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Unassociated Document

    

      PLEDGE
        AGREEMENT

       

      PLEDGE
        AGREEMENT (this
        “Agreement”),
        dated
        as of July 7, 2008, made by each entity listed as a pledgor on the signature
        pages hereto (the “Pledgor”),
        in
        favor of DRIFTWOOD
        VENTURES, INC.,
        a
        Delaware corporation (the "Buyer").

       

      WITNESSETH:

      

      WHEREAS,
        the Pledgor and Buyer are parties to the Securities Purchase Agreement, dated
        as
        of even date herewith (as amended, restated or otherwise modified from time
        to
        time, the "Securities
        Purchase Agreement"),
        pursuant to which the Pledgor shall be required to sell, and the Buyer shall
        purchase or have the right to purchase, the “Secured Notes” (as defined
        therein);

      

      WHEREAS,
        it is a condition precedent to the Buyer entering into the Securities Purchase
        Agreement that the Pledgor shall have executed and delivered to the Buyer
        this
        Agreement to secure all of its obligations under the Securities Purchase
        Agreement, the Secured Notes issued pursuant thereto (as such Secured Notes
        may
        be amended, restated, replaced or otherwise modified from time to time in
        accordance with the terms thereof, collectively, the “Notes”)
        and the
“Transaction Documents” (as defined in the Securities Purchase Agreement, the
“Transaction
        Documents”);
        and

      

      WHEREAS,
        the Pledgor has determined that the execution, delivery and performance of
        this
        Agreement directly benefits, and is in the best interest of, the
        Pledgor.

       

      NOW,
        THEREFORE, in consideration of the premises and the agreements herein and
        in
        order to induce the Buyer to perform under the Securities Purchase Agreement,
        the Pledgor agrees with the Buyer as follows:

      

      SECTION
        1. Definitions
        and Rules of Interpretation.

      

      (a) Definitions.
        Reference is made to the Securities Purchase Agreement and the Notes for
        a
        statement of terms thereof. All terms used in this Agreement which are defined
        in the Securities Purchase Agreement or in Article 8 or Article 9 of the
        Uniform
        Commercial Code as in effect from time to time in the State of New York (the
        “Code”),
        and
        which are not otherwise defined herein shall have the same meanings herein
        as
        set forth therein; provided,
        that
        terms used herein which are defined in the Code as in effect in the State
        of New
        York on the date hereof shall continue to have the same meaning notwithstanding
        any replacement or amendment of such statute except as the Buyer may otherwise
        determine. In the event that any such term is defined in both the Securities
        Purchase Agreement and the Code, the definition of such term in the Securities
        Purchase Agreement shall control.

      

      (b) Rules
        of Interpretation .
        Except
        as otherwise expressly provided in this Agreement, the following rules of
        interpretation apply to this Agreement: (i) the singular includes the plural
        and
        the plural includes the singular; (ii) “or” and “any” are not exclusive and
“include” and “including” are not limiting; (iii) a reference to any agreement
        or other contract includes permitted supplements and amendments; (iv) a
        reference to a law includes any amendment or modification to such law and
        any
        rules or regulations issued thereunder; (v) a reference to a person includes
        its
        permitted successors and assigns; and (vi) a reference in this Agreement
        to an
        Article, Section, Annex, Exhibit or Schedule is to the Article, Section,
        Annex,
        Exhibit or Schedule of this Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SECTION
        2. Pledge
        and Grant of Security Interest. As collateral security for all of the
        Obligations (as defined in Section 3 hereof), the Pledgor hereby pledges
        and
        assigns and grants to the Buyer a continuing security interest in, and Lien
        on,
        all of the Pledgor’s right, title and interest in and to the following
        (collectively, the “Collateral”):

       

      (a) all
        present, as set forth in Schedule
        I,
        and all
        future, issued and outstanding shares of capital stock, or other equity or
        investment securities of, or partnership, membership, or joint venture interests
        in, each Subsidiary (as defined in the Securities Purchase Agreement), whether
        now owned or hereafter acquired by the Pledgor and whether or not evidenced
        or
        represented by any stock certificate, certificated security or other instrument,
        together with the certificates representing such equity interests, all options
        and other rights, contractual or otherwise, in respect thereof and all
        dividends, distributions, cash, instruments, investment property and any
        other
        property (including, but not limited to, any stock dividend and any distribution
        in connection with a stock split) from time to time received, receivable
        or
        otherwise distributed in respect of or in exchange for any or all of the
        foregoing and all cash and noncash proceeds thereof (collectively, the
“Pledged
        Shares”);

       

      (b) all
        present and future increases, profits, combinations, reclassifications, and
        substitutes and replacements for all or part of the foregoing Collateral
        heretofore described;

      

      (c) all
        investment property, financial assets, securities, capital stock, other equity
        interests, stock options and commodity contracts of the Pledgor, all,
        debentures, bonds, promissory notes or other evidences of indebtedness payable
        or owing to the Pledgor, and all other assets now or hereafter received or
        receivable with respect to the foregoing;

       

      (d) all
        securities entitlements of the Pledgor in any and all of the foregoing;
        and

       

      (e) all
        proceeds (including proceeds of proceeds) of any and all of the
        foregoing;

      

      in
        each
        case, whether now owned or hereafter acquired by the Pledgor and howsoever
        its
        interest therein may arise or appear (whether by ownership, security interest,
        Lien, claim or otherwise).

       

      SECTION
        3. Security
        for Obligations. The security interest created hereby in the Collateral
        constitutes continuing collateral security for all of the following obligations,
        whether now existing or hereafter incurred (the “Obligations”):

       

      (a) the
        payment by the Pledgor, as and when due and payable (by scheduled maturity,
        required prepayment, acceleration, demand or otherwise), of all amounts from
        time to time owing by it in respect of the Securities Purchase Agreement,
        the
        Notes and the other Transaction Documents, (including, without limitation,
        all
        interest that accrues after the commencement of any bankruptcy proceeding
        of the
        Pledgor, whether or not the payment of such interest is unenforceable or
        is not
        allowable due to the existence of such bankruptcy proceeding), and (B) all
        fees,
        commissions, expense reimbursements, indemnifications and all other amounts
        due
        or to become due under any of the Transaction Documents; and

       

      
        
          
          

        

        
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      (b) the
        due
        performance and observance by the Pledgor of all of its other obligations
        from
        time to time existing in respect of any of the Transaction Documents for
        so long
        as the Notes are outstanding.

       

      SECTION
        4. Delivery
        of the Collateral.

       

      (a) All
        certificates currently representing the Pledged Shares shall be delivered
        to the
        Buyer on or prior to the execution and delivery of this Agreement. All other
        promissory notes, certificates and instruments constituting Collateral from
        time
        to time or required to be pledged to the Buyer pursuant to the terms of this
        Agreement or the Securities Purchase Agreement (the “Additional
        Collateral”)
        shall
        be delivered to the Buyer promptly upon receipt thereof by or on behalf of
        the
        Pledgor. All such promissory notes, certificates and instruments shall be
        held
        by the Buyer pursuant hereto and shall be delivered in suitable form for
        transfer by delivery or shall be accompanied by duly executed instruments
        of
        transfer or assignment or undated stock powers executed in blank, all in
        form
        and substance reasonably satisfactory to the Buyer. If any Collateral consists
        of uncertificated securities, unless the immediately following sentence is
        applicable thereto, at the request of Buyer, the Pledgor shall cause the
        Buyer
        (or its designated custodian, nominee or other designee) to become the
        registered holder thereof, or cause each issuer of such securities to agree
        that
        it will comply with instructions originated by the Buyer (or its designated
        custodian, nominee or other designee) with respect to such securities without
        further consent by the Pledgor. If any Collateral consists of securities
        entitlements, the Pledgor shall transfer such securities entitlements to
        the
        Buyer (or its designated custodian, nominee or other designee) or cause the
        applicable securities intermediary to agree that it will comply with entitlement
        orders by the Buyer (or its designated custodian, nominee or other designee)
        without further consent by the Pledgor.

      

      (b) Promptly
        upon the receipt by the Pledgor of any Additional Collateral, a Pledge
        Amendment, duly executed by the Pledgor, in substantially the form of
Annex
        I
        hereto
        (a “Pledge
        Amendment”),
        shall
        be delivered to the Buyer, in respect of the Additional Collateral which
        is or
        are to be pledged pursuant to this Agreement and the Securities Purchase
        Agreement, which Pledge Amendment shall from and after delivery thereof
        constitute part of Schedule
        I
        hereto.
        Each Pledgor hereby authorizes the Buyer to attach each Pledge Amendment
        to this
        Agreement and agrees that all certificates or instruments listed on any Pledge
        Amendment shall for all purposes hereunder constitute Collateral and the
        Pledgor
        shall be deemed upon delivery thereof to have made the representations and
        warranties set forth in Section
        5
        with
        respect to such Additional Collateral.

       

      
        
          
          

        

        
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      (c) If
        the
        Pledgor shall receive, by virtue of the Pledgor’s being or having been an owner
        of any Collateral, any (i) stock certificate (including, without limitation,
        any
        certificate representing a stock dividend or distribution in connection with
        any
        increase or reduction of capital, reclassification, merger, consolidation,
        sale
        of assets, combination of shares, stock split, spin-off or split-off),
        promissory note or other instrument, (ii) option or right, whether as an
        addition to, substitution for, or in exchange for, any Collateral, or otherwise,
        (iii) dividends payable in cash (except such dividends permitted to be
        retained by the Pledgor pursuant to Section
        7
        hereof)
        or in securities or other property or (iv) dividends, distributions, cash,
        instruments, investment property and other property in connection with a
        partial
        or total liquidation or dissolution or in connection with a reduction of
        capital, capital surplus or paid-in surplus, the Pledgor shall receive such
        stock certificate, promissory note, instrument, option, right, payment or
        distribution in trust for the benefit of the Buyer, shall segregate it from
        the
        Pledgor’s other property and shall deliver it forthwith to the Buyer in the
        exact form received, with any necessary endorsement and/or appropriate stock
        powers duly executed in blank, to be held by the Buyer as Collateral and
        as
        further collateral security for the Obligations.

       

      SECTION
        5. Representations
        and Warranties. The Pledgor represents and warrants as follows:

      

      (a) The
        Pledgor, (i) is a corporation, limited liability company or limited partnership
        duly organized, validly existing and in good standing under the laws of the
        state or jurisdiction of its organization, and (ii) has all requisite power
        and
        authority to execute, deliver and perform this Agreement.

      

      (b) The
        execution, delivery and performance by the Pledgor of this Agreement (i)
        have
        been duly authorized by all necessary action, (ii) do not and will not
        contravene its charter or bylaws, or any applicable law or any contractual
        restriction binding on or affecting it or any of its properties, and (iii)
        do
        not and will not result in or require the creation of any Lien upon or with
        respect to any of its properties other than pursuant to this
        Agreement.

       

      (c) The
        issuers of the Pledged Shares set forth in Schedule
        I
        hereto
        are the
        Pledgor’ only Subsidiaries existing on the date hereof. The Pledged Shares have
        been duly authorized and validly issued, are fully paid and nonassessable
        and
        the holders thereof are not entitled to any preemptive first refusal or other
        similar rights. Except as noted in Schedule
        I
        hereto,
        the Pledged Shares constitute 100% of the issued shares of capital stock,
        partnership interests or membership or other equity interests, as applicable,
        of
        the Subsidiaries. All other shares of stock constituting Collateral will
        be,
        when issued, duly authorized and validly issued, fully paid and
        nonassessable.

       

      (d) The
        Pledgor is and will be at all times the legal and beneficial owner of the
        Collateral free and clear of any Lien, security interest, option or other
        charge
        or encumbrance except for the security interest and Lien created by this
        Agreement or any Permitted Liens.

       

      (e) The
        exercise by the Buyer of any of its rights and remedies hereunder will not
        contravene any law or any contractual restriction binding on or affecting
        the
        Pledgor or any of the properties of the Pledgor and will not result in or
        require the creation of any Lien, security interest or other charge or
        encumbrance upon or with respect to any of the properties of the Pledgor
        other
        than pursuant to this Agreement and the other Transaction
        Documents.

       

      
        
          
          

        

        
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      (f) No
        authorization or approval or other action by, and no notice to or filing
        with,
        any governmental authority is required to be obtained or made by the Pledgor
        for
        (i) the due execution, delivery and performance by the Pledgor of this
        Agreement, (ii) the grant by the Pledgor, or the perfection, of the security
        interest and Lien purported to be created hereby in the Collateral or (iii)
        the
        exercise by the Buyer of any of its rights and remedies hereunder, except
        as may
        be required in connection with any sale of any Collateral by laws affecting
        the
        offering and sale of securities generally.

       

      (g) This
        Agreement creates a valid security interest and Lien in favor of the Buyer
        in
        the Collateral, as security for the Obligations. The Buyer’s having possession
        of the promissory notes evidencing the Collateral, the certificates representing
        the Pledged Shares and all other certificates, instruments and cash constituting
        Collateral from time to time results in the perfection of such security interest
        and Lien. Such security interest and Lien is, or in the case of Collateral
        in
        which the Pledgor obtains rights after the date hereof, will be, a perfected
        Lien. All action necessary or desirable to perfect and protect such security
        interest and Lien has been duly taken, except for the Buyer’s having possession
        of certificates, instruments and cash constituting Collateral after the date
        hereof.

       

      SECTION
        6. Covenants
        as to the Collateral. So long as any Obligations shall remain outstanding
        and the Securities Purchase Agreement and the other Transaction Documents
        shall
        not have been terminated, the Pledgor will, unless the Buyer shall otherwise
        consent in writing:

       

      (a) keep
        adequate records concerning the Collateral and permit the Buyer, or any
        designees or representatives thereof at any time or from time to time to
        examine
        and make copies of and abstracts from such records;

       

      (b) at
        the
        Pledgor’s expense, promptly deliver to the Buyer a copy of each material notice
        or other material communication received by the Pledgor in respect of the
        Collateral;

       

      (c) at
        the
        Pledgor’s expense, defend the Buyer’s right, title and security interest in and
        to the Collateral against the claims of any Person;

       

      (d) at
        the
        Pledgor’s expense, at any time and from time to time, promptly execute and
        deliver all further instruments and documents and take all further action
        that
        may be necessary or desirable or that the Buyer may reasonably request in
        order
        to (i) perfect and protect, or maintain the perfection of, the security
        interest and Lien purported to be created hereby, (ii) enable the Buyer to
        exercise and enforce its rights and remedies hereunder in respect of the
        Collateral or (iii) otherwise effect the purposes of this Agreement, including,
        without limitation, delivering to the Buyer irrevocable proxies in respect
        of
        the Collateral;

      (e) not
        sell,
        assign (by operation of law or otherwise), exchange or otherwise dispose
        of any
        Collateral or any interest therein except as expressly permitted by the
        Securities Purchase Agreement;

       

      
        
          
          

        

        
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      (f) not
        create or suffer to exist any Lien, upon or with respect to any Collateral
        except for the Lien created hereby or for any Permitted Lien;

       

      (g) not
        make
        or consent to any amendment or other modification or waiver with respect
        to any
        Collateral or enter into any agreement or permit to exist any restriction
        with
        respect to any Collateral other than pursuant to the Transaction
        Documents;

       

      (h) except
        as
        expressly permitted by the Securities Purchase Agreement, not permit the
        issuance of (i) any additional shares of any class of capital stock, partnership
        interests, member interests or other equity of any Subsidiary, (ii) any
        securities convertible voluntarily by the holder thereof or automatically
        upon
        the occurrence or non-occurrence of any event or condition into, or exchangeable
        for, any such shares of capital stock or (iii) any warrants, options, contracts
        or other commitments entitling any Person to purchase or otherwise acquire
        any
        such shares of capital stock;

       

      (i) not
        issue
        any stock certificate, certificated security or other instrument to evidence
        or
        represent any shares of capital stock, any partnership interest or membership
        interest described in Schedule
        I
        hereto;
        and

       

      (j) not
        take
        or fail to take any action which would in any manner impair the validity
        or
        enforceability of the Buyer’s security interest in and Lien on any Collateral.

       

      SECTION
        7. Voting
        Rights, Dividends, Etc. in Respect of the Collateral.

       

      (a) So
        long
        as no Event of Default (as defined in the Notes) (an “Event
        of Default”) shall
        have occurred and be continuing:

       

      (i) the
        Pledgor may exercise any and all voting and other consensual rights pertaining
        to any Collateral for any purpose not inconsistent with the terms of this
        Agreement, the Securities Purchase Agreement or the other Transaction Documents;
        provided,
        however,
        that
        (A) Pledgor will not exercise nor refrain from exercising any such right,
        as the case may be, if the Buyer gives it notice that, in the Buyer’s judgment,
        such action (or inaction) is reasonably likely to have a Material Adverse
        Effect
        and (B) the Pledgor will give the Buyer at least five (5) Business Days’
notice of the manner in which it intends to exercise, or the reasons for
        refraining from exercising, any such right which is reasonably likely to
        have a
        Material Adverse Effect;

      (ii) the
        Pledgor may receive and retain any and all dividends, interest or other
        distributions paid in respect of the Collateral to the extent permitted by
        the
        Securities Purchase Agreement; provided,
        however,
        that
        any and all (A) dividends and interest paid or payable other than in cash
        in
        respect of, and instruments and other property received, receivable or otherwise
        distributed in respect of or in exchange for, any Collateral, (B) dividends
        and
        other distributions paid or payable in cash in respect of any Collateral
        in
        connection with a partial or total liquidation or dissolution or in connection
        with a reduction of capital, capital surplus or paid-in surplus, and (C)
        cash
        paid, payable or otherwise distributed in redemption of, or in exchange for,
        any
        Collateral, together with any dividend, distribution, interest or other payment
        which at the time of such dividend, distribution, interest or other payment
        was
        not permitted by the Securities Purchase Agreement, shall be, and shall
        forthwith be delivered to the Buyer to hold as, Collateral and shall, if
        received by the Pledgor, be received in trust for the benefit of the Buyer,
        shall be segregated from the other property or funds of the Pledgor, and
        shall
        be forthwith delivered to the Buyer in the exact form received with any
        necessary indorsement and/or appropriate stock powers duly executed in blank,
        to
        be held by the Buyer as Collateral and as further collateral security for
        the
        Obligations; and

       

      
        
          
          

        

        
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      (iii) the
        Buyer
        will execute and deliver (or cause to be executed and delivered) to the Pledgor
        all such proxies and other instruments as the Pledgor may reasonably request
        for
        the purpose of enabling the Pledgor to exercise the voting and other rights
        which it is entitled to exercise pursuant to paragraph (i) of this Section
        7(a)
        and to
        receive the dividends, distributions, interest and other payments which it
        is
        authorized to receive and retain pursuant to paragraph (ii) of this Section
        7(a),
        in each
        case, to the extent that the Buyer has possession of such
        Collateral.

       

      (b) Upon
        the
        occurrence and during the continuance of an Event of Default:

       

      (i) all
        rights of the Pledgor to exercise the voting and other consensual rights
        which
        it would otherwise be entitled to exercise pursuant to paragraph (i) of
        subsection (a) of this Section
        7,
        and to
        receive the dividends, distributions, interest and other payments which it
        would
        otherwise be authorized to receive and retain pursuant to paragraph (ii) of
        subsection (a) of this Section 7,
        shall
        cease, and all such rights shall thereupon become vested in the Buyer which
        shall thereupon have the sole right to exercise such voting and other consensual
        rights and to receive and hold as Collateral such dividends, distributions,
        interest and other payments;

       

      (ii) without
        limiting the generality of the foregoing, the Buyer may at its option exercise
        any and all rights of conversion, exchange, subscription or any other rights,
        privileges or options pertaining to any of the Collateral as if it were the
        absolute owner thereof, including, without limitation, the right to exchange,
        in
        its discretion, any and all of the Collateral upon the merger, consolidation,
        reorganization, recapitalization or other adjustment of any issuer of the
        Collateral or upon the exercise by any issuer of the Collateral of any right,
        privilege or option pertaining to any Collateral, and, in connection therewith,
        to deposit and deliver any and all of the Collateral with any committee,
        depository, registrar or other designated agent upon such terms and conditions
        as it may determine; and 

       

      (iii) all
        dividends, distributions, interest and other payments which are received
        by the
        Pledgor contrary to the provisions of paragraph (i) of this Section
        7(b)
        shall be
        received in trust for the benefit of the Buyer, shall be segregated from
        other
        funds of the Pledgor, and shall be forthwith paid over to the Buyer as
        Collateral in the exact form received with any necessary indorsement and/or
        appropriate stock powers duly executed in blank, to be held by the Buyer
        as
        Collateral and as further collateral security for the Obligations.

       

      
        
          
          

        

        
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      SECTION
        8. Additional
        Provisions Concerning the Collateral.

       

      (a) The
        Pledgor hereby (i) authorizes the Buyer to file one or more financing or
        continuation statements, and amendments thereto, relating to the Collateral,
        without the signature of the Pledgor where permitted by law, (ii) ratifies
        such
        authorization to the extent that the Buyer has filed any such financing or
        continuation statements, or amendments thereto, without the signature of
        the
        Pledgor prior to the date hereof and (iii) authorizes the Buyer to execute
        any
        agreements, instruments or other documents in the Pledgor’s name and to file
        such agreements, instruments or other documents that are related to the security
        interest and Lien of the Buyer in the Collateral or as provided under Article
        8
        or Article 9 of the UCC in any appropriate filing office. 

       

      (b) The
        Pledgor hereby irrevocably appoints the Buyer as its attorney-in-fact and
        proxy,
        with full authority in the place and stead and in its name or otherwise,
        from
        time to time in the Buyer’s discretion to take any action and to execute any
        instrument which the Buyer may deem necessary or advisable to accomplish
        the
        purposes of this Agreement (subject to the rights of the Pledgor under
Section
        7(a)
        hereof),
        including, without limitation, to receive, indorse and collect all instruments
        made payable to the Pledgor representing any dividend, interest payment or
        other
        distribution in respect of any Collateral and to give full discharge for
        the
        same. This power is coupled with an interest and is irrevocable until the
        termination of this Agreement in accordance with Section 13(e)
        hereof.

       

      (c) If
        the
        Pledgor fails to perform any agreement or obligation contained herein, the
        Buyer
        itself may perform, or cause performance of, such agreement or obligation,
        and
        the expenses of the Buyer incurred in connection therewith shall be payable
        by
        the Pledgor pursuant to Section
        10
        hereof
        and shall be secured by the Collateral.

       

      (d) Other
        than the exercise of reasonable care to assure the safe custody of the
        Collateral while held hereunder, the Buyer shall have no duty or liability
        to
        preserve rights pertaining thereto and shall be relieved of all responsibility
        for the Collateral upon surrendering it or tendering surrender of it to the
        Pledgor. The Buyer shall be deemed to have exercised reasonable care in the
        custody and preservation of the Collateral in its possession if the Collateral
        is accorded treatment substantially equal to that which the Buyer accords
        its
        own property, it being understood that the Buyer shall not have responsibility
        for (i) ascertaining or taking action with respect to calls, conversions,
        exchanges, maturities, tenders or other matters relating to any Collateral,
        whether or not the Buyer has or is deemed to have knowledge of such matters,
        or
        (ii) taking any necessary steps to preserve rights against any parties with
        respect to any Collateral.

       

      (e) The
        powers conferred on the Buyer hereunder are solely to protect its interest
        in
        the Collateral and shall not impose any duty upon it to exercise any such
        powers. Except for the safe custody of any Collateral in its possession and
        the
        accounting for monies actually received by it hereunder, the Buyer shall
        have no
        duty as to any Collateral or as to the taking of any necessary steps to preserve
        rights against prior parties or any other rights pertaining to any
        Collateral.

       

      
        
          
          

        

        
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      (f) Upon
        the
        occurrence and during the continuation of any Default or Event of Default,
        the
        Buyer may at any time in its discretion (i) without notice to the Pledgor,
        transfer or register in the name of the Buyer or any of its nominees any
        or all
        of the Collateral, subject only to the revocable rights of the Pledgor under
        Section
        7(a)
        hereof,
        and (ii) exchange certificates or instruments constituting Collateral for
        certificates or instruments of smaller or larger denominations. 

       

      SECTION
        9. Remedies
        Upon Default. If any Event of Default shall have occurred and be
        continuing:

       

      (a) The
        Buyer
        may exercise in respect of the Collateral, in addition to other rights and
        remedies provided for herein or otherwise available to it, all of the rights
        and
        remedies of a secured party on default under the Code then in effect in the
        State of New York; and without limiting the generality of the foregoing and
        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
        or
        broker’s board or elsewhere, at such price or prices and on such other terms as
        the Buyer may deem commercially reasonable. The Pledgor agrees that, to the
        extent notice of sale shall be required by law, at least ten (10) days’ notice
        to the Pledgor of the time and place of any public sale or the time after
        which
        any private sale is to be made shall constitute reasonable notification.
        The
        Buyer shall not be obligated to make any sale of Collateral regardless of
        notice
        of sale having been given. The Buyer 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.

       

      (b) The
        Pledgor recognizes that it may be impracticable to effect a public sale of
        all
        or any part of the Pledged Shares or any other securities constituting
        Collateral and that the Buyer may, therefore, determine to make one or more
        private sales of any such securities to a restricted group of purchasers
        who
        will be obligated to agree, among other things, to acquire such securities
        for
        its own account, for investment and not with a view to the distribution or
        resale thereof. The Pledgor acknowledges that any such private sale may be
        at
        prices and on terms less favorable to the seller than the prices and other
        terms
        which might have been obtained at a public sale and, notwithstanding the
        foregoing, agrees that such private sales shall be deemed to have been made
        in a
        commercially reasonable manner and that the Buyer shall have no obligation
        to
        delay sale of any such securities for the period of time necessary to permit
        the
        issuer of such securities to register such securities for public sale under
        the
        Securities Act of 1933, as amended (the “Securities
        Act”).
        The
        Pledgor further acknowledges and agrees that any offer to sell such securities
        which has been (i) publicly advertised on a bona fide basis in a newspaper
        or
        other publication of general circulation in the financial community of New
        York,
        New York (to the extent that such an offer may be so advertised without prior
        registration under the Securities Act) or (ii) made privately in the manner
        described above to not less than fifteen (15) bona fide
        offerees
        shall be deemed to involve a “public disposition” for the purposes of Section
        9-610 of the Code (or any successor or similar, applicable statutory provision)
        as then in effect in the State of New York, notwithstanding that such sale
        may
        not constitute a “public offering” under the Securities Act, and that the Buyer
        may, in such event, bid for the purchase of such securities.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (c) Any
        cash
        held by the Buyer as Collateral and all cash proceeds received by the Buyer
        in
        respect of any sale of, collection from, or other realization upon, all or
        any
        part of the Collateral may, in the discretion of the Buyer, be held by the
        Buyer
        as collateral for, and/or then or at any time thereafter applied (after payment
        of any amounts payable to the Buyer pursuant to Section
        10
        hereof)
        in whole or in part by the Buyer against, all or any part of the Obligations
        in
        such order as the Buyer shall elect consistent with the provisions of the
        Securities Purchase Agreement. 

      

      (d) In
        the
        event that the proceeds of any such sale, collection or realization are
        insufficient to pay all amounts to which the Buyer is legally entitled, the
        Pledgor shall be jointly and severally liable for the deficiency, together
        with
        interest thereon at the highest rate specified in the Securities Purchase
        Agreement for interest on overdue principal thereof or such other rate as
        shall
        be fixed by applicable law, together with the costs of collection and the
        reasonable fees, costs and expenses of any attorneys employed by the Buyer
        to
        collect such deficiency.

       

      SECTION
        10. Indemnity
        and Expenses.

       

      (a) The
        Pledgor, hereby agrees to indemnify and hold the Buyer (and all of its officers,
        directors, employees, attorneys, consultants) harmless from and against any
        and
        all claims, damages, losses, liabilities, obligations, penalties, fees, costs
        and expenses (including, without limitation, reasonable legal fees and
        disbursements of counsel) to the extent that they arise out of or otherwise
        result from this Agreement (including, without limitation, enforcement of
        this
        Agreement), except claims, losses or liabilities arising or resulting directly
        from such Person’s gross negligence or willful misconduct as determined by a
        court of competent jurisdiction.

       

      (b) The
        Pledgor shall be obligated for, and will upon demand pay to the Buyer the
        reasonable amount of any and all out-of-pocket costs and expenses, including
        the
        reasonable fees and disbursements of the Buyer’s counsel and of any experts
        which the Buyer may incur in connection with (i) the preparation, negotiation,
        execution, delivery, recordation, administration, amendment, waiver or other
        modification or termination of this Agreement, (ii) the custody, preservation,
        use or operation of, or the sale of, collection from, or other realization
        upon,
        any Collateral, (iii) the exercise or enforcement of any of the rights of
        the
        Buyer hereunder, or (iv) the failure by the Pledgor to perform or observe
        any of
        the provisions hereof.

       

      SECTION
        11. Notices,
        Etc. All notices and other communications provided for hereunder shall be
        in
        writing and shall be mailed (by certified mail, postage prepaid and return
        receipt requested), sent by Federal Express or other recognized courier service
        (return receipt requested), telecopied or delivered, if to the Pledgor, to
        it at
        the address specified for the Pledgor in the Securities Purchase Agreement
        or if
        to the Buyer, to it at the address specified in the Securities Purchase
        Agreement; or as to either such Person at such other address as shall be
        designated by such Person in a written notice to such other Person complying
        as
        to delivery with the terms of this Section 11. All such notices and other
        communications shall be effective (i) if sent by certified mail, postage
        prepaid, return receipt requested, when received or three (3) Business Days
        after mailing, whichever first occurs, (ii) if telecopied, when transmitted
        and
        confirmation is received, provided same is on a Business Day and, if not,
        on the next Business Day or (iii) if delivered or sent by Federal Express
        or
        other recognized courier service (return receipt requested), upon delivery,
        provided same is on a Business Day and, if not, on the next Business Day.
        

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      SECTION
        12. Security
        Interest Absolute. All rights of the Buyer, all Liens and all obligations of
        the Pledgor hereunder shall be absolute and unconditional irrespective of:
        (i)
        any lack of validity or enforceability of the Securities Purchase Agreement
        or
        any other agreement or instrument relating thereto, (ii) any change in the
        time,
        manner or place of payment of, or in any other term in respect of, all or
        any of
        the Obligations, or any other amendment or waiver of or consent to any departure
        from the Securities Purchase Agreement or any other Transaction Document,
        (iii)
        any exchange or release of, or non-perfection of any Lien on any Collateral,
        or
        any release or amendment or waiver of or consent to departure from any guaranty,
        for all or any of the Obligations, or (iv) any other circumstance which might
        otherwise constitute a defense available to, or a discharge of, the Pledgor
        in
        respect of the Obligations (other than the payment in full of the Obligations).
        All authorizations and agencies contained herein with respect to any of the
        Collateral are irrevocable and powers coupled with an interest.

       

      SECTION
        13. Miscellaneous.

       

      (a) No
        amendment of any provision of this Agreement shall be effective unless it
        is in
        writing and signed by the Pledgor and the Buyer, and no waiver of any provision
        of this Agreement, and no consent to any departure by the Pledgor therefrom,
        shall be effective unless it is in writing and signed by the Buyer, and then
        such waiver or consent shall be effective only in the specific instance and
        for
        the specific purpose for which given.

       

      (b) No
        failure on the part of the Buyer to exercise, and no delay in exercising,
        any
        right hereunder or under any other Transaction Document shall operate as
        a
        waiver thereof; nor shall any single or partial exercise of any such right
        preclude any other or further exercise thereof or the exercise of any other
        right. The rights and remedies of the Buyer provided herein and in the other
        Transaction Documents are cumulative and are in addition to, and not exclusive
        of, any rights or remedies provided by law. The rights of the Buyer under
        any
        Transaction Document against any party thereto are not conditional or contingent
        on any attempt by the Buyer to exercise any of its rights under any other
        Transaction Document against such party or against any other
        Person.

       

      (c) Any
        provision of this Agreement which is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining portions
        hereof or affecting the validity or enforceability of such provision in any
        other jurisdiction. 

       

      (d) This
        Agreement shall create a continuing security interest in and Lien on the
        Collateral and shall (i) remain in full force and effect until the termination
        of this Agreement in accordance with Section 13 (e) hereof and (ii) be
        binding on the Pledgor and their respective successors and assigns and shall
        inure, together with all rights and remedies of the Buyer, to the benefit
        of the
        Buyer and its successors, transferees and assigns. Without limiting the
        generality of clause (ii) of the immediately preceding sentence, the Buyer
        may
        assign or otherwise transfer its rights and obligations under this Agreement
        and
        any other Transaction Document to any other Person pursuant to the terms
        of the
        Securities Purchase Agreement, and such other Person shall thereupon become
        vested with all of the benefits in respect thereof granted to the Buyer herein
        or otherwise. Upon any such assignment or transfer, all references in this
        Agreement to the Buyer shall mean the assignee of the Buyer. None of the
        rights
        or obligations of the Pledgor hereunder may be assigned or otherwise transferred
        without the prior written consent of the Buyer, and any such assignment or
        transfer shall be null and void.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (e) Notwithstanding
        anything to the contrary in this Agreement, (i) this Agreement (along with
        all
        powers of attorney granted hereunder) and the security interests and Lien
        created hereby shall terminate and all rights to the Collateral shall revert
        to
        the Pledgor upon the repayment in full and /or complete conversion to equity
        securities of the Pledgor of all indebtedness obligations owed by the Pledgor
        to
        the Buyer under the Notes (including, without limitation, all principal,
        interest and fees related to the Notes), and (ii) the Buyer will, upon the
        Pledgor’s request and at the Pledgor’s expense, (A) return to the Pledgor such
        of the Collateral (to the extent delivered to the Buyer) as shall not have
        been
        sold or otherwise disposed of or applied pursuant to the terms hereof, and
        (B)
        execute and deliver to the Pledgor, without recourse, representation or
        warranty, such documents as the Pledgor shall reasonably request to evidence
        such termination.

       

      (f) The
        internal laws, and not the laws of conflicts, of New York shall govern the
        enforceability and validity of this agreement, the construction of its terms
        and
        the interpretation of the rights and duties of the parties, except as required
        by mandatory provisions of law and except to the extent that the validity
        and
        perfection or the perfection and the effect of perfection or non-perfection
        of
        the security interest and Lien created hereby, or remedies hereunder, in
        respect
        of any particular Collateral are governed by the law of a jurisdiction other
        than the State of Delaware.

       

      (g) Each
        party to this agreement hereby irrevocably and unconditionally submits, for
        itself and its property, to the exclusive jurisdiction of the united states
        district court for the southern district of New York sitting in Manhattan
        or the
        commercial division, civil branch of the supreme court of the State of Yew
        York
        sitting in New York county in connection with any suit, action or proceeding
        directly or indirectly arising out of, under or in connection with the
        Transaction Documents or the transactions contemplated thereby. No party
        to this
        agreement may move to (i) transfer any such suit, action or proceeding brought
        in such New York court or federal court to another jurisdiction, (ii)
        consolidate any such suit, action or proceeding brought in such New York
        court
        or federal court with a suit, action or proceeding in another jurisdiction
        or
        (iii) dismiss any such suit, action or proceeding brought in such New York
        court
        or federal court for the purpose of bringing the same in another jurisdiction.
        Each party to this agreement agrees that a final judgment in any such suit,
        action or proceeding shall be conclusive and may be enforced in any other
        jurisdiction by suit on the judgment or in any other manner provided by law.
        Each party to this agreement hereby irrevocably and unconditionally waives,
        to
        the fullest extent it may legally and effectively do so, any objection which
        it
        may now or hereafter have to the laying of venue of any suit, action or
        proceeding arising out of or relating to the transaction documents or the
        shares
        in any New York court sitting in the county of New York or any federal court
        sitting in the southern district of New York. Each party to this agreement
        hereby consents to the service of process in any such suit, action or proceeding
        by notice in the manner specified in Section
        11.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      (h) The
        Pledgor irrevocably consents to the service of process of any of the aforesaid
        courts in any such action, suit or proceeding by the mailing of copies thereof
        by registered or certified mail (or any substantially similar form of mail),
        postage prepaid, to the Pledgor at its address provided herein, such service
        to
        become effective when received or 10 days after such mailing, whichever first
        occurs.

      

      (i) Nothing
        contained herein shall affect the right of the Buyer to serve process in
        any
        other manner permitted by law or commence legal proceedings or otherwise
        proceed
        against the Pledgor or
        any
        property of the Pledgor in
        any
        other jurisdiction.

      

      (j) The
        Pledgor irrevocably and unconditionally waives any right it may have to claim
        or
        recover in any legal action, suit or proceeding referred to in this Section
        any
        special, exemplary, punitive or consequential damages.

       

      (k) EACH
        PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
        LAW,
        ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR
        PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
        WITH
        THIS AGREEMENT OR OTHER TRANSACTION DOCUMENTS.

      

      (l) The
        headings herein are for convenience only, do not constitute a part of this
        Agreement and shall not be deemed to limit or affect any of the provisions
        hereof. The language used in this Agreement will be deemed to be the language
        chosen by the parties to express their mutual intent, and no rules of strict
        construction will be applied against any party.

       

      (m) This
        Agreement may be executed in any number of counterparts and by different
        parties
        hereto in separate counterparts, each of which shall be deemed to be an
        original, but all of which taken together shall constitute one and the same
        agreement.

      

      [Signature
        Page Follows]

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      In
        Witness Whereof,
        the
        Pledgor has caused this Agreement to be executed and delivered by its officer
        thereunto duly authorized, as of the date first above written.

       

      GREEN
        SCREEN INTERACTIVE SOFTWARE, INC.

      

      

      By:
        /s/
        Ron Chaimowitz

      Name:
        Ron
        Chaimowitz

      Title:
        Chief Executive Officer

      Address:
        575 Broadway, New York, New York 10012

       

      

      

      

      ACCEPTED
        BY:

      

      DRIFTWOOD
        VENTURES, INC.

      

      By:
        /s/
        Charles Bentz

      Name:
        Charles
        Bentz

      Title:
        Chief
        Financial Officer

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ANNEX
        I

       

      TO

       

      PLEDGE
        AGREEMENT

      

      

      PLEDGE
        AMENDMENT

       

      This
        Pledge Amendment, dated July ●, 2008, is delivered pursuant to Section
        4
        of the
        Pledge Agreement referred to below. The undersigned hereby agrees that this
        Pledge Amendment may be attached to the Pledge Agreement, dated as of July
        7,
        2008, made by [Pledgor] in favor of Driftwood Ventures, Inc., (the "Collateral
        Agent") as it may heretofore have been or hereafter may be amended or otherwise
        modified or supplemented from time to time and that the promissory notes
        [and/or] shares or other equity interests listed on this Pledge Amendment
        shall
        be hereby pledged and assigned to the Collateral Agent and become part of
        the
        Collateral referred to in such Pledge Agreement and shall secure all of the
        obligations referred to in such Pledge Agreement.

       

      
        	 	
                 Pledged
                  Shares

              	 	 
	
                Pledgor

              	
                Name
                  of Issuer

              	
                Number
                  of Shares or Other
                  Equity Interests

              	
                Class

              	
                Certificate
                  No(s)

              
	 	 	 	 	 

      

       

      
        	 	 	 
	 	[PLEDGOR]
	 
 	 
 	 
 
	 	By:  	 
	 	
                Name:

                Title:Unassociated Document

    
      SECURITY
        AGREEMENT

      

      SECURITY
        AGREEMENT,
        dated
        as of July 7, 2008 (this "Agreement")
        made
        by GREEN SCREEN INTERACTIVE SOFTWARE, INC.,
        a
        Delaware corporation (the "Company"),
        and
        the undersigned subsidiaries of the Company (each a "Grantor"
        and
        collectively and together with the Company the "Grantors"),
        in
        favor of DRIFTWOOD VENTURES, INC., a Delaware corporation (the “Buyer”).

      

      WITNESSETH:

      

      WHEREAS,
        the Company and Buyer are parties to the Securities Purchase Agreement, dated
        as
        of even date herewith (as amended, restated or otherwise modified from time
        to
        time, the "Securities
        Purchase Agreement"),
        pursuant to which the Company shall be required to sell, and the Buyer shall
        purchase or have the right to purchase, the "Notes" (as defined therein)
        issued
        pursuant thereto (as such Notes may be amended, restated, replaced or otherwise
        modified from time to time in accordance with the terms thereof, collectively,
        the "Notes");

      

      WHEREAS,
        each of the Grantors (other than the Company) (collectively, the "Guarantors")
        has
        executed and delivered a Guaranty dated the date hereof (the “Guaranty”)
        in
        favor of the Buyer, with respect to the Company’s obligations under the
        Securities Purchase Agreement, the Notes and the Transaction Documents (as
        defined below); and

      

      WHEREAS,
        it is a condition precedent to the Buyer entering into the Securities Purchase
        Agreement that the Grantors shall have executed and delivered to the Buyer
        this
        Agreement providing for the grant to the Buyer of a security interest in
        all
        personal property of each Grantor to secure all of the Company's obligations
        under the Securities Purchase Agreement, the "Notes", the “Transaction
        Documents” (as defined in the Securities Purchase Agreement) (the “Transaction
        Documents”)
        and
        the Guarantors’ obligations under the Guaranty;

      

      NOW,
        THEREFORE, in consideration of the premises and the agreements herein and
        in
        order to induce the Buyer to perform under the Securities Purchase Agreement,
        each Grantor agrees with the Buyer, as follows:

      

      SECTION
        1. Definitions.

       

      (a) Reference
        is hereby made to the Securities Purchase Agreement and the Notes for a
        statement of the terms thereof. All terms used in this Agreement and the
        recitals hereto which are defined in the Securities Purchase Agreement, the
        Notes or in Articles 8 or 9 of the Uniform Commercial Code as in effect from
        time to time in the State of New York (the "Code"),
        and
        which are not otherwise defined herein shall have the same meanings herein
        as
        set forth therein; provided
        that
        terms used herein which are defined in the Code as in effect
        in
        the State of New York on the date hereof shall continue to have the same
        meaning
        notwithstanding any replacement or amendment of such statute except as the
        Buyer
        may otherwise determine. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) The
        following terms shall have the respective meanings provided for in the Code:
        "Accounts", "Cash Proceeds", "Chattel Paper", "Commercial Tort Claim",
        "Commodity Account", "Commodity Contracts", "Deposit Account", "Documents",
        "Equipment", "Fixtures", "General Intangibles", "Goods", "Instruments",
        "Inventory", "Investment Property", "Letter-of-Credit Rights", "Noncash
        Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes", "Security",
        "Record", "Security Account", "Software", and "Supporting
        Obligations".

       

      (c) As
        used
        in this Agreement, the following terms shall have the respective meanings
        indicated below, such meanings to be applicable equally to both the singular
        and
        plural forms of such terms:

      

      "Copyright
        Licenses"
        means
        all licenses, contracts or other agreements, whether written or oral, naming
        any
        Grantor as licensee or licensor and providing for the grant of any right
        to use
        or sell any works covered by any copyright (including, without limitation,
        all
        Copyright Licenses set forth in Schedule
        II
        hereto).

      

      "Copyrights"
        means
        all domestic and foreign copyrights, whether registered or not, including,
        without limitation, all copyright rights throughout the universe (whether
        now or
        hereafter arising) in any and all media (whether now or hereafter developed),
        in
        and to all original works of authorship fixed in any tangible medium of
        expression, acquired or used by any Grantor (including, without limitation,
        all
        copyrights described in Schedule
        II
        hereto),
        all applications, 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
        or any
        other country or any political subdivision thereof), and all reissues,
        divisions, continuations, continuations in part and extensions or renewals
        thereof.

      

      "Event
        of Default"
        shall
        have the meaning set forth in the Notes.

      

      "Insolvency
        Proceeding"
        means
        any proceeding commenced by or against any Person under any provision of
        the
        Bankruptcy Code (Chapter 11 of Title 11 of the United States Code) or under
        any other bankruptcy or insolvency law, assignments for the benefit of
        creditors, formal or informal moratoria, compositions, or extensions generally
        with creditors, or proceedings seeking reorganization, arrangement, or other
        similar relief.

      

      "Intellectual
        Property"
        means
        the Copyrights, Trademarks and Patents.

      

      "Licenses"
        means
        the Copyright Licenses, the Trademark Licenses and the Patent
        Licenses.

      

      "Lien"
        means
        any mortgage, deed of trust, pledge, lien (statutory or otherwise), security
        interest, charge or other encumbrance or security or preferential arrangement
        of
        any nature, including, without limitation, any conditional sale or title
        retention arrangement, any capitalized lease and any assignment, deposit
        arrangement or financing lease intended as, or having the effect of,
        security.

      

      "Patent
        Licenses"
        means
        all licenses, contracts or other agreements, whether written or oral, naming
        any
        Grantor as licensee or licensor and providing for the grant of any right
        to
        manufacture, use or sell any invention covered by any Patent (including,
        without
        limitation, all Patent Licenses set forth in Schedule
        II
        hereto).

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      

      "Patents"
        means
        all domestic and foreign letters patent, design patents, utility patents,
        industrial designs, inventions, trade secrets, ideas, concepts, methods,
        techniques, processes, proprietary information, technology, know-how, formulae,
        rights of publicity and other general intangibles of like nature, now existing
        or hereafter acquired (including, without limitation, all domestic and foreign
        letters patent, design patents, utility patents, industrial designs, inventions,
        trade secrets, ideas, concepts, methods, techniques, processes, proprietary
        information, technology, know-how and formulae described in Schedule
        II hereto),
        all applications, 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 or any other country or any political subdivision thereof), and all
        reissues, divisions, continuations, continuations in part and extensions
        or
        renewals thereof.

      

      "Trademark
        Licenses"
        means
        all licenses, contracts or other agreements, whether written or oral, naming
        any
        Grantor as licensor or licensee and providing for the grant of any right
        concerning any Trademark, together with any goodwill connected with and
        symbolized by any such trademark licenses, contracts or agreements and the
        right
        to prepare for sale or lease and sell or lease any and all Inventory now
        or
        hereafter owned by any Grantor and now or hereafter covered by such licenses
        (including, without limitation, all Trademark Licenses described in Schedule
        II
        hereto).

      

      "Trademarks"
        means
        all domestic and foreign trademarks, service marks, collective marks,
        certification marks, trade names, business names, d/b/a's, Internet domain
        names, trade styles, designs, logos and other source or business identifiers
        and
        all general intangibles of like nature, now or hereafter owned, adopted,
        acquired or used by any Grantor (including, without limitation, all domestic
        and
        foreign trademarks, service marks, collective marks, certification marks,
        trade
        names, business names, d/b/a's, Internet domain names, trade styles, designs,
        logos and other source or business identifiers described in Schedule
        II
        hereto),
        all applications, 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), and all reissues, extensions or renewals thereof, together with
        all
        goodwill of the business symbolized by such marks and all customer lists,
        formulae and other Records of any Grantor relating to the distribution of
        products and services in connection with which any of such marks are
        used.

       

      SECTION
        2. Grant
        of Security Interest.
        As
        collateral security for all of the "Obligations" (as defined in Section
        3
        hereof),
        each Grantor hereby pledges and assigns to the Buyer, and grants to the Buyer
        a
        continuing security interest in, all personal property of each Grantor, wherever
        located and whether now or hereafter existing and whether now owned or hereafter
        acquired, of every kind and description, tangible or intangible (collectively,
        the "Collateral"),
        including, without limitation, the following:

      (a) all
        Accounts;

      

      (b) all
        Chattel Paper (whether tangible or electronic);

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      

      (c) the
        Commercial Tort Claims specified on Schedule
        VI
        hereto;

      

      (d) all
        Deposit Accounts, all cash, and all other property from time to time deposited
        therein and the monies and property in the possession or under the control
        of
        the Buyer or any affiliate, representative, agent or correspondent of the
        Buyer; 

      

      (e) all
        Documents;

      

      (f) all
        Equipment;

      

      (g) all
        Fixtures;

      

      (h) all
        General Intangibles (including, without limitation, all Payment
        Intangibles);

      

      (i) all
        Goods;

      

      (j) all
        Instruments (including, without limitation, Promissory Notes and each
        certificated Security);

      

      (k) all
        Inventory;

      

      (l) all
        Investment Property;

      

      (m) all
        Copyrights, Patents and Trademarks, and all Licenses;

      

      (n) all
        Letter-of-Credit Rights;

      

      (o) all
        Supporting Obligations;

      

      (p) all
        other
        tangible and intangible personal property of each Grantor (whether or not
        subject to the Code), including, without limitation, all bank and other accounts
        and all cash and all investments therein, all proceeds, products, offspring,
        accessions, rents, profits, income, benefits, substitutions and replacements
        of
        and to any of the property of any Grantor described in the preceding clauses
        of
        this Section
        2
        (including, without limitation, any proceeds of insurance thereon and all
        causes
        of action, claims and warranties now or hereafter held by each Grantor in
        respect of any of the items listed above), and all books, correspondence,
        files
        and other Records, including, without limitation, all tapes, desks, cards,
        Software, data and computer programs in the possession or under the control
        of
        any Grantor or any other Person from time to time acting for any Grantor
        that at
        any time evidence or contain information relating to any of the property
        described in the preceding clauses of this Section
        2
        or are
        otherwise necessary or helpful in the collection or realization
        thereof;
        and

      

      (q) all
        Proceeds, including all Cash Proceeds and Noncash Proceeds, and products
        of any
        and all of the foregoing Collateral; 

      

      in
        each
        case howsoever any Grantor's interest therein may arise or appear (whether
        by
        ownership, security interest, claim or otherwise).

       

      
        
          
          

        

        
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      SECTION
        3. Security
        for Obligations.
        The
        security interest created hereby in the Collateral constitutes continuing
        collateral security for all of the following obligations, whether now existing
        or hereafter incurred (collectively, the "Obligations"):

      

      (a) (i)
        the
        payment by the Company, as and when due and payable (by scheduled maturity,
        required prepayment, acceleration, demand or otherwise), of all amounts from
        time to time owing by it in respect of the Securities Purchase Agreement,
        the
        Notes and the other "Transaction
        Documents"
        (as
        defined in the Securities Purchase Agreement), and (ii) in the case of the
        Guarantors, the payment by each of the Guarantors, as and when due and payable
        of all "Guaranteed Obligations" under (as defined in) the Guaranty, including,
        without limitation, in both cases, (A) all principal of and interest on the
        Notes (including, without limitation, all interest that accrues after the
        commencement of any Insolvency Proceeding of any Grantor, whether or not
        the
        payment of such interest is unenforceable or is not allowable due to the
        existence of such Insolvency Proceeding), and (B) all fees, commissions,
        expense
        reimbursements, indemnifications and all other amounts due or to become due
        under any of the Transaction Documents; and

      

      (b) the
        due
        performance and observance by each Grantor of all of its other obligations
        from
        time to time existing in respect of any of the Transaction Documents, for
        so
        long as the Notes are outstanding.

       

      SECTION
        4. Representations
        and Warranties.
        Each
        Grantor represents and warrants as follows:

       

      (a) Schedule
        I
        hereto
        sets forth (i) the exact legal name of the Grantors, and (ii) the organizational
        identification number of each Grantor or states that no such organizational
        identification number exists.

      

      (b) There
        is
        no pending or written notice threatening any action, suit, proceeding or
        claim
        affecting any Grantor before any governmental authority or any arbitrator,
        or
        any order, judgment or award by any governmental authority or arbitrator,
        that
        may adversely affect the grant by any Grantor, or the perfection, of the
        security interest purported to be created hereby in the Collateral, or the
        exercise by the Buyer of any of its rights or remedies hereunder.

      

      (c) All
        Federal, state and local tax returns and other reports required by applicable
        law to be filed by any Grantor have been filed, or extensions have been
        obtained, and all taxes, assessments and other governmental charges imposed
        upon
        any Grantor or any property of any Grantor (including, without limitation,
        all
        federal income and social security taxes on employees' wages) and which have
        become due and payable on or prior to the date hereof have been paid, except
        to
        the extent contested in good faith by proper proceedings which stay the
        imposition of any penalty, fine or Lien resulting from the non-payment thereof
        and with respect to which adequate reserves have been set aside for the payment
        thereof in accordance with generally accepted accounting principles consistently
        applied ("GAAP"). 

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      

      (d) All
        Equipment, Fixtures, Goods and Inventory of each Grantor now existing are,
        and
        all Equipment, Fixtures, Goods and Inventory of each Grantor hereafter existing
        will be, located and/or based at the addresses specified therefor in
Schedule
        III
        hereto,
        except that each Grantor will give the Buyer not less than 30 days' prior
        written notice of any change of the location of any such Collateral, other
        than
        to locations set forth on Schedule
        III
        and with
        respect to which the Buyer has filed financing statements and otherwise fully
        perfected its Liens thereon. Each Grantor's chief place of business and chief
        executive office, the place where each Grantor keeps its Records concerning
        Accounts and all originals of all Chattel Paper are located at the addresses
        specified therefor in Schedule
        III
        hereto.
        None of the Accounts is evidenced by Promissory Notes or other Instruments.
        Set
        forth in Schedule
        IV
        hereto
        is a complete and accurate list, as of the date of this Agreement, of (i)
        each
        Promissory Note, Security and other Instrument owned by each Grantor and
        (ii)
        each Deposit Account, Securities Account and Commodities Account of each
        Grantor, together with the name and address of each institution at which
        each
        such Account is maintained, the account number for each such Account and
        a
        description of the purpose of each such Account. Set forth in Schedule
        II hereto
        is
        a complete and correct list of each trade name used by each Grantor and the
        name
        of, and each trade name used by, each person from which each Grantor has
        acquired any substantial part of the Collateral. 

      

      (e) Each
        Grantor has delivered to the Buyer complete and correct copies of each License
        described in Schedule
        II
        hereto,
        including all schedules and exhibits thereto, which represents all of the
        Licenses existing on the date of this Agreement. Each such License sets forth
        the entire agreement and understanding of the parties thereto relating to
        the
        subject matter thereof, and there are no other agreements, arrangements or
        understandings, written or oral, relating to the matters covered thereby
        or the
        rights of each Grantor or any of its affiliates in respect thereof. Each
        material License now existing is, and any material License entered into in
        the
        future will be, the legal, valid and binding obligation of the parties thereto,
        enforceable against such parties in accordance with its terms. No default
        under
        any material License by any such party has occurred, nor does any defense,
        offset, deduction or counterclaim exist thereunder in favor of any such
        party.

      

      (f) Each
        Grantor owns and controls, or otherwise possesses adequate rights to use,
        all
        Trademarks, Patents and Copyrights, which are the only trademarks, patents,
        copyrights, inventions, trade secrets, proprietary information and technology,
        know-how, formulae, rights of publicity necessary to conduct its business
        in
        substantially the same manner as conducted as of the date hereof. Schedule
        II
        hereto
        sets forth a true and complete list of all registered copyrights, issued
        Patents, Trademarks, and Licenses annually owned or used by each Grantor
        as of
        the date hereof. To the best knowledge of the Grantors, all such Intellectual
        Property of each Grantor is subsisting and in full force and effect, has
        not
        been adjudged invalid or unenforceable, is valid and enforceable and has
        not
        been abandoned in whole or in part. Except as set forth in Schedule II, no
        such
        Intellectual Property is the subject of any licensing or franchising agreement.
        Each Grantor has no knowledge of any conflict with the rights of others to
        any
        Intellectual Property and, to the best knowledge of the Grantors, each Grantor
        is not now infringing or in conflict with any such rights of others in any
        material respect, and to the best knowledge of the Grantors, no other Person
        is
        now infringing or in conflict in any material respect with any such properties,
        assets and rights owned or used by each Grantor. No Grantor has received
        any
        notice that it is violating or has violated the trademarks, patents, copyrights,
        inventions, trade secrets, proprietary information and technology, know-how,
        formulae, rights of publicity or other intellectual property rights of any
        third
        party.

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      

      (g) Each
        Grantor is and will be at all times the sole and exclusive owner of, or
        otherwise has and will have adequate rights in, the Collateral free and clear
        of
        any Liens, except for Permitted Liens on any Collateral. No effective financing
        statement or other instrument similar in effect covering all or any part
        of the
        Collateral is on file in any recording or filing office except such as may have
        been filed in favor of the Buyer relating to this Agreement.

      

      (h) The
        exercise by the Buyer of any of its rights and remedies hereunder will not
        contravene any law or any contractual restriction binding on or otherwise
        affecting each Grantor or any of its properties and will not result in or
        require the creation of any Lien, upon or with respect to any of its
        properties.

      

      (i) No
        authorization or approval or other action by, and no notice to or filing
        with,
        any governmental authority or other regulatory body, or any other Person,
        is
        required for (i) the grant by each Grantor, or the perfection, of the
        security interest purported to be created hereby in the Collateral, or
        (ii) the exercise by the Buyer of any of its rights and remedies hereunder,
        except (A) for the filing under the Uniform Commercial Code as in effect in
        the applicable jurisdiction of the financing statements, all of which financing
        statements, have been duly filed and are in full force and effect, (B) with
        respect to the perfection of the security interest created hereby in the
        Intellectual Property, for the recording of the appropriate Assignment for
        Security, substantially in the form of Exhibit
        A
        hereto,
        as applicable, in the United States Patent and Trademark Office or the United
        States Copyright Office, as applicable, and (C) with respect to the
        perfection of the security interest created hereby in foreign Intellectual
        Property and Licenses, for registrations and filings in jurisdictions located
        outside of the United States and covering rights in such jurisdictions relating
        to the Intellectual Property and Licenses.

      

      (j) This
        Agreement creates in favor of the Buyer a legal, valid and enforceable security
        interest in the Collateral, as security for the Obligations. The Buyer's
        having
        possession of all Instruments and cash constituting Collateral from time
        to time
        (or with respect to deposit accounts, entering into appropriate control
        agreements), the recording of the appropriate Assignment for Security executed
        pursuant hereto in the United States Patent and Trademark Office and the
        United
        States Copyright Office, the execution of appropriate assignments of Letter
        of
        Credit Rights, as applicable, and the filing of the financing statements
        and the
        other filings and recordings, as applicable, described in Schedule
        V
        hereto
        and, with respect to the Intellectual Property hereafter existing and not
        covered by an appropriate Assignment for Security, the recording in the United
        States Patent and Trademark Office or the United States Copyright Office,
        as
        applicable, of appropriate instruments of assignment, result in the perfection
        of such security interests. Such security interests are, or in the case of
        Collateral in which each Grantor obtains rights after the date hereof, will
        be,
        perfected, first priority security interests, subject only to Permitted Liens
        and the recording of such instruments of assignment. Such recordings and
        filings
        and all other action necessary or desirable to perfect and protect such security
        interest have been or will be duly taken, except for the Buyer's having
        possession of Instruments and cash constituting Collateral after the date
        hereof
        and the other filings and recordations described in Section
        4(l)
        hereof.

      

      (k) As
        of the
        date hereof, no Grantor holds any Commercial Tort Claims nor is aware of
        any
        such pending claims, except for such claims described in Schedule
        VI.

       

      
        
          
          

        

        
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      SECTION
        5. Covenants
        as to the Collateral.
        So long
        as any of the Obligations shall remain outstanding, unless the Buyer shall
        otherwise consent in writing:

       

      (a) Further
        Assurances.
        Each
        Grantor will at its expense, at any time and from time to time, promptly
        execute
        and deliver all further instruments and documents and take all further action
        that the Buyer may reasonably request in order to: (i) perfect and protect
        the security interest purported to be created hereby; (ii) enable the Buyer
        to exercise and enforce its rights and remedies hereunder in respect of the
        Collateral; or (iii) otherwise effect the purposes of this Agreement,
        including, without limitation: (A) marking conspicuously all Chattel Paper
        and each License and, at the request of the Buyer, each of its Records
        pertaining to the Collateral with a legend, in form and substance satisfactory
        to the Buyer, indicating that such Chattel Paper, License or Collateral is
        subject to the security interest created hereby, (B)  delivering and
        pledging to the Buyer hereunder each Promissory Note, Security, Chattel Paper
        or
        other Instrument, now or hereafter owned by any Grantor, duly endorsed and
        accompanied by executed instruments of transfer or assignment, all in form
        and
        substance satisfactory to the Buyer, (C) executing and filing (to the
        extent, if any, that any Grantor's signature is required thereon) or
        authenticating the filing of, such financing or continuation statements,
        or
        amendments thereto, as may be necessary or desirable or that the Buyer may
        request in order to perfect and preserve the security interest purported
        to be
        created hereby, (D) furnishing to the Buyer from time to time statements
        and schedules further identifying and describing the Collateral and such
        other
        reports in connection with the Collateral in each case as the Buyer may
        reasonably request, all in reasonable detail, (E) if any Collateral shall
        be in the possession of a third party, notifying such Person of the Buyer's
        security interest created hereby and obtaining a written acknowledgment from
        such Person that such Person holds possession of the Collateral for
        the
        benefit of the Buyer, which such written acknowledgement shall be in form
        and
        substance satisfactory to the Buyer, (F) if at any time after the date
        hereof, any Grantor acquires or holds any Commercial Tort Claim, promptly
        notifying the Buyer in a writing signed by such Grantor setting forth a brief
        description of such Commercial Tort Claim and granting to the Buyer a security
        interest therein and in the proceeds thereof, which writing shall incorporate
        the provisions hereof and shall be in form and substance satisfactory to
        the
        Buyer, (G) upon the acquisition after the date hereof by any Grantor of any
        motor vehicle or other Equipment subject to a certificate of title or ownership
        (other than a Motor Vehicle or Equipment that is subject to a purchase money
        security interest), causing the Buyer to be listed as the lienholder on such
        certificate of title or ownership and delivering evidence of the same to
        the
        Buyer in accordance with the Securities Purchase Agreement; and (H) taking
        all actions required by any earlier versions of the Uniform Commercial Code
        or
        by other law, as applicable, in any relevant Uniform Commercial Code
        jurisdiction, or by other law as applicable in any foreign
        jurisdiction.

      

      (b) Location
        of Equipment and Inventory.
        Each
        Grantor will keep the Equipment and Inventory at the locations specified
        therefor on
        Schedule III hereto, or, at such other locations in the United States, provided
        that within 10 days following the relocation of Equipment or Inventory to
        such
        other location, Grantor shall deliver to the Buyer a new Schedule II indicating
        such new location.

      

      (c) Condition
        of Equipment.
        Each
        Grantor will maintain or cause the Equipment (necessary or useful to its
        business) to be maintained and preserved in good condition, repair and working
        order, ordinary wear and tear excepted, and will forthwith, or in the case
        of
        any loss or damage to any Equipment of any Grantor within a commercially
        reasonable time after the occurrence thereof, make or cause to be made all
        repairs, replacements and other improvements in connection therewith which
        are
        necessary or desirable, consistent with past practice, or which the Buyer
        may
        request to such end. Any Grantor will promptly furnish to the Buyer a statement
        describing in reasonable detail any such loss or damage in excess of
        $250,000 per
        occurrence to any Equipment.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

         

      

      (d) Taxes,
        Etc.
        Each
        Grantor agrees to 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 Equipment
        and
        Inventory, except to the extent the validity thereof is being contested in
        good
        faith by proper proceedings which stay the imposition of any penalty, fine
        or
        Lien resulting from the non-payment thereof and with respect to which adequate
        reserves in accordance with GAAP have been set aside for the payment
        thereof.

      

      (e) Insurance.

       

      (i) Each
        Grantor will, at its own expense, maintain insurance (including, without
        limitation, commercial general liability and property insurance) with respect
        to
        the Equipment and Inventory in such amounts, against such risks, in such
        form
        and with responsible and reputable insurance companies or associations as
        is
        required by any governmental authority having jurisdiction with respect thereto
        or as is carried generally in accordance with sound business practice by
        companies in similar businesses similarly situated and in any event, in amount,
        adequacy and scope reasonably satisfactory to the Buyer. To the extent requested
        by the Buyer at any time and from time to time, each such policy for liability
        insurance shall provide for all losses to be paid on behalf of the Buyer
        and any
        Grantor as their respective interests may appear, and each policy for property
        damage insurance shall provide for all losses to be adjusted with, and paid
        directly to, the Buyer. To the extent requested by the Buyer at any time
        and
        from time to time, each such policy shall in addition (A) name the Buyer
        as an
        additional insured party thereunder (without any representation or warranty
        by
        or obligation upon the Buyer) as their interests may appear, (B) contain
        an
        agreement by the insurer that any loss thereunder shall be payable to the
        Buyer
        on its own account notwithstanding any action, inaction or breach of
        representation or warranty by any Grantor, (C) provide that there shall be
        no
        recourse against the Buyer for payment of premiums or other amounts with
        respect
        thereto, and (D) provide that at least 30 days' prior written notice of
        cancellation, lapse, expiration or other adverse change shall be given to
        the
        Buyer by the insurer. Any Grantor will, if so requested by the Buyer, deliver
        to
        the Buyer original or duplicate policies of such insurance and, as often
        as the
        Buyer may reasonably request, a report of a reputable insurance broker with
        respect to such insurance. Any Grantor will also, at the request of the Buyer,
        execute and deliver instruments of assignment of such insurance policies
        and
        cause the respective insurers to acknowledge notice of such
        assignment.

       

      (ii) Reimbursement
        under any liability insurance maintained by any Grantor pursuant to this
        Section
        5(e)
        may be
        paid directly to the Person who shall have incurred liability covered by
        such
        insurance. In the case of any loss involving damage to Equipment or Inventory,
        any proceeds of insurance maintained by any Grantor pursuant to this
Section
        5(e)
        shall be
        paid to the Buyer (except as to which paragraph (iii) of this Section
        5(e)
        is not
        applicable), any Grantor will make or cause to be made the necessary repairs
        to
        or replacements of such Equipment or Inventory, and any proceeds of insurance
        maintained by any Grantor pursuant to this Section
        5(e)
        shall be
        paid by the Buyer to any Grantor as reimbursement for the costs of such repairs
        or replacements.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      (iii) All
        insurance payments in respect of such Equipment or Inventory shall be paid
        to
        the Buyer and applied as specified in Section
        7(b)
        hereof.

       

      (f) Provisions
        Concerning the Accounts and the Licenses.

       

      (i) Any
        Grantor will (A) give the Buyer at least 30 days' prior written notice of
        any
        change in such Grantor's name, identity or organizational structure, (B)
        maintain its jurisdiction of incorporation as set forth in Section
        4(b)
        hereto,
        (C) immediately notify the Buyer upon obtaining an organizational identification
        number, if on the date hereof such Grantor did not have such identification
        number, and (D) keep adequate records concerning the Accounts and Chattel
        Paper
        and permit representatives of the Buyer during normal business hours on
        reasonable notice to such Grantor, to inspect and make abstracts from such
        Records and Chattel Paper.

       

      (ii) Each
        Grantor will, except as otherwise provided in this subsection (f), continue
        to collect, at its own expense, all amounts due or to become due under the
        Accounts. In connection with such collections, any Grantor may (and, at the
        Buyer's direction, will) take such action as any Grantor or the Buyer may
        deem
        necessary or advisable to enforce collection or performance of the Accounts;
        provided,
        however,
        that
        the Buyer shall have the right at any time, upon the occurrence and during
        the
        continuance of an Event of Default, to notify the account debtors or obligors
        under any Accounts of the assignment of such Accounts to the Buyer and to
        direct
        such account debtors or obligors to make payment of all amounts due or to
        become
        due to any Grantor thereunder directly to the Buyer or its designated agent
        and,
        upon such notification and at the expense of any Grantor and to the extent
        permitted by law, to enforce collection of any such Accounts and to adjust,
        settle or compromise the amount or payment thereof, in the same manner and
        to
        the same extent as may Grantor might have done. After receipt by any Grantor
        of
        a notice from the Buyer that the Buyer has notified, intends to notify, or
        has
        enforced or intends to enforce any Grantor's rights against the account debtors
        or obligors under any Accounts as referred to in the proviso to the immediately
        preceding sentence, (A) all amounts and proceeds (including Instruments)
        received by any Grantor in respect of the Accounts shall be received in trust
        for the benefit of the Buyer hereunder, shall be segregated from other funds
        of
        any Grantor and shall be forthwith paid over to the Buyer in the same form
        as so
        received (with any necessary endorsement) to be held as cash collateral and
        either (i) credited to the outstanding obligations so long as no Event of
        Default shall have occurred and be continuing or (ii) if an Event of Default
        shall have occurred and be continuing, applied as specified in Section
        7(b)
        hereof,
        and (B) no Grantor will adjust, settle or compromise the amount or payment
        of
        any Account or release wholly or partly any account debtor or obligor thereof
        or
        allow any credit or discount thereon. In addition, upon the occurrence and
        during the continuance of an Event of Default, the Buyer may (in its sole
        and
        absolute discretion) direct any or all of the banks and financial institutions
        with which any Grantor either maintains a Deposit Account or a lockbox or
        deposits the proceeds of any Accounts to send immediately to the Buyer by
        wire
        transfer (to such account as the Buyer shall specify, or in such other manner
        as
        the Buyer shall direct) all or a portion of such securities, cash, investments
        and other items held by such institution. Any such securities, cash, investments
        and other items so received by the Buyer shall (in the sole and absolute
        discretion of the Buyer) be held as additional Collateral for the Obligations
        or
        distributed in accordance with Section
        7
        hereof.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      (iii) Upon
        the
        occurrence and during the continuance of any breach or default under any
        material License referred to in Schedule
        II
        hereto
        by any party thereto other than any Grantor, each Grantor party thereto will,
        promptly after obtaining knowledge thereof, give the Buyer written notice
        of the
        nature and duration thereof, specifying what action, if any, it has taken
        and
        proposes to take with respect thereto and thereafter
        will
        take reasonable steps to protect and preserve its rights and remedies in
        respect
        of such breach or default, or will obtain or acquire an appropriate substitute
        License.

       

      (iv) Each
        Grantor will, at its expense, promptly deliver to the Buyer a copy of each
        notice or other communication received by it by which any other party to any
        material License referred to in Schedule
        II
        hereto
        purports to exercise any of its rights or affect any of its obligations
        thereunder, together with a copy of any reply by such Grantor
        thereto.

       

      (v) Each
        Grantor will exercise promptly and diligently each and every right which
        it may
        have under each material License (other than any right of termination) and
        will
        duly perform and observe in all respects all of its obligations under each
        material License and will take all action reasonably necessary to maintain
        such
        Licenses in full force and effect. No Grantor will, without the prior written
        consent of the Buyer, cancel, terminate, amend or otherwise modify in any
        respect, or waive any provision of, any material License referred to in
Schedule
        II
        hereto.

       

      (g) Transfers
        and Other Liens.

       

      (i) No
        Grantor will sell, assign (by operation of law or otherwise), lease, license,
        exchange or otherwise transfer or dispose of any of the Collateral,
        except
        (A) Inventory or licenses in the ordinary course of business, and (B) worn-out
        or obsolete assets not necessary to the business.

       

      (ii) No
        Grantor will create, suffer to exist or grant any Lien upon or with respect
        to
        any Collateral other than a Permitted Lien.

       

      
        
          
          

        

        
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      (h) Intellectual
        Property.

       

      (i) If
        applicable, any Grantor shall, upon the Buyer's written request, duly execute
        and deliver the applicable Assignment for Security in the form attached hereto
        as Exhibit
        A.
        Each
        Grantor (either itself or through licensees) will, and will cause each licensee
        thereof to, take all action necessary to maintain all of the Intellectual
        Property in full force and effect, including, without limitation, using the
        proper statutory notices and markings and using the Trademarks on each
        applicable trademark class of goods in order to so maintain the Trademarks
        in
        full force and free from any claim of abandonment for non-use, and each Grantor
        will not (nor permit any licensee thereof to) do any act or knowingly omit
        to do
        any act whereby any Intellectual Property may become invalidated; provided,
        however,
        that so
        long as no Event of Default has occurred and is continuing, no Grantor shall
        have an obligation to use or to maintain any Intellectual Property (A) that
        relates solely to any product or work, that has been, or is in the process
        of
        being, discontinued, abandoned or terminated, (B) that is being replaced
        with
        Intellectual Property substantially similar to the Intellectual Property
        that
        may be abandoned or otherwise become invalid, so long as the failure to use
        or
        maintain such Intellectual Property does not materially adversely affect
        the
        validity of such replacement Intellectual Property and so long as such
        replacement Intellectual Property is subject to the Lien created by this
        Agreement or (C) that is substantially the same as another Intellectual Property
        that is in full force, so long the failure to use or maintain such Intellectual
        Property does not materially adversely affect the validity of such replacement
        Intellectual Property and so long as such other Intellectual Property is
        subject
        to the Lien and security interest created by this Agreement. Each
        Grantor
        will
        cause to be taken all necessary steps in any proceeding before the United
        States
        Patent and Trademark Office and the United States Copyright Office or any
        similar office or agency in any other country or political subdivision thereof
        to maintain each registration of the Intellectual Property (other than the
        Intellectual Property described in the proviso to the immediately preceding
        sentence), including, without limitation, filing of renewals, affidavits
        of use,
        affidavits of incontestability and opposition, interference and cancellation
        proceedings and payment of maintenance fees, filing fees, taxes or other
        governmental fees. If any Intellectual Property (other than Intellectual
        Property described in the proviso to the first sentence of subsection (i)
        of
        this clause (h)) is infringed, misappropriated, diluted or otherwise violated
        in
        any material respect by a third party, each Grantor shall (x) upon learning
        of
        such infringement, misappropriation, dilution or other violation, promptly
        notify the Buyer and (y) to the extent any Grantor shall deem appropriate
        under
        the circumstances, promptly sue for infringement, misappropriation, dilution
        or
        other violation, seek injunctive relief where appropriate and recover any
        and
        all damages for such infringement, misappropriation, dilution or other
        violation, or take such other actions as such Grantor shall deem appropriate
        under the circumstances to protect such Intellectual Property. Each
        Grantor
        shall
        furnish to the Buyer from time to time upon its request statements and schedules
        further identifying and describing the Intellectual Property and Licenses
        and
        such other reports in connection with the Intellectual Property and Licenses
        as
        the Buyer may reasonably request, all in reasonable detail and promptly upon
        request of the Buyer, following receipt by the Buyer of any such statements,
        schedules or reports, each Grantor shall modify this Agreement by amending
        Schedule
        II
        hereto,
        as the case may be, to include any Intellectual Property and License, as
        the
        case may be, which becomes part of the Collateral under this Agreement and
        shall
        execute and authenticate such documents and do such acts as shall be necessary
        or, in the judgment of the Buyer, desirable to subject such Intellectual
        Property and Licenses to the Lien and security interest created by this
        Agreement. Notwithstanding anything herein to the contrary, upon the occurrence
        and during the continuance of an Event of Default, no Grantor may abandon
        or
        otherwise permit any Intellectual Property to become invalid without the
        prior
        written consent of the Buyer, and if any Intellectual Property is infringed,
        misappropriated, diluted or otherwise violated in any material respect by
        a
        third party, each Grantor will take such action as the Buyer shall deem
        appropriate under the circumstances to protect such Intellectual
        Property.

       

      
        
          
          

        

        
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      (ii) In
        no
        event shall any Grantor, either itself or through any agent, employee, licensee
        or designee, file an application for the registration of any Trademark or
        Copyright or the issuance of any Patent with the United States Patent and
        Trademark Office or the United States Copyright Office, as applicable, or
        in any
        similar office or agency of the United States or any country or any political
        subdivision thereof unless it gives the Buyer prior written notice thereof.
        Upon
        request of the Buyer, any Grantor shall execute, authenticate and deliver
        any
        and all assignments, agreements, instruments, documents and papers as the
        Buyer
        may reasonably request to evidence the Buyer's security interest hereunder
        in
        such Intellectual Property and the General Intangibles of any Grantor relating
        thereto or represented thereby, and each Grantor hereby appoints the Buyer
        its
        attorney-in-fact to execute and/or authenticate and file all such writings
        for
        the foregoing purposes, all acts of such attorney being hereby ratified and
        confirmed, and such power (being coupled with an interest) shall be irrevocable
        until the indefeasible payment in full in cash of all of the Obligations
        in full
        and the termination of each of the Transaction Documents.

      

      (i) Deposit,
        Commodities and Securities Accounts.
        Upon
        the Buyer's written request, each Grantor shall cause each bank and other
        financial institution with an account referred to in Schedule
        IV
        hereto
        to execute and deliver to the Buyer a control agreement, in form and substance
        reasonably satisfactory to the Buyer, duly executed by each Grantor and such
        bank or financial institution, or enter into other arrangements in form and
        substance satisfactory to the Buyer, pursuant to which such institution shall
        irrevocably agree, inter alia,
        that
        (i) it will comply at any time with the instructions originated by the
        Buyer to such bank or financial institution directing the disposition of
        cash,
        Commodity Contracts, securities, Investment Property and other items from
        time
        to time credited to such account, without further consent of each Grantor,
        which
        instructions the Buyer will not give to such bank or other financial institution
        in the absence of a continuing Event of Default, (ii) all cash, Commodity
        Contracts, securities, Investment Property and other items of each Grantor
        deposited with such institution shall be subject to a perfected, first priority
        security interest in favor of the Buyer, (iii) any right of set off (other
        than recoupment of standard fees), banker's Lien or other similar Lien, security
        interest or encumbrance shall be fully waived as against the Buyer, and
        (iv) upon receipt of written notice from the Buyer during the continuance
        of an Event of Default, such bank or financial institution shall immediately
        send to the Buyer by wire transfer (to such account as the Buyer shall specify,
        or in such other manner as the Buyer shall direct) all such cash, the value
        of
        any Commodity Contracts, securities, Investment Property and other items
        held by
        it. Without the prior written consent of the Buyer, each Grantor shall not
        make
        or maintain any Deposit Account, Commodity Account or Securities Account
        except
        for the accounts set forth in Schedule
        IV
        hereto.
        The provisions of this paragraph 5(i) shall not apply to (i) Deposit Accounts
        for which the Buyer is the depositary and (ii) Deposit Accounts specially
        and
        exclusively used for payroll, payroll taxes and other employee wage and benefit
        payments to or for the benefit of each Grantor's salaried
        employees.

       

      (j) Motor
        Vehicles.

      

      (i) Upon
        the
        Buyer's written request, each Grantor shall deliver to the Buyer originals
        of
        the certificates of title or ownership for all motor vehicles with a value
        in
        excess of $50,000, owned by it with the Buyer listed as lienholder, for the
        benefit of the Buyers.

       

      
        
          
          

        

        
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      (ii) Each
        Grantor hereby appoints the Buyer as its attorney-in-fact, effective the
        date
        hereof and terminating upon the termination of this Agreement, for the purpose
        of (A) executing on behalf of each Grantor title or ownership applications
        for
        filing with appropriate state agencies to enable motor vehicles now owned
        or
        hereafter acquired by each Grantor to be retitled and the Buyer listed as
        lienholder thereof, (B) filing such applications with such state agencies,
        and
        (C) executing such other documents and instruments on behalf of, and taking
        such
        other action in the name of, each Grantor as the Buyer may deem necessary
        or
        advisable to accomplish the purposes hereof (including, without limitation,
        for
        the purpose of creating in favor of the Buyer a perfected Lien on the motor
        vehicles and exercising the rights and remedies of the Buyer hereunder).
        This
        appointment as attorney-in-fact is coupled with an interest and is irrevocable
        until all of the Obligations are indefeasibly paid in full in cash and after
        all
        Transaction Documents have been terminated.

      

      (iii) Any
        certificates of title or ownership delivered pursuant to the terms hereof
        shall
        be accompanied by odometer statements for each motor vehicle covered
        thereby.

      

      (iv) So
        long
        as no Event of Default shall have occurred and be continuing, upon the request
        of any Grantor, the Buyer shall execute and deliver to any Grantor such
        instruments as any Grantor shall reasonably request to remove the notation
        of
        the Buyer as lienholder on any certificate of title for any motor vehicle;
        provided,
        however,
        that
        any such instruments shall be delivered, and the release effective, only
        upon
        receipt by the Buyer of a certificate from any Grantor stating that such
        motor
        vehicle is to be sold or has suffered a casualty loss (with title thereto
        passing to the casualty insurance company therefor in settlement of the claim
        for such loss) and the amount that any Grantor will receive as sale proceeds
        or
        insurance proceeds. Any proceeds of such sale or casualty loss shall be paid
        to
        the Buyer hereunder immediately upon receipt, to be applied to the Obligations
        then outstanding.

      

      (k) Control.
        Each
        Grantor hereby agrees to take any or all action that may be necessary or
        desirable or that the Buyer may request in order for the Buyer to obtain
        control
        in accordance with Sections 9-105 - 9-107 of the Code with respect to the
        following Collateral: (i) Electronic Chattel Paper, (ii) Investment
        Property, and (iii) Letter-of-Credit Rights.

      

      (l) Inspection
        and Reporting.
        Each
        Grantor shall permit the Buyer, or any agent or representatives thereof or
        such
        professionals or other Persons as the Buyer may designate, not more than
        once a
        year in the absence of an Event of Default, (i) to examine and make copies
        of and abstracts from any Grantor's records and books of account, (ii) to
        visit
        and inspect its properties, (iii) to verify materials, leases, Instruments,
        Accounts, Inventory and other assets of any Grantor from time to time,
        (iii) to conduct audits, physical counts, appraisals and/or valuations,
        examinations at the locations of any Grantor. Each Grantor shall also permit
        the
        Buyer, or any agent or representatives thereof or such professionals or other
        Persons as the Buyer may designate to discuss any Grantor's affairs, finances
        and accounts with any of its directors, officers, managerial employees,
        independent accountants or any of its other representatives.

      

      (m) Future
        Subsidiaries.
        If any
        Grantor shall hereafter create or acquire any Subsidiary, simultaneously
        with
        the creation of acquisition of such Subsidiary, such Grantor shall cause
        such
        Subsidiary to become a party to this Agreement as an additional "Grantor"
        hereunder, and to duly execute and deliver a guaranty of the Obligations
        in
        favor of the Buyer in form and substance reasonably acceptable to the Buyer,
        and
        to duly execute and/or deliver such opinions of counsel and other documents,
        in
        form and substance reasonably acceptable to the Buyer, as the Buyer shall
        reasonably request with respect thereto. 

       

      
        
          
          

        

        
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      SECTION
        6. Additional
        Provisions Concerning the Collateral.

       

      (a) Each
        Grantor hereby (i) authorizes the Buyer to file one or more Uniform
        Commercial Code financing or continuation statements, and amendments thereto,
        relating to the Collateral and (ii) ratifies such authorization to the
        extent that the Buyer has filed any such financing or continuation statements,
        or amendments thereto, prior to the date hereof. A photocopy 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.

      

      (b) Each
        Grantor hereby irrevocably appoints the Buyer as its attorney-in-fact and
        proxy,
        with full authority in the place and stead of each Grantor and in the name
        of
        each Grantor or otherwise, from time to time in the Buyer's discretion, so
        long
        as an Event of Default shall have occurred and is continuing, to take any
        action
        and to execute any instrument which the Buyer may deem necessary or advisable
        to
        accomplish the purposes of this Agreement (subject to the rights of each
        Grantor
        under Section
        5
        hereof),
        including, without limitation, (i) to obtain and adjust insurance required
        to be
        paid to the Buyer pursuant to Section
        5(e)
        hereof,
        (ii) to ask, demand, collect, sue for, recover, compound, receive and give
        acquittance and receipts for moneys due and to become due under or in respect
        of
        any Collateral, (iii) to receive, endorse, and collect any drafts or other
        instruments, documents and chattel paper in connection with clause (i) or
        (ii)
        above, (iv) to file any claims or take any action or institute any proceedings
        which the Buyer may deem necessary or desirable for the collection of any
        Collateral or otherwise to enforce the rights of the Buyer with respect to
        any
        Collateral, and (v) to execute assignments, licenses and other documents
        to
        enforce the rights of the Buyer with respect to any Collateral. This power
        is
        coupled with an interest and is irrevocable until all of the Obligations
        are
        indefeasibly paid in full in cash. 

       

      (c) For
        the
        purpose of enabling the Buyer to exercise rights and remedies hereunder,
        at such
        time as the Buyer shall be lawfully entitled to exercise such rights and
        remedies, and for no other purpose, each Grantor hereby grants to the Buyer,
        to
        the extent assignable, an irrevocable, non-exclusive license (exercisable
        without payment of royalty or other compensation to any Grantor) to use,
        assign,
        license or sublicense any Intellectual Property now owned or hereafter acquired
        by any Grantor, wherever the same may be located, including in such license
        reasonable access to all media in which any of the licensed items may be
        recorded or stored and to all computer programs used for the compilation
        or
        printout thereof. Notwithstanding anything contained herein to the contrary,
        but
        subject to the provisions of the Securities Purchase Agreement that limit
        the
        right of any Grantor to dispose of its property and Section
        5(h)
        hereof,
        so long as no Event of Default shall have occurred and be continuing, any
        Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell,
        dispose of or take other actions with respect to the Intellectual Property
        in
        the ordinary course of its business. In furtherance of the foregoing, unless
        an
        Event of Default shall have occurred and be continuing, the Buyer shall from
        time to time, upon the request of any Grantor, execute and deliver any
        instruments, certificates or other documents, in the form so requested, which
        such Grantor shall have certified are appropriate (in any Grantor's judgment)
        to
        allow it to take any action permitted above (including relinquishment of
        the
        license provided pursuant to this clause (c) as to any Intellectual Property).
        Further, upon the indefeasible payment in full in cash of all of the
        Obligations, the Buyer (subject to Section
        10(e)
        hereof)
        shall release and reassign to any Grantor all of the Buyer's right, title
        and
        interest in and to the Intellectual Property, and the Licenses, all without
        recourse, representation or warranty whatsoever. The exercise of rights and
        remedies hereunder by the Buyer shall not terminate the rights of the holders
        of
        any licenses or sublicenses theretofore granted by each Grantor in accordance
        with the second sentence of this clause (c). Each Grantor hereby releases
        the
        Buyer from any claims, causes of action and demands at any time arising out
        of
        or with respect to any actions taken or omitted to be taken by the Buyer
        under
        the powers of attorney granted herein other than actions taken or omitted
        to be
        taken through the Buyer's gross negligence or willful misconduct, as determined
        by a final determination of a court of competent jurisdiction. 

       

      
        
          
          

        

        
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      (d) If
        any
        Grantor fails to perform any agreement contained herein, the Buyer may itself
        perform, or cause performance of, such agreement or obligation, in the name
        of
        any Grantor or the Buyer, and the expenses of the Buyer incurred in connection
        therewith shall be payable by any Grantor pursuant to Section
        8
        hereof
        and shall be secured by the Collateral.

      

      (e) The
        powers conferred on the Buyer hereunder are solely to protect its interest
        in
        the Collateral and shall not impose any duty upon it to exercise any such
        powers. Except for the safe custody of any Collateral in its possession and
        the
        accounting for moneys actually received by it hereunder, the Buyer shall
        have no
        duty as to any Collateral or as to the taking of any necessary steps to preserve
        rights against prior parties or any other rights pertaining to any
        Collateral.

      

      (f) Anything
        herein to the contrary notwithstanding (i) each Grantor shall remain liable
        under the Licenses and otherwise with respect to any of the Collateral to
        the
        extent set forth therein to perform all of its obligations thereunder to
        the
        same extent as if this Agreement had not been executed, (ii) the exercise
        by the Buyer of any of its rights hereunder shall not release any Grantor
        from
        any of its obligations under the Licenses or otherwise in respect of the
        Collateral, and (iii) the Buyer shall not have any obligation or liability
        by reason of this Agreement under the Licenses or with respect to any of
        the
        other Collateral, nor shall the Buyer be obligated to perform any of the
        obligations or duties of any Grantor thereunder or to take any action to
        collect
        or enforce any claim for payment assigned hereunder.

       

      
        
          
          

        

        
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      SECTION
        7. Remedies
        Upon Event of Default.
        If any
        Event of Default shall have occurred and be continuing:

       

      (a) The
        Buyer
        may exercise in respect of the Collateral, in addition to any other rights
        and
        remedies provided for herein or otherwise available to it, all of the rights
        and
        remedies of a secured party upon default under the Code (whether or not the
        Code
        applies to the affected Collateral), and also may (i) take absolute control
        of the Collateral, including, without limitation, transfer into the Buyer's
        name
        or into the name of its nominee or nominees and thereafter receive, for the
        benefit of the Buyer, all payments made thereon, give all consents, waivers
        and
        ratifications in respect thereof and otherwise act with respect thereto as
        though it were the outright owner thereof, (ii) require each Grantor to,
        and each Grantor hereby agrees that it will at its expense and upon request
        of
        the Buyer forthwith, assemble all or part of its respective Collateral as
        directed by the Buyer and make it available to the Buyer at a place or places
        to
        be designated by the Buyer that is reasonably convenient to both parties,
        and
        the Buyer may enter into and occupy any premises owned or leased by any Grantor
        where the Collateral or any part thereof is located or assembled for a
        reasonable period in order to effectuate the Buyer's rights and remedies
        hereunder or under law, without obligation to any Grantor in respect of such
        occupation, and (iii) without notice except as specified below and without
        any obligation to prepare or process the Collateral for sale, (A) sell the
        Collateral or any part thereof in one or more parcels at public or private
        sale,
        at any of the Buyer's offices or elsewhere, for cash, on credit or for future
        delivery, and at such price or prices and upon such other terms as the Buyer
        may
        deem commercially reasonable and/or (B) lease, license or dispose of the
        Collateral or any part thereof upon such terms as the Buyer may deem
        commercially reasonable. Each Grantor agrees that, to the extent notice of
        sale
        or any other disposition of its respective Collateral shall be required by
        law,
        at least ten (10) days' notice to any Grantor of the time and place of any
        public sale or the time after which any private sale or other disposition
        of its
        respective Collateral is to be made shall constitute reasonable notification.
        The Buyer shall not be obligated to make any sale or other disposition of
        any
        Collateral regardless of notice of sale having been given. The Buyer 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. Each Grantor hereby waives any
        claims against the Buyer arising by reason of the fact that the price at
        which
        its respective Collateral may have been sold at a private sale was less than
        the
        price which might have been obtained at a public sale or was less than the
        aggregate amount of the Obligations, even if the Buyer accepts the first
        offer
        received and does not offer such Collateral to more than one offeree, and
        waives
        all rights that any Grantor may have to require that all or any part of such
        Collateral be marshalled upon any sale (public or private) thereof. Each
        Grantor
        hereby acknowledges that (i) any such sale of its respective Collateral by
        the Buyer shall be made without warranty, (ii) the Buyer may specifically
        disclaim any warranties of title, possession, quiet enjoyment or the like,
        and
        (iii) such actions set forth in clauses (i) and (ii) above shall not
        adversely effect the commercial reasonableness of any such sale of Collateral.
        In addition to the foregoing, (1) upon written notice to any Grantor from
        the Buyer, such Grantor shall cease any use of the Intellectual Property
        or any
        trademark, patent or copyright similar thereto for any purpose described
        in such
        notice; (2) the Buyer may, at any time and from time to time, upon 10 days'
        prior notice to such Grantor, license, whether general, special or otherwise,
        and whether on an exclusive or non-exclusive basis, any of the Intellectual
        Property, throughout the universe for such term or terms, on such conditions,
        and in such manner, as the Buyer shall in its sole discretion determine;
        and (3)
        the Buyer may, at any time, pursuant to the authority granted in Section
        6
        hereof
        (such authority being effective upon the occurrence and during the continuance
        of an Event of Default), execute and deliver on behalf of such Grantor, one
        or
        more instruments of assignment of the Intellectual Property (or any application
        or registration thereof), in form suitable for filing, recording or registration
        in any country.

       

      (b) Any
        cash
        held by the Buyer as Collateral and all Cash Proceeds received by the Buyer
        in
        respect of any sale of or collection from, or other realization upon, all
        or any
        part of the Collateral may, in the discretion of the Buyer, be held by the
        Buyer
        as collateral for, and/or then or at any time thereafter applied (after payment
        of any amounts payable to the Buyer pursuant to Section
        8
        hereof)
        in whole or in part by the Buyer against, all or any part of the Obligations
        in
        such order as the Buyer shall elect, consistent with the provisions of the
        Securities Purchase Agreement. Any surplus of such cash or Cash Proceeds
        held by
        the Buyer and remaining after the indefeasible payment in full in cash of
        all of
        the Obligations shall be paid over to whomsoever shall be lawfully entitled
        to
        receive the same or as a court of competent jurisdiction shall
        direct.

      
        
          
          

        

        
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      (c) In
        the
        event that the proceeds of any such sale, collection or realization are
        insufficient to pay all amounts to which the Buyer is legally entitled, such
        each shall be liable for the deficiency, together with interest thereon at
        the
        highest rate specified in any of the applicable Transaction Documents for
        interest on overdue principal thereof or such other rate as shall be fixed
        by
        applicable law, together with the costs of collection and the reasonable
        fees,
        costs, expenses and other client charges of any attorneys employed by the
        Buyer
        to collect such deficiency.

      

      (d) Each
        Grantor hereby acknowledges that if the Buyer complies with any applicable
        state, provincial, or federal law requirements in connection with a disposition
        of the Collateral, such compliance will not adversely affect the commercial
        reasonableness of any sale or other disposition of the Collateral.

      

      (e) The
        Buyer
        shall not be required to marshal any present or future collateral security
        (including, but not limited to, this Agreement and the Collateral) for, or
        other
        assurances of payment of, the Obligations or any of them or to resort to
        such
        collateral security or other assurances of payment in any particular order,
        and
        all of the Buyer's rights hereunder and in respect of such collateral security
        and other assurances of payment shall be cumulative and in addition to all
        other
        rights, however existing or arising. To the extent that any Grantor lawfully
        may, each Grantor hereby agrees that it will not invoke any law relating
        to the
        marshalling of collateral which might cause delay in or impede the enforcement
        of the Buyer's rights under this Agreement or under any other instrument
        creating or evidencing any of the Obligations or under which any of the
        Obligations is outstanding or by which any of the Obligations is secured
        or
        payment thereof is otherwise assured, and, to the extent that it lawfully
        may,
        each Grantor hereby irrevocably waives the benefits of all such
        laws.

       

      SECTION
        8. Indemnity
        and Expenses.

       

      (a) Each
        Grantor agrees, jointly and severally, to defend, protect, indemnify and
        hold
        the Buyer, jointly and severally, harmless from and against any and all claims,
        damages, losses, liabilities, obligations, penalties, fees, costs and expenses
        (including, without limitation, reasonable legal fees, costs, expenses, and
        disbursements of such Person's counsel) to the extent that they arise out
        of or
        otherwise result from this Agreement (including, without limitation, enforcement
        of this Agreement), except claims, losses or liabilities resulting solely
        and
        directly from such Person's gross negligence or willful misconduct, as
        determined by a final judgment of a court of competent
        jurisdiction.

       

      (b) Each
        Grantor agrees, jointly and severally, to upon demand pay to the Buyer the
        amount of any and all costs and expenses, including the reasonable fees,
        costs,
        expenses and disbursements of counsel for the Buyer and of any experts and
        agents (including, without limitation, any collateral trustee which may act
        as
        agent of the Buyer), which the Buyer may incur in connection with (i) the
        preparation, negotiation, execution, delivery, recordation, administration,
        amendment, waiver or other modification or termination of this Agreement,
        (ii) the custody, preservation, use or operation of, or the sale of,
        collection from, or other realization upon, any Collateral, (iii) the
        exercise or enforcement of any of the rights of the Buyer hereunder, or
        (iv) the failure by any Grantor to perform or observe any of the provisions
        hereof.

       

      
        
          
          

        

        
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      SECTION
        9. Notices,
        Etc.
        All
        notices and other communications provided for hereunder shall be in writing
        and
        shall be mailed (by certified mail, postage prepaid and return receipt
        requested), telecopied, e-mailed or delivered, if to any Grantor at its address
        specified below and if to the Buyer to it, at its address specified below;
        or as
        to any such Person, at such other address as shall be designated by such
        Person
        in a written notice to such other Person complying as to delivery with the
        terms
        of this Section
        9.
        All
        such notices and other communications shall be effective (a) if sent by
        certified mail, return receipt requested, when received or three days after
        deposited in the mails, whichever occurs first, (b) if telecopied or
        e-mailed, when transmitted (during normal business hours) and confirmation
        is
        received, otherwise, the day after the notice was transmitted if confirmation
        is
        received, or (c) if delivered, upon delivery.

      

      SECTION
        10. Miscellaneous.

       

      (a) No
        amendment of any provision of this Agreement shall be effective unless it
        is in
        writing and signed by each Grantor and the Buyer, and no waiver of any provision
        of this Agreement, and no consent to any departure by each Grantor therefrom,
        shall be effective unless it is in writing and signed by the Buyer, and then
        such waiver or consent shall be effective only in the specific instance and
        for
        the specific purpose for which given.

      

      (b) No
        failure on the part of the Buyer to exercise, and no delay in exercising,
        any
        right hereunder or under any of the other Transaction Documents shall operate
        as
        a waiver thereof; nor shall any single or partial exercise of any such right
        preclude any other or further exercise thereof or the exercise of any other
        right. The rights and remedies of the Buyer provided herein and in the other
        Transaction Documents are cumulative and are in addition to, and not exclusive
        of, any rights or remedies provided by law. The rights of the Buyer under
        any of
        the other Transaction Documents against any party thereto are not conditional
        or
        contingent on any attempt by such Person to exercise any of its rights under
        any
        of the other Transaction Documents against such party or against any other
        Person, including but not limited to, any Grantor.

      

      (c) Any
        provision of this Agreement that is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining portions
        hereof or thereof or affecting the validity or enforceability of such provision
        in any other jurisdiction.

      

      (d) This
        Agreement shall create a continuing security interest in the Collateral and
        shall (i) remain in full force and effect until the indefeasible payment
        in full
        in cash of the Obligations, and (ii) be binding on each Grantor and all other
        Persons who become bound as debtor to this Agreement in accordance with Section
        9-203(d) of the Code and shall inure, together with all rights and remedies
        of
        the Buyer hereunder, to the benefit of the Buyer and its permitted successors,
        transferees and assigns. Without limiting the generality of clause (ii) of
        the
        immediately preceding sentence, without notice to any Grantor and the Buyer
        may
        assign or otherwise transfer their rights and obligations under this Agreement
        and any of the other Transaction Documents, to any other Person and such
        other
        Person shall thereupon become vested with all of the benefits in respect
        thereof
        granted to the Buyer herein or otherwise. Upon any such assignment or transfer,
        all references in this Agreement to the Buyer shall mean the assignee of
        the
        Buyer. None of the rights or obligations of any Grantor hereunder may be
        assigned or otherwise transferred without the prior written consent of the
        Buyer, and any such assignment or transfer without the consent of the
        Buyer
        shall be
        null and void.

       

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

      

      (e) Upon
        the
        indefeasible payment in full in cash of the Obligations, (i) this Agreement
        and
        the security interests created hereby shall terminate and all rights to the
        Collateral shall revert to the respective Grantor that granted such security
        interests hereunder, and (ii) the Buyer will, upon any Grantor's request
        and at
        such Grantor's expense, (A) return to such Grantor such of the Collateral
        as
        shall not have been sold or otherwise disposed of or applied pursuant to
        the
        terms hereof, and (B) execute and deliver to such Grantor such documents
        as such
        Grantor shall reasonably request to evidence such termination, all without
        any
        representation, warranty or recourse whatsoever.

      

      (f) THIS
        AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
        THE
        LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS
        OF LAW
        AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION
        AND
        THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
        HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
        GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
        YORK.

      

      (g) ANY
        LEGAL
        ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT
        RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN
        THE
        COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
        OF
        NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF
        THIS
        AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
        PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
        COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
        EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
        OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
        WHICH
        IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR
        PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING
        OF SUCH
        LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

      

      (h) EACH
        GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) THE BUYER
        WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION
        BASED
        ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
        THE
        OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
        VERBAL
        OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

      

      (i) Each
        Grantor irrevocably consents to the service of process of any of the aforesaid
        courts in any such action, suit or proceeding by the mailing of copies thereof
        by registered or certified mail (or any substantially similar form of mail),
        postage prepaid, to any Grantor at its address provided herein, such service
        to
        become effective 10 days after such mailing.

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

      

      (j) Nothing
        contained herein shall affect the right of the Buyer to serve process in
        any
        other manner permitted by law or commence legal proceedings or otherwise
        proceed
        against any Grantor or any property of any Grantor in any other
        jurisdiction.

      

      (k) Each
        Grantor irrevocably and unconditionally waives any right it may have to claim
        or
        recover in any legal action, suit or proceeding referred to in this Section
        any
        special, exemplary, punitive or consequential damages.

      

      (l) Section
        headings herein are included for convenience of reference only and shall
        not
        constitute a part of this Agreement for any other purpose.

      

      (m) This
        Agreement may be executed in any number of counterparts and by different
        parties
        hereto in separate counterparts, each of which shall be deemed to be an
        original, but all of which taken together constitute one in the same
        Agreement.

      

      [REMAINDER
        OF THIS PAGE INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
        delivered by its officer thereunto duly authorized, as of the date first
        above
        written.

      

      GREEN
        SCREEN INTERACTIVE SOFTWARE, INC.

      

      By: /s/
        Ron Chaimowitz

      Name:
        Ron
        Chaimowitz

      Title:
        Chief
        Executive Officer

      Address:
        575 Broadway,  New
        York,
        New York 10012

      

      GREEN
        SCREEN ONLINE LLC

      

      By:
        /s/
        Mark Seremet

      Name:
        Mark
        Seremet

      Title:
        Manager

      

      

      ZOO
        DIGITAL PUBLISHING LIMITED

      

      By:
        /s/
        Ian Stewart

      Name:
        Ian
        Stewart

      Title:
        Chairman

      

      

      SUPERVILLAIN
        STUDIOS, LLC

      

      By:/s/
        Susan Cummings

      Name:
        Susan
        Cummings

      Title:
        Sole
        Manager

      

      

      ZOO
        GAMES, INC.

      

      By:
        /s/
        Susan Kain

      Name:
        Susan
        Kain

      Title:
        President

       

      ACCEPTED
        BY:

      

      DRIFTWOOD
        VENTURES, INC.

      

      By:
        /s/
        Charles Bentz

      Name:
        Charles
        Bentz  

      Title:
        Chief
        Financial Officer

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

      

      ASSIGNMENT
        FOR SECURITY

      

      [TRADEMARKS]
        [PATENTS] [COPYRIGHTS]

      

      

      WHEREAS,
        ______________________________
        (the
        "Assignor")
        [has
        adopted, used and is using, and holds all right, title and interest in and
        to,
        the trademarks and service marks listed on the annexed Schedule 1A,
        which
        trademarks and service marks are registered or applied for in the United
        States
        Patent and Trademark Office (the "Trademarks")]
        [holds all right, title and interest in the letter patents, design patents
        and
        utility patents listed on the annexed Schedule 1A,
        which
        patents are issued or applied for in the United States Patent and Trademark
        Office (the "Patents")]
        [holds all right, title and interest in the copyrights listed on the annexed
        Schedule
        1A,
        which
        copyrights are registered in the United States Copyright Office (the
        "Copyrights")];

      

      WHEREAS,
        the Assignor has entered into a Security Agreement, dated as of
        ________________, 2005 (as amended, restated or otherwise modified from time
        to
        time the "Security
        Agreement"),
        in
        favor of DRIFTWOOD VENTURES, INC. (the "Assignee");

      

      WHEREAS,
        pursuant to the Security Agreement, the Assignor has assigned to the Assignee
        and granted to the Assignee for the benefit of the Buyers (as defined in
        the
        Security Agreement) a continuing security interest in all right, title and
        interest of the Assignor in, to and under the [Trademarks, together with,
        among
        other things, the good-will of the business symbolized by the Trademarks]
        [Patents] [Copyrights] and the applications and registrations thereof, and
        all
        proceeds thereof, including, without limitation, any and all causes of action
        which may exist by reason of infringement thereof and any and all damages
        arising from past, present and future violations thereof (the "Collateral"),
        to
        secure the payment, performance and observance of the "Obligations" (as defined
        in the Security Agreement);

      

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, the Assignor does hereby pledge, convey, sell,
        assign, transfer and set over unto the Assignee and grants to the Assignee
        for
        the benefit of the Buyers a continuing security interest in the Collateral
        to
        secure the prompt payment, performance and for the benefit of the Buyers
        observance of the Obligations.

      

      The
        Assignor does hereby further acknowledge and affirm that the rights and remedies
        of the Assignee with respect to the Collateral are more fully set forth in
        the
        Security Agreement, the terms and provisions of which are hereby incorporated
        herein by reference as if fully set forth herein.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Assignor has caused this Assignment to be duly executed
        by
        its officer thereunto duly authorized as of _____________, 20__

       

      
        	 	 	 
	 	[GRANTORS]
	 
 	 
 	 
 
	 	By:  	 
	 	
                Name:

                Title:
                  

              
	 	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      STATE
        OF
        ____________

      ss.:

      COUNTY
        OF
        __________

      

      

      On
        this
        ____ day of _______________, 20__, before me personally came ________________,
        to me known to be the person who executed the foregoing instrument, and who,
        being duly sworn by me, did depose and say that s/he is the ________________
        of
        _______________________________________, a ____________________, and that
        s/he
        executed the foregoing instrument in the firm name of
        _______________________________________, and that s/he had authority to sign
        the
        same, and s/he acknowledged to me that he executed the same as the act and
        deed
        of said firm for the uses and purposes therein mentioned.

      

      ______________________________

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      SCHEDULE
        1A TO ASSIGNMENT FOR SECURITY

      

      

      

      

      [Trademarks
        and Trademark Applications]

      [Patent
        and Patent Applications]

      [Copyright
        and Copyright Applications] 

      Owned
        by
        ______________________________

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