Document:

EXHIBIT
      E

    

    SECURITY
      AGREEMENT

    

    This
      SECURITY AGREEMENT, dated as of May __, 2007 (this “Agreement”),
      is
      among MSTI Holdings, Inc., a Delaware corporation
      (the
      “Company”),
      all
      of the Subsidiaries of the Company
      (such
      subsidiaries,
      the
“Guarantors”
      and
      together with the Company,
      the
“Debtors”)
      and
      the holders of the Company’s 8% Secured Convertible Debentures due April ___,
      2010 and issued on May ___, 2007 in the original aggregate principal amount
      of
      $[_____ (collectively, the “Debentures”)
      signatory hereto, their endorsees, transferees and assigns (collectively, the
      “Secured
      Parties”).

    

    WITNESSETH:

    

    WHEREAS,
      pursuant to the Purchase Agreement (as defined in the Debentures), the Secured
      Parties have severally agreed to extend the loans to the Company evidenced
      by
      the Debentures; 

    

    WHEREAS,
      pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the
      “Guarantee”),
      the
      Guarantors
      have
      jointly and severally agreed to guarantee and act as surety for payment of
      such
      Debentures; and

    

    WHEREAS,
      in order to induce the Secured Parties to extend the loans evidenced by the
      Debentures, each Debtor has agreed to execute and deliver to the Secured Parties
      this Agreement and to grant the Secured Parties, pari passu
      with
      each other Secured Party and through the Agent, a security interest in certain
      property of such Debtor to secure the prompt payment, performance and discharge
      in full of all of the Company’s obligations under the Debentures and the
      Guarantors’ obligations under the Guarantee.

    

    NOW,
      THEREFORE, in consideration of the agreements herein contained and for other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

    

    1.
       Certain
      Definitions.
      As used
      in this Agreement, the following terms shall have the meanings set forth in
      this
      Section 1. Terms used but not otherwise defined in this Agreement that are
      defined in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial
      tort claim”, “deposit account”, “document”, “equipment”, “fixtures”, “general
      intangibles”, “goods”, “instruments”, “inventory”, “investment property”,
“letter-of-credit rights”, “proceeds” and “supporting obligations”) shall have
      the respective meanings given such terms in Article 9 of the UCC.

    

    (a)
       “Collateral”
means
      the collateral in which the Secured Parties are granted a security interest
      by
      this Agreement and which shall include the following personal property of the
      Debtors, whether presently owned or existing or hereafter acquired or coming
      into existence, wherever situated, and all additions and accessions thereto
      and
      all substitutions and replacements thereof, and all proceeds, products and
      accounts thereof, including, without limitation, all proceeds from the sale
      or
      transfer of the Collateral and of insurance covering the same and of any tort
      claims in connection therewith,
      and all
      dividends, interest, cash, notes, securities, equity interest or other property
      at any time and from time to time acquired, receivable or otherwise distributed
      in respect of, or in exchange for, any or all of the Pledged Securities (as
      defined below):

    

    (i)
      All
      goods, including, without limitation, (A) all machinery, equipment, computers,
      motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special
      and
      general tools, fixtures, test and quality control devices and other equipment
      of
      every kind and nature and wherever situated, together with all documents of
      title and documents representing the same, all additions and accessions thereto,
      replacements therefor, all parts therefor, and all substitutes for any of the
      foregoing and all other items used and useful in connection with any Debtor’s
      businesses and all improvements thereto; and (B) all inventory;

     

    
      
         

      

      
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    (ii)
       All
      contract rights and other general intangibles, including, without limitation,
      all partnership interests, membership interests, stock or other securities,
      rights
      under any of the Organizational Documents, agreements related to the Pledged
      Securities, licenses,
      distribution and other agreements, computer software (whether “off-the-shelf”,
      licensed from any third party or developed by any Debtor), computer software
      development rights, leases, franchises, customer lists, quality control
      procedures, grants and rights, goodwill, trademarks, service marks, trade
      styles, trade names, patents, patent applications, copyrights, and income tax
      refunds; 

     

    (iii)
       All
      accounts, together with all instruments, all documents of title representing
      any
      of the foregoing, all rights in any merchandising, goods, equipment, motor
      vehicles and trucks which any of the same may represent, and all right, title,
      security and guaranties with respect to each account, including any right of
      stoppage in transit; 

    

    (iv)
       All
      documents, letter-of-credit rights, instruments and chattel paper;

    

    (v) All
      commercial tort claims;

    

    (vi) All
      deposit accounts and all cash (whether or not deposited in such deposit
      accounts);

    

    (vii) All
      investment property;

    

     (viii) All
      supporting obligations; and

    

    (ix) All
      files, records, books of account, business papers, and computer programs;
      and

     

    
      
         

      

      
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    (x) the
      products and proceeds of all of the foregoing Collateral set forth in clauses
      (i)-(ix) above.

    

    Without
      limiting the generality of the foregoing, the “Collateral”
shall
      include all investment property and general intangibles respecting ownership
      and/or other equity interests in each Guarantor, including, without limitation,
      the shares of capital stock and the other equity interests listed on
Schedule
      H
      hereto
      (as the same may be modified from time to time pursuant to the terms hereof),
      and any other shares of capital stock and/or other equity interests of any
      other
      direct or indirect subsidiary of any Debtor obtained in the future, and, in
      each
      case, all certificates representing such shares and/or equity interests and,
      in
      each case, all rights, options, warrants, stock, other securities and/or equity
      interests that may hereafter be received, receivable or distributed in respect
      of, or exchanged for, any of the foregoing and all rights arising under or
      in
      connection with the Pledged Securities, including, but not limited to, all
      dividends, interest and cash.

     

    Notwithstanding
      the foregoing, nothing herein shall be deemed to constitute an assignment of
      any
      asset which, in the event of an assignment, becomes void by operation of
      applicable law or the assignment of which is otherwise prohibited by applicable
      law (in each case to the extent that such applicable law is not overridden
      by
      Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law);
      provided,
      however,
      that to
      the extent permitted by applicable law, this Agreement shall create a valid
      security interest in such asset and, to the extent permitted by applicable
      law,
      this Agreement shall create a valid security interest in the proceeds of such
      asset.

    

    (b)
       “Intellectual
      Property”
means
      the collective reference to all rights, priorities and privileges relating
      to
      intellectual property, whether arising under United States, multinational or
      foreign laws or otherwise, including, without limitation, (i) all copyrights
      arising under the laws of the United States, any other country or any political
      subdivision thereof, whether registered or unregistered and whether published
      or
      unpublished, all registrations and recordings thereof, and all applications
      in
      connection therewith, including, without limitation, all registrations,
      recordings and applications in the United States Copyright Office, (ii) all
      letters patent of the United States, any other country or any political
      subdivision thereof, all reissues and extensions thereof, and all applications
      for letters patent of the United States or any other country and all divisions,
      continuations and continuations-in-part thereof, (iii) all trademarks, trade
      names, corporate names, company names, business names, fictitious business
      names, trade dress, service marks, logos, domain names and other source or
      business identifiers, and all goodwill associated therewith, now existing or
      hereafter adopted or acquired, all registrations and recordings thereof, and
      all
      applications in connection therewith, whether in the United States Patent and
      Trademark Office or in any similar office or agency of the United States, any
      State thereof or any other country or any political subdivision thereof, or
      otherwise, and all common law rights related thereto, (iv) all trade secrets
      arising under the laws of the United States, any other country or any political
      subdivision thereof, (v) all rights to obtain any reissues, renewals or
      extensions of the foregoing, (vi) all licenses for any of the foregoing, and
      (vii) all causes of action for infringement of the foregoing.

     

    
      
         

      

      
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    (c) “Majority
      in Interest”
means,
      at any time of determination, the majority in interest (based on
      then-outstanding principal amounts of Debentures at the time of such
      determination) of the Secured Parties.

    

    (d) “Necessary
      Endorsement”
means
      undated stock powers endorsed in blank or other proper instruments of assignment
      duly executed and such other instruments or documents as the Agent (as that
      term
      is defined below) may reasonably request.

    

    (e)
       “Obligations”
means
      all of the liabilities
      and obligations (primary, secondary, direct, contingent, sole, joint or several)
      due or to become due, or that are now or may be hereafter contracted or
      acquired, or owing to, of any Debtor to the Secured Parties, including, without
      limitation, all
      obligations under this Agreement, the Debentures, the Guarantee and any other
      instruments, agreements or other documents executed and/or delivered in
      connection herewith or therewith, in each case, whether now or hereafter
      existing, voluntary or involuntary, direct or indirect, absolute or contingent,
      liquidated or unliquidated, whether or not jointly owed with others, and whether
      or not from time to time decreased or extinguished and later increased, created
      or incurred, and all or any portion of such obligations or liabilities that
      are
      paid, to the extent all or any part of such payment is avoided or recovered
      directly or indirectly from any of the Secured Parties as a preference,
      fraudulent transfer or otherwise as such obligations may be amended,
      supplemented, converted, extended or modified from time to time. Without
      limiting the generality of the foregoing, the term “Obligations” shall include,
      without limitation: (i) principal of, and interest on the Debentures and the
      loans extended pursuant thereto; (ii) any and all other fees, indemnities,
      costs, obligations and liabilities of the Debtors from time to time under or
      in
      connection with this Agreement, the Debentures, the Guarantee and any other
      instruments, agreements or other documents executed and/or delivered in
      connection herewith or therewith; and (iii) all amounts (including but not
      limited to post-petition interest) in respect of the foregoing that would be
      payable but for the fact that the obligations to pay such amounts are
      unenforceable or not allowable due to the existence of a bankruptcy,
      reorganization or similar proceeding involving any Debtor.

    

    (f)
       “Organizational
      Documents”
means
      with respect to any Debtor, the documents by which such Debtor was organized
      (such as a certificate of incorporation, certificate of limited partnership
      or
      articles of organization, and including, without limitation, any certificates
      of
      designation for preferred stock or other forms of preferred equity) and which
      relate to the internal governance of such Debtor (such as bylaws, a partnership
      agreement or an operating, limited liability or members agreement).

    

    (g)
       “Pledged
      Securities”
shall
      have the meaning ascribed to such term in Section 4(i).

     

    
      
         

      

      
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    (h) “UCC”
means
      the Uniform Commercial Code of the State of New York and or any other applicable
      law of any state or states which has jurisdiction with respect to all, or any
      portion of, the Collateral or this Agreement, from time to time. It is the
      intent of the parties that defined terms in the UCC should be construed in
      their
      broadest sense so that the term “Collateral” will be construed in its broadest
      sense. Accordingly if there are, from time to time, changes to defined terms
      in
      the UCC that broaden the definitions, they are incorporated herein and if
      existing definitions in the UCC are broader than the amended definitions, the
      existing ones shall be controlling. 

    

    2.
       Grant
      of Security Interest in Collateral.
      As an
      inducement for the Secured Parties to extend the loans as evidenced by the
      Debentures and to secure the complete and timely payment, performance and
      discharge in full, as the case may be, of all of the Obligations, each Debtor
      hereby unconditionally and irrevocably pledges, grants and hypothecates to
      the
      Secured Parties a security interest in and to, a lien upon and a right of
      set-off against all of their respective right, title and interest of whatsoever
      kind and nature in and to, the Collateral (a “Security
      Interest”
and,
      collectively, the “Security
      Interests”).

    

    3. Delivery
      of Certain Collateral.
      Contemporaneously or prior to the execution of this Agreement, each Debtor
      shall
      deliver or cause to be delivered to the Agent (a) any and all certificates
      and
      other instruments representing or evidencing the Pledged Securities, and (b)
      any
      and all certificates and other instruments or documents representing any of
      the
      other Collateral, in each case, together with all Necessary Endorsements. The
      Debtors are, contemporaneously with the execution hereof, delivering to Agent,
      or have previously delivered to Agent, a true and correct copy of each
      Organizational Document governing any of the Pledged Securities.

    

    4.  Representations,
      Warranties, Covenants and Agreements of the Debtors.
      Except
      as set forth under the corresponding section of the disclosure schedules
      delivered to the Secured Parties concurrently herewith (the “Disclosure
      Schedules”),
      which
      Disclosure Schedules shall be deemed a part hereof, each Debtor represents
      and
      warrants to, and covenants and agrees with, the Secured Parties as
      follows:

    

    (a)
      Each
      Debtor has the requisite corporate, partnership, limited liability company
      or
      other power and authority to enter into this Agreement and otherwise to carry
      out its obligations hereunder. The execution, delivery and performance by each
      Debtor of this Agreement and the filings contemplated therein have been duly
      authorized by all necessary action on the part of such Debtor and no further
      action is required by such Debtor. This Agreement has been duly executed by
      each
      Debtor. This Agreement constitutes the legal, valid and binding obligation
      of
      each Debtor, enforceable against each Debtor in accordance with its terms except
      as such enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization and similar laws of general application relating to or affecting
      the rights and remedies of creditors and by general principles of
      equity.

    

    (b)
       The
      Debtors have no place of business or offices where their respective books of
      account and records are kept (other than temporarily at the offices of its
      attorneys or accountants) or places where Collateral is stored or located,
      except as set forth on Schedule
      A
      attached
      hereto. Except as specifically set forth on Schedule
      A,
      each
      Debtor is the record owner of the real property where such Collateral is
      located, and there exist no mortgages or other liens on any such real property
      except for Permitted Liens (as defined in the Debentures). Except as disclosed
      on Schedule
      A,
      none of
      such Collateral is in the possession of any consignee, bailee, warehouseman,
      agent or processor.

     

    
      
         

      

      
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    (c)
       Except
      for Permitted Liens (as defined in the Debentures) and except as set forth
      on
Schedule
      B
      attached
      hereto, the Debtors are the sole owner of the Collateral (except for
      non-exclusive licenses granted by any Debtor in the ordinary course of
      business), free and clear of any liens, security interests, encumbrances, rights
      or claims, and are fully authorized to grant the Security Interests. Except
      as
      set forth on Schedule
      B
      attached
      hereto, there is not on file in any governmental or regulatory authority, agency
      or recording office an effective financing statement, security agreement,
      license or transfer or any notice of any of the foregoing (other than those
      that
      will be filed in favor of the Secured Parties pursuant to this Agreement)
      covering or affecting any of the Collateral. Except as set forth on Schedule
      B
      attached
      hereto and except pursuant to this Agreement, as long as this Agreement shall
      be
      in effect, the Debtors shall not execute and shall not knowingly permit to
      be on
      file in any such office or agency any other financing statement or other
      document or instrument (except to the extent filed or recorded in favor of
      the
      Secured Parties pursuant to the terms of this Agreement).

    

    (d)
       No
      written claim has been received that any Collateral or Debtor's use of any
      Collateral violates the rights of any third party. There has been no adverse
      decision to any Debtor's claim of ownership rights in or exclusive rights to
      use
      the Collateral in any jurisdiction or to any Debtor's right to keep and maintain
      such Collateral in full force and effect, and there is no proceeding involving
      said rights pending or, to the best knowledge of any Debtor, threatened before
      any court, judicial body, administrative or regulatory agency, arbitrator or
      other governmental authority.

    

    (e)
       Each
      Debtor shall at all times maintain its books of account and records relating
      to
      the Collateral at its principal place of business and its Collateral at the
      locations set forth on Schedule
      A
      attached
      hereto and may not relocate such books of account and records or tangible
      Collateral unless it delivers to the Secured Parties at least 30 days prior
      to
      such relocation (i) written notice of such relocation and the new location
      thereof (which must be within the United States) and (ii) evidence that
      appropriate financing statements under the UCC and other necessary documents
      have been filed and recorded and other steps have been taken to perfect the
      Security Interests to create in favor of the Secured Parties a valid, perfected
      and continuing perfected first priority lien in the Collateral.

    

    (f)
       This
      Agreement creates in favor of the Secured Parties a valid security interest
      in
      the Collateral, subject only to Permitted Liens (as defined in the Debentures)
      securing the payment and performance of the Obligations. Upon making the filings
      described in the immediately following paragraph, all security interests created
      hereunder in any Collateral which may be perfected by filing Uniform Commercial
      Code financing statements shall have been duly perfected. Except for the filing
      of the Uniform Commercial Code financing statements referred to in the
      immediately following paragraph, the recordation of the Intellectual Property
      Security Agreement (as defined below) with respect to copyrights and copyright
      applications in the United States Copyright Office referred to in paragraph
      (m),
the
      execution and delivery of deposit account control agreements satisfying the
      requirements of Section 9-104(a)(2) of the UCC with respect to each deposit
      account of the Debtors,
      and the
      delivery of the certificates and other instruments provided in Section
      3,
      no
      action is necessary to create, perfect or protect the security interests created
      hereunder. Without limiting the generality of the foregoing, except for the
      filing of said financing statements, the recordation of said Intellectual
      Property Security Agreement, and the execution and delivery of said deposit
      account control agreements, no consent of any third parties and no
      authorization, approval or other action by, and no notice to or filing with,
      any
      governmental authority or regulatory body is required for (i) the execution,
      delivery and performance of this Agreement, (ii) the creation or perfection
      of
      the Security Interests created hereunder in the Collateral or (iii) the
      enforcement of the rights of the Agent and the Secured Parties
      hereunder.

     

    
      
         

      

      
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    (g)
       Each
      Debtor hereby authorizes the Agent to file one or more financing statements
      under the UCC, with respect to the Security Interests, with the proper filing
      and recording agencies in any jurisdiction deemed proper by it.

    

     (h)
       The
      execution, delivery and performance of this Agreement by the Debtors does not
      (i) violate any of the provisions of any Organizational Documents of any Debtor
      or any judgment, decree, order or award of any court, governmental body or
      arbitrator or any applicable law, rule or regulation applicable to any Debtor
      or
      (ii) conflict with, or constitute a default (or an event that with notice or
      lapse of time or both would become a default) under, or give to others any
      rights of termination, amendment, acceleration or cancellation (with or without
      notice, lapse of time or both) of, any agreement, credit facility, debt or
      other
      instrument (evidencing any Debtor's debt or otherwise) or other understanding
      to
      which any Debtor is a party or by which any property or asset of any Debtor
      is
      bound or affected. If any, all required consents (including, without limitation,
      from stockholders or creditors of any Debtor) necessary for any Debtor to enter
      into and perform its obligations hereunder have been obtained.

    

     (i)
       The
      capital stock and other equity interests listed on Schedule
      H
      hereto
      (the “Pledged
      Securities”)
      represent all of the capital stock and other equity interests of the Guarantors,
      and represent all capital stock and other equity interests owned, directly
      or
      indirectly, by the Company. All of the Pledged Securities are validly issued,
      fully paid and nonassessable, and the Company is the legal and beneficial owner
      of the Pledged Securities, free and clear of any lien, security interest or
      other encumbrance except for the security interests created by this Agreement
      and other Permitted Liens (as defined in the Debentures). 

    

    (j)
       The
      ownership and other equity interests in partnerships and limited liability
      companies (if any)
      included
      in the Collateral
      (the
“Pledged
      Interests”)
      by
      their express terms do not provide that they are securities governed by Article
      8 of the UCC and are not held in a securities account or by any financial
      intermediary.

     

    
      
         

      

      
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    (k)
       Except
      for Permitted Liens (as defined in the Debentures), each Debtor shall at all
      times maintain the liens and Security Interests provided for hereunder as valid
      and perfected first priority liens and security interests in the Collateral
      in
      favor of the Secured Parties until this Agreement and the Security Interest
      hereunder shall be terminated pursuant to Section 11 hereof. Each Debtor hereby
      agrees to defend the same against the claims of any and all persons and
      entities. Each Debtor shall safeguard and protect all Collateral for the account
      of the Secured Parties. At the request of the Agent, each Debtor will sign
      and
      deliver to the Agent on behalf of the Secured Parties at any time or from time
      to time one or more financing statements pursuant to the UCC in form reasonably
      satisfactory to the Agent and will pay the cost of filing the same in all public
      offices wherever filing is, or is deemed by the Agent to be, necessary or
      desirable to effect the rights and obligations provided for herein. Without
      limiting the generality of the foregoing, each Debtor shall pay all fees, taxes
      and other amounts necessary to maintain the Collateral and the Security
      Interests hereunder, and each Debtor shall obtain and furnish to the Agent
      from
      time to time, upon demand, such releases and/or subordinations of claims and
      liens which may be required to maintain the priority of the Security Interests
      hereunder.

    

    (l)
       No
      Debtor
      will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose
      of any of the Collateral (except for non-exclusive licenses granted by a Debtor
      in its ordinary course of business and sales of inventory by a Debtor in its
      ordinary course of business) without the prior written consent of a Majority
      in Interest.

    

    (m) Each
      Debtor shall keep and preserve its equipment, inventory and other tangible
      Collateral in good condition, repair and order and shall not operate or locate
      any such Collateral (or cause to be operated or located) in any area excluded
      from insurance coverage.

    

    (n) Each
      Debtor shall maintain with financially sound and reputable insurers, insurance
      with respect to the Collateral, including Collateral hereafter acquired, against
      loss or damage of the kinds and in the amounts customarily insured against
      by
      entities of established reputation having similar properties similarly situated
      and in such amounts as are customarily carried under similar circumstances
      by
      other such entities and otherwise as is prudent for entities engaged in similar
      businesses but in any event sufficient to cover the full replacement cost
      thereof. Each Debtor shall cause each insurance policy issued in connection
      herewith to provide, and the insurer issuing such policy to certify to the
      Agent, that (a) the Agent will be named as lender loss payee and additional
      insured under each such insurance policy; (b) if such insurance be proposed
      to
      be cancelled or materially changed for any reason whatsoever, such insurer
      will
      promptly notify the Agent and such cancellation or change shall not be effective
      as to the Agent for at least thirty (30) days after receipt by the Agent of
      such
      notice, unless the effect of such change is to extend or increase coverage
      under
      the policy; and (c) the Agent will have the right (but no obligation) at its
      election to remedy any default in the payment of premiums within thirty (30)
      days of notice from the insurer of such default. If no Event of Default (as
      defined in the Debentures) exists and if the proceeds arising out of any claim
      or series of related claims do not exceed $100,000, loss payments in each
      instance will be applied by the applicable Debtor to the repair and/or
      replacement of property with respect to which the loss was incurred to the
      extent reasonably feasible, and any loss payments or the balance thereof
      remaining, to the extent not so applied, shall be payable to the applicable
      Debtor; provided,
      however,
      that
      payments received by any Debtor after an Event of Default occurs and is
      continuing or in excess of $100,000 for any occurrence or series of related
      occurrences shall be paid to the Agent on behalf of the Secured Parties and,
      if
      received by such Debtor, shall be held in trust for the Secured Parties and
      immediately paid over to the Agent unless otherwise directed in writing by
      the
      Agent. Copies of such policies or the related certificates, in each case, naming
      the Agent as lender loss payee and additional insured shall be delivered to
      the
      Agent at least annually and at the time any new policy of insurance is
      issued.

     

    
      
         

      

      
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    (o)
       Each
      Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the
      Secured Parties promptly, in sufficient detail, of any material adverse change
      in the Collateral, and of the occurrence of any event which would have a
      material adverse effect on the value of the Collateral or on the Secured
      Parties’ security interest, through the Agent, therein.

    

    (p)
       Each
      Debtor shall promptly execute and deliver to the Agent such further deeds,
      mortgages, assignments, security agreements, financing statements or other
      instruments, documents, certificates and assurances and take such further action
      as the Agent may from time to time request and may in its sole discretion deem
      necessary to perfect, protect or enforce the Secured Parties’ security interest
      in the Collateral including, without limitation, if applicable, the execution
      and delivery of a separate security agreement with respect to each Debtor’s
      Intellectual Property (“Intellectual
      Property Security Agreement”)
      in
      which the Secured Parties have been granted a security interest hereunder,
      substantially in a form reasonably acceptable to the Agent, which Intellectual
      Property Security Agreement, other than as stated therein, shall be subject
      to
      all of the terms and conditions hereof.

    

    (q)
       Each
      Debtor shall permit the Agent and its representatives and agents to inspect
      the
      Collateral during normal business hours and upon reasonable prior notice, and
      to
      make copies of records pertaining to the Collateral as may be reasonably
      requested by the Agent from time to time.

    

    (r)
       Each
      Debtor shall take all steps reasonably necessary to diligently pursue and seek
      to preserve, enforce and collect any rights, claims, causes of action and
      accounts receivable in respect of the Collateral.

    

    (s)
       Each
      Debtor shall promptly notify the Secured Parties in sufficient detail upon
      becoming aware of any attachment, garnishment, execution or other legal process
      levied against any Collateral and of any other information received by such
      Debtor that may materially affect the value of the Collateral, the Security
      Interest or the rights and remedies of the Secured Parties
      hereunder.

     

    
      
         

      

      
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    (t)
       All
      information heretofore, herein or hereafter supplied to the Secured Parties
      by
      or on behalf of any Debtor with respect to the Collateral is accurate and
      complete in all material respects as of the date furnished.

    

    (u)
       The
      Debtors shall at all times preserve and keep in full force and effect their
      respective valid existence and good standing and any rights and franchises
      material to its business.

    

    (v)
       No
      Debtor
      will change its name, type of organization, jurisdiction of organization,
      organizational identification number (if it has one), legal or corporate
      structure, or identity, or add any new fictitious name unless it provides at
      least 30 days prior written notice to the Secured Parties of such change and,
      at
      the time of such written notification, such Debtor provides any financing
      statements or fixture filings necessary to perfect and continue the perfection
      of the Security Interests granted and evidenced by this Agreement.

    

    (w) Except
      in
      the ordinary course of business, no Debtor may consign any of its inventory
      or
      sell any of its inventory on bill and hold, sale or return, sale on approval,
      or
      other conditional terms of sale without the consent of the
      Agent
      which shall not be unreasonably withheld.

    

    (x)
       No
      Debtor
      may relocate its chief executive office to a new location without providing
      30
      days prior written notification thereof to the Secured Parties and so long
      as,
      at the time of such written notification, such Debtor provides any financing
      statements or fixture filings necessary to perfect and continue the perfection
      of the Security Interests granted and evidenced by this Agreement.

    

    (y) Each
      Debtor was organized and remains organized solely under the laws of the state
      set forth next to such Debtor’s name in Schedule
      D
      attached
      hereto, which Schedule
      D
      sets
      forth each Debtor’s organizational identification number or, if any Debtor does
      not have one, states that one does not exist.

    

    (z) 
      (i) The
      actual name of each Debtor is the name set forth in Schedule
      D
      attached
      hereto; (ii) no Debtor has any trade names except as set forth on Schedule
      E
      attached
      hereto; (iii) no Debtor has used any name other than that stated in the preamble
      hereto or as set forth on Schedule
      E
      for the
      preceding five years; and (iv) no entity has merged into any Debtor or been
      acquired by any Debtor within the past five years except as set forth on
Schedule
      E.

    

    (aa) At
      any
      time and from time to time that any Collateral consists of instruments,
      certificated securities or other items that require or permit possession by
      the
      secured party to perfect the security interest created hereby, the applicable
      Debtor shall deliver such Collateral to the Agent.

     

    
      
         

      

      
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    (bb)
       Each
      Debtor, in its capacity as issuer, hereby agrees to comply with any and all
      orders and instructions of Agent regarding the Pledged Interests consistent
      with
      the terms of this Agreement without the further consent of any Debtor as
      contemplated by Section 8-106 (or any successor section) of the UCC. Further,
      each Debtor agrees that it shall not enter into a similar agreement (or one
      that
      would confer “control” within the meaning of Article 8 of the UCC) with any
      other person or entity.

     

    (cc) Each
      Debtor shall cause all tangible chattel paper constituting Collateral to be
      delivered to the Agent, or, if such delivery is not possible, then to cause
      such
      tangible chattel paper to contain a legend noting that it is subject to the
      security interest created by this Agreement. To the extent that any Collateral
      consists of electronic chattel paper, the applicable Debtor shall cause the
      underlying chattel paper to be “marked” within the meaning of Section 9-105 of
      the UCC (or successor section thereto).

    

    (dd) If
      there
      is any investment property or deposit account included as Collateral that can
      be
      perfected by “control” through an account control agreement, the applicable
      Debtor shall cause such an account control agreement, in form and substance
      in
      each case satisfactory to the Agent, to be entered into and delivered to the
      Agent for the benefit of the Secured Parties.

    

    (ee)
       To
      the
      extent that any Collateral consists of letter-of-credit rights, the applicable
      Debtor shall cause the issuer of each underlying letter of credit to consent
      to
      an assignment of the proceeds thereof to the Secured Parties.

    

    (ff)
       To
      the
      extent that any Collateral is in the possession of any third party, the
      applicable Debtor shall join with the Agent in notifying such third party of
      the
      Secured Parties’ security interest in such Collateral and shall use its best
      efforts to obtain an acknowledgement and agreement from such third party with
      respect to the Collateral, in form and substance reasonably satisfactory to
      the
      Agent.

    

    (gg) If
      any
      Debtor shall at any time hold or acquire a commercial tort claim, such Debtor
      shall promptly notify the Secured Parties in a writing signed by such Debtor
      of
      the particulars thereof and grant to the Secured Parties in such writing a
      security interest therein and in the proceeds thereof, all upon the terms of
      this Agreement, with such writing to be in form and substance satisfactory
      to
      the Agent.

    

    (hh) Each
      Debtor shall immediately provide written notice to the Secured Parties of any
      and all accounts which arise out of contracts with any governmental authority
      and, to the extent necessary to perfect or continue the perfected status of
      the
      Security Interests in such accounts and proceeds thereof, shall execute and
      deliver to the Agent an assignment of claims for such accounts and cooperate
      with the Agent in taking any other steps required, in its judgment, under the
      Federal Assignment of Claims Act or any similar federal, state or local statute
      or rule to perfect or continue the perfected status of the Security Interests
      in
      such accounts and proceeds thereof.

     

    
      
         

      

      
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    (ii) Each
      Debtor shall cause each subsidiary
      of such
      Debtor to immediately become a party hereto (an “Additional
      Debtor”),
      by
      executing and delivering an Additional Debtor Joinder in substantially the
      form
      of Annex
      A
      attached
      hereto and comply with the provisions hereof applicable to the Debtors.
      Concurrent therewith, the Additional Debtor shall deliver replacement schedules
      for, or supplements to all other Schedules to (or referred to in) this
      Agreement, as applicable, which replacement schedules shall supersede, or
      supplements shall modify, the Schedules then in effect. The Additional Debtor
      shall also deliver such opinions of counsel, authorizing resolutions, good
      standing certificates, incumbency certificates, organizational documents,
      financing statements and other information and documentation as the Agent may
      reasonably request. Upon delivery of the foregoing to the Agent, the Additional
      Debtor shall be and become a party to this Agreement with the same rights and
      obligations as the Debtors, for all purposes hereof as fully and to the same
      extent as if it were an original signatory hereto and shall be deemed to have
      made the representations, warranties and covenants set forth herein as of the
      date of execution and delivery of such Additional Debtor Joinder, and all
      references herein to the “Debtors” shall be deemed to include each Additional
      Debtor.

    

    (jj)
       Each
      Debtor shall vote the Pledged Securities to comply with the covenants and
      agreements set forth herein and in the Debentures.

    

    (kk) Each
      Debtor shall register the pledge of the applicable Pledged Securities on the
      books of such Debtor. Each Debtor shall notify each issuer of Pledged Securities
      to register the pledge of the applicable Pledged Securities in the name of
      the
      Secured Parties on the books of such issuer. Further, except with respect to
      certificated securities delivered to the Agent, the applicable Debtor shall
      deliver to Agent an acknowledgement of pledge (which, where appropriate, shall
      comply with the requirements of the relevant UCC with respect to perfection
      by
      registration) signed by the issuer of the applicable Pledged Securities, which
      acknowledgement shall confirm that: (a) it has registered the pledge on its
      books and records; and (b) at any time directed by Agent during the continuation
      of an Event of Default, such issuer will transfer the record ownership of such
      Pledged Securities into the name of any designee of Agent, will take such steps
      as may be necessary to effect the transfer, and will comply with all other
      instructions of Agent regarding such Pledged Securities without the further
      consent of the applicable Debtor.

    

    (ll)
      In
      the
      event that, upon an occurrence of an Event of Default, Agent shall sell all
      or
      any of the Pledged Securities to another party or parties (herein called the
      “Transferee”)
      or
      shall purchase or retain all or any of the Pledged Securities, each Debtor
      shall, to the extent applicable: (i) deliver to Agent or the Transferee, as
      the
      case may be, the articles of incorporation, bylaws, minute books, stock
      certificate books, corporate seals, deeds, leases, indentures, agreements,
      evidences of indebtedness, books of account, financial records and all other
      Organizational Documents and records of the Debtors and their direct and
      indirect subsidiaries; (ii) use its best efforts to obtain resignations of
      the
      persons then serving as officers and directors of the Debtors and their direct
      and indirect subsidiaries, if so requested; and (iii) use its best efforts
      to
      obtain any approvals that are required by any governmental or regulatory body
      in
      order to permit the sale of the Pledged Securities to the Transferee or the
      purchase or retention of the Pledged Securities by Agent and allow the
      Transferee or Agent to continue the business of the Debtors and their direct
      and
      indirect subsidiaries.

     

    
      
         

      

      
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    (mm) Without
      limiting the generality of the other obligations of the Debtors hereunder,
      each
      Debtor shall promptly (i) cause to be registered at the United States Copyright
      Office all of its material copyrights, (ii) cause the security interest
      contemplated hereby with respect to all Intellectual Property registered at
      the
      United States Copyright Office or United States Patent and Trademark Office
      to
      be duly recorded at the applicable office, and (iii) give the Agent notice
      whenever it acquires (whether absolutely or by license) or creates any
      additional material Intellectual Property.

    

    (nn) Each
      Debtor will from time to time, at the joint and several expense of the Debtors,
      promptly execute and deliver all such further instruments and documents, and
      take all such further action as may be necessary or desirable, or as the Agent
      may reasonably request, in order to perfect and protect any security interest
      granted or purported to be granted hereby or to enable the Secured Parties
      to
      exercise and enforce their rights and remedies hereunder and with respect to
      any
      Collateral or to otherwise carry out the purposes of this
      Agreement.

    

    (oo) Schedule
      F
      attached
      hereto lists all of the patents, patent applications, trademarks, trademark
      applications, registered copyrights, and domain names owned by any of the
      Debtors as of the date hereof. Schedule
      F
      lists
      all material licenses in favor of any Debtor for the use of any patents,
      trademarks, copyrights and domain names as of the date hereof. All material
      patents and trademarks of the Debtors have been duly recorded at the United
      States Patent and Trademark Office and all material copyrights of the Debtors
      have been duly recorded at the United States Copyright Office.

    

    (pp) Except
      as
      set forth on Schedule
      G
      attached
      hereto, none of the account debtors or other persons or entities obligated
      on
      any of the Collateral is a governmental authority covered by the Federal
      Assignment of Claims Act or any similar federal, state or local statute or
      rule
      in respect of such Collateral.

    

    5. Effect
      of Pledge on Certain Rights. If
      any of
      the Collateral subject to this Agreement consists of nonvoting equity or
      ownership interests (regardless of class, designation, preference or rights)
      that may be converted into voting equity or ownership interests upon the
      occurrence of certain events (including, without limitation, upon the transfer
      of all or any of the other stock or assets of the issuer), it is agreed that
      the
      pledge of such equity or ownership interests pursuant to this Agreement or
      the
      enforcement of any of Agent’s rights hereunder shall not be deemed to be the
      type of event which would trigger such conversion rights notwithstanding any
      provisions in the Organizational Documents or agreements to which any Debtor
      is
      subject or to which any Debtor is party.

    

    6.
       Defaults.
      The
      following events shall be “Events
      of Default”:

    

    (a)
      The
      occurrence of an Event of Default (as defined in the Debentures) under the
      Debentures;

     

    
      
         

      

      
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    (b)
      Any
      representation or warranty of any Debtor in this Agreement shall prove to have
      been incorrect in any material respect when made;

    

    (c)
      The
      failure by any Debtor to observe or perform any of its obligations hereunder
      for
      five (5) days after delivery to such Debtor of notice of such failure by or
      on
      behalf of a Secured Party unless such default is capable of cure but cannot
      be
      cured within such time frame and such Debtor is using best efforts to cure
      same
      in a timely fashion; or

    

    (d)
      If
      any provision of this Agreement shall at any time for any reason be declared
      to
      be null and void, or the validity or enforceability thereof shall be contested
      by any Debtor, or a proceeding shall be commenced by any Debtor, or by any
      governmental authority having jurisdiction over any Debtor, seeking to establish
      the invalidity or unenforceability thereof, or any Debtor shall deny that any
      Debtor has any liability or obligation purported to be created under this
      Agreement.

    

    7.  Duty
      To Hold In Trust.
      

    

    (a) Upon
      the
      occurrence of any Event of Default and at any time thereafter, each Debtor
      shall, upon receipt of any revenue, income,
      dividend, interest
      or other
      sums subject to the Security Interests, whether payable pursuant to the
      Debentures or otherwise, or of any check, draft, note, trade acceptance or
      other
      instrument evidencing an obligation to pay any such sum, hold the same in trust
      for the Secured Parties and shall forthwith endorse and transfer any such sums
      or instruments, or both, to the Secured Parties, pro-rata in proportion to
      their
      respective then-currently outstanding principal amount of Debentures for
      application to the satisfaction of the Obligations (and if any Debenture is
      not
      outstanding, pro-rata in proportion to the initial purchases of the remaining
      Debentures). 

    

    (b) If
      any
      Debtor shall become entitled to receive or shall receive any securities or
      other
      property (including, without limitation, shares of Pledged Securities or
      instruments representing Pledged Securities acquired after the date hereof,
      or
      any options, warrants, rights or other similar property or certificates
      representing a dividend, or any distribution in connection with any
      recapitalization, reclassification or increase or reduction of capital, or
      issued in connection with any reorganization of such Debtor or any of its direct
      or indirect subsidiaries) in respect of the Pledged Securities (whether as
      an
      addition to, in substitution of, or in exchange for, such Pledged Securities
      or
      otherwise), such Debtor agrees to (i) accept the same as the agent of the
      Secured Parties; (ii) hold the same in trust on behalf of and for the benefit
      of
      the Secured Parties; and (iii) to deliver any and all certificates or
      instruments evidencing the same to Agent on or before the close of business
      on
      the fifth business day following the receipt thereof by such Debtor, in the
      exact form received together with the Necessary Endorsements, to be held by
      Agent subject to the terms of this Agreement as Collateral.

     

    
      
         

      

      
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    8.  Rights
      and Remedies Upon Default.
      

    

    (a) Upon
      the
      occurrence of any Event of Default and at any time thereafter, the Secured
      Parties, acting through the Agent, shall have the right to exercise all of
      the
      remedies conferred hereunder and under the Debentures, and the Secured Parties
      shall have all the rights and remedies of a secured party under the UCC. Without
      limitation, the Agent, for the benefit of the Secured Parties, shall have the
      following rights and powers:

    

    (i)
      The
      Agent shall have the right to take possession of the Collateral and, for that
      purpose, enter, with the aid and assistance of any person, any premises where
      the Collateral, or any part thereof, is or may be placed and remove the same,
      and each Debtor shall assemble the Collateral and make it available to the
      Agent
      at places which the Agent shall reasonably select, whether at such Debtor's
      premises or elsewhere, and make available to the Agent, without rent, all of
      such Debtor’s respective premises and facilities for the purpose of the Agent
      taking possession of, removing or putting the Collateral in saleable or
      disposable form.

    

    (ii) Upon
      notice to the Debtors by Agent, all rights of each Debtor to exercise the voting
      and other consensual rights which it would otherwise be entitled to exercise
      and
      all rights of each Debtor to receive the dividends and interest which it would
      otherwise be authorized to receive and retain, shall cease. Upon such notice,
      Agent shall have the right to receive, for the benefit of the Secured Parties,
      any interest, cash dividends or other payments on the Collateral and, at the
      option of Agent, to exercise in such Agent’s discretion all voting rights
      pertaining thereto. Without limiting the generality of the foregoing, Agent
      shall have the right (but not the obligation) to exercise all rights with
      respect to the Collateral as it were the sole and absolute owner thereof,
      including, without limitation, to vote and/or to exchange, at its sole
      discretion, any or all of the Collateral in connection with a merger,
      reorganization, consolidation, recapitalization or other readjustment concerning
      or involving the Collateral or any Debtor or any of its direct or indirect
      subsidiaries.

    

    (iii)
      The
      Agent shall have the right to operate the business of each Debtor using the
      Collateral and shall have the right to assign, sell, lease or otherwise dispose
      of and deliver all or any part of the Collateral, at public or private sale
      or
      otherwise, either with or without special conditions or stipulations, for cash
      or on credit or for future delivery, in such parcel or parcels and at such
      time
      or times and at such place or places, and upon such terms and conditions as
      the
      Agent may deem commercially reasonable, all without (except as shall be required
      by applicable statute and cannot be waived) advertisement or demand upon or
      notice to any Debtor or right of redemption of a Debtor, which are hereby
      expressly waived. Upon each such sale, lease, assignment or other transfer
      of
      Collateral, the Agent, for the benefit of the Secured Parties, may, unless
      prohibited by applicable law which cannot be waived, purchase all or any part
      of
      the Collateral being sold, free from and discharged of all trusts, claims,
      right
      of redemption and equities of any Debtor, which are hereby waived and
      released.

     

    
      
         

      

      
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    (iv) The
      Agent
      shall have the right (but not the obligation) to notify any account debtors
      and
      any obligors under instruments or accounts to make payments directly to the
      Agent, on behalf of the Secured Parties, and to enforce the Debtors’ rights
      against such account debtors and obligors.

    

    (v) The
      Agent, for the benefit of the Secured Parties, may (but is not obligated to)
      direct any financial intermediary or any other person or entity holding any
      investment property to transfer the same to the Agent, on behalf of the Secured
      Parties, or its designee.

    

    (vi) The
      Agent
      may (but is not obligated to) transfer any or all Intellectual Property
      registered in the name of any Debtor at the United States Patent and Trademark
      Office and/or Copyright Office into the name of the Secured Parties or any
      designee or any purchaser of any Collateral.

    

    (b) The
      Agent
      shall comply with any applicable law in connection with a disposition of
      Collateral and such compliance will not be considered adversely to affect the
      commercial reasonableness of any sale of the Collateral. The Agent may sell
      the
      Collateral without giving any warranties and may specifically disclaim such
      warranties. If the Agent sells any of the Collateral on credit, the Debtors
      will
      only be credited with payments actually made by the purchaser. In addition,
      each
      Debtor waives any and all rights that it may have to a judicial hearing in
      advance of the enforcement of any of the Agent’s rights and remedies hereunder,
      including, without limitation, its right following an Event of Default to take
      immediate possession of the Collateral and to exercise its rights and remedies
      with respect thereto.

     

    (c) For
      the
      purpose of enabling the Agent to further exercise rights and remedies under
      this
      Section 8 or elsewhere provided by agreement or applicable law, each Debtor
      hereby grants to the Agent, for the benefit of the Agent and the Secured
      Parties, an irrevocable, nonexclusive license (exercisable without payment
      of
      royalty or other compensation to such Debtor) to use, license or sublicense
      following an Event of Default, any Intellectual Property now owned or hereafter
      acquired by such Debtor, and wherever the same may be located, and including
      in
      such license access to all media in which any of the licensed items may be
      recorded or stored and to all computer software and programs used for the
      compilation or printout thereof.

    

    9.  Applications
      of Proceeds.
      The
      proceeds of any such sale, lease or other disposition of the Collateral
      hereunder or from payments made on account of any insurance policy insuring
      any
      portion of the Collateral shall be applied first, to the expenses of retaking,
      holding, storing, processing and preparing for sale, selling, and the like
      (including, without limitation, any taxes, fees and other costs incurred in
      connection therewith) of the Collateral, to the reasonable attorneys’ fees and
      expenses incurred by the Agent in enforcing the Secured Parties’ rights
      hereunder and in connection with collecting, storing and disposing of the
      Collateral, and then to satisfaction of the Obligations pro rata among the
      Secured Parties (based on then-outstanding principal amounts of Debentures
      at
      the time of any such determination), and to the payment of any other amounts
      required by applicable law, after which the Secured Parties shall pay to the
      applicable Debtor any surplus proceeds. If, upon the sale, license or other
      disposition of the Collateral, the proceeds thereof are insufficient to pay
      all
      amounts to which the Secured Parties are legally entitled, the Debtors will
      be
      liable for the deficiency, together with interest thereon, at the rate of 18%
      per annum or the lesser amount permitted by applicable law (the “Default Rate”),
      and the reasonable fees of any attorneys employed by the Secured Parties to
      collect such deficiency. To the extent permitted by applicable law, each Debtor
      waives all claims, damages and demands against the Secured Parties arising
      out
      of the repossession, removal, retention or sale of the Collateral, unless due
      solely to the gross negligence or willful misconduct of the Secured Parties
      as
      determined by a final judgment (not subject to further appeal) of a court of
      competent jurisdiction.

     

    
      
         

      

      
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    10. Securities
      Law Provision.
      Each
      Debtor recognizes that Agent may be limited in its ability to effect a sale
      to
      the public of all or part of the Pledged Securities by reason of certain
      prohibitions in the Securities Act of 1933, as amended, or other federal or
      state securities laws (collectively, the “Securities
      Laws”),
      and
      may be compelled to resort to one or more sales to a restricted group of
      purchasers who may be required to agree to acquire the Pledged Securities for
      their own account, for investment and not with a view to the distribution or
      resale thereof. Each Debtor agrees that sales so made may be at prices and
      on
      terms less favorable than if the Pledged Securities were sold to the public,
      and
      that Agent has no obligation to delay the sale of any Pledged Securities for
      the
      period of time necessary to register the Pledged Securities for sale to the
      public under the Securities Laws. Each Debtor shall cooperate with Agent in
      its
      attempt to satisfy any requirements under the Securities Laws (including,
      without limitation, registration thereunder if requested by Agent) applicable
      to
      the sale of the Pledged Securities by Agent.

     

    11.  Costs
      and Expenses.
      Each
      Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses
      incurred in connection with any filing required hereunder, including without
      limitation, any financing statements pursuant to the UCC, continuation
      statements, partial releases and/or termination statements related thereto
      or
      any expenses of any searches reasonably required by the Agent. The Debtors
      shall
      also pay all other claims and charges which in the reasonable opinion of the
      Agent is reasonably likely to prejudice, imperil or otherwise affect the
      Collateral or the Security Interests therein. The Debtors will also, upon
      demand, pay to the Agent the amount of any and all reasonable expenses,
      including the reasonable fees and expenses of its counsel and of any experts
      and
      agents, which the Agent, for the benefit of the Secured Parties, may incur
      in
      connection with (i) the enforcement of this Agreement, (ii) the custody or
      preservation of, or the sale of, collection from, or other realization upon,
      any
      of the Collateral, or (iii) the exercise or enforcement of any of the rights
      of
      the Secured Parties under the Debentures. Until so paid, any fees payable
      hereunder shall be added to the principal amount of the Debentures and shall
      bear interest at the Default Rate.

    

    12.  Responsibility
      for Collateral.
      The
      Debtors assume all liabilities and responsibility in connection with all
      Collateral, and the Obligations shall in no way be affected or diminished by
      reason of the loss, destruction, damage or theft of any of the Collateral or
      its
      unavailability for any reason. Without limiting the generality of the foregoing,
      (a) neither the Agent nor any Secured Party (i) has any duty (either before
      or
      after an Event of Default) to collect any amounts in respect of the Collateral
      or to preserve any rights relating to the Collateral, or (ii) has any obligation
      to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor
      shall remain obligated and liable under each contract or agreement included
      in
      the Collateral to be observed or performed by such Debtor thereunder. Neither
      the Agent nor any Secured Party shall have any obligation or liability under
      any
      such contract or agreement by reason of or arising out of this Agreement or
      the
      receipt by the Agent or any Secured Party of any payment relating to any of
      the
      Collateral, nor shall the Agent or any Secured Party be obligated in any manner
      to perform any of the obligations of any Debtor under or pursuant to any such
      contract or agreement, to make inquiry as to the nature or sufficiency of any
      payment received by the Agent or any Secured Party in respect of the Collateral
      or as to the sufficiency of any performance by any party under any such contract
      or agreement, to present or file any claim, to take any action to enforce any
      performance or to collect the payment of any amounts which may have been
      assigned to the Agent or to which the Agent or any Secured Party may be entitled
      at any time or times.

     

    
      
         

      

      
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    13.  Security
      Interests Absolute.
      All
      rights of the Secured Parties and all obligations of the Debtors hereunder,
      shall be absolute and unconditional, irrespective of: (a) any lack of validity
      or enforceability of this Agreement, the Debentures or any agreement entered
      into in connection with the foregoing, or any portion hereof or thereof; (b)
      any
      change in the time, manner or place of payment or performance of, or in any
      other term of, all or any of the Obligations, or any other amendment or waiver
      of or any consent to any departure from the Debentures or any other agreement
      entered into in connection with the foregoing; (c) any exchange, release or
      nonperfection of any of the Collateral, or any release or amendment or waiver
      of
      or consent to departure from any other collateral for, or any guarantee, or
      any
      other security, for all or any of the Obligations; (d) any action by the Secured
      Parties to obtain, adjust, settle and cancel in its sole discretion any
      insurance claims or matters made or arising in connection with the Collateral;
      or (e) any other circumstance which might otherwise constitute any legal or
      equitable defense available to a Debtor, or a discharge of all or any part
      of
      the Security Interests granted hereby. Until the Obligations shall have been
      paid and performed in full, the rights of the Secured Parties shall continue
      even if the Obligations are barred for any reason, including, without
      limitation, the running of the statute of limitations or bankruptcy. Each Debtor
      expressly waives presentment, protest, notice of protest, demand, notice of
      nonpayment and demand for performance. In the event that at any time any
      transfer of any Collateral or any payment received by the Secured Parties
      hereunder shall be deemed by final order of a court of competent jurisdiction
      to
      have been a voidable preference or fraudulent conveyance under the bankruptcy
      or
      insolvency laws of the United States, or shall be deemed to be otherwise due
      to
      any party other than the Secured Parties, then, in any such event, each Debtor’s
      obligations hereunder shall survive cancellation of this Agreement, and shall
      not be discharged or satisfied by any prior payment thereof and/or cancellation
      of this Agreement, but shall remain a valid and binding obligation enforceable
      in accordance with the terms and provisions hereof. Each Debtor waives all
      right
      to require the Secured Parties to proceed against any other person or
entity
      or
to
      apply
      any Collateral which the Secured Parties may hold at any time, or to marshal
      assets, or to pursue any other remedy. Each Debtor waives any defense arising
      by
      reason of the application of the statute of limitations to any obligation
      secured hereby.

    

    14.
       Term
      of Agreement.
      This
      Agreement and the Security Interests shall terminate on the date on which all
      payments under the Debentures have been indefeasibly paid in full and all other
      Obligations have been paid or discharged; provided, however, that all
      indemnities of the Debtors contained in this Agreement (including, without
      limitation, Annex B hereto) shall survive and remain operative and in full
      force
      and effect regardless of the termination of this Agreement.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    15.
       Power
      of Attorney; Further Assurances.

    

    (a)
       Each
      Debtor authorizes the Agent, and does hereby make, constitute and appoint the
      Agent and its officers, agents, successors or assigns with full power of
      substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in
      the name of the Agent or such Debtor, to, after the occurrence and during the
      continuance of an Event of Default, (i) endorse any note, checks, drafts, money
      orders or other instruments of payment (including payments payable under or
      in
      respect of any policy of insurance) in respect of the Collateral that may come
      into possession of the Agent; (ii) to sign and endorse any financing statement
      pursuant to the UCC or any invoice, freight or express bill, bill of lading,
      storage or warehouse receipts, drafts against debtors, assignments,
      verifications and notices in connection with accounts, and other documents
      relating to the Collateral; (iii) to pay or discharge taxes, liens, security
      interests or other encumbrances at any time levied or placed on or threatened
      against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
      and sue for monies due in respect of the Collateral; (v) to transfer any
      Intellectual Property or provide licenses respecting any Intellectual Property;
      and (vi) generally, at the option of the Agent, and at the expense of the
      Debtors, at any time, or from time to time, to execute and deliver any and
      all
      documents and instruments and to do all acts and things which the Agent deems
      necessary to protect, preserve and realize upon the Collateral and the Security
      Interests granted therein in order to effect the intent of this Agreement and
      the Debentures all as fully and effectually as the Debtors might or could do;
      and each Debtor hereby ratifies all that said attorney shall lawfully do or
      cause to be done by virtue hereof. This power of attorney is coupled with an
      interest and shall be irrevocable for the term of this Agreement and thereafter
      as long as any of the Obligations shall be outstanding. The
      designation set forth herein shall be deemed to amend and supersede any
      inconsistent provision in the Organizational Documents or other documents or
      agreements to which any Debtor is subject or to which any Debtor is a party.
      Without
      limiting the generality of the foregoing, after the occurrence and during the
      continuance of an Event of Default, each Secured Party is specifically
      authorized to execute and file any applications for or instruments of transfer
      and assignment of any patents, trademarks, copyrights or other Intellectual
      Property with the United States Patent and Trademark Office and the United
      States Copyright Office.

    

    (b)
       On
      a
      continuing basis, each Debtor will make, execute, acknowledge, deliver, file
      and
      record, as the case may be, with the proper filing and recording agencies in
      any
      jurisdiction, including, without limitation, the jurisdictions indicated on
      Schedule
      C
      attached
      hereto, all such instruments, and take all such action as may reasonably be
      deemed necessary or advisable, or as reasonably requested by the Agent, to
      perfect the Security Interests granted hereunder and otherwise to carry out
      the
      intent and purposes of this Agreement, or for assuring and confirming to the
      Agent the grant or perfection of a perfected security interest in all the
      Collateral under the UCC.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    (c)
       Each
      Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact,
      with full authority in the place and instead of such Debtor and in the name
      of
      such Debtor, from time to time in the Agent’s discretion, to take any action and
      to execute any instrument which the Agent may deem necessary or advisable to
      accomplish the purposes of this Agreement, including the filing, in its sole
      discretion, of one or more financing or continuation statements and amendments
      thereto, relative to any of the Collateral without the signature of such Debtor
      where permitted by law, which financing statements may (but need not) describe
      the Collateral as “all assets” or “all personal property” or words of like
      import, and ratifies all such actions taken by the Agent. This power of attorney
      is coupled with an interest and shall be irrevocable for the term of this
      Agreement and thereafter as long as any of the Obligations shall be
      outstanding.

    

    16.  Notices.
      All
      notices, requests, demands and other communications hereunder shall be subject
      to the notice provision of the Purchase Agreement (as such term is defined
      in
      the Debentures).

    

    17.  Other
      Security.
      To the
      extent that the Obligations are now or hereafter secured by property other
      than
      the Collateral or by the guarantee, endorsement or property of any other person,
      firm, corporation or other entity, then the Agent shall have the right, in
      its
      sole discretion, to pursue, relinquish, subordinate, modify or take any other
      action with respect thereto, without in any way modifying or affecting any
      of
      the Secured Parties’ rights and remedies hereunder.

    

    18.  Appointment
      of Agent.
      The
      Secured Parties hereby appoint [DKR SoundShore Oasis Holding Fund Ltd.] to
      act
      as their agent (“DKR”
or
      “Agent”)
      for
      purposes of exercising any and all rights and remedies of the Secured Parties
      hereunder. Such appointment shall continue until revoked in writing by a
Majority
      in Interest, at which time a Majority in Interest
      shall
      appoint a new Agent, provided that DKR may not be removed as Agent unless DKR
      shall then hold less than $100,000 in principal amount of Debentures;
      provided,
      further,
      that
      such removal may occur only if each of the other Secured Parties shall then
      hold
      not less than an aggregate of $200,000 in principal amount of Debentures.
The
      Agent
      shall have the rights, responsibilities and immunities set forth in Annex
      B
      hereto.

     

    19.  Miscellaneous.

    

    (a)
       No
      course
      of dealing between the Debtors and the Secured Parties, nor any failure to
      exercise, nor any delay in exercising, on the part of the Secured Parties,
      any
      right, power or privilege hereunder or under the Debentures shall operate as
      a
      waiver thereof; nor shall any single or partial exercise of any right, power
      or
      privilege hereunder or thereunder preclude any other or further exercise thereof
      or the exercise of any other right, power or privilege.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    (b)
       All
      of
      the rights and remedies of the Secured Parties with respect to the Collateral,
      whether established hereby or by the Debentures or by any other agreements,
      instruments or documents or by law shall be cumulative and may be exercised
      singly or concurrently.

    

    (c)
       This
      Agreement,
      together with the exhibits and schedules hereto, contain the entire
      understanding of the parties with respect to the subject matter hereof and
      supersede all prior agreements and understandings, oral or written, with respect
      to such matters, which the parties acknowledge have been merged into this
      Agreement and the exhibits and schedules hereto.
      No
      provision of this Agreement may be waived, modified, supplemented or amended
      except in a written instrument signed, in the case of an amendment, by the
      Debtors and the Secured Parties or, in the case of a waiver, by the party
      against whom enforcement of any such waived provision is sought. 

    

    (d)
       If
      any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

    

    (e)
       No
      waiver
      of any default with respect to any provision, condition or requirement of this
      Agreement shall be deemed to be a continuing waiver in the future or a waiver
      of
      any subsequent default or a waiver of any other provision, condition or
      requirement hereof, nor shall any delay or omission of any party to exercise
      any
      right hereunder in any manner impair the exercise of any such
      right.

    

    (f)
       This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company and the Guarantors may
      not
      assign this Agreement or any rights or obligations hereunder without the prior
      written consent of each Secured Party (other than by merger). Any Secured Party
      may assign any or all of its rights under this Agreement to any Person to whom
      such Secured Party assigns or transfers any Securities, provided such transferee
      agrees in writing to be bound, with respect to the transferred Securities,
      by
      the provisions of this Agreement that apply to the “Secured
      Parties.”

    

    (g)
       Each
      party shall take such further action and execute and deliver such further
      documents as may be necessary or appropriate in order to carry out the
      provisions and purposes of this Agreement.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    (h)
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each Debtor agrees that all proceedings
      concerning the interpretations, enforcement and defense of the transactions
      contemplated by this Agreement and the Debentures (whether brought against
      a
      party hereto or its respective affiliates, directors, officers, shareholders,
      partners, members, employees or agents) shall be commenced exclusively in the
      state and federal courts sitting in the City of New York, Borough of Manhattan.
      Each Debtor hereby irrevocably submits to the exclusive jurisdiction of the
      state and federal courts sitting in the City of New York, Borough of Manhattan
      for the adjudication of any dispute hereunder or in connection herewith or
      with
      any transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any proceeding, any claim that it is not
      personally subject to the jurisdiction of any such court, that such proceeding
      is improper. Each party hereto hereby irrevocably waives personal service of
      process and consents to process being served in any such proceeding by mailing
      a
      copy thereof via registered or certified mail or overnight delivery (with
      evidence of delivery) to such party at the address in effect for notices to
      it
      under this Agreement and agrees that such service 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. Each party hereto hereby irrevocably waives, to the fullest extent
      permitted by applicable law, any and all right to trial by jury in any legal
      proceeding arising out of or relating to this Agreement or the transactions
      contemplated hereby. If any party shall commence a proceeding to enforce any
      provisions of this Agreement, then the prevailing party in such proceeding
      shall
      be reimbursed by the other party for its reasonable attorney’s fees and other
      costs and expenses incurred with the investigation, preparation and prosecution
      of such proceeding.

    

    (i)
       This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

    

    (j) All
      Debtors shall jointly and severally be liable for the obligations of each Debtor
      to the Secured Parties hereunder.

    

    (k) Each
      Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured
      Parties and their respective partners, members, shareholders, officers,
      directors, employees and agents (and any other persons with other titles that
      have similar functions) (collectively, “Indemnitees”)
      from
      and against any and all losses, claims, liabilities, damages, penalties, suits,
      costs and expenses, of any kind or nature, (including fees relating to the
      cost
      of investigating and defending any of the foregoing) imposed on, incurred by
      or
      asserted against such Indemnitee in any way related to or arising from or
      alleged to arise from this Agreement or the Collateral, except any such losses,
      claims, liabilities, damages, penalties, suits, costs and expenses which result
      from the gross negligence or willful misconduct of the Indemnitee as determined
      by a final, nonappealable decision of a court of competent jurisdiction. This
      indemnification provision is in addition to, and not in limitation of, any
      other
      indemnification provision in the Debentures, the Purchase Agreement (as such
      term is defined in the Debentures) or any other agreement, instrument or other
      document executed or delivered in connection herewith or therewith.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    (l) Nothing
      in this Agreement shall be construed to subject Agent or any Secured Party
      to
      liability as a partner in any Debtor or any if its direct or indirect
      subsidiaries that is a partnership or as a member in any Debtor or any of its
      direct or indirect subsidiaries that is a limited liability company, nor shall
      Agent or any Secured Party be deemed to have assumed any obligations under
      any
      partnership agreement or limited liability company agreement, as applicable,
      of
      any such Debtor or any if its direct or indirect subsidiaries or otherwise,
      unless and until any such Secured Party exercises its right to be substituted
      for such Debtor as a partner or member, as applicable, pursuant
      hereto.

    

    (m)
       To
      the
      extent that the grant of the security interest in the Collateral and the
      enforcement of the terms hereof require the consent, approval or action of
      any
      partner or member, as applicable, of any Debtor or any direct or indirect
      subsidiary of any Debtor or compliance with any provisions of any of the
      Organizational Documents, the Debtors hereby grant such consent and approval
      and
      waive any such noncompliance with the terms of said documents.

    

    [SIGNATURE
      PAGES FOLLOW]

    
      
         

      

      
        23

        
          

        

      

       

    

     

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

     

    
      	
              MSTI
                HOLDINGS, INC.

               

            
	
              By:

              
                

              

              Name:

              Title:

            
	 
	
              [INSERT
                NAMES OF SUBSIDIARIES]

               

            
	
              By:

              
                

              

              Name:

              Title:

            

    

     

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

    
      
         

      

      
        24

        
          

        

      

       

    

    [SIGNATURE
      PAGE OF HOLDERS TO MST SA]

     

    Name
      of
      Investing Entity: __________________________

     

    Signature
      of Authorized Signatory of Investing entity:
      _________________________

     

    Name
      of
      Authorized Signatory: _________________________

     

    Title
      of
      Authorized Signatory: __________________________

     

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    SCHEDULE
      A

    

    Principal
      Place of Business of Debtors:

    

    Locations
      Where Collateral is Located or Stored:

    

    SCHEDULE
      B

    

    

    SCHEDULE
      C

    

    

    SCHEDULE
      D

    Legal
      Names and Organizational Identification Numbers

    

    

    SCHEDULE
      E

    Names;
      Mergers and Acquisitions

     

     

    SCHEDULE
      F

    Intellectual
      Property

    

    

    SCHEDULE
      G

    Account
      Debtors

     

     

    SCHEDULE
      H

    Pledged
      Securities

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    ANNEX
      A

    to

    SECURITY

    AGREEMENT

    

    FORM
      OF ADDITIONAL DEBTOR JOINDER

    

    Security
      Agreement dated as of May __, 2007 made by

    MSTI
      Holdings, Inc.

    and
      its
      subsidiaries party thereto from time to time, as Debtors

    to
      and in
      favor of

    the
      Secured Parties identified therein (the “Security
      Agreement”)

    

    Reference
      is made to the Security Agreement as defined above; capitalized terms used
      herein and not otherwise defined herein shall have the meanings given to such
      terms in, or by reference in, the Security Agreement.

    

    The
      undersigned hereby agrees that upon delivery of this Additional Debtor Joinder
      to the Secured Parties referred to above, the undersigned shall (a) be an
      Additional Debtor under the Security Agreement, (b) have all the rights and
      obligations of the Debtors under the Security Agreement as fully and to the
      same
      extent as if the undersigned was an original signatory thereto and (c) be deemed
      to have made the representations and warranties set forth therein as of the
      date
      of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING
      THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE
      SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH
      IN
      THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL
      PROVISIONS SET FORTH THEREIN.

    

    Attached
      hereto are supplemental and/or replacement Schedules to the Security Agreement,
      as applicable.

    

    An
      executed copy of this Joinder shall be delivered to the Secured Parties, and
      the
      Secured Parties may rely on the matters set forth herein on or after the date
      hereof. This Joinder shall not be modified, amended or terminated without the
      prior written consent of the Secured Parties.

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in
      the
      name and on behalf of the undersigned.

    
      	 	 	 	 
	
            	 	 	[Name
              of
              Additional Debtor]
	
            	 	 	
            
	
            	 	 	
              By:

               

              Name:

              Title:

              

              Address:

            

    

     

    Dated:

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ANNEX
      B

    to

    SECURITY

    AGREEMENT

    

    THE
      AGENT

    

    1.
      Appointment. The
      Secured Parties (all capitalized terms used herein and not otherwise defined
      shall have the respective meanings provided in the Security Agreement to which
      this Annex B is attached (the "Agreement")),
      by
      their acceptance of the benefits of the Agreement, hereby designate DKR
      SoundShore Oasis Holding Fund Ltd. to act as their agent (“DKR”
or
      “Agent”)
      as the
      Agent to act as specified herein and in the Agreement. Each Secured Party shall
      be deemed irrevocably to authorize the Agent to take such action on its behalf
      under the provisions of the Agreement and any other Transaction Document (as
      such term is defined in the Debentures) and to exercise such powers and to
      perform such duties hereunder and thereunder as are specifically delegated
      to or
      required of the Agent by the terms hereof and thereof and such other powers
      as
      are reasonably incidental thereto. The Agent may perform any of its duties
      hereunder by or through its agents or employees.

    

    2.
      Nature
      of Duties.
      The
      Agent shall have no duties or responsibilities except those expressly set forth
      in the Agreement. Neither the Agent nor any of its partners, members,
      shareholders, officers, directors, employees or agents shall be liable for
      any
      action taken or omitted by it as such under the Agreement or hereunder or in
      connection herewith or therewith, be responsible for the consequence of any
      oversight or error of judgment or answerable for any loss, unless caused solely
      by its or their gross negligence or willful misconduct as determined by a final
      judgment (not subject to further appeal) of a court of competent jurisdiction.
      The duties of the Agent shall be mechanical and administrative in nature; the
      Agent shall not have by reason of the Agreement or any other Transaction
      Document a fiduciary relationship in respect of any Debtor or any Secured Party;
      and nothing in the Agreement or any other Transaction Document, expressed or
      implied, is intended to or shall be so construed as to impose upon the Agent
      any
      obligations in respect of the Agreement or any other Transaction Document except
      as expressly set forth herein and therein.

    

    3.
      Lack
      of Reliance on the Agent.
      Independently and without reliance upon the Agent, each Secured Party, to the
      extent it deems appropriate, has made and shall continue to make (i) its own
      independent investigation of the financial condition and affairs of the Company
      and its subsidiaries in connection with such Secured Party’s investment in the
      Debtors, the creation and continuance of the Obligations, the transactions
      contemplated by the Transaction Documents, and the taking or not taking of
      any
      action in connection therewith, and (ii) its own appraisal of the
      creditworthiness of the Company and its subsidiaries, and of the value of the
      Collateral from time to time, and the Agent shall have no duty or
      responsibility, either initially or on a continuing basis, to provide any
      Secured Party with any credit, market or other information with respect thereto,
      whether coming into its possession before any Obligations are incurred or at
      any
      time or times thereafter. The Agent shall not be responsible to the Debtors
      or
      any Secured Party for any recitals, statements, information, representations
      or
      warranties herein or in any document, certificate or other writing delivered
      in
      connection herewith, or for the execution, effectiveness, genuineness, validity,
      enforceability, perfection, collectibility, priority or sufficiency of the
      Agreement or any other Transaction Document, or for the financial condition
      of
      the Debtors or the value of any of the Collateral, or be required to make any
      inquiry concerning either the performance or observance of any of the terms,
      provisions or conditions of the Agreement or any other Transaction Document,
      or
      the financial condition of the Debtors, or the value of any of the Collateral,
      or the existence or possible existence of any default or Event of Default under
      the Agreement, the Debentures or any of the other Transaction
      Documents.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    4.
      Certain
      Rights of the Agent.
      The
      Agent shall have the right to take any action with respect to the Collateral,
      on
      behalf of all of the Secured Parties. To the extent practical, the Agent shall
      request instructions from the Secured Parties with respect to any material
      act
      or action (including failure to act) in connection with the Agreement or any
      other Transaction Document, and shall be entitled to act or refrain from acting
      in accordance with the instructions of Secured Parties holding a majority in
      principal amount of Debentures (based on then-outstanding principal amounts
      of
      Debentures at the time of any such determination); if such instructions are
      not
      provided despite the Agent’s request therefor, the Agent shall be entitled to
      refrain from such act or taking such action, and if such action is taken, shall
      be entitled to appropriate indemnification from the Secured Parties in respect
      of actions to be taken by the Agent; and the Agent shall not incur liability
      to
      any person or entity by reason of so refraining. Without limiting the foregoing,
      (a) no Secured Party shall have any right of action whatsoever against the
      Agent
      as a result of the Agent acting or refraining from acting hereunder in
      accordance with the terms of the Agreement or any other Transaction Document,
      and the Debtors shall have no right to question or challenge the authority
      of,
      or the instructions given to, the Agent pursuant to the foregoing and (b) the
      Agent shall not be required to take any action which the Agent believes (i)
      could reasonably be expected to expose it to personal liability or (ii) is
      contrary to this Agreement, the Transaction Documents or applicable
      law.

    

    5.
      Reliance.
      The
      Agent shall be entitled to rely, and shall be fully protected in relying, upon
      any writing, resolution, notice, statement, certificate, telex, teletype or
      telecopier message, cablegram, radiogram, order or other document or telephone
      message signed, sent or made by the proper person or entity, and, with respect
      to all legal matters pertaining to the Agreement and the other Transaction
      Documents and its duties thereunder, upon advice of counsel selected by it
      and
      upon all other matters pertaining to this Agreement and the other Transaction
      Documents and its duties thereunder, upon advice of other experts selected
      by
      it. Anything to the contrary notwithstanding, the Agent shall have no obligation
      whatsoever to any Secured Party to assure that the Collateral exists or is
      owned
      by the Debtors or is cared for, protected or insured or that the liens granted
      pursuant to the Agreement have been properly or sufficiently or lawfully
      created, perfected, or enforced or are entitled to any particular
      priority.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    6.
      Indemnification.
      To the
      extent that the Agent is not reimbursed and indemnified by the Debtors, the
      Secured Parties will jointly and severally reimburse and indemnify the Agent,
      in
      proportion to their initially purchased respective principal amounts of
      Debentures, from and against any and all liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, costs, expenses or disbursements
      of any kind or nature whatsoever which may be imposed on, incurred by or
      asserted against the Agent in performing its duties hereunder or under the
      Agreement or any other Transaction Document, or in any way relating to or
      arising out of the Agreement or any other Transaction Document except for those
      determined by a final judgment (not subject to further appeal) of a court of
      competent jurisdiction to have resulted solely from the Agent's own gross
      negligence or willful misconduct. Prior to taking any action hereunder as Agent,
      the Agent may require each Secured Party to deposit with it sufficient sums
      as
      it determines in good faith is necessary to protect the Agent for costs and
      expenses associated with taking such action.

    

    7.
      Resignation
      by the Agent. 

     

    (a)
      The
      Agent may resign from the performance of all its functions and duties under
      the
      Agreement and the other Transaction Documents at any time by giving 30 days'
      prior written notice (as provided in the Agreement) to the Debtors and the
      Secured Parties. Such resignation shall take effect upon the appointment of
      a
      successor Agent pursuant to clauses (b) and (c) below.

    

    (b)
      Upon
      any such notice of resignation, the Secured Parties, acting by a Majority
      in Interest,
      shall
      appoint a successor Agent hereunder.

    

    (c)
      If a
      successor Agent shall not have been so appointed within said 30-day period,
      the
      Agent shall then appoint a successor Agent who shall serve as Agent until such
      time, if any, as the Secured Parties appoint a successor Agent as provided
      above. If a successor Agent has not been appointed within such 30-day period,
      the Agent may petition any court of competent jurisdiction or may interplead
      the
      Debtors and the Secured Parties in a proceeding for the appointment of a
      successor Agent, and all fees, including, but not limited to, extraordinary
      fees
      associated with the filing of interpleader and expenses associated therewith,
      shall be payable by the Debtors on demand.

    

    8.
      Rights
      with respect to Collateral.
      Each
      Secured Party agrees with all other Secured Parties and the Agent (i) that
      it
      shall not, and shall not attempt to, exercise any rights with respect to its
      security interest in the Collateral, whether pursuant to any other agreement
      or
      otherwise (other than pursuant to this Agreement), or take or institute any
      action against the Agent or any of the other Secured Parties in respect of
      the
      Collateral or its rights hereunder (other than any such action arising from
      the
      breach of this Agreement) and (ii) that such Secured Party has no other rights
      with respect to the Collateral other than as set forth in this Agreement and
      the
      other Transaction Documents. Upon the acceptance of any appointment as Agent
      hereunder by a successor Agent, such successor Agent shall thereupon succeed
      to
      and become vested with all the rights, powers, privileges and duties of the
      retiring Agent and the retiring Agent shall be discharged from its duties and
      obligations under the Agreement.  After any retiring Agent’s resignation or
      removal hereunder as Agent, the provisions of the Agreement including this
      Annex
      B shall inure to its benefit as to any actions taken or omitted to be taken
      by
      it while it was Agent.Palladium
        Capital Advisors, LLC

      230
        Park
        Avenue, Suite 539

      New
        York,
        New York 10169

      

      Tel
        (646)
        485-7297 Fax (646) 390-6328 

      

      Email
        jp@palladiumcapital.com

      

      May
        15,
        2007

      

      

      Frank
        T.
        Matarazzo

      President

      Microwave
        Satellite Technologies, Inc.

      259-263
        Goffle Road

      Hawthorne,
        New Jersey 07506 

      

      Re: Placement
        Agent Agreement

      

      Dear
        Frank:

       

      This
        letter agreement (the “Agreement”) confirms our understanding with respect to
        the engagement by Microwave Satellite Technologies, Inc. (the “Company”) of
        Palladium Capital Advisors, LLC (“PCA”) as placement agent in connection with
        the sale of up to $12.5 million of equity or equity-linked securities on
        a best
        efforts basis through a private placement or similar unregistered transaction
        on
        terms that have been or will be determined by the Company and its advisors
        as
        set forth in the Company’s Confidential Private Placement Memorandum dated May
        7, 2007, as may be revised by the Company from time to time (the “Transaction”)
        to investors (the “Investors”). For purposes hereof, the term “Transaction” also
        includes a convertible loan or other type of investment convertible into
        or
        exchangeable for or otherwise linked to the equity of the Company. The term
        of
        the Agreement (the “Term”) shall be for a period of twelve (12) months from the
        date hereof or until earlier terminated by either party as described below
        in
        Section 7. 

       

      
        	1.	
                Scope.
                  The Company hereby engages PCA to act as placement agent during
                  the Term
                  in connection with the Transaction(s). The goal of the engagement
                  is to
                  raise up to $12.5 million in capital for the Company to be used
                  for growth
                  opportunities and general working capital purposes. PCA shall assist
                  the
                  Company and shall, on behalf of the Company, contact such potential
                  investors as PCA and the Company agree in advance. PCA shall assist
                  the
                  Company in effecting the Transaction(s), and shall use its best
                  efforts to
                  offer and sell the securities in accordance with this Agreement.
                  PCA shall
                  market to those, and only those investors listed in Addendum A
                  hereto, as
                  may be amended by mutual agreement of the parties from time to
                  time, and
                  the Company shall retain the right, in its sole discretion, to
                  accept or
                  reject investors identified by PCA. PCA’s engagement by the Company shall
                  be exclusive solely as to the potential investors included in Addendum
                  A.
                  PCA shall receive written approval from the Company prior to marketing
                  to
                  any other investors who have not been included on Addendum A. It
                  is
                  anticipated that the Company shall also engage its own legal counsel
                  and
                  may require the services of an accounting firm.

              

      

       

      
        	2.	
                Company
                  Information.
                  The Company shall cooperate with PCA in connection with its financial
                  review and analysis of the Company and shall provide PCA with such
                  information concerning the Company as PCA deems necessary or appropriate
                  for such review and analysis (collectively, the “Information”).
                  

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        

          Microwave
            Satellite Technologies, Inc.

          May
            15, 2007

           

        

      

      PCA
        shall
        keep in confidence and shall use only for the purposes of performing its
        obligations pursuant to this Agreement, and shall not, without the Company's
        consent, disclose to any person any non-public Information furnished by the
        Company to PCA except (a) its own counsel and other advisors on a confidential
        basis, (b) to the Investors approved by the Company in accordance with the
        terms
        hereof and (c) to such other persons as such counsel has advised is required
        by
        applicable law, and then only after informing the Company of such legal
        requirement and providing the Company sufficient time to seek a protective
        order
        or otherwise prevent or restrict such disclosure.

       

      All
        Information provided by the Company shall be accurate and complete in all
        material respects and shall not contain any untrue statement of a material
        fact
        or omit to state any material fact necessary to make the statements therein,
        in
        light of the circumstances under which they were made, not false or misleading.
        PCA does not assume responsibility for the accuracy or completeness of the
        Information, including but not limited to any disclosure materials related
        to
        the Transaction(s) except for such information that is provided in writing
        by
        PCA to the Company that is independently produced by PCA and not based on
        Information provided by the Company or information available from generally
        recognized public sources. The Company acknowledges and agrees that PCA will
        rely primarily on the Information and on information available from generally
        recognized public sources in performing its services hereunder, without having
        any obligation to independently verify the same and that PCA has no obligation
        to undertake an independent evaluation, appraisal or physical inspection
        of any
        assets or liabilities of the Company. If at any time prior to the completion
        of
        a Transaction an event occurs which would cause
        the
        Information (as supplemented or amended) to contain an untrue statement of
        a
        material fact or to omit to state a material fact necessary in order to make
        the
        statements therein, in light of the circumstances under which they were made,
        not misleading, the Company will notify PCA immediately of such
        event.

       

      
        	3.	
                Fees.
                  The Company shall pay PCA the following
                  amounts:

              

      

       

      
        	
              	a.	
                Private
                  Placement Fee.
                  PCA shall be paid upon consummation of the Transaction(s) a transaction
                  fee, payable in cash, of 7.0% of the Gross Proceeds (as defined
                  below)
                  from the capital received, directly or indirectly, by the Company
                  solely
                  from investors identified on Addendum A, with respect to a Transaction
                  (the “Transaction Fee”). For purposes hereof, “Gross Proceeds” shall mean
                  the fair market value of all of the consideration (including, without
                  limitation, cash, securities, other assets and contingent payment
                  amounts
                  actually paid, plus debt and liabilities assumed (including, without
                  limitation, indebtedness for borrowed money, pension liabilities
                  and
                  guarantees, license fees, royalty fees, joint venture interests
                  or other
                  property, obligations or services, but excluding payments made
                  to exercise
                  any convertible securities) received by the Company or any of its
                  security
                  holders in connection with any Transaction, directly or indirectly,
                  from
                  the sale or exchange of the Company’s securities issued in a Transaction
                  before the deduction of expenses related to such Transaction, including
                  but not limited to the fee payable to PCA. All cash compensation
                  payable
                  by the Company to PCA hereunder shall be paid by wire transfer.
                  

              

      

       

      
        	 	
                b.

              	
                Placement
                  Warrants.
                  Upon consummation of a Transaction, the Company will issue to PCA
                  five-year stock purchase warrants (the “Placement Agent Warrants”),
                  equivalent to 7% of the shares issued in the Transaction to investors
                  listed
                  in Addendum A,
                  taking into consideration any increase in shares under a ratchet
                  or
                  similar provision pursuant to which the number of shares initially
                  purchased is subsequently increased, with an “exercise price” equal to
                  100% of the exercise price of the warrants issued in the Transaction.
                  The
                  exercise price is defined as the price at which PCA may convert
                  the
                  Placement Agent Warrants into common stock of the Company. In addition
                  to
                  the exercise price, PCA shall pay a “warrant cost” of $0.001 per share
                  (one-tenth of a cent) to the Company upon the issuance of Placement
                  Agent
                  Warrants. 

              

      

       

      
        
          
          

        

        
          Page
            2 of 8

          
            

          

        

        
          
          

        

      

      
        

          Microwave
            Satellite Technologies, Inc.

          May
            15, 2007

           

        

      

      A
        separate Placement Agent Warrant Agreement shall be prepared after consummation
        of the Transaction, and shall take the form of PCA’s standard warrant agreement,
        but shall be acceptable to the Company, which contains the following terms,
        among others: the Placement Agent Warrants are not transferable by the
        warrantholder other than to a limited number of employees and affiliates
        of PCA
        subject to compliance with all applicable securities laws; the Placement
        Agent
        Warrants may be exercised as to all or any lesser number of shares of equity
        securities commencing immediately after the date of the consummation of the
        Transaction; the Placement Agent Warrants may be exercised on a cash-less
        basis
        if not registered within 1 year of the closing of the Transaction and be
        redeemable on the same terms as the Transaction warrants; and the warrant
        agreement will contain provisions for change of control, weighted average
        based
        anti-dilution and customary piggy-back registration rights.

       

      
        	
              	c.	
                In
                  the event consideration is to be paid in whole or in part by installment
                  payments, the portion of PCA’s fee relating thereto shall be calculated
                  and paid when and as such installment payments are
                  made.

              

      

       

      
        	
              	d.	
                Consideration
                  received by the Company paid in whole or in part in the form of
                  securities
                  or other noncash consideration will be valued at its fair market
                  value, as
                  reasonably determined by an independent third party to be mutually
                  agreed
                  upon by the Company and PCA, as of the day prior to the closing
                  of the
                  Transaction (or later date on which a contingent payment is made),
                  provided, however, that if such consideration consists of securities
                  with
                  an existing trading market, such securities will be valued at the
                  average
                  of the last sales price for such securities on the five trading
                  days prior
                  to the date of the closing (or later date on which a contingent
                  payment is
                  made).

              

      

       

      
        	
              	e.	
                The
                  foregoing fees (including the Placement Agent Warrants) are payable
                  for
                  any Transaction that occurs during the Term or within 12 months
                  thereafter
                  with respect to investors included in Addendum A.
                  

              

      

       

      
        	
                4.

              	
                Expenses.
                  In addition to the Transaction Fee and the Warrants, the Company
                  agrees to
                  reimburse PCA for its reasonable expenses incurred in connection
                  with this
                  engagement approved in advance in writing by Company. These expenses
                  generally include travel costs and other customary expenses for
                  this type
                  of transaction. Such expenses shall not exceed $25,000 in the aggregate
                  without the prior written consent of the Company. Legal fees incurred
                  by
                  PCA to prepare, review and finalize this letter agreement will
                  not be
                  reimbursable by the Company.

              

      

       

      
        	
                5.

              	
                Advertisements.
                  Upon a closing of a Transaction, the Company agrees that PCA has
                  the right
                  to place advertisements in financial and other newspapers and journals
                  (whether in print or on the internet), and to publicize on its
                  website and
                  in its marketing materials, at its sole expense, describing its
                  services
                  to the Company hereunder, provided that the Company has the right
                  to
                  review, comment on and approve all such advertisements, website
                  postings
                  and publications prior to publication.

              

      

       

      
        	
                6.

              	
                Indemnification.
                  The Company shall indemnify PCA, its agents and affiliates in accordance
                  with Annex A attached hereto and made a part hereof.
                  

              

      

       

      
        	
                7.

              	
                Termination;
                  Survival.
                  This Agreement may be terminated at any time by either party hereto
                  upon
                  five days prior written notice to the other party, effective upon
                  receipt
                  of such notice to that effect by the other party, or automatically
                  upon
                  the consummation of the Transaction. Upon termination or expiration
                  of
                  this Agreement, the Company shall have no further obligation to
                  PCA other
                  than with respect to fees payable to PCA as provided herein, provided
                  that
                  the provisions of Sections 3 through 9, inclusive, and PCA’s obligation to
                  preserve the confidential information provided to it by Company
                  for an
                  indefinite period, shall survive any such expiration or termination.
                  The
                  indemnification provisions in Annex A shall survive the termination
                  or
                  expiration of this Agreement for the earlier of (i) forty months
                  after
                  such termination or expiration or (ii) the applicable statute of
                  limitations period. 

              

      

       

      
        
          
          

        

        
          Page
            3 of 8

          
            

          

        

        
          
          

        

      

      
        

          Microwave
            Satellite Technologies, Inc.

          May
            15, 2007

           

        

      

      
        	
                8.

              	
                Venue.
                  The Company and PCA agree that any legal suit, action, or proceeding
                  arising out of or relating to this Agreement and/or the transactions
                  contemplated by this Agreement shall be instituted exclusively
                  in the
                  state or federal courts located in New York County, New York. The
                  parties
                  further irrevocably consent to the service of any complaint, summons,
                  notice or other process relating to any such action or proceeding
                  by
                  delivery thereof to such party by hand or by registered or certified
                  mail
                  in the manner prescribed in Section 9(f) hereof. The parties further
                  irrevocably consent that any judgment rendered by such court in
                  the State
                  of New York may be entered in other courts having competent jurisdiction
                  thereof. Without in any way limiting the indemnification provisions
                  in
                  Annex A hereto, the prevailing party shall have the right to recover
                  any
                  costs, including reasonable attorneys’ fees, in the event of any action
                  brought to enforce any of the terms or provisions of this Agreement.
                  The
                  parties agree that service may be made by overnight mail at its
                  address
                  set forth herein in any action to enforce any of the provisions
                  herein.
                  Without in any way limiting the indemnification provision in Annex
                  A
                  hereto, and subject to Section 7 hereof, any action arising under
                  or
                  related to this Agreement for compensation must be brought prior
                  to six
                  months following the later of (i) the closing of the Transaction,
                  (ii)
                  notice of the claim giving rise to such action, or (iii) termination
                  of
                  this Agreement, or such action shall be barred as
                  untimely.

              

      

       

      
        	9.	
                Miscellaneous.

              

      

       

      
        	
              	a.	
                Successors
                  and Assigns.
                  This Agreement shall be binding on and inure to the benefit of
                  each
                  party's agents, affiliates, successors and assigns, but may not
                  be
                  assigned without the prior written consent of the other
                  party.

              

      

       

      
        	
              	b.	
                Governing
                  Law.
                  This Agreement shall be governed by and construed in accordance
                  with the
                  internal laws of the State of New York, without regard to conflicts
                  of
                  laws or principles thereof.

              

      

       

      
        	
              	c.	
                Amendment.
                  This Agreement may not be modified or amended except in writing
                  signed by
                  the parties hereto.

              

      

       

      
        	 	
                d.

              	
                PCA’s
                  Obligations.
                  The obligations of PCA and the Company hereunder are solely corporate
                  obligations, and no officer, director, employee, agent, member,
                  shareholder, or controlling person shall be subject to any personal
                  liability whatsoever to any person, nor will any such claim be
                  asserted by
                  or on behalf of PCA or the Company or any of their respective affiliates.
                  The Company acknowledges and agrees that PCA is acting as an independent
                  contractor under this Agreement and that the engagement of PCA
                  is not
                  intended to confer rights on any person or entity other than the
                  Company
                  and PCA. Nothing contained in this Agreement shall limit or restrict
                  the
                  right of PCA or of any member, employee, agent or representative
                  of PCA,
                  to be a member, shareholder, partner, director, officer, employee,
                  agent
                  or representative of, or to engage in, any other business, whether
                  of a
                  similar nature or not, nor to limit or restrict the right of PCA
                  to render
                  services of any kind to any other corporation, company, firm, individual
                  or association. PCA is a registered broker-dealer in good standing
                  with
                  the SEC under the Securities Act of 1934 and in all jurisdictions
                  in which
                  the nature of its activities or the substance of its actions would
                  require
                  such registration or qualification pursuant to the blue-sky laws
                  of such
                  jurisdiction. PCA will comply with all laws, rules and regulations
                  related
                  to its activities on behalf of Company pursuant to this Agreement.
                  All
                  consents, authorizations, and approvals necessary or appropriate
                  for PCA
                  to undertake its obligations set forth in this Agreement have been
                  obtained by PCA prior to execution of this Agreement and PCA shall
                  immediately use its best efforts to secure investors for the Company
                  as
                  set forth herein.

              

      

       

      
        
          
          

        

        
          Page
            4 of 8

          
            

          

        

        
          
          

        

      

      
        

          Microwave
            Satellite Technologies, Inc.

          May
            15, 2007

           

        

      

      
        	 	
                e.

              	
                Entire
                  Agreement.
                  This Agreement embodies the entire agreement and understanding
                  of the
                  parties hereto with respect to the subject matter hereof and supersedes
                  any and all prior agreements, arrangements and understandings whether
                  written or oral, relating to matters provided herein, including
                  the
                  Placement Agent Agreement, dated May 9, 2007, between the parties
                  hereto.
                  This Agreement is entered into by each of the parties hereto without
                  reliance on any statement, representation, promise, inducement
                  or
                  agreement not expressly contained within this Agreement. Except
                  as set
                  forth in Annex A hereof, nothing in this Agreement is intended
                  to confer
                  upon any other person (including the stockholders, employees or
                  creditors
                  of the Company) any rights or remedies hereunder or by reason hereof.
                  In
                  case any provision of this Agreement shall be invalid, illegal
                  or
                  unenforceable, the validity, legality and enforceability of the
                  remaining
                  provisions of this Agreement shall not in any way be affected or
                  impaired
                  thereby.

              

      

       

      
        	 	
                f.

              	
                Notices.
                  All notices or communications hereunder shall be in writing and
                  mailed,
                  sent by fascimile or delivered to the Company and to PCA at their
                  respective addresses set forth above (with a copy (if to the Company)
                  to
                  Harvey J. Kesner, Esq., Haynes and Boone, LLP, 153 East 53rd
                  Street, New York, NY 10022, facsimile: (212)-884-8233).
                  

              

      

       

      
        	 	
                g.

              	
                Opinions
                  and Advice.
                  PCA is acting as financial advisor and is not an expert on, and
                  cannot
                  render opinions regarding, legal, accounting, regulatory or tax
                  matters.
                  The Company should consult with its other professional advisors
                  concerning
                  these matters before undertaking the proposed Transaction. PCA
                  will not
                  have any rights or obligations in connection with the sale and
                  purchase of
                  the securities contemplated by this Agreement except as expressly
                  provided
                  in this Agreement. In no event will PCA be obligated to purchase
                  the
                  securities for its own account or for the accounts of its customers.
                  

              

      

       

      
        	 	
                h.

              	
                No
                  Waiver.
                  The failure or neglect of the parties hereto to insist, in any
                  one or more
                  instances, upon the strict performance of any of the terms or conditions
                  of this Agreement, or their waiver of strict performance of any
                  of the
                  terms or conditions of this Agreement, shall not be construed as
                  a waiver
                  or relinquishment in the future of such term or condition, but
                  the same
                  shall continue in full force and
                  effect.

              

      

       

      
        	 	
                i.

              	
                Counterparts.
                  This Agreement may be executed in any number of counterparts, each
                  of
                  which shall be deemed to be an original and all of which taken
                  together
                  shall be deemed one and the same
                  instrument.

              

      

       

      
        
          
          

        

        
          Page
            5 of 8

          
            

          

        

         

      

      

        Microwave
          Satellite Technologies, Inc.

        May
          15, 2007

         

      

      If
        the
        foregoing correctly sets forth your understanding and intentions, please
        so
        indicate by returning to us a signed copy of this letter. 

      
        	 	 	 
	 	
                Sincerely,
                  
                  Palladium
                    Capital Advisors, LLC

                

              
	 
 	 
 	 
 
	 	By:  	/s/ Joel
                Padowitz
	 	
                
Joel
                Padowitz, Chief Executive
                Officer

      

      

      APPROVED
        AND ACCEPTED

      

      On
        May
        15, 2007:

      

      MICROWAVE
        SATELLITE TECHNOLOGIES, INC.

       

      
        By:  
          /s/ Frank T. Matarazzo

        
          
            

          

        

        Print
          name: Frank
          T.
          Matarazzo
          Title: President

        

      

       

      [Addendum
        A and Annex A follow]

       

      
        
          
          

        

        
          Page
            6 of 8

          
            

          

        

         

      

      

        Microwave
          Satellite Technologies, Inc.

        May
          15, 2007

         

      

      ANNEX
        A

       

      The
        Company agrees that it will indemnify and hold harmless PCA, its affiliates,
        and
        their respective directors, members, officers, employees, agents,
        representatives and controlling persons (collectively “PCA” and each such entity
        or person being an “Indemnified
        Party”)
        from
        and against any and all losses, claims, damages and liabilities, joint or
        several, as incurred, to which such Indemnified Party may become subject,
        and
        related to or arising out of the engagement of PCA hereunder, the activities
        performed or omitted by or on behalf of an Indemnified Party pursuant to
        this
        Agreement, the Transactions contemplated thereby or PCA’s role in connection
        therewith; provided
        that the
        Company will not be liable to the extent that any loss, claim, damage or
        liability is found in a final judgment (not subject to further appeal) by
        a
        court to have resulted primarily from actions taken or omitted to be taken
        by
        PCA in bad faith or from PCA's gross negligence or willful misconduct in
        performing the services described above. The Company also agrees to reimburse
        any Indemnified Party for all expenses (including reasonable counsel fees
        and
        disbursements) as they are incurred in connection with the investigation
        of,
        preparation for or defense of any pending or threatened claim, or any action,
        investigation, suit or proceeding arising therefrom, whether or not such
        Indemnified Party is a party, whether or not liability resulted and whether
        or
        not such claim, action or proceeding is initiated or brought by or on behalf
        of
        the Company. The Company also agrees that no Indemnified Party shall have
        any
        liability (whether direct or indirect, in contract or tort or otherwise)
        to the
        Company or its security holders or creditors related to or arising out of
        the
        engagement of PCA pursuant to, or the performance by PCA of the services
        contemplated by, this Agreement except to the extent that any loss, claim,
        damage or liability is found in a final judgment (not subject to further
        appeal)
        by a court to have resulted primarily from actions taken or omitted to be
        taken
        by PCA in bad faith or from PCA's gross negligence or willful
        misconduct.

       

      If
        the
        indemnification provided for in this Agreement is for any reason held
        unenforceable, the Company agrees to contribute to the losses, claims, damages
        and liabilities, as incurred by any Indemnified Person, for which such
        indemnification is held unenforceable in such proportion as is appropriate
        to
        reflect the relative benefits to the Company, on the one hand, and PCA, on
        the
        other hand, of the Transaction (whether or not the Transaction is consummated).
        The Company agrees that for the purposes of this paragraph the relative benefits
        to the Company and PCA of the Transaction shall be deemed to be in the same
        proportion that the total value of the Transaction or contemplated Transaction
        by the Company as a result of or in connection with the proposed Transaction
        bears to the fee paid or to be paid to PCA under this Agreement; provided
        that, to
        the extent permitted by applicable law, in no event shall the Indemnified
        Parties be required to contribute an aggregate amount in excess of the aggregate
        fees actually paid to PCA under this Agreement.

       

      Promptly
        after receipt by an Indemnified Party of notice of any claim or the commencement
        of any action, suit or proceeding with respect to which an Indemnified Party
        may
        be entitled to indemnity hereunder, such Indemnified Party will notify the
        Company in writing of such claim or of the commencement of such action or
        proceeding, and the Company will
        assume the defense of such action, suit or proceeding and will employ counsel
        satisfactory to the Indemnified Parties and will pay the fees and disbursements
        of such counsel, as incurred. Notwithstanding the preceding sentence, any
        Indemnified Party will be entitled to employ counsel separate from counsel
        for
        the Company and from any other party in such action if such Indemnified Party
        reasonably determines that a conflict of interest exists which makes
        representation by counsel chosen by the Company not advisable or if such
        Indemnified Party reasonably determines that the Company’s assumption of the
        defense does not adequately represent its interest. In such event, the fees
        and
        disbursements of such separate counsel will be paid by the Company, but in
        no
        event will the Company be liable for the fees and expenses of more than one
        counsel (in addition to local) for all Indemnified Parties in connection
        with
        any one action or separate but similar or related actions in the same
        jurisdiction arising out of the same general claims or circumstances.

       

      
        
          
          

        

        
          Page
            7 of 8

          
            

          

        

        
          
          

        

      

      
        

          Microwave
            Satellite Technologies, Inc.

          May
            15, 2007

           

        
The
        Company agrees that, without PCA’s prior written consent, it will not settle,
        compromise or consent to the entry of any judgment in any pending or threatened
        claim, action or proceeding in respect of which indemnification could be
        sought
        under the indemnification provision of this Agreement (whether or not PCA
        or any
        other Indemnified Party is an actual or potential party to such claim, action
        or
        proceeding), unless such settlement, compromise or consent includes an
        unconditional release of each Indemnified Party from all liability arising
        out
        of such claim, action or proceeding. PCA agrees that, without the Company’s
        prior written consent, it will not settle, compromise or consent to the entry
        of
        any judgment in any pending or threatened claim, action or proceeding in
        respect
        of which indemnification could be sought under the indemnification provision
        of
        this Agreement (whether or not the Company is an actual or potential party
        to
        such claim, action or proceeding), unless such settlement, compromise or
        consent
        includes an unconditional release of each Indemnified Party from all liability
        arising out of such claim, action or proceeding.

       

      In
        the
        event any Indemnified Party is requested or required to appear as a witness
        in
        any action, suit or proceeding brought by or on behalf of or against the
        Company
        or any affiliate or any participant in a Transaction covered hereby in which
        such Indemnified Party is not named as a defendant, the Company agrees to
        reimburse PCA and such Indemnified Party for all reasonable disbursements
        incurred by them in connection with such Indemnified Party’s appearing and
        preparing to appear as a witness, including, without limitation, the reasonable
        fees and disbursements of their legal counsel, and to compensate PCA and
        such
        Indemnified Party in an amount to be mutually agreed upon.

       

      In
        the
        event that any amounts due under these indemnification provisions contained
        in
        this Annex A are not paid within thirty days after written notice of such
        event
        giving rise to the indemnification obligations, such amounts shall bear interest
        at a rate of 1.5% per month or at the highest rate permitted under the laws
        of
        the State of New York, whichever rate is lower.

       

      The
        provisions of Annex A shall be in addition to any liability which the Company
        may otherwise have. These provisions shall be governed by the law of the
        State
        of New York and shall be operative, in full force and in full effect, regardless
        of any termination or expiration of this agreement, subject to Sections 7
        and 8
        of the Agreement.

      
        	 	 	 	 
	
                PALLADIUM
                  CAPITAL

                ADVISORS,
                  LLC

              	 	 	
                MICROWAVE
                  SATELLITE 

                TECHNOLOGIES,
                  INC.

              
	 	 	 	 
	By:  /s/
                Joel Padowitz	 	 	By: 
/s/
                Frank T.Matarazzo
	
                
                  
Joel
                  Padowitz, CEO

              	 	 	
                
                  
Frank
                  T.Matarazzo, President 

              

      

       

      
        
          
          

        

        
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            8 of 8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]