Document:

ex1006.htm

    Exhibit
10.06

    

    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION
OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN SECURED BY SUCH SECURITIES.

    

    Original
Issue Date: December 30,
2008

    

    $740,000

    

    

    14%
DEBENTURE

    DUE
AUGUST 31, 2009

    

    THIS
DEBENTURE of Amber Alert Safety Centers, Inc., a Nevada corporation, having a
principal place of business at 101 Roundhill Drive, 2nd Floor, Rockaway, NJ
07866 (the “Company”), designated
as its 14% Debenture, due August 31, 2009 (the “Debenture”).

    

    FOR VALUE
RECEIVED, the Company promises to pay to John Thomas Bridge & Opportunity
Fund, L.P. or its registered assigns (the “Holder”), the
principal sum of $740,000 on the earlier of (i) August 31, 2009 or (ii) upon the
New Financing Date, as defined in Section 11 (the “Maturity Date”), and
to pay accrued interest to the Holder monthly on the then outstanding principal
amount of this Debenture at the rate of 14% per annum, payable in
cash.

    

    This Debenture is subject to the terms and conditions set forth in
the Purchase Agreement, as well as to the following additional provisions:

     

    Section
1.                      This
Debenture is exchangeable for an equal aggregate principal amount of Debentures
of different authorized denominations, as requested by the Holder surrendering
the same.  No service charge will be made for such registration of
transfer or exchange.

     

    Section
2.                       This
Debenture has been issued subject to certain investment representations of the
original Holder set forth in the Purchase Agreement and may be transferred
or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.  Prior to due
presentment to the Company for transfer of this Debenture, the Company and any
agent of the Company may treat the Person in whose name this Debenture is duly
registered on the Debenture register as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not
this Debenture is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.

     

    
      
        
        

      

      
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    Section
3.                      Events of
Default.

    

    (a)           “Event of Default”,
wherever used herein, means any one of the following events (whatever the reason
and whether it shall be voluntary or involuntary or effected by operation of law
or pursuant to any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):

    

    (i) any
default in the payment of the principal amount of this Debenture when the same
shall become due and payable, either at Maturity or by acceleration or
otherwise; or

    

    (ii) default
shall be made in the payment of interest on this Debenture when the same becomes
due and payable and the default continues for a period of five
(5)  business days; or

    

    (iii)           any
representation or warranty made by the Company in the Purchase Agreement or any
other Transaction Documents was incorrect in any material respect on or as of
the date made; or

    

    (iv)           the
Company shall fail to observe or perform any other covenant or agreement
contained in this Debenture or any of the other Transaction Documents which
failure is not cured, if possible to cure, within 10 calendar days after written
notice of such default is sent by the Holder or by any other holder to the
Company; or

    

    (v)           the
Company shall commence, or there shall be commenced against the Company a case
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Company  commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Company or there
is commenced against the Company any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 60 days; or the Company is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the
Company  suffers any appointment of any custodian or the like for it
or any substantial part of its property which continues undischarged or unstayed
for a period of 60 days; or the Company makes a general assignment for the
benefit of creditors; or the Company shall fail to pay, or shall state that it
is unable to pay, or shall be unable to pay, its debts generally as they become
due; or the Company; or any corporate or other action is taken by the Company or
any subsidiary thereof for the purpose of effecting any of the foregoing;
or

    

    (vi) default
shall occur with respect to any indebtedness, excluding Excluded Indebtedness,
for borrowed money of the Company or under any agreement to which the Company is
a party and such default shall exceed $75,000; or

    

    (vii) default
with respect to any contractual obligation of the Company under or pursuant to
any contract, lease, or other agreement to which the Company is a party and such
default shall continue for more than the period of grace, if any, therein
specified, if the aggregate amount of the Company’s contractual liability
arising out of such default exceeds or is reasonably estimated to exceed
$75,000; or

    

    (viii)           final
judgment for the payment of money in excess of $75,000 shall be rendered against
the Company and the same shall remain undischarged for a period of 60 days
during which execution shall not be effectively stayed; or

    

    (ix)           any
failure to pay non-executive employee wages.

    

    (b)           If
any Event of Default occurs, the full principal amount of this Debenture,
together with interest and other amounts owing in respect thereof, to the date
of acceleration shall become immediately due and payable in cash; provided,
however, that the Holder shall have the right to convert all or a portion of
such principal of the Debenture into shares of Common Stock pursuant to the
terms set forth in Section 4 below (and to receive cash on the (i) accrued
interest and (ii) principal amount Holder elects not to
convert).  Commencing upon an Event of Default that results in the
eventual acceleration of this Debenture, the interest rate on this Debenture
shall accrue at the rate of 18% per annum, or such lower maximum amount of
interest permitted to be charged under applicable law.  The Holder
need not provide and the Company hereby waives any presentment, demand, protest
or other notice of any kind, and the Holder may immediately and without
expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable
law.  Such declaration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a
Debenture holder until such time, if any, as the full payment under this Section
shall have been received by it.  No such rescission or annulment shall
affect any subsequent Event of Default or impair any right consequent
thereon.

     

    
      
        
        

      

      
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    Section
4.                          
Conversion Upon Event
of Default.

    

    (a)           The
Holder, if elected pursuant to Section 3(b) above, shall convert all or a
portion of the principal of this Debenture into shares of Common Stock, the
Holder shall effect such conversion by delivering to the Company a notice of
conversion (a “Notice
of Default
Conversion”),
specifying therein the principal amount of the Debenture to be converted and the
date on which such conversion is to be effected (a “Default Conversion
Date”).

    

    (b)           If
the Holder elects to convert all of the principal of this Debenture into shares
of Common Stock, then the number of shares of Common Stock issuable upon such
conversion shall be an amount of Common Stock equal to 51% of the Fully Diluted
Shares Outstanding, after giving effect to the default conversion, determined by
quotient of (x) the Fully Diluted Shares Outstanding at the Default Conversion
Date and (y) 49%. If the Holder elects to convert a portion of the
principal of this Debenture into shares of Common Stock, then the number of
shares of Common Stock issuable upon such conversion shall be determined on a
pro rata basis.

    
      	
               
      

            	 

    

               Section 5.      This Debenture is a
direct obligation of the Company, and the obligation of the Company to repay
this Debenture is absolute and unconditional, but is expressly subordinated to
all currently outstanding secured indebtedness of the Company outstanding on the
date hereof. The repayment terms hereof and the separate consideration described
in the Purchase Agreement agreed to be paid to Holder for making the loan
evidenced by this Debenture reflect the substantial risks Holder is assuming by
virtue of such subordination and Holder’s further agreement evidenced hereby
that no recourse shall be had for the payment of the principal of, or interest
on the Debenture, or for any claim based hereon, or otherwise in respect hereof,
against any shareholder, officer or director, as such, past, present or future,
of the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the express terms hereof and
as part of the consideration for the repayment terms here or hereof, expressly
waived and released.

    

               Section 6.          Interest on the
amount advanced will accrue on this Debenture until the Maturity Date. at the
rate of fourteen percent (14% per annum), and be payable on the first day of
each month, beginning February 1, 2009, and continuing until Maturity Date. If
any portion of this Debenture is outstanding on the Maturity Date, interest at
the rate of eighteen percent (18%) per annum or the highest rate allowed by law,
whichever is lower, shall accrue on the outstanding principal of this Debenture
from the Maturity Date to and including the date of payment by the
Company.  All past due interest shall accrue on a daily basis and
shall be payable in cash. The Holder may demand payment of all or any part of
this Debenture, together with accrued interest, if any, and any other amounts
due hereunder, as of the Maturity Date or any date thereafter.

     

       Section 7.          Security
Interest.  This Debenture shall be secured by the assets of the
Company, as set forth in the Security Agreement.

    

               Section 8.         Any payment
made by the Company to the Investor, on account of this Debenture shall be
applied in the following order of priority: (i) first, to any amounts other than
principal and accrued interest, if any, hereunder, (ii) second, to accrued
interest, if any, through and including the date of payment, and (iv) then, to
principal of the Debenture.

    

               Section 9.          The
outstanding principal of the loan evidenced by this Debenture may not be
prepaid, except as set forth in Section 12 hereof.

    

               Section
10.               
The term "Maturity Date" means the earliest of (i) August 31, 2009, (the "Stated
Maturity Date"), (ii) the New Financing Date (as defined below) or (iii) the
accelerated Maturity Date applicable in the case of any uncured Event of Default
prior to Maturity.

     

    
      
        
        

      

      
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    Section
11.                      
The term "New Financing Date" means the third business day after the date on
which the Company closes any equity, equity equivalent, or debt financing (“New
Financing”) in which the Company receives gross proceeds of at least One Million
Dollars ($1,000,000) or more or the last of any such equity, equity equivalent,
or debt financing which in the aggregate equal gross proceeds of $1,000,000 or
more to the Company. All such gross proceeds are determined before deduction of
any fees or other expenses or disbursements of any kind in connection with the
relevant transaction, offering or placement of securities.

     

    Section
12.                        
Upon the closing of one or more equity, equity equivalent, or debt financings in
which the Company receives gross proceeds of less than One Million Dollars
($1,000,000) per financing and in the aggregate, the Company shall pay an amount
equal to 50% of the proceeds of such financing to reduce the principal amount of
this Debenture.

     

    Section 13.                        
In the event of a Change of Control taking place otherwise than in connection
with the New Financing, Holder, at its option, will have the right (a)
immediately prior to the Change in Control, to convert the Debenture into
securities of the Company of the same class as those held by the persons
acquiring control of the Company, or (b) to require the Company, upon the Change
in Control, to purchase the Debenture at a purchase price of 125% of the price,
plus accrued interest.  The Company shall give Holder 20 days notice
prior to the event of a Change of Control.

    

    Section 14.       This Debenture shall
be governed by and interpreted in accordance with the laws of the State of Texas
for contracts to be wholly performed in such state and without giving effect to
the principles thereof regarding the conflict of laws. Each of the parties
consents to the exclusive jurisdiction of the state courts of the State of Texas
located in Harris County and and the United States District Court for the
Southern District of Texas in connection with any dispute arising under this
Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non convenes, to the bringing
of any such proceeding in such jurisdictions. To the extent determined by such
court, the Company shall reimburse the Holder for any reasonable legal fees and
disbursements incurred by the Holder in enforcement of or protection of any of
its rights under this Debenture. The Company and the Holder hereby waive a trial
by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other in respect of any matter arising out of or in
connection with this Agreement or the Debenture

    

               
Section 15.       The Company covenants
that it will at all times reserve and keep available out of its authorized and
unissued shares of Common Stock solely for the purpose of issuance upon Default Conversion of the Debenture, free from
preemptive rights or any other actual contingent purchase rights of persons
other than the Holder, not less than such number of shares of the Common Stock
as shall be issuable upon the conversion of the outstanding principal amount of
the Debenture.  The Company covenants that all shares of Common Stock
that shall be so issuable shall, upon issue, be duly and validly authorized,
issued and fully paid and nonassessable.

    

               
Section
16.                       
Upon a Default Conversion hereunder the
Company shall not be required to issue stock certificates representing fractions
of shares of the Common Stock, but may if otherwise permitted, make a cash
payment in respect of any final fraction of a share.  If the Company
elects not, or is unable, to make such a cash payment, the Holder shall be
entitled to receive, in lieu of the final fraction of a share, one whole share
of Common Stock.

    

                Section 17.       Issuance of
certificates for shares of the Common Stock on Default Conversion of the
Debentures shall be made without charge to the Holder thereof for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate.

    

    Section 18.        Any and all notices
or other communications or deliveries to be provided by the Holder hereunder,
including, without limitation, any notice of conversion, shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service, addressed to the Company, at the address set forth above,
facsimile number (973) 532 - 0794, Attn: Kai Patterson or such other address or
facsimile number as the Company may specify for such purposes by notice to the
Holder delivered in accordance with this Section.  Any and all notices
or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by facsimile, sent by a nationally
recognized overnight courier service addressed to each Holder at the facsimile
telephone number or address of Holder appearing on the books of the Company, or
if no such facsimile telephone number or address appears, at the principal place
of business of the Holder.  Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. Houston, Texas time), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (Houston, Texas
time) on any date and earlier than 11:59 p.m. (Texas time) on such date, (iii)
the second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. Whenever any payment or other
obligation hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day.

    

    Section 19.       This Debenture shall be mutilated,
lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Debenture, or in lieu
of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or
destroyed but only upon receipt of evidence of such loss, theft or destruction
of such Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Company.

    

    Section 20.       If any provision of
this Debenture is invalid, illegal or unenforceable, the balance of this
Debenture shall remain in effect, and if any provision is inapplicable to any
person or circumstance, it shall nevertheless remain applicable to all other
persons and circumstances.  If it shall be found that any interest or
other amount deemed interest due hereunder violates applicable laws governing
usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum permitted rate of interest. The Company covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on this Debenture as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this indenture, and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefits or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impeded
the execution of any power herein granted to the Holder, but will suffer and
permit the execution of every such as though no such law has been enacted.

     

    
      
        
        

      

      
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    Section
21.                         
Definitions.  For
the purposes hereof, in addition to the terms defined elsewhere in this
Debenture: (a) capitalized terms not otherwise defined herein have the meanings
given to such terms in the Purchase Agreement, and (b) the following terms shall
have the following meanings:

    

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

    

    “Change of Control” as
used herein shall mean the occurrence of the following events:

    

    (i)           A
sale, transfer, or other disposition by the Company through a single transaction
or a series of transactions occurring within a 90-day period of securities of
the Company representing Beneficial Ownership (as defined below) of fifty (50%)
percent or more of the combined voting power of the Company then outstanding
securities to any “Unrelated Person” or “Unrelated Persons” acting in concert
with one another.  For purposes of this definition, the term “Person”
shall mean and include any individual, partnership, joint venture, association,
trust corporation, or other entity [including a “group” as referred to in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“1934
Act”)].  For purposes of this definition, the term “Unrelated Person”
shall mean and include any Person other than the Company, a wholly-owned
subsidiary of the Company, an existing shareholder, or an employee benefit plan
of the Company; provided however, a sale of the Company’s securities in a
capital raising transaction shall not be a Change of Control.

    

    (ii)           A
sale, transfer, or other disposition through a single transaction or a series of
transactions occurring within a 90-day period of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.

    

    (iii)           A
change in the ownership of the Company through a single transaction or a series
of transactions occurring within a 90-day period such that any Unrelated Person
or Unrelated Persons acting in concert with one another become the “Beneficial
Owner,” directly or indirectly, of securities of the Company representing at
least fifty-one (51%) percent of the combined voting power of the Company then
outstanding securities.  For purposes of this Agreement, the term
“Beneficial Owner” shall have the same meaning as given to that term in Rule
13d-3 promulgated under the 1934 Act, provided that any pledgee of voting
securities is not deemed to be the Beneficial Owner of the securities prior to
its acquisition of voting rights with respect to the securities.

    

    (iv)           Any
consolidation or merger of the Company with or into an Unrelated Person, unless
immediately after the consolidation or merger the holders of the Common Stock of
the Company immediately prior to the consolidation or merger are the beneficial
owners of securities of the surviving corporation representing at least
fifty-one (51%) percent of the combined voting power of the surviving
corporation’s then outstanding securities.

    

    “Excluded Indebtedness
” means the Company’s preexisting debt obligations (principal and
interest) to clients of John Thomas Financial (the “Prior Notes”), in the
principal amount of approximately $2,053,419.

    

    “Fully Diluted Shares
Outstanding” means the sum of (i) the shares of Common Stock issued and
outstanding and (ii) shares of Common Stock issuable upon exercise or conversion
of outstanding Company derivative securities.

    

    “Person” means a
corporation, an association, a partnership, organization, a business, an
individual, a government or political subdivision thereof or a governmental
agency.

    

    “Purchase Agreement”
means the Purchase Agreement, dated as of the date hereof, to which the Company
and the original Holder are parties, as amended, modified or supplemented from
time to time in accordance with its terms.

    

    “Transaction
Documents” shall have the meaning set forth in the Purchase
Agreement.

    

    *********************

     

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a
duly authorized officer as of the date first above indicated.

     

    
      
        	 	
                AMBER
      ALERT SAFETY CENTERS, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

      

    

     

    
       

    

    

    

    6ex1007.htm

    Exhibit
10.07

     

    SECURITY
AGREEMENT

     

    THIS
SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified
from time to time, this “Agreement”) dated as of
December 30, 2008 by and between Amber Alert Safety Centers,
Inc., a Nevada corporation (the “Company” or the “Debtor”) and John
Thomas Bridge & Opportunity Fund, L.P., a Delaware limited
partnership (together with its successors and assigns in such capacity, the
“Secured
Party”).

     

    W I T N E
S S E T H:

     

    WHEREAS,
on the date hereof, John Thomas Bridge & Opportunity Fund, L.P., has
purchased a certain Debenture dated as of the date hereof by the Company in the
original principal amount of $740,000 (such note, together with any promissory
notes or other securities issued in exchange or substitution therefor or in
addition or replacement thereof, and as any of the same may be amended,
restated, modified or supplemented and in effect from time to time, being herein
referred to individually and collectively as the “Debenture”);

     

    WHEREAS,
the Debenture is being acquired by Secured Party and Secured Party has made
certain financial accommodations to the Company pursuant to a Purchase Agreement
of even date herewith between the Company (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Purchase Agreement”);
and

    

    WHEREAS,
Debtor will derive substantial benefit and advantage from the financial
accommodations to Debtor set forth in the Purchase Agreement.

     

    NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     

    Section
1.  Definitions.  Capitalized
terms used herein without definition and defined in the Purchase Agreement are
used herein as defined therein.  In addition, as used
herein:

     

    “Accounts” means any “account,”
as such term is defined in the Uniform Commercial Code, and, in any event, shall
include, without limitation, “supporting obligations” as defined in the Uniform
Commercial Code.

     

    “As-extracted Collateral” means
any “as-extracted collateral,” as such term is defined in the Uniform Commercial
Code.

     

    “Capital Lease Obligation”
means, as to any Person, any obligation that is required to be classified and
accounted for as a capital lease on a balance sheet of such Person prepared in
accordance with GAAP, and the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with GAAP.

     

    
      
        
        

      

      
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    “Chattel Paper” means any
“chattel paper,” as such term is defined in the Uniform Commercial
Code.

     

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

     

    “Commercial Tort Claims” means
“commercial tort claims” as such term is defined in the Uniform Commercial
Code.

     

    “Contracts” means all
contracts, undertakings, or other agreements (other than rights evidenced by
Chattel Paper, Documents or Instruments) in or under which Debtor may now or
hereafter have any right, title or interest, including, without limitation, with
respect to an Account, any agreement relating to the terms of payment or the
terms of performance thereof.

     

    “Copyrights” means any
copyrights, rights and interests in copyrights, works protectable by copyrights,
copyright registrations and copyright applications, including, without
limitation, the copyright registrations and applications listed on Schedule III attached
hereto (if any), and all renewals of any of the foregoing, all income,
royalties, damages and payments now and hereafter due and/or payable under or
with respect to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing and
the right to sue for past, present and future infringements of any of the
foregoing.

     

    “Deposit Accounts” means all
“deposit accounts” as such term is defined in the Uniform Commercial Code, now
or hereafter held in the name of Debtor.

     

    “Documents” means any
“documents,” as such term is defined in the Uniform Commercial Code, and shall
include, without limitation, all documents of title (as defined in the Uniform
Commercial Code), bills of lading or other receipts evidencing or representing
Inventory or Equipment.

     

    “Equipment” means any
“equipment,” as such term is defined in the Uniform Commercial Code and, in any
event, shall include, Motor Vehicles.

     

    “Event of Default” shall have
the meaning set forth in the Debenture.

     

    “General Intangibles” means any
“general intangibles,” as such term is defined in the Uniform Commercial Code,
and, in any event, shall include, without limitation, all right, title and
interest in or under any Contract, models, drawings, materials and records,
claims, literary rights, goodwill, rights of performance, Copyrights,
Trademarks, Patents, warranties, rights under insurance policies and rights of
indemnification.

     

    “Goods” means any “goods”, as
such term is defined in the Uniform Commercial Code, including, without
limitation, fixtures and embedded Software to the extent included in “goods” as
defined in the Uniform Commercial Code.

     

    “Instruments” means any
“instrument,” as such term is defined in the Uniform Commercial Code, and shall
include, without limitation, promissory notes, drafts, bills of exchange, trade
acceptances, letters of credit, letter of credit rights (as defined in the
Uniform Commercial Code), and Chattel Paper.

     

    “Inventory” means any
“inventory,” as such term is defined in the Uniform Commercial
Code.

     

    “Investment Property” means any
“investment property”, as such term is defined in the Uniform Commercial
Code.

     

    “Liabilities” shall mean all
obligations, liabilities and indebtedness of every nature of Debtors from time
to time owed or owing under or in respect of this Agreement, the Purchase
Agreement, the Debenture and any of the other Transaction Documents, as the case
may be, including, without limitation, the principal amount of all debts, claims
and indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now and/or from time to time hereafter owing, due or payable whether before or
after the filing of a bankruptcy, insolvency or similar proceeding under
applicable federal, state, foreign or other law and whether or not an allowed
claim in any such proceeding.

     

    “Lien” means any mortgage,
lien, pledge, hypothecation, charge, security interest, encumbrance or
adverse claim of any kind and any restrictive covenant, condition, restriction
or exception of any kind that has the practical effect of creating a mortgage,
lien, pledge, hypothecation, charge, security interest, encumbrance or adverse
claim of any kind (including any of the foregoing created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor with respect to a Capital Lease Obligation or any financing
lease having substantially the same economic effect as any of the
foregoing).

     

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

     

    “Patents” means any patents and
patent applications, including, without limitation, the inventions and
improvements described and claimed therein, all patentable inventions and those
patents and patent applications listed on Schedule IV
attached hereto (if any), and the reissues, divisions, continuations, renewals,
extensions and continuations-in-part of any of the foregoing, and all income,
royalties, damages and payments now or hereafter due and/or payable under or
with respect to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing and
the right to sue for past, present and future infringements of any of the
foregoing.

     

    “Permitted Lien” means (a)
Liens created by the Transaction Documents; (b) Liens existing on the date of
this Agreement not otherwise described in any other clause of this definition
and set forth on in the Transaction Documents; (c) Liens for taxes or other
governmental charges not at the time due and payable so long as the Company and
its Subsidiaries maintain adequate reserves in accordance with GAAP in respect
of such taxes and charges; (d) Liens arising in the ordinary course of business
in favor of carriers, warehousemen, mechanics and materialmen, or other similar
Liens imposed by law, which remain payable without penalty or which are being
contested in good faith by appropriate proceedings diligently prosecuted, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto, and in each case for which adequate reserves in accordance with
GAAP are being maintained; (e) Liens arising in the ordinary course of business
in connection with worker’s compensation, unemployment compensation and other
types of social security (excluding Liens arising under ERISA); (f) attachments,
appeal bonds (and cash collateral securing such bonds), judgments and other
similar Liens, for sums not exceeding $50,000 in the aggregate for the Company
and its Subsidiaries, arising in connection with court proceedings, provided
that the execution or other enforcement of such Liens is effectively stayed; (g)
easements, rights of way, restrictions, minor defects or irregularities in title
and other similar Liens arising in the ordinary course of business and not
materially detracting from the value of the property subject thereto and not
interfering in any material respect with the ordinary conduct of the business of
the Company or any of its Subsidiaries; and (h) Liens arising solely by virtue
of any statutory or common law provision relating to banker’s liens, rights of
set-off or similar rights and remedies and burdening only deposit accounts or
other funds maintained with a creditor depository institution, provided that no
such deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board of Governors of the U.S. Federal Reserve
System and that no such deposit account is intended by the Company or any of its
Subsidiaries to provide collateral to the depository institution.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Proceeds” means “proceeds,” as
such term is defined in the Uniform Commercial Code and, in any event, includes,
without limitation, (a) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable with respect to any of the Collateral, (b) any and
all payments (in any form whatsoever) made or due and payable from time to time
in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), and (c) any and all other amounts from time to time paid or payable
under, in respect of or in connection with any of the Collateral.

     

    “Representative” means any
Person acting as agent, representative or trustee on behalf of the Secured Party
from time to time.

     

    “Software” means all “software”
as such term is defined in the Uniform Commercial Code, now owned or hereafter
acquired by Debtor, other than software embedded in any category of Goods,
including, without limitation, all computer programs and all supporting
information provided in connection with a transaction related to any
program.

     

    “Trademarks” means any
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, the trademarks and
applications listed in Schedule V attached
hereto (if any) and renewals thereof, and all income, royalties, damages and
payments now or hereafter due and/or payable under or with respect to any of the
foregoing, including, without limitation, damages and payments for past, present
and future infringements of any of the foregoing and the right to sue for past,
present and future infringements of any of the foregoing.

     

    “Uniform Commercial Code” shall
mean the Uniform Commercial Code as in effect from time to time of the state or
states having jurisdiction with respect to all or any portion of the Collateral
from time to time; provided, that to the extent that the Uniform Commercial Code
is used to define any term herein and such term is defined differently in
different Articles or Divisions of the Uniform Commercial Code, the definition
of such term contained in Article 9 shall govern.

     

    Section
2.  Representations, Warranties
and Covenants of Debtor.  Debtor represents and warrants to,
and covenants with, the Secured Party as follows:

     

    (a)           Debtor
has rights in and the power to transfer the Collateral in which it purports to
grant a security interest pursuant to Section 3 hereof
(subject, with respect to after acquired Collateral, to Debtor acquiring the
same) and no Lien other than Permitted Liens exists or will exist upon such
Collateral at any time.

     

    (b)           This
Agreement is effective to create in favor of Secured Party a valid security
interest in and Lien upon all of Debtor’s right, title and interest in and to
the Collateral, and upon (i) the filing of appropriate Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule I attached
hereto, (ii) each Deposit Account being subject to an Account Control Agreement
(as hereinafter defined) between the applicable Debtor and depository
institution and the Secured Party, (iii) the security interest created hereby
being noted on each certificate of title evidencing the ownership of any Motor
Vehicle, such security interest will be a duly perfected first priority security
interest in all of the Collateral (other than Instruments not constituting
Chattel Paper), and upon delivery of the Instruments to the Secured Party or its
Representative, duly endorsed by Debtor or accompanied by appropriate
instruments of transfer duly executed by Debtor, the security interest in the
Instruments will be duly perfected.

     

    (c)           All
of the Equipment, Inventory and Goods owned by Debtor are located at the places
as specified on Schedule I attached
hereto (except to the extent any such Equipment, Inventory or Goods is in
transit or located at Debtor’s job site in the ordinary course of
business).  Except as disclosed on Schedule I, none of
the Collateral is in the possession of any bailee, warehousemen, processor or
consignee.  Schedule I discloses
Debtor’s name as of the date hereof as it appears in official filings in the
state or province, as applicable, of its incorporation, formation or
organization, the type of entity of Debtor (including corporation, partnership,
limited partnership or limited liability company), organizational identification
number issued by Debtor’s state of incorporation, formation or organization (or
a statement that no such number has been issued), Debtor’s state or province, as
applicable, of incorporation, formation or organization and the chief place of
business, chief executive officer and the office where Debtor keeps its books
and records.  Such Debtor has only one state or province, as
applicable, of incorporation, formation or organization. Such Debtor does not do
business and has not done business during the past five (5) years under any
trade name or fictitious business name except as disclosed on Schedule II attached
hereto.

     

    (d)           No
Copyrights, Patents or Trademarks listed on Schedules III, IV and
V, respectively, if any, have been adjudged invalid or unenforceable or
have been canceled, in whole or in part, or are not presently
subsisting.  Each of such Copyrights, Patents and Trademarks (if any)
is valid and enforceable.  Such Debtor is the sole and exclusive owner
of the entire and unencumbered right, title and interest in and to each of such
Copyrights, Patents and Trademarks, identified on Schedules III, IV and
V, as applicable, as being owned by Debtor, free and clear of any liens,
charges and encumbrances, including without limitation licenses, shop rights and
covenants by Debtor not to sue third persons.  Such Debtor has
adopted, used and is currently using, or has a current bona fide intention to
use, all of such Trademarks and Copyrights.  Such Debtor has no notice
of any suits or actions commenced or threatened with reference to the
Copyrights, Patents or Trademarks owned by it.

     

    (e)           Debtor
agrees to deliver to the Secured Party an updated Schedule I, II, III, IV
and/or V within five (5) Business Days of any change
thereto.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (f)           All
depositary and other accounts including, without limitation, Deposit Accounts,
securities accounts, brokerage accounts and other similar accounts, maintained
by Debtor are described on Schedule VI hereto,
which description includes for each such account the name of the Debtor
maintaining such account, the name, address and telephone and telecopy numbers
of the financial institution at which such account is maintained, the account
number and the account officer, if any, of such account.  Debtor shall
open any new Deposit Accounts, securities accounts, brokerage accounts or other
accounts unless Debtor shall have given Secured Party ten (10) Business Days’
prior written notice of its intention to open any such new
accounts.  Debtor shall deliver to Secured Party a revised version of
Schedule VI
showing any changes thereto within five (5) Business Days of any such
change.  Debtor hereby authorizes the financial institutions at which
Debtor maintains an account to provide Secured Party with such information with
respect to such account as Secured Party from time to time reasonably may
request, and Debtor hereby consents to such information being provided to
Secured Party.  In addition, all of Debtor’s depositary, security,
brokerage and other accounts including, without limitation, Deposit Accounts
shall be subject to the provisions of Section 4.5
hereof.

     

    (g)           Such
Debtor does not own any Commercial Tort Claim except for those disclosed on
Schedule VII
hereto (if any).

     

    (h)           Such
Debtor does not have any interest in real property or mining rights with respect
to real property except as disclosed on Schedule
VIII  (if any).  Debtor shall deliver to Secured
Party a revised version of Schedule VIII showing
any changes thereto within ten (10) Business Days of any such
change.  Except as otherwise agreed to by Secured Party, all such
interests in real property or mining rights with respect to such real property
are subject to a mortgage, deed of trust and assignment of production proceeds
(in form and substance satisfactory to Secured Party) in favor of Secured Party
(hereinafter, a “Mortgage”).

     

    (i)           Debtor
shall duly and properly record each interest in real property held by
Debtor except with respect to easements, rights of way, access agreements,
surface damage agreements, surface use agreements or similar
agreements that Debtor, using prudent customs and practices in the industry
in which it operates, does not believe are of material value or material to the
operation of Debtor's business or, with respect to state and federal rights
of way, are not capable of being recorded as a matter of state and federal
law.

    

    (j)           All
Equipment (including, without limitation, Motor Vehicles) owned by Debtor and
subject to a certificate of title or ownership statute is described on Schedule IX hereto,
which description includes for each such account the name of the Debtor that
owns such Equipment, the location of such Equipment (or, if mobile, the primary
location at which such Equipment is based) and the applicable certificate of
title number and applicable vehicle identification or similar identification
number of such Equipment.  The Debtors shall deliver to Secured Party
a revised version of Schedule IX showing
any changes thereto within five (5) Business Days of the first day of each
calendar quarter (or, in the event that the Debtors shall acquire additional
Equipment subject to a certificate of title or ownership statute having an
aggregate fair market value in excess of $20,000 during any such calendar
quarter, within five (5) Business Days of the date the Debtors shall have
acquired the Equipment exceeding such $20,000 aggregate threshold).

    

    Section
3.  Collateral.  As
collateral security for the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the Liabilities, Debtor hereby
pledges and grants to the Secured Party, for the benefit of itself, a Lien on
and security interest in and to all of Debtor’s right, title and interest in the
personal property and assets of Debtor, whether now owned by Debtor or hereafter
acquired and whether now existing or hereafter coming into existence and
wherever located (all being collectively referred to herein as “Collateral”), including,
without limitation:

     

    (a)           all
Instruments, together with all payments thereon or thereunder:

     

    (b)           all
Accounts;

     

    (c)           all
Inventory;

     

    (d)           all
General Intangibles (including payment intangibles (as defined in the Uniform
Commercial Code) and Software);

     

    (e)           all
Equipment (including Motor Vehicles);

     

    (f)           all
Documents;

     

    (g)           all
Contracts;

     

    (h)           all
Goods;

     

    (i)           all
Investment Property;

     

    (j)           all
Deposit Accounts, including, without limitation, the balance from time to time
in all bank accounts maintained by Debtor;

     

    (k)           all
Commercial Tort Claims specified on Schedule
VII;

     

    (l)           all
As-extracted Collateral;

     

    (m)           all
Trademarks, Patents and Copyrights; and

     

    (n)           all
other tangible and intangible property of Debtor, including, without limitation,
all interests in real property, Proceeds, tort claims, products, accessions,
rents, profits, income, benefits, substitutions, additions and replacements of
and to any of the property of Debtor described in the preceding clauses of this
Section 3
(including, without limitation, any proceeds of insurance thereon, insurance
claims and all rights, claims and benefits against any Person relating thereto),
other rights to payments not otherwise included in the foregoing, and all books,
correspondence, files, records, invoices and other papers, including without
limitation all tapes, cards, computer runs, computer programs, computer files
and other papers, documents and records in the possession or under the control
of Debtor, any computer bureau or service company from time to time acting for
Debtor.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Section
4.  Covenants;
Remedies.  In furtherance of the grant of the pledge and
security interest pursuant to Section 3 hereof,
Debtor hereby agrees with the Secured Party as follows:

     

    4.1.  Delivery and Other
Perfection; Maintenance, etc.

     

    (a)           Delivery of Instruments,
Documents, Etc.  Debtor shall deliver and pledge to the Secured
Party or its Representative any and all Instruments, negotiable Documents,
Chattel Paper and certificated securities (accompanied by stock powers executed
in blank) duly endorsed and/or accompanied by such instruments of assignment and
transfer executed by Debtor in such form and substance as the Secured Party or
its Representative may request; provided, that so
long as no Event of Default shall have occurred and be continuing, Debtor may
retain for collection in the ordinary course of business any Instruments,
negotiable Documents and Chattel Paper received by Debtor in the ordinary course
of business, and the Secured Party or its Representative shall, promptly upon
request of Debtor, make appropriate arrangements for making any other
Instruments, negotiable Documents and Chattel Paper pledged by Debtor available
to Debtor for purposes of presentation, collection or renewal (any such
arrangement to be effected, to the extent deemed appropriate by the Secured
Party or its Representative, against trust receipt or like document). If Debtor
retains possession of any Chattel Paper, negotiable Documents or Instruments
pursuant to the terms hereof, such Chattel Paper, negotiable Documents and
Instruments shall be marked with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the security interest of
John Thomas Bridge & Opportunity Fund, L.P., as secured party.”

     

    (b)           Other Documents and
Actions.  Debtor shall give, execute, deliver, file and/or
record any financing statement, notice, instrument, document, agreement,
Mortgage or other papers that may be necessary or desirable (in the reasonable
judgment of the Secured Party or its Representative) to create, preserve,
perfect or validate the security interest granted pursuant hereto (or any
security interest or mortgage contemplated or required hereunder, including with
respect to Section
2(h) of this Agreement) or to enable the Secured Party or its
Representative to exercise and enforce the rights of the Secured Party hereunder
with respect to such pledge and security interest, provided that notices
to account debtors in respect of any Accounts or Instruments shall be subject to
the provisions of clause (e) below.  Notwithstanding the foregoing
Debtor hereby irrevocably authorizes the Secured Party at any time and from time
to time to file in any filing office in any jurisdiction any initial financing
statements and amendments thereto that (a) indicate the Collateral (i) as all
assets of Debtor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the Uniform Commercial Code of the state or states having jurisdiction with
respect to all or any portion of the Collateral from time to time, or (ii) as
being of an equal or lesser scope or with greater detail, and (b) contain any
other information required by part 5 of Article 9 of the Uniform Commercial Code
of the state or states having jurisdiction with respect to all or any portion of
the Collateral from time to time for the sufficiency or filing office acceptance
of any financing statement or amendment, including (i) whether Debtor is an
organization, the type of organization and any organization identification
number issued to Debtor, and (ii) in the case of a financing statement filed as
a fixture filing or indicating Collateral as As-extracted Collateral or timber
to be cut, a sufficient description of real property to which the Collateral
relates.  Debtor agrees to furnish any such information to the Secured
Party promptly upon request.  Debtor also ratifies its authorization
for the Secured Party to have filed in any jurisdiction any like initial
financing statements or amendments thereto if filed prior to the date
hereof.

     

    (c)           Books and
Records.  Debtor shall maintain at its own cost and expense
complete and accurate books and records of the Collateral, including, without
limitation, a record of all payments received and all credits granted with
respect to the Collateral and all other dealings with the
Collateral.  Upon the occurrence and during the continuation of any
Event of Default, Debtor shall deliver and turn over any such books and records
(or true and correct copies thereof) to the Secured Party or its Representative
at any time on demand.  Debtor shall permit any Representative of the
Secured Party to inspect such books and records at any time during reasonable
business hours and will provide photocopies thereof at Debtor’s expense to the
Secured Party upon request of the Secured Party.

     

    (d)           Motor
Vehicles.  Debtor shall, promptly upon acquiring same, cause
the Secured Party to be listed as the lienholder on each certificate of title or
ownership covering any items of Equipment, including Motor Vehicles (or
otherwise comply with the certificate of title or ownership laws of the relevant
jurisdiction issuing such certificate of title or ownership in order to properly
evidence and perfect Secured Party’s security interest in the assets represented
by such certificate of title or ownership).  Debtor shall, within five
(5) Business Days of its receipt of an original certificate of title or
ownership from any applicable certificate or title or ownership authority,
deliver such original certificate of title or ownership (which certificate of
title or ownership shall list Secured Party as lienholder in accordance with the
preceding sentence) to Secured Party.  Notwithstanding the foregoing,
with respect to each item of Equipment identified on Schedule IX hereof as of
the closing date, the Company shall, within fifteen (15) Business days of the
date hereof (or sixty (60) days of the date hereof with respect to Equipment
marked with an asterisk on Schedule IX), deliver to Secured Party, an original
certificate of title or ownership from the applicable certificate of title or
ownership authority identifying the Company as the owner of such Equipment and
listing Secured Party as lienholder.

     

    (e)           Notice to Account Debtors;
Verification.  (i) Upon the occurrence and during the
continuance of any Event of Default (or if any rights of set-off (other than
set-offs against an Account arising under the Contract giving rise to the same
Account) or contra accounts may be asserted), upon request of the Secured Party
or its Representative, Debtor shall promptly notify (and Debtor hereby
authorizes the Secured Party and its Representative so to notify) each account
debtor in respect of any Accounts or Instruments or other Persons obligated on
the Collateral that such Collateral has been assigned to the Secured Party
hereunder, and that any payments due or to become due in respect of such
Collateral are to be made directly to the Secured Party, and (ii) the Secured
Party and its Representative shall have the right at any time or times to make
direct verification with the account debtors or other Persons obligated on the
Collateral of any and all of the Accounts or other such Collateral.

     

    (f)           Intellectual
Property.  Debtor represents and warrants that the Copyrights,
Patents and Trademarks listed on Schedules III, IV and
V, respectively (if any), constitute all of the registered Copyrights and
all of the Patents and Trademarks now owned by Debtor.  If Debtor
shall (i) obtain rights to any new patentable inventions, any registered
Copyrights or any Patents or Trademarks, or (ii) become entitled to the benefit
of any registered Copyrights or any Patents or Trademarks or any improvement on
any Patent, the provisions of this Agreement above shall automatically apply
thereto and Debtor shall give to Secured Party prompt written notice
thereof.  Debtor hereby authorizes Secured Party to modify this
Agreement by amending Schedules III, IV and
V, as applicable, to include any such registered Copyrights or any such
Patents and Trademarks.  Debtor shall have the duty (i) to prosecute
diligently any patent, trademark, or service mark applications pending as of the
date hereof or hereafter, (ii) to make application on unpatented but patentable
inventions and on trademarks, copyrights and service marks, as appropriate,
(iii) to preserve and maintain all rights in the Copyrights, Patents and
Trademarks, to the extent material to the operations of the business of Debtor
and (iv) to ensure that the Copyrights, Patents and Trademarks are and remain
enforceable, to the extent material to the operations of the business of
Debtor.  Any expenses incurred in connection with Debtor’s obligations
under this Section
4.1(f) shall be borne by Debtor.  Except for any such items
that Debtor reasonably believes (using prudent industry customs and practices)
are no longer necessary for the on-going operations of its business, no Debtor
shall abandon any right to file a patent, trademark or service mark application,
or abandon any pending patent, trademark or service mark application or any
other Copyright, Patent or Trademark without the written consent of Secured
Party, which consent shall not be unreasonably withheld.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (g)           Further Identification of
Collateral.  Debtor will, when and as often as requested by the
Secured Party or its Representative, furnish to the Secured Party or such
Representative, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Secured Party or its Representative may reasonably request, all in reasonable
detail.

     

    (h)           Investment
Property.  Debtor will take any and all actions required or
requested by the Secured Party, from time to time, to (i) cause the Secured
Party to obtain exclusive control of any Investment Property owned by Debtor in
a manner acceptable to the Secured Party and (ii) obtain from any issuers of
Investment Property and such other Persons, for the benefit of the Secured
Party, written confirmation of the Secured Party’s control over such Investment
Property.  For purposes of this Section 4.1(h), the
Secured Party shall have exclusive control of Investment Property if (i) such
Investment Property consists of certificated securities and Debtor delivers such
certificated securities to the Secured Party (with appropriate endorsements if
such certificated securities are in registered form); (ii) such Investment
Property consists of uncertificated securities and either (x) Debtor delivers
such uncertificated securities to the Secured Party or (y) the issuer thereof
agrees, pursuant to documentation in form and substance satisfactory to the
Secured Party, that it will comply with instructions originated by the Secured
Party without further consent by Debtor, and (iii) such Investment Property
consists of security entitlements and either (x) the Secured Party becomes the
entitlement holder thereof or (y) the appropriate securities intermediary
agrees, pursuant to the documentation in form and substance satisfactory to the
Secured Party, that it will comply with entitlement orders originated by the
Secured Party without further consent by any Debtor.

     

    
      	
               
      

            	
              (i)

            	
              Reserved.

            

    

     

    (j)           Commercial Tort
Claims.  Debtor shall promptly notify Secured Party of any
Commercial Tort Claim acquired by it that concerns a claim in excess of $20,000
and unless otherwise consented to by Secured Party, Debtor shall enter into a
supplement to this Agreement granting to Secured Party a Lien on and security
interest in such Commercial Tort Claim.

     

    4.2  Other
Liens.  Debtors will not create, permit or suffer to exist, and
will defend the Collateral against and take such other action as is necessary to
remove, any Lien on the Collateral except Permitted Liens, and will defend the
right, title and interest of the Secured Party in and to the Collateral and in
and to all Proceeds thereof against the claims and demands of all Persons
whatsoever.

     

    4.3  Preservation of
Rights.  Whether or not any Event of Default has occurred or is
continuing, the Secured Party and its Representative may, but shall not be
required to, take any steps the Secured Party or its Representative deems
necessary or appropriate to preserve any Collateral or any rights against third
parties to any of the Collateral, including obtaining insurance for the
Collateral at any time when Debtor has failed to do so, and Debtors shall
promptly pay, or reimburse the Secured Party for, all expenses incurred in
connection therewith.

     

    4.4  Formation of Subsidiaries;
Name Change; Location; Bailees.

     

    (a)           No
Debtor shall form or acquire any Subsidiary unless (i) Debtor pledges all of the
stock of such subsidiary (or all of the stock of such subsidiary owned by the
Debtor with respect to the Permitted JV) to the Secured Party pursuant to a
pledge agreement in form and substance acceptable to Secured Party) (a “Subsidiary Pledge Agreement”), (ii) such
Subsidiary becomes a party to this Agreement and all other applicable Security
Documents and (iii) the formation or acquisition of such Subsidiary is not
prohibited by the terms of the Transaction Documents.

     

    (b)           No
Debtor shall (i) reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the date hereof without the prior written consent of Secured
Party, or (ii) otherwise change its name, identity or corporate
structure.  Debtor will notify Secured Party promptly in writing prior
to any such change in the proposed use by Debtor of any tradename or fictitious
business name other than any such name set forth on Schedule II attached
hereto.

     

    (c)           Except
for the sale of Inventory in the ordinary course of business, other sales of
assets expressly permitted by the terms of the Purchase Agreement, and
Equipment, Inventory or Goods that are in transit or located at Debtor’s job
site in the ordinary course of business, Debtor will keep the Collateral at the
locations specified in Schedule
I.  Debtor will give Secured Party thirty (30) day’s prior
written notice of any change in Debtor’s chief place of business or of any new
location for any of the Collateral (other than the location of any Equipment,
Inventory or Goods that are in transit or located at Debtor’s job site in the
ordinary course of business).

     

    (d)           If
any Collateral is at any time in the possession or control of any warehousemen,
bailee, consignee or processor, Debtor shall, upon the request of Secured Party
or its Representative, notify such warehousemen, bailee, consignee or processor
of the Lien and security interest created hereby and shall instruct such Person
to hold all such Collateral for Secured Party’s account subject to Secured
Party’s instructions.

     

    (e)           Debtor
acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement
without the prior written consent of Secured Party and agrees that it will not
do so without the prior written consent of Secured Party, subject to Debtor’s
rights under Section 9-509(d)(2) to the Uniform Commercial Code.

     

    (f)           No
Debtor shall enter into any Contract that restricts or prohibits the grant to
Secured Party of a security interest in Accounts, Chattel Paper, Instruments or
payment intangibles or the proceeds of the foregoing.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    4.5           Bank Accounts and Securities
Accounts.

     

    (a)           Within
ten (10) business days of the date hereof, the Secured Party and Debtor, as
applicable, shall enter into an account control agreement or securities account
control agreement, as applicable, (each an “Account Control Agreement”),
in the form attached hereto as Schedule X, with each
financial institution with which Debtor maintains from time to time any Deposit
Accounts (general or special), securities accounts, brokerage accounts or other
similar accounts, which financial institutions are set forth on Schedule VI attached
hereto.  Pursuant to the Account Control Agreements and pursuant
hereto, each Debtor grants and shall grant to the Secured Party a continuing
lien upon, and security interest in, all such accounts and all funds at any time
paid, deposited, credited or held in such accounts (whether for collection,
provisionally or otherwise) or otherwise in the possession of such financial
institutions, and each such financial institution shall act as the Secured
Party’s agent in connection therewith.  Following the Closing Date, no
Debtor shall establish any Deposit Account, securities account, brokerage
account or other similar account with any financial institution unless prior
thereto, the Secured Party and Debtor shall have entered into an Account Control
Agreement with such financial institution which purports to cover such
account.  Debtor shall deposit and keep on deposit all of its funds
into a Deposit Account which is subject to an Account Control
Agreement.   Notwithstanding the preceding, the provisions of
this Section 4.5(a) shall not apply to the Debtor’s Bank of America account
number 381002463937 (“Merchant Account”) provided, however, Debtor hereby agrees
that it shall not keep on deposit in the Merchant Account funds in excess of
$10,000 (the “Threshold Amount”). In the event the Merchant Account reaches the
Threshold Amount, Debtor shall be required, within one (1) business day of
reaching such Threshold Amount, to transfer such funds to an account then
subject to an Account Control Agreement as necessary so that the Merchant
Account has less than the Threshold Amount. In the event Debtor keeps on deposit
in the Merchant Account funds in excess of the Threshold Amount for three (3)
consecutive business days, then Debtor shall deliver to Secured Party, within 10
Business days following such event, an Account Control Agreement pursuant to
which Debtor shall grant to the Secured Party a continuing lien upon, and
security interest in, the Merchant Account and all funds at any time paid,
deposited, credited or held in the Merchant Account (whether for collection,
provisionally or otherwise), and the financial institution where the Merchant
Account is maintained shall act as the Secured Party’s agent in connection
therewith.

     

    (b)           Upon
the Secured Party’s request following the occurrence and continuance of an Event
of Default, Debtor shall establish lock-box or blocked accounts (collectively,
“Blocked Accounts”) in
Debtor’s name with such banks as are reasonably acceptable to the Secured Party
(“Collecting Banks”),
subject to irrevocable instructions in a form reasonably acceptable to the
Secured Party, to which the obligors of all Accounts shall directly remit all
payments on Accounts and in which Debtor will immediately deposit all cash
payments for Inventory or other cash payments constituting proceeds of
Collateral in the identical form in which such payment was made, whether by cash
or check.  In addition, the Secured Party may establish one or more
depository accounts at each Collecting Bank or at a centrally located bank
(collectively, the “Depository
Account”).  All amounts held or deposited in the Blocked
Accounts held by such Collecting Bank shall be transferred to the Depository
Account without any further notice or action required by Secured
Party.  Subject to the foregoing, Debtor hereby agrees that all
payments received by the Secured Party whether by cash, check, wire transfer or
any other instrument, made to such Blocked Accounts or otherwise received by the
Secured Party and whether in respect of the Accounts or as proceeds of other
Collateral or otherwise will be the sole and exclusive property of the Secured
Party.  Debtor, and any of its Affiliates, employees, agents and other
Persons acting for or in concert with Debtor shall, acting as trustee for the
Secured Party, receive, as the sole and exclusive property of the Secured Party,
any moneys, checks, notes, drafts or other payments relating to and/or proceeds
of Accounts or other Collateral which come into the possession or under the
control of Debtor or any Affiliates, employees, agent or other Persons acting
for or in concert with Debtor, and immediately upon receipt thereof, Debtor or
Persons shall deposit the same or cause the same to be deposited in kind, in a
Blocked Account.

     

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

     

    (a)           Debtor
shall, at the request of the Secured Party or its Representative, assemble the
Collateral and make it available to Secured Party or its Representative at a
place or places designated by the Secured Party or its Representative which are
reasonably convenient to Secured Party or its Representative, as applicable, and
Debtor;

     

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

     

    (c)           the
Secured Party shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether or not
said Uniform Commercial Code is in effect in the jurisdiction where the rights
and remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to: (i) exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if the
Secured Party were the sole and absolute owner thereof (and Debtor agrees to
take all such action as may be appropriate to give effect to such right) and
(ii) to the appointment of a receiver or receivers for all or any part of the
Collateral, whether such receivership be incident to a proposed sale or sales of
such Collateral or otherwise and without regard to the value of the Collateral
or the solvency of any person or persons liable for the payment of the
Liabilities secured by such Collateral.  Debtor hereby consents to the
appointment of such receiver or receivers, waives any and all defenses to such
appointment and agrees that such appointment shall in no manner impair,
prejudice or otherwise affect the rights of Secured Party under this
Agreement.  Debtor hereby expressly waives notice of a hearing for
appointment of a receiver and the necessity for bond or an accounting by the
receiver;

     

    (d)           the
Secured Party or its Representative in their discretion may, in the name of the
Secured Party or in the name of Debtor or otherwise, demand, sue for, collect or
receive any money or property at any time payable or receivable on account of or
in exchange for any of the Collateral, but shall be under no obligation to do
so;

     

    (e)  the
Secured Party or its Representative may take immediate possession and occupancy
of any premises owned, used or leased by Debtor and exercise all other rights
and remedies which may be available to the Secured Party; and

     

    (f)           the
Secured Party may, upon ten (10) Business Days’ prior written notice to Debtor
of the time and place (which notice Debtors hereby agree is commercially
reasonable notification for purposes hereof), with respect to the Collateral or
any part thereof which shall then be or shall thereafter come into the
possession, custody or control of the Secured Party or its Representative, sell,
lease, license, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Secured Party deems best, and for
cash or for credit or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of performance or notice of
intention to effect any such disposition or of the time or place thereof (except
such notice as is required above or by applicable statute and cannot be waived),
and the Secured Party or anyone else may be the purchaser, lessee, licensee,
assignee or recipient of any or all of the Collateral so disposed of at any
public sale (or, to the extent permitted by law, at any private sale) and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise), of
Debtors, any such demand, notice and right or equity being hereby expressly
waived and released.  The Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the sale may be so
adjourned.

     

    
      
        
        

      

      
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    The
proceeds of each collection, sale or other disposition under this Section 4.6 shall be
applied in accordance with Section 4.9
hereof.

     

    4.7  Deficiency.  If
the proceeds of sale, collection or other realization of or upon the Collateral
are insufficient to cover the costs and expenses of such realization and the
payment in full of the Liabilities, Debtors shall remain liable for any
deficiency.

     

    4.8  Private
Sale.  Debtor recognizes that the Secured Party may be unable
to effect a public sale of any or all of the Collateral consisting of securities
by reason of certain prohibitions contained in the Securities Act of 1933, as
amended (the “Act”), and
applicable state securities laws, but may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such Collateral for their own account for
investment and not with a view to the distribution or resale
thereof.  Debtor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner.  The Secured Party shall be under no obligation to delay a
sale of any of the Collateral to permit Debtor to register such Collateral for
public sale under the Act, or under applicable state securities laws, even if
Debtors would agree to do so.  The Secured Party shall not incur any
liability as a result of the sale of any such Collateral, or any part thereof,
at any private sale provided for in this Agreement conducted in a commercially
reasonable manner, and Debtor hereby waives any claims against the Secured Party
arising by reason of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the
Liabilities, even if the Secured Party accepts the first offer received and does
not offer the Collateral to more than one offeree.

     

    Debtor
further agrees to do or cause to be done all such other acts and things as may
be necessary to make such sale or sales of any portion or all of any such
Collateral valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales, all at Debtor’s’s expense,
provided that
Debtors shall be under no obligation to take any action to enable any or all of
such Collateral to be registered under the provisions of the
Act.  Debtor further agrees that a breach of any of the covenants
contained in this Section 4.8 will
cause irreparable injury to the Secured Party, that the Secured Party has no
adequate remedy at law in respect of such breach and, as a consequence, agrees
that each and every covenant contained in this Section 4.8 shall be
specifically enforceable against Debtors, and Debtor hereby waives and agrees
not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing.

     

    4.9  Application of
Proceeds.  The proceeds of any collection, sale or other
realization of all or any part of the Collateral, and any other cash at the time
held by the Secured Party under this Agreement, shall be applied in the manner
set forth in the Debenture (or, if not so set forth, in a manner acceptable to,
and at the election of, the Secured Party).

     

    4.10  Attorney-in-Fact.  Debtor
hereby irrevocably constitutes and appoints the Secured Party, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Debtor and in the name of Debtor
or in its own name, from time to time in the discretion of the Secured Party,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments which may be necessary or desirable to perfect or protect any
security interest granted hereunder or to maintain the perfection or priority of
any security interest granted hereunder, and, without limiting the generality of
the foregoing, hereby gives the Secured Party the power and right, on behalf of
Debtor, without notice to or assent by Debtor, to do the following upon the
occurrence and during the continuation of any Event of Default:

     

    (a)           to
take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement;

     

    (b)           to
ask, demand, collect, receive and give acquittance and receipts for any and all
moneys due and to become due under any Collateral and, in the name of Debtor or
its own name or otherwise, to take possession of and endorse and collect any
checks, drafts, notes, acceptances or other Instruments for the payment of
moneys due under any Collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Secured Party for the purpose of collecting any and all such
moneys due under any Collateral whenever payable and to file any claim or to
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Secured Party for the purpose of collecting any and
all such moneys due under any Collateral whenever payable;

     

    (c)           to
pay or discharge charges or liens levied or placed on or threatened against the
Collateral, to effect any insurance called for by the terms of this Agreement
and to pay all or any part of the premiums therefor;

     

    (d)           to
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due, and to become due thereunder, directly to the
Secured Party or as the Secured Party shall direct, and to receive payment of
and receipt for any and all moneys, claims and other amounts due, and to become
due at any time, in respect of or arising out of any Collateral;

     

    (e)           to
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other Documents
constituting or relating to the Collateral;

     

    (f)           to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of any
Collateral;

     

    (g)           to
defend any suit, action or proceeding brought against Debtor with respect to any
Collateral;

     

    (h)           to
settle, compromise or adjust any suit, action or proceeding described above and,
in connection therewith, to give such discharges or releases as the Secured
Party may deem appropriate;

     

    (i)           to
the extent that Debtor’s authorization given in Section 4.1(b) of
this Agreement is not sufficient to file such financing statements with respect
to this Agreement, with or without Debtor’s signature, or to file a photocopy of
this Agreement in substitution for a financing statement, as the Secured Party
may deem appropriate and to execute in Debtor’s name such financing statements
and amendments thereto and continuation statements which may require Debtor’s
signature; and

     

    (j)           generally
to sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Secured Party
were the absolute owners thereof for all purposes, and to do, at the Secured
Party’s option and at Debtor’s expense, at any time, or from time to time, all
acts and things which the Secured Party reasonably deems necessary to protect,
preserve or realize upon the Collateral and the Secured Party’s lien therein, in
order to effect the intent of this Agreement, all as fully and effectively as
Debtor might do.

     

    Debtor
hereby ratifies, to the extent permitted by law, all that such attorneys
lawfully do or cause to be done by virtue hereof.  The power of
attorney granted hereunder is a power coupled with an interest and shall be
irrevocable until this Agreement is terminated in accordance with Section 4.12
hereof.

     

    Debtor
also authorizes the Secured Party, at any time from and after the occurrence and
during the continuation of any Event of Default, (x) to communicate in its own
name with any party to any Contract with regard to the assignment of the right,
title and interest of Debtor in and under the Contracts hereunder and other
matters relating thereto and (y) to execute, in connection with any sale of
Collateral provided for in Section 4.6 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

     

    
      
        
        

      

      
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    4.11  Perfection.  Prior
to or concurrently with the execution and delivery of this Agreement, Debtor
shall:

     

    (a)           file
such financing statements, assignments for security and other documents in such
offices as may be necessary or as the Secured Party or the Representative may
request to perfect the security interests granted by Section 3 of this
Agreement;

     

    (b)           at
Secured Party’s request, deliver to the Secured Party or its Representative the
originals of all Instruments together with, in the case of Instruments
constituting promissory notes, allonges attached thereto showing such promissory
notes to be payable to the order of a blank payee; and

     

    (c)           deliver
to the Secured Party or its Representative, the originals of all Motor Vehicle
Titles, duly endorsed indicating the Secured Party’s interest therein as a
lienholder, together with such other documents as may be required consistent
with Section
4.1(d) hereof to perfect the security interest granted by Section 3 in
all Motor Vehicles.

     

    4.12  Termination.  This
Agreement and the Liens and security interests granted hereunder shall not
terminate until the termination of the Debenture and the full and complete
performance and indefeasible satisfaction of all the Liabilities in respect of
to the Debenture (including, without limitation, the indefeasible payment in
full in cash of all such Liabilities).  The Secured Party shall also
execute and deliver to Debtor upon such termination and at Debtors’ expense such
Uniform Commercial Code termination statements, certificates for terminating the
liens on the Motor Vehicles (if any) and such other documentation as shall be
reasonably requested by Debtors to effect the termination and release of the
Liens and security interests in favor of the Secured Party affecting the
Collateral.

     

    4.13  Further
Assurances.

     

    (a)           At
any time and from time to time, upon the written request of the Secured Party or
its Representative, and at the sole expense of Debtors, Debtors will promptly
and duly execute and deliver any and all such further instruments, documents and
agreements and take such further actions as the Secured Party or its
Representative may reasonably require in order for the Secured Party to obtain
the full benefits of this Agreement and of the rights and powers herein granted
in favor of the Secured Party, including, without limitation, using Debtors’
best efforts to secure all consents and approvals necessary or appropriate for
the assignment to the Secured Party of any Collateral held by Debtors or in
which Debtor has any rights not heretofore assigned, the filing of any financing
or continuation statements under the Uniform Commercial Code with respect to the
liens and security interests granted hereby, transferring Collateral to the
Secured Party’s possession (if a security interest in such Collateral can be
perfected by possession), placing the interest of the Secured Party as
lienholder on the certificate of title of any Motor Vehicle and obtaining
waivers of liens from landlords and mortgagees.  Debtor also hereby
authorizes the Secured Party and its Representative to file any such financing
or continuation statement without the signature of Debtor to the extent
permitted by applicable law.

     

    (b)           Upon
the request of the Secured Party, Debtor shall procure insurers’ acknowledgments
of any assignments of key man life insurance policies which may be assigned to
the Secured Party as additional security for the Liabilities and will take all
such further action as required by any insurer or the Secured Party in
connection with any such assignment.

     

    4.14  Limitation on Duty of
Secured Party.  The powers conferred on the Secured Party under
this Agreement are solely to protect the Secured Party’s interest in the
Collateral and shall not impose any duty upon it to exercise any such
powers.  The Secured Party shall be accountable only for amounts that
it actually receives as a result of the exercise of such powers and neither the
Secured Party nor its Representative nor any of their respective officers,
directors, employees or agents shall be responsible to Debtors for any act or
failure to act, except for willful misconduct.  Without limiting the
foregoing, the Secured Party and any Representative shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
their possession if such Collateral is accorded treatment substantially
equivalent to that which the relevant Secured Party or any Representative, in
its individual capacity, accords its own property consisting of the type of
Collateral involved, it being understood and agreed that neither the Secured
Party nor any Representative shall have any responsibility for taking any
necessary steps (other than steps taken in accordance with the standard of care
set forth above) to preserve rights against any Person with respect to any
Collateral.

     

    Also
without limiting the generality of the foregoing, neither the Secured Party nor
any Representative shall have any obligation or liability under any Contract or
license by reason of or arising out of this Agreement or the granting to the
Secured Party of a security interest therein or assignment thereof or the
receipt by the Secured Party or any Representative of any payment relating to
any Contract or license pursuant hereto, nor shall the Secured Party or any
Representative be required or obligated in any manner to perform or fulfill any
of the obligations of Debtors under or pursuant to any Contract or license, or
to make any payment, or to make any inquiry as to the nature or the sufficiency
of any payment received by it or the sufficiency of any performance by any party
under any Contract or license, or to present or file any claim, or to take any
action to collect or enforce any performance or the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

     

    
      
        
        

      

      
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    Section
5.  Miscellaneous.

     

    5.1  No
Waiver.  No failure on the part of the Secured Party or any of
its Representatives to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Secured Party or
any of its Representatives of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.  The rights and remedies hereunder provided are cumulative and
may be exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.

     

    5.2  Governing
Law.  This Agreement shall be governed by and construed in
accordance with the internal laws and decisions of the State of Texas applicable
to contracts made and to be performed in that State, without regard to conflict
of law principles thereof that would result in the application of the laws of
any jurisdiction other than the State of Texas.

     

    5.3  Notices.  All
notices, approvals, requests, demands and other communications hereunder shall
be delivered or made in the manner set forth in, and shall be effective in
accordance with the terms of, the Purchase Agreement; provided, that, to the
extent any such communication (i) is being made or sent to Debtor that is not
the Company, such communication shall be effective as to Debtor if made or sent
to the Company in accordance with the foregoing or (ii) is being made or sent to
Secured Party, such communication shall be made to Secured Party at the address
set forth below  Secured Party’s signature hereto.  Debtors
and Secured Party may change their respective notice addresses by written notice
given to each other party five (5) days prior to the effectiveness of such
change.

     

    5.4  Amendments,
Etc.  The terms of this Agreement may be waived, altered or
amended only by an instrument in writing duly executed by the Debtor sought to
be charged or benefited thereby and the Secured Party.  Any such
amendment or waiver shall be binding upon the Secured Party and the Debtor
sought to be charged or benefited thereby and their respective successors and
assigns.

     

    5.5  Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of each of the parties hereto,
provided, that
no Debtor shall assign or transfer its rights hereunder without the prior
written consent of the Secured Party.  Secured Party, in its capacity
as collateral agent, may assign its rights hereunder without the consent of
Debtors, in which event such assignee shall be deemed to be Secured Party
hereunder with respect to such assigned rights.

     

    5.6  Counterparts;
Headings.  This Agreement may be authenticated in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may authenticate this Agreement by
signing any such counterpart.  This Agreement may be authenticated by
manual signature or facsimile, .pdf or similar electronic signature, all of
which shall be equally valid. The headings in this Agreement are for convenience
of reference only and shall not alter or otherwise affect the meaning
hereof.

     

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

     

    5.9  SUBMISSION TO JURISDICTION;
WAIVER OF VENUE; SERVICE OF PROCESS.  (A)  DEBTOR
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR STATE OF TEXAS COURT SITTING IN THE CITY OF HOUSTON, COUNTY OF
HARRIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND DEBTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF SECURED
PARTY TO BRING PROCEEDINGS AGAINST ANY DEBTOR IN THE COURTS OF ANY OTHER
JURISDICTION.  ANY JUDICIAL PROCEEDING BY A DEBTOR AGAINST SECURED
PARTY, ANY BUYER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTION WITH THIS AGREEMENT
SHALL BE BROUGHT ONLY IN A COURT IN HOUSTON, TEXAS (AND SECURED PARTY AND BUYERS
HEREBY SUBMIT TO THE JURISDICTION OF SUCH COURT).  EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH ACTION OR PROCEEDING BY MAILING A COPY THEREOF TO SUCH
PARTY AT THE ADDRESS FOR NOTICES TO IT IN ACCORDANCE WITH SECTION 5.3
OF  THIS AGREEMENT AND AGREES THAT SUCH NOTICE SHALL CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING
CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
IN ANY MANNER PERMITTED BY LAW.

     

    5.10  WAIVER OF RIGHT TO TRIAL BY
JURY.  DEBTOR AND SECURED PARTY EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE.   DEBTOR AND SECURED PARTY
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION  OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

     

    5.11           Joint and
Several.  The obligations, covenants and agreements of Debtor
hereunder shall be the joint and several obligations, covenants and agreements
of Debtor, whether or not specifically stated herein.

     

    5.12           No Strict
Construction.  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.

     

    5.13           Entire
Agreement.  This Agreement supersedes all other prior oral or
written agreements between Debtor, Secured Party and their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the Transaction Documents and instruments referenced herein
and therein contain the entire understanding of the parties with respect to the
matters covered herein and therein.

     

    -
Remainder of Page Intentionally Left Blank; Signature Page Follows
-

     

    
      
        
        

      

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

     

    
      
        	 	
                DEBTOR:

                 

                AMBER ALERT SAFETY CENTERS,
      INC., a Nevada corporation

              	 
	 	 	 	 
	
              	
                By:
      

              	/s/ 
      KAI D. PATTERSON	 
	 	 	Name: Kai
      D. Patterson	 
	 	 	Title: Chief
      Executive Officer	 
	 	 	FEIN	 

      

    

     

    
      
        	 	
                SECURED
      PARTY:

                 

                JOHN THOMAS BRIDGE &
      OPPORTUNITY FUND, L.P., a Delaware limited
    partnership

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ GEORGE
      R. JARKESY, JR.	 
	 	 	Name: George
      R. Jarkesy, Jr.	 
	 	 	Title: Managing
      Member of the General Partner	 
	 	 	 	 
	 	 	Notice
      Address:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	Attention:	 
	 	 	Telecopy:	 

      

    

     

     

     

     

    11

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