Exhibit 10.2
 
SECURITY AGREEMENT

THIS AGREEMENT, made and entered into as of the 23rd day of January, 2008 by and
between Gregory J. Wessling, (hereinafter referred to as "Secured Party"), and
HouseRaising, Inc., (hereinafter referred to as “Debtor”).

WITNESSETH:

WHEREAS, in connection with the Debtor's negotiable Promissory Note and
Forbearance Agreement of even date herewith in the original principal amount of
Sixteen Thousand Three Hundred Dollars ($16,300.00) along with other obligation
to pay Secured Party contained therein (hereinafter referred to as the “Note”
and incorporated herein by reference); and

WHEREAS, in order to secure the obligations of Debtor under and pursuant to the
Note, Debtor has agreed to convey to Secured Party a security interest in
certain of Debtor's assets in accordance with the terms and conditions
hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and for Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by Debtor, the parties hereto, each intending to be
mutually bound hereby, agree as follows:

1. Creation of Security Interest. Debtor hereby transfers, conveys, assigns and
grants to Secured Party a security interest in the following items (all such
items being collectively referred to herein as the "Collateral"):

All personal property, tangible or intangible, now owned or hereafter acquired
by Debtor, including, without limitation, all equipment, motor vehicles,
furniture, fixtures, inventory, contract rights, chattel paper, accounts, and
general intangibles; all accessories and parts now or hereafter affixed thereto
or utilized in connection therewith; all increases, substitutions, replacements,
additions and accessions with respect thereto, now owned or hereafter acquired;
and all proceeds and products with respect thereto. Specifically, Debtor assigns
as additional collateral certain intellectual property owned by Debtor which
assignment is evidenced by the Collateral Assignment Agreement executed by and
between the Debtor and Secured Party of even date herewith, a copy of which is
attached hereto as Schedule 1.

2. Debt Secured. The security interest conveyed hereunder shall secure all
obligations and indebtedness of Debtor to Secured Party of every kind and nature
under and pursuant to the Note.

3. Financing Statements. In order to perfect the security interest conveyed
hereunder, Debtor agrees to execute or have executed and deliver to Secured
Party, simultaneously with the execution hereof, any and all Financing
Statements and other instruments or documents including but not limited to
registration of said assignment with the United States Patent and Trademark
Office and any landlord's lien waiver which Secured Party may deem necessary or
appropriate in order to perfect said security interest. Debtor further agrees
that at any time that any obligation under the Note remains unpaid, promptly
upon receipt of Secured Party's written request therefore, Debtor shall execute
and deliver to Secured Party any Financing Statement or other instrument or
document that Secured Party may reasonably deem necessary or appropriate in
order to perfect or continue the perfection of said security interest.

--------------------------------------------------------------------------------

4. Possession and Risk of Loss. Debtor agrees to insure the Collateral and keep
it insured to the extent of its full fair market value against fire and other
casualties, with extended coverage, under forms of policies and with companies
satisfactory to Secured Party. Debtor agrees to pay for all premiums for such
insurance when due, and further agrees to deliver copies of policies of said
insurance to Secured Party. If Debtor fails to comply with the provisions of
this Paragraph 4, Secured Party may (but shall not be obligated to), in addition
to and without limiting any other available remedies, procure or maintain such
insurance, Debtor hereby agreeing to pay the premium therefore upon written
demand of Secured Party as an additional part of the obligations secured
hereunder. All such insurance policies shall name Secured Party as an additional
insured.

Debtor hereby covenants and agrees to give Secured Party at least thirty (30)
days' prior written notice of any change in the location of any of the
Collateral from the current location of same and to take such actions and steps
as Secured Party may deem necessary or appropriate, as set forth in writing
delivered by Secured Party to Debtor, in order to maintain a perfected security
interest therein.

5. Default and Remedies. Any default under the Note, Collateral Assignment
Agreement or of the Security Agreement or any failure by Debtor to cure any
breach hereunder within ten (10) days after Debtor's receipt of Secured Party's
written notice thereof, shall constitute a default hereunder and under any
obligation or liability of Debtor to Secured Party, including but not limited to
the Note. Upon any such default, Secured Party shall be authorized, in his sole
and absolute discretion, to declare any or all of Debtor's obligations and
indebtedness to Secured Party (including but not limited to the Note) to be
immediately due and payable, without demand or notice to Debtor and Secured
Party may exercise any one or more of the rights and remedies granted pursuant
to this Agreement, or any of the Security Instruments or given to a secured
party under the Uniform Commercial Code or other applicable state or federal law
then in effect in the State of North Carolina (or in such other state as the
Collateral may then be located) or otherwise, including, without limitation, the
right upon default to take possession of and sell, lease or otherwise dispose of
the Collateral.

6. Delivery and Disposition on Default. Debtor agrees that in the event of a
default hereunder, it shall, if so requested by Secured Party, assemble at
Debtor's expense and at a convenient place acceptable to Secured Party, all of
the Collateral not theretofore delivered to Secured Party. If any notification
of intended disposition by Secured Party of any of the collateral upon default
is required to be given to Debtor, such notification, if mailed, shall be deemed
reasonable and properly given if mailed through the United States Postal Service
at least seven (7) days before such disposition, postage prepaid, addressed to
Debtor at 4801 E. Independence Boulevard, Suite 200, Charlotte, North Carolina
28212.

2

--------------------------------------------------------------------------------

7. Persons Benefitted and Notices. This Agreement shall inure to the benefit of
Secured Party, his legal representatives, heirs, successors in interest and
assigns, and to any other person or entity who derives from Secured Party, title
to or an interest in the Note, and shall be binding upon Debtor and its legal
representatives, successors in interest and permitted assigns. Except as
otherwise specifically set forth herein, all notices to the parties hereto shall
be deemed duly and properly given and received three (3) days after mailing by
United States Certified Mail to the respective addresses set forth below
opposite their respective signatures, unless any such party has theretofore
advised the other parties in writing of a change of address for such party for
the dispatch of notices hereunder.

8. Termination. This Agreement and the security interest hereby created in the
Collateral shall terminate when all liabilities and indebtedness under the Note
have been paid and satisfied in full. Wessling further agrees that once the
obligations of the Promissory Note have been fully satisfied, he will execute
any document reasonably necessary to document the termination of the obligations
of the Promissory Note, Security Agreement, and Collateral Assignment
Agreement.  Wessling agrees that the payment of the Wachovia Debt without the
invocation of his Personal Guarantee shall constitute a satisfaction of the
Promissory Note provided the principal sum of Sixteen Thousand Three Hundred
Dollars ($16,300.00) with interest has been paid.

9. Waiver. Secured Party shall not be deemed to have waived any of his rights in
any Collateral unless such waiver is in writing and duly signed by Secured
Party. No delay or omission by Secured Party in exercising any right hereunder
shall operate as a waiver thereof or of any other right.

10. Terminology. All personal pronouns used in this Agreement, whether used in
the masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural and vice-versa. Titles of paragraphs in this
Agreement are for convenience only, and neither limit nor amplify the provisions
hereof.

11. North Carolina Law to Govern. This Agreement has been made and entered into
in the State of North Carolina and shall be governed by the laws thereof.
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
contained herein should be prohibited or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the other provisions of this
Agreement.

IN WITNESS WHEREOF, the parties hereto have set forth their respective hands and
seals, all as of the date first set forth above.

Debtor:
HouseRaising, Inc.
   
By:
/s/ Richard A. von Gnechten (SEAL)
Richard A. von Gnechten, Chief Financial Officer
   
Secured Party:
   
/s/ Gregory J. Wessling (SEAL)
Gregory J. Wessling

3

--------------------------------------------------------------------------------

SCHEDULE 1

All Property and Equipment reflected on Balance Sheet of company, valued at
$705,488 as of 9/30/07 as further detailed below:

HouseRaising, Inc.
Property and Equipment
As of 9/30/07
 

   
2000
 
   2001   
 
2002
 
   2003   
 
2004
 
2005
 
2006
 
As of 9/30
2007
 
Total
 
Computer Equipment
   
28,402.90
         
7,278.11
               
14,027.93
   
9,242.86
   
7,585.56
   
66,537.36
 
Software
   
4,075.00
                           
(84.89
)   
3,956.88
   
6,777.31
   
14,724.30
 
Furniture (Corp & HR-C)
   
37,300.00
                     
48,448.09
   
6,278.00
         
16,582.51
   
108,608.60
 
Furniture (HR-GC)
                                             
24,972.53
   
24,972.53
 
Office Equipment
   
34,729.84
                                             
34,729.84
 
Telephone
   
3,709.95
                                             
3,709.95
 
Asset Purchase
                           
11,488.11
   
167,225.71
         
5,389.76
   
184,103.58
 
Design Center (HR-C)
                                 
6,607.20
   
39,206.75
   
3439.09
   
49,253.04
 
Design Center (HR-GC)
                                       
16,102.39
   
202,746.41
   
218,848.80
       
108,217.69
   
-
   
7,278.11
   
-
   
59,936.20
   
194,053.95
   
68,508.88
   
267,493.17
   
705,488.00
 

 
All Capitalized Software (also known as System-C) as reflected on Balance Sheet
of company, valued at $14,577,344 as of 9/30/07, including related patents
(including those noted below), trademarks/service markets (including those noted
below) and all HRI Master Portfolio Plans of the company (approximately 1917
hard copy and 696 electronic plan files) reflecting a total of approximately
2613 total plans:

U.S. PATENT APPLICATION – SERIAL NO.: 11/029,569 (FILED JANUARY 5, 2005) 
 
SYSTEM AND METHOD FOR AUTOMATED MANAGEMENT OF CUSTOM HOME DESIGN AND BUILD
PROJECTS, REFERENCE FILE #P/4267-2
 
FORMAL DRAWINGS – SUBMITTED ON 2/27/2006
 
PUBLISHED - JUNE 7, 2007 (ELECTRONIC PUBLICATION # US-2007-0129971-A1)
 
INTERNATIONAL PATENT APPLICATION - SERIAL NO.: 11/029,569 (FILED JANUARY 17,
2005)
 
SYSTEM AND METHOD FOR AUTOMATED MANAGEMENT OF CUSTOM HOME DESIGN AND BUILD
PROJECTS - BASED ON US PATENT APPLICATION & SERIAL NO.: 11/029,569. REFERENCE
FILE #P/4267-4
 
UNITED STATES ART SEARCH REPORT
 
INTERNATIONAL SEARCH REPORT
 
U.S. PATENT APPLICATION – SERIAL NO.: 60/734,234 (FILED NOVEMBER 7, 2005)
 
SYSTEM AND METHOD FOR AUTOMATED MANAGEMENT AND ON-LINE ACADEMIC INSTITUTION FOR
CUSTOM HOME DESIGN AND BUILD PROJECTS
 
STATUS: WRITTEN OPINION AND SEARCH REPORT FROM PCT INTERNATIONAL SEARCHING
AUTHORITY AT 10/10/2007 AND DISCLOSURE STATEMENT AT 9/20/2007
 
U.S. PATENT APPLICATION – SERIAL NO.: 60/786,855 (FILED MARCH 29, 2006)
 
SYSTEM AND METHOD FOR AUTOMATED MANAGEMENT OF REPLACEMENT BUILDING PROJECTS IN A
DISASTER RELIEF AREA
 
PUBLISHED - DECEMBER 13, 2007 (ELECTRONIC PUBLICATION # US-2007-0288269-A1)

4

--------------------------------------------------------------------------------

Trademarks/Service Marks
Type of Mark
Original Owner of Mark
 
Current Owner
 
1st Used Date
Filing Date or Last Renewal Date
 
Registration Date
 
Expiration Date
 
Serial No.
 
Registration No.
 
Date Continued Use Form Due Yr. 5 & 6
HouseRaising
US
HouseRaising, Inc. - NC
 
HouseRaising, Inc.- NC
 
5/5/1999
10/11/2005
 
3/27/2007
 
3/27/2017
 
78/731105
 
3,221,713
 
 
House Raising USA
US
The MBSIHOME Corp
 
HouseRaising, Inc.- NC
 
5/10/2000
8/23/2001
 
1/14/2003
 
1/14/2013
 
78/080750
 
2,675,093
 
1/14/2008-2009
HouseRaising, A National Company of Local Homebuilders
US
HouseRaising, Inc.- NC
 
HouseRaising, Inc.- NC
 
5/5/1999
10/11/2005
 
3/27/2007
 
3/27/2017
 
78/731121
 
3,221,714
 
 
Old World Craftsmanship in New World Relationships
US
HouseRaising, Inc. -Delaware
 
Assignment Pending 4/26/2006 to HRI - NC Corp
 
11/30/2003
1/29/2004
 
9/6/2005
 
9/6/2015
 
78/359321
 
2,991,884
 
9/6/2010-2011
Straight, Level & Square
US
HouseRaising, Inc. - Delaware
 
Assignment Pending 4/26/2006 to HRI - NC Corp
 
6/24/2003
6/25/2003
 
8/31/2004
 
8/31/2014
 
78/266729
 
2,879,409
 
8/31/2009-2010
REVOLUTIONIZING the Way CUSTOM HOMES are Designed & Built
US
HouseRaising, Inc. - Delaware
 
Assignment Pending 4/26/2006 to HRI - NC Corp
 
3/1/2004
6/11/2004
 
12/27/2005
 
12/27/2015
 
78/434121
 
3,034,683
 
12/27/2010-2011
The MBSIHome Corp
US
The MBSIHOME Corp
 
The MBSIHOME Corp
 
3/1/1999
5/14/1999
 
8/22/2000
 
8/22/2010
 
75/706771
 
2,379,123
 
 
MBSIHOMES
US
The MBSIHOME Corp
 
The MBSIHOME Corp
 
3/1/1999
5/14/1999
 
8/29/2000
 
8/29/2010
 
75/706769
 
2,381,024
 
 
PowerHouse Specifications
US
HouseRaising, Inc. - NC
 
HouseRaising, Inc.- NC
 
5/5/1999
1/18/2006
 
11/27/2007
 
11/27/2017
 
78/793764
 
3,343,913
 
 
A Builder's Home
US
HouseRaising, Inc. - NC
 
HouseRaising, Inc.- NC
 
1/1/2006
6/19/2007
 
Pending
 
Pending
 
77/209658
 
Pending
 
 
HouseRaising, For All the Right Reasons
US
HouseRaising, Inc. - NC
 
HouseRaising, Inc.- NC
 
1/1/2004
6/19/2007
 
Pending
 
Pending
 
77/209612
 
 
 
 
Together, We Can Build Your Dream
US
HouseRaising, Inc. -NC
 
HouseRaising, Inc.- NC
 
6/1/2007
6/19/2007
 
Pending - Under Opposition
 
Pending
 
77/209570
 
 
 
 

 

Domains
 
 
Domain Name
Management Company
Created Date
houseraisingusa.com
Network Solutions
2/10/2001
houseraisingusa.net
Network Solutions
2/10/2001
houseraisingacademy.com
GoDaddy.com
5/18/2005
houseraisingacademy.net
GoDaddy.com
5/18/2005
houseraising.com
Network Solutions
5/4/2002
houseraising.net
Network Solutions
9/14/2001
synergybuildernetwork.com
Network Solutions
2/16/2000

--------------------------------------------------------------------------------