which shall not have
been exercised, the Conversion Price computed upon the original issue thereof
(or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such expiration, be recomputed
as if:

                           (1)  in the case of Convertible Securities or Options
for Common Stock, the only Additional Common Stock issued were Common Stock, if
any, actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities and the consideration received therefor
was the consideration actually received by the Company for the issue of all such
Options, whether or not exercised, plus the consideration actually received by
the Company upon such exercise, or for the issue of all such Convertible
Securities whether or not converted or exchanged, plus the additional
consideration, if any, actually received by the Company upon such conversion or
exchange, and

                           (2)  in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the Company for the Additional Common Stock deemed to
have been then issued was the consideration actually received by the Company for
the issue of all such Options, whether or not exercised, plus the consideration
deemed to have been received by the Company upon the issue of the Convertible
Securities with respect to which such Options were actually exercised;

                  (iv)  no readjustment pursuant to clause (ii) or (iii) above
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (1) the Conversion Price on the original adjustment date,
or (2) the Exercise Price that would have resulted from any issuance of
Additional Common Stock between the original adjustment date and such
readjustment date.

         (d)    Adjustment of Exercise Price Upon Certain Issuances of
Additional Common Stock. In the event that after the date hereof the Company
shall issue Additional Common Stock (including Additional Common Stock deemed to

                                      -5-
<PAGE>

be issued pursuant to Section 4.1(c)) without consideration, or for a
consideration per share of Common Stock less than the Conversion Price in effect
on the date of and immediately prior to such issue, then and in such event, such
Conversion Price shall be reduced, concurrently with such issue, to a price
(subject to Section 4.1(b)), calculated to the nearest cent) determined by
multiplying such Conversion Price by a fraction, the numerator of which shall be
the number of Common Stock outstanding immediately prior to such issue plus the
number of Common Stock which the aggregate consideration received or deemed
received by the Company for the total number of Additional Common Stock so
issued or deemed issued would purchase at such Conversion Price; and the
denominator of which shall be the number of Common Stock outstanding immediately
prior to such issue plus the number of such Additional Common Stock so issued or
deemed issued; provided, however, that, for the purposes of this Section 4.1(d),
all Common Stock issuable upon conversion of outstanding Convertible Securities
or exercise of outstanding Options shall be deemed to be outstanding, and
immediately after any Additional Common Stock are deemed issued pursuant to
Section 4.1(c), such Additional Common Stock shall be deemed to be outstanding.

         (e)    Determination of Consideration. For purposes of this Section
4.1, the consideration received by the Company for the issue of any Additional
Common Stock shall be computed as follows:

                  (i)   Cash and Property: Except as provided in clause (ii)
below, such consideration shall:

                           (1)  insofar as it consists of cash, be computed as
the aggregate amount of cash received by the Company, before deducting any
discounts, commissions or other expenses allowed, paid or incurred by the
Company for any underwriting or otherwise in connection with the issuance and
sale thereof, and excluding amounts paid or payable for accrued interest or
accrued dividends;

                           (2)  insofar as it consists of property other than
cash, be computed at the fair market value thereof at the time of such issue, as
determined in good faith by the Board of Directors; provided, however, that no
value shall be attributed to any services performed by any employee, officer or
director of the Company; and

                           (3)  in the event Additional Common Stock are issued
together with other securities or other assets of the Company for consideration
which covers both, be the proportion of such consideration so received with
respect to such Additional Common Stock, computed as provided in clauses (1) and
(2) above, as determined in good faith by the Board of Directors.

                  (ii)  Options and Convertible Securities. The consideration
per share of Common Stock received by the Company for Additional Common Stock
deemed to have been issued pursuant to Section 4.1(c), relating to Options and
Convertible Securities, shall initially be determined by dividing:

                                      -6-
<PAGE>

                           (1)  the total amount, if any, received or receivable
by the Company as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Company upon the exercise of such Options or the conversion or exchange of
such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities by

                           (2)  the maximum number of Common Stock (as set forth
in the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise
of such Options or the conversion or exchange of such Convertible Securities.

         4.2.   Adjustments for Split, Subdivision or Combination of Common
Stock.  In the event the outstanding Common Stock shall be subdivided (by equity
dividend, equity split, or otherwise), into a greater number of Common Stock,
the Conversion Price then in effect shall, concurrently with the effectiveness
of such subdivision, be proportionately decreased. In the event the outstanding
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of Common Stock, the Conversion Price then in
effect shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.

         4.3.   Adjustments for Distributions. In the event the Company at any
time or from time to time makes, or fixes a record date for the determination of
holders of Common Stock entitled to receive, any distribution (other than a
distribution described in Section 4.2), including a distribution in cash,
provision shall be made so that Lender shall receive upon conversion of the Note
under Section 1.1(a), in addition to the number of Common Stock receivable
thereupon, the amount of securities or assets of the Company which Lender would
have received had the Note been converted into Common Stock on the date of such
event under Section 1.1(a) and had Lender thereafter, during the period from the
date of such event to and including the date of conversion, retained such
securities or assets receivable by it as aforesaid during such period, subject
to all other adjustments called for during such period under this Section 4 with
respect to the rights of Lender.

         4.4.   Adjustments for Reclassification, Exchange and Substitution. If
the Common Stock issuable upon conversion of the Note under Section 1.1(a) shall
be changed into the same or a different number of Common Stock of any other
class or classes of Common Stock or other securities or property of the Company,
whether by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of Common Stock provided for in Section 4.2), or
merger, consolidation or other reorganization or a sale of all or substantially
all the assets of the Company, then and in each such event provision shall be
made so that Lender shall thereafter be entitled to receive, upon conversion of
the Note under Section 1.1(a), the number of Common Stock or other securities or

                                      -7-
<PAGE>

property of the Company or otherwise, receivable upon such reorganization,
reclassification or other transaction by a holder of the number of Common Stock
into which this Note could have been converted under Section 1.1(a) immediately
prior to such reorganization, reclassification or other transaction. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 4 with respect to the rights of Lender after the reorganization,
reclassification or other transaction to the end that the provisions of this
Section 4 (including adjustments of the Conversion Price then in effect and the
number of Common Stock purchasable upon conversion of the Note under Section
1.1(a)) shall be applicable after that event as nearly equivalent as may be
practicable.

         4.5.   No Impairment. The Company will not, through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company but will at all times in good faith assist in the carrying out of all
the provisions of Section 4 and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of Lender
against impairment.

         4.6.   Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to Lender a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Company
shall, upon the written request at any time of Lender, furnish or cause to be
furnished to Lender a like certificate setting forth (a) such adjustments and
readjustments, (b) the Conversion Price at the time in effect, and (c) the
number of Common Stock and the amount, if any, of other property which at the
time would be received upon the conversion of the Note under Section 1.1(a).

5.       Notices. In the event that the Company shall propose at any time:
         -------

                  (a)   to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights; or

                  (b)   to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all its property or
business, or to voluntarily liquidate, dissolve or wind up;

then, in connection with each such event, the Company shall send to the Lender
(i) at least 10 days' prior written notice of the date on which a record shall
be taken for such distribution or subscription rights (and specifying the date
on which the holders of Common Stock shall be entitled thereto) or for
determining rights to vote, if any; and (ii) at least 10 days' prior written
notice of the date when the same shall take place, and the date, if any is to be
fixed, on which the holders of record of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
the occurrence of such event). Notwithstanding the above, the 10 days' notice
requirement may be shortened or waived upon the written consent of the Lender.

                                      -8-
<PAGE>

                  Any written notice by the Company required or permitted
hereunder shall be given by hand delivery or first class mail, postage prepaid,
addressed to the Lender at the address shown on the books of the Company for the
Lender.

6.       General.
         -------

         6.1.   Collection. If any action is instituted to collect this Note,
the Company promises to pay to Lender all reasonable costs and expenses
(including reasonable attorneys' fees) incurred in connection with such action.

         6.2.   Cash Distributions. The Company shall not, after the date of the
Note, make a cash dividend or other distribution in cash to any of its
stockholders or any other "affiliate" or any "associate" of the Company (as such
terms are defined in Rule 405 under the Securities Act).

         6.3.   Amendments and Waivers. The parties may, by mutual agreement,
amend this Note in any respect, and any party, as to such party, may (i) extend
the time for the performance of any of the obligations of the other party and
(ii) waive compliance by the other party with any of the agreements contained
herein and performance of any obligations by the other party. To be effective,
any such amendment or waiver must be in writing and be signed by the party
providing such waiver or extension, as the case may be. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
which any party may otherwise have at law or in equity. The waiver by any party
hereto of any breach of any provision of this Note shall not operate or be
construed as a waiver of any subsequent breach, whether or not similar.

         6.4.   Conflicting Agreements. In the event of any inconsistencies
between the terms of this Note and the terms of any other document related to
the loan evidenced by this Note, the terms of this Note shall prevail.

         6.5.   Severability. The unenforceability or invalidity of any
provision or provisions of this Note as to any persons or circumstances shall
not render that provision or those provisions unenforceable or invalid as to any
other provisions or circumstances, and all provisions hereof, in all other
respects, shall remain valid and enforceable.

         6.6.   Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of California applicable to
agreements made and to be performed entirely within the State of California,
without regard to the conflicts of law principles thereof. The Company and the
Lender irrevocably consent to the jurisdiction of the courts of the State of
California or the federal courts located in that state in connection with any
lawsuit, action or proceeding arising out of or relating to this Note.

         6.7.   Presentment, Etc. The Company hereby expressly waives
presentment, demand for payment, dishonor, notice of dishonor, protest, notice
of protest, and any other formality.

         6.8.   Waivers. The nonexercise by the Lender of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

                                      -9-
<PAGE>

         6.9.   Transferability. Neither the Lender nor the Company may assign
or otherwise transfer its rights or obligations under this Note without the
prior, written consent of the other party hereto, except that, subject to
compliance with applicable federal and state securities laws, the Lender may
transfer to (i) Lender's spouse or children or grandchildren (in each case,
natural or adopted), or the spouses of such children or grandchildren, any trust
established solely for Lender's benefit or the benefit of Lender's spouse or
children or grandchildren (in each case, natural or adopted), or the spouses of
such children or grandchildren, or any corporation or partnership in which the
direct and beneficial owner of all of the equity interest is the Lender or
Lender's spouse or children or grandchildren (in each case, natural or adopted),
or the spouses of such children or grandchildren, or any trust for the benefit
of such persons; (ii) the heirs, executors, administrators, personal
representatives or distributees upon the death of Lender to whom Lender's rights
and obligations under the Note are transferred by will or the laws of descent
and distribution on account of death, or upon the incompetency or disability of
such Lender for purposes of the protection and management of Lender's assets or
(iii) any of the other lenders party to the Purchase Agreement.

7.  Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon deposit with
the United States Post Office by registered or certified mail, postage prepaid
and addressed to such party at the address set forth below, or at such other
address as such party may designate by ten (10) days advanced written notice to
the other parties.

         If to the Company:

         EARTHWORKS ENTERTAINMENT, INC.
         324 Datura Street
         West Palm Beach, FL  33314
         Attn:  Randall Henley, Esq.
         Telephone:   561-820-8100
         Facsimile:   561-820-8103

                                      -10-
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this Note as of the date first written above.

                                   EARTHWORKS ENTERTAINMENT, INC.

                                   By /s/ Peter Keefe
                                      ------------------
                                      Name:  Peter Keefe
                                      Title: President

                                      -11-
<PAGE>

                                                                       Exhibit A
                                                                       ---------

                              Notice of Conversion
                              --------------------

                  To:      Earthworks Entertainment, Inc.

                  Attention:  Chief Executive Officer

                  The undersigned hereby elects to convert [all or a portion of]
this Note into ______________ shares of Common Stock of Earthworks
Entertainment, Inc. pursuant to the terms of this Note.

         Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:

        ----------------------------------------------------------------
                                     (Name)

        ----------------------------------------------------------------

        ----------------------------------------------------------------
                                    (Address)

                  The undersigned hereby represents and warrants that the
aforesaid shares are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof in a manner that would violate the Securities Act.

                                     -----------------------------------------
                                     (Signature and Date)

                                      -12-

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