Document:

United States Securities and Exchange Commission EDGAR filing

Exhibit 4.4

PLEDGE AGREEMENT

December 2, 2005

In consideration of loans being made by IIG Capital LLC, as agent for IIG Trade Opportunities Fund NV (together with its successors and assigns, "Secured Party"), to Internet Billing Company, LLC, a Georgia limited liability company (together with its successors and assigns, “Borrower”), pursuant to a Credit and Security Agreement dated December 31, 2004 between the Borrower and the Secured Party (the “Original Credit Agreement”), as amended by a First Amendment to Credit and Security Agreement and Consent Agreement dated the date hereof among the Borrower, the Secured Party and the Guarantors (as such term is defined therein) (the “Amendment” and collectively with the Original Credit Agreement, as the same may be amended, modified, supplemented, restated or renewed from time to time, the “Credit Agreement), INTERACTIVE BRAND DEVELOPMENT, INC., (together with its successors and assigns, the “Grantor”) entered into an Amended and Restated Guaranty dated the date hereof in favor of the Secured Party (the “Guaranty”) pursuant to which Grantor guaranteed to the Secured Party the full and punctual payment and performance by the Borrower of the Guaranteed Obligations (as defined in the Guaranty). Secured Party is willing to enter into the Amendment only if Grantor pledges to the Secured Party all of its equity ownership interest, whether now owned or hereinafter acquired, in: (i) Penthouse Media Group, Inc. (“PMG”), subject only to the liens described in Schedule B attached hereto; (ii) XTV Investment LLC (“XTV”) and (iii) Media Billing LLC (“Media Billing”), as provided herein. Accordingly, Grantor hereby agrees that Secured Party shall have the rights, remedies and benefits as follows:

1.

Grant of Security Interest. As collateral security for the prompt payment, performance and observance of the Guaranteed Obligations and the Guarantor’s obligations under the Guaranty (the “Secured Obligations”), Grantor hereby absolutely, unconditionally and irrevocably pledges to Secured Party, and grants and transfers to Secured Party a lien upon and a security interest in Grantor’s entire right, title and interest, whether now owned or hereinafter acquired, to the following: (a) (i) 347,138 shares of class B non-voting stock of PMG (the “PMG Shares”), which lien shall be second in priority to the liens described in Schedule B attached hereto (but only until such time as such priority liens are released, at which time such stock shall be immediately delivered to Secured Party and Secured Party will have a first priority lien on such stock; provided, however, that the Secured Party agrees to subordinate its lien on 40,000 of the PMG Shares (or such lesser amount as Grantor may pledge) to a lien thereon that may be granted by Grantor to a secured lender to Grantor, in a transaction which provides Grantor at least $2,000,000 to be used by Grantor to make a payment to CMI II, LLC (or its affiliates) which will result in the release from the lien of CMI II, LLC (and/or its affiliates) of at least 43,333 of the PMG Shares provided such payment results in the delivery to Secured Party (and a first priority security interest in favor of Secured Party) of all other PMG Shares so released) provided Grantor shall have provided to Secured Party, prior to the delivery of any PMG Shares to such secured lender, a letter from such secured lender to Secured Party in which such secured lender agrees to deliver such PMG Shares to Secured Party upon the termination of such secured lender’s lien as long as such PMG Shares remain pledged to Secured Party, (ii) its 100% membership interest in XTV, and (iii) its 100% membership interests in Media Billing 

(collectively, the “Equity Interests”); and (b) any and all additional or other shares, securities or other investment property or financial assets or other consideration received or receivable in connection with or in respect of any of the Equity Interests, and all dividends and distributions with respect thereto (whether cash, stock or otherwise, and whether ordinary, special, liquidating or otherwise), stock splits, stock dividends, spin-offs, conversions, reclassifications, reorganizations, mergers, consolidations, combinations or otherwise, and including (without limitation) any and all options, warrants and other rights to acquire securities in respect thereof, any and all substitutions therefor and additions thereto, and the certificates evidencing the foregoing; whether constituting an account, chattel paper, document, instrument, certificated or uncertificated security, other investment property, financial asset, general intangible, money or otherwise, and whether held directly, as a securities entitlement or otherwise, and in each case together with all products and proceeds thereof (all of the foregoing, collectively being called the “Collateral”).

2.

Delivery of Collateral. Grantor shall deliver to Secured Party any and all stock certificates and other instruments evidencing or respecting the Collateral, which certificates or instruments shall be delivered on or prior to December 2, 2005; provided, however, that in the event that certificates evidencing the Collateral are acquired by or returned to the Grantor after the date hereof, either pursuant to a subsequent transaction or through release of a prior pledge, such certificates shall be delivered immediately to Secured Party upon receipt by Grantor. Stock certificates shall be delivered with corresponding stock powers, duly endorsed in blank with medallion signature guarantees if requested by Secured Party. Each certificate shall be delivered free and clear of all Liens (as defined herein), except as reflected on the restrictive legends set forth on the stock certificates related to, and existing upon, the certificates set forth as Schedule A or otherwise established by Secured Party, and otherwise must be in form suitable for transfer. If any of the Collateral has been issued in uncertificated form, then Grantor shall execute and deliver such notices, transfer instructions and other documents respecting any Collateral (and Secured Party’s rights, powers, privileges, remedies and interests in and to the Collateral) as Secured Party from time to time may request to effect such transfer. In Secured Party's discretion the foregoing may include, among other things, an account control agreement in form and substance reasonably satisfactory to Secured Party and granting Secured Party exclusive control over each applicable securities account (and all investment property and financial assets therein). Secured Party is hereby authorized, at its option and without obligation to do so, to transfer to or register in its name or the name of its nominee(s), including any “securities intermediary”, as defined in the Uniform Commercial Code as in effect from time to time in the State of New York (“NYUCC”), and any nominee(s) of any of the foregoing, all or any part of the Collateral, without notice to Grantor. In the event Secured Party determines to so transfer or register all or any part of the Collateral, Secured Party shall provide to Grantor copies of all notices and other communications received by Secured Party with respect to the Collateral promptly following receipt thereof.

3.

Rights to Collateral. (a) So long as no Event of Default shall have occurred and be continuing (or would occur by virtue thereof) under any of the Secured Obligations (an “Event of Default”), Grantor shall be entitled to: (i) exercise any and all voting and consensual rights and powers relating or pertain­ing to the Collateral; and (ii) receive and retain any and all regular cash dividends made or payable on or in respect of the Collateral. Any such distributions received by 

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the Grantor shall be held in trust for Secured Party and shall be delivered to Secured Party within five calendar days of the Grantor's receipt thereof absent the occurrence and continuance of an Event of Default and subject to the following sentence. Notwithstanding anything to the contrary in the foregoing, any and all special or liquidating or other dividends, and other distributions of securities or other assets or properties made on or in respect of or received in exchange for Collateral (whether as a result of a distribution, redemption, conversion, exchange, stock dividend, spin-off, subdivision, combination, reclassification, recapitalization, merger, consolidation, dissolution or otherwise) shall be and become part of the Collateral, and, if received by Grantor, shall be held in trust for, and delivered immediately to, Secured Party (accompanied by appropriate stock powers or other appropriate assignment documentation) to be held as Collateral pursuant hereto.

(b)

So long as no Event of Default shall have occurred and be continuing, Secured Party shall, promptly following receipt of any request therefor from Grantor, execute and deliver (or cause to be executed and delivered) to Grantor all such proxies, powers of attorney, dividend orders, conversion elections and other instruments as Grantor reasonably may request for the purpose of enabling Grantor to exercise the voting, consensual, conversion and other rights and powers entitled to be exercised by Grantor with respect to the Collateral.

(c)

If any Event of Default shall have occurred and be continuing, without limiting the other rights of Secured Party hereunder, Secured Party or its nominee may, upon notice to Grantor, exercise any or all voting, consensual and other rights (including, without limitation, the right to exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options) pertaining to any and all of the Collateral, and (whether or not Secured Party also is electing to exercise any such rights itself) may prohibit Grantor from exercising the same, and shall have the right, without notice to Grantor, to receive and retain as Collateral, any and all dividends and interest payments (including regular cash dividends and interest payments) and distributions made or payable on or in respect of the Collateral as if Secured Party were the absolute owner thereof.

4.

Representations and Warranties. Grantor represents and warrants that the following are true and correct on the date of this Agreement and that at all times while any Secured Obligations are outstanding the following will be true and correct: (a) all Collateral (i) is and will be owned benefi­cially and (except as provided in Section 2) of record solely by Grantor with good and marketable title thereto, (ii) is and will be owned by Grantor free and clear of any and all liens, charges, security interests or encumbrances other than the Lien granted hereunder or as otherwise set forth in Schedule B attached hereto, and (iii) is and will be free from any restriction with respect to (A) its pledge to Secured Party, (B) subject to compliance with applicable securities laws, its transferability by Grantor (or by Secured Party as pledgee) and (C) the right of Grantor (or Secured Party, as and if permitted under this Agreement) to exercise any and all rights which such Collateral may have from time to time with respect to voting, giving consents, receiving dividends and rights conversion and any right to receive interest and principal payments (the foregoing liens, encumbrances, restrictions and limitations, being collectively, a “Lien”); (b) all Collateral has been duly and validly assigned and transferred as Collateral to Secured Party; and (c) the membership interests in XTV and Media Billing are uncertificated membership interests.

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5.

Other Covenants. Grantor covenants and agrees that Grantor will not directly or indirectly (other than pursuant to this Agreement and as set forth in Schedule B attached hereto): (a) make, create, incur, assume or permit to exist any Lien of any nature in, to or against any part of the Collateral; (b) assign, pledge or in any way transfer or encumber any Collateral or Grantor’s right to receive any income or other distribution or proceeds from any part of the Collateral; (c) enter into any shareholders’ agreement, voting trust or similar agreement or arrangement, or any amendment thereto or waiver thereof, or any other restriction or limitation in any way respecting assignability, transferability or any voting, dividend, distribution, right of conversion or other ownership right with respect to any of the Collateral unless Secured Party agrees in writing thereto; or (d) offer or agree to do or cause or assist the initiation or continuation of any of the foregoing. Grantor covenants and agrees that Grantor will permit neither Media Billing nor XTV to issue any additional membership interests to any person after the date of this Agreement.

6.

Further Assurances; Power of Attorney. On the request of Secured Party, Grantor shall execute and deliver or cause to be executed and delivered to Secured Party such documents and instruments respecting the Collateral as may be necessary or desirable for Secured Party to evidence, confirm, perfect or protect its interests in the Collateral and to enforce its rights hereunder, including, but not limited to, an acknowledgment with respect to the pledge of any after-acquired Collateral. Secured Party is authorized to file without Grantor’s signature one or more financing, modification and continuation statements regarding the Collateral, to sign any such statement on behalf of Grantor if Secured Party deems such signature necessary or desirable under applicable law, and to file a photographic or other reproduction of this Agreement or any financing, modification or continuation statement as a financing, modification or continuation statement in Secured Party’s discretion. Secured Party has no liability for any failure to file or mistake in filing of any such document. If Grantor fails to satisfy or perform any of its obligations under this Agreement, Secured Party, in its sole discretion, may affect such performance. Grantor hereby irrevocably appoints Secured Party, which shall have full power of substitution, as Grantor’s attorney-in-fact and proxy, with full power and authority in the place and stead of Grantor and in the name of Grantor or otherwise, from time to time in Secured Party’s discretion, after the occurrence of an Event of Default, to take any action and to execute any instrument (including, without limita­tion, any stock power or other appropriate instrument of transfer) that Secured Party may deem necessary or advisable to accomplish the foregoing and the purposes of this Agreement, which appointment is coupled with an interest and shall survive, to the maximum extent then permitted by law, Grantor’s liquidation, dissolution or bankruptcy. Grantor covenants and agrees to defend Secured Party’s right, title, special property and first priority security interest in and to the Collateral against the claims of any person or entity by timely and diligently contesting such claims in good faith by appropriate legal proceedings.

7.

Reasonable Care, Etc. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Secured Party accords its own property. Secured Party has no responsibility for (i) ascertaining or taking action with respect to calls, exercises of rights or options, con­versions, exchanges, redemptions, payments on maturity (by acceleration or otherwise) tenders or other matters relative to any Collateral, whether or not 

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Secured Party has or is deemed to have knowledge of such matters or an interest in such matters, (ii) taking any necessary steps to preserve rights against any parties with respect to any Collateral or (iii) other than as provided in Section 2, notifying Grantor as to any matter pertaining to the Collateral or pertaining to any issuer of any securities included as Collateral.

8.

Remedies Upon Default. (a) If any Event of Default shall occur and be continuing, Secured Party shall have all of the rights and remedies provided to a secured party by the NYUCC and other applicable laws as in effect from time to time. Grantor agrees that (1) to the maximum extent permitted by law, Secured Party may apply and retain the Collateral (to the extent of its fair market value (which, if there is no trading market for the Collateral, shall be determined in good faith by Secured Party) at the time Secured Party declares the Secured Obligations to be, or any of the Guaranteed Obligations otherwise become, due and payable) (whether at maturity, by acceleration or otherwise) and apply such fair market value against the Secured Obligations and (2) Secured Party may otherwise pursue such remedies as are available to Secured Party at law or in equity including, without limitation, under the NYUCC, without either election being of remedies (should it be determined that Secured Party's choice is improper it may pursue another remedy). No notice to Grantor of any action proposed to be taken or taken need be given unless required by law and not waivable. In the event that notice is necessary, written notice mailed to Grantor at the address given on the signature page hereof (or such other address as requested by Grantor pursuant to notice given under Section 13, and received by Secured Party prior to its giving such notice to Grantor) at least ten business days prior to the date of public sale of Collateral or prior to the date after which a private sale or any other disposition of Collateral will be made, shall constitute reasonable notice, but notice given in any other reasonable manner or at any other reasonable time shall be sufficient. Secured Party may apply the proceeds of any such sale or disposition of Collateral (or other monies received in respect of Collateral) to the satisfaction of its reasonable attorneys’ fees, legal expenses and other reasonable costs and expenses incurred in connection with its retaking, holding, preparing for sale, and selling of Collateral prior to applying same to the payment of amounts under the Secured Obligations (which may be in such order as Secured Party may elect). Without precluding any other methods of sale, the sale of the Collateral shall have been made in a commercially reasonable manner if conducted in conformity with reasonable commercial practices of disposing of similar collateral, but in any event Secured Party may sell, at its option, on such terms as it may choose without assuming any credit risk and without any obligation to advertise. Secured Party shall not be liable for any insufficiency of the proceeds of any sale of any Collateral to satisfy amounts under the Secured Obligations in full, and Grantor shall remain liable for any such deficiency.

(b)

Secured Party shall have the right to sell the Collateral hereunder by any commercially reasonable method. Without limiting the generality of the foregoing, Grantor specifically agrees that the methods described in this Section are commercially reasonable methods for the sale of securities held as Collateral. Grantor recognizes that Secured Party may not be able to, or may determine not to, effect an immediate public sale of any or all of such securities and may elect to sell the securi­ties over a period of time and/or resort to one or more private sales thereof, which may result in prices, and be on other terms, less favorable to Grantor than if such sale were immediately made in a public sale. If, at the time of sale, Secured Party determines that there may be a question as to whether the securities may be sold in a public 

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market, Secured Party, in its sole discretion at the time of any such sale or proposed sale, may restrict the prospective bidders or purchasers as to their number, nature and investment intention (including, among other things, requiring that the persons making, or proposing to make, such purchases represent and agree, to the satisfaction of Secured Party, that they are “accredited investors” under the Securities Act of 1933 and applicable Securities and Exchange Commission rules and/or satisfy such additional or other criteria as Secured Party may require, and that they are purchasing the securities for their own account, for investment and not with a view toward the distribution or resale of any thereof in violation of the Securities Act). Secured Party may also sell such securities from time to time in limited quantities over a period of time. Any sale may be made in one lot, as an entirety or in separate parcels, even if such sale is made at a discount from the then current market price of the securities and regardless of the availability of paragraph (k) of Rule 144 promulgated under the Securities Act or another exemption from the registration provisions of the Securities Act or the availability of an effective and current registration statement under the Securities Act covering such actual or proposed sale. Grantor may retain and apply the proceeds thereof against amounts due under the Secured Obligations. Any sale as to which the selling process commenced prior to the satisfaction of the Secured Obligations may be consummated notwithstanding that, after entering into such agreement of sale, the Secured Obligations may have been fully paid and satisfied.

(c)

Secured Party may arrange for the sale of the Collateral, or any part thereof (determined in its discretion), in one or more public or private sales, for cash, upon credit or for future delivery, at such price or prices, at such time or times and by delivering such certificates (without regard to Grantor’s holding period under the Securities Act or for tax or other purposes, or as to any actual or relative tax or other basis therein, or the tax or other consequences thereof) as Secured Party shall determine in its sole discretion. Secured Party shall incur no liability in case any proposed sale fails to occur (due to the failure of such purchaser to pay for the Collateral so sold, or otherwise) and, in case of any such failure, Grantor shall not be relieved of any of the Secured Obligations or hereunder and such Collateral may again be sold under and pursuant to the provisions of this Agreement. 

(d)

To the maximum extent permitted by applicable law, Secured Party may (i) be the purchaser of any or all of the Collateral so sold, or (ii) apply and retain the Collateral as a partial or full offset, at their fair market value (as determined under Section 9(a)), against any of the Secured Obligations and the purchase price thereof may be applied as a credit against amounts due under the Secured Obligations, and, in either case, thereafter hold the same, absolutely, free from any right or claim of whatsoever kind.

(e)

Secured Party shall not be obligated to make or direct any sale of Col­lateral regardless of notice of sale having been given. Secured Party may postpone, adjourn or direct the adjournment of any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Notwithstanding anything to the contrary in this Section, Secured Party shall have no duty or obligation to exercise any of the aforesaid rights, privileges or options, and shall not be responsible for any fail­ure to do so or delay in so doing.

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9.

Certain Acknowledgments and Waivers. Grantor acknowledges and agrees that the rights, powers, privileges, remedies and interests granted to or conferred upon Secured Party by this Agreement and applicable law are purely discretionary and shall not, and shall not be deemed or construed to, impose upon Secured Party any duty or other obligation (unless otherwise expressly so provided in this Agreement) to (a) sell, foreclose or otherwise realize upon any Collateral, (b) protect or preserve any Collateral, (c) perform or satisfy any obligation under or respecting any Collateral or any person or entity, (d) mitigate or otherwise reduce any damage or other loss, or (e) otherwise exercise or enforce any such right, power, privilege, remedy or interest. Any sale, foreclosure or other realization upon any Collateral, or any other exercise or enforcement of any such right, power, privilege, remedy or interest, if undertaken by Secured Party in its discretion, may be delayed, discontinued or otherwise not pursued or exhausted for any reason whatsoever (whether intentionally or otherwise). Without limiting the generality of the foregoing, to the extent waiver is not limited under applicable law, Grantor hereby expressly waives each and every claim or defense, and agrees that Grantor will not assert or pursue (by action, suit, counterclaim or otherwise) any claim or defense, respecting (i) any settlement or compromise with any obligor or other third party under any account receivable, note, instrument, agreement, document or general intangible included in the Collateral, irrespective of any reduction in the potential proceeds therefrom, (ii) the selection or order of disposition of any Collateral (which may be at random or in any order Secured Party may select in its sole and absolute discretion), (iii) the private sale of any Collateral, whether or not any public market exists, (iv) the application and retention of Collateral as a partial or full offset, at their fair market value (as determined under Section 9(a)) against amounts due under the Secured Obligations, (v) the choice or timing of any sale date as to any Collateral (which Secured Party may select in its sole and absolute discretion), irrespective of whether greater sale proceeds would be realizable on a different sale date, (vi) the adequacy of the sale price of any Collateral, (vii) any insufficiency of any such proceeds to fully satisfy the Secured Obligations, (viii) any sale of any Collateral to the first person to receive an offer or make a bid, (ix) the selection of any purchaser of any Collateral, or (ix) any default by any purchaser of any Collateral. To the maximum extent permitted by applicable law, Grantor hereby expressly waives the applicability of any and all applicable laws that are or may be in conflict with the terms and provisions of this Agreement, now or at any time in the future, to the extent waiver is not limited under applicable law, including (without limitation) those pertaining to notice (other than notices required by this Agreement, appraisal, valuation, stay, extension, moratorium, marshaling of assets, exemption and equity of redemption; provided, however, that the preceding provision is not intended to confer upon Secured Party any right, power, privilege, remedy or interest not permissible under applicable law notwithstanding the foregoing waivers. Neither Secured Party nor any of its representatives shall incur any liability in connection with any sale of or other action taken respecting any Collateral in accordance with the provisions of this Agreement or applicable law.

10.

Release of Collateral. Promptly following the written request therefor from Grantor following payment in full, with good funds, to Secured Party of the Secured Obligations, and Secured Party shall release from the security interest granted hereunder and shall return to Grantor or other party entitled thereto pursuant to any agreement to which Grantor and Secured Party may be a party (and shall execute and deliver to Grantor, at Grantor’s expense and without recourse to Secured Party, the documentation reasonably requested by Grantor to effect such release) all of the Collateral held hereunder by Secured Party on the date of such request.

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11.

Expenses. Following an Event of Default, Grantor will pay to Secured Party, on demand, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses incurred by Secured Party) related or incidental to the care, holding, retaking, preparing for sale, selling or collection of or realization upon any of the Collateral or relating or incidental to the establishment or preserving or enforcement of the rights of Secured Party hereunder or in respect of any of the Collateral. Such expenses shall be included in the “Secured Obligations.”

12.

Notices. All notices and other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered given if given in the manner, and be deemed given at times, as follows: (a) on the date delivered, if personally delivered; (b) on the next business day after being sent by recognized overnight mail service specifying next business day delivery; or (c) five (5) business days after mailing, if mailed by United States certified or registered mail, return receipt requested, in each case with delivery charges pre-paid and addressed to the following addresses:

(a)

If to Grantor:

2200 S.W. 10th Street

Deerfield Beach, Florida 33442

Attention: President 

(b)

If to Secured Party:

1500 Broadway, 17th Floor

New York, New York 10036

Attention: Martin S. Silver 

The above-named persons may designate by notice to each other any new address for the purpose of this Agreement. Notice of a change of address shall be effective only when notice thereof is given and effective in accordance with this paragraph.

13.

Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to any conflicts of laws provision that would defer to the substantive laws of another jurisdiction). 

14.

Consent to Jurisdiction; Venue. Grantor hereby consents and agrees that the State Courts of New York in the County of New York and the United States District Court for the Southern District of New York each shall have personal jurisdiction and proper venue with respect to any dispute between the Secured Party and Grantor under this Agreement, without, however, depriving the Secured Party of the right, in the Secured Party's discretion, to commence or participate in any action, suit or proceeding in any other court having proper jurisdiction and venue over Grantor relating to this Agreement or otherwise. In any dispute with the Secured Party, Grantor will not raise, and hereby expressly waives, any objection or defense to any such jurisdiction and venue as an inconvenient forum. Grantor further agrees that any action or proceeding brought by Grantor against the Secured Party under this Agreement shall be brought only in the State Courts of New York in the County of New York or the United States District Court for the Southern District of New York. Grantor and Secured Party irrevocably consent to service of process in any such action, suit or proceeding by delivery of copies thereof by a 

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method and to their respective addresses set forth in Section 13. Nothing herein shall affect the right of either Grantor or Secured Party to serve process in any other manner permitted by law.

15.

Amendments, Etc. No amendment or waiver of any provision of this Agreement, nor consent to any departure herefrom, shall in any event be effective unless the same shall be in writing and signed by the party to be charged (in the case of an amendment, by both parties), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

16.

Severability. The provisions of this Agreement are intended to be severable. If for any reason any provisions of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

17.

Successors and Assigns. This Agreement shall be binding on Grantor and Grantor’s successors and any assigns and shall inure to the benefit of Secured Party and Secured Party's successors and assigns. This Agreement may not be assigned by the Grantor and Grantor may not delegate any obligations hereunder. Secured Party may assign this Agreement (and may assign and/or deliver to any such assignee any of the Collateral) and/or any of its rights and powers hereunder, with all or any of the Secured Obligations and, in the event of such assignment, the assignee shall have the same rights and remedies as if originally named herein or therein in the place of Secured Party, and Secured Party shall be thereafter fully discharged from all responsibility with respect to such agreements and any such Collateral assigned and/or delivered.

18.

Section Headings. The section and other headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof. References in this Agreement to sections or schedules are to those of this Agreement, unless otherwise stated.

19.

Jury Trial Waiver. GRANTOR WAIVES ANY RIGHT GRANTOR MAY HAVE TO JURY TRIAL.

IN WITNESS WHEREOF, the Grantor has executed this Pledge Agreement as of the 2nd day of December, 2005.

GRANTOR:

INTERACTIVE BRAND DEVELOPMENT, INC.

2200 S.W. 10th Street

Deerfield Beach, Florida 33442

By: /s/ Gary Spaniak, Jr.

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AGREED AND ACCEPTED:

SECURED PARTY:

IIG CAPITAL LLC, as agent for

IIG TRADE OPPORTUNITIES FUND NV

1500 Broadway, 17th Floor

New York, New York 10036

By: /s/ Martin S. Silver

    

Martin S. Silver, Manager

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Schedule A

Equity Interests

			
	 	 	Certificate Nos.

	 	 	 
	__________ shares of PMG

	 	 
	 	 	 
	 	 	 
	____% membership interest in XTV

	 	[Uncertificated]

	 	 	 
	 	 	 
	____% membership interest in Media Billing

	 	[Uncertificated]

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Schedule B

Liens on PMG Stock

Liens created by the Pledge Agreement dated as of September 28, 2004 by Grantor (f/k/a Care Concepts I, Inc.) and Media Billing Company LLC in favor of Newman & Newman, P.C. on behalf of Castlerigg Master Investments Limited and Vestcap International Management Limited; and

Lien that may be created on 86,666 of the PMG Shares released from the lien under the above Pledge Agreement and in lieu thereof created in favor of CMI II, LLC (an affiliate of Castlerigg Master Investments Limited) under a Settlement Agreement to be entered into by and among CMI II, LLC and, among others, Guarantor.

Liens created by the Pledge Agreement dated as of September 28, 2004 by Grantor (f/k/a Care Concepts I, Inc.) in favor of Newman & Newman, P.C. on behalf of the persons or entities executing said Pledge Agreement.

-12-United States Securities and Exchange Commission EDGAR filing

Exhibit 4.5

SECURITY AGREEMENT

SECURITY AGREEMENT dated as of December 2, 2005 ("Agreement") between INTERACTIVE BRAND DEVELOPMENT, INC., a Delaware corpora­tion (the "Debtor"), and IIG CAPITAL, LLC, a New York limited liability company, as agent for IIG TRADE OPPORTUNITIES FUND NV (the "Secured Party").

RECITALS

WHEREAS, Internet Billing Company, LLC (the “Borrower”) and the Secured Party have entered into a Credit and Security Agreement dated as of December 31, 2004 (as amended, modified, supplemented or renewed from time to time, the “Credit Agreement”);

WHEREAS, subsequent to the commencement of the Credit Agreement, the Debtor acquired and completed the acquisition of 100% of the equity interest in Media Billing Company, LLC, which owns 100% of the equity interests in the Borrower;

WHEREAS, pursuant to a request of the Debtor, the Borrower, the Secured Party and the Guarantors are entering into a First Amendment to Credit and Security Agreement and Consent Agreement dated the date hereof (the “Amendment”) pursuant to which the Secured Party will, among other things: (i) forbear declaring certain defaults under the Credit Agreement, (ii) increase the Maximum Advance Commitment, and (iii) extend the Termination Date; 

WHEREAS, in connection with and as a condition to the execution of the Amendment, the Debtor is executing a guaranty in favor of the Secured Party (the “IBD Guaranty”); and

WHEREAS, it is an additional condition to the execution, delivery and performance by the Secured Party of the Amendment that the Debtor execute and deliver this Agreement to secure both its obligations under the IBD Guaranty and the Borrower’s obligations under the Credit Agreement.

NOW, THEREFORE, in consideration of the mutual cove­nants contained herein, to induce the Secured Party to execute, deliver and perform the Amendment and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor hereby agrees as follows:

1.

Defined Terms. Capitalized terms used but not defined herein shall have their respective meanings as set forth in the Credit Agreement. Unless otherwise defined herein or in the Credit Agreement, terms used in Article 9 of the Uniform Commercial Code of the State of New York (the "UCC") are used herein as defined in the UCC.

2.

Grant of Security. The Debtor hereby grants to the Secured Party a continuing security interest in and Lien on all of the Debtor's right, title and interest in and to all of the property and assets of the Debtor, whether now or hereafter existing or now owned or hereafter acquired and wherever located (the "Collateral"), including, without limitation, the following:

(a)

All equipment in all of its forms, wherever located, including, without limitation, all machinery and other goods, furniture, furnishings, fixtures, office supplies and other tangible personal property and all parts thereof and all accessions thereto, together with all parts, fittings, special tools, alterations, substitutions, replacements and accessions thereto (collectively, the "Equipment");

(b)

All inventory in all of its forms, wherever located, including, without limitation, (i) all supplies, goods, incidentals, packaging materials and all other items which contribute to the finished product or to the promotion or sale thereof (ii) all raw materials and work in process, finished goods, and materials used or consumed in manufacture or production, (iii) goods in which the Debtor has an interest in mass or a joint or other interest or right of any kind (including, without limitation, goods in which the Debtor has an interest or right as consignee), and (iv) goods which are returned to or repossessed by the Debtor, and, with respect to all of the foregoing, all additions thereto, substitutions therefor, accessions thereto and products thereof (collectively, the "Inventory"), and all documents and documents of title, whether relating to or covering any of the fore­going, or otherwise;

(c)

All accounts, accounts receivable, contract rights, chattel paper, instruments, acceptances, notes, drafts, acceptances and other forms of obligations of any kind, now or hereafter existing, whether or not arising out of or in connection with the sale or lease of goods or the rendering of services, together with all ledger sheets, files, records and documents relating to any of the foregoing, including all computer records, programs, storage media and computer software useful or required in connection therewith (collectively, the "Receivables"), and all rights now or hereafter existing in and to all security agreements, leases, and other contracts securing or otherwise relating to any Receivables (the "Related Contracts");

(d)

All rights under all other contracts and agreements to which the Debtor is a party; 

(e)

All trademarks, trade names, trade styles, ser­vice marks, prints and labels on which said trademarks, trade names, trade styles and service marks have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, and all registrations and record­ings thereof, including, without limitation, applications, reg­istrations and recordings in the United States Patent and Trade­mark Office or in any similar office or agency of the United States, any State thereof, or any other country or any political subdivision thereof, together with the goodwill associated therewith, including, but not limited to, those described on Schedule 2(e) hereto, and all reis­sues, amendments, extensions or renewals thereof and all licenses thereof (collectively, the "Trademarks");

(f)

All letters patent of the United States or any other country, and all applications therefor, all right, title and interest therein and thereto, and all registrations and recordings thereof, including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, including, without limitation, those described on Schedule 2(f) hereto, and all reissues, continuations, divisionals, continuations-in-part or extensions thereof and all licenses thereof (collectively, the "Patents");

-2-

(g)

All copyrights, copyrighted works or any item which embodies such copyrighted work of the United States or any other country, and all applications therefor, all right, title and interest therein and thereto, and all registrations and recordings thereof, including, without limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivi­sion thereof, including, without limitation, those described on Schedule 2(g) hereto, and all derivative works, extensions or renewals thereof (collectively, the "Copyrights");

(h)

All computer hardware and software, including, without limitation, all rights (including rights as licensee and lessee) with respect to (i) computer and other electronic data processing hardware, including all integrated computer systems, central processing units, memory units, display terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (ii) all software programs designed for use on the computers and electronic data processing hardware described in clause (i) above, including all operating system software, utilities and application programs in whatsoever form (source code and object code in magnetic tape, disk, or hard copy format or any other listings whatsoever); (iii) any firmware associated with any of the foregoing; and (iv) any documentation for hardware, software and firmware described in clauses (i), (ii) and (iii) above, including flow charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes (collectively, “Computer Hardware and Software”);

(i)

All motor vehicles and trailers owned by the Debtor, including, without limitation, those described on Sched­ule 2(i) hereto (the "Motor Vehicles");

(j)

All right, title and interest, in, to and under, all deposit and other accounts maintained by the Debtor at any bank or other financial institution;

(k)

All commercial tort claims set forth on Schedule 2(k) hereto;

(l)

All general intangibles, including payment intangibles, good will and tax refunds; 

(m)

All rights and claims in or under any policy of insurance, including, but not limited to, insurance for fire, damage, loss and casualty, whether covering real property or personal property, or tangible or intangible property; 

(n)

All other personal property of the Debtor, including, without limitation, all other goods, documents, instruments, general intangibles, investment property (including, without limitation, all securities, security entitlements, securities accounts, commodity contracts and commodity accounts), letters of credit, letter-of-credit rights, and money; and

(o)

All books and records (whether computerized or in any other form or medium), proceeds of any and all of the foregoing Col­lateral (including, without limitation, proceeds which consti­tute property of the types described in clauses (a) through (n) of this Section 2) and, to the extent not otherwise included, all payments under insurance (whether or not the Secured Party is the loss payee or additional insured thereof), or any indemnity, warranty 

-3-

or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the Collateral, and any and all products, renewals, replacements, substitutions, additions, accessions, rents, issue, royalties and profits of any and all of the foregoing Collateral, in all cases whether now owned or hereafter acquired or arising. 

3.

Security for Obligations. The Collateral secures the prompt and complete payment and performance when due of the Obligations and of Debtor’s obligations under the IBD Guaranty. 

4.

Debtor Remains Liable. Notwithstanding anything contained herein to the contrary, (a) the Debtor shall remain liable under the contracts and agreements included in the Col­lateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Secured Party of any of its rights or remedies hereunder shall not release the Debtor from any of its duties or obligations under the con­tracts and agreements included in the Collateral, and (c) the Secured Party shall have no obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of the Debtor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

5.

Representations and Warranties. The Debtor rep­resents and warrants to the Secured Party as follows:

(a)

The Debtor (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) has all requisite corporate power and author­ity to own or lease and operate its properties and to conduct its business as now being conducted, and (iii) is duly qualified and in good standing as a foreign corporation, and is authorized to do business, under the laws of each jurisdiction where the char­acter of the properties owned or leased and operated by it or the transaction of its business makes such qualification or authorization necessary.

(b)

The Debtor has full power and authority to execute, make and deliver this Agreement, which has been duly authorized by all necessary and proper corporate action (including, without limitation, by the Board of Directors and stockholders of the Debtor), and to incur and perform its obligations hereunder. Except in connection with the filings to record or perfect security interests and Liens granted to the Secured Party in the Collat­eral, in the jurisdictions set forth on Schedule 5(b) attached hereto and made a part hereof, no consent, authorization or approval or other action by, and no notice, registration or filing with, any Governmental Authority or other Person, or the taking of any other action, is required: (i) for the grant by the Debtor of the lien granted hereby, (ii) for the perfection or the exercise by the Secured Party of its rights and remedies hereunder, or (iii) execution, delivery and performance by the Debtor of this Agreement or any such other agreements, documents and instruments.  

(c)

This Agreement constitutes the valid and legally binding obligations of the Debtor, enforceable in accordance with its terms.

(d)­

The execu­tion, delivery and performance by the Debtor of this Agree­ment 

-4-

does not and will not: (i) violate or conflict with any requirement of law; (ii) violate or conflict with, result in a breach of or constitute (with notice or lapse of time, or both) a default under any agreement, document, instrument, order, judgment, decree, or other contractual obligation of the Debtor or by which any of its properties or assets are bound or affected; or (iii) result in or require the creation or imposition of any lien, security interest, charge or other encumbrance upon any property or assets of the Debtor except as contemplated by this Agreement.

(e)

All of the Collateral is located at the addresses specified in Schedule 5(e) hereto and made a part hereof. The chief place of business and chief executive office of the Debtor and the office where the Debtor keeps its books and records concerning the Collateral are located at the address set forth in Schedule 5(e). All originals of all chattel paper, negotiable documents and instruments, including, without limitation, all notes, chattel paper and other instruments contained in the Collateral, have been delivered to the Secured Party. Except for the foregoing, none of the Receivables or other Collateral is evidenced by chattel paper, negotiable documents or instruments. 

(f)

The Debtor owns the Collateral free and clear of any Lien, except for (i) the Lien cre­ated by this Agreement and (ii) liens set forth on Schedule 5(f) hereto and made a part hereof (the “Permitted Liens”). Except for the financ­ing statements filed in connection with Permitted Liens, no effective financing statement or other instrument or other security interest or Lien simi­lar in effect covering all or any part of the Collateral is on file in any recording office, except such as may have been filed in favor of the Secured Party relating to this Agreement.

(g)

The Debtor conducts, and for the past five years has conducted, no business under any name or trade name other than Interactive Brand Development, Inc., which is the Debtor’s legal name, and ____________________. Debtor’s federal tax identification number is ______________ and its corporate identification number is _____________________.

(h)

Except for the Collateral heretofore delivered to the Secured Party, the Debtor has exclusive possession and control of all Collateral at the addresses specified in Schedule 5(e) attached hereto and made a part hereof.

(i)

The Debtor has the right to use all Patents, Trademarks and Copyrights, all Computer Hardware and Software, and all other rights, free from materially burdensome restrictions, which are necessary for the operation of its business as presently con­ducted. There is not pending or, to the knowledge of the Debtor, threatened any claim or litigation against or affecting the Debtor contesting the validity of any of the Patents, Trademarks or Copyrights, Computer Hardware or Software, or other rights.

(j)

Except for the Permitted Liens, this Agreement creates a valid, perfected, first priority Lien in the Collateral, securing the payment of the Obligations. 

6.

Further Assurances. (a) The Debtor agrees that at any time and from time to time, at the expense of the Debtor, the Debtor will promptly execute and deliver all fur­ther instruments and documents, and take all further action, that may be necessary or desirable, or that the Secured Party may request, in order to perfect and protect the lien granted or purported to be granted hereby, to enable the Secured Party to exercise and enforce its rights and remedies 

-5-

hereun­der with respect to any Collateral, or otherwise in furtherance of the transactions contemplated by the Credit Agreement. Without limiting the gener­ality of the foregoing, the Debtor will: (i) at the request of the Secured Party, mark conspicuously each document, instrument and each agreement included in the Collateral and, at the request of the Secured Party, each of its records pertaining to the Collateral with a legend, in form and substance satisfactory to the Secured Party, indicat­ing that such Collateral is subject to the lien granted hereby; (ii) if any Receivable or other item of Collateral shall be evi­denced by a note, chattel paper or other instrument, deliver such to the Secured Party duly endorsed and accompa­nied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Secured Party; and (iii) execute and file such financing or continuation statements, or amend­ments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Secured Party may request, in order to perfect and preserve the lien granted or purported to be granted hereby.

(b)

The Debtor hereby authorizes the Secured Party to file one or more financing or continuation statements, or amend­ments thereto, and such other instruments or notices, and amendments thereto, relative to all or any part of the Collateral without the signature of the Debtor where permitted by law. A fac­simile or photographic or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

(c)

The Debtor will furnish to the Secured Party at any time and from time to time statements and schedules further identify­ing and describing the Collateral and such other reports in con­nection with the Collateral as the Secured Party may reasonably request.

(d)

The Debtor will defend the Collateral against all claims and demands of all Persons (other than the Secured Party and holders of Permitted Liens) claiming an interest therein. The Debtor will pay promptly when due all property and other taxes, assessments and govern­mental charges or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Collateral.

7.

Certain Covenants. The Debtor shall:

(a)

Keep its chief place of business and chief executive office and the office where it keeps its records concerning the Collateral at the location therefor specified in Schedule 5(e) hereto. 

(b)

Keep the Collateral (other than Inventory sold in the ordinary course of business) at the places therefor specified in Schedule 5(e) hereto.

(c)

Except as otherwise provided in this Agreement, the Debtor may continue to collect, at its own expense, all amounts due or to become due to the Debtor under the Receivables. In connection with such collections, the Debtor may take (and, after the occurrence of an Event of Default (as hereinafter defined), at the Secured Party's request, shall take) such action as the Secured Party may deem necessary or advisable to enforce collection of the Receivables; provided, however, that the Secured Party shall have the right at any time after the occurrence of an Event of Default, upon written notice to the Debtor, to notify the account debtors or obli­gors under any Receivables of the assignment of such Receivables to the Secured 

-6-

Party and to direct such account debtors or obligors to make payment of all amounts due or to become due to the Debtor thereunder directly to the Secured Party and, at the expense of the Debtor, to enforce collection of any such Receivables, and to adjust, settle or compromise the amount or payment thereof, in such manner and to such extent as the Secured Party may deem necessary or appropriate. After receipt by the Debtor of the notice from the Secured Party referred to in the proviso in the preceding sentence, (i) all amounts and proceeds (including instruments) received by the Debtor in respect of the Receivables shall be received in trust for the benefit of the Secured Party hereunder, shall be segregated from other funds of the Debtor and shall be forthwith paid over to the Secured Party in the same form as received (with any neces­sary endorsement) to be held as cash Collateral or to be applied to the Obligations as deter­mined by the Secured Party, (ii) the Debtor shall not adjust, settle or compromise the amount or payment of any Receivable, or release wholly or partly any account debtor obligor thereof, or allow any credit or discount thereon, other than any discount allowed for prompt payment permitted in writing on the applicable invoice, and (iii) the Debtor shall not withdraw any funds from any accounts maintained by the Debtor at the Secured Party.

(d)

Cause the Equipment to be maintained and pre­served in good working order and condition, ordinary wear and tear excepted;

(e)

Promptly notify the Secured Party in writing of any loss or damage to the Collateral;

(f)

Not sell, assign (by operation of law or other­wise), lease, mortgage, transfer or otherwise dispose of (other than Inventory sold in the ordinary course of business) all or any portion of the Collateral or any of its other assets or properties, or create or suffer to exist any lien upon or with respect to any of the Collateral or any of its other assets or properties, except for Permitted Liens;

(g)

Not use or permit the Collateral to be used for any unlawful purpose or in any violation of any law, statute, rule or regulation;

(h)

Not permit the Collateral to become a part of or to be affixed to any real property; 

(i)

Take all reasonable steps to maintain and enforce the Trademarks, Patents and Copyrights, including but not lim­ited to (1) payment of all fees, (2) prosecuting infringers if failure to do so would materially and adversely affect the busi­ness of Debtor and (3) diligently pursuing any application or registration material to the business of the Debtor.

(j)

Immediately notify the Secured Party upon incurring or otherwise obtaining a commercial tort claim other than as set forth on an Schedule 2(k), hereto, and, upon the request of the Secured Party, enter into an amendment to this Agreement, in form and substance satisfactory to the Bank, and such other documents and agreements, and take such other action, as the Bank may deem necessary or appropriate to grant in favor of the Secured Party a Lien in and to each such commercial tort claim.

(k)

The Debtor shall promptly notify the Bank upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of deposit accounts, investment property, 

-7-

letter-of-credit rights or electronic chattel paper and, upon the request of the Secured Party, promptly execute such other documents, and do such other acts or things deemed appropriate by the Secured Party to deliver to the Secured Party control with respect to such Collateral; promptly notify the Secured Party upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of documents or instruments and will promptly execute such other documents, and do such other acts or things deemed appropriate by the Secured Party to deliver to the Secured Party possession of such documents which are negotiable and instruments, and, with respect to nonnegotiable documents, to have such nonnegotiable documents issued in the name of the Secured Party; and with respect to Collateral in the possession of a third party, obtain an acknowledgement from the third party that it is holding the Collateral for the benefit of the Secured Party, all in form and substance satisfactory to the Secured Party.

8.

Secured Party Appointed Attorney-in-Fact. The Debtor hereby irrevocably appoints the Secured Party the Debtor's attorney-in-fact, with full authority in the place and stead of the Debtor and in the name of the Debtor, after the occurrence of an Event of Default, to take any action and to execute any instru­ment which the Secured Party may deem necessary or advisable to accom­plish the purposes of this Agreement including, with­out limitation, (a) to obtain and adjust insurance required to be maintained, (b) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral, (c) to receive, endorse, assign, and collect any and all checks, notes, drafts and other negotiable and non-negotiable instruments, documents and chattel paper, and the Debtor waives notice of presentment, protest and non-payment of any instrument, document or chattel paper so endorsed or assigned, (d) to file any claims or take any action or institute any proceedings which the Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Secured Party with respect to any of the Collateral, and (e) to sell, transfer, assign or otherwise deal in or with the Collateral and the proceeds and products thereof, as full and effectually as if the Secured Party were the absolute owner thereof and to otherwise do such acts and things which the Secured Party deems necessary or useful to protect, preserve or realize upon the Collateral and the Secured Party’s security interest therein. The powers conferred on the Secured Party hereunder are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers. Neither the Secured Party nor any attorney-in-fact shall be liable for any act or omission, error in judgment or mistake of law provided the same is not the result of gross negligence or willful misconduct. The Debtor hereby ratifies and approves all acts of the Secured Party, as its attorney-in-fact, and the Secured Party, as its attorney-in-fact, will not be liable for any acts of commission or omission, nor for any error of judg­ment or mistake of fact or law. These powers, being coupled with an interest, are irrevocable and shall continue until all of the Obligations are indefeasibly paid in full and this Agreement is terminated. After the occurrence of an Event of Default, the Debtor also authorizes the Secured Party, at any time and from time to time, to communicate in its own name with any party to any con­tract, agreement or instrument included in the Collateral with regard to the assignment of such contract, agreement or instru­ment and other matters relating thereto. The Secured Party may, but shall be under no obligation to, take any of the foregoing actions and the Secured Party shall have no liability or responsibility for any act or omission taken with respect thereto. 

9.

The Secured Party May Perform. If the Debtor fails to perform any agreement contained herein, the Secured Party may itself per­form, or cause performance of, such 

-8-

agreement, and the expenses of the incurred in connection therewith shall be payable by the Debtor. 

10.

The Secured Party's Duties. The powers conferred on the Secured Party hereunder are solely to protect the Secured Party's interest in the Collateral and shall not impose any duty upon it to exercise any such powers. The Secured Party shall not have any duty as to any Collat­eral or as to the taking of any necessary steps to preserve rights against prior parties or any other Person pertaining to any Collateral. 

11.

Event of Default. The term “Event of Default” shall mean an Event of Default as such term is defined in the Credit Agreement. 

12.

Remedies; Distribution of Proceeds. If any Event of Default shall have occurred, the Secured Party may exercise in respect of the Collat­eral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party under the UCC or any Uniform Commercial Code of any applicable jurisdiction, which rights shall be cumulative, and also may (i) require the Debtor to, and the Debtor hereby agrees that it will at its expense and upon the request of the Secured Party, assemble all or part of the Collateral as directed by the Secured Party and make it available to the Secured Party at a place and time to be designated by the Secured Party, (ii) enter the premises where any of the Collateral is located, completing any work in progress, preparing any Collateral for disposition, disposing of Collateral, taking and carrying away the same, by any of its representatives, with or without legal process, to the Secured Party's places of storage, and (iii) without notice except as specified below, sell the Col­lateral or any part thereof in one or more parcels at public or private sale, at any of the Secured Party's offices or elsewhere, for cash, on credit or for future delivery and upon such other terms as the Secured Party may deem commercially reasonable. At any such sale the Collateral or any portion thereof may be sold in one lot as an entirety or in separate parcels as the Secured Party in its sole discretion deems advisable. The Secured Party may be the purchaser at any such sale, free from any right of redemption, which the Debtor hereby waives, and payment may be made, in whole or in part, in respect of such purchase price by the application of the Obligations by the Secured Party. The Debtor agrees that, to the extent notice of sale shall be required by law, at least five (5) days' notice to the Debtor of the time and place of any public or private sale is to be made shall con­stitute reasonable notification. The Debtor shall be obligated for, and the proceeds of sale shall be applied first to, the costs of taking, assembling, finishing, collecting, refurbishing, storing, guarding, insuring, preparing for sale, and selling the Collateral, including the fees and disbursements of attorneys, auctioneers, appraisers and accountants employed by the Secured Party. In the event that the proceeds of any sale or other disposition of the Collateral are insufficient to pay in full the Obligations, the Debtor shall remain liable for any deficiency.

13.

Indemnity and Expenses. (a) The Debtor agrees to indemnify the Secured Party from and against any and all claims, losses and liabilities growing out of or resulting from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabili­ties resulting from the Secured Party's gross negligence or willful mis­conduct. The Debtor will upon demand pay to the Secured Party the amount of any and all reasonable expenses, including the fees and out-of-pocket disbursements of its counsel and of any experts and agents, which the Secured Party may incur in connection with (i) filing or recording fees 

-9-

incurred in connection with this Agreement, (ii) the custody, preservation, use or opera­tion of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of the Secured Party hereunder, or (iv) the failure by the Debtor to perform or observe any of the provisions hereof. 

14.

Notices. Except as otherwise expressly provided in this Agreement, any notice, request, demand or other communication permitted or required to be given hereunder shall be in writing and shall be given in the manner provided Section 8 of the IBD Guaranty.

15.

 Entire Agreement. This Agreement con­tains the entire agreement with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto.

16.

Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies. This Agreement may be amended, superseded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the Debtor and the Secured Party or, in the case of a waiver, by the Secured Party. No delay on the part of the Secured Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of the Secured Party of any such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privi­lege. The rights and remedies herein provided are cumulative and shall not preclude the Secured Party from seeking any other remedy available, whether pursuant to applicable law or otherwise. 

17.

Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to principles of conflicts or choice of law (other than Section 5-1401 of the New York General Obligations Law).

18.

Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Secured Party and the Debtor and their respective successors and assigns. This Agreement is not assignable by the Debtor with­out the prior written consent of the Secured Party.

19.

Severability. Every provision of this Agreement is intended to be severable. If any term or provision of this Agreement shall be or be held to be invalid, illegal or unenforceable for any reason whatsoever, the validity, legality and enforceability of the remaining provisions hereof or thereof shall not in any way be affected or impaired thereby.

20.

Captions. All section titles or captions con­tained in this Agreement are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement. All references herein to Sections shall be deemed references to such parts of this Agreement, unless the context shall otherwise require.

(page intentionally ends here)

-10-

IN WITNESS WHEREOF, the Debtor and the Secured Party have each signed this Agreement as of the date first above written.

INTERACTIVE BRAND DEVELOPMENT, INC., 

Debtor

By: /s/ Gary Spaniak, Jr. 

Print Name: Gary Spaniak, Jr.

Print Title: President

IIG CAPITAL, LLC, as agent for

IIG TRADE OPPORTUNITIES FUND NV 

Secured Party

By: /s/ Martin Silver

Print Name: Martin Silver

Print Title: Manager

-11-

SCHEDULE 2(e)

Trademarks

-12-

SCHEDULE 2(f)

Patents

-13-

SCHEDULE 2(g)

Copyrights

-14-

SCHEDULE 2(i)

Motor Vehicles

-15-

SCHEDULE 2(k)

Tort Claims

-16-

SCHEDULE 5(b)

Filing Jurisdictions

-17-

SCHEDULE 5(e)

Principal Place of Business/Location of Collateral

-18-

SCHEDULE 5(f)

Permitted Liens

-19-

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