SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT
      (the
“Agreement”), is
      entered into and made effective as of September____, 2008, by and between
Vortex
      Resource Corp. (the
      “Company”),
      and
Trafalgar
      Capital Specialized Investment Fund, Luxembourg 
      (the “Secured
      Party”).

     

    WHEREAS,
      the
      Company shall issue and sell to the Secured Party, as provided in the Securities
      Purchase Agreement dated the date hereof between
      the Company and the Secured Party (the “Securities Purchase
      Agreement”),
      and the
      Secured Party shall purchase up to Two Million Seven Hundred Fifty Thousand
      Dollars ($2,750,000) of secured promissory notes (the “Notes”),
      which
      shall be convertible into shares of the Company’s common stock, par value $.001
      (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”),
      for a
      total purchase price of Two Million Seven Hundred Fifty Thousand
      Dollars ($2,750,000);

     

    WHEREAS,
      to
      induce
      the Secured Party to enter into the transaction contemplated by the Securities
      Purchase Agreement, the Notes, the Pledge Agreement, and the Escrow
      Agreement,
      each as
      defined in the Securities Purchase
      Agreement (collectively referred to as the “Transaction
      Documents”),
      the
      Company hereby grants to the Secured Party a security interest in and to the
      pledged collateral identified on Attachment
      1
      hereto
      until the satisfaction of the Obligations, as defined herein below.


     

    NOW,
      THEREFORE, in
      consideration of the premises and the mutual covenants herein contained, and
      for
      other good and valuable consideration, the adequacy and receipt of which are
      hereby acknowledged, the parties hereto hereby agree as follows:

     

    ARTICLE
      1.

     

    DEFINITIONS
      AND INTERPRETATIONS

     

    Section
      1.1. Recitals.
      

     

    The
      above
      recitals are true and correct and are incorporated herein, in their entirety,
      by
      this reference.

     

    Section
      1.2. Interpretations.
      

     

    Nothing
      herein expressed or implied is intended or shall be construed to confer upon
      any
      person other than the Secured Party any right, remedy or claim under or by
      reason hereof.

     

    Section
      1.3. Obligations
      Secured.

     

    The
      obligations secured hereby are any and all obligations of the Company now
      existing or hereinafter incurred to the Secured Party, whether oral or written
      and whether arising before, on or after the date hereof including, without
      limitation, those obligations of the Company to the Secured Party under the
      Securities Purchase Agreement, the Notes, and Irrevocable Transfer Agent
      Instructions and any other amounts now or hereafter owed to the Secured Party
      by
      the Company thereunder or hereunder (collectively, the “Obligations”).

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ARTICLE
      2.

     

    PLEDGED
      COLLATERAL, ADMINISTRATION OF COLLATERAL 

    AND
      TERMINATION OF SECURITY INTEREST

     

    Section
      2.1. Grant
      of Security Interest.

     

    1. As
      security for the Obligations, Company hereby pledges to Secured Party and grants
      to Secured Party a security interest in all right, title and interests of
      Company and its subsidiaries in and to the property described in Attachment
      1
      hereto, whether now existing or hereafter from time to time acquired
      (collectively, the “Pledged
      Collateral.”).

     

    (a) Simultaneously
      with the execution and delivery of this Agreement, the Company shall make,
      execute, acknowledge, file, record and deliver to the Secured Party any
      documents reasonably requested by the Secured Party to perfect its security
      interest in the Pledged Collateral. Simultaneously with the execution and
      delivery of this Agreement, the Company shall make, execute, acknowledge and
      deliver to the Secured Party such documents and instruments, including, without
      limitation, financing statements, certificates, affidavits and forms as may,
      in
      the Secured Party’s reasonable judgment, be necessary to effectuate, complete or
      perfect, or to continue and preserve, the security interest of the Secured
      Party
      in the Pledged Collateral, and the Secured Party shall hold such documents
      and
      instruments as secured party, subject to the terms and conditions contained
      herein.

     

    Section
      2.2. Rights;
      Interests; Etc.

     

    (a) So
      long
      as no Event of Default (as hereinafter defined) shall have occurred and be
      continuing:

     

    (i) the
      Company and its subsidiaries shall be entitled to exercise any and all rights
      pertaining to the Pledged Collateral or any part thereof for any purpose not
      inconsistent with the terms hereof; and

     

    (ii) the
      Company and its subsidiaries shall be entitled to receive and retain any and
      all
      payments paid or made in respect of the Pledged Collateral.

     

    (b) Upon
      the
      occurrence and during the continuance of an Event of Default:

     

    (i) All
      rights of the Company and/or its subsidiaries to exercise the rights which
      it
      would otherwise be entitled to exercise pursuant to
      Section 2.2(a)(i) hereof and to receive payments which it would
      otherwise be authorized to receive and retain pursuant to
      Section 2.2(a)(ii) hereof shall be suspended, and all such rights
      shall thereupon become vested in the Secured Party who shall thereupon have
      the
      sole right to exercise such rights and to receive and hold as Pledged Collateral
      such payments; provided,
      however,
      that if
      the Secured Party shall become entitled and shall elect to exercise its right
      to
      realize on the Pledged Collateral pursuant to Article 5 hereof, then all
      cash sums received by the Secured Party, or held by Company and/or its
      subsidiaries for the benefit of the Secured Party and paid over pursuant to
      Section 2.2(b)(ii) hereof, shall be applied against any outstanding
      Obligations; and


    
      
         

      

      
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    (ii) All
      interest, dividends, income and other payments and distributions which are
      received by the Company and/or its subsidiaries contrary to the provisions
      of
      Section 2.2(b)(i) hereof shall be received in trust for the benefit of
      the Secured Party, shall be segregated from other property of the Company and/or
      its subsidiaries and shall be forthwith paid over to the Secured Party; or
      

     

    (iii) The
      Secured Party in its sole discretion shall be authorized to sell
      any
      or all of the Pledged Collateral at public or private sale in order to recoup
      all of the outstanding principal plus accrued interest owed pursuant to the
      Notes as described herein

     

    (c) Each
      of
      the following events shall constitute a default under this Agreement (each
      an
“Event
      of Default”):

     

    (i) any
      default, whether in whole or in part, shall occur in the payment to the Secured
      Party of principal, interest or other item comprising the Obligations as and
      when due or with respect to any other debt or obligation of the Company to
      a
      party other than the Secured Party;

     

    (ii) any
      default, whether in whole or in part, shall occur in the due observance or
      performance of any obligations or other covenants, terms or provisions to be
      performed under this Agreement or the Transaction Documents; 

     

    (iii) the
      Company and/or its subsidiaries shall: (1) make a general assignment for
      the benefit of its creditors; (2) apply for or consent to the appointment
      of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar
      official for itself or any of its assets and properties; (3) commence a
      voluntary case for relief as a debtor under the United States Bankruptcy Code;
      (4) file with or otherwise submit to any governmental authority any
      petition, answer or other document seeking: (A) reorganization, (B) an
      arrangement with creditors or (C) to take advantage of any other present or
      future applicable law respecting bankruptcy, reorganization, insolvency,
      readjustment of debts, relief of debtors, dissolution or liquidation;
      (5) file or otherwise submit any answer or other document admitting or
      failing to contest the material allegations of a petition or other document
      filed or otherwise submitted against it in any of the proceedings set forth
      in
      this Section 2.2(c)(ii) under any such applicable law, or (6) be
      adjudicated a bankrupt or insolvent by a court of competent jurisdiction; or
      (iii)
      any
      case, proceeding or other action shall be commenced against the Company for
      the
      purpose of effecting, or an order, judgment or decree shall be entered by any
      court of competent jurisdiction approving (in whole or in part) anything
      specified in Section 2.2(c)(ii) hereof, or any receiver, trustee,
      assignee, custodian, sequestrator, liquidator or other official shall be
      appointed with respect to the Company and/or its subsidiaries, or shall be
      appointed to take or shall otherwise acquire possession or control of all or
      a
      substantial part of the assets and properties of the Company and/or its
      subsidiaries, and any of the foregoing shall continue unstayed and in effect
      for
      any period of thirty (30) days.

     

    
      
         

      

      
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    ARTICLE
      3.

     

    ATTORNEY-IN-FACT;
      PERFORMANCE

     

    Section
      3.1. Secured
      Party Appointed Attorney-In-Fact.

     

    Upon
      the
      occurrence of an Event of Default, the Company hereby appoints the Secured
      Party
      as its attorney-in-fact, with full authority in the place and stead of the
      Company and in the name of the Company or otherwise, from time to time in the
      Secured Party’s discretion to take any action and to execute any instrument
      which the Secured Party may reasonably deem necessary to accomplish the purposes
      of this Agreement, including, without limitation, to receive and collect all
      instruments made payable to the Company representing any payments in respect
      of
      the Pledged Collateral or any part thereof and to give full discharge for the
      same. The Secured Party may demand, collect, receipt for, settle, compromise,
      adjust, sue for, foreclose, or realize on the Pledged Collateral as and when
      the
      Secured Party may determine. To facilitate collection, the Secured Party may
      notify account debtors and obligors on any Pledged Collateral or Pledged
      Collateral to make payments directly to the Secured Party.

     

    Section
      3.2. Secured
      Party May Perform.

     

    If
      the
      Company fails to perform any agreement contained herein, the Secured Party,
      at
      its option, may itself perform, or cause performance of, such agreement, and
      the
      expenses of the Secured Party incurred in connection therewith shall be included
      in the Obligations secured hereby and payable by the Company under
      Section 8.3.

     

    ARTICLE
      4.

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      4.1. Authorization;
      Enforceability.

     

    Each
      of
      the parties hereto represents and warrants that it has taken all action
      necessary to authorize the execution, delivery and performance of this Agreement
      and the transactions contemplated hereby; and upon execution and delivery,
      this
      Agreement shall constitute a valid and binding obligation of the respective
      party, subject to applicable bankruptcy, insolvency, reorganization, moratorium
      and similar laws affecting creditors’ rights or by the principles governing the
      availability of equitable remedies.

     

    Section
      4.2. Ownership
      of Pledged Collateral.

     

    The
      Company warrants and represents that it is the legal and beneficial owner of
      the
      Pledged Collateral free and clear of any lien, security interest, option or
      other charge or encumbrance except for the security interest created by this
      Agreement.

     

    
      
         

      

      
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    ARTICLE
      5.

     

    DEFAULT;
      REMEDIES; SUBSTITUTE COLLATERAL

     

    Section
      5.1. Default
      and Remedies.

     

    (a) If
      an
      Event of Default described in Section 2.2(c)(i) or (ii) occurs,
      then in each such case the Secured Party may declare the Obligations to be
      due
      and payable immediately, by a notice in writing to the Company, and upon any
      such declaration, the Obligations shall become immediately due and payable.
      If
      an Event of Default described in Sections 2.2(c)(iii) or
      (iv) occurs and is continuing for the period set forth therein, then the
      Obligations shall automatically become immediately due and payable without
      declaration or other act on the part of the Secured Party.

     

    (b) Upon
      the
      occurrence of an Event of Default, the Secured Party shall: (i) be entitled
      to receive all distributions with respect to the Pledged Collateral,
      (ii) to cause the Pledged Collateral to be transferred into the name of the
      Secured Party or its nominee, (iii) to dispose of the Pledged Collateral,
      and (iv) to realize upon any and all rights in the Pledged Collateral then
      held by the Secured Party.

     

    Section
      5.2. Method
      of Realizing Upon the Pledged Collateral: Other Remedies.

     

    Upon
      the
      occurrence of an Event of Default, in addition to any rights and remedies
      available at law or in equity, the following provisions shall govern the Secured
      Party’s right to realize upon the Pledged Collateral:

     

    (a) Any
      item
      of the Pledged Collateral may be sold for cash or other value in any number
      of
      lots at brokers board, public auction or private sale and may be sold without
      demand, advertisement or notice (except that the Secured Party shall give the
      Company ten (10) days’ prior written notice of the time and place or
      of the time after which a private sale may be made (the “Sale
      Notice”)),
      which notice period shall in any event is hereby agreed to be commercially
      reasonable. At any sale or sales of the Pledged Collateral, the Company may
      bid
      for and purchase the whole or any part of the Pledged Collateral and, upon
      compliance with the terms of such sale, may hold, exploit and dispose of the
      same without further accountability to the Secured Party. The Company will
      execute and deliver, or cause to be executed and delivered, such instruments,
      documents, assignments, waivers, certificates, and affidavits and supply or
      cause to be supplied such further information and take such further action
      as
      the Secured Party reasonably shall require in connection with any such
      sale.

     

    (b) Any
      cash
      being held by the Secured Party as Pledged Collateral and all cash proceeds
      received by the Secured Party in respect of, sale of, collection from, or other
      realization upon all or any part of the Pledged Collateral shall be applied
      as
      follows:

     

    (i) to
      the
      payment of all amounts due the Secured Party for the expenses reimbursable
      to it
      hereunder or owed to it pursuant to Section 8.3 hereof;

     

    (ii) to
      the
      payment of the Obligations then due and unpaid.

     

    
      
         

      

      
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    (iii) the
      balance, if any, to the person or persons entitled thereto, including, without
      limitation, the Company.

     

    (c) In
      addition to all of the rights and remedies which the Secured Party may have
      pursuant to this Agreement, the Secured Party shall have all of the rights
      and
      remedies provided by law, including, without limitation, those under the Uniform
      Commercial Code.

     

    (i) If
      the
      Company fails to pay such amounts due upon the occurrence of an Event of Default
      which is continuing, then the Secured Party may institute a judicial proceeding
      for the collection of the sums so due and unpaid, may prosecute such proceeding
      to judgment or final decree and may enforce the same against the Company and
      collect the monies adjudged or decreed to be payable in the manner provided
      by
      law out of the property of Company, wherever situated.

     

    (ii) The
      Company agrees that it shall be liable for any reasonable fees, expenses and
      costs incurred by the Secured Party in connection with enforcement, collection
      and preservation of the Transaction Documents, including, without limitation,
      reasonable legal fees and expenses, and such amounts shall be deemed included
      as
      Obligations secured hereby and payable as set forth in Section 8.3
      hereof.

     

    Section
      5.3. Proofs
      of Claim.

     

    In
      case
      of the pendency of any receivership, insolvency, liquidation, bankruptcy,
      reorganization, arrangement, adjustment, composition or other judicial
      proceeding relating to the Company or the property of the Company or of such
      other obligor or its creditors, the Secured Party (irrespective of whether
      the
      Obligations shall then be due and payable as therein expressed or by declaration
      or otherwise and irrespective of whether the Secured Party shall have made
      any
      demand on the Company for the payment of the Obligations), subject to the rights
      of Previous Security Holders, shall be entitled and empowered, by intervention
      in such proceeding or otherwise:

     

    (i) to
      file
      and prove a claim for the whole amount of the Obligations and to file such
      other
      papers or documents as may be necessary or advisable in order to have the claims
      of the Secured Party (including any claim for the reasonable legal fees and
      expenses and other expenses paid or incurred by the Secured Party permitted
      hereunder and of the Secured Party allowed in such judicial proceeding),
      and

     

    (ii) to
      collect and receive any monies or other property payable or deliverable on
      any
      such claims and to distribute the same; and any custodian, receiver, assignee,
      trustee, liquidator, sequestrator or other similar official in any such judicial
      proceeding is hereby authorized by the Secured Party to make such payments
      to
      the Secured Party and, in the event that the Secured Party shall consent to
      the
      making of such payments directed to the Secured Party, to pay to the Secured
      Party any amounts for expenses due it hereunder.

     

    Section
      5.4. Duties
      Regarding Pledged Collateral.

     

    The
      Secured Party shall have no duty as to the collection or protection of the
      Pledged Collateral or any income thereon or as to the preservation of any rights
      pertaining thereto, beyond the safe custody and reasonable care of any of the
      Pledged Collateral actually in the Secured Party’s possession.

     

    
      
         

      

      
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    ARTICLE
      6.

     

    AFFIRMATIVE
      COVENANTS

     

    The
      Company covenants and agrees that, from the date hereof and until the
      Obligations have been fully paid and satisfied, unless the Secured Party shall
      consent otherwise in writing (as provided in Section 8.4
      hereof):

     

    Section
      6.1. Existence,
      Properties, Etc.

     

    (a) The
      Company shall do, or cause to be done, all things, or proceed with due diligence
      with any actions or courses of action, that may be reasonably necessary
      (i) to maintain Company’s due organization, valid existence and good
      standing under the laws of its state of incorporation, and (ii) to preserve
      and keep in full force and effect all qualifications, licenses and registrations
      in those jurisdictions in which the failure to do so could have a Material
      Adverse Effect (as defined below); and (b) the Company shall not do, or
      cause to be done, any act impairing the Company’s corporate power or authority
      (i) to carry on the Company’s business as now conducted, and (ii) to
      execute or deliver this Agreement or any other document delivered in connection
      herewith, including, without limitation, any UCC-1 Financing Statements required
      by the Secured Party to which it is or will be a party, or perform any of
      its obligations hereunder or thereunder. For purpose of this Agreement, the
      term
“Material
      Adverse Effect”
shall
      mean any material and adverse affect as determined by Secured Party in its
      sole
      discretion, whether individually or in the aggregate, upon (a) the
      Company’s assets, business, operations, properties or condition, financial or
      otherwise or results of operations of the Company, taken as a whole, excluding
      any change, event, circumstance or effect that is caused by changes in general
      economic conditions or changes generally affecting the industry in which the
      Company operates (provided that such changes do not affect the Company in a
      materially disproportionate manner); or (b) the Company’s ability to make
      payment as and when due of all or any part of the Obligations; or (c) the
      Pledged Collateral.

     

    Section
      6.2. Financial
      Statements and Reports.

     

    The
      Company shall furnish to the Secured Party such financial data as the Secured
      Party may reasonably request. Without limiting the foregoing, the Company shall
      furnish to the Secured Party (or cause to be furnished to the Secured Party)
      the
      following:

     

    (a) as
      soon
      as practicable and in any event within ninety (90) days after the end of each
      fiscal year of the Company, the balance sheet of the Company as of the close
      of
      such fiscal year, the statement of earnings and retained earnings of the Company
      as of the close of such fiscal year, and statement of cash flows for the Company
      for such fiscal year, all in reasonable detail, prepared in accordance with
      generally accepted accounting principles consistently applied, certified by
      the
      chief executive and chief financial officers of the Company as being true and
      correct and accompanied by a certificate of the chief executive and chief
      financial officers of the Company, stating that the Company has kept, observed,
      performed and fulfilled each covenant, term and condition of this Agreement
      during such fiscal year and that no Event of Default hereunder has occurred
      and
      is continuing, or if an Event of Default has occurred and is continuing,
      specifying the nature of same, the period of existence of same and the action
      the Company proposes to take in connection therewith;

     

    
      
         

      

      
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    (b) within
      thirty (30) days of the end of each calendar month, a balance sheet of the
      Company as of the close of such month, and statement of earnings and retained
      earnings of the Company as of the close of such month, all in reasonable detail,
      and prepared substantially in accordance with generally accepted accounting
      principles consistently applied, certified by the chief executive and chief
      financial officers of the Company as being true and correct; and

     

    (c) promptly
      upon receipt thereof, copies of all accountants' reports and accompanying
      financial reports submitted to the Company by independent accountants in
      connection with each annual examination of the Company.

     

    Section
      6.3 Accounts
      and Reports.

     

    The
      Company shall maintain a standard system of accounting in accordance with
      generally accepted accounting principles consistently applied and provide,
      at
      its sole expense, to the Secured Party the following:

     

    (a) as
      soon
      as available, a copy of any notice or other communication alleging any
      nonpayment or other material breach or default, or any foreclosure or other
      action respecting any material portion of its assets and properties, received
      respecting any of the indebtedness of the Company in excess of $25,000 (other
      than the Obligations), or any demand or other request for payment under any
      guaranty, assumption, purchase agreement or similar agreement or arrangement
      respecting the indebtedness or obligations of others in excess of $25,000,
      including any received from any person acting on behalf of the Secured Party
      or
      beneficiary thereof, except for supplier requests in the normal course of
      business for payment of past due accounts payable invoices so long as such
      past
      due amounts do not exceed in the aggregate $50,000 at any time; and


     

    (b) within
      fifteen (15) days after the making of each submission or filing, a copy of
      any report, financial statement, notice or other document, whether periodic
      or
      otherwise, submitted to the shareholders of the Company, or submitted to or
      filed by the Company with any governmental authority involving or affecting
      (i)
      the Company that could have a Material Adverse Effect; (ii) the
      Obligations; (iii) any part of the Pledged Collateral; or (iv) any of
      the transactions contemplated in this Agreement or the Transaction
      Documents.

     

    Section6.4. Maintenance
      of Books and Records; Inspection.

     

    The
      Company shall maintain its books, accounts and records in accordance with
      generally accepted accounting principles consistently applied, and permit the
      Secured Party, its officers and employees and any professionals designated
      by
      the Secured Party in writing, during business hours and upon reasonable notice
      to visit and inspect any of its properties (including but not limited to the
      Pledged Collateral), corporate books and financial records, and to discuss
      its
      accounts, affairs and finances with any employee, officer or director
      thereof.

     

    
      
         

      

      
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    Section
      6.5. Maintenance
      and Insurance.

     

    (c) The
      Company shall maintain or cause to be maintained, at its own expense, all of
      its
      assets and properties in good working order and condition, making all necessary
      repairs thereto and renewals and replacements thereof.

     

    (d) The
      Company shall maintain or cause to be maintained, at its own expense, insurance
      in form, substance and amounts (including deductibles), which the Company deems
      reasonably necessary to the Company’s business, (i) adequate to insure all
      assets and properties of the Company, which assets and properties are of a
      character usually insured by persons engaged in the same or similar business
      against loss or damage resulting from fire or other risks included in an
      extended coverage policy; (ii) against public liability and other tort
      claims that may be incurred by the Company; (iii) as may be required by the
      Transaction Documents and/or applicable law and (iv) as may be reasonably
      requested by Secured Party, all with adequate, financially sound and reputable
      insurers.

     

    Section
      6.6. Contracts
      and Other Collateral.

     

    The
      Company shall perform all of its obligations under or with respect to each
      instrument, receivable, contract and other intangible included in the Pledged
      Collateral to which the Company is now or hereafter will be party on a timely
      basis and in the manner therein required, including, without limitation, this
      Agreement.

     

    Section
      6.7. Defense
      of Collateral, Etc.

     

    The
      Company shall defend and enforce its right, title and interest in and to any
      part of: (a) the Pledged Collateral; and (b) if not included within
      the Pledged Collateral, those assets and properties whose loss could have a
      Material Adverse Effect, the Company shall defend the Secured Party’s right,
      title and interest in and to each and every part of the Pledged Collateral,
      each
      against all manner of claims and demands on a timely basis to the full extent
      permitted by applicable law.

     

    Section
      6.8. Payment
      of Debts, Taxes, Etc.

     

    The
      Company shall pay, or cause to be paid, all of its indebtedness and other
      liabilities and perform, or cause to be performed, all of its obligations in
      accordance with the respective terms thereof, and pay and discharge, or cause
      to
      be paid or discharged, all taxes, assessments and other governmental charges
      and
      levies imposed upon it, upon any of its assets and properties on or before
      the
      last day on which the same may be paid without penalty, as well as pay all
      other
      lawful claims (whether for services, labor, materials, supplies or
      otherwise) as and when due

     

    Section
      6.9. Taxes
      and Assessments; Tax Indemnity.

     

    The
      Company shall (a) file all tax returns and appropriate schedules thereto
      that are required to be filed under applicable law, prior to the date of
      delinquency, (b) pay and discharge all taxes, assessments and governmental
      charges or levies imposed upon the Company, upon its income and profits or
      upon
      any properties belonging to it, prior to the date on which penalties attach
      thereto, and (c) pay all taxes, assessments and governmental charges or
      levies that, if unpaid, might become a lien or charge upon any of its
      properties; provided,
      however,
      that
      the Company in good faith may contest any such tax, assessment, governmental
      charge or levy described in the foregoing clauses (b) and (c) so long as
      appropriate reserves are maintained with respect thereto. 

     

    
      
         

      

      
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    Section
      6.10. Compliance
      with Law and Other Agreements.
      

     

    The
      Company shall maintain its business operations and property owned or used in
      connection therewith in compliance with (a) all applicable federal, state
      and local laws, regulations and ordinances governing such business operations
      and the use and ownership of such property, and (b) all agreements,
      licenses, franchises, indentures and mortgages to which the Company is a party
      or by which the Company or any of its properties is bound. Except as set forth
      in its cash flow projections provided to the Secured Party as set forth in
      the
      Securities Purchase Agreement, without limiting the foregoing, the Company
      shall
      pay all of its indebtedness promptly in accordance with the terms thereof.
      

     

    Section
      6.11. Notice
      of Default.
      

     

    The
      Company shall give written notice to the Secured Party of the occurrence of
      any
      default or Event of Default under this Agreement, the Transaction Documents
      or
      the Debenture any other agreement of Company for the payment of money, promptly
      upon the occurrence thereof.

     

    Section
      6.12. Notice
      of Litigation.

     

    The
      Company shall give notice, in writing, to the Secured Party of (a) any
      actions, suits or proceedings wherein the amount at issue is in excess of
      $50,000, instituted by any persons against the Company, or affecting any of
      the
      assets of the Company, and (b) any dispute, not resolved within fifteen
      (15) days of the commencement thereof, between the Company on the one hand
      and
      any governmental or regulatory body on the other hand, which might reasonably
      be
      expected to have a Material Adverse Effect on the business operations or
      financial condition of the Company.

     

    ARTICLE
      7.

     

    NEGATIVE
      COVENANTS

     

    The
      Company covenants and agrees that, from the date hereof until the Obligations
      have been fully paid and satisfied, the Company shall not, unless the Secured
      Party shall consent otherwise in writing:

     

    Section
      7.1. Indebtedness.

     

    Other
      than in the ordinary course of business consistent with past practice, the
      Company shall not directly or indirectly permit, create, incur assume, permit
      to
      exist, increase, renew or extend on or after the date hereof any additional
      debt
      or permit any subsidiary of the Company to do or allow any of the foregoing
      without the Secured Party’s prior written consent beyond that which is set forth
      in Schedule 4(j) of the Securities Purchase Agreement. .

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Section
      7.2. Liens
      and Encumbrances.

     

    Other
      than in the ordinary course of business consistent with past practice, and
      except for such assignment, transfer, pledge, mortgage, security interest or
      other lien or encumbrance as is outstanding on the date of this Agreement,
      the
      Company shall not directly or indirectly make, create, incur, assume or permit
      to exist any assignment, transfer, pledge, mortgage, security interest or other
      lien or encumbrance of any nature in, to or against any part of the Pledged
      Collateral or of the Company’s capital stock, or offer or agree to do so, or own
      or assign, pledge or in any way transfer or encumber its right to receive any
      income or other distribution or proceeds from any part of the Pledged Collateral
      or the Company’s capital stock; or enter into any sale-leaseback financing
      respecting any part of the Pledged Collateral as lessee, or cause or assist
      the
      inception or continuation of any of the foregoing.

     

    Section
      7.3. Certificate
      of Incorporation, By-Laws, Mergers, Consolidations, Acquisitions and
      Sales.

     

    Other
      than in the ordinary course of business consistent with past practice, without
      the prior express written consent of the Secured Party, the Company shall not:
      (a) Amend its Certificate of Incorporation or By-Laws; (b) issue
      or
      sell any Common Stock or Preferred Stock without consideration or for a
      consideration per share less
      than
      the bid price of the Common Stock
      determined immediately prior to its issuance, (c) issue or sell any
      Preferred Stock, warrant, option, right, contract, call, or other security
      or
      instrument granting the holder thereof the right to acquire Common Stock without
      consideration or for a consideration per share less than such Common Stock’s bid
      price value determined immediately prior to its issuance,
      (c) be a
      party to any merger, consolidation or corporate reorganization,
      (d) purchase or otherwise acquire all or substantially all of the assets or
      stock of, or any partnership or joint venture interest in, any other person,
      firm or entity, (e) enter into any security instrument granting the holder
      a security interest in any of the assets of the Company or sell, transfer or
      lease all or any substantial part of the assets of the Company, nor
      (f) create any subsidiaries nor convey any of its assets to any
      subsidiary.

     

    Section
      7.4. Management,
      Ownership.

     

    The
      Company shall not materially change its ownership, executive staff or management
      without the prior written consent of the Secured Party. The ownership, executive
      staff and management of the Company are material factors in the Secured Party's
      willingness to institute and maintain a lending relationship with the
      Company.

     

    Section
      7.5. Dividends,
      Etc.

     

    The
      Company shall not declare or pay any dividend of any kind, in cash or in
      property, on any class of its capital stock, nor purchase, redeem, retire or
      otherwise acquire for value any shares of such stock, nor make any distribution
      of any kind in respect thereof, nor make any return of capital to shareholders,
      nor make any payments in respect of any pension, profit sharing, retirement,
      stock option, stock bonus, incentive compensation or similar plan (except as
      required or permitted hereunder), without the prior written consent of the
      Secured Party.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Section
      7.6. Guaranties;
      Loans.

     

    Other
      than in the ordinary course of business, and except for such guarantees or
      liabilities as are outstanding on the date of this Agreement, the Company shall
      not guarantee nor be liable in any manner, whether directly or indirectly,
      or
      become contingently liable after the date of this Agreement in connection with
      the obligations or indebtedness of any person or persons, except for (i) the
      indebtedness currently secured by the liens identified on the Pledged Collateral
      identified on Exhibit A hereto and (ii) the endorsement of negotiable
      instruments payable to the Company for deposit or collection in the ordinary
      course of business. The Company shall not make any loan, advance or extension
      of
      credit to any person other than in the normal course of its
      business.

     

    Section
      7.7. Debt.

     

    Other
      than in the ordinary course of business, and except for such indebtedness as
      is
      outstanding on the date of this Agreement, without the prior written approval
      of
      Trafalgar, the Company shall not create, incur, assume or suffer to exist any
      additional indebtedness of any description whatsoever in an aggregate amount
      in
      excess of $50,000 (excluding any indebtedness of the Company to the Secured
      Party, trade accounts payable and accrued expenses incurred in the ordinary
      course of business and the endorsement of negotiable instruments payable to
      the
      Company, respectively for deposit or collection in the ordinary course of
      business).

     

    Section
      7.8. Conduct
      of Business.

     

    The
      Company will continue to engage in the business of the Company in the same
      manner as heretofore conducted and only in the ordinary course consistent with
      past practice.

     

    Section
      7.9. Places
      of Business.

     

    The
      location of the Company’s chief place of business is at the address set forth in
      Section 8.1 hereof. The Company shall not change the location of its chief
      place
      of business, chief executive office or any place of business disclosed to the
      Secured Party or move any of the Pledged Collateral from its current location
      (other
      than in the ordinary course of business) without
      thirty (30) days' prior written notice to the Secured Party in each instance.
      

     

    ARTICLE
      8.

     

    MISCELLANEOUS

     

    Section
      8.1. Notices.

     

    All
      notices or other communications required or permitted to be given pursuant
      to
      this Agreement shall be in writing and shall be considered as duly given on:
      (a) the date of delivery, if delivered in person, by nationally recognized
      overnight delivery service or (b) five (5) days after mailing if
      mailed from within the continental United States by certified mail, return
      receipt requested to the party entitled to receive the same:

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
              If
                to the Company:

            	
              Yossi
                Attia, CEO

            
	 	
              9107
                Wilshire Blvd., Suite 450

            
	 	
              Beverly
                Hills, CA 90210

            
	 	
              Facsimile:
                310-461-1901

            
	 	 
	
              With
                a Copy to:

            	
              Law
                Offices of Stephen M. Fleming LLC

            
	 	
              403
                Merrick Avenue, 2nd
                Floor

            
	 	
              East
                Meadow NY 11554

            
	 	
              Facsimile:
                516-977-1209

            
	 	 
	
              And
                if to the Secured Party:

            	
              Trafalgar
                Capital Specialized 

              Investment
                Fund, Luxembourg

            
	 	
              18851
                NE 29th
                Avenue

            
	 	
              Aventura,
                Florida

            
	 	
              Suite
                306

            
	 	
              Attention:
                Bob Press

              Portfolio
                Manager

            
	 	
              Facsimile:
                1-786-323-1651

            


    

    


    Any
      party
      may change its address by giving notice to the other party stating its new
      address. Commencing on the tenth (10th) day
      after the giving of such notice, such newly designated address shall be such
      party’s address for the purpose of all notices or other communications required
      or permitted to be given pursuant to this Agreement.

     

    Section
      8.2. Severability.

     

    If
      any
      provision of this Agreement shall be held invalid or unenforceable, such
      invalidity or unenforceability shall attach only to such provision and shall
      not
      in any manner affect or render invalid or unenforceable any other severable
      provision of this Agreement, and this Agreement shall be carried out as if
      any
      such invalid or unenforceable provision were not contained herein.

     

    Section
      8.3. Expenses.

     

    In
      the
      event of an Event of Default, the Company will pay to the Secured Party the
      amount of any and all reasonable expenses, including the reasonable fees and
      expenses of its counsel, which the Secured Party may incur in connection with:
      (i) the custody or preservation of, or the sale, collection from, or other
      realization upon, any of the Pledged Collateral; (ii) the exercise or
      enforcement of any of the rights of the Secured Party hereunder or
      (iii) the failure by the Company to perform or observe any of the
      provisions hereof.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    Section
      8.4. Waivers,
      Amendments, Etc.

     

    The
      Secured Party’s delay or failure at any time or times hereafter to require
      strict performance by Company of any undertakings, agreements or covenants
      shall
      not waiver, affect, or diminish any right of the Secured Party under this
      Agreement to demand strict compliance and performance herewith. Any waiver
      by
      the Secured Party of any Event of Default shall not waive or affect any other
      Event of Default, whether such Event of Default is prior or subsequent thereto
      and whether of the same or a different type. None of the undertakings,
      agreements and covenants of the Company contained in this Agreement, and no
      Event of Default, shall be deemed to have been waived by the Secured Party,
      nor
      may this Agreement be amended, changed or modified, unless such waiver,
      amendment, change or modification is evidenced by an instrument in writing
      specifying such waiver, amendment, change or modification and signed by the
      Secured Party.

     

    Section
      8.5. Continuing
      Security Interest.

     

    This
      Agreement shall create a continuing security interest in the Pledged Collateral
      and shall: (i) remain in full force and effect until payment in full of the
      Obligations; and (ii) be binding upon the Company and its successors and
      heirs and (iii) inure to the benefit of the Secured Party and its
      successors and assigns. Upon the payment or satisfaction in full of the
      Obligations, the Company shall be entitled to the return, at its expense, of
      such of the Pledged Collateral as shall not have been sold in accordance with
      Section 5.2 hereof or otherwise applied pursuant to the terms
      hereof.

     

    Section
      8.6. Independent
      Representation.

     

    Each
      party hereto acknowledges and agrees that it has received or has had the
      opportunity to receive independent legal counsel of its own choice and that
      it
      has been sufficiently apprised of its rights and responsibilities with regard
      to
      the substance of this Agreement.

     

    Section
      8.7. Applicable
      Law: Jurisdiction.

     

    This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of Florida without regard to the principles of conflict of laws.
      The
      parties further agree that any action between them shall be heard in Florida
      and
      expressly consent to the jurisdiction and venue of the Florida State Court
      sitting in Broward County, Florida and the United States District Court for
      the
      Southern District of Florida for the adjudication of any civil action asserted
      pursuant to this Paragraph.

     

    Section
      8.8. Waiver
      of Jury Trial.

     

    AS
      A
      FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT AND TO
      MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES
      ANY
      RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS
      AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.


     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    Section
      8.9. Entire
      Agreement.

     

    This
      Agreement constitutes the entire agreement among the parties and supersedes
      any
      prior agreement or understanding among them with respect to the subject matter
      hereof.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    


    IN
      WITNESS WHEREOF, the
      parties hereto have executed this Security Agreement as of the date first above
      written.

     

    
      	
              COMPANY:

            
	
              VORTEX
                RESOURCES CORP.

            
	 
	
              By:

            	 
	
              Name:
                Yossi Attia

            
	
              Title:
                Chief Executive Officer

            
	 
	
              SECURED
                PARTY:

            
	
              TRAFALGAR
                CAPITAL SPECIALIZED

            
	
              INVESTMENT
                FUND, LUXEMBOURG

            
	
              By:       
                Trafalgar
                Capital Sarl

            
	
              Its:       
                General
                Partner

            
	 
	
              By:
                

            	 
	
              Name:
                

            
	
              Title:
                Chairman of the Board

            


    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    DEFINITION
      OF PLEDGED COLLATERAL

     

    For
      the
      purpose of securing prompt and complete payment and performance by the Company
      of all of the Obligations, the Company unconditionally and irrevocably hereby
      grants to the Secured Party a continuing security interest in and to, and lien
      upon, the three wells specified below in the Company’s Davy Crockett gas field
      subsidiary. 

     

    
      	 	
              1.

            	
              N/2,
                W/2, SW/4, SW/4, of Section 124, Block O, G.S.A. RR Co. Survey, Crockett
                County, Texas.

            


    

    
      	 	
              2.

            	
              S/2,
                W/2, SW/4, SW/4, of Section 124, Block O, G.S.A. RR Co. Survey, Crockett
                County, Texas.

            


    

    
      	 	
              3.

            	
              N/2,
                E/2, SW/4, SW/4, of Section 124, Block O, G.S.A. RR Co. Survey, Crockett
                County, Texas.

            


    

     

    
      
         

      

      
        A-1