SECURITY AGREEMENT

SECURITY AGREEMENT (this “Security Agreement” ) dated as of March 20, 2009 by PERF­GO GREEN, INC., a Delaware corporation (the “Debtor” ) in favor of STAR FUNDING, INC., a New York corporation (the “Creditor” ).

A.           Concurrently herewith, the Debtor is executing and delivering a Factoring Agreement between Debtor and the Creditor (as it may be amended, restated, modified or supplemented from time to time, the “Factoring Agreement” ) and a Supply Agreement between Debtor and the Creditor (as it may be amended, restated, modified or supplemented from time to time, the “Supply Agreement” ), in each case dated as of the date hereof.

B.           Concurrently herewith, PERF Go-Green Holdings, Inc. (the “Guarantor” ) is executing and delivering a Guarantee of even date herewith in favor of the Creditor (as it may be amended, restated, modified or supplemented from time to time, the “Guarantee” ), pursuant to which the Guarantor is unconditionally and irrevocably guaranteeing all of the obligations of Debtor to the Creditor, including without limitation alt the obligations of Debtor under the Factoring Agreement and Supply Agreement.

C.           The Creditor will not consider entering into the Factoring Agreement and purchasing receivables thereunder, nor extending financial accommodations to Debtor under the Supply Agreement, unless, among other things, the Debtor execute and deliver this Security Agreement and grant to the Creditor a security interest in the Collateral specified herein.

ACCORDINGLY, in consideration of the premises, and in order to induce the Creditor to execute and deliver the Factoring Agreement and Supply Agreement, and to extend credit, purchase accounts receivable and provide other financial accommodations thereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor hereby agrees with the Creditor as follows:

1.            Defined Terms . (a) Capitalized terms that are defined in the Factoring Agreement or Supply Agreement and are not otherwise defined herein have the respective meanings given to them in said documents and, in addition, the following terms have the meanings set forth in this Section 1. Capitalized terms used but not defined in this Agreement that are defined in Article 9 of the UCC shall have the respective meanings given such terms in Article 9 of the UCC as in effect as of the date hereof.

“Accounts” means all accounts receivable, book debts, notes, drafts, instruments, documents, acceptances and other forms of obligations now owned or hereafter received or acquired by or belonging or owing to the Debtor (including under any trade names, styles or divisions thereof), whether arising from (a) the sale, lease, licensing, assignment or other disposition of goods by the Debtor, (b) services rendered or to be rendered by the Debtor, (c) a policy of insurance issued or to be issued by the Debtor, (d) a secondary obligation incurred or to be incurred by the Debtor, or (e) any other transaction, whether or not the same involves any of the foregoing and all of the Debtor’s rights in, to and under all purchase orders now owned or hereafter received or acquired by it for goods or services, and all of the Debtor’s rights to any goods represented by any of the foregoing (including returned or repossessed goods and unpaid seller’s rights) and all moneys due or to become due to the Debtor under all contracts for the sale of goods and/or the performance of services by the Debtor (whether or not yet earned by performance) or in connection with any other transaction, now in existence or hereafter arising, including the right to receive the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any person or entity with respect to any of the foregoing. The term “Accounts” shall in any event include, without limitation, all “accounts” as such term is defined in the UCC, whether now existing or hereafter created and whether now owned or hereafter acquired by the Debtor.

“Collateral” has the meaning specified in Section 2.

“Commodity Account” means any “commodity account”, as such term is defined in the UCC, whether now existing or hereafter created and whether now owned or hereafter acquired by the Debtor.

“Commodity Contract” means any “commodity contract”, as such term is defined in the UCC, whether now existing or hereafter created and whether now owned or hereafter acquired by the Debtor or to which the Debtor is now or at any time hereafter a party.

“Contracts” means all contracts to which the Debtor is, or may at any time hereafter become, a party or in which it now has or may at any time hereafter acquire an interest, and all agreements and undertakings of any third parties in favor or for the benefit of the Debtor.

“Contract Rights” means any right of the Debtor to payment under a Contract not yet earned by performance and not evidenced by an Instrument or Chattel Paper, now in existence or hereafter arising (including (a) all rights of the Debtor to receive moneys due and to become due to it thereunder or in connection therewith, (b) all rights of the Debtor to damages arising out of, or for, breach or default in respect thereof and (c) all rights of the Debtor to perform and to exercise all remedies thereunder).

“Copyrights” means all of the following to the extent that the Debtor now has or hereafter acquires any right, title or interest therein: (a) all copyrights in all works, whether published or unpublished, now existing or hereafter created or acquired, whether registered or unregistered, whether created by statute or common law, (b) all registrations and recordings thereof, all applications in connection therewith, including registrations, recordings and applications in the United States Copyright Office, and all renewals of such registrations, recordings or applications.

“Copyright Licenses” means any agreement, written or oral, naming the Debtor as licensor or licensee, granting any right to use any Copyright, now in existence or hereafter arising.

“Factoring Agreement” has the meaning specified in Recital A.

“Financial Asset” means any “financial asset”, as such term is defined in the UCC, whether now existing or hereafter created and whether now owned or hereafter acquired by the Debtor.

“Guarantee” has the meaning specified in Recital B.

“Guarantor” has the meaning specified in Recital B.

“Intellectual Property” means, collectively, all Patents, Patent Licenses, Trademarks,

Trademark Licenses, Copyrights and Copyright Licenses.

“Leases” means all leasehold interests now or at any time hereafter held by the Debtor.

“Licenses” and “Licensing Agreements” means the Patent Licenses, the Copyright Licenses and the Trademark Licenses.

“Lien” means any mortgage, pledge, hypothecation, assignment, security interest, encumbrance, lien (statutory or otherwise), preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever (including conditional sale or other title retention agreement).

“Obligations” means all indebtedness and other liabilities and obligations of the Debtor to the Creditor, now existing or hereafter arising, including without limitation all of its obligations to the Creditor under the Factoring Agreement, the Supply Agreement, and any related documents or instruments.

“Patents” means (a) all patents and patent applications and the inventions and improvements described and claimed therein, and all patentable inventions, now owned or hereafter acquired or obtained by the Debtor, (b) all registrations and recordings thereof, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, (c) all reissues, divisions, continuations, renewals, extensions and continuations-in-part of any of the foregoing, (d) all income, royalties, damages or payments now and hereafter due and/or payable under or with respect to any of the foregoing, including damages or payments for past or future infringements of any of the foregoing, (e) the right to sue for past, present and future infringements of any of the foregoing throughout the world, and (f) all rights and obligations pursuant to any Patent License with respect thereto, whether the Debtor is a licensor or licensee under any such Patent License, and, subject to the terms of such licenses, the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter owned by the Debtor and now or hereafter covered by such licenses.

“Patent License” means any agreement, written or oral, providing for the grant by or to the Debtor of any right to use any Patent, now in existence or hereafter arising.

“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent; (iii) any Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings; (iv) Liens in respect of security deposits provided in the ordinary course of business and consistent with past practices; (v) Liens (A) upon or in any equipment acquired or held by the Company or any of its subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment; (vi) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (i) and (v) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase; (vii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods; and (viii) the security interests in favor of those certain third party lenders that are subject to the Subordination Agreement.

“Proceeds” means (a) all “proceeds”, as such term is defined in the UCC, and (b) to the extent not included in such definition, (i) any and all proceeds of any insurance, indemnity, warranty, guaranty or letter of credit payable to the Debtor from time to time with respect to any of the Collateral, (ii) all payments (in any form whatsoever) paid or payable to the Debtor from time to time in connection with any taking of all or any part of the Collateral by any governmental authority (or any Person acting under color of governmental authority), (iii) all judgments in favor of the Debtor in respect of the Collateral, (iv) any claim of the Debtor against third parties for past, present or future infringement or dilution of any Patent or Patent License Trademark or Trademark License, Copyright or Copyright License and (v) all other amounts from time to time paid or payable or received or receivable under or in connection with any of the Collateral.

“Securities Account” means any “securities account”, as such term is defined in the UCC, whether now existing or hereafter created and whether now owned or hereafter acquired by the Debtor.

“Securities Entitlement” means any “securities entitlement”, as such term is defined in the UCC, whether now existing or hereafter created and whether now owned or hereafter acquired by the Debtor.

“Subordination Agreement” means the Subordination Agreement of even date herewith among the Debtor, the Creditor, the Guarantor and certain third party lenders.

“Supply Agreement” has the meaning specified in Recital A.

“Trademarks” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired by the Debtor, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and (b) all renewals thereof.

“Trademark Licenses” means any agreement, written or oral, providing for the grant by or to the Debtor of any right to use any Trademark, now in existence or hereafter arising.

“Transaction Document” means the Factoring Agreement, the Supply Agreement, the Guarantee, this Security Agreement and each other instrument, document or agreement executed or delivered in connection with any of the foregoing.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York.

(b)           Unless otherwise expressly specified herein, defined terms denoting the singular number shall, when in the plural form, denote the plural number of the matter or item to which such defined terms refer, and vice-versa.

(c)           Words of the neuter gender mean and include correlative words of the masculine and feminine gender.

(d)           The Section and Schedule headings used in this Security Agreement are for convenience only and shall not affect the construction or meaning of any provisions of this Security Agreement.

(e)           Unless otherwise specified, the words “hereof’, “herein”, “hereunder” and other similar words refer to this Security Agreement as a whole and not just to the Section, subsection or clause in which they are used; and the words “this Security Agreement” refer to this Security Agreement, as amended, restated, modified or supplemented from time to time.

(f)           Whenever the words “included”, “includes” or “including” are used in this Security Agreement, they shall be deemed to be followed by the words “without limitation”.

(g)           Unless otherwise specified, references to Sections, Recitals and Schedules are references to Sections of, and Recitals and Schedules to, this Security Agreement.

2.            Security Interest . (a) As security for the due and punctual payment and performance of the Obligations, the Debtor hereby pledges and assigns to the Creditor, and hereby grants to the Creditor a lien upon and a continuing security interest in, all personal property and fixtures of the Debtor, whether now owned or hereafter acquired by the Debtor and wherever located and whether now existing or hereafter arising or created (all such property and assets are herein collectively called the “Collateral”), including without limitation the following:

3.            Obligations Absolute . (a) The Debtor hereby agrees that this Security Agreement shall be binding upon the Debtor, and the grant to the Creditor of a security interest in the Collateral hereunder shall be irrevocable and unconditional, irrespective of the validity, legality or enforceability of any Transaction Document or any of the Obligations, the absence of any action to enforce the same, the waiver or consent by the Creditor with respect to any provision thereof, the recovery of any judgment against any other Person, or any action to enforce the same or any other similar circumstances. The Debtor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Debtor, any notice to require a proceeding first against any other Person, protest or notice with respect to any promissory notes or evidences of indebtedness secured hereby or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Security Agreement will remain in full force and effect so long as the Supply Agreement and/or the Factoring Agreement are in effect or any Obligations remain unpaid.

(b)           The Debtor agrees that, without notice to or further assent by the Debtor, the liability of any other Person for or upon any of the Obligations may, from time to time, in whole or in part, be renewed, extended, modified, accelerated, compromised or released by the Creditor, as the Creditor may deem advisable, and that any other collateral or liens securing any of the Obligations may, from time to time, in whole or in part (subject, in the ease of the Collateral, to the provisions of this Security Agreement), be exchanged, sold or surrendered by the Creditor, as the Creditor may deem advisable, all without impairing, abridging, affecting or diminishing this Security Agreement or the rights of the Creditor hereunder or with respect to the Collateral.

4.            Representations and Warranties . The Debtor hereby makes the following representations and warranties, which shall be deemed to be repeated and confirmed upon the creation or acquisition by the Debtor of each item of Collateral and upon the creation of any Obligation:

(a)           The Debtor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has full power and authority to own its properties and to carry on its business as now being conducted, is duly qualified to do business and is in good standing in each jurisdiction in which the character of its properties, the transaction of its business, the location of its Inventory or Equipment, the performance of its obligations under its Contracts, or the collection of any of its Accounts make such qualification necessary and where the failure to be so qualified would have a material adverse effect on the business or financial condition of the Debtor, and has full power and authority to execute, deliver and perform this Security Agreement.

(b)           Its execution, delivery and performance of this Security Agreement and the granting of the security interest in the Collateral hereunder (i) have all been duly authorized by all requisite action of the Debtor, (ii) do not require the approval of its shareholders, and (iii) will not (1) violate any provision of law or the Debtor’s organizational documents, (2) violate, be in conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any indenture, agreement or other instrument to which it is a party or by which it or any of its properties is bound, (3) violate any governmental or agency rule or regulation or any order of any court, tribunal or govermnental agency or (4) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the Collateral, except for the security interest created by this Security Agreement. No authorizations, approvals and consents of, and no filing and registration with, any governmental or regulatory authority or agency are necessary for the execution, delivery or performance by the Debtor of this Security Agreement or for the validity or enforceability hereof. No consent of any party to any Contract or any account debtor in respect of any Account is required in connection with the execution, delivery and performance of this Security Agreement or the creation of a security interest in such Contract or Account pursuant hereto, other than the consents obtained by Debtor and delivered to Creditor pursuant to the Subordination Agreement.

(c)           This Security Agreement constitutes the legal, valid and binding obligation of the Debtor, enforceable against the Debtor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting enforceability of creditors’ rights generally and except as specific performance may be subject to equitable principles of general applicability. This Security Agreement creates in favor of the Creditor a valid first priority lien and first priority security interest in the Collateral, enforceable against the Debtor and all third parties, and superior in right to all other security interests, liens, encumbrances, or charges, existing or future, other than as set forth in the Subordination Agreement and certain Permitted Liens.

(d)           Except for the security interest of the Creditor therein the Debtor is, and as to Collateral created or acquired from time to time after the date hereof the Debtor will be, the owner of all the Collateral, having good and marketable title thereto, free from any lien, security interest, encumbrance or other right, title or interest of any Person, other than Permitted Liens.

(e)           Appropriate financing statements with respect to the security interest created hereunder have been or will be duly filed in all appropriate offices; no filing of any other financing statements or other instruments and no recording, filing or indexing of this Security Agreement is necessary or appropriate in order to preserve and protect the liens and security interests created or intended to be created by this Security Agreement as legal, valid and enforceable perfected liens on and security interests in the Collateral (other than filings or appropriate assignments with the United States Patent and Trademark Office or the United States Copyright Office with respect to Intellectual Property of the Debtor, if any).

(f)           There is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) now on file or registered in any public office (other than in respect of Permitted Liens) covering any interest of the Debtor in the Collateral, or intended so to be, and so long as the Supply Agreement and/or Factoring Agreement are in effect or any of the Obligations remain unpaid the Debtor will not execute, and will not permit the filing or the continued existence on file of any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) relating to the Collateral in any public office, except financing statements filed or to be filed with respect to the security interest granted hereunder to the Creditor or with respect to the Permitted Liens.

(g)           The chief executive office and principal place of business of the Debtor is located at the address set forth in Schedule I. The originals of all documents (as well as all duplicates thereof) evidencing or relating to the Accounts, Contracts, Leases, Intellectual Property, Investment Property and other Financial Assets and the original books of account and records of the Debtor relating thereto are kept at the office or offices specified in Schedule I. All Inventory and Equipment is held on the date hereof at the locations specified in Schedule I.

(h)           The name of the Debtor set forth in the preamble is correct. The Debtor is not currently doing, and has not at any time during the five years immediately preceding the date hereof done, business under any trade name or other assumed name. Except as set forth on Schedule I, during the five years immediately preceding the date hereof (w) the Debtor has not had any name other than its present name, (x) the Debtor has not merged or consolidated with any other entity during the five years immediately preceding the date hereof, (y) the Debtor has not acquired all or substantially all of the assets of any other Person and (z) the Debtor has not acquired any other Person, nor been acquired by any other Person.

(i)           None of the Collateral constitutes farm products (as such term is defined in the UCC) or Proceeds thereof.

(j)           On the date of this Agreement, none of the account debtors on any Accounts, and none of the parties to any Contracts, is a governmental entity.

(k)           Except as set forth on Schedule I, the Debtor has no ownership interest in any Commercial Tort Claims.

(l)           To the Debtor’s knowledge, the information, schedules, exhibits and reports furnished by the Debtor to the Creditor in connection with the negotiation and preparation of this Security Agreement did not contain any omissions or misstatements of fact which would make the statements contained therein misleading or incomplete in any material respect.

5.            Covenants .                                (a) At all reasonable times upon reasonable notice the Creditor shall have full access to, and the right to audit, check, inspect and make abstracts and copies of, the Debtor’s books, records, audits, correspondence and all other papers and computer tapes and programs relating to the Collateral. The Creditor shall have the right to confirm and verify the Accounts, General Intangibles, and other Collateral and to do whatever the Creditor may deem necessary to protect its interests and the Debtor shall furnish such assistance and information as the Creditor may require in connection therewith. The Creditor may enter from time to time the premises of the Debtor at any reasonable time during business hours for the purpose of inspecting the Collateral and any and all records pertaining thereto.

(b)           The Debtor will keep the Collateral, at its own expense, in customary good repair and condition, and will not misuse, abuse or waste the Collateral or allow the Collateral to deteriorate (or permit any of the foregoing), except for normal wear and tear, and will make the Collateral available for inspection by the Creditor at all reasonable times upon reasonable notice during business hours.

(c)           The Debtor will comply in all material respects with all acts, rules, regulations, orders, decrees and directions of any governmental authority applicable to the Collateral or any part thereof or to the operation of its business; provided, however , that the Debtor may contest any act, regulation, order, decree or direction in any reasonable manner which shall not in the reasonable opinion of the Creditor adversely affect the Creditor’s rights or the first priority of the Creditor’s security interest in the Collateral.

(d)           The Debtor will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of its income or profits therefrom, as well as all claims of any kind (including claims for labor, materials and supplies), except that no such charge need be paid if (i) the validity thereof is being contested by the Debtor in good faith by appropriate proceedings, (ii) such proceedings do not involve, in the reasonable opinion of the Creditor, any danger of the sale, forfeiture or loss of any of the Collateral or any interest therein and (iii) s