EXHIBIT 10.18
                                                                   -------------












                           LOAN AND SECURITY AGREEMENT

                                      among

                                    LENDERS,

                         GREEN POWER KENANSVILLE, L.L.C.

                               3212 Wickford Drive

                        Wilmington, North Carolina 28409

                                       and

                        GREEN POWER ENERGY HOLDINGS CORP.
                               3212 Wickford Drive
                        Wilmington, North Carolina 28409


                         Dated as of the Effective Date

                            (as hereinafter defined)



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                                TABLE OF CONTENTS
                                -----------------


1        LOAN AND TERMS OF PAYMENT.............................................1

         1.1      LOAN AND TERMS OF PAYMENT....................................1
         1.2      INTEREST RATE; PAYMENTS......................................1
         1.3      WARRANTS.....................................................2
         1.4      FEES.........................................................2

2        CONDITIONS OF LOANS...................................................2

         2.1      NECESSARY AGREEMENTS; DOCUMENTS..............................2
         2.2      REPRESENTATIONS; WARRANTIES..................................2

3        CREATION OF SECURITY INTEREST.........................................2

         3.1      SENIOR LENDER................................................2
         3.2      GRANT OF SECURITY INTEREST...................................2
         3.3      AUTHORIZATION TO FILE........................................2

4        REPRESENTATIONS AND WARRANTIES........................................2

         4.1      DUE ORGANIZATION AND AUTHORIZATION...........................2
         4.2      COLLATERAL...................................................3
         4.3      LITIGATION...................................................3
         4.4      SEC FILINGS..................................................3
         4.5      SOLVENCY.....................................................3
         4.6      REGULATORY COMPLIANCE........................................3
         4.7      FULL DISCLOSURE..............................................3

5        AFFIRMATIVE COVENANTS.................................................3

         5.1      GOVERNMENT COMPLIANCE........................................3
         5.2      TAXES........................................................3
         5.3      INSURANCE....................................................4
         5.4      FURTHER ASSURANCES...........................................4

6        NEGATIVE COVENANTS....................................................4

         6.1      ENCUMBRANCE..................................................4
         6.2      ADDITIONAL DEBT..............................................4

7        EVENTS OF DEFAULT.....................................................4

         7.1      PAYMENT DEFAULT..............................................4
         7.2      INSOLVENCY...................................................4

8        LENDERS' RIGHTS AND REMEDIES..........................................4

         8.1      RIGHTS AND REMEDIES..........................................4
         8.2      ACCOUNTS COLLECTION..........................................4
         8.3      LENDER'S EXPENSES............................................5
         8.4      REMEDIES CUMULATIVE..........................................5

9        NOTICES...............................................................5


10       CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER...........................5


11       GENERAL PROVISIONS....................................................5

         11.1     SUCCESSORS AND ASSIGNS.......................................5
         11.2     INDEMNIFICATION..............................................5
         11.3     TIME OF THE ESSENCE..........................................6
         11.4     SEVERABILITY OF PROVISION....................................6
         11.5     AMENDMENTS IN WRITING, INTEGRATION...........................6




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         11.6     COUNTERPARTS.................................................6
         11.7     SURVIVAL.....................................................6
         11.8     CONFIDENTIALITY..............................................6
         11.9     ATTORNEYS' FEES, COSTS AND EXPENSES..........................6

12       DEFINITIONS; USAGE....................................................6

         12.1     DEFINITIONS..................................................6
         12.2     USAGE........................................................8

























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         This LOAN AND SECURITY  AGREEMENT  (this  "Agreement")  dated as of the
Effective Date among Green Power Energy Holdings Corp., a Delaware  corporation,
with its principal place of business at the location set forth on the Cover Page
of this Agreement (the "Company"),  Green Power Kenansville,  L.L.C., a Delaware
limited liability company,  with its principal place of business at the location
set forth on the Cover Page of this Agreement  ("Borrower")  and the Lenders set
forth on Exhibit B hereto and each of the other Lenders (as that term is defined
in Section 12.1),  provides the terms on which Lenders will lend to Borrower and
Borrower will repay Lenders. The parties hereby agree as follows:

1 LOAN AND TERMS OF PAYMENT.

1.1 Loan and Terms of Payment.

         (a) Lenders will loan Borrower an amount up to, but not exceeding, FOUR
MILLION  DOLLARS  ($4,000,000),  pursuant  to the terms of this  Agreement  (the
"Loan"). Seventy-five percent (75%) of any amounts received by Borrower pursuant
to the  Loan  will  be used  to  purchase  the  Facility  or to pay  debt on the
acquisition of the Facility.  Twenty-five  percent (25%) of any amounts received
by Borrower  pursuant to the Loan will be used as working capital of the Company
or any subsidiary thereof.

         (b) The Loan will be evidenced by a series of promissory  notes made by
Borrower payable to Lenders in  substantially  the form of Exhibit A hereto (the
"Notes").  Lender will lend  Borrower the amount set forth next to Lender's name
on Exhibit B hereto,  and Borrower will execute a Note made payable to Lender in
such amount.  The Loan will be made to the Borrower through the delivery of wire
transferred  funds  for  the  benefit  of  Borrower  pursuant  to the  following
instructions:  For the Account of Green Power Kenansville, LLC, Bank of America,
3500 South College Road,  Wilmington,  South Carolina 28405, ABA # 053000196 for
the benefit of Account Number 000682917414.

         (c) The Notes will accrue interest at 15.00% per annum. Interest on the
Notes is payable on the fifteenth  (15th) day of each month.  Late payments will
be subject to the interest and penalties  contained in the Notes. No payments of
principal  under the Notes shall be due and payable prior to the Maturity  Date.
The entire  balance of each Note,  including  principal  and  accrued but unpaid
interest  from the date hereof,  shall be due and payable on the Maturity  Date.
When a payment is due on a day that is not a Business  Day,  the  payment is due
the next Business Day and additional  fees or interest  accrue  according to the
terms of the Notes. The Notes may not be prepaid prior to the Maturity Date.

         (d)  Pursuant  to the  Notes,  Borrower  shall  have the  option on the
Maturity Date to extend the Maturity Date until the two year  anniversary of the
Effective Date.

1.2 Interest Rate; Payments.

         (a) Excess Interest. At maturity (whether by acceleration or otherwise)
or on earlier final payment of the  Obligations,  Lenders will compute the total
amount of interest that has been contracted for,  charged or received by Lenders
or payable by Borrower  hereunder and compare such amount to the Maximum  Lawful
Amount that could have been contracted for,  charged or received by Lenders.  If
such  computation  reflects  that the  total  amount of  interest  that has been
contracted  for,  charged or received by Lenders or payable by Borrower  exceeds
the Maximum Lawful Amount, then Lenders shall apply such excess to the reduction
of the  principal  balance,  and any  remaining  excess  shall  be  refunded  to
Borrower.  This provision  concerning the crediting or refund of excess interest
shall control and take precedence over all other agreements between Borrower and
Lenders so that under no circumstances  shall the total interest contracted for,
charged or received by Lenders exceed the Maximum Lawful Amount.

         (b)  Computation of Interest;  Default Rate.  Interest is computed on a
360 day year for the actual number of days elapsed. Lenders will not compute the
interest in a manner that would cause Lenders to contract for, charge or receive
interest that would exceed the Maximum Lawful Rate or the Maximum Lawful Amount.


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After an Event of Default,  Obligations  accrue interest at the Default Interest
Rate. The Default  Interest Rate is the least of (i) the Maximum Lawful Rate, if
the Maximum Lawful rate is  established by applicable  law, or (ii) the interest
rate applicable immediately prior to the occurrence of the Event of Default plus
5  percentage  points,  if no Maximum  Lawful Rate law has been  established  by
applicable  law; or (iii) 18% per annum; or (iv) such lesser rate of interest as
each Lender in its sole  discretion  may choose to charge;  but in no event more
than the Maximum Lawful Rate.

1.3 Warrants. On the Effective Date, the Company will deliver to the each Lender
a warrant  (the  "Warrant")  to purchase one (1) share of the  Company's  common
stock,  par value $0.001 per share (the  "Common  Stock") for every FOUR DOLLARS
($4.00) in principal  amount of such Lender's  Note. The Company shall set forth
the number of shares each Lender has a right to purchase pursuant to the Warrant
(the "Warrant  Shares")  next to such  Lender's  name on Exhibit B hereto.  Each
Warrant  shall grant the  applicable  Lender the right to purchase such Lender's
Warrant  Shares for an exercise  price of $1.00 per share at any time during the
one period  commencing  on the  anniversary  date of the date of issuance of the
Warrant.

1.4 Fees. Each party hereto will pay his or its own fees.


2 CONDITIONS OF LOANS.  Each Lender's  obligation to make the Loan is subject to
the following conditions

precedent:

2.1 Necessary Agreements; Documents. Each Lender must receive the agreements and
documents it requires; and

2.2 Representations; Warranties. The representations and warranties in Section 5
must be materially  true on the Effective  Date and no Event of Default may have
occurred and be continuing, or result from the Loan.

3 CREATION OF SECURITY INTEREST.

3.1 Senior Lender.  Borrower  reserves the right to grant to Senior  Lender,  if
any, a security  interest  in the  Collateral  that is senior in priority to the
security interest of Lenders. The security interest in the Collateral granted to
Senior  Lender,  if any, may secure up to FOUR  MILLION  FIVE  HUNDRED  THOUSAND
DOLLARS  ($4,500,000) of principal debt, plus accrued interest and other amounts
owed by Borrower to Senior Lender.

3.2  Grant of  Security  Interest.  Borrower  grants  each  Lender a  continuing
security interest second in priority to the Senior Lender, if any, in all of the
Collateral to secure all  Obligations  and  performance of each of the Company's
and Borrower's duties under the Loan Documents. If this Agreement is terminated,
Lenders' lien and security  interest in the  Collateral  will continue until the
Company and Borrower fully satisfy their Obligations.

3.3  Authorization  to File.  The Company and Borrower  authorize each Lender to
file financing  statements  without notice to the Company or Borrower,  with all
appropriate jurisdictions, as each Lender deems appropriate, in order to perfect
or protect Lenders' interest in the Collateral.

4  REPRESENTATIONS  AND  WARRANTIES.  The  Company  represents  and  warrants as
follows:

4.1 Due Organization and Authorization.

(a) Each of the Company and Borrower is duly  existing  and in good  standing in
its state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its  ownership of
property  requires that it be qualified  except where the failure to do so could
not reasonably be expected to cause a Material Adverse Change

(b) The execution, delivery and performance of the Loan Documents have been duly
authorized,  and do not  conflict  with the  Company's or  Borrower's  formation
documents,  nor  constitute an event of default under any material  agreement by
which either is bound.  Neither the Company nor Borrower is in default under any
agreement to which or by which it is bound in which the default could reasonably
be expected to cause a Material Adverse Change.



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4.2 Collateral.

(a) Following its acquisition of the Facility, Borrowers will have good title to
the Facility.

(b) Each of Moez Nagji, Wayne Coverdale, Steve Stanko and A.D. Justus Trust have
good title to the shares of Common Stock pledged by such Person  pursuant to the
Pledge Agreement attached hereto as Exhibit C.

4.3 Litigation. To the knowledge and belief of the Company, there are no actions
or  proceedings  pending  or,  to the  knowledge  of the  Company's  Responsible
Officers,  threatened  by or against  the  Company or Borrower in which a likely
adverse  decision  could  reasonably  be  expected  to cause a Material  Adverse
Change.

4.4 SEC  Filings.  Any  reports  filed with the SEC by the  Company  pursuant to
Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934 may be read and
copied at the SEC's public  reference  rooms located at 450 Fifth Street,  N.W.,
Washington, D.C. 20549. Any information in such documents was accurate as of the
date of filing with the SEC, and the Company is not  obligated  hereby to update
such information.

4.5 Solvency. The fair salable value of the Company's assets (including goodwill
minus disposition costs) exceeds the fair value of its liabilities;  the Company
is not left with  unreasonably  small  capital  after the  transactions  in this
Agreement;  and the Company is able to pay its debts  (including trade debts) as
they mature.

4.6 Regulatory Compliance.  The Company has not violated any laws, ordinances or
rules,  the violation of which could  reasonably be expected to cause a Material
Adverse Change. The Company and Borrower have each timely filed all required tax
returns and paid, or made  adequate  provision to pay, all material  taxes.  The
Company  and  Borrower   have  each   obtained  all   consents,   approvals  and
authorizations  or, made all declarations or filings with, and given all notices
to, all  government  authorities  that are necessary to continue its business as
currently conducted.

4.7 Full Disclosure.  No written representation,  warranty or other statement of
Borrower in any certificate or written  statement given to any Lender (tcontains
any  untrue  statement  of a  material  fact or omits to state a  material  fact
necessary to make the statements contained in the certificates or statements not
misleading  (it  being  recognized  by each  Lender  that  the  projections  and
forecasts  provided  by  Borrower  in  good  faith  and  based  upon  reasonable
assumptions  are not to be viewed as facts and that  actual  results  during the
period or periods covered by any such  projections and forecasts may differ from
the projected or forecasted results)

5 AFFIRMATIVE COVENANTS. The Company will do all of the following for so long as
any Lender has an obligation to lend, or there are outstanding obligations:

5.1 Government Compliance.  The Company will maintain each of its and Borrower's
legal existence and good standing in its  jurisdiction of formation and maintain
the  qualification  of each in each  jurisdiction  in which  the  failure  to so
qualify could  reasonably be expected to have a material  adverse  effect on the
Company's or Borrower's  business or  operations.  The Company will comply,  and
have the Borrower comply, with all laws,  ordinances and regulations to which it
is subject, noncompliance with which could have a material adverse effect on the
Company's  business or  operations  or could  reasonably  be expected to cause a
Material Adverse Change.

5.2 Taxes. The Company will make, and cause Borrower to make,  timely payment of
all material  federal,  state, and local taxes or assessments  (other than taxes
and  assessments  which the Company is contesting  in good faith,  with adequate
reserves  maintained  in accordance  with GAAP) and will deliver to Lenders,  on
demand, appropriate certificates attesting to the payment.


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5.3  Insurance.  The Company will keep  Borrower's  business and the  Collateral
insured for risks. Insurance policies will be in a form, with companies,  and in
amounts that are reasonable and customary for the protection of the  Collateral.
So long as no Event of Default has occurred and is  continuing,  Borrower  shall
have  the  option  of  applying  the  proceeds  of any  casualty  policy  to the
replacement or repair of destroyed or damaged property; provided that, after the
occurrence  and during the  continuance  of an Event of  Default,  all  proceeds
payable  under any such  casualty  policy  shall,  at the option of Lenders,  be
payable to Lenders on account of the Obligations.

5.4  Further  Assurances.  The  Company and  Borrower  will  execute any further
instruments and take further action as any Lender reasonably requests to perfect
or continue such Lenders'  security  interest in the Collateral or to effect the
purposes of this Agreement.

6 NEGATIVE  COVENANTS.  The  Company  will not do any of the  following  without
Lenders' prior written consent,  which will not be unreasonably withheld, for so
long as any  Lender  has an  obligation  to lend or  there  are any  outstanding
Obligations:

6.1  Encumbrance.  Permit  any  Collateral  not to be  subject  to the  security
interest granted herein, subject to the provisions of Section 3.1 and 3.2.

6.2 Additional  Debt.  Make or permit any payment on any additional debt that is
not subordinated to the interests of the Lenders granted herein and in any other
related agreement, without Lenders' prior written consent.

7 EVENTS OF DEFAULT. Any one of the following is an Event of Default:

7.1 Payment Default. If Borrower fails to pay any of the Obligations within five
(5) days after their due date and in turn fails to cure said  default  within 30
days of receipt of written notice from the Lender of such failure to pay; or

7.2 Insolvency. (i) If the Company becomes insolvent; (ii) if the Company begins
an Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against the
Company and not dismissed or stayed within 30 days.

8 LENDERS' RIGHTS AND REMEDIES.

8.1 Rights and  Remedies.  When an Event of Default  occurs and  continues  each
Lender may,  subject to the  tendering of  applicable  notice to the Borrower as
provided for herein, do any or all of the following:

(a)  Declare all  Obligations  immediately  due and payable  (but if an Event of
Default described in Section 7.2 occurs, all Obligations are immediately due and
payable without any action by Lenders);

(b) Make any payments and do any acts it considers  necessary or  reasonable  to
protect its security  interest in the  Collateral.  Borrower  will  assemble the
Collateral if any Lender requests and make it available to Lenders.  Lenders may
enter premises where the Collateral is located,  take and maintain possession of
any part of the Collateral,  and pay, purchase,  contest, or compromise any Lien
which  appears to be prior or  superior  to its  security  interest  and pay all
expenses incurred.  Borrower grants Lenders a license to enter and occupy any of
its premises, without charge, to exercise any of Lenders' rights or remedies;

(c) Apply to the  Obligations any amount held by such Lender owing to or for the
credit or the account of Borrower;

(d) Dispose of the Collateral according to the Code.

8.2 Accounts  Collection.  When an Event of Default occurs and  continues,  each
Lender may notify any Person  owing  Borrower  money of such  Lender's  security


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interest  in the funds and  verify  the  amount of the  Account.  Borrower  must
collect  all  payments  in trust for  Lenders  and,  if  requested  by  Lenders,
immediately  deliver  the  payments  to  Lenders in the form  received  from the
account debtor, with proper endorsements for deposit.

8.3  Lender's  Expenses.  If  Borrower  fails to pay any amount or  furnish  any
required proof of payment to third persons,  Lenders may make all or part of the
payment or obtain  insurance  policies  required  in Section  5.3,  and take any
action under the policies  Lenders deem prudent.  Any amounts paid by any Lender
are such Lender's Expenses and immediately due and payable,  bearing interest at
the applicable rate of the Notes and secured by the  Collateral.  No payments by
any Lender are deemed an  agreement  to make  similar  payments in the future or
such Lender's waiver of any Event of Default.

8.4 Remedies Cumulative. Each Lender's rights and remedies under this Agreement,
the Loan Documents, and all other agreements are cumulative. Each Lender has all
rights and remedies provided under the Code, by law, or in equity.  Any Lender's
exercise of one right or remedy is not an election,  and any Lender's  waiver of
any Event of Default is not a continuing  waiver.  Any  Lender's  delay is not a
waiver,  election, or acquiescence.  No waiver is effective unless signed by the
Lender  against  whom it operates  and then is only  effective  for the specific
instance and purpose for which it was given.

9 NOTICES. All notices or demands by any party about this Agreement or any other
related  agreement must be in writing and be personally  delivered or sent by an
overnight delivery service,  by certified mail, postage prepaid,  return receipt
requested,  or by  telefacsimile  to the addresses set forth at the beginning of
this  Agreement.  A party may  change  its  notice  address  by giving the other
parties written notice.

10 CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.

         Texas law governs the Loan  Documents  without  regard to principles of
conflicts  of law as if  performed  entirely  within the State of Texas by Texas
residents.  The  Company,  Borrower,  and Lenders  each submit to the  exclusive
jurisdiction of the State and Federal courts in Dallas County, Texas.

         THE  COMPANY,  BORROWER,  AND LENDERS  EACH WAIVE THEIR RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION  ARISING OUT OF ANY OF THE LOAN  DOCUMENTS
OR ANY CONTEMPLATED  TRANSACTION,  INCLUDING CONTRACT,  TORT, BREACH OF DUTY AND
ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER
INTO THIS  AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL AND,
BY ITS EXECUTION OF THIS  AGREEMENT  CONFIRMS THAT IT KNOWINGLY AND  VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH COUNSEL.

11 GENERAL PROVISIONS.

11.1 Successors and Assigns.  This Agreement binds and is for the benefit of the
successors and permitted assigns of each party. Neither the Company nor Borrower
may assign this  Agreement  or any rights or  Obligations  under it without each
Lender's prior written consent which may be granted or withheld in each Lender's
discretion.  Each Lender has the right,  without the consent of or notice to the
Company or Borrower, to sell, transfer, negotiate, or grant participation in all
or any part of, or any  interest  in,  such  Lender's  obligations,  rights  and
benefits under this Agreement, the Loan Documents or any related agreement.

11.2 Indemnification.  THE COMPANY WILL INDEMNIFY, DEFEND AND HOLD HARMLESS EACH
LENDER AGAINST: (A) ALL OBLIGATIONS,  DEMANDS,  CLAIMS, AND LIABILITIES ASSERTED
BY ANY OTHER PARTY IN CONNECTION WITH THE TRANSACTIONS  CONTEMPLATED BY THE LOAN
DOCUMENTS;  AND (B) ALL LOSSES INCURRED BY EACH SUCH LENDER FROM, FOLLOWING,  OR
CONSEQUENTIAL TO TRANSACTIONS BETWEEN LENDERS AND BORROWER (INCLUDING REASONABLE
ATTORNEYS'  FEES AND  EXPENSES),  EXCEPT  FOR  LOSSES  CAUSED  BY SUCH  LENDER'S
NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.



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11.3 Time of the  Essence.  Time is of the  essence for the  performance  of all
obligations in this Agreement.

11.4  Severability  of Provision.  Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.

11.5 Amendments in Writing,  Integration.  All amendments to this Agreement must
be in writing signed by each Lender, the Company,  and Borrower.  This Agreement
and the Loan Documents represent the entire agreement about this subject matter,
and supersedes prior or contemporaneous negotiations or agreements. All prior or
contemporaneous  agreements,  understandings,  representations,  warranties, and
negotiations  between the parties about the subject matter of this Agreement and
the Loan Documents merge into this Agreement and the Loan Documents.

11.6 Counterparts.  This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts,  each of which, when executed
and  delivered,  are  an  original,  and  all  taken  together,  constitute  one
Agreement. Such counterparts may be manual or facsimile signatures.

11.7  Survival.  All  covenants,  representations  and  warranties  made in this
Agreement continue in full force while any Obligations remain  outstanding.  The
obligations  of the Company in Section  12.2 to  indemnify  Lenders will survive
until all  statutes  of  limitations  for  actions  that may be brought  against
Lenders have run.

11.8 Confidentiality. In handling any confidential information, each Lender will
exercise  the same  degree of care  that it  exercises  for its own  proprietary
information,  but  disclosure  of  information  may  be  made  (i)  to  Lenders'
subsidiaries or Affiliates in connection with their business with Borrower, (ii)
to prospective transferees or purchasers of any interest in the loans (provided,
however, each Lender shall use commercially reasonable efforts in obtaining such
prospective  transferee or purchasers agreement of the terms of this provision),
(iii) as required by law, regulation, subpoena, or other order, (iv) as required
in  connection  with such Lender's  examination  or audit and (v) as such Lender
considers appropriate in exercising remedies under this Agreement.  Confidential
information  does not  include  information  that  either:  (a) is in the public
domain or in a Lender's  possession  when  disclosed to such Lender,  or becomes
part of the public domain after  disclosure to such Lender;  or (b) is disclosed
to such Lender by a third party, if Lender does not know that the third party is
prohibited from disclosing the information.

11.9 Attorneys'  Fees, Costs and Expenses.  In any action or proceeding  between
the Company or Borrower and any Lender arising out of the Loan  Documents,  each
party will pay its own  attorneys'  fees and other costs and expenses  incurred,
whether or not a lawsuit is filed.

12 DEFINITIONS; USAGE. In this Agreement:

12.1 Definitions.

         "Affiliate"  of a Person is a Person that owns or controls  directly or
indirectly the Person,  any Person that controls or is controlled by or is under
common  control  with the Person,  and each of that  Person's  senior  executive
officers,  directors,  partners and, for any Person that is a limited  liability
company, that Person's managers and members.

         "Agreement"  shall have the meaning given to it in the first  paragraph
of this Agreement.

         "Borrower" shall have the meaning given to it in the first paragraph of
this Agreement.

         "Business  Day" is any day that is not a  Saturday,  Sunday or a day on
which the banks in the Dallas metropolitan area are generally closed.

         "Code" is the Texas Business and Commerce Code.


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         "Collateral" shall mean (i) the Facility, and (ii) the property pledged
pursuant to the Pledge Agreement.

         "Common Stock" shall have the meaning given to it in Section 1.3.

         "Company"  shall have the meaning given to it in the first paragraph of
this Agreement.

         "Effective  Date,"  with regard to each  Lender,  is the date that such
Lender executes this  Agreement,  as evidenced by the date on the signature page
of this Agreement or a Supplement.

         "Facility" means the plant at Kenansville, North Carolina to be
purchased by Borrower and all personal property of Borrower or the Company
located therein.

         "GAAP" is generally accepted accounting principles.

         "Insolvency  Proceeding"  is any  proceeding  by or against  any Person
under the United States  Bankruptcy  Code, or any other bankruptcy or insolvency
law,  including   assignments  for  the  benefit  of  creditors,   compositions,
extensions generally with its creditors,  or proceedings seeking reorganization,
arrangement, or other relief.

         "Lender"  shall have the meaning given to it in the first  paragraph of
this  Agreement and shall also mean each Lender who executes this Agreement or a
Supplement.

         "Lenders"  shall mean Lender and each  additional  Person who becomes a
party to this  Agreement  by  executing a Supplement  and  delivering  it to the
Company.

         "Lender's  Expenses"  are all audit fees and  expenses  and  reasonable
costs or  expenses  (including  reasonable  attorneys'  fees and  expenses)  for
preparing,  negotiating,   administering,   defending  and  enforcing  the  Loan
Documents (including appeals or Insolvency Proceedings).

         "Lien" is a mortgage,  lien, deed of trust,  charge,  pledge,  security
interest or other encumbrance.

         "Loan" shall have the meaning given to it in Section 2.1(a).

         "Loan  Documents" are,  collectively,  this Agreement,  the Notes,  the
Warrants, the Pledge Agreement and any other present or future agreement between
the  Company or  Borrower  and any Lender (or for the  benefit of any Lender) in
connection with this Agreement, all as amended, extended or restated.

         "Material  Adverse  Change"  means  (i) a  material  impairment  in the
perfection or priority of the Lenders' security interest in the Collateral or in
the value of such Collateral which is not covered by adequate  insurance occurs;
(ii) a  material  adverse  change  in the  business,  operations,  or  condition
(financial or otherwise) of the Company occurs;  or (iii) a material  impairment
of the prospect of repayment of any portion of the Obligations occurs.

         "Maturity  Date"  is the one year  anniversary  of the  Effective  Date
unless extended by one year pursuant to Section 2.1(d) hereof.

         "Maximum  Lawful Amount" is defined in the definition of Maximum Lawful
Rate below.

         "Maximum  Lawful  Rate" is the maximum  rate of  interest  and the term
"Maximum Lawful Amount" means the maximum amount of interest that is permissible
under  applicable  state or federal  laws for the type of loan  evidenced by the
Loan  Documents.  If the Maximum  Lawful Rate is  increased  by statute or other
governmental  action after the Effective  Date, then the new Maximum Lawful Rate
will be applicable  to the payments from the effective  date of the rate change,
unless otherwise prohibited by law.



                                       7
<PAGE>

         "Notes" shall have the meaning given to it in Section 2.1(b).

         "Obligations" are all debts, principal, interest, Lender's Expenses and
other amounts Borrower owes Lenders now or later,  including  interest  accruing
after Insolvency Proceedings begin.

         "Person" is any individual, sole proprietorship,  partnership,  limited
liability company, joint venture, company, trust,  unincorporated  organization,
association,  corporation,  institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

         "Pledge  Agreement"  means the pledge  agreement  among Moez Nagji,  an
individual resident in North Carolina,  Wayne Coverdale,  an individual resident
in North Carolina,  Steve Stanko, an individual  resident in Pennsylvania,  A.D.
Justus Trust, a trust, and Lenders, attached hereto in the form of Exhibit D.

         "Responsible  Officer"  is each of the  Chief  Executive  Officer,  the
President, the Chief Financial Officer and the Controller of the Company.

         "SEC" means the United States Securities and Exchange Commission.

         "Senior  Lender"  means any Person or Persons  who is or are  granted a
security  interest  senior in  priority to that  granted to Lenders  pursuant to
Section 3.1 or 3.2 of this Agreement

         "Subsidiary" is for any Person, a joint venture,  or any other business
entity of which more than 50% of the voting stock or other  equity  interests is
owned or  controlled,  directly  or  indirectly,  by the  Person  or one or more
Affiliates of the Person.

         "Supplement"  means a supplement to this Agreement executed by a Person
by which such Person agrees to lend money to Borrower and becomes a party to and
bound by this Agreement.

         "Warrant"  means the  warrant  agreement  among the Company and Lenders
referred to in Section 2.3 and attached hereto as Exhibit C.

12.2 Usage

         In this Agreement, unless a clear contrary intention appears:

         (a) the singular number includes the plural number and vice versa;

         (b)  reference to any Person  includes  such  Person's  successors  and
assigns  but,  if  applicable,  only  if such  successors  and  assigns  are not
prohibited by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;

         (c) reference to any gender  includes each other gender or, in the case
of an entity, the neuter;

         (d)  reference  to any  agreement,  document or  instrument  means such
agreement, document or instrument as amended or modified and in effect from time
to time in accordance with the terms thereof;

         (e) reference to any law means such law as amended, modified, codified,
replaced  or  reenacted,  in whole or in part,  and in effect from time to time,
including  rules and  regulations  promulgated  thereunder  and reference to any
section or other provision of any law means that provision of such law from time
to time in effect and  constituting  the  substantive  amendment,  modification,
codification, replacement or reenactment of such section or other provision;

         (f) "hereunder",  "hereof",  "hereto" and words of similar import shall
be deemed  references  to this  Agreement  as a whole and not to any  particular
Article, Section or other provision thereof;



                                       8
<PAGE>

         (g)  "including"  (and  with  correlative   meaning   "include")  means
including  without  limiting the  generality of any  description  preceding such
term;

         (h) "or" is used in the inclusive sense of "and/or";

         (i) with  respect to the  determination  of any period of time,  "from"
means "from and including" and "to" means "to but excluding"; and

         (j) references to documents,  instruments or agreements shall be deemed
to refer as well to all addenda, exhibits, schedules or amendments thereto.

THIS  AGREEMENT  AND THE OTHER  LOAN  DOCUMENTS  REPRESENT  THE FINAL  AGREEMENT
BETWEEN  THE  PARTIES  AND  MAY  NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


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                                       9
<PAGE>

Executed as of August 18, 2003.


THE COMPANY:

GREEN POWER ENERGY HOLDINGS CORP.


By:      ______________________________
         Wayne Coverdale
         President and Chief Executive Officer

BORROWER:


By:      ______________________________
         Wayne Coverdale
         President and Chief Executive Officer

LENDER:


By:      ______________________________
Name:    ______________________________
Title:   ______________________________


































                                       10
<PAGE>

                    SUPPLEMENT TO LOAN AND SECURITY AGREEMENT



         The undersigned has read the Green Power and Energy Holdings Corp. Loan
and Security  Agreement dated as of the Effective Date (the  "Agreement")  among
the Company,  Borrower,  and Lenders  (terms  defined in the  Agreement are used
herein  with  the  same  meaning),  and is  fully  cognizant  of the  terms  and
provisions  thereof. In consideration of being permitted to acquire a promissory
note from the Company,  the  undersigned  agrees that,  by the execution of this
Supplement,  the  undersigned  has  become,  and is,  one of the  parties to the
Agreement as if originally  named  therein,  for all intents and purposes and to
the same extent as if originally named in the Agreement.

         The  undersigned  is hereby  lending $ __________  to  Borrower,  to be
evidenced  by a Note made by  Borrower  and  payable to the  undersigned  in the
amount of $__________.

         The address of the undersigned is:

                  _______________________

                  _______________________

                  _______________________



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                                       11
<PAGE>



         Dated this _____ day of __________, 20___.


                                               _________________________________
                                               (Signature of Lender)



                                               _________________________________
                                               (Printed or typed name of Lender)








         Accepted  and agreed to on behalf of the Company and the Borrower as of
this _____ day of __________, 20___.

                                              GREEN POWER ENERGY HOLDINGS, CORP.



                                              By________________________________

                                              Title_____________________________



                                              GREEN POWER KENANSVILLE, L.L.C.



                                              By________________________________

                                              Title_____________________________



































                                       12
<PAGE>

                                    EXHIBIT A



                            [Form of Promissory Note]



<PAGE>

                                 PROMISSORY NOTE

$[_______]                   Dallas, Texas       Effective Date: [_______], 2003

         FOR VALUE RECEIVED, the undersigned, GREEN POWER KENANSVILLE,  L.L.C..,
a Delaware  limited  liability  company  (hereinafter  referred to as  "Maker"),
promises  to pay to  [____________],  an  individual  resident  in the  state of
[_______] whose address is [address]  ("Holder"),  in lawful money of the United
States of America,  the sum of [amount]  ($[________]),  together  with interest
thereon from the date hereof until paid at the rate of 15.0% per annum.

         This promissory note (this "Note") is due and payable as follows:

         Interest  on the Note is  payable on the  fifteenth  (15th) day of each
         month following the Effective Date. No payments of principal under this
         Note shall be due until the Maturity Date, at which point all principal
         and accrued interest remaining outstanding shall become immediately due
         and payable.  For purposes of this Note, the term "Maturity Date" shall
         mean the one (1) year anniversary of the Effective Date,  provided that
         if Maker  exercises its option  pursuant to Section  1.1(d) of the Loan
         Agreement  among Maker,  Holder and other lenders to extend maturity of
         this Note,  "Maturity Date" shall mean the two (2) year  anniversary of
         the Effective Date.

         All  payments of  principal  and interest on this Note shall be made at
the address of Holder set forth above, or such other place as the holder of this
Note shall  designate  in writing to Maker.  If any payment of  principal  of or
interest on this Note shall  become due on a day which is not a Business Day (as
hereinafter defined), such payment shall be made on the next succeeding Business
Day and any such  extension of time shall be included in  computing  interest in
connection with such payment. As used herein, the term "Business Day" shall mean
any day other than a Saturday, Sunday or any other day on which national banking
associations are authorized to be closed.

         If any  installment or payment of principal or interest of this Note is
not paid within ten (10) days of when it is due and is not cured  within  thirty
(30) days following such ten (10) day period; or if Maker shall become insolvent
(however such insolvency may be evidenced);  or if any governmental authority or
any court at the instance  thereof shall take possession of any substantial part
of the  property of or assume  control over the affairs or  operations  of, or a
receiver shall be appointed for or take possession of the property of, or a writ
or order of attachment or garnishment shall be issued or made against any of the
property of Maker;  thereupon,  at the option of Holder,  this Note shall become
and be due and payable forthwith.

         This Note is intended to be performed in accordance  with,  and only to
the extent  permitted  by, all  applicable  usury laws. If any provision of this
Note or the  application  hereof to any person or  circumstance  shall,  for any
reason and to any extent, be invalid or  unenforceable,  neither the application
of such provision to any other person or  circumstance  nor the remainder of the
instrument in which such  provision is contained  shall be affected  thereby and
such provision shall be enforced to the greatest extent  permitted by law. It is
expressly  stipulated  and agreed to be the intent of the Holder to at all times
comply with the usury and other  applicable laws now or hereafter  governing the
interest payable on the  indebtedness  evidenced by this Note. If the applicable
law is ever revised, repealed or judicially interpreted so as to render usurious
any amount  called  for under this Note,  or  contracted  for,  charged,  taken,
reserved or received with respect to the indebtedness evidenced by this Note, or
if Holder's  exercise of the option to accelerate  the maturity of this Note, or
if any  prepayment  by Maker results in Maker having paid any interest in excess
of that permitted by law, then it is the express intent of Maker and Holder that
all excess amounts theretofore  collected by Holder be credited on the principal
balance  of this Note  (or,  if this  Note has been  paid in full,  refunded  to
Maker),  and the provisions of this Note  immediately be deemed reformed and the
amounts thereafter  collectable hereunder reduced,  without the necessity of the

<PAGE>

execution of any new document, so as to comply with the then applicable law, but
so as to  permit  the  recovery  of the  fullest  amount  otherwise  called  for
hereunder.  All  sums  paid,  or  agreed  to be  paid,  by  Maker  for the  use,
forbearance,   detention,  taking,  charging,  receiving  or  reserving  of  the
indebtedness  of Maker to Holder  under this Note shall,  to the maximum  extent
permitted  by  applicable  law, be  amortized,  prorated,  allocated  and spread
throughout the full term of such indebtedness  until payment in full so that the
rate or amount of interest on account of such  indebtedness  does not exceed the
usury ceiling from time to time in effect and  applicable  to such  indebtedness
for so long as such indebtedness is outstanding. Notwithstanding anything to the
contrary  contained  herein, it is not the intention of Holder to accelerate the
maturity of any interest  that has not accrued at the time of such  acceleration
or to collect unearned interest at the time of such acceleration.

         In no  event  shall  Chapter  346  of the  Texas  Finance  Code  (which
regulates  certain  revolving  loan accounts and revolving  tri-party  accounts)
apply to this Note. To the extent that Chapter 303 of the Texas Finance Code, as
amended,  is applicable  to this Note,  the "weekly  ceiling"  specified in such
chapter is the applicable ceiling.

         THIS NOTE, AND THE LOAN IT EVIDENCES,  HAVE BEEN  NEGOTIATED,  EXECUTED
AND MADE IN THE  STATE  OF  TEXAS,  WITH  REFERENCE  TO THE  LAWS OF SAID  STATE
(INCLUDING  APPLICABLE  FEDERAL LAW),  AND IT IS UNDERSTOOD  AND AGREED THAT THE
LEGALITY,  ENFORCEABILITY,  AND  CONSTRUCTION  HEREOF SHALL BE GOVERNED BY TEXAS
LAW, INCLUDING SUCH APPLICABLE FEDERAL LAW.

                                     MAKER:



                                                 GREEN POWER KENANSVILLE, L.L.C.



                                                 By:____________________________
                                                    Moez Nagji
                                                    Chief Financial Officer



<PAGE>
<TABLE>
<CAPTION>

                                    EXHIBIT B



------------------------------ ------------------------------------ ----------- ----------------
                                                                     Principal
          Lender                                                       Value       Number of
                                          Address                     of Note    Warrant Shares
------------------------------ ------------------------------------ ----------- ----------------
<S>                            <C>                                    <C>             <C>


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


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


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


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


------------------------------ ------------------------------------ ----------- ----------------
</TABLE>




<PAGE>

                                    EXHIBIT C



                                [Form of Warrant]



<PAGE>

                                WARRANT AGREEMENT


THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE  SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR APPLICABLE  STATE  SECURITIES  LAWS, OR AN OPINION OF COUNSEL IN
FORM,  REASONABLY  ACCEPTABLE  TO THE ISSUER THAT  REGISTRATION  IS NOT REQUIRED
UNDER THE 1933 ACT OR UNLESS SOLD  PURSUANT TO RULE 144 UNDER SAID ACT. ANY SUCH
OFFER,  SALE,  ASSIGNMENT OR TRANSFER MUST ALSO COMPLY WITH THE APPLICABLE STATE
SECURITIES LAWS.


                        GREEN POWER ENERGY HOLDINGS CORP

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:      ______                            Number of Shares:___________


Date of Issuance: ______, 2003


Green Power Energy  Holdings  Corp.,  a Delaware  corporation  (the  "Company"),
hereby certifies that, for Ten United States Dollars ($10.00) and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  _______________,  the  registered  holder hereof or his permitted
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company  upon  surrender of this  Warrant,  at any time or times on or after the
first anniversary of the date of issuance, but not after 11:59 P.M. Central Time
on the Expiration  Date (as defined herein)  _________ fully paid  nonassessable
shares of Common Stock (as defined herein) of the Company (the "Warrant Shares")
at the purchase price per share provided in Section 1(b) below.

         Section 1.

         (a) Loan and  Security  Agreement.  This Warrant is one of the Warrants
(the "Warrants")  issued pursuant to the terms of that certain Loan and Security
Agreement dated as of ______,  2003,  among the Company and the Lenders referred
to therein (the "Loan Agreement").

         (b) Definitions.  The following words and terms as used in this Warrant
shall have the following meanings:

                  (i) "Common Stock" means (i) the Company's  common stock,  par
value $0.001 per share,  and (ii) any capital stock into which such Common Stock
shall have been changed or any capital stock  resulting from a  reclassification
of such Common Stock.

                  (ii)  "Expiration  Date" means the date two (2) years from the
date of this  Warrant or, if such date falls on a Saturday,  Sunday or other day
on which banks are required or authorized to be closed in the City of Wilmington
or the State of North  Carolina or on which  trading  does not take place on the
principal  exchange or automated  quotation  system on which the Common Stock is
traded (a "Holiday"), the next date that is not a Holiday.


<PAGE>

                  (iii)  "Person"  means  an  individual,  a  limited  liability
company,  a  partnership,   a  joint  venture,   a  corporation,   a  trust,  an
unincorporated  organization  and a  government  or  any  department  or  agency
thereof.

                  (iv)  "Securities  Act" means the  Securities  Act of 1933, as
amended.

                  (v)  "Warrant"  means this Warrant and all Warrants  issued in
exchange, transfer or replacement of any thereof.

                  (vi) "Warrant Exercise Price" shall be $1.00 per common share.

         Section 2. Exercise of Warrant.

         (a) Subject to the terms and  conditions  hereof,  this  Warrant may be
exercised by the holder hereof then  registered on the books of the Company,  in
whole  or in part,  at any  time on any  Business  Day (as  defined  in the Loan
Agreement) on or after the opening of business on the first  anniversary  of the
date of issuance of this  Warrant  and prior to 11:59 P.M.  Eastern  Time on the
Expiration  Date  by (i)  delivery  of a  written  notice,  in the  form  of the
subscription  notice  attached as Exhibit A hereto (the "Exercise  Notice"),  of
such holder's election to exercise this Warrant,  which notice shall specify the
number of Warrant  Shares to be  purchased,  (ii)  payment to the  Company of an
amount equal to the Warrant  Exercise Price  multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (plus any applicable issue or
transfer  taxes) (the  "Aggregate  Exercise  Price") in cash or by check or wire
transfer,  and (iii) the  surrender  to a common  carrier  for  delivery  to the
Company  as soon  as  practicable  following  such  date,  this  Warrant  (or an
indemnification  undertaking  with  respect  to this  Warrant in the case of its
loss,  theft or  destruction);  provided,  that if such Warrant Shares are to be
issued in any name other  than that of the  registered  holder of this  Warrant,
such issuance  shall be deemed a transfer and the  provisions of Section 7 shall
be  applicable.  In the event of any exercise of the rights  represented by this
Warrant in compliance with this Section 2(a), a certificate or certificates  for
the Warrant Shares so purchased,  in such  denominations  as may be requested by
the holder hereof and  registered in the name of, or as directed by, the holder,
shall be delivered at the  Company's  expense to, or as directed by, such holder
as soon as practicable, and in no event later than ten (10) Business Days, after
the Company's receipt of the Exercise Notice,  the Aggregate  Exercise Price and
this Warrant (or an indemnification  undertaking with respect to this Warrant in
the case of its loss,  theft or  destruction).  Upon  delivery  of the  Exercise
Notice and Aggregate Exercise Price referred to in clause (ii) above, the holder
of this Warrant  shall be deemed for all  corporate  purposes to have become the
holder of record of the Warrant  Shares with  respect to which this  Warrant has
been exercised, irrespective of the date of delivery of this Warrant as required
by clause (iii) above or the certificates evidencing such Warrant Shares.

         (b) Unless the rights represented by this Warrant shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than ten (10)  Business Days after any exercise and at its own

<PAGE>

expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall  represent  rights to  purchase  the  number of  Warrant  Shares
purchasable  immediately  prior to such exercise  under this Warrant  exercised,
less the  number of  Warrant  Shares  with  respect  to which  such  Warrant  is
exercised.

         (c) No  fractional  shares  of Common  Stock are to be issued  upon the
exercise of this Warrant, but rather the number of shares of Common Stock issued
upon  exercise of this Warrant  shall be rounded up or down to the nearest whole
number.

         (d)  Limitation on Beneficial  Ownership.  The Company shall not effect
any exercise of this Warrant and no holder of this Warrant  shall have the right
to exercise  this Warrant  pursuant to Section 2 to the extent that after giving
effect to such exercise such Person (together with such Person's affiliates) (A)
would beneficially own in excess of 4.9% of the outstanding shares of the Common
Stock following such exercise and (B) would have acquired,  through  exercise of
this Warrant or otherwise,  in excess of 4.9% of the  outstanding  shares of the
Common Stock  following  such  exercise  during the 60-day  period ending on and
including  such date of exercise.  For purposes of the foregoing  sentence,  the
number  of  shares  of  Common  Stock  beneficially  owned by a  Person  and its
affiliates or acquired by a Person and its affiliates, as the case may be, shall
include  the number of shares of Common  Stock  issuable  upon  exercise of this
Warrant with respect to which the  determination of such sentence is being made,
but shall  exclude the number of shares of Common  Stock which would be issuable
upon (i) exercise of the remaining,  non-exercised Warrant beneficially owned by
such  Person  and  its  affiliates  and  (ii)  exercise  or  conversion  of  the
unexercised  or  unconverted  portion  of any other  securities  of the  Company
(including,  without  limitation,  any  warrants)  subject  to a  limitation  on
conversion or exercise analogous to the limitation contained herein beneficially
owned by such Person and its  affiliates.  Except as set forth in the  preceding
sentence,  for  purposes of this Section  2(d),  beneficial  ownership  shall be
calculated in accordance  with Section 13(d) of the  Securities  Exchange Act of
1934, as amended.  A holder of this Warrant may waive the  restrictions  of this
paragraph  only upon not less than 61 days prior  written  notice to the Company
(with such waiver taking  effect only upon the  expiration of such 61 day notice
period).  Notwithstanding  anything  to  the  contrary  contained  herein,  each
Exercise Notice shall constitute a representation  by the holder submitting such
Exercise  Notice that,  after giving  effect to such  Exercise  Notice,  (A) the
holder will not  beneficially own (as determined in accordance with this Section
2(d)) and (B) during  the 60-day  period  ending on and  including  such date of
exercise, the holder will not have acquired, through exercise of this Warrant or
otherwise,  a  number  of  shares  of  Common  Stock  in  excess  of 4.9% of the
outstanding  shares of Common Stock as reflected  in the  Company's  most recent
Form 10-Q or Form 10-K,  as the case may be, or more recent public press release
or other  public  notice by the  Company  setting  forth the number of shares of
Common Stock outstanding, but after giving effect to exercise of this Warrant by
such  holder  since the date as of which such  number of  outstanding  shares of
Common Stock was reported.

         Section 3. Covenants as to Common Stock. The Company hereby covenants
and agrees as follows:

         (a) This  Warrant is, and any  Warrant  issued in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

<PAGE>

         (b) All Warrant  Shares  which may be issued  upon the  exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable  and free from all taxes,  liens and charges with respect
to the issue thereof.

         (c) During  the period  within  which the  rights  represented  by this
Warrant may be  exercised,  the Company  will at all times have  authorized  and
reserved at least 100% of the number of shares of Common Stock needed to provide
for the  exercise of the rights  then  represented  by this  Warrant and the par
value of said shares  will at all times be less than or equal to the  applicable
Warrant Exercise Price.

         Section 4. Taxes.  The Company shall pay any and all taxes which may be
payable  with  respect to the  issuance  and  delivery  of Warrant  Shares  upon
exercise of this Warrant.

         Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise
specifically  provided  herein,  no holder,  as such,  of this Warrant  shall be
entitled to vote or receive  dividends  or be deemed the holder of shares of the
Company  for any  purpose,  nor shall  anything  contained  in this  Warrant  be
construed  to confer  upon the holder  hereof,  as such,  any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization,  issue of stock,  reclassification
of stock,  consolidation,  merger,  conveyance or otherwise),  receive notice of
meetings,  receive dividends or subscription rights, or otherwise,  prior to the
issuance to the holder of this Warrant of the Warrant  Shares which he or she is
then  entitled to receive  upon the due exercise of this  Warrant.  In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on such holder to purchase  any  securities  (upon  exercise of this  Warrant or
otherwise)  or as a stockholder  of the Company,  whether such  liabilities  are
asserted by the Company or by creditors of the Company.

         Section 6.  Representations of Holder.  The holder of this Warrant,  by
the  acceptance  hereof,  represents  that it is acquiring  this Warrant and the
Warrant  Shares  for its own  account  for  investment  only and not with a view
towards,  or for resale in connection  with, the public sale or  distribution of
this  Warrant or the Warrant  Shares,  except  pursuant to sales  registered  or
exempted  under the  Securities  Act;  provided,  however,  that by  making  the
representations herein, the holder does not agree to hold this Warrant or any of
the Warrant Shares for any minimum or other specific term and reserves the right
to dispose of this Warrant and the Warrant Shares at any time in accordance with
or pursuant to a  registration  statement or an exemption  under the  Securities
Act.

         Section 7. Ownership and Transfer.

         (a) The Company shall maintain at its principal  executive  offices (or
such other office or agency of the Company as it may  designate by notice to the
holder hereof),  a register for this Warrant,  in which the Company shall record
the name and address of the Person in whose name this  Warrant has been  issued,
as well as the name and  address of each  transferee.  The Company may treat the
Person in whose name any Warrant is  registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events  recognizing  any transfers  made in accordance  with the terms of
this Warrant.

         (b) This  Warrant  and the  rights  granted  to the  holder  hereof are
transferable, in whole or in part, upon surrender of this Warrant, together with

<PAGE>

a properly  executed  warrant  power in the form of  Exhibit B attached  hereto;
provided,  however,  that any  transfer  or  assignment  shall be subject to the
conditions set forth in Section 7(c) below.

         (c) The holder of this  Warrant  understands  that this Warrant has not
been and is not expected to be, registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold,  assigned or transferred
unless (a)  subsequently  registered  thereunder,  or (b) such holder shall have
delivered to the Company an opinion of counsel, in generally acceptable form, to
the effect that the securities to be sold,  assigned or transferred may be sold,
assigned  or  transferred  pursuant  to an  exemption  from  such  registration;
provided  that  (i) any sale of such  securities  made in  reliance  on Rule 144
promulgated  under the  Securities  Act may be made only in accordance  with the
terms of said Rule and further,  if said Rule is not  applicable,  any resale of
such securities  under  circumstances in which the seller (or the person through
whom the sale is made)  may be  deemed  to be an  underwriter  (as that  term is
defined in the Securities Act) may require  compliance with some other exemption
under the  Securities  Act or the rules and  regulations  of the  Securities and
Exchange  Commission  thereunder;  and (ii)  neither  the  Company nor any other
person is under any obligation to register the Warrants under the Securities Act
or any state  securities  laws or to comply with the terms and conditions of any
exemption thereunder.

         Section 8. Adjustment to the Shares. The Warrant Exercise Price and the
number of shares of Common Stock issuable upon exercise of this Warrant shall be
adjusted from time to time as follows:

         (a)  Adjustment  of  Warrant   Exercise   Price  upon   Subdivision  or
Combination  of  Common  Stock.  If the  Company  at  anytime  after the date of
issuance  of this  Warrant  subdivides  (by any  stock  split,  stock  dividend,
recapitulation  or otherwise) one or more classes of its  outstanding  shares of
Common  Stock into a greater  number of shares,  the Warrant  Exercise  Price in
effect immediately prior to such subdivision will be proportionately reduced and
the  number of  shares of Common  Stock  obtainable  upon the  exercise  of this
Warrant will be proportionately  increased. If the Company at any time after the
date of issuance of this Warrant combines (by  combination,  reverse stock split
or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares,  the Warrant  Exercise  Price in effect  immediately
prior to such  combination will be  proportionately  increased and the number of
shares  of  Common  Stock  obtainable  upon  exercise  of this  Warrant  will be
proportionately decreased.

         (b) Reclassification,  Exchange, Combinations or Substitution. Upon any
reclassification,  exchange,  substitution,  or other  event  that  results in a
change of the number  and/or class of the  securities  issuable upon exercise or
conversion  of this  Warrant,  the holder of this  Warrant  shall be entitled to
receive,  upon exercise or  conversion  of this Warrant,  the number and kind of
securities  and property that the holder of this Warrant would have received for
the shares of Common Stock if this Warrant had been exercised immediately before
such reclassification,  exchange,  substitution,  or other event. The Company or
its successor  shall  promptly issue to holder of this Warrant a new Warrant for
such new  securities  or other  property.  The new  Warrant  shall  provide  for
adjustments  which shall be as nearly  equivalent as may be  practicable  to the
adjustments  provided  for in this  Section  8  including,  without  limitation,
adjustments  to the Warrant  Exercise  Price and to the number of  securities or
property  issuable  upon  exercise of the new Warrant.  The  provisions  of this
Section 8(b) shall similarly apply to successive  reclassifications,  exchanges,
substitutions, or other events.

<PAGE>

         Section  9. Lost,  Stolen,  Mutilated  or  Destroyed  Warrant.  If this
Warrant is lost, stolen,  mutilated or destroyed,  the Company shall, on receipt
of an indemnification undertaking,  issue a new Warrant of like denomination and
tenor as this Warrant so lost, stolen, mutilated or destroyed.

         Section  10.   Notice.   Any  notices,   consents,   waivers  or  other
communications required or permitted to be given under the terms of this Warrant
must be in writing and will be deemed to have been delivered:  (i) upon receipt,
when delivered  personally;  (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

                  If to the Company:

                           Green Power Energy Holdings, Corp.
                           3212 Wickford Drive
                           Wilmington, North Carolina 28409
                           Telephone: (910) 392-7690
                           Facsimile: ______________________
                           Attention:  Moez Nagji

                  With copy to:

                           Jackson Walker LLP
                           901 Main Street, Suite 6000
                           Dallas, Texas 75202
                           Telephone: (214) 953 - 6119
                           Facsimile: (214) 953 - 5822
                           Attention: George Diamond, Esq.

If to a holder of this Warrant,  to the following  address and facsimile  number
____________ _______________________,  or at such other address and facsimile as
shall be delivered to the Company upon the issuance or transfer of this Warrant.
Each party shall provide five days' prior  written  notice to the other party of
any change in address or facsimile number.  Written  confirmation of receipt (A)
given by the recipient of such notice,  consent,  waiver or other communication,
(B) mechanically or electronically  generated by the sender's  facsimile machine
containing the time, date,  recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally  recognized  overnight
delivery service shall be rebuttable  evidence of personal  service,  receipt by
facsimile or receipt from a nationally  recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

         Section  11.  Date.  The date of this  Warrant  is  _____,  2003.  This
Warrant, in all events, shall be wholly void and of no effect after the close of
business on the Expiration Date.

         Section 12. Amendment and Waiver.  Except as otherwise provided herein,
the  provisions  of the  Warrants  may be amended  and the  Company may take any
action  herein  prohibited,  or omit to perform  any act herein  required  to be
performed  by it, only if the Company has  obtained  the written  consent of the

<PAGE>

holders  of  Warrants  representing  a majority  of the  shares of Common  Stock
obtainable upon exercise of the Warrants then outstanding; provided that no such
action may increase the Warrant  Exercise  Price of the Warrants or decrease the
number of shares or class of stock  obtainable  upon  exercise  of any  Warrants
without the written consent of the holder of such Warrant.

         Section  13.  Descriptive  Headings  The  descriptive  headings  of the
several  Sections and  paragraphs  of this Warrant are inserted for  convenience
only and do not constitute a part of this Warrant.

         Section  14.  Governing  Law.  This  Warrant  shall be  governed by and
construed  and  enforced  in  accordance  with the laws of the  State of  Texas,
without  giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Texas or any other  jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of Texas.

                            [Signature Page Follows]



<PAGE>


         This Warrant has been duly executed by the Company as of the date first
set forth above.

                                               GREEN POWER ENERGY HOLDINGS CORP.



                                               By:______________________________
                                                  Moez Nagji
                                                  Chief Financial Officer



<PAGE>

                              EXHIBIT A TO WARRANT
                              --------------------

                                SUBSCRIPTION FORM

        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                       GREEN POWER ENERGY HOLDINGS, CORP.

         The  undersigned   holder  hereby   exercises  the  right  to  purchase
_________________  of the shares of Common  Stock  ("Warrant  Shares")  of Green
Power Energy Holdings Corp., a Delaware  corporation (the "Company"),  evidenced
by the attached Warrant (the "Warrant").  Capitalized  terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

         1. Payment of Warrant  Exercise Price.  The holder shall pay the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

         2. Delivery of Warrant Shares.  The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date:                             ,
     ____________________  _______ ___________





Name of Registered Holder

_____________________________

Name:________________________














                                      A-1
<PAGE>

                              EXHIBIT B TO WARRANT
                              --------------------

                              FORM OF WARRANT POWER


FOR  VALUE  RECEIVED,  the  undersigned  does  hereby  assign  and  transfer  to
________________,  Federal Identification No. __________,  a warrant to purchase
____________ shares of the capital stock of Green Power Energy Holdings Corp., a
Delaware corporation,  represented by warrant certificate no. _____, standing in
the name of the  undersigned on the books of said  corporation.  The undersigned
does  hereby  irrevocably  constitute  and appoint  ______________,  attorney to
transfer the warrants of said  corporation,  with full power of  substitution in
the premises.


Dated:  _______________, 200__
                                                ________________________________

                                                Name:___________________________























                                      B-1
<PAGE>

                                    EXHIBIT D



                               [Pledge Agreement]





<PAGE>

                                PLEDGE AGREEMENT


         THIS PLEDGE AGREEMENT ("Agreement") is made as of August 18, 2003, by
Wayne Coverdale, Steve Stanko, A.D. Justus Trust and Moez Nagji (hereinafter
collectively called "Pledgor"), in favor of the individuals or entities listed
on Schedule "A" hereto and each additional person who becomes a party to this
Agreement by executing a Supplement and delivering it to the Company
(hereinafter collectively called the "Secured Party"). Pledgor hereby agrees
with Secured Party as follows:

         1.  Definitions.  As used in this Agreement,  the following terms shall
have the meanings indicated below.

                  (a) The term "Code" shall mean the Uniform  Commercial Code as
         in effect in the State of Texas on the date of this  Agreement or as it
         may hereafter be amended from time to time.

                  (b) The term "Collateral" shall mean all property specifically
         described  on  Schedule  "B"  attached  hereto and made a part  hereof.
         Schedule  "B"  shall set forth up to  1,000,000  shares of Green  Power
         Energy Corp. common stock (consisting of 250,000 shares held by each of
         the Pledgors).  The number of shares actually set forth on Schedule "B"
         shall be that number of shares  equal to  one-fourth  of the  aggregate
         amount of money then loaned to Green Power  Kenansville,  L.L.C. by the
         Secured  Party,  rounded to the  nearest  10,000.  Each  Pledgor  shall
         contribute  one-fourth  of the total  shares  pledged  pursuant to this
         Agreement.  Schedule  "B" shall be updated from time to time to reflect
         the proper number of shares as described in this Section 1(b). The term
         Collateral,  as used herein,  shall also include (i) all  certificates,
         instruments and/or other documents  evidencing the foregoing,  (ii) all
         renewals, replacements and substitutions of all of the foregoing, (iii)
         all Additional Property (as hereinafter defined), and (iv) all PRODUCTS
         and PROCEEDS of all of the foregoing.  The designation of proceeds does
         not authorize Pledgor to sell,  transfer or otherwise convey any of the
         foregoing property.

                  (c) The term "Loan  Documents"  shall mean all instruments and
         documents   evidencing,   securing,   governing,   guaranteeing  and/or
         pertaining to the Indebtedness, together with all renewals, extensions,
         amendments, supplements and restatements thereto.

                  (d) The term  "Indebtedness"  shall  mean the  obligations  of
         Green  Power  Energy  Holdings  Corp.  and Green  Power  Holdings,  LLC
         (hereinafter  referred  to as  "Primary  Debtor")  pursuant to the Loan
         Documents.

                  (e) The term  "Documents"  shall mean this (i)  Agreement  and
         (ii) the Loan Documents.

                  (f) The term "Obligated Party" shall mean any party other than
         Primary Debtor who secures, guarantees and/or is otherwise obligated to
         pay all or any portion of the Indebtedness.

<PAGE>

                  (g) Additional Definitions.  All words and phrases used herein
         which are expressly defined in Section 1.201, Chapter 8 or Chapter 9 of
         the Code shall have the meaning  provided for therein.  Other words and
         phrases defined  elsewhere in the Code shall have the meaning specified
         therein  except to the  extent  such  meaning  is  inconsistent  with a
         definition in Section 1.201, Chapter 8 or Chapter 9 of the Code.

         2. Security Interest.  As security for the Indebtedness,  Pledgor,  for
value received, hereby grants to Secured Party a continuing security interest in
the Collateral on a pro rata basis based upon the amount of Indebtedness owed to
the respective Secured Party referenced on Schedule "A" hereto.

         3.  Additional  Property.  Collateral  shall also include the following
property  (collectively,   the  "Additional  Property")  which  Pledgor  becomes
entitled to receive or shall  receive in connection  with any other  Collateral:
(a)  any  stock  certificate,  including  without  limitation,  any  certificate
representing  a  stock  dividend  or any  certificate  in  connection  with  any
recapitalization,  reclassification,  merger, consolidation, conversion, sale of
assets, combination of shares, stock split or spin-off; (b) any option, warrant,
subscription or right in substitution of any other Collateral; (c) any dividends
or distributions of any kind whatsoever, whether distributable in cash, stock or
other  property;  and (d)  any  conversion  or  redemption  proceeds;  provided,
however,  that  until the  occurrence  of an Event of  Default  (as  hereinafter
defined), Pledgor shall be entitled to all cash dividends paid on the Collateral
free of the security  interest  created  under this  Agreement.  All  Additional
Property  received  by Pledgor  shall be  received  in trust for the  benefit of
Secured Party.  All Additional  Property and all  certificates  or other written
instruments or documents  evidencing and/or representing the Additional Property
that is received  by  Pledgor,  together  with such  instruments  of transfer as
Secured Party may request,  shall  immediately be delivered to or deposited with
Secured Party and held by Secured  Party as  Collateral  under the terms of this
Agreement.  If the  Additional  Property  received by Pledgor shall be shares of
stock or other  securities,  such shares of stock or other  securities  shall be
duly  endorsed in blank or  accompanied  by proper  instruments  of transfer and
assignment  duly  executed  in  blank  with,  if  requested  by  Secured  Party,
signatures  guaranteed by a member or member organization in good standing of an
authorized  Securities  Transfer  Agents  Medallion  Program,  all in  form  and
substance  satisfactory to Secured Party.  Secured Party shall be deemed to have
possession of any Collateral in transit to Secured Party or its agent.

         4. Voting  Rights.  As long as no Event of Default  shall have occurred
hereunder,  any voting rights incident to any stock or other securities  pledged
as Collateral may be exercised by Pledgor; provided,  however, that Pledgor will
not exercise,  or cause to be  exercised,  any such voting  rights,  without the
prior written consent of Secured Party, if the direct or indirect effect of such
vote will result in an Event of Default hereunder.

         5.  Maintenance  of  Collateral.  Other than the exercise of reasonable
care to assure the safe custody of any Collateral in Secured Party's  possession
from  time to  time,  Secured  Party  does  not  have  any  obligation,  duty or
responsibility  with respect to the Collateral.  Without limiting the generality
of the  foregoing,  Secured  Party  shall  not  have  any  obligation,  duty  or
responsibility to do any of the following: (a) ascertain any maturities,  calls,
conversions,  exchanges,  offers,  tenders or similar  matters  relating  to the
Collateral  or  informing  Pledgor with  respect to any such  matters;  (b) fix,

<PAGE>

preserve  or  exercise  any  right,  privilege  or option  (whether  conversion,
redemption or otherwise) with respect to the Collateral unless (i) Pledgor makes
written  demand to Secured Party to do so, (ii) such written  demand is received
by Secured Party in sufficient  time to permit  Secured Party to take the action
demanded in the ordinary  course of its  business,  and (iii)  Pledgor  provides
additional collateral,  acceptable to Secured Party in its sole discretion;  (c)
collect any amounts  payable in respect of the  Collateral  (Secured Party being
liable to account to Pledgor only for what Secured Party may actually receive or
collect thereon);  (d) sell all or any portion of the Collateral to avoid market
loss; (e) sell all or any portion of the Collateral unless and until (i) Pledgor
makes written demand upon Secured Party to sell the Collateral, and (ii) Pledgor
provides  additional  collateral,  acceptable  to  Secured  Party  in  its  sole
discretion;  or (f) hold the Collateral for or on behalf of any party other than
Pledgor.

         6.  Representations  and  Warranties.  Pledgor  hereby  represents  and
warrants the following to Secured Party:

                  (a)  Enforceability.  This  Agreement and the other  Documents
         constitute legal, valid and binding obligations of Pledgor, enforceable
         in  accordance  with  their  respective  terms,  except as  limited  by
         bankruptcy,  insolvency or similar laws of general application relating
         to the  enforcement  of  creditors'  rights  and  except to the  extent
         specific remedies may generally be limited by equitable principles.

                  (b)  Ownership  and  Liens.  Pledgor  has  good  title  to the
         Collateral   free  and  clear  of  all   liens,   security   interests,
         encumbrances  or  adverse  claims,  except  for the  security  interest
         created by this Agreement. No dispute, right of setoff, counterclaim or
         defense  exists  with  respect  to all or any  part of the  Collateral.
         Pledgor  has  not  executed  any  other  security  agreement  currently
         affecting the Collateral and no financing statement or other instrument
         similar in effect covering all or any part of the Collateral is on file
         in any  recording  office  except as may have been executed or filed in
         favor of Secured Party.

                  (c) No  Conflicts  or  Consents.  Neither the  ownership,  the
         intended use of the  Collateral  by Pledgor,  the grant of the security
         interest by Pledgor to Secured Party herein nor the exercise by Secured
         Party of its rights or remedies  hereunder,  will (i) conflict with any
         provision  of (A)  any  domestic  or  foreign  law,  statute,  rule  or
         regulation,  or (B) any agreement,  judgment,  license, order or permit
         applicable  to or binding  upon  Pledgor  or  otherwise  affecting  the
         Collateral,  or (ii)  result in or require  the  creation  of any lien,
         charge or  encumbrance  upon any assets or  properties of Pledgor or of
         any person.  No consent,  approval,  authorization  or order of, and no
         notice to or filing with,  any court,  governmental  authority or third
         party is  required  in  connection  with the  grant by  Pledgor  of the
         security interest herein or the exercise by Secured Party of its rights
         and remedies hereunder.

                  (d) Security Interest.  Pledgor has and will have at all times
         full right,  power and  authority  to grant a security  interest in the
         Collateral to Secured  Party in the manner  provided  herein,  free and
         clear of any lien,  security  interest or other charge or  encumbrance.
         This Agreement creates a legal,  valid and binding security interest in
         favor of Secured Party in the Collateral.


<PAGE>

                  (e) Location.  Pledgor's  residence or chief executive office,
         as the case may be, and the office  where the  records  concerning  the
         Collateral  are  kept  is  located  at its  address  set  forth  on the
         signature page hereof.

                  (f)  Solvency of  Pledgor.  As of the date  hereof,  and after
         giving  effect  to this  Agreement  and  the  completion  of all  other
         transactions  contemplated  by Pledgor at the time of the  execution of
         this Agreement,  (i) Pledgor is and will be solvent and (ii) Pledgor is
         paying and will continue to be able to pay its debts as they mature.

                  (g) Securities. Any certificates evidencing securities pledged
         as  Collateral  are valid and  genuine and have not been  altered.  All
         securities  pledged as Collateral have been duly authorized and validly
         issued,  are  fully  paid and  non-assessable,  and were not  issued in
         violation of the preemptive  rights of any party or of any agreement by
         which  Pledgor  or the  issuer  thereof is bound.  No  restrictions  or
         conditions  exist  with  respect  to  the  transfer  or  voting  of any
         securities  pledged  as  Collateral,  except as has been  disclosed  to
         Secured Party in writing.

         7.  Affirmative  Covenants.  Pledgor  will  comply  with the  covenants
contained in this Section at all times during the period of time this  Agreement
is effective unless Secured Party shall otherwise consent in writing.

                  (a)  Ownership  and  Liens.  Pledgor  will  maintain  good and
         marketable  title  to all  Collateral  free  and  clear  of all  liens,
         security  interests,  encumbrances  or adverse  claims,  except for the
         security  interest  created by this Agreement.  Pledgor will not permit
         any  dispute,  right of setoff,  counterclaim  or defense to exist with
         respect to all or any part of the  Collateral.  Pledgor  will cause any
         financing  statement or other security  instrument  with respect to the
         Collateral  to be  terminated,  except as may exist or as may have been
         filed in favor of Secured  Party.  Pledgor  will  defend at its expense
         Secured  Party's  right,  title  and  security  interest  in and to the
         Collateral against the claims of any third party.

                  (b)    Delivery   of    Instruments    and/or    Certificates.
         Contemporaneously  herewith, Pledgor covenants and agrees to deliver to
         Secured Party any certificates,  documents or instruments  representing
         or evidencing the Collateral, with Pledgor's endorsement thereon and/or
         accompanied  by proper  instruments  of transfer  and  assignment  duly
         executed in blank with, if requested by Secured Party.

                  (c) Adverse  Claim.  Pledgor  covenants and agrees to promptly
         notify Secured Party of any claim, action or proceeding affecting title
         to the  Collateral,  or any  part  thereof,  or the  security  interest
         created  hereunder and, at Pledgor's  expense,  defend Secured  Party's
         security  interest  in the  Collateral  against the claims of any third
         party. Pledgor also covenants and agrees to promptly deliver to Secured
         Party a copy of all written notices received by Pledgor with respect to
         the Collateral, including without limitation, notices received from the
         issuer of any securities pledged hereunder as Collateral.

                  (d) Further Assurances.  Pledgor will  contemporaneously  with
         the  execution  hereof and from time to time  thereafter at its expense
         promptly execute and deliver all further  instruments and documents and

<PAGE>

         take all further action  necessary or appropriate or that Secured Party
         may request in order (i) to perfect and protect the  security  interest
         created or  purported  to be created  hereby and the first  priority of
         such security  interest,  (ii) to enable  Secured Party to exercise and
         enforce its rights and remedies hereunder in respect of the Collateral,
         and (iii) to otherwise effect the purposes of this Agreement, including
         without limitation,  executing and filing any financing or continuation
         statements, or any amendments thereto.

         8. Negative Covenants. Pledgor will comply with the covenants contained
in this  Section  at all times  during  the  period of time  this  Agreement  is
effective, unless Secured Party shall otherwise consent in writing.

                  (a) Transfer or Encumbrance. Pledgor will not (i) sell, assign
         (by operation of law or otherwise) or transfer  Pledgor's rights in any
         of the  Collateral,  (ii)  grant  a lien  or  security  interest  in or
         execute,  file or record  any  financing  statement  or other  security
         instrument  with  respect  to the  Collateral  to any party  other than
         Secured Party,  or (iii) deliver actual or  constructive  possession of
         any certificate,  instrument or document evidencing and/or representing
         any of the Collateral to any party other than Secured Party.

                  (b) Impairment of Security Interest.  Pledgor will not take or
         fail  to  take  any  action  which  would  in  any  manner  impair  the
         enforceability of Secured Party's security interest in any Collateral.

                  (c)  Restrictions  on Securities.  Pledgor will not enter into
         any agreement  creating,  or otherwise permit to exist, any restriction
         or condition  upon the  transfer,  voting or control of any  securities
         pledged as  Collateral,  except as  consented  to in writing by Secured
         Party.

                  (d) Place of Perfection. Pledgor will not change his name from
         the name  specified on the signature  page hereof unless  Secured Party
         has received written notice from Pledgor  specifying the new name, such
         notice to be received  by Secured  Party not less than 30 days prior to
         such  change of name.  Pledgor  shall not  change the  location  of his
         residence  to a  location  other  than  the  address  specified  on the
         signature page hereto unless Secured Party has received  written notice
         from  Pledgor  specifying  the address of the new location of Pledgor's
         residence, such notice to be received by Secured Party not less than 30
         days prior to such change of location.

         9.  Rights of  Secured  Party.  Secured  Party  shall  have the  rights
contained in this Section at all times during the period of time this  Agreement
is effective.

                  (a) Power of Attorney.  Pledgor  hereby  irrevocably  appoints
         Secured  Party as  Pledgor's  attorney-in-fact,  such power of attorney
         being  coupled with an interest,  with full  authority in the place and
         stead of Pledgor and in the name of Pledgor or  otherwise,  to take any
         action and to execute any instrument  which Secured Party may from time
         to time in Secured Party's  discretion deem necessary or appropriate to
         accomplish   the  purposes  of  this   Agreement,   including   without
         limitation,   the  following  action:   (i)  transfer  any  securities,
         instruments,  documents or  certificates  pledged as  Collateral in the
         name of Secured Party or its nominee; (ii) use any interest, premium or
         principal  payments,  conversion or  redemption  proceeds or other cash
         proceeds  received in connection  with any  Collateral to reduce any of

<PAGE>

         the  Indebtedness;  (iii)  exchange  any of the  securities  pledged as
         Collateral  for any  other  property  upon any  merger,  consolidation,
         reorganization,  recapitalization  or other  readjustment of the issuer
         thereof, and, in connection  therewith,  to deposit and deliver any and
         all of such securities with any committee,  depository, transfer agent,
         registrar or other  designated  agent upon such terms and conditions as
         Secured  Party may deem  necessary  or  appropriate;  (iv)  exercise or
         comply with any conversion,  exchange, redemption,  subscription or any
         other right,  privilege or option pertaining to any securities  pledged
         as Collateral;  provided,  however,  except as provided herein, Secured
         Party  shall not have a duty to exercise or comply with any such right,
         privilege or option (whether  conversion,  redemption or otherwise) and
         shall not be  responsible  for any delay or  failure  to do so; and (v)
         file any claims or take any action or institute any  proceedings  which
         Secured  Party may deem  necessary or  appropriate  for the  collection
         and/or  preservation  of the  Collateral  or  otherwise  to enforce the
         rights of Secured Party with respect to the Collateral.

                  (b)  Performance by Secured Party. If Pledgor fails to perform
         any agreement or obligation  provided herein,  Secured Party may itself
         perform, or cause performance of, such agreement or obligation, and the
         expenses of Secured Party incurred in connection  therewith  shall be a
         part of the  Indebtedness,  secured by the  Collateral  and  payable by
         Pledgor on demand.

Notwithstanding  any other provision herein to the contrary,  Secured Party does
not have any duty to  exercise or  continue  to  exercise  any of the  foregoing
rights and shall not be responsible for any failure to do so or for any delay in
doing so.

         10. Events of Default.  Each of the following  constitutes an "Event of
Default" under this Agreement:

                  (a)  Failure  to Pay  Indebtedness.  The  failure,  refusal or
         neglect of Primary  Debtor to make any payment of principal or interest
         on the Indebtedness,  or any portion thereof,  as the same shall become
         due and payable; or

                  (b)  Non-Performance  of  Covenants.  The  failure  of Primary
         Debtor,  Pledgor or any Obligated Party to timely and properly observe,
         keep or perform any covenant, agreement, warranty or condition required
         herein or in any of the other Documents; or

                  (c) Default Under other Documents. The occurrence of a default
         under any of the other Documents.

                  (d) Bankruptcy or Insolvency.  If Primary  Debtor,  Pledgor or
         any  Obligated  Party:  (i) becomes  insolvent,  or makes a transfer in
         fraud  of  creditors,  or  makes  an  assignment  for  the  benefit  of
         creditors,  or admits in writing its or his inability to pay its or his
         debts as they become due; (ii) generally is not paying its or his debts
         as such debts  become due;  (iii) has a receiver,  trustee or custodian
         appointed for, or take possession of, all or  substantially  all of the
         assets of such party or any of the  Collateral,  either in a proceeding
         brought by such party or in a proceeding brought against such party and
         such appointment is not discharged or such possession is not terminated
         within sixty (60) days after the  effective  date thereof or such party
         consents to or acquiesces in such appointment or possession; (iv) files

<PAGE>

         a petition for relief under the United  States  Bankruptcy  Code or any
         other  present or future  federal or state  insolvency,  bankruptcy  or
         similar  laws (all of the  foregoing  hereinafter  collectively  called
         "Applicable  Bankruptcy Law") or an involuntary  petition for relief is
         filed against such party under any  Applicable  Bankruptcy Law and such
         involuntary  petition is not dismissed within sixty (60) days after the
         filing  thereof,  or an order for relief  naming  such party is entered
         under any Applicable Bankruptcy Law, or any composition, rearrangement,
         extension,  reorganization  or other relief of debtors now or hereafter
         existing is requested or consented to by such party;  (v) fails to have
         discharged   within  a  period  of  sixty  (60)  days  any  attachment,
         sequestration  or similar  writ levied upon any property of such party;
         or (vi) fails to pay within  thirty (30) days any final money  judgment
         against such party; or

                  (e) Execution on Collateral. The Collateral or any portion
         thereof is taken on execution or other process of law in any action
         against Pledgor; or

                  (f)  Abandonment.  Pledgor  abandons  the  Collateral  or  any
         portion thereof; or

                  (g)  Action  by Other  Lienholder.  The  holder of any lien or
         security interest on any of the Collateral (without hereby implying the
         consent of Secured  Party to the existence or creation of any such lien
         or security interest on the Collateral),  declares a default thereunder
         or institutes  foreclosure or other  proceedings for the enforcement of
         its remedies thereunder; or

                  (h) Liquidation,  Death and Related Events.  If Primary Debtor
         or any  Obligated  Party is an entity,  the  liquidation,  dissolution,
         merger or consolidation of any such entity or, if Primary Debtor or any
         Obligated Party is an individual,  the death or legal incapacity of any
         such individual.

         11.  Remedies  and Related  Rights.  If an Event of Default  shall have
occurred,  and without  limiting any other rights and remedies  provided herein,
under any of the other  Documents  or  otherwise  available  to  Secured  Party,
Secured  Party may exercise  one or more of the rights and remedies  provided in
this Section.

                  (a)  Remedies.  Secured  Party  may from time to time upon the
         occurrence  of  an  Event  of  Default,  at  its  discretion,   without
         limitation  and without  notice except as expressly  provided in any of
         the Documents:

                           (i)  exercise  in respect of the  Collateral  all the
                  rights and remedies of a secured party under the Code;

                           (ii)  reduce its claim to judgment  or  foreclose  or
                  otherwise enforce,  in whole or in part, the security interest
                  granted hereunder by any available judicial procedure;

                           (iii) sell or otherwise dispose of, at its office, on
                  the premises of Pledgor or  elsewhere,  the  Collateral,  as a
                  unit or in parcels, by public or private  proceedings,  and by
                  way of one or more contracts (it being agreed that the sale or

<PAGE>

                  other  disposition  of any part of the  Collateral  shall  not
                  exhaust  Secured  Party's  power of sale,  but  sales or other
                  dispositions  may be made from  time to time  until all of the
                  Collateral   has  been  sold  or  disposed  of  or  until  the
                  Indebtedness  has been paid and performed in full), and at any
                  such sale or other  disposition  it shall not be  necessary to
                  exhibit any of the Collateral;

                           (iv) buy the Collateral,  or any portion thereof,  at
                  any public sale;

                           (v) buy the Collateral,  or any portion  thereof,  at
                  any private sale if the  Collateral  is of a type  customarily
                  sold  in a  recognized  market  or is of a type  which  is the
                  subject of widely distributed standard price quotations;

                           (vi) apply for the  appointment of a receiver for the
                  Collateral,   and   Pledgor   hereby   consents  to  any  such
                  appointment; and

                           (vi)  at  its  option,   retain  the   Collateral  in
                  satisfaction of the  Indebtedness  whenever the  circumstances
                  are such that  Secured  Party is  entitled  to do so under the
                  Code or otherwise.

         Pledgor  agrees  that in the event  Pledgor is  entitled to receive any
         notice  under the Code,  as it exists in the state  governing  any such
         notice, of the sale or other disposition of any Collateral,  reasonable
         notice  shall be deemed  given  when  such  notice  is  deposited  in a
         depository  receptacle  under the care and custody of the United States
         Postal Service,  postage prepaid, at Pledgor's address set forth on the
         signature  page  hereof,  ten (10) days prior to the date of any public
         sale, or after which a private sale, of any of such Collateral is to be
         held.  Secured  Party  shall  not be  obligated  to  make  any  sale of
         Collateral  regardless  of notice of sale having  been  given.  Secured
         Party  may  adjourn  any  public or  private  sale from time to time by
         announcement at the time and place fixed  therefor,  and such sale may,
         without further  notice,  be made at the time and place to which it was
         so  adjourned.   Pledgor  further  acknowledges  and  agrees  that  the
         redemption by Secured Party of any  certificate  of deposit  pledged as
         Collateral shall be deemed to be a commercially  reasonable disposition
         under the Code.

                  (b)  Private  Sale  of  Securities.  Pledgor  recognizes  that
         Secured  Party may be unable to effect a public sale of all or any part
         of the  securities  pledged as Collateral  because of  restrictions  in
         applicable  federal and state  securities  laws and that Secured  Party
         may, therefore, determine to make one or more private sales of any such
         securities to a restricted group of purchasers who will be obligated to
         agree,  among other things,  to acquire such  securities  for their own
         account,  for  investment  and not with a view to the  distribution  or
         resale thereof.  Pledgor  acknowledges  that each any such private sale
         may be at prices and other  terms less  favorable  then what might have
         been  obtained at a public  sale and,  notwithstanding  the  foregoing,
         agrees that each such private sale shall be deemed to have been made in
         a commercially  reasonable  manner and that Secured Party shall have no
         obligation to delay the sale of any such  securities  for the period of
         time  necessary to permit the issuer to register  such  securities  for
         public sale under any federal or state securities laws. Pledgor further
         acknowledges  and agrees that any offer to sell such  securities  which
         has been made privately in the manner  described above to not less than
         five (5) bona fide offerees  shall be deemed to involve a "public sale"

<PAGE>

         for the  purposes of the Code,  notwithstanding  that such sale may not
         constitute a "public  offering"  under any federal or state  securities
         laws and that Secured Party may, in such event, bid for the purchase of
         such securities.

                  (c)  Application  of Proceeds.  If any Event of Default  shall
         have  occurred,  Secured Party may at its  discretion  apply or use any
         cash  held by  Secured  Party  as  Collateral,  and any  cash  proceeds
         received by Secured  Party in respect of any sale or other  disposition
         of,  collection from, or other realization upon, all or any part of the
         Collateral as follows:

                           (i)  to  the  repayment  or   reimbursement   of  the
                  reasonable costs and expenses (including,  without limitation,
                  reasonable  attorneys' fees and expenses)  incurred by Secured
                  Party  in  connection  with  (A)  the  administration  of  the
                  Documents, (B) the custody, preservation, use or operation of,
                  or the sale of,  collection from, or other  realization  upon,
                  the Collateral,  and (C) the exercise or enforcement of any of
                  the rights and remedies of Secured Party hereunder;

                           (ii) to the  payment  or  other  satisfaction  of any
                  liens and other encumbrances upon the Collateral;

                           (iii) to the satisfaction of the Indebtedness;

                           (iv) by holding such cash and proceeds as Collateral;

                           (v) to the payment of any other  amounts  required by
                  applicable law (including without limitation, Section 9.615 of
                  the Code or any other applicable statutory provision); and

                           (vi)  by  delivery  to  Pledgor  or any  other  party
                  lawfully  entitled to receive such cash or proceeds whether by
                  direction of a court of competent jurisdiction or otherwise.

                  (d) Limited  Recourse.  Secured  Party's  sole remedy  against
         Pledgor shall be to enforce  Secured Party's rights with respect to the
         Collateral.  Secured  Party  shall not be  entitled  to  enforce  or to
         attempt to enforce  any  deficiency  or other  money  judgment  against
         Pledgor with respect to any  obligations,  including but not limited to
         the obligations under the Documents, in excess of such amounts received
         by Secured Party from the proceeds of the sale of,  collection  from or
         other realization upon the Collateral.

                  (e)  Non-Judicial  Remedies.  In granting to Secured Party the
         power to enforce its rights hereunder without prior judicial process or
         judicial hearing,  Pledgor  expressly  waives,  renounces and knowingly
         relinquishes  any legal  right which might  otherwise  require  Secured
         Party to enforce its rights by judicial process. Pledgor recognizes and
         concedes that  non-judicial  remedies are consistent  with the usage of
         trade,  are responsive to commercial  necessity and are the result of a
         bargain at arm's length.  Nothing herein is intended to prevent Secured
         Party or Pledgor from  resorting to judicial  process at either party's
         option.

                  (f) Waiver. Pledgor waives any and all notice of acceptance of
         this  Agreement  and  of  the  creation,  modification,  rearrangement,
         renewal or extension of the  Indebtedness.  Pledgor  further waives any
         defense  arising by reason of any  disability  or other  defense of any
         third party or by reason of the cessation from any cause  whatsoever of

<PAGE>

         the liability of any third party.  Until all of the Indebtedness  shall
         have been paid in full,  Pledgor shall have no right of subrogation and
         Pledgor  waives the right to enforce any remedy which Secured Party has
         or may hereafter  have against any third party,  and waives any benefit
         of and any right to participate in any other security whatsoever now or
         hereafter held by Secured Party.  Pledgor authorizes Secured Party, and
         without notice or demand and without any  reservation of rights against
         Pledgor and without affecting  Pledgor's  liability hereunder or on the
         Indebtedness,  to (i) take or hold any other  property of any type from
         any  third  party  as  security  for the  Indebtedness,  and  exchange,
         enforce,  waive and  release  any or all of such other  property,  (ii)
         apply  such  other  property  and  direct  the  order or manner of sale
         thereof as Secured Party may in its discretion determine,  (iii) renew,
         extend, accelerate,  modify,  compromise,  settle or release any of the
         Indebtedness  or  other  security  for the  Indebtedness,  (iv)  waive,
         enforce  or  modify  any of  the  provisions  of  any of the  Documents
         executed by any third party,  and (v) release or  substitute  any third
         party.

                  (g) Voting Rights. Upon the occurrence of an Event of Default,
         Pledgor will not exercise any voting  rights with respect to securities
         pledged as Collateral.  Pledgor  hereby  irrevocably  appoints  Secured
         Party as  Pledgor's  attorney-in-fact  (such  power of  attorney  being
         coupled with an interest)  and proxy to exercise any voting rights with
         respect  to  Pledgor's   securities  pledged  as  Collateral  upon  the
         occurrence of an Event of Default.

                  (h) Dividend Rights and Interest Payments. Upon the occurrence
         of an Event of Default:

                           (i) all rights of  Pledgor to receive  and retain the
                  dividends and interest  payments  which it would  otherwise be
                  authorized  to receive and retain  pursuant to Section 3 shall
                  automatically  cease,  and all  such  rights  shall  thereupon
                  become vested with Secured Party which shall  thereafter  have
                  the sole right to receive,  hold and apply as Collateral  such
                  dividends and interest payments; and

                           (ii) all  dividend and  interest  payments  which are
                  received by Pledgor contrary to the provisions of clause (i)
                  of this Subsection  shall be received in trust for the benefit
                  of Secured  Party,  shall be  segregated  from other  funds of
                  Pledgor,  and shall be forthwith paid over to Secured Party in
                  the exact form  received  (properly  endorsed  or  assigned if
                  requested by Secured  Party),  to be held by Secured  Party as
                  Collateral.

         12. Miscellaneous.

                  (a)  Entire  Agreement.  This  Agreement  contains  the entire
         agreement of Secured Party and Pledgor with respect to the  Collateral.
         If the  parties  hereto  are  parties  to any prior  agreement,  either
         written  or  oral,  relating  to the  Collateral,  the  terms  of  this
         Agreement shall amend and supersede the terms of such prior  agreements
         as to  transactions  on or after the effective date of this  Agreement,
         but all security agreements,  financing statements,  guaranties,  other
         contracts and notices for the benefit of Secured  Party shall  continue
         in full  force and  effect to secure the  Indebtedness  unless  Secured
         Party specifically releases its rights thereunder by separate release.


<PAGE>

                  (b) Amendment.  No  modification,  consent or amendment of any
         provision  of this  Agreement  or any of the other  Documents  shall be
         valid or  effective  unless  the same is in  writing  and signed by the
         party against whom it is sought to be enforced.

                  (c) Actions by Secured Party. The lien,  security interest and
         other security  rights of Secured Party hereunder shall not be impaired
         by (i) any renewal, extension, increase or modification with respect to
         the Indebtedness,  (ii) any surrender,  compromise,  release,  renewal,
         extension,  exchange or substitution which Secured Party may grant with
         respect to the Collateral,  or (iii) any release or indulgence  granted
         to any endorser, guarantor or surety of the Indebtedness. The taking of
         additional  security  by Secured  Party shall not release or impair the
         lien,  security  interest  or other  security  rights of Secured  Party
         hereunder or affect the obligations of Pledgor hereunder.

                  (d) Waiver by Secured Party. Secured Party may waive any Event
         of Default  without  waiving  any other  prior or  subsequent  Event of
         Default. Secured Party may remedy any default without waiving the Event
         of Default remedied.  Neither the failure by Secured Party to exercise,
         nor the delay by Secured Party in exercising,  any right or remedy upon
         any Event of Default  shall be  construed  as a waiver of such Event of
         Default  or as a waiver  of the  right to  exercise  any such  right or
         remedy at a later date. No single or partial  exercise by Secured Party
         of any  right  or  remedy  hereunder  shall  exhaust  the same or shall
         preclude any other or further exercise thereof, and every such right or
         remedy  hereunder  may be  exercised  at any  time.  No  waiver  of any
         provision hereof or consent to any departure by Pledgor therefrom shall
         be effective  unless the same shall be in writing and signed by Secured
         Party and then such waiver or consent  shall be  effective  only in the
         specific  instances,  for the purpose for which given and to the extent
         therein specified.  No notice to or demand on Pledgor in any case shall
         of itself  entitle  Pledgor to any other or further notice or demand in
         similar or other circumstances.

                  (e)  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE GOVERNED BY AND
         CONSTRUED  IN  ACCORDANCE  WITH  THE LAWS OF THE  STATE  OF  TEXAS  AND
         APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT
         OF  PERFECTION  OR  NON-PERFECTION  OF THE  SECURITY  INTEREST  GRANTED
         HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE
         LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.

                  (f) Venue.  Federal  Courts within the State of North Carolina
         shall have  jurisdiction  over any and all  disputes  arising  under or
         pertaining to this  Agreement and venue for any such disputes  shall be
         in the State of North Carolina.

                  (g)  Severability.  If any provision of this Agreement is held
         by a  court  of  competent  jurisdiction  to  be  illegal,  invalid  or
         unenforceable  under present or future laws,  such  provision  shall be
         fully  severable,  shall not impair or invalidate the remainder of this
         Agreement  and the effect  thereof  shall be confined to the  provision
         held to be illegal, invalid or unenforceable.

<PAGE>

                  (h) No Obligation. Nothing contained herein shall be construed
         as an obligation on the part of Secured Party to extend or continue to
         extend credit to Primary Debtor.

                  (i)  Notices.   All  notices,   requests,   demands  or  other
         communications  required  or  permitted  to be given  pursuant  to this
         Agreement shall be in writing and given by (i) personal delivery,  (ii)
         expedited  delivery  service  with proof of  delivery,  or (iii) United
         States mail,  postage  prepaid,  registered or certified  mail,  return
         receipt  requested,  sent to the intended  addressee at the address set
         forth on the signature page hereof or to such different  address as the
         addressee  shall have designated by written notice sent pursuant to the
         terms hereof and shall be deemed to have been received  either,  in the
         case of personal  delivery,  at the time of personal  delivery,  in the
         case of expedited  delivery service,  as of the date of first attempted
         delivery at the address and in the manner  provided  herein,  or in the
         case of mail,  upon deposit in a depository  receptacle  under the care
         and custody of the United  States  Postal  Service.  Either party shall
         have the right to change its address for notice  hereunder to any other
         location  within the  continental  United States by notice to the other
         party of such  new  address  at least  thirty  (30)  days  prior to the
         effective date of such new address.

                  (j) Binding Effect and Assignment.  This Agreement (i) creates
         a continuing security interest in the Collateral, (ii) shall be binding
         on  Pledgor  and  the  heirs,   executors,   administrators,   personal
         representatives,  successors  and assigns of  Pledgor,  and (iii) shall
         inure to the benefit of Secured Party and its  successors  and assigns.
         Without  limiting the  generality of the  foregoing,  Secured Party may
         pledge,  assign or otherwise  transfer the  Indebtedness and its rights
         under this Agreement and any of the other Documents to any other party.
         Pledgor's  rights and  obligations  hereunder  may not be  assigned  or
         otherwise  transferred  without  the prior  written  consent of Secured
         Party.

                  (k) Gender and  Number.  Within this  Agreement,  words of any
         gender  shall be held and  construed to include the other  gender,  and
         words in the singular number shall be held and construed to include the
         plural and words in the plural  number  shall be held and  construed to
         include the  singular,  unless in each  instance  the context  requires
         otherwise.

                  (l)  Cumulative  Rights.  All rights and  remedies  of Secured
         Party  hereunder are  cumulative of each other and of every other right
         or remedy which Secured Party may otherwise have at law or in equity or
         under any of the other  Documents,  and the  exercise of one or more of
         such rights or remedies shall not prejudice or impair the concurrent or
         subsequent exercise of any other rights or remedies.

                  (m) Descriptive  Headings.  The headings in this Agreement are
         for convenience  only and shall in no way enlarge,  limit or define the
         scope or meaning of the various and several provisions hereof.

                            [Signature Page follows]



<PAGE>

EXECUTED as of the date first written above.

                                    PLEDGOR:
                                            ____________________________________
                                            Wayne Coverdale
                                            3212 Wickford Drive
                                            Wilmington, NC 28409


                                            ____________________________________
                                            Moez Nagji
                                            6189 Moores Creek Dr
                                            Summerfield NC 27358


                                            ____________________________________
                                            Steve Stanko
                                            RBS Enterprises, Inc.
                                            898 Fern Hill Road,
                                            West Chester, PA  19380


                                            ____________________________________
                                            Mark Justus,
                                            as Trustee for the A.D. Justus Trust
                                            AD Justus Trust
                                            123 Maple Tree Lane
                                            Powell, TN  37849


                                 SECURED PARTY:


                                            ____________________________________


                                            ____________________________________


                                            ____________________________________


                                            ____________________________________


                                            ____________________________________


                                            ____________________________________

<PAGE>

                         SUPPLEMENT TO PLEDGE AGREEMENT



                  The undersigned  has read the Pledge  Agreement among Pledgors
         and Secured Parties dated as of __________, 2003 (the "Agreement"), and
         is  fully   cognizant  of  the  terms  and   provisions   thereof.   In
         consideration  of being permitted to acquire a promissory note from the
         Company,  the  undersigned  agrees  that,  by  the  execution  of  this
         Supplement,  the undersigned has become,  and is, one of the parties to
         the  Agreement  as if  originally  named  therein,  for all intents and
         purposes  and  to  the  same  extent  as if  originally  named  in  the
         Agreement.

         The address of the undersigned is:

                  _______________________

                  _______________________

               [Remainder of this page intentionally left blank.]



<PAGE>


         Dated this _____ day of __________, 20___.


                                        ________________________________________
                                        Signature of Secured Party)
                                        (Printed or typed name of Secured Party)

                                         _______________________________________
                                         Address of Secured Party:






         Accepted  and agreed to on behalf of  Pledgors  as of this _____ day of
__________, 20___.

Pledgor's Address:                                   PLEDGOR:


________________________      Wayne Coverdale


                              __________________________________________________
________________________      Moez Nagji


                              __________________________________________________
________________________      Steve Stanko


                              __________________________________________________
________________________      Mark Justus, as Trustee for the A. D. Justus Trust




<PAGE>

                                  SCHEDULE "A"



Name of Secured Party                                     Collateral Allocation



<PAGE>


                                  SCHEDULE "B"

The following property is a part of the Collateral as defined in Subsection
1(b):

         75,000  shares  of  common  stock  of Green  Power  Energy  Corp.  (the
         "Company") as evidenced by Certificate  Number  ________  issued in the
         name of Wayne  Coverdale;  75,000 shares of common stock of the Company
         as evidenced by Certificate Number ________ issued in the name of Steve
         Stanko;  75,000  shares of common  stock of the Company as evidenced by
         Certificate  Number  ________  issued  in the name of the A. D.  Justus
         Trust and 75,000  shares of common stock of the Company as evidenced by
         Certificate Number _______ issued in the name of Moez Nagji.