Document:

Exhibit
10.10

 

THIS NOTE HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

	
  No.          

  	
   

  	
  Original
  Issue Date: January 30, 2007

  
	
   

  	
   

  	
  First
  Amended and Restated Issue Date: February 26, 2007

  
	
   

  	
   

  	
  Second
  Amended and Restated Issue Date: April 11, 2007

  
	
   

  	
   

  	
  Third
  Amended and Restated Issue Date: May 17, 2007

  
	
   

  	
   

  	
  Fourth
  Amended and Restated Issue Date: June 29, 2007

  

 

	
  Holder:

  	
   

  	
  John Fife

  
	
  Address:

  	
   

  	
  303 East Wacker Drive

  
	
   

  	
   

  	
  Suite 301

  
	
   

  	
   

  	
  Chicago, IL 60601

  

 

FOURTH AMENDED AND RESTATED ORIGINAL ISSUE DISCOUNT
SECURED

NOTE

 

THIS Fourth Amended and Restated Original Issue Discount Secured Note
is one of a duly authorized issue of Notes of NATIONAL STORM MANAGEMENT, INC.,
a Nevada corporation, having a principal place of business at 999 North Main
Street, Suite 202, Glen Ellyn, IL 60137 with offices at 1315 West 53rd
Street, Mangonia Park, FL  33407 (the “Company”),
designated as its Note or Notes (the “Note” or “Notes”) in an aggregate face
amount of Two Million Four Hundred Eighty One Thousand and 00/100 Dollars ($2,481,000.00)
(the “Maturity Amount”). This Fourth Amended and Restated Original Issue
Discount Secured Note dated June 29, 2007 supersedes and replaces that certain Third
Amended and Restated Original Issue Discount Secured Note dated May 17, 2007,
which superseded and replaced that certain Second Amended and Restated Original
Issue Discount Secured Note dated April 11, 2007, which superseded and replaced
that certain First Amended and Restated Original Issue Discount Secured Note
dated February 26, 2007, which superseded and replaced that certain Original
Issue Discount Secured Note dated January 30, 2007.  The Notes shall be due upon the earlier of
(i) July 30, 2007 or (ii) the occurrence of an event of default, as defined
below (“Maturity Date”).

 

FOR VALUE RECEIVED, the Company promises to pay the Maturity Amount to
the Holder or registered assigns on the Maturity Date.  Upon the occurrence of an event of default

 

 

 

the
Maturity Amount, as determined as of the date of payment by Schedule A hereto,
shall bear interest at the rate of eighteen (18%) percent per annum from the
day such interest is due hereunder through and including the date of
payment.  The principal of, and interest
on, this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, at the address of the Holder last appearing on the Note
Register.

 

This Note is subject to the following additional provisions:

 

Section 1.              
[This section intentionally left blank.]

 

Section 2.               Company
Covenants.  The Company covenants and
agrees that, so long as any amount is due and owing under the Note or the 2006
Note (as defined in the Stock Pledge Agreement), it shall not:

 

(a)           Fail to make any
payment of the principal of, interest on, or other obligations in respect of,
this Note, free of any claim of subordination, as and when the same shall
become due and payable (whether on the Maturity Date or by acceleration or
otherwise), for five (5) business days after the same shall be due and payable;

 

(b)           Fail to observe or
perform any other covenant, agreement or warranty contained in, or otherwise
commit any breach of, this Note or the Fourth Amended and Restated Stock Pledge
Agreement (the “Stock Pledge Agreement”) entered into contemporaneously
herewith (collectively, the “Loan Documents”), including but not limited to the
obligation of the Company to deliver to the Holder additional Pledged Shares
(as defined in the Stock Pledge Agreement), together with stock powers executed
and with the signatures thereon medallion guaranteed, and irrevocable letters
of instruction to the Company’s transfer agent, all under certain circumstances
as more fully set forth in the Stock Pledge Agreement, for five (5) Business
Days after the date on which notice of such failure or breach shall have been
given;

 

(c)           Commence a voluntary
case under the United States Bankruptcy Code or insolvency laws as now or
hereafter in effect or any successor thereto (the “Bankruptcy Code”); or suffer
to have an involuntary case commenced against it under the Bankruptcy Code in
which the petition is not controverted within thirty (30 days), or is not
dismissed within sixty (60) days, after commencement of such involuntary case;
or suffer to have a “custodian” (as defined in the Bankruptcy Code) appointed
for, or take charge of, all or any substantial part of the property of the
Company, or commence any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company, or suffer to have commenced against it any such
proceeding which remains undismissed for a period of sixty (60) days; or be
adjudicated insolvent or bankrupt; or suffer to have any order of relief or
other order approving any such case or proceeding entered; or suffer to have
any appointment of any

 

 

 

custodian
or the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of sixty (60) days; or make a general
assignment for the benefit of creditors; or fail to pay, or state that it is
unable to pay, its debts generally as they become due; call a meeting of all of
its creditors with a view to arranging a composition or adjustment of its
debts; or by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or take any corporate or other action for
the purpose of effecting any of the foregoing;

 

(d)           Default in any of its
obligations under any mortgage, credit agreement or other facility, indenture,
agreement or other instrument under which there may be issued, or by which
there may be secured or evidenced any indebtedness of the Company in an amount
exceeding $750,000.00, whether such indebtedness now exists or shall hereafter
be created and such default shall result in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable; provided, that the default of the Company in its payment
obligations under the 2006 Note shall not be deemed such an event of default
under this Section 2(d);

 

(e)           Be a party to any
Change of Control Transaction (as defined in Section 7), or sell or
dispose of all or in excess of forty-nine (49%) percent of its assets (based on
book value calculation as reflected in the Company’s most recent financial
statements) in one or more transactions (whether or not such sale would
constitute a Change of Control Transaction);

 

(f)            Have its common
stock suspended or delisted from trading for in excess of three (3) trading
days;

 

(g)           Suffer to have the average daily trading volume of its
common stock, during any consecutive ten (10) trading-day period, be less than
two thousand ($2,000) dollars in value;

 

(h)           Suffer
a determination by the U.S. Securities and Exchange Commission or National
Association of Securities Dealers, or any applicable state regulatory
authority, that it has violated applicable securities laws;

 

(i)            Enter
into a transaction or series of transactions that would violate the “Twenty
Percent Rule” if the common stock of the Company were traded on the NASDAQ
market;

 

(j)            Enter into another financing arrangement (other than a
secured loan from a national banking institution) or sale of equity (other than
common stock at a fixed price per share) with another entity;

 

 (k)          Suffer to have an action, suit or proceeding commenced
against it seeking damages in an amount against which it is not insured
exceeding fifty thousand ($50,000) dollars; or

 

 

 

(l)            Make
any representation or warranty that is not true and correct in all material
respects as of the date of this Note and as of the date of a subsequent
drawdown as provided in Section 1 as though made at that time, except
for representations and warranties that are expressly made as of a particular
date, which shall be true and correct in all material respects as of such date.

 

Section 3.               Events
of Default.  “Event of Default”
wherever used herein, means a breach of one or more of the covenants set forth
in Section 2 (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative
or governmental body).  Upon the
occurrence of an Event of Default, interest shall accrue on the unpaid portion
of the Maturity Amount at a rate of one and one/half (1.5%) percent per month,
or eighteen (18%) percent per year.

 

Section 4.               Transfer
or Exchange of Notes.

 

(a)           The Notes are exchangeable for an
equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same but shall not
be issuable in denominations of less than integral multiples of Twenty Thousand
Dollars ($20,000) unless such amount represents the full principal balance of
Notes outstanding to such Holder.  No
service charge will be made for such registration of transfer or exchange.

 

(b)           The Holder, by
acceptance hereof, agrees to give written notice to the Company before
transferring this Note; such notice will describe briefly the proposed transfer
and will give the Company the name, address, and tax identification number of
the proposed transferee, and will further provide the Company with an opinion
of the Holder’s counsel that such transfer can be accomplished in accordance
with federal and applicable state securities laws (unless such transaction is
permitted by the plan of distribution in an effective Registration Statement).  Promptly upon receiving such written notice,
the Company shall present copies thereof to the Company’s counsel.

 

(i)            If,
in the opinion of such counsel, the proposed transfer may be effected without
registration or qualification (under any federal or state securities laws), the
Company, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the Holder shall be entitled to transfer this Note or to dispose of
underlying shares received upon the previous conversion of this Note, all in
accordance with the terms of the notice delivered by the Holder to the Company;
provided, that an appropriate legend may be endorsed on this Note respecting
restrictions upon transfer thereof necessary or advisable in the opinion of
counsel and satisfactory to the Company to prevent further transfers which
would be in violation of Section 5 of the Securities Act and applicable state
securities laws; and provided, further, that the prospective transferee or
purchaser

 

 

shall execute such documents and make such representations, warranties, and
agreements as may be required solely to comply with the exemptions relied upon
by the Company for the transfer or disposition of the Note.

 

(ii)           If
in the opinion of the counsel referred to in this Section 4(b), the
proposed transfer or disposition of this Note described in the written notice
given pursuant to this Section 4(b) may not be effected without
registration or qualification of this Note, the Company shall promptly give
written notice thereof to the Holder, and the Holder will limit its activities
in respect to such as, in the opinion of such counsel, are permitted by law.

 

(c)           Prior to transfer of
this Note in compliance with Section 4(b), the Company and any agent of
the Company may treat the person in whose name this Note is duly registered on
the Note Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Note is
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.

 

Section 5.               Interest
Rate Limitation.  The parties intend
to conform strictly to the applicable usury laws in effect from time to time
during the term of the loan evidenced hereby. 
Accordingly, if any transaction contemplated hereby would be usurious
under such laws, then notwithstanding any other provision hereof:  (i) the aggregate of all interest that is
contracted for, charged, or received under the Loan Documents shall not exceed
the maximum amount of interest allowed by applicable law (the “Highest Lawful
Rate”), and any excess shall be promptly credited to the Company by the Holder
(or, to the extent that such consideration shall have been paid, such excess
shall be promptly refunded to the Company by the Holder); (ii) neither the
Company nor any other person now or hereafter liable hereunder shall be
obligated to pay the amount of such interest to the extent that it is in excess
of the Highest Lawful Rate; and (iii) the effective rate of interest shall be
reduced to the Highest Lawful Rate.  All
sums paid, or agreed to be paid, to the Holder for the use, forbearance, and
detention of the debt of the Company to the Holder shall, to the extent
permitted by applicable law, be allocated throughout the full term of the Loan
Documents until payment is made in full so that the actual rate of interest
does not exceed the Highest Lawful Rate in effect at any particular time during
the full term thereof.  If at any time
the rate of interest under the Loan Documents exceeds the Highest Lawful Rate,
the rate of interest to accrue pursuant to the Loan Documents shall be limited,
notwithstanding anything to the contrary in the Loan Documents, to the Highest
Lawful Rate, but any subsequent reductions in the base rate shall not reduce the
interest to accrue pursuant to the Loan Documents below the Highest Lawful Rate
until the total amount of interest accrued equals the amount of interest that
would have accrued if a varying rate per annum equal to the interest rate under
the Loan Documents had at all times been in effect.  If the total amount of interest paid or
accrued pursuant to the Loan Documents under the foregoing provisions is less
than the total amount of interest that would have accrued if a varying rate per
annum equal to the interest rate under the Loan Documents had been in effect,
then the Company agrees to pay to the Holder an amount

 

 

 

equal
to the difference between (x) the lesser of (A) the amount of interest that
would have accrued if the Highest Lawful Rate had at all times been in effect,
or (B) the amount of interest that would have accrued if a varying rate per
annum equal to the interest rate under the Loan Documents had at all times been
in effect, and (y) the amount of interest accrued in accordance with the other
provisions of the Loan Documents.

 

Section 6.               Prepayment.

 

(a)           The Company shall
have the right to prepay this Note in whole or in part prior to the Maturity
Date.

 

(b)           The Company shall
give to the Holder at least five (5) business days, but not more than ten (10)
business days, written notice of any intention to prepay this Note, which
notice shall specify the “Prepayment Date”.

 

(c)           Any prepayment shall
reduce the Maturity Amount by the amount of such prepayment.

 

Section 7.               Definitions.  For the purposes hereof, the following terms
shall have the following meanings:

 

“Business Day” means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the States
of Illinois or Florida are authorized or required by law or other government
action to close.

 

“Change of Control Transaction” means the occurrence of any of (i) an
acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of in
excess of 49% of the voting securities of the Company coupled with a
replacement of more than one-half of the members of the Company’s board of
directors which is not approved by those individuals who are members of the
board of directors on the date hereof in one or a series of related
transactions, or (ii) the merger of the Company with or into another entity,
consolidation or sale of all or substantially all of the assets of the Company
in one or a series of related transactions, unless following such transaction,
the holders of the Company’s securities continue to hold at least 40% of such
securities following such transaction. 
The execution by the Company of an agreement to which it is a party or
by which it is bound providing for any of the events set forth above in (i) or
(ii) does not constitute the occurrence of the event until after the event in
fact occurs.

 

Section 8.               Nature
of Company Obligation.  Except as
expressly provided herein, no provision of this Note shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, interest and liquidated damages (if any) on, this Note at

 

 

 

the
time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct obligation of the
Company.

 

Section 9.               Replacement
Note.  If this Note shall be
mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in
exchange and substitution for and upon cancellation of a mutilated Note, or in
lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for
the principal amount of this Note so mutilated, lost, stolen or destroyed but
only upon receipt of evidence of such loss, theft or destruction of such Note,
and of the ownership hereof, and indemnity, if requested, all reasonably
satisfactory to the Company.

 

Section 10.             Choice
of Law and Venue; Submission to Jurisdiction; Service of Process.

 

(a)           THE VALIDITY OF THIS
NOTE, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE
PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS (WITHOUT REFERENCE TO THE
CHOICE OF LAW PRINCIPLES THEREOF).  THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
NOTE SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED
IN THE COUNTY OF COOK, STATE OF ILLINOIS OR, AT THE SOLE OPTION OF HOLDER, IN
ANY OTHER COURT IN WHICH HOLDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.

 

(b)           THE COMPANY HEREBY
SUBMITS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

 

(c)           THE COMPANY HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT, OR OTHER PROCESS ISSUED IN
ANY ACTION OR PROCEEDING AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT, OR
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO COMPANY.

 

(d)           NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF THE HOLDER TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY HOLDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE

 

 

 

TAKING
OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE
FORUM OR JURISDICTION.

 

(e)           To the extent
determined by such court, the Company shall reimburse the Holder for any
reasonable legal fees and disbursements incurred by the Holder in enforcement
of or protection of any of its rights under any of this Note.

 

Section 11.             Waiver.  Any waiver by the Company or the Holder of a
breach of any provision of this Note shall not operate as or be construed to be
a waiver of any other breach of such provision or of any breach of any other
provision of this Note.  The failure of
the Company or the Holder to insist upon strict adherence to any term of this
Note on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Note.  Any waiver
must be in writing.

 

Section 12.               Invalidity.  If any provision of this Note is invalid,
illegal or unenforceable, the balance of this Note shall remain in effect, and
if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

 

Section 13.             Business
Day.  Whenever any payment or other
obligation hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next calendar month, the preceding
Business Day in the appropriate calendar month).

 

Section 14.             Collateral
Security.  The obligation of the
Company for payment of principal, interest and all other sums hereunder, in the
event of a default and failure of the Company to perform hereunder, is secured
by the pledge of the Pledged Shares (as defined in the Stock Pledge Agreement)
by the Company as Pledgor under the terms and conditions of the Stock Pledge
Agreement.

 

Section 15.             Lock-Up.  Except as provided below, as long as any
portion of the Note remains outstanding, the Company’s Chief Executive Officer,
Terry Kiefer, shall not sell, pledge, hypothecate, transfer or otherwise
dispose of or encumber any portion of the Company’s common stock owned by him,
or engage in any short sale or other derivative or hedging transaction with
respect to the Company’s common stock. 
Notwithstanding the foregoing, Mr. Kiefer may sell (i) up to one (1%)
percent of the total number of the outstanding shares of the Company’s common
stock during every ninety (90) day period commencing on the effective date of a
registration statement, and (ii) up to four (4%) percent of the total number of
the outstanding shares of the Company’s common stock during each such ninety
(90) day period at a price equal to or greater than fifty ($0.50) cents per
share.

 

 

 

Terry
Kiefer has pledged 2,000,000 shares of the Company’s common stock to secure a
note issued by the Company to Equities First Holdings, LLC on April 4,
2006.  The Holder hereby acknowledges
having received a copy of said note and any related documents.

 

Section 16.             Payment
of Legal Fees.  The Company shall pay
legal fees and expenses incurred by the Holder in connection with negotiating
and entering into the Note in an amount not to exceed five thousand five
hundred ($5,500) Dollars.

 

Section 17.             Waiver
of Jury Trial.  THE COMPANY HEREBY
WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS NOTE. THE COMPANY REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

 

 

[signature page follows]

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer duly authorized for such purpose, as of the date first
above indicated.

 

 

	
   

  	
   

  	
  NATIONAL
  STORM MANAGEMENT, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Terry Kiefer

  
	
   

  	
   

  	
  Name:

  	
  Terry
  Kiefer

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:Exhibit
10.11

 

FOURTH AMENDED AND RESTATED STOCK PLEDGE AGREEMENT

 

                This FOURTH AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT (“Agreement”) is entered into as of the 29th day of June
2007 by and between John Fife (the “Secured Party”), and National Storm Management,
Inc., a Nevada corporation having a principal place of business at 999 North
Main Street, Suite 202, Glen Ellyn, IL 
60137 with offices at 1315 West 53rd Street, Mangonia Park,
FL  33407 (the “Pledgor”).

 

RECITALS

 

A.                                   The Pledgor
previously entered into that certain Third Amended and Restated Stock Pledge
Agreement dated as of May 17, 2007 (the “Third Amended and Restated Stock
Pledge Agreement”), which Third Amended and Restated Stock Pledge Agreement
superseded and replaced that certain Second Amended and Restated Stock Pledge
Agreement dated as of April 11, 2007 (the “Second Amended and Restated Stock
Pledge Agreement”), which Second Amended and Restated Stock Pledge Agreement
superseded and replaced that certain Amended and Restated Stock Pledge
Agreement dated as of February 26, 2007 (the “First Amended and Restated Stock
Pledge Agreement”), which First Amended and Restated Stock Pledge Agreement
superseded and replaced that certain Stock Pledge Agreement dated as of January
30, 2007, pursuant to which the Pledgor agreed to pledge the Pledged Shares
(defined below) as security for:  (i) the
performance of its obligations under its Original Issue Discount Secured Note
dated as of January 30, 2007 issued to the Secured Party in an aggregate
original face amount of up to eight hundred twenty five thousand and 00/100 dollars
($825,000.00) (the “Original Note”) and (ii) any and all other obligations of
the Pledgor to the Secured Party as the same may then exist or arise from time
to time.

 

B.                                     Pursuant to
this Agreement, the Pledgor has agreed to pledge the Pledged Shares as security
for: (i) the performance of its obligations under its Fourth Amended and
Restated Original Issue Discount Secured Note dated as of the date hereof and
issued to the Secured Party in an aggregate original face amount of two million
four hundred eighty one thousand and 00/100 dollars ($2,481,000.00) (the “Note”),
which Note supersedes and replaces the Third Amended and Restated Original
Issue Discount Secured Note dated May 17, 2007, which superseded and replaced
the Second Amended and Restated Original Issue Discount Secured Note dated
April 11, 2007, which superseded and replaced the First Amended and Restated
Original Issue Discount Secured Note dated February 26, 2007, which superseded
and replaced the Original Note, and (ii) any and all other obligations of the
Pledgor to the Secured Party as the same may currently exist or arise from time
to time.  Capitalized terms in this
Agreement which are not identified herein shall have the meanings given such
terms in the Note.

 

C.                                     The Secured
Party is willing to accept the Note from the Pledgor only upon receiving the
Pledgor’s pledge of the Pledged Shares as set forth in this Agreement.

 

1

 

                NOW, THEREFORE, in consideration
of the premises, the mutual covenants and conditions contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

                1.             Grant of Security Interest;
True-Up.

 

(a)           The Pledgor hereby pledges to the Secured Party as
collateral and security for the Secured Obligations (as defined in Section 2)
the securities initially set forth on the attached Schedule 1 of this Agreement
(the “Pledged Shares”), as well as all securities pledged as collateral to
secure the obligations of the Pledgor as more fully set forth in that certain
note dated as of July 24, 2006 (the “2006 Note”) by the Pledgor for the benefit
of the holder of all or any part thereof (each, a “Holder”).  On or prior to the date of this Agreement,
the Pledgor has delivered to the Secured Party certificate(s) representing the
Pledged Shares, along with a stock transfer power duly executed in blank by the
Pledgor and stamped with a bank medallion guarantee, and an irrevocable letter
of instruction to the Pledgor’s transfer agent, instructing the transfer agent
to register the Pledged Shares in the name of the Holder in the event of a
default under the Note or under this Agreement (an “Irrevocable Letter of
Instruction”).  In calculating the value
of Pledged Shares delivered as part of a True-Up, the common stock of the
Pledgor (the “Common Stock”), including the shares being delivered to the
Secured Party, shall be deemed to have the market value that it had on the date
on which the deficiency in collateral was calculated, without giving effect to
any subsequent increase or decrease in the value of the Common Stock in the
market.

 

(b)           True-up.  The Pledgor shall be required to increase the
number of Pledged Shares (a “True-Up”) if (A) on any monthly anniversary during
the term of the Note the market value of the Pledged Shares then held by the
Pledgor does not equal or exceed 300% of the sum of the Maturity Amount of the
Note and any amounts due under the 2006 Note (collectively, the “Combined
Obligations”), or (B) on any trading day during the term of the Note the market
value of the Pledged Shares then held by the Pledgor does not equal or exceed
250% of the Combined Obligations.  A
True-Up shall not be deemed to be made until the following steps have been
taken:

 

(i)            Within
five (5) business days after receipt of notice from the Secured Party of a
deficiency in the value of the Pledged Shares, the Pledgor shall deliver to the
Secured Party (A) a certificate or certificates for additional shares equal to
not less than 300% of the principal amount of the Combined Obligations (the “True-up
Shares”), together with (B) necessary stock powers, signed in blank and
medallion-guaranteed, and with (C) an Irrevocable Letter of Instruction (the
certificates, stock powers and Irrevocable Letter of Instruction are
collectively referred to as the “True-Up Documents”).  In calculating the number of Pledged Shares
delivered as part of a True-Up, the Common Stock shall be valued at the Market
Value (as defined in Section 1(b)(ii) below)  based upon which the deficiency was
calculated (e.g., the average closing bid price for the ten (10) trading days
prior to the date on which the Collateral is valued).

 

(ii)           If
the Pledgor fails to deliver the True-up Documents to the Secured Party within
five (5) business days after receipt of notice by the Secured Party therefor,
the Pledgor shall pay to the Secured Party, in cash, two hundred and fifty
($250) dollars per business day until such certificates are delivered.  Unless otherwise set forth on Schedule 1
of this Agreement, the Pledgor is the beneficial and record owner of the
Pledged Shares set forth opposite the Pledgor’s name on such Schedule. The
Pledged Shares, together

 

2

with any additions, replacements, accessions and substitutes therefore, or
proceeds thereof, are hereinafter referred to collectively as the “Collateral”
or the “Pledged Shares”.  Market Value
means the average closing bid price for the ten (10) trading days prior to the
date on which the Collateral is valued for purposes of this Section 1.

 

                                2.             Secured Obligations.  During the term hereof, the Collateral shall
secure the performance by the Pledgor of its obligations, covenants, and
agreements under (a) the Note, (b) the 2006 Note and (c) derived from any other
circumstance, whether or not reduced to writing, and whether currently in
existence or subsequently created, to the Secured Party.  The obligations, covenants and agreements
described in this Section 2 are the “Secured Obligations.”

 

                3.             Perfection of Security Interests.

 

(a)  Prior to execution of this
Agreement by the Pledgor, the Pledgor has delivered the Pledged Shares,
together with stock powers with medallion guarantees affixed thereto and an
Irrevocable Letter of Instruction.

 

                (b)           At its expense, the Pledgor shall cause the public records
to be searched with respect to the Collateral and will execute, deliver, file
and record (in such manner and form as the Secured Party may require), or
permit the Secured Party to file and record, as its attorney in fact, any
financing statements, any carbon, photographic or other reproduction of a
financing statement or this Agreement (which shall be sufficient as a financing
statement hereunder), any specific assignments or other paper that may be
reasonably necessary or desirable, or that the Secured  Party may request, in order to create,
preserve, perfect or validate any security interest or to enable the Secured
Party to exercise and enforce its rights hereunder with respect to any of the
Collateral.  The Pledgor hereby appoints
the Secured Party as the Pledgor’s attorney-in-fact to execute in the name and
behalf of the Pledgor such additional financing statements as the Secured Party
may request.

 

                4.             Assignment. 
In connection with the transfer of the Note in accordance with its
terms, the Secured Party may assign or transfer the whole or any part of its
security interest granted hereunder, and may transfer as collateral security
the whole or any part of his security interest in the Collateral.  Any transferee of the Collateral shall be
vested with all of the rights and powers of the Secured Party hereunder with
respect to the Collateral.

 

5.             Pledgor’s
Warranty.  On the date hereof, and at
the time of any True-Up (as described in Section 1(b), the Pledgor
represents and warrants hereby to the Secured Party as follows with respect to
the Pledged Shares and the transactions contemplated by the Note and this
Agreement:

 

(a)           The Collateral is
free and clear of any encumbrances of every nature whatsoever, and such Pledgor
is the sole owner of the Pledged Shares;

 

(b)           The Pledgor further agrees
not to grant or create any security interest, claim, lien, pledge or other
encumbrance with respect to the Collateral or attempt to sell, transfer or
otherwise dispose of the Collateral until the Secured Obligations have been
paid in full or this Agreement terminates;

 

(c)           This Agreement constitutes
the legal, valid and binding obligation of the Pledgor enforceable in
accordance with its terms (except as the enforcement thereof may be limited by

 

3

bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and
similar laws, now or hereafter in effect);

 

                (d)           The Pledgor has made necessary inquiries of the Pledgor
and believes that the Pledgor fully intends to fulfill and has the capability
of fulfilling the Secured Obligations to be performed by the Pledgor in
accordance with the terms of the Note;

 

                (e)           The Pledgor is not acting, and has not agreed to act, in
any plan to sell or dispose of any shares in a manner intended to circumvent
the registration requirements of the Securities Act of 1933, as amended, or any
applicable state law; and

 

(f)            The Pledgor has
been advised by counsel of the elements of a bona-fide pledge for purposes of
Rule 144(d)(3)(iv) under the Securities Act of 1933, as amended, including the
relevant SEC interpretations, and affirms that its pledge of shares pursuant to
this Agreement will constitute a bona-fide pledge of such shares for purposes
of such rule.

 

                6.             Collection of Dividends and Interest.  During the term of this Agreement and so long
as the Pledgor is not in default under the Note, the Pledgor is authorized to
collect all dividends, distributions, interest payments, and other amounts that
may be, or may become, due on any of the Collateral.

 

                7.             Voting Rights. 
During the term of this Agreement and until such time as this Agreement
has terminated or the Secured Party has exercised its rights under this
Agreement to foreclose its security interest in the Collateral, the Pledgor
shall have the right to exercise any voting rights evidenced by, or relating
to, the Collateral.

 

                8.             Warrants and Options.  In the event that, during the term of this
Agreement, subscription, spin-off, warrants, dividends, or any other rights or
option shall be issued in connection with the Collateral, such warrants,
dividends, rights and options shall be immediately delivered to the Secured
Party to be held under the terms hereof in the same manner as the Collateral.

 

                9.             Preservation of the Value of the Collateral.  The Pledgor shall pay all taxes, charges, and
assessments against the Collateral and do all acts necessary to preserve and
maintain the value thereof.

 

                10.           Secured Party as Pledgor’s Attorney-in-Fact.

 

                (a)           The Pledgor hereby irrevocably appoints the Secured Party
as the Pledgor’s attorney-in-fact, with full authority in the place and stead
of the Pledgor and in the name of the Pledgor, the Secured Party or otherwise,
from time to time at the Secured Party’s discretion, to take any action and to
execute any instrument that the Secured Party may reasonably deem necessary or
advisable to accomplish the purposes of this Agreement, including: (i) upon the
occurrence and during the continuance of an Event of Default, to receive,
indorse, and collect all instruments made payable to the Pledgor representing
any dividend, interest payment or other distribution in respect of the
Collateral or any part thereof to the extent permitted hereunder and to give
full discharge for the same and to execute and file governmental notifications
and reporting forms; (ii) to arrange for the transfer of the Collateral on the
books of any of the Pledgor or any other person to the name of the Secured
Party or to the name of the Secured Party’s nominee.

 

4

 

                (b)           In addition to the designation of the Secured Party as the
Pledgor’s attorney-in-fact in subsection (a), the Pledgor hereby
irrevocably appoints the Secured Party as the Pledgor’s agent and
attorney-in-fact to make, execute and deliver any and all documents and
writings which may be necessary or appropriate for approval of, or be required
by, any regulatory authority located in any city, county, state or country
where the Pledgor engages in business, in order to transfer or to more
effectively transfer any of the Pledged Shares or otherwise enforce the Secured
Party’s rights hereunder.

 

                11.           Remedies upon Default.  Upon the occurrence and during the
continuance of an Event of Default under the Note (each, an “Event of Default”):

 

                (a)           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 on
default under the Uniform Commercial Code (the “Code”) (irrespective of whether
the Code applies to the affected items of Collateral), and the Secured Party
may also 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 exchange,
broker’s board or at any of the Secured Party’s offices or elsewhere, for cash,
on credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as the Secured Party may deem commercially
reasonable, irrespective of the impact of any such sales on the market price of
the Collateral.  To the maximum extent
permitted by applicable law, the Secured Party may be the purchaser of any or
all of the Collateral at any such sale and shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or
any portion of the Collateral sold at any such public sale, to use and apply
all or any part of the Secured Obligations as a credit on account of the
purchase price of any Collateral payable at such sale.  Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of the
Pledgor, and the Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay, or appraisal that it now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.  The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) calendar days
notice to the Pledgor of the time and place of any public sale or the time
after which a private sale is to be made shall constitute reasonable
notification.  The Secured Party shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given.  The Secured Party may
adjourn 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.  To the maximum extent permitted by law, the
Pledgor hereby waives any claims against the Secured Party arising because the
price at which any Collateral may have been sold at such a private sale was
less than the price that might have been obtained at a public sale, even if the
Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree.

 

                (b)           Notwithstanding the foregoing, the Secured Party hereby
acknowledges that the total number of shares of stock that may be sold pursuant
to Section 11(a) shall not exceed, on any given trading day, the greater
of:  (i) 3% of the aggregate trading
volume during the previous five (5) trading days, including that day; (ii) 15%
of the trading volume on that day; or (iii) such number of shares as yield proceeds
(net of commissions) of $50,000.

 

                (c)           The Secured Party hereby agrees that, upon delivery of an
opinion of counsel stating that the rights of the Secured Party will not be
affected thereby, other shares of the Common Stock may at any time be
substituted for all or a portion of the Pledged Shares;

 

5

 

                (d)           The Pledgor hereby agrees that any sale or other
disposition of the Collateral conducted in conformity with reasonable
commercial practices of banks, insurance companies, or other financial institutions
in the city and state where the Secured Party or the Pledgor is located in
disposing of property similar to the Collateral shall be deemed to be
commercially reasonable.

 

                (e)           The Pledgor hereby acknowledges that the sale by the
Secured Party of any Collateral pursuant to the terms hereof in compliance with
the Securities Act of 1933 as now in effect or as hereafter amended, or any
similar statute hereafter adopted with similar purpose or effect (the “Securities
Act”), as well as applicable “Blue Sky” or other state securities laws, may
require strict limitations as to the manner in which the Secured Party or any
subsequent transferee of the Collateral may dispose thereof.  The Pledgor acknowledges and agrees that in
order to protect the Secured Party’s interest it may be necessary to sell the
Collateral at a price less than the maximum price attainable if a sale were
delayed or were made in another manner, such as a public offering under the
Securities Act.  The Pledgor has no
objection to sale in such a manner and agrees that the Secured Party shall have
no obligation to obtain the maximum possible price for the Collateral.  Without limiting the generality of the
foregoing, the Pledgor agrees that, upon the occurrence and during the
continuation of an Event of Default, the Secured Party, subject to applicable
law, from time to time may attempt to sell all or any part of the Collateral by
a private placement, restricting the bidders and prospective purchasers to
those who will represent and agree that they are purchasing for investment only
and not for distribution.  In so doing,
the Secured Party may solicit offers to buy the Collateral or any part thereof
for cash, from a limited number of investors reasonably believed by the Secured
Party to be institutional investors or other accredited investors who might be
interested in purchasing the Collateral. 
If the Secured Party shall solicit such offers, then the acceptance by
the Secured Party of one of the offers shall be deemed to be a commercially reasonable
method of disposition of the Collateral.

 

                (f)            If the Secured Party shall determine to exercise its
right to sell all or any portion of the Collateral pursuant to this Section
11, the Pledgor agrees that, upon request of the Secured Party, the Pledgor
will, at its own expense:

 

(i)            Execute and
deliver, or cause the officers and directors of the Pledgor to execute and
deliver, to any person, entity or governmental authority as the Secured Party
may choose, any and all documents and writings which, in the Secured Party’s
reasonable judgment, may be necessary or appropriate for approval, or be
required by, any regulatory authority located in any city, county, state or
country where the Pledgor engages in business, in order to transfer or to more
effectively transfer the Pledged Shares or otherwise enforce the Secured Party’s
rights hereunder; and

 

                                (ii)           Do or cause to be done all such other
acts and things as may be necessary to make such sale of the Collateral or any
part thereof valid and binding and in compliance with applicable law; and

 

                                (iii)          Cause the Pledgor to timely file all
periodic reports required to be filed by the Pledgor under the Securities
Exchange Act of 1934.

 

                                (g)           THE PLEDGOR EXPRESSLY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY LAW:  (i) ANY
CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME THE
SECURED PARTY DISPOSES OF ALL

 

6

 

OR
ANY PART OF THE COLLATERAL AS PROVIDED IN THIS SECTION 11; (ii) ALL
RIGHTS OF REDEMPTION, STAY OR APPRAISAL THAT IT NOW HAS OR MAY AT ANY TIME IN
THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING OR HEREAFTER
ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS SECTION
11, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.

 

(h)           Anything to the
contrary contained in this Agreement or otherwise notwithstanding, if and to
the extent that, on any date, the foreclosure by a Holder on any of the Pledged
Shares would result in the Secured Party or such designee being deemed the
beneficial owner of more than 9.99% of the then-outstanding shares of Common
Stock or any other class of Capital Shares (as defined below), then the Secured
Party shall not have the right, and the Pledgor shall not have the obligation, to
permit the re-issuance of any Pledged Shares in the name or at the direction of
such Holder as shall cause such Holder to be deemed the beneficial owner of
more than 9.99% of the then Outstanding (as defined below) Common Stock or any
other class of Capital Shares (as defined below).  “Outstanding”, when used with reference to
the Capital Shares, means, on any date of determination, all issued and
outstanding Capital Shares, and includes all such shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in such
shares; provided, however, that any Capital Shares directly or
indirectly owned or held by or for the account of the Pledgor or any Subsidiary
(as defined below) of the Pledgor shall not be deemed “Outstanding” for
purposes hereof.  “Capital Shares” means
the Common Stock and any other shares of any other class or series of capital
stock, whether now or hereafter authorized and however designated, which have
the right to participate in the distribution of earnings and assets (upon
dissolution, liquidation or winding-up) of the Pledgor.  “Subsidiary” means any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are owned directly or indirectly by the Pledgor.

 

(i)            The Pledgor
acknowledges that there is no adequate remedy at law for failure by it to
comply with the provisions of this Section 11 and that such failure
would not be adequately compensable in damages, and therefore agrees that its
agreements contained in this Section 11 may be specifically enforced.

 

 

                12.           Term of Agreement and Application
of Proceeds.

 

                 (a)          This
Agreement shall continue in full force and effect until the payment in full of
the Secured Obligations.  If the Note is
paid in full, the security interests in the relevant Collateral shall be deemed
released, and any portion of the Collateral not transferred to or sold by the
Secured Party shall be returned to the Pledgor. 
Within five (5) trading days of the termination of this Agreement, (i)
the relevant Collateral, along with any relevant stock powers, shall be
returned to the Pledgor, as contemplated above; (ii) the Secured Party shall
notify the transfer agent of the termination of the Irrevocable Letter of
Direction; and (iii) if any of the returned Collateral has been registered in
the name of the Secured Party pursuant to the Irrevocable Letter of
Instruction, such notice to the transfer agent by the Secured Party shall
instruct the transfer agent to register such Collateral in the name of the
Pledgor.

 

                (b)           Upon the occurrence and during the continuance of an Event
of Default, any cash held by the Secured Party as Collateral and all cash
proceeds received by the Secured Party in respect of any sale of, collection
from or other realization upon all or any part of the Collateral

 

7

 

pursuant
to the exercise by the Secured Party of its remedies as a secured creditor as provided
in Section 11 shall be applied from time to time by the Secured Party as
provided in the Note.

 

                13.           Indemnity and Expenses.  The Pledgor agrees:

 

                (a)           To indemnify and hold harmless the Secured Party and each
of its directors, officers, employees, agents and affiliates from and against
any and all claims, damages, demands, losses, obligations, judgments and
liabilities (including, without limitation, reasonable attorneys’ fees and
expenses) in any way arising out of or in connection with this Agreement or the
Secured Obligations, except to the extent the same shall arise as a result of
the gross negligence or willful misconduct of the party seeking to be
indemnified; and

 

                (b)           To pay and reimburse the Secured Party upon demand for all
reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) that the Secured Party may incur in connection
with (i) the custody, use or preservation of, or the sale of, collection from
or other realization upon, any of the Collateral, including the reasonable
expenses of re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, (ii) the exercise or
enforcement of any rights or remedies granted hereunder, under the Secured
Obligations or otherwise available to it (whether at law, in equity or
otherwise), or (iii) the failure by the Pledgor to perform or observe any of
the provisions hereof.  The provisions of
this Section 13 shall survive the execution and delivery of this Agreement,
the repayment of any of the Secured Obligations, the termination of the
commitments of the Secured Party under the Secured Obligations and the
termination of this Agreement.

 

                14.           Duties of the Secured Party.  The powers conferred on the Secured Party
hereunder are solely to protect its interests in the Collateral and shall not
impose on it any duty to exercise such powers. 
Except as provided in Section 9-207 of the Code, the Secured Party shall
have no duty with respect to the Collateral or any responsibility for taking
any necessary steps to preserve rights against any persons with respect to any
Collateral.

 

                15.           Choice of Law and Venue;
Submission to Jurisdiction; Service of Process.

 

                (a)           THE VALIDITY OF THIS AGREEMENT, ITS
CONSTRUCTION, INTERPRETATION AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS (WITHOUT REFERENCE TO THE CHOICE OF LAW
PRINCIPLES THEREOF).  THE PARTIES AGREE
THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL
BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN COOK
COUNTY, STATE OF ILLINOIS OR, AT THE SOLE OPTION OF THE SECURED PARTY, IN ANY
OTHER COURT IN WHICH THE SECURED PARTY SHALL INITIATE LEGAL OR EQUITABLE
PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN
CONTROVERSY.

 

                (b)           THE PLEDGOR HEREBY SUBMITS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF

 

8

 

FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION.

 

                (c)           THE PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT, OR OTHER PROCESS ISSUED IN ANY ACTION OR PROCEEDING AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINT, OR OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO THE PLEDGOR AT ITS ADDRESS FOR NOTICES IN
ACCORDANCE WITH THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF THE PLEDGOR’S ACTUAL RECEIPT THEREOF OR THREE (3)
DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.

 

                (d)           NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
AFFECT THE RIGHT OF THE SECURED PARTY TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY THE SECURED PARTY OF
ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER
THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

 

                16.           Amendments; etc. 
No amendment or waiver of any provision of this Agreement nor consent to
any departure by the Pledgor herefrom shall in any event be effective unless
the same shall be in writing and signed by the Secured Party, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.  No
failure on the part of the Secured Party to exercise, and no delay in
exercising, any right under this Agreement, the Note, the 2006 Note or
otherwise with respect to any of the Secured Obligations, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right under
this Agreement, the Note, the 2006 Note or otherwise with respect to any of the
Secured Obligations preclude any other or further exercise thereof or the
exercise of any other right.  The remedies
provided for in this Agreement or otherwise with respect to any of the Secured
Obligations are cumulative and not exclusive of any remedies provided by law.

 

                17.           Notices. 
Unless otherwise specifically provided herein, all notices shall be in
writing addressed to the respective party as set forth below: and may be
personally served, faxed, telecopied or sent by overnight courier service or
United States mail:

 

                                If to the
Pledgor:

 

                                National Storm
Management, Inc.

                                999 North Main
Street, Suite 202

                                Glen Ellyn,
IL  60137

                                Attention:  Scott Knoll, Chief Financial Officer

                                Tel.:  (630)469-7663

                                Fax:  (630)446-4400

 

                                With copies to:

 

                                Ungaretti &
Harris

                                3500 Three First
National Plaza

                                70 West Madison
Street

 

9

 

                                Chicago, IL  60602

                                Attention:  Michael Black, Esq.

                                Tel.:  (312)977-4400

                                Fax:  (312)977-4405

 

                                If to Secured
Party:

 

                                John Fife

                                303 East Wacker
Drive, Suite 301

                                Chicago, IL  60601

                                Tel.:  (312)565-1569

                                Fax:  (312)819-9701

 

                                With
copies to:

 

                                Merrill Weber,
Esq.

                                303 East Wacker
Drive, Suite 301

                                Chicago, IL  60601

                                Tel.:  (773)406-2386

                                Fax:  (312)819-9701

 

Any
notice given pursuant to this section shall be deemed to have been given:  (a) if delivered in person, when delivered;
(b) if delivered by fax, on the date of transmission if transmitted on a
Business Day before 4:00 p.m. at the place of receipt or, if not, on the next
succeeding Business Day; (c) if delivered by overnight courier, two (2) days
after delivery to such courier properly addressed; or (d) if by United States
mail, four (4) Business Days after depositing in the United States mail, with
postage prepaid and properly addressed. 
Any party hereto may change the address or fax number at which it is to
receive notices hereunder by notice to the other party in writing in the
foregoing manner.

 

                18.           Continuing Security Interest.  This Agreement shall create a continuing
security interest in the Collateral and shall: 
(a) remain in full force and effect until the indefeasible payment in
full of the Secured Obligations, including the cash collateralization,
expiration, or cancellation of all Secured Obligations, if any, consisting of
letters of credit, and the full and final termination of any commitment to
extend any financial accommodations under the Note, the 2006 Note, this
Agreement or otherwise with respect to the Secured Obligations; (b) be binding
upon the Pledgor and its successors and assigns; and (c) inure to the benefit
of the Secured Party and its successors, transferees, and assigns.  Upon the indefeasible payment in full of the
Secured Obligations, including the cash collateralization, expiration, or
cancellation of all Secured Obligations, if any, consisting of letters of
credit, and the full and final termination of any commitment to extend any
financial accommodations under the Note, the 2006 Note, this Agreement or
otherwise with respect to the Secured Obligations, the security interests
granted herein shall automatically terminate and all rights to the Collateral
shall revert to the Pledgor.  Upon any
such termination, the Secured Party, at the Pledgor’s expense, shall execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination. 
Such documents shall be prepared by the Pledgor and shall be in form and
substance reasonably satisfactory to the Secured Party.

 

10

 

                19.           Security Interest Absolute.  To the maximum extent permitted by law, all
rights of the Secured Party, all security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:

 

                (a)           Any lack of validity or enforceability of any of the
Secured Obligations or any other agreement or instrument relating thereto,
including the Note, the 2006 Note or any other thereof;

 

                (b)           Any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Note, the 2006
Note or any other thereof, or any other agreement or instrument relating
thereto;

 

                (c)           Any exchange, release, or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Secured Obligations; or

 

                (d)           Any other circumstances that might otherwise constitute a
defense available to, or a discharge of, the Pledgor.

 

                20.           Headings. 
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.

 

                21.           Severability. 
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

 

                22.           Counterparts; Telefacsimile Execution.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement.  Delivery of an executed counterpart of this
Agreement by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Agreement.  Any party delivering an executed counterpart
of this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, or binding effect
hereof.

 

                23.           Waiver of Marshaling.  Each of the Pledgor and the Secured Party
acknowledges and agrees that in exercising any rights under or with respect to
the Collateral, the Secured Party:  (a)
Is under no obligation to marshal any Collateral; (b) May, in its absolute
discretion, realize upon the Collateral in any order and in any manner it so
elects; and (c) May, in its absolute discretion, apply the proceeds of any or
all of the Collateral to the Secured Obligations in any order and in any manner
it so elects.  The Pledgor and the
Secured Party waive any right to require the marshaling of any of the
Collateral.

 

                24.           Waiver of Jury Trial.  THE PLEDGOR AND THE SECURED PARTY HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT

 

11

 

CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  THE PLEDGOR AND THE SECURED PARTY REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

 

 

[signature
page follows]

 

12

 

IN
WITNESS WHEREOF, the Pledgor and the Secured Party have caused this Agreement
to be duly executed and delivered by themselves or, in the case of parties that
are not natural persons, their officers thereunto duly authorized, as of the
date first written above.

 

	
   

  	
  NATIONAL
  STORM MANAGEMENT, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Terry Kiefer

  
	
   

  	
   

  	
  (Name)
  Terry Kiefer

  	
   

  
	
   

  	
   

  	
  (Title)
  CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Fife

  
	
   

  	
   

  	
  (Name)
  JOHN FIFE

  	
   

  

 

 

 

Schedule 1 - Pledged Shares

 

	
  Pledged Shares:

  	
   

  	
  Twenty-three million
  (23,000,000) shares of the common stock of National Storm Management, Inc.

  
	
   

  	
   

  	
   

  
	
  Name of Pledgor:

  	
   

  	
  National Storm Management,
  Inc.

  
	
   

  	
   

  	
   

  
	
  Jurisdiction of
  Organization:

  	
   

  	
  Nevada

  
	
   

  	
   

  	
   

  
	
  Type of Interest:

  	
   

  	
  Shares of common stock

  
	
   

  	
   

  	
   

  
	
  Number of Shares/Units (if
  applicable): see above

  
	
   

  	
   

  	
   

  
	
  Certificate Numbers:

  	
   

  	
  359, 378

  
	
   

  	
   

  	
   

  
	
  Date of Issuance:

  	
   

  	
  January 29, 2007; April
  10, 2007

  
	
   

  	
   

  	
   

  
	
  Percentage of Outstanding
  Interests in Pledgor:     Approximately     %

  
	
   

  	
   

  	
   

  
	
  Date of certificates:

  	
   

  	
  January 29, 2007; April
  10, 2007

  

 

14

 

Schedule 2 - Pledgor Information

 

 

For
Pledgor That Is a Registered Organization

Jurisdiction
of Organization: Nevada

 

Type
of Organization: Corporation

 

Organizational
ID Number (if any): 04-3619346

 

For
Pledgor That Is An Individual:
                           

 

Address
of Principal Residence: See Notice section

 

For
Pledgor That Is Neither a Registered Organization nor an Individual:

 

Type
of Organization:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]