MAGIC LANTERN GROUP  INC
STOCK PLEDGE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>8
<FILENAME>exhibit10_7.htm
<DESCRIPTION>STOCK PLEDGE AGREEMENT
<TEXT>
<html>

<head>
<meta name="GENERATOR" content="Microsoft FrontPage 5.0">
<meta name="ProgId" content="FrontPage.Editor.Document">
<title>EXHIBIT 10.7</title>
</head>

<body>

<u><p ALIGN="CENTER"><font face="Times New Roman">STOCK PLEDGE AGREEMENT</font></p>
</u><p>&nbsp;</p>
<p><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Stock Pledge Agreement (this &quot;Agreement&quot;),
dated as of April 28, 2004, among Laurus Master Fund, Ltd. (the &quot;Pledgee&quot;), Magic Lantern
Group, Inc., a New York corporation (the &quot;Company&quot;), Magicvision Media Inc., an Ontario
Corporation, and Magic Lantern Communications Ltd., a Canadian Corporation, and each of
the other undersigned pledgors (the Company and each such other undersigned pledgor, a &quot;<u>Pledgor</u>&quot;
and collectively, the &quot;<u>Pledgors</u>&quot;).</font></p>
<u><p ALIGN="CENTER"><font face="Times New Roman">BACKGROUND</font></p>
</u><p><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has entered into a Securities
Purchase Agreement dated as of April 28, 2004 (as amended, modified, restated or
supplemented from time to time, the &quot;Purchase Agreement&quot;), pursuant to which the Pledgee
provides or will provide certain financial accommodations to the Company.</font></p>
<p><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to induce the Pledgee to provide or
continue to provide the financial accommodations described in the Purchase Agreement, each
Pledgor has agreed to pledge and grant a security interest in the collateral described
herein to the Pledgee on the terms and conditions set forth herein.</font></p>
<p><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the
premises and for other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto agree as follows:</font></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Defined Terms</u>. All capitalized terms used herein which are not defined shall
have the meanings given to them in the Purchase Agreement.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Pledge and Grant of Security Interest</u>. To secure the full and punctual
payment and performance of (the following clauses (a) and (b), the &quot;Indebtedness&quot;) (a) the
obligations under the Purchase Agreement and (b) all other indebtedness, obligations and
liabilities of each Pledgor to the Pledgee whether now existing or hereafter arising,
direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and
whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or
otherwise (in each case, irrespective of the genuineness, validity, regularity or
enforceability of such Indebtedness, or of any instrument evidencing any of the
Indebtedness or of any collateral therefor or of the existence or extent of such
collateral, and irrespective of the allowability, allowance or disallowance of any or all
of such in any case commenced by or against any Pledgor under Title 11, United States
Code, including, without limitation, obligations or indebtedness of each Pledgor for
post-petition interest, fees, costs and charges that would have accrued or been added to
the Indebtedness but for the commencement of such case), each Pledgor hereby pledges,
assigns, hypothecates, transfers and grants a security interest to Pledgee in all of the
following (the &quot;Collateral&quot;):</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the shares of
stock set forth on <u>Schedule A</u> annexed hereto and expressly made a part hereof
(together with any additional shares of stock or other equity interests acquired by any
Pledgor, the &quot;Pledged Stock&quot;), the certificates representing the Pledged Stock and all
dividends, cash, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of the
Pledged Stock;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all additional
shares of stock of any issuer (each, an &quot;Issuer&quot;) of the Pledged Stock from time to time
acquired by any Pledgor in any manner, including, without limitation, stock dividends or a
distribution in connection with any increase or reduction of capital, reclassification,
merger, consolidation, sale of assets, combination of shares, stock split, spin-off or
split-off (which shares shall be deemed to be part of the Collateral), and the
certificates representing such additional shares, and all dividends, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such shares; and</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all options
and rights, whether as an addition to, in substitution of or in exchange for any shares of
any Pledged Stock and all dividends, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in exchange
for any or all such options and rights.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Delivery of Collateral</u>. All certificates representing or evidencing the
Pledged Stock shall be delivered to and held by or on behalf of Pledgee pursuant hereto
and shall be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to Pledgee. Each Pledgor hereby authorizes the
Issuer upon demand by the Pledgee to deliver any certificates, instruments or other
distributions issued in connection with the Collateral directly to the Pledgee, in each
case to be held by the Pledgee, subject to the terms hereof. Upon an Event of Default (as
defined below) under the Note that has occurred and is continuing beyond any applicable
grace period, the Pledgee shall have the right, during such time in its discretion and
without notice to the Pledgor, to transfer to or to register in the name of the Pledgee or
any of its nominees any or all of the Pledged Stock. In addition, the Pledgee shall have
the right at such time to exchange certificates or instruments representing or evidencing
Pledged Stock for certificates or instruments of smaller or larger denominations.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Representations and Warranties of each Pledgor</u>. Each Pledgor jointly and
severally represents and warrants to the Pledgee (which representations and warranties
shall be deemed to continue to be made until all of the Indebtedness has been paid in full
and the Purchase Agreement and each agreement and instrument entered into in connection
therewith has been irrevocably terminated) that:</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the execution,
delivery and performance by each Pledgor of this Agreement and the pledge of the
Collateral hereunder do not and will not result in any violation of any agreement,
indenture, instrument, license, judgment, decree, order, law, statute, ordinance or other
governmental rule or regulation applicable to any Pledgor;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;this Agreement
constitutes the legal, valid, and binding obligation of each Pledgor enforceable against
each Pledgor in accordance with its terms;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all
Pledged Stock owned by each Pledgor is set forth on Schedule A hereto and (ii) each
Pledgor is the direct and beneficial owner of each share of the Pledged Stock;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all of the
shares of the Pledged Stock have been duly authorized, validly issued and are fully paid
and nonassessable;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no consent or
approval of any person, corporation, governmental body, regulatory authority or other
entity, is or will be necessary for (i) the execution, delivery and performance of this
Agreement, (ii) the exercise by the Pledgee of any rights with respect to the Collateral
or (iii) the pledge and assignment of, and the grant of a security interest in, the
Collateral hereunder;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;there are no
pending or, to the best of Pledgor's knowledge, threatened actions or proceedings before
any court, judicial body, administrative agency or arbitrator which may materially
adversely affect the Collateral;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each Pledgor
has the requisite power and authority to enter into this Agreement and to pledge and
assign the Collateral to the Pledgee in accordance with the terms of this Agreement.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each Pledgor
owns each item of the Collateral and, except for the pledge and security interest granted
to Pledgee hereunder, the Collateral shall be, immediately following the closing of the
transactions contemplated by the Purchase Agreement, free and clear of any other security
interest, pledge, claim, lien, charge, hypothecation, assignment, offset or encumbrance
whatsoever (collectively, &quot;Liens&quot;).</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;there are no
restrictions on transfer of the Pledged Stock contained in the certificate of
incorporation or by-laws (or equivalent organizational documents) of the Issuer or
otherwise which have not otherwise been enforceably and legally waived by the necessary
parties.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;none of the
Pledged Stock has been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance or
transfer may be subject.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the pledge and
assignment of the Collateral and the grant of a security interest under this Agreement
vest in the Pledgee all rights of each Pledgor in the Collateral as contemplated by this
Agreement.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Pledged
Stock constitutes one hundred percent (100%) of the issued and outstanding shares of
capital stock of each Issuer.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Covenants</u>. Each Pledgor jointly and severally covenants that, until the
Indebtedness shall be satisfied in full and the Purchase Agreement and each agreement and
instrument entered into in connection therewith is irrevocably terminated:</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Pledgor
will sell, assign, transfer, convey, or otherwise dispose of its rights in or to the
Collateral or any interest therein; nor will any Pledgor create, incur or permit to exist
any Lien whatsoever with respect to any of the Collateral or the proceeds thereof other
than that created hereby. </font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Pledgor
will, at its expense, defend Pledgee's right, title and security interest in and to the
Collateral against the claims of any other party.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Pledgor
shall at any time, and from time to time, upon the written request of Pledgee, execute and
deliver such further documents and do such further acts and things as Pledgee may
reasonably request in order to effect the purposes of this Agreement including, but
without limitation, delivering to Pledgee upon the occurrence of an Event of Default
irrevocable proxies in respect of the Collateral in form satisfactory to Pledgee. Until
receipt thereof, upon an Event of Default that has occurred and is continuing beyond any
applicable grace period, this Agreement shall constitute Pledgor's proxy to Pledgee or its
nominee to vote all shares of Collateral then registered in each Pledgor's name.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Pledgor
will consent to or approve the issuance of (i) any additional shares of any class of
capital stock or other equity interests of the Issuer; or (ii) any securities convertible
either voluntarily by the holder thereof or automatically upon the occurrence or
nonoccurrence of any event or condition into, or any securities exchangeable for, any such
shares, unless, in either case, such shares are pledged as Collateral pursuant to this
Agreement.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Voting Rights and
Dividends</u>. In addition to the Pledgee's rights and remedies set forth in Section 8
hereof, in case an Event of Default shall have occurred and be continuing, beyond any
applicable cure period, the Pledgee shall (i) be entitled to vote the Collateral, (ii) be
entitled to give consents, waivers and ratifications in respect of the Collateral (each
Pledgor hereby irrevocably constituting and appointing the Pledgee, with full power of
substitution, the proxy and attorney-in-fact of each Pledgor for such purposes) and (iii)
be entitled to collect and receive for its own use cash dividends paid on the Collateral.
No Pledgor shall be permitted to exercise or refrain from exercising any voting rights or
other powers if, in the reasonable judgment of the Pledgee, such action would have a
material adverse effect on the value of the Collateral or any part thereof; and, <u>
provided</u>, <u>further</u>, that each Pledgor shall give at least five (5) days' written
notice of the manner in which such Pledgor intends to exercise, or the reasons for
refraining from exercising, any voting rights or other powers other than with respect to
any election of directors and voting with respect to any incidental matters. Following the
occurrence of an Event of Default, all dividends and all other distributions in respect of
any of the Collateral, shall be delivered to the Pledgee to hold as Collateral and shall,
if received by any Pledgor, be received in trust for the benefit of the Pledgee, be
segregated from the other property or funds of any other Pledgor, and be forthwith
delivered to the Pledgee as Collateral in the same form as so received (with any necessary
endorsement)</font><b><font face="Times New Roman">.</font></p>
</b><p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Event of Default</u>.
An Event of Default shall be deemed to have occurred and may be declared by the Pledgee
upon the happening of any of the following events:</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An &quot;Event of
Default&quot; under the Purchase Agreement or any agreement or note related to the Purchase
Agreement shall have occurred and be continuing beyond any applicable cure period;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any Pledgor
shall default in the performance of any of its obligations under any agreement between any
Pledgor and Pledgee, including, without limitation, this Agreement, and such default shall
not be cured for a period of fifteen (15) business days after the occurrence thereof;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
representation or warranty of any Pledgor made herein, in the Purchase Agreement or in any
agreement, statement or certificate given in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false or misleading in any material respect and
shall not be cured for a period of fifteen (15) business days after the occurrence
thereof; </font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any portion of
the Collateral is subjected to levy of execution, attachment, distraint or other judicial
process; or any portion of the Collateral is the subject of a claim (other than by the
Pledgee) of a Lien or other right or interest in or to the Collateral and such levy or
claim shall not be cured, disputed or stayed within a period of fifteen (15) business days
after the occurrence thereof; or</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any Pledgor
shall (i) apply for, consent to, or suffer to exist the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or other fiduciary of itself or
of all or a substantial part of its property, (ii) make a general assignment for the
benefit of creditors, (iii) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or
insolvent, (v) file a petition seeking to take advantage of any other law providing for
the relief of debtors, (vi) acquiesce to, or fail to have dismissed, within sixty (60)
days, any petition filed against it in any involuntary case under such bankruptcy laws, or
(vii) take any action for the purpose of effecting any of the foregoing.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Remedies</u>. In case
an Event of Default shall have occurred and be declared by the Pledgee, the Pledgee may:
</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfer any
or all of the Collateral into its name, or into the name of its nominee or nominees;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise all
corporate rights with respect to the Collateral including, without limitation, all rights
of conversion, exchange, subscription or any other rights, privileges or options
pertaining to any shares of the Collateral as if it were the absolute owner thereof,
including, but without limitation, the right to exchange, at its discretion, any or all of
the Collateral upon the merger, consolidation, reorganization, recapitalization or other
readjustment of the Issuer thereof, or upon the exercise by the Issuer of any right,
privilege or option pertaining to any of the Collateral, and, in connection therewith, to
deposit and deliver any and all of the Collateral with any committee, depository, transfer
agent, registrar or other designated agent upon such terms and conditions as it may
determine, all without liability except to account for property actually received by it;
and</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to any
requirement of applicable law, sell, assign and deliver the whole or, from time to time,
any part of the Collateral at the time held by the Pledgee, at any private sale or at
public auction, with or without demand, advertisement or notice of the time or place of
sale or adjournment thereof or otherwise (all of which are hereby waived, except such
notice as is required by applicable law and cannot be waived), for cash or credit or for
other property for immediate or future delivery, and for such price or prices and on such
terms as the Pledgee in its sole discretion may determine, or as may be required by
applicable law.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Pledgor hereby waives and
releases any and all right or equity of redemption, whether before or after sale
hereunder. At any such sale, unless prohibited by applicable law, the Pledgee may bid for
and purchase the whole or any part of the Collateral so sold free from any such right or
equity of redemption. All moneys received by the Pledgee hereunder whether upon sale of
the Collateral or any part thereof or otherwise shall be held by the Pledgee and applied
by it as provided in Section 10 hereof. No failure or delay on the part of the Pledgee in
exercising any rights hereunder shall operate as a waiver of any such rights nor shall any
single or partial exercise of any such rights preclude any other or future exercise
thereof or the exercise of any other rights hereunder. The Pledgee shall have no duty as
to the collection or protection of the Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in accordance
with the requirements of Section 10 hereof. The Pledgee may exercise its rights with
respect to property held hereunder without resort to other security for or sources of
reimbursement for the Indebtedness. In addition to the foregoing, Pledgee shall have all
of the rights, remedies and privileges of a secured party under the Uniform Commercial
Code of New York regardless of the jurisdiction in which enforcement hereof is sought.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Private Sale</u>.
Each Pledgor recognizes that the Pledgee may be unable to effect (or to do so only after
delay which would adversely affect the value that might be realized from the Collateral) a
public sale of all or part of the Collateral by reason of certain prohibitions contained
in the Securities Act, and may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things, to
acquire such Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor agrees that any such private sale may be at
prices and on terms less favorable to the seller than if sold at public sales and that
such private sales shall be deemed to have been made in a commercially reasonable manner.
Each Pledgor agrees that the Pledgee has no obligation to delay sale of any Collateral for
the period of time necessary to permit the Issuer to register the Collateral for public
sale under the Securities Act.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Proceeds of Sale</u>. The proceeds of any collection, recovery, receipt,
appropriation, realization or sale of the Collateral shall be applied by the Pledgee as
follows:</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First, to the
payment of all costs, reasonable expenses and charges of the Pledgee and to the
reimbursement of the Pledgee for the prior payment of such costs, reasonable expenses and
charges incurred in connection with the care and safekeeping of the Collateral (including,
without limitation, the reasonable expenses of any sale or any other disposition of any of
the Collateral), the expenses of any taking, attorneys' fees and reasonable expenses,
court costs, any other fees or expenses incurred or expenditures or advances made by
Pledgee in the protection, enforcement or exercise of its rights, powers or remedies
hereunder;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Second, to the
payment of the Indebtedness, in whole or in part, in such order as the Pledgee may elect,
whether or not such Indebtedness is then due;</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Third, to such
persons, firms, corporations or other entities as required by applicable law including,
without limitation, Section 9-504(1)(c) of the UCC; and</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fourth, to the
extent of any surplus to the Pledgors or as a court of competent jurisdiction may direct.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the
proceeds of any collection, recovery, receipt, appropriation, realization or sale are
insufficient to satisfy the Indebtedness, each Pledgor shall be jointly and severally
liable for the deficiency plus the costs and fees of any attorneys employed by Pledgee to
collect such deficiency.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver of Marshaling</u>.
Each Pledgor hereby waives any right to compel any marshaling of any of the Collateral.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>No Waiver</u>. Any
and all of the Pledgee's rights with respect to the Liens granted under this Agreement
shall continue unimpaired, and Pledgor shall be and remain obligated in accordance with
the terms hereof, notwithstanding (a) the bankruptcy, insolvency or reorganization of any
Pledgor, (b) the release or substitution of any item of the Collateral at any time, or of
any rights or interests therein, or (c) any delay, extension of time, renewal, compromise
or other indulgence granted by the Pledgee in reference to any of the Indebtedness. Each
Pledgor hereby waives all notice of any such delay, extension, release, substitution,
renewal, compromise or other indulgence, and hereby consents to be bound hereby as fully
and effectively as if such Pledgor had expressly agreed thereto in advance. No delay or
extension of time by the Pledgee in exercising any power of sale, option or other right or
remedy hereunder, and no failure by the Pledgee to give notice or make demand, shall
constitute a waiver thereof, or limit, impair or prejudice the Pledgee's right to take any
action against any Pledgor or to exercise any other power of sale, option or any other
right or remedy.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Expenses</u>. The
Collateral shall secure, and each Pledgor shall pay to Pledgee on demand, from time to
time, all reasonable costs and expenses, (including but not limited to, reasonable
attorneys' fees and costs, taxes, and all transfer, recording, filing and other charges)
of, or incidental to, the custody, care, transfer, administration of the Collateral or any
other collateral, or in any way relating to the enforcement, protection or preservation of
the rights or remedies of the Pledgee under this Agreement or with respect to any of the
Indebtedness.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The <u>Pledgee
Appointed Attorney-In-Fact and Performance by the Pledgee</u>. Upon the occurrence of an
Event of Default, each Pledgor hereby irrevocably constitutes and appoints the Pledgee as
such Pledgor's true and lawful attorney-in-fact, with full power of substitution, to
execute, acknowledge and deliver any instruments and to do in such Pledgor's name, place
and stead, all such acts, things and deeds for and on behalf of and in the name of such
Pledgor, which such Pledgor could or might do or which the Pledgee may deem necessary,
desirable or convenient to accomplish the purposes of this Agreement, including, without
limitation, to execute such instruments of assignment or transfer or orders and to
register, convey or otherwise transfer title to the Collateral into the Pledgee's name.
Each Pledgor hereby ratifies and confirms all that said attorney-in-fact may so do and
hereby declares this power of attorney to be coupled with an interest and irrevocable. If
any Pledgor fails to perform any agreement herein contained, the Pledgee may itself
perform or cause performance thereof, and any costs and expenses of the Pledgee incurred
in connection therewith shall be paid by the Pledgors as provided in Section 10 hereof.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Waivers</u>.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EACH PARTY
HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OTHER AGREEMENT
EXECUTED OR DELIVERED BY THEM IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY,
AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL
BY JURY. </font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Recapture</u>.
Notwithstanding anything to the contrary in this Agreement, if the Pledgee receives any
payment or payments on account of the Indebtedness, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under the United
States Bankruptcy Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or affecting the enforcement of
creditors' rights generally, common law or equitable doctrine, then to the extent of any
sum not finally retained by the Pledgee, each Pledgor's obligations to the Pledgee shall
be reinstated and this Agreement shall remain in full force and effect (or be reinstated)
until payment shall have been made to Pledgee, which payment shall be due on demand.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Captions</u>. All
captions in this Agreement are included herein for convenience of reference only and shall
not constitute part of this Agreement for any other purpose.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Miscellaneous</u>.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement
constitutes the entire and final agreement among the parties with respect to the subject
matter hereof and may not be changed, terminated or otherwise varied except by a writing
duly executed by the parties hereto.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No waiver of
any term or condition of this Agreement, whether by delay, omission or otherwise, shall be
effective unless in writing and signed by the party sought to be charged, and then such
waiver shall be effective only in the specific instance and for the purpose for which
given.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event
that any provision of this Agreement or the application thereof to any Pledgor or any
circumstance in any jurisdiction governing this Agreement shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation, or rule of law, such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform to such statute, regulation or rule of law, and the remainder
of this Agreement and the application of any such invalid or unenforceable provision to
parties, jurisdictions, or circumstances other than to whom or to which it is held invalid
or unenforceable shall not be affected thereby, nor shall same affect the validity or
enforceability of any other provision of this Agreement.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement
shall be binding upon each Pledgor, and each Pledgor's successors and assigns, and shall
inure to the benefit of the Pledgee and its successors and assigns.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice or
other communication required or permitted pursuant to this Agreement shall be given in
accordance with the Purchase Agreement. </font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement
shall be governed by and construed and enforced in all respects in accordance with the
laws of the State of New York applied to contracts to be performed wholly within the State
of New York.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EACH PLEDGOR
EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF EACH COURT OF COMPETENT JURISDICTION
LOCATED IN THE STATE OF NEW YORK FOR ALL PURPOSES IN CONNECTION WITH THIS AGREEMENT. ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY
ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN A
STATE COURT LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. EACH PLEDGOR FURTHER
CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT
LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED
COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY
BE SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED
A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE
PERMISSIBLE UNDER THE RULES OF SAID COURTS. EACH PLEDGOR WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE
BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON <u>FORUM</u> <u>NON</u> <u>CONVENIENS</u>.</font></p>
<p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY"><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement
may be executed in one or more counterparts, each of which shall be deemed an original and
all of which when taken together shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed an original
signature hereto.</font></p>
<b><p ALIGN="CENTER"><font face="Times New Roman">[Remainder of Page Intentionally Left
Blank]</font></p>
</b><p>&nbsp;</p>
<p><font face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have duly
executed this Agreement as of the day and year first written above.</font></p>
<table CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="743" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td VALIGN="TOP" width="629">
    &nbsp;</td>
    <td VALIGN="TOP" width="829" colspan="2">
    <font face="Times New Roman">MAGIC LANTERN GROUP, INC.</font><p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="629">&nbsp;</td>
    <td VALIGN="TOP" width="73">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="629">&nbsp;</td>
    <td VALIGN="TOP" width="73">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="629">
    &nbsp;</td>
    <td VALIGN="TOP" width="73">
    <font face="Times New Roman">By:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="629">
    &nbsp;</td>
    <td VALIGN="TOP" width="73">
    <font face="Times New Roman">Name:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="629">
    &nbsp;</td>
    <td VALIGN="TOP" width="73">
    <font face="Times New Roman">Title:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="629">&nbsp;</td>
    <td VALIGN="TOP" width="73">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="743" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td VALIGN="TOP" width="642">
    &nbsp;</td>
    <td VALIGN="TOP" width="816" colspan="2">
    <font face="Times New Roman">MAGICVISION MEDIA INC.</font><p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="642">&nbsp;</td>
    <td VALIGN="TOP" width="60">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="642">&nbsp;</td>
    <td VALIGN="TOP" width="60">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="642">
    &nbsp;</td>
    <td VALIGN="TOP" width="60">
    <font face="Times New Roman">By:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="642">
    &nbsp;</td>
    <td VALIGN="TOP" width="60">
    <font face="Times New Roman">Name:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="642">
    &nbsp;</td>
    <td VALIGN="TOP" width="60">
    <font face="Times New Roman">Title:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="642">&nbsp;</td>
    <td VALIGN="TOP" width="60">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
</table>
<p>&nbsp;</p>
<table CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="743" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td VALIGN="TOP" width="655">
    &nbsp;</td>
    <td VALIGN="TOP" width="803" colspan="2">
    <font face="Times New Roman">MAGIC LANTERN COMMUNICATIONS
                            LTD.</font><p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="655">&nbsp;</td>
    <td VALIGN="TOP" width="47">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="655">&nbsp;</td>
    <td VALIGN="TOP" width="47">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="655">
    &nbsp;</td>
    <td VALIGN="TOP" width="47">
    <font face="Times New Roman">By:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="655">
    &nbsp;</td>
    <td VALIGN="TOP" width="47">
    <font face="Times New Roman">Name:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="655">
    &nbsp;</td>
    <td VALIGN="TOP" width="47">
    <font face="Times New Roman">Title:</font></td>
    <td VALIGN="TOP" width="756" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="655">&nbsp;</td>
    <td VALIGN="TOP" width="47">&nbsp;</td>
    <td VALIGN="TOP" width="756">&nbsp;</td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="743" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td VALIGN="TOP" width="598">
    &nbsp;</td>
    <td VALIGN="TOP" width="860" colspan="2">
    <font face="Times New Roman">LAURUS MASTER FUND, LTD.</font><p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="598">&nbsp;</td>
    <td VALIGN="TOP" width="71">&nbsp;</td>
    <td VALIGN="TOP" width="789">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="598">&nbsp;</td>
    <td VALIGN="TOP" width="71">&nbsp;</td>
    <td VALIGN="TOP" width="789">&nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="598">
    &nbsp;</td>
    <td VALIGN="TOP" width="71">
    <font face="Times New Roman">By:</font></td>
    <td VALIGN="TOP" width="789" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="598">
    &nbsp;</td>
    <td VALIGN="TOP" width="71">
    <font face="Times New Roman">Name:</font></td>
    <td VALIGN="TOP" width="789" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="598">
    &nbsp;</td>
    <td VALIGN="TOP" width="71">
    <font face="Times New Roman">Title:</font></td>
    <td VALIGN="TOP" width="789" style="border-bottom-style: solid; border-bottom-width: 1">
    &nbsp;</td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="598">&nbsp;</td>
    <td VALIGN="TOP" width="71">&nbsp;</td>
    <td VALIGN="TOP" width="789">&nbsp;</td>
  </tr>
</table>
<dir>
  <dir>
    <dir>
      <dir>
        <dir>
          <dir>
            <dir>
              <dir>
                <dir>
                  <dir>
                    <dir>
                      <dir>
                        <p>&nbsp;</p>
                      </dir>
                    </dir>
                  </dir>
                </dir>
              </dir>
            </dir>
          </dir>
        </dir>
      </dir>
    </dir>
  </dir>
</dir>
<u><p ALIGN="CENTER"><font face="Times New Roman">SCHEDULE A to the Stock Pledge Agreement</font></p>
</u><p ALIGN="JUSTIFY"></p>
<p ALIGN="JUSTIFY">&nbsp;</p>
<u><p ALIGN="CENTER"><font face="Times New Roman">Pledged Stock</font></p>
</u>
<table BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="722" ALIGN="left" HSPACE="12" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="28%" VALIGN="MIDDLE"><font SIZE="2" face="Times New Roman"><b>
    <p ALIGN="CENTER">Pledgor</b></font></td>
    <td WIDTH="27%" VALIGN="MIDDLE"><font SIZE="2" face="Times New Roman"><b>
    <p ALIGN="CENTER">Issuer</b></font></td>
    <td WIDTH="15%" VALIGN="MIDDLE"><font SIZE="2" face="Times New Roman"><b>
    <p ALIGN="CENTER">Class of Stock</b></font></td>
    <td WIDTH="11%" VALIGN="MIDDLE"><font SIZE="2" face="Times New Roman"><b>
    <p ALIGN="CENTER">Stock Certificate Number</b></font></td>
    <td WIDTH="8%" VALIGN="MIDDLE"><font SIZE="2" face="Times New Roman"><b>
    <p ALIGN="CENTER">Par Value</b></font></td>
    <td WIDTH="11%" VALIGN="MIDDLE"><font SIZE="2" face="Times New Roman"><b>
    <p ALIGN="CENTER">Number of Shares</b></font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">
    <font face="Times New Roman">Magic Lantern Group, Inc.</font></p>
    <p ALIGN="CENTER"></font></td>
    <td WIDTH="27%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Magicvision Media Inc.</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Common (Voting)</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    C10</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">No
    par</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    7,411</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Magicvision Media Inc.</font></td>
    <td WIDTH="27%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">
    <font face="Times New Roman">Magic Lantern Communications Ltd.</font></p>
    <p ALIGN="CENTER"></font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">
    <font face="Times New Roman">Common</font></p>
    <p ALIGN="CENTER"><font face="Times New Roman">(Voting)</font></font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    C1</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">No
    par</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    33,464</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Magicvision Media Inc.</font></td>
    <td WIDTH="27%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">
    <font face="Times New Roman">Magic Lantern Communications Ltd.</font></p>
    <p ALIGN="CENTER"></font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">
    <font face="Times New Roman">Class A </font></p>
    <p ALIGN="CENTER"><font face="Times New Roman">(Non-Voting)</font></font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    SA-3</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">No
    par</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    1,000</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">
    <font face="Times New Roman">Magic Lantern Communications Ltd.</font></p>
    <p ALIGN="CENTER"></font></td>
    <td WIDTH="27%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Tutorbuddy Inc.</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Common (Voting)</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    C1</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">No
    par</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    120</font></td>
  </tr>
  <tr>
    <td WIDTH="28%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">
    <font face="Times New Roman">Magic Lantern Communications Ltd.</font></p>
    <p ALIGN="CENTER"></font></td>
    <td WIDTH="27%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Synoptic Technologies Inc.</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    Common (Voting)</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    10</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">No
    par</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2" face="Times New Roman"><p ALIGN="CENTER">
    75</font></td>
  </tr>
</table>
<p ALIGN="CENTER"></p>
<p ALIGN="CENTER">&nbsp;</p>

</body>

</html>

</TEXT>
</DOCUMENT>
