Notarial Deed and Security Agreement among Smithfield Fiduciary LLC, Iroquois Master Fund Ltd., and Other Secured Parties

Summary

This notarial deed certifies an agreement among Smithfield Fiduciary LLC (acting as Collateral Agent and Secured Party), Iroquois Master Fund Ltd., and several other investment entities and individuals, all represented by legal counsel. The agreement establishes the parties' roles as secured creditors, likely in connection with a financing or security arrangement. The document is officially certified by a Budapest notary, confirming the parties' identities and authority to act. Key obligations and terms are not detailed in the excerpt, but the agreement formalizes the secured status of the parties involved.

EX-4.12 13 v045780_ex4-12.txt [GRAPHIC OMITTED] BUDAPEST, II. KER. KAPAS U. 31., V. EM. 43. POSTACIM: 1277 BUDAPEST, PF. 86. TEL: 201-5083, 212-4265, FAX: 212-4275 - -------------------------------------------------------------------------------- English Licence No. IM/IGKOD/2002/KOZJ/2382------------------------------------- Deed Number:[***].-------------------------------------------------------------- ----------------------------CERTIFIED OFFICE COPY------------------------------ --------------------------------NOTARIAL DEED---------------------------------- Before me doktor Zaborszky Eszter Notary Substitute, acting for doktor Judit Bokai, Notary of the Second District of the City of Budapest, hereby certify that the following parties appeared before me in the Notary's office 1027 Budapest, Kapas utca 31. V/43. at the date below: - -------------------------------------------------------------------------------- 1. SMITHFIELD FIDUCIARY LLC whose registered office is at the offices of Maples and Calder, Attorneys-at-Law, Ugland House P.O. Box 309, George Town, Grand Cayman, Cayman Islands, British West Indies, address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., registered under No. 94284, represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY" and the ,,COLLATERAL AGENT") and - -------------------------------------------------------------------------------- 2. IROQUOIS MASTER FUND LTD. having its registered seat at 641 Lexington Avenue, 26th Floor New York, New York 10022 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 3. ROCKMORE INVESTMENT MASTER FUND, LTD. having its registered seat at 650 Fifth Avenue 24th Floor New York, New York 10019 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 4. CRANSHIRE CAPITAL, L.P. having its registered seat at 666 Dundee Road, Suite 1901, Northbrook, IL 60062 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., F.E.I.N number ###-###-####, represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 5. GRACE BROTHERS, LTD. having its registered seat at 1560 Sherman Ave Evanston, Illinois 60201 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 6. RAQ, LLC having its registered seat at 787 7th Avenue 48th Floor New York, New York 10019 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 7. PARAGON CAPITAL, L.P. having its registered seat at 110 East 59th St New York, New York 10022 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 8. NITE CAPITAL, L.P. having its registered seat at 100 E Cook Avenue #201 Libertyville, Illinois 60048 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 9. BRISTOL INVESTMENT FUND, LTD. having its registered seat at 10990 Wilshire Blvd #1410 Los Angeles, California 90024 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 10. GLOBAL HUNTER HOLDINGS, L.P. having its registered seat at 1808 Point de Vue Suite 1000 Ft. Mound, Texas 75022 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 11. HUDSON BAY FUND L.P. having its registered seat at 120 Broadway 40th Floor New York, New York 10271 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 12. RONALD HART having its permanent address at 4821 Crestwood Drive Little Rock, Arkansas 72207 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., place and date of birth: Syracuse, New York, U.S.A., March 23, 1942, mother's maiden name: Colvin, represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 13. KUEKENHOF CAPITAL MANAGEMENT, LLC having its registered seat at 22 Church St Suite #5 Ramsey, New Jersey 07446 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 2 14. SIMON HALEGOUA having its permanent address at 1 Crescent Road Bellterre, New York 11777 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., place and date of birth: New York City, New York, U.S.A., June 6, 1953, mother's maiden name: Colvin, represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and - -------------------------------------------------------------------------------- 15. ISAAK HALEGOUA having its permanent address at 25 Bell Circle Bellterre, New York 11777 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., place and date of birth: Athens, Greece, March 5, 1948, mother's maiden name: Stakouakis, represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and 16. AUDREY HALEGOUA having its permanent address at 25 Bell Circle Bellterre, New York 11777 U.S.A., address for delivery/"kezbesitesi cim": Gardos, Furedi, Mosonyi, Tomori Ugyvedi Iroda, 1056 Budapest, Vaci utca 81., place and date of birth: New York City, New York, U.S.A. February 21, 1948, mother's maiden name: Hockhemier, represented by DR. PALFI ENDRE ISTVAN lawyer (mother's maiden name: Dr. Mosonyi Zsofia) who has evidenced his identity by his identity card no.: 571010 AA, and who has evidenced his signing authority by power of attorney, (the ,,SECURED PARTY") and 17. KRAFT ELEKTRONIKAI ZARTKORUEN MUKODO RESZVENYTARSASAG, having its registered seat at H-1112 Budapest, Koerberki ut 36., registered by the Metropolitan Court of Budapest acting as Court of Registration under registration No. 01-10-044503 H-2537 , represented by Tibor Kovacs (mother's maiden name: [***]) who has evidenced her identity by her identity card no.: [***], and who has evidenced her signing authority by firm extract, (the ,,CHARGOR"). Since [***] client does not understand the English language, I requested to act as transaction witnesses the following persons: 1/ [***] (born on [***], mother's maiden name [***]) as witness and 2/ [***] (born on [***], mother's maiden name [***]) as witness. The parties hereto have requested that I prepare in the form of a notarial deed the present MORTGAGE AGREEMENT W I T N E S S E T H: - - - - - - - - - - WHEREAS, pursuant to a Securities Purchase Agreement ("SECURITIES PURCHASE AGREEMENT") dated on or around the date hereof, by and among the American United Global, Inc., with headquarters located at 108 Village Square #327, Somers, New York 10589, U.S.A. whose U.S. Federal Tax Identification Number is ###-###-#### (the "BORROWER"), the Secured Parties referred to above and Alpha Capital Aktiengesellschaft with headquarters at c/o Alpha Capital, AG 160 Central Park South #2701 New York, New York 10019, and certain ancillary agreements (collectively the "TRANSACTION DOCUMENTS") the Secured Parties severally, but not jointly, agrees to grant a loan facility ("LOAN") in a total principal amount equal to USD 5,700,000 to the Borrower which shall be evidenced by the issuance by the Borrower to such Secured Parties of the Borrower's senior secured convertible notes ("NOTES"). 3 WHEREAS, the Borrower is an affiliate of the Mortgagor and the Mortgagor acknowledges that it will derive substantial benefit from the making of an inter-company loan to be made from the Loan under the Securities Purchase Agreement to finance the purchasing of equipment for the Mortgagor. WHEREAS, in order to induce the Secured Parties to enter into the transactions contemplated by the Securities Purchase Agreement and the Notes, the Mortgagor has agreed to create Mortgages on the Real Property (each as defined below). 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. (a) As used in this Agreement, the following terms have the meanings specified below: "BUSINESS DAYS" means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed. "CIVIL CODE" means Act IV of 1959 of the Civil Code of the Republic of Hungary, as amended. "LOAN AMOUNT" means the amount set opposite the name of each Secured Party in Schedule A attached hereto. "OBLIGATIONS" means, with respect to each Secured Party, the due and punctual payment of (i) the Loan Amount owing to such Secured Party, having a maturity date of June 12, 2009 as may be extended at the option of the respective Secured Party in accordance with the provisions of Section 1 (Maturity) of the Notes and (ii) interest on overdue amounts at a rate of 18% (eighteen percent) per annum from the date such amount was due, whether at maturity, by acceleration or otherwise, until the same is paid in full, and (iii) all other monetary obligations, including without limitation in respect of fees, commissions, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Borrower to such Secured Party under any of the Transaction Documents. "PERMITTED LIENS" means the following: (i) Any third party rights existing on the date hereof and specifically disclosed in Schedule B attached hereto as inseparable part of this Agreement ("EXISTING LIENS"); 4 (ii) Liens in favor of the Secured Parties and/or the Collateral Agent pursuant to the Transaction Documents; and (iii) Liens arising by mandatory provisions of applicable laws. "REAL PROPERTY" means the proprietary portion of 7/10 of the parcel of real property located in Ivanc, Hungary registered in the Land Register kept by the Land Office of District Kormend (In Hungarian: "KORMENDI KORZETI FOLDHIVATAL") (the "LAND OFFICE") under topographical lot number 215/7. "SALE VALUE" means, with respect to the Real Property, the value thereof (expressed in U.S. Dollars) as proposed by the Collateral Agent and agreed to by the Mortgagor, provided that in the event that the Mortgagor shall not have agreed to any such proposal within 5 days thereof, the maximum value (expressed in U.S. Dollars) determined by any independent valuation expert of recognized standing selected by the Collateral Agent using any reasonable method as would, in the reasonable judgment of such expert, allow for either of the following to occur, in accordance with the other terms and conditions of this Agreement, within no more than three months of the date such expert sends notice of the amount of such valuation to each of the Collateral Agent and the Mortgagor: (i) the sale or other disposition thereof, or (ii) the entry by the Collateral Agent into an agreement with a reputable and financially sound third party for the purchase thereof by such third party within no more than three months of the date of such agreement. (b) Terms used in this Agreement but not otherwise defined in this Agreement that are defined in the Transaction Documents shall have the respective meanings given such terms in the Transaction Documents as in effect on the date hereof and, by signing this Agreement, the Mortgagor acknowledges having received and reviewed a copy of each Transaction Document. 2. Grant of Mortgages. As an inducement for each Secured Party to enter into the transactions contemplated by the Transaction Documents and to secure the complete and timely payment, performance and discharge in full, as the case may be, of the Obligations owing to such Secured Party, each Secured Party and the Mortgagor hereby create in favor of such Secured Party in accordance with Section 262 (1) of the Civil Code a several mortgage (each a "MORTGAGE" and collectively the "MORTGAGES") on the Real Property. 3. Registration of Mortgages. Each Mortgage shall be created by its registration in the Land Register kept by the Land Office. The Mortgagor shall, immediately after the Mortgages shall have been registered, record in its accounting system and indicate in all of its financial reports the fact that the Mortgages are created over the Real Property. 4. Ranking; Application for Registrations. Each Mortgage shall rank pari passu with each other Mortgage. The Mortgagor and the Secured Parties hereby jointly request the Land Office to register each Mortgage in the Land Register in favor of the respective Secured Party over the Real Property to secure the Obligations owing to such Secured Party and simultaneously record a note that each Mortgage shall rank pari passu with each other Mortgage. The Mortgagor and the Secured Parties hereby authorize the Collateral Agent to apply for the registration of the Mortgages in the Land Register. The Collateral Agent shall immediately notify the Mortgagor and the Secured Parties of submitting the application by sending a copy thereof sealed by the Land Office to certify the delivery of such application. Each Secured Party hereby appoint and authorize Gardos, Furedi, Mosonyi, Tomori Law Firm having its registered office at Vaci utca 81., H-1056 Budapest, Hungary as its agent for service of delivery in any proceedings before the Land Office in accordance with Section 26 (9) of the Act CXLI of 1997 on the Land Register. 5 5. Representations, Warranties, Covenants and Agreements of the Mortgagor. The Mortgagor represents and warrants to, and covenants and agrees with, each of the Secured Parties as follows: (a) The Mortgagor has the requisite corporate power and authority to enter into this Agreement and to otherwise carry out its obligations thereunder. The execution, delivery and performance by the Mortgagor of this Agreement and the registration of the Mortgages in accordance with this Agreement have been duly authorized by all necessary action on the part of the Mortgagor and no further action is required by the Mortgagor. (b) Except for the Real Property, there is no real property owned by the Mortgagor. (c) The Mortgagor is the sole owner of the Real Property, free and clear of any Liens (including any right recorded in the Land Register to establish a Lien having the priority rank of such record) other than Permitted Liens, and is fully authorized to grant the Mortgages under this Agreement. No registration of any Lien has been or shall be, before submitting the application for registration of the Mortgages, requested (or authorized to do so) by the Mortgagor covering the Real Property. So long as this Agreement shall be in effect, the Mortgagor shall not file (or authorize the filing of) a request for registration of any Lien covering the Real Property (other than request for registration of the Mortgages) without the prior consent of the Collateral Agent. (d) The Mortgagor has no knowledge of any claim that any Mortgage or the Mortgagor's use of the Real Property violates the rights of any third party. There has been no adverse decision of which the Mortgagor is aware as to the Mortgagor's exclusive right to use the Real Property, and, to the knowledge of the Mortgagor there is no proceeding involving said rights pending or threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority. (e) Upon the performance of the registrations in the Land Register, as set forth in Section 4 above, this Agreement creates in favor of each Secured Party a valid mortgage on the Real Property, securing the payment and satisfaction in full of the Obligations owing to such Secured Party, which is prior to all other Liens now existing or hereafter created or arising on the Real Property. Except for the registration of the Mortgages in the Land Register, no authorization or approval of or filing with or notice to any governmental authority or regulatory body is required either: (i) for the grant by the Mortgagor of, or the effectiveness of, the Mortgages granted hereby or for the execution, delivery and performance of this Agreement by the Mortgagor or (ii) for the perfection of or exercise by the Collateral Agent and the Secured Parties of their rights and remedies hereunder. (f) The execution, delivery and performance of this Agreement does not conflict with or cause a breach or default, or an event that with or without the passage of time or notice, shall constitute a breach or default, under any agreement to which the Mortgagor is a party or by which the Mortgagor is bound. No consent (including, without limitation, from stock holders or creditors of the Mortgagor) is required for the Mortgagor to enter into and perform its obligations hereunder, other than consents already obtained by the Mortgagor. 6 (g) The Mortgagor shall at all times maintain the Mortgages provided for hereunder as valid and perfected first priority Mortgages on the Real Property in favor of each Secured Party and insure that such Mortgages remain senior to all existing and hereafter created Liens. The Mortgagor shall safeguard and protect the Real Property. The Mortgagor hereby agrees to defend the same against any and all persons. (h) Unless by operation of mandatory provisions of laws, the Mortgagor will not allow the Real Property to be forfeited or dedicated to the public without the prior written consent of the Collateral Agent. The Mortgagor will not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose the Real Property without the prior written consent of the Collateral Agent. (i) The Mortgagor shall keep the Real Property adequately insured in favor of the Collateral Agent (for the benefit of the Secured Parties) against all risks which is customary for Hungarian companies carrying out similar activities to insure. (j) The Mortgagor shall keep and preserve the Real Property in good condition, unless where the failure to comply with the foregoing provisions does not result in an adverse effect on the value of the Real Property or on the Mortgage therein. (k) The Mortgagor shall, within ten (10) days of obtaining knowledge thereof, advise the Collateral Agent, in sufficient detail, of the occurrence of any event which would have a material adverse effect on the value of the Real Property or on any Mortgage therein. (l) The Mortgagor shall promptly execute and deliver to the Secured Parties such further deeds, mortgages, assignments, security agreements or other instruments, documents, certificates and assurances and take such further action as necessary to perfect or protect any Mortgage in the Real Property. (m) The Mortgagor shall permit the Collateral Agent and its representatives and agents upon prior written notice by the Collateral Agent (acting upon instruction of any Secured Party) to inspect the Real Property at any time during normal business hours, and to make copies of records pertaining thereto as may be reasonably requested by the Collateral Agent (acting upon instruction of any Secured Party) from time to time, all of which shall be at the sole cost and expense of (i) if an Event of Default shall have occurred and be continuing at the inception of such inspection, the Mortgagor, or (ii) in all other events, the Secured Party initiating such inspection. 7 (n) The Mortgagor shall promptly notify the Collateral Agent in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against the Real Property and of any other information received by the Mortgagor that reasonably would be expected to have an adverse affect on the value of the Real Property, any Mortgage or the rights and remedies of the Secured Parties hereunder. (o) The Mortgagor shall not use or permit the Real Property to be used unlawfully or in violation of any provision of this Agreement or any applicable statute, regulation or ordinance or any policy of insurance covering the Real Property where violation is reasonably likely to have a material adverse effect on the Secured Parties' rights in the Real Property or the Collateral Agent's or any Secured Party's ability to foreclose on the Real Property. (p) The Mortgagor shall not cause or suffer to exist any Lien in or to the Real Property other than Permitted Liens without the prior written consent of the Collateral Agent. (q) The Mortgagor shall notify the Collateral Agent of any change in the Mortgagor's name, identity, chief place of business, chief executive office or residence within thirty (30) days of such change. 6. Defaults. Each of the following events shall be an "EVENT OF DEFAULT": (a) the failure by the Borrower to perform any of the Obligations; (b) the occurrence of an Event of Default under and as defined in any Note; and (c) the Mortgagor breaches any representation, warranty, covenant or obligation under this Agreement, except in the case of a breach of a covenant or obligation which is curable, only if such breach continues for a period of at least ten (10) consecutive Business Days. 7. Rights and Remedies Upon Default. Upon the occurrence and during the continuation of any Event of Default and the delivery to the Borrower of an Event of Default Redemption Notice (as defined in each Note), the Collateral Agent (on behalf of, and for the benefit of each Secured Party) shall become entitled to seek satisfaction from the Real Property on the third Business Day following the date of delivery of the Event of Default Redemption Notice and the Collateral Agent shall have the right to exercise all of the remedies conferred hereunder, under the Notes, and the Collateral Agent shall have all the rights and remedies of a secured creditor under the Civil Code. Without limitation, the Collateral Agent shall have the following rights and powers: (a) The Collateral Agent shall have the right to seek satisfaction of all of the Obligations owing to the Secured Parties from the Real Property via court execution, as provided under Section 255 (1) of the Civil Code. (b) The Collateral Agent shall have the right to take possession of the Real Property in accordance with Sections 257 and 258 (1) of the Civil Code. The Collateral Agent shall have the right to assign, sell, or otherwise dispose of and deliver the Real Property (or designate a person who officially deals with granting loans against security and/or organizing public sales to do so) as provided under Sections 257 and 258 of the Civil Code, at public or private sale or otherwise, for a purchase price not less than the Sale Value, in U.S. Dollars (or an equivalent amount in any other currency selected by the Collateral Agent), for cash or on credit or for future delivery, in such parcel or parcels and at such time or times within a maximum period of 15 months from the date of the Event of Default Redemption Notice giving rise thereto, and at such place or places, and upon such terms and conditions as the Collateral Agent may deem commercially reasonable and as are in compliance with any applicable laws. Upon each such sale, assignment or other transfer of the Real Property, the Collateral Agent and/or any Secured Party may purchase the Real Property being sold, free from and discharged of all trusts, claims, right of redemption and equities of the Mortgagor, which are hereby waived and released. 8 (c) The Collateral Agent may, in order to implement the assignment, sale or other disposition of the Real Property pursuant to this Section, execute and deliver (pursuant to the authority provided for in Section 11 (Power of Attorney; Further Assurances) on behalf of the Mortgagor one or more instruments of transfer of the Real Property in form suitable for filing, recording or registration in any jurisdictions as the Secured Parties may determine advisable. 8. Applications of Proceeds; Expenses. (a) The proceeds of any such sale or other disposition of the Real Property hereunder shall be applied first, to the reasonable 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 that Real Property, to the reasonable attorneys' fees and expenses incurred by the Collateral Agent and/or Secured Parties in enforcing its rights hereunder, and then to satisfaction of the Obligations, and to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the Mortgagor any surplus proceeds. If, upon the sale or other disposition of the Real Property, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled, the Mortgagor, in its capacity of mortgagor, will not be liable for the deficiency. To the extent permitted by applicable law, the Mortgagor waives all claims, damages and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the Real Property, unless due to the gross negligence or willful misconduct of the Collateral Agent and/or Secured Parties. (b) The Mortgagor agrees to pay all out-of-pocket fees, costs and expenses reasonably incurred in connection with the registration of the Mortgages in the Land Register, including, without limitation, any expenses of any searches reasonably required by the Collateral Agent. The Mortgagor shall also pay all other claims and charges which in the reasonable opinion of the Collateral Agent and/or Secured Parties would reasonably be expected to prejudice, imperil or otherwise affect the Real Property or any Mortgage. Without prejudice to the provisions of Section 5(m) above, the Mortgagor will also, upon demand, pay to the Collateral Agent and/or Secured Parties 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 Collateral Agent and/or Secured Parties may incur in connection with the inspection or sale of, or other realization upon, any of the Real Property. 9 9. Responsibility for Real Property. The Mortgagor shall assume all liabilities and responsibility in connection with the Real Property and provide without delay, upon occurrence of any material adverse change in the value of the Real Property, adequate security of the Obligations. 10. Term of Mortgage. Each Mortgage shall terminate on the date on which all payments under the respective Note have been made in full or otherwise converted pursuant to the terms thereof and the respective Obligations have been paid or discharged in full. Upon such termination, the respective Secured Party, at the request of the Mortgagor to be delivered to the Collateral Agent, will release any consent required for cancellation of the Mortgage from the Land Register. The Mortgagor shall be responsible for filing the application for cancellation with the Land Register. 11. Power of Attorney; Further Assurances. (a) The Mortgagor hereby authorizes the Collateral Agent (acting on behalf of the Secured Parties), and its respective officers, agents, successors or assigns with full power of substitution, as the Mortgagor's true and lawful attorney-in-fact, with power, in the name of the Mortgagor, to, after the occurrence and during the continuance of an Event of Default, (i) pay or discharge taxes, Liens, Mortgages or other encumbrances at any time levied or placed on or threatened against the Real Property; (ii) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Real Property; and (iii) generally, to do, at the option of the Collateral Agent (acting on behalf of the Secured Parties) or, as the case may be, and at the Mortgagor's expense, at any time, or from time to time, all acts and things which the Collateral Agent, as the case may be, deems necessary to protect, preserve and realize upon the Real Property and the Mortgages granted thereon, in order to effect the intent of this Agreement and the Notes, all as fully and effectually as the Mortgagor might or could do; and the Mortgagor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. (b) On a continuing basis, the Mortgagor will make, execute, acknowledge, deliver, file and record, as the case may be, with the Land Register all such instruments, and take all such action as necessary to perfect any Mortgage granted hereunder and otherwise to carry out the provisions of this Agreement, or for assuring and confirming to the Secured Parties the grant or perfection of a first priority Mortgage in the Real Property, subject only to Permitted Liens. (c) The Mortgagor hereby agrees to co-operate in good faith with each Secured Party and the Collateral Agent, from time to time in filing with the Land Register, any amendment of the data recorded in the Land Register with respect the Mortgage. 12. Collateral Agent. (a) The Collateral Agent shall give prompt notice to each Secured Party of each notice or request required or permitted to be given to the Collateral Agent by the Mortgagor pursuant to the terms of this Agreement. The Collateral Agent will distribute to each Secured Party each instrument and other agreement received for its account and copies of all other communications received by the Collateral Agent from the Mortgagor for distribution to the Secured Parties by the Collateral Agent in accordance with the terms of this Agreement. Notwithstanding anything herein contained to the contrary, all notices to and communications with the Mortgagor under this Agreement shall be affected by the Secured Party through the Collateral Agent. 10 (b) All Cash Proceeds received by the Collateral Agent in respect of any sale of or collection from, or other realization upon, all or any part of the Collateral may, in the discretion of the Collateral Agent, be held by the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Collateral Agent) in whole or in part by the Collateral Agent against, all or any part of the Obligations in such order as the Collateral Agent shall elect, consistent with the provisions of the Securities Purchase Agreement. 13. Notices. (a) Any and all notices or other communications or deliveries hereunder (including without limitation any Event of Default Redemption Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 12:00 p.m. (New York City time) on a Business Day, or (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Business Day or later than 12:00 p.m. (New York City time) on any Business Day, or (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given, in each case if delivered to the following addresses: If to the Borrower (this address being set forth solely for the purposes of evidencing the date of deemed receipt by the Borrower of an Event of Default Redemption Notice in the application of Section 7 (Rights and Remedies Upon Default) hereunder): American United Global, Inc. 108 Village Square #327 Somers, New York 10589 USA Telephone: 425 ###-###-#### Facsimile: 631 ###-###-#### Attention: Robert Rubin, CEO With a copy to: Sichenzia Ross Friedman Ference LLP 1065 Avenue of the Americas, 21st Floor New York, New York 10018 USA Telephone: 212 ###-###-#### Facsimile: 212 ###-###-#### Attention: Richard A. Friedman, Esq. 11 If to the Mortgagor: Kraft Elektronikai Zartkoruen Mukodo Reszvenytarsasag, H-1112 Budapest Koerberki ut 36. Hungary Mailing address: H-1506 Budapest, P. O. Box: 89, Hungary Telephone: +36 1 ###-###-#### Facsimile: +36 1 ###-###-#### With a copy to: Sichenzia Ross Friedman Ference LLP 1065 Avenue of the Americas, 21st Floor New York, New York 10018 USA Telephone: 212 ###-###-#### Facsimile: 212 ###-###-#### Attention: Richard A. Friedman, Esq. If to Smithfield Fiduciary LLC as Secured Party: Smithfield Fiduciary LLC c/o Highbridge Capital Management, LLC 9 West 57th Street, 27th Floor New York, New York 10019 USA Facsimile: (212) 751-0755 Attn: Ari J. Storch/Adam J. Chill 12 If to Iroquois Master Fund Ltd. as Secured Party: Iroquois Master Fund Ltd. 641 Lexington Avenue 26th Floor New York, New York 10022 USA Facsimile: (212) 207-3452 Telephone: (212) 974-3070 Attention: Joshua Silverman If to Rockmore Investment Master Fund, Ltd. as Secured Party: Rockmore Investment Master Fund, Ltd. 650 Fifth Avenue 24th Floor New York, New York 10019 USA Facsimile: (212) 258-2315 Telephone: (212) 803-5261 Attention: Bruce Bernstein If to Cranshire Capital, L.P. as Secured Party: Cranshire Capital, L.P. 666 Dundee Road Suite 1901 Northbrook, Illinois 60062 USA Facsimile: (847) 784-9031 Telephone: (847) 562-9030 Attention: Mitch Kopin If to Grace Brothers, Ltd. as Secured Party: Grace Brothers, Ltd. 1560 Sherman Ave Evanston, Illinois 60201 USA Facsimile: (847) 733-0339 Telephone: (847) 733-1230 Attention: Bradford T. Whitmore If to RAQ LLC as Secured Party: RAQ LLC 787 7th Avenue 48th Floor New York, New York 10019 USA Facsimile: (212) 554-4490 Telephone: (212) 554-4300 Attention: J. Jay Lobell Steve Rocamboli 13 If to Paragon Capital, L.P. as Secured Party: Paragon Capital, L.P. 110 East 59th St New York, New York 10022 USA Facsimile: (212) 894-0279 Telephone: (212) 894-0275 Attention: Alan P. Donenfeld If to Nite Capital, L.P. as Secured Party: Nite Capital, L.P. 100 E Cook Avenue #201 Libertyville, Illinois 60048 USA Facsimile: (847) 968-2648 Telephone: (847) 968-2655 Attention: Keith Goodman If to Bristol Investment Fund, Ltd. as Secured Party: c/o Bristol Investment Fund, Ltd. 10990 Wilshire Blvd #1410 Los Angeles, California 90024 USA Facsimile: (310) 696-0334 Telephone: (310) 696-0333 Attention: Paul Kessler Amy Wong If to Global Hunter Holdings, L.P. as Secured Party: Global Hunter Holdings, L.P. 1808 Point de Vue Suite 1000 Ft. Mound, Texas 75022 USA Facsimile: (504) 525-5607 Telephone: (504) 527-0333 Attention: Daniel O. Conwill If to Hudson Bay Fund L.P. as Secured Party: Hudson Bay Fund L.P. 120 Broadway 40th Floor New York, New York 10271 USA Facsimile: (212) 571-1279 Telephone: (212) 571-1244 Attention: Yoav Roth 14 If to Ronald Hart as Secured Party: Ronald Hart 4821 Crestwood Drive Little Rock, Arkansas 72207 USA Telephone: (501) 265-0063 If to Kuekenhof Capital Management, LLC as Secured Party: Kuekenhof Capital Management, LLC 22 Church St Suite #5 Ramsey, New Jersey 07446 USA Facsimile: (201) 995-1954 Telephone: (201) 995-1950 Attention: Michael C. James If to Simon Halegoua as Secured Party: Simon Halegoua 1 Crescent Road Belle Teere, New York 11777 USA Telephone: (631) 928-9225 If to Isaak Halegoua as Secured Party: Isaak Halegoua 1 Crescent Road Belle Teere, New York 11777 USA Telephone: (631) 928-9225 If to Audrey Halegoua as Secured Party: Audrey Halegoua 1 Crescent Road Belle Teere, New York 11777 USA Telephone: (631) 928-9225 If to Smithfield Fiduciary LLC as the Collateral Agent: Smithfield Fiduciary LLC c/o Highbridge Capital Management, LLC 9 West 57th Street, 27th Floor New York, New York 10019 USA Facsimile: (212) 751-0755 Attn: Ari J. Storch/Adam J. Chill 15 (b) All notices, communications and deliveries hereunder to or from the Mortgagor must be sent through the Collateral Agent. Any and all notices or other communications or deliveries made by the Mortgagor through the Collateral Agent shall be deemed to be properly sent by the Mortgagor to each Secured Party. 14. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Real Property or by the guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Secured Parties shall have the right, in their 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. 15. Miscellaneous. (a) No course of dealing between the Mortgagor and the Collateral Agent or any Secured Party, nor any failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any Secured Party, any right, power or privilege hereunder, under the Notes or under this Agreement 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. (b) All of the rights and remedies of the Collateral Agent and the Secured Parties with respect to the Real Property, whether established hereby, by the Notes or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently. (c) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and is intended to supersede all prior negotiations, understandings and agreements with respect thereto. Except as specifically set forth in this Agreement, no provision of this Agreement may be modified or amended except by a written agreement signed by the parties hereto. (d) In the event that any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction for any reason, unless such provision is narrowed by judicial construction, this Agreement shall, as to such jurisdiction, be construed as if such invalid, prohibited or unenforceable provision had been more narrowly drawn so as not to be invalid, prohibited or unenforceable. If, notwithstanding the foregoing, any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction, such provision, as to such jurisdiction, shall be ineffective to the extent of such invalidity, prohibition or unenforceability without invalidating the remaining portion of such provision or the other provisions of this Agreement and without affecting the validity or enforceability of such provision or the other provisions of this Agreement in any other jurisdiction. (e) This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors and assigns. 16 (f) 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 of this Agreement. (g) This Agreement shall be construed in accordance with the laws of the Republic of Hungary. The parties hereto irrevocably agree that the Hungarian courts shall have jurisdiction to settle any dispute, suit, action or proceedings which may arise out of or in connection with this Agreement. (h) 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. -----------------------******************************----------------------- An unlimited number of official copies of the present deed may be issued to the Parties. --------------------------------------------------------------- I informed the clients that a notarial deed is enforceable if it contains--- a) that the parties assume an obligation and due consideration therefor, or a unilateral obligation,------------------------------------------------------ b) name of the obligee and the obligor,------------------------------------- c) subject, quantity (amount) and title of the obligation,------------------ d) term and way of fulfilment.---------------------------------------------- Should the obligation be bound to a condition or point of time, it is necessary for the enforceability that the occurence of the condition or point of time is certified by a notarial deed.------------------------------------ I, the undersigned notary substitute, have prepared this document on basis of the draft put at my disposal, have read it in front of the Parties, have explained to them its content and legal consequences, in particular with regard to its enforceability. The Parties have declared that the content of this document complies in all respects with their contractual intent and thus this document has been signed by the Parties, the interpreter and the transaction witnesses and by me.-------------------------------------------- Executed at the City of Budapest, on the 12th (twelve) day of June, 2006. (Two Thousand Six) -------------------------------------------------------- Dr. Palfi Endre m.p. Smithfield Fiduciary LLC, Dr. Palfi Endre m.p. Iroquois Master Fund Ltd., Dr. Palfi Endre m.p. Rockmore Investment Master Fund, Ltd., Dr. Palfi Endre m.p. Cranshire Capital L.P., Dr. Palfi Endre m.p. Grace Brothers, Ltd., Dr. Palfi Endre m.p. RAQ, LLC, Dr. Palfi Endre m.p. Paragon Capital, L.P., Palfi Endre m.p. Nite Capital, L.P., Palfi Endre m.p. Bristol Investment Fund, Ltd., Palfi Endre m.p. Global Hunter Holdings, L.P., Palfi Endre m.p. Hudson Bay Fund L.P., Palfi Endre m.p. Ronald Hart, Palfi Endre m.p. Kuekenhof Capital Management, LLC, Palfi Endre m.p. Simon Halegoua, Palfi Endre m.p. Isaak Halegoua, Palfi Endre m.p. Audrey Halegoua, Tibor Kovacs m.p. Kraft Elektronikai Zartkoruen Mukodo Reszvenytarsasag. [***] m.p. interpreter and witness, [***] m.p. witness, [***]m.p. Notary.-------------- It is hereby certified that the present Certified Office Copy being true and faithful copy of the original of the notarial deed deposited with the archives of Dr. Bokai Judit under registration number above.---------------- Executed at the City of Budapest, on the 12th (twelve) day of June, 2006. (Two Thousand Six) -------------------------------------------------------- [***] Notary 17 SCHEDULE A LOAN AMOUNTS - -------------------------------------------------------------------------------- NAME OF THE SECURED PARTIES LOAN AMOUNTS - -------------------------------------------------------------------------------- Smithfield Fiduciary LLC USD 1,000,000 - -------------------------------------------------------------------------------- Iroquois Master Fund, Ltd USD 600,000 - -------------------------------------------------------------------------------- Rockmore Investment Master Fund, Ltd. USD 500,000 - -------------------------------------------------------------------------------- Cranshire Capital, L.P. USD 500,000 - -------------------------------------------------------------------------------- Grace Brothers, Ltd. USD 1,250,000 - -------------------------------------------------------------------------------- RAQ, LLC USD 250,000 - -------------------------------------------------------------------------------- Paragon Capital L.P. USD 350,000 - -------------------------------------------------------------------------------- Nite Capital, L.P. USD 250,000 - -------------------------------------------------------------------------------- Bristol Investment Fund, Ltd. USD 250,000 - -------------------------------------------------------------------------------- Global Hunter Holdings, L.P. USD 250,000 - -------------------------------------------------------------------------------- Hudson Bay Fund L.P. USD 250,000 - -------------------------------------------------------------------------------- Ronald Hart USD 50,000 - -------------------------------------------------------------------------------- Kuekenhof Capital Management, LLC USD 100,000 - -------------------------------------------------------------------------------- Simon Halegoua USD 50,000 - -------------------------------------------------------------------------------- Isaak Halegoua USD 25,000 - -------------------------------------------------------------------------------- Audrey Halegoua USD 25,000 - -------------------------------------------------------------------------------- AGGREGATE LOAN AMOUNTS USD 5,700,000 - -------------------------------------------------------------------------------- 2 SCHEDULE B EXISTING LIENS TYPE OF RESOLUTION NO. LEGAL TITLE OF NAME OF THE HOLDER OF RECORD IN THE EXISTING LIEN THE LIEN LAND REGISTER - -------------------------------------------------------------------------------- Resolution on 34206/2000.09.22. Right to way on land The owner of the real registration (in Hungarian: property under "utszolgalmi jog") topographical lot number 215/8 - -------------------------------------------------------------------------------- Resolution on 34206/2000.09.22. Right to erect water The Municipality of registration pipe on land and Ivanc prohibition with (address: H-9931 Ivanc, respect to a Kosuth Lajos utca 119.) protected area (In Hungarian: "vizvezetesi jog es vedosavra vonatkozo tilalom") - -------------------------------------------------------------------------------- 3