f8k0707ex10ii_bedminster.htm


    SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT (this “Agreement”) is made as of
      the 26th day of June, 2007, by BEDMINSTER NATIONAL CORP., a
      Nevada corporation, having a mailing address at 90 Washington Valley Road,
      Bedminster, NJ 07921, (the “Company”), Metropolitan
      Computing Corp., a New Jersey corporation, having a mailing address at
      6 Great Meadow Lane, East Hanover, New Jersey 07936 (“MCC”); ( together
Company and MCC, individually and collectively, jointly and
      severally the (“Debtors”), for the benefit and security of
DUTCHESS PRIVATE EQUITIES FUND, LTD., having a mailing address
      at 50 Commonwealth Avenue, Suite 2, Boston, Massachusetts 02116 (the
“Secured Party”).

     

    WHEREAS,
      the Company has executed and delivered to Secured Party a Note or instruments,
      including, without limitation, (i) that certain Note dated June 26, 2007 from
      the Company in favor of the Secured Party (the “Note”) pursuant
      to which the Secured Party has agreed to make certain loans and other financial
      accommodations to the Company;

     

    WHEREAS,
      each of the other Debtors has executed and delivered a guaranty (as amended
      or
      otherwise modified from time to time, the "Guaranty") of
      certain obligations of the Company, including all obligations of the Company
      under the Note; and

     

    WHEREAS,
      the obligations of the Company under the Note and the obligations of each other
      Debtor under the Guaranty are to be secured pursuant to this
      Agreement;

     

    NOW,
      THEREFORE, for and in consideration of any loan, advance or other financial
      accommodation heretofore or hereafter made to or for the benefit of any Debtor
      under or in connection with the Note of any other Finance Documents (as defined
      below), and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

     

    ARTICLE
      I.

     

    CONSTRUCTION
      AND DEFINED TERMS

     

    Section
      1.01 Article and Section Headings. Article and Section
      headings and captions in this Agreement are for convenience only and shall
      not
      affect the construction or interpretation of this Agreement. Unless otherwise
      expressly stated in this Agreement, references in this Agreement to Sections
      shall be read as Sections of this Agreement.

     

    Section
      1.02 Schedules and Exhibits. The references in this
      Agreement to specific Schedules and Exhibits shall be read as references to
      such
      specific Schedules or Exhibits attached, or intended to be attached, to this
      Agreement and any counterpart of this Agreement and regardless of whether they
      are in fact attached to this Agreement, and including any amendments,
      supplements and replacements to such Schedules and Exhibits from time to
      time.

     

    Section
      1.03 Defined Terms.  Unless otherwise
      expressly stated in this Agreement, (a)
      capitalized terms which are not otherwise defined herein shall have the
      respective meanings assigned
      thereto in the UCC (as defined below); and (b) the following terms used in
      this
      Agreement shall have the following meanings:

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Collateral”
      means, with respect to any Debtor, all property and rights of such
      Debtor in which a security interest is granted hereunder.

     

    “Computer
      Hardware and Software” means, with respect to any Debtor, all of such
      Debtor's rights (including rights as licensee and lessee) with respect to (i)
      computer and other electronic data processing hardware, including all integrated
      computer systems, central processing units, memory units, display terminals,
      printers, computer elements, card readers, tape drives, hard and soft disk
      drives, cables, electrical supply hardware, generators, power equalizers,
      accessories, peripheral devices and other related computer hardware; (ii) all
      software programs designed for use on the computers and electronic data
      processing hardware described in clause (i) above, including all
      operating system software, utilities and application programs in whatsoever
      form
      (source code and object code in magnetic tape, disk or hard copy format or
      any
      other listings whatsoever); (iii) any firmware associated with any of the
      foregoing; and (iv) any documentation for hardware, software and firmware
      described in clauses (i), (ii) and (iii) above, including flow charts,
      logic diagrams, manuals, specifications, training materials, charts and pseudo
      codes.

     

    “Equity
      Interest” With respect to any Person, any ownership interest in such
      Person, including shares, partnership interests, joint venture interests,
      membership interests, limited liability company interests, unit interests and
      any other equity or ownership interests of any kind, and any subscriptions,
      options, warrants, commitments, purchase rights, preemptive rights or agreements
      of any kind (including any stockholders’ or voting trust agreements) for the
      issuance, sale, registration or voting of, or for securities convertible into,
      any shares, partnership interests, joint venture interests, membership
      interests, limited liability company interests, and any other equity or
      ownership interests in such Person.

     

    “Finance
      Documents” mean, collectively, the Note, the Guaranty, and any other
      documents or agreements executed in connection therewith or herewith and
      pertaining to the Secured Obligations.

     

    “Lien”
      Any security interest (including security interest within the
      definition of “security interest” in the UCC), encumbrance, lien (including any
      judgment lien, any contract lien, any lien arising or resulting from nonpayment
      of any tax, assessment, charge or other imposition, and any lien arising or
      resulting from nonpayment for labor, materials, or supplies), security agreement
      (including any agreement that creates or provides for a security interest),
      deed
      of trust, mortgage, grant, pledge, assignment, hypothecation, title retention
      contract, or other arrangement for security purposes, and any agricultural
      lien
      (including any agricultural lien within the definition of “agricultural lien” in
      the UCC), and including any of the foregoing arising by operation of statute
      or
      other law or the application of equitable principles, whether perfected or
      unperfected, avoidable or unavoidable, consensual or nonconsensual, and any
      financing statement or other similar notice document, whether or not filed,
      and
      any agreement to give a financing statement or other similar notice
      document.

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Lien
      Proceeding” Any action taken (including self help) or proceeding
      (judicial or otherwise) commenced by any Person other than Secured Party for
      the
      purpose of enforcing or protecting any actual or alleged Lien upon any of the
      Collateral, and including any foreclosure, repossession, attachment, execution
      or other process regarding any of the Collateral.

     

    “Permitted
      Lien” means those Liens described on Schedule 3.07.

     

    “Person”
      Any natural person, corporation, limited liability company,
      partnership, joint venture, entity, association, joint-stock company, trust
      or
      unincorporated organization and any Governmental Authority, including any
      receiver, debtor-in-possession, trustee, custodian, conservator, or
      liquidator.

     

    “Secured
      Obligations” All indebtedness, liabilities and obligations which are
      now or may at any time hereafter be due, owing or incurred in any manner
      whatsoever to Secured Party by any Debtor, whether under this Agreement, any
      Note, the Guaranty or any other Finance Document, in each case howsoever
      created, arising or evidenced, whether direct or indirect, absolute or
      contingent, whether at stated maturity, by acceleration or otherwise (including,
      without limitation, the payment of interest and other amounts which would accrue
      and become due but for the filing of a petition in bankruptcy or the operation
      of the automatic stay under Section 3 62(a) of the Bankruptcy Code, 11 U.S.C.
§
3 62(a)), including, without limitation, all charges, fees, expenses,
      commissions, reimbursements, premiums, indemnities and other payments related
      to
      or in respect of such obligations.

     

    “UCC”
      means the Uniform Commercial Code as in effect in the Commonwealth
      of
      Massachusetts on the date of this Agreement, as may be amended or modified
      from
      time to time after the date hereof; provided that, "UCC" shall
      also mean the Uniform Commercial Code as in effect from time to time in any
      applicable jurisdiction.

     

    ARTICLE
      II.

     

    SECURITY
      INTEREST; PERFECTION

     

    Section
      2.01 Security Interest. To secure the full and timely
      payment, performance and satisfaction of the Secured Obligations, each Debtor
      hereby collaterally assigns to Secured Party, and grants Secured Party a
      security interest in, all of such Debtor’s property, whether now owned or
      hereafter existing or acquired, regardless of where located including, without
      limitation, all of such Debtor’s:

     

    
      
        	
                (a)  

              	
                
                  Accounts;

                

              


      

       

    

    
      
        
          	
                  (b)  

                	
                  
                    
                      Chattel
                        Paper, including Electronic Chattel
                        Paper;

                    

                  

                


        

      

    

     

    
      
        
          
            	
                    (c)  

                  	
                    
                      
                        
                          Computer
                            Hardware and Software and all rights with respect thereto,
                            including, any
                            and all licenses, options, warranties, service contracts,
                            program
                            services, test rights, maintenance rights, support rights,
                            improvement
                            rights, renewal rights and indemnifications, and any
                            substitutions,
                            replacements, additions or model conversions of any of
                            the
                            foregoing

                        

                      

                    

                  


          

        

      

       

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      
        
          
             

            
              	
                      (d)  

                    	
                      
                        
                          
                            
                              Commercial
                                Tort Claims now or hereafter identified on Schedule 2.01(d) to this
                                Agreement;

                            

                          

                        

                      

                    


            

          

        

         

      

    

    
      	
              (e)  

            	
              Deposit
                Accounts;

            


    

     

    
      	
              (f)  

            	
              Documents;

            


    

     

    
      	
              (g)  

            	
              Financial
                Assets;

            


    

     

    
      	
              (h)  

            	
              General
                Intangibles;

            


    

     

    
      	
              (i)  

            	
              Goods
                (including all of its Equipment, Fixtures, Real Estate and Inventory),
                and
                all embedded software, accessions, additions, attachments, improvements,
                substitutions and replacements thereto and
                therefor);

            


    

     

    
      	
              (j)  

            	
              Instruments;

            


    

     

    
      	
              (k)  

            	
              Intellectual
                Property;

            


    

     

    
      	
              (l)  

            	
              Investment
                Property;

            


    

     

    
      	
              (m)  

            	
              Letter
                of Credit Rights;

            


    

     

    
      	
              (n)  

            	
              money
                (of every jurisdiction whatsoever);

            


    

     

    
      	
              (o)  

            	
              Security
                Entitlements;

            


    

     

    
      	
              (p)  

            	
              Supporting
                Obligations

            


    

     

    
      	
              (q)  

            	
              with
                respect to each Person (as hereinafter defined) listed in Schedule
                2.01(q) hereto and each other corporation hereafter acquired or formed
                by such Debtor, the Equity Interests from time to time issued and
                outstanding, including the certificates, if any, representing the
                Equity
                Interests and any interest of such Debtor in the entries on the books
                of
                the issuer thereof or any financial intermediary pertaining to the
                Equity
                Interests, together with all dividends, cash, options, warrants,
                rights,
                instruments, distributions, returns of capital or principal, income,
                interest, profits and other property, interests (debt or equity)
                or
                proceeds as a result of a split, revision, reclassification,
                consolidation, merger or other like change of the Equity Interests
                or any
                issuer thereof, from time to time received, receivable or otherwise
                distributed to such Debtor in respect of or in exchange for any or
                all of
                the Equity Interests;

            


    

     

    
      	
              (r)  
                

            	
              all
                promissory notes or intercompany notes and all certificates or instruments
                evidencing such promissory notes or intercompany notes; and to the
                extent
                not included in the foregoing, other personal property of any kind
                or
                description, together with all books, records, writings, data bases,
                information and other property relating to, used or useful in connection
                with, or evidencing, embodying, incorporating or referring to any
                of the
                foregoing, and all Proceeds, products, rents, issues, profits and
                returns
                of and from any of the foregoing; provided that to the extent that
                the provisions of any lease or license of Computer Hardware and Software
                or Intellectual Property expressly prohibit (which prohibition is
                enforceable under applicable law) the assignment thereof, and the
                grant of
                a security interest therein, the Secured Party will not enforce its
                security interest (other than in respect of the Proceeds thereof)
                for so
                long as such prohibition continues, it being  understood
                that upon request of the Secured Party, such Debtor will in good
                faith
                use reasonable efforts to obtain consent for the creation of a security
                interest in favor of the Secured Party (and to Secured Party’s enforcement
                of such security interest) in such Debtor's rights under such lease
                or
                license. Notwithstanding the above, the shares of stock of MCC held
                by the
                Company are specifically excluded and shall not be held as securities
                pursuant to this Agreement.

            


    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    Section
      2.02 Intentionally Omitted 

     

    Section
      2.03 Perfection by Filing.

     

    
      	
              (a)  

            	
              Each
                Debtor authorizes Secured Party to file any financing statement and
                agrees
                to execute, in recordable form, and deliver to Secured Party any
                other
                document or instrument, and to cause any third party to execute and
                deliver to Secured Party any other document (including financing
                statement
                termination statements), requested by Secured Party to perfect the
                security interests created under this Agreement and to establish,
                maintain, and continue the first priority of the security interests
                created under this Agreement.

            


    

     

    
      	
              (b)  

            	
              Each
                Debtor hereby appoints Secured Party as such Debtor’s attorney-in-fact,
                with power of substitution, which appointment is irrevocable and
                coupled
                with an interest, to execute in the name of Debtor, and to transmit
                to, or
                file, record, or register with, any Person, and at any time, any
                document
                or instrument that Secured Party may deem necessary or advisable
                for the
                purpose of creating, enforcing, defending, protecting, perfecting,
                continuing, or maintaining any security interest, or the perfection
                or
                priority of any security interest, created under this
                Agreement.

            


    

     

    
      	
              (c)  

            	
              Secured
                Party shall not be required to obtain Debtor’s consent or authorization
                for Secured Party to file, and Secured Party shall be entitled to
                file,
                with or without execution by Debtor (or by Secured Party as Debtor’s
                attorney-in-fact), any financing statement, amendment, or other record
                that Secured Party may be authorized to file in accordance with the
                terms
                of the UCC with respect to the security interests created under this
                Agreement.

            


    

     

    
      
        	
                (d)  

              	
                
                  Any
                    financing statement or other document filed to perfect the security
                    interests evidenced by this Agreement may, at Secured Party’s option,
                    describe or indicate the Collateral in the manner that the Collateral
                    is
                    described in this Agreement, or as all assets of Debtor, or as
                    all
                    personal property of Debtor, or by any other description or indication
                    of
                    the Collateral that may be sufficient for a financing statement
                    under the
                    UCC.

                

              


      

       

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
       

      
        
          	
                  (e)  

                	
                  
                    
                      If
                        prior to Debtor’s execution of this Agreement, Secured Party shall have
                        filed in any jurisdiction, or with any governmental authority,
                        any
                        financing statement, amendment, or other document describing
                        or indicating
                        the Collateral, or containing a description or indication
                        of all assets of
                        Debtor or all personal property of Debtor comprising the
                        Collateral, or
                        containing any other description or indication of the Collateral,
                        Debtor,
                        by executing this Agreement, irrevocably (i) authorizes,
                        ratifies,
                        confirms, and adopts (A)  each
                        such previously filed financing statement, amendment or other
                        document,
                        and (B) the
                        filing of each such previously filed financing statement,
                        amendment, or
                        other document, and (ii) agrees that each such previously
                        filed financing
                        statement, amendment, or other document is valid and effective
                        as though
                        it had been authorized by Debtor and filed with Debtor’s
                        authorization.

                    

                  

                


        

         

      

    

    2.04
      Perfection by Possession. If Collateral is of a type as to which it
      is necessary, desirable, or advisable, as determined by Secured Party, for
      Secured Party to take possession of such Collateral in order to protect,
      perfect, or maintain the first priority of Secured Party’s security interest or
      other Lien (subject only to Permitted Security) in such (or any other)
      Collateral, then, promptly upon Secured Party’s request, Debtor shall deliver
      such Collateral to Secured Party.

     

    ARTICLE
      III. 

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Debtor
      makes the following representations and warranties to Secured Party, which
      shall
      each be continuing and in effect at all times, and Secured Party shall be
      entitled to rely upon the truth, accuracy, and completeness of the following
      representations and warranties without regard to any other information that
      may
      be now or hereafter known by or disclosed to Secured Party or any of Secured
      Party’s directors, officers, employees, agents, attorneys or other
      advisors:

     

    Section
      3.01 Debtor’s Name and Identification Number. The name
      of each Debtor set forth on the first page and the signature page of this
      Agreement is Debtor’s correct and complete legal name. The street address for
      Debtor in this Agreement is Debtor’s mailing address. Such Debtor's chief
      executive office and principal place of business are as set forth on Schedule
      3.01  hereto (and such Debtor has not maintained its chief
      executive office and principal place of business at any other location during
      the five (5) years preceding the date hereof, and each other location where
      such
      Debtor maintains a place of business is also set forth on Schedule
      3.01  hereto

     

    Section
      3.02 Permitted Liens; Collateral. (a) No financing
      statement (other than Permitted Liens) covering any of such Debtor’s rights in
      the Collateral is on file in any public office; (b) Secured Party’s security
      interest in the Collateral is a first priority perfected security interest,
      subject to no Liens other than Permitted Liens; (c) such Debtor is and will
      be
      the lawful owner of all Collateral, free of all liens, claims, security
      interests and encumbrances whatsoever, other than the security interest
      hereunder and Permitted Liens, with full power and authority to execute this
      Agreement and perform such Debtor's obligations hereunder, and to subject the
      Collateral to the security interest hereunder and (d) all information with
      respect to the Collateral set forth in any
      schedule, certificate or other writing at any time heretofore or hereafter
      furnished by such Debtor to the Secured Party is and will be true and correct
      in
      all material respects as of the date furnished.

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Section
      3.03 Authorization and No Conflicts. (a) Each Debtor is
      a corporation duly organized, validly existing and in good standing under the
      laws of its state of incorporation as listed on the first page of this
      Agreement; (b) the execution and delivery of this Agreement and the performance
      by such Debtor of its obligations hereunder are within such Debtor's corporate
      powers, have been duly authorized by all necessary corporate action, have
      received all necessary governmental approval (if any shall be required), and
      do
      not and will not contravene or conflict with any provision of law or of the
      articles of incorporation or by-laws of such Debtor or of any material
      agreement, indenture, instrument or other document, or any material judgment,
      order or decree, which is binding upon such Debtor; and (c) this Agreement
      is a
      legal, valid and binding obligation of such Debtor, enforceable in accordance
      with its terms, except that the enforceability of this Agreement may be limited
      by bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
      reorganization, moratorium or other similar laws now or hereafter in effect
      relating to creditors' rights generally and by general principles of equity
      (regardless of whether enforcement is sought in a proceeding in equity or at
      law).

     

    Section
      3.04 Tangible Collateral. Schedule 3.04 hereto
      contains a complete listing of such Debtor’s tangible Collateral located with
      any bailee, warehousemen or other third parties and all of such Debtor’s
      Collateral which is subject to certificate of title statutes.

     

    Section
      3.05 Deposit Accounts. Except as listed on Schedule
      2.02, Debtor has no Deposit Accounts and is not a party to or otherwise
      bound by any Deposit Account Agreement.

     

    Section
      3.06 Leases. Except as listed on Schedule 3.06 (which
      schedule contains a true, accurate and complete list and description of all
      leases to which Debtor is a lessor, lessee, or other party or otherwise bound),
      Debtor is not a lessor or lessee under, or a party to, or otherwise bound by
      the
      terms of, any lease.

     

    Section
      3.07 Commercial Tort Claims. Except as listed on
Schedule 2.01(d), Debtor has no Commercial Tort Claims.

     

    Section
      3.08 Subsidiaries. Schedule 3.08 lists all of the
      current subsidiaries of Debtors. Upon closing of the acquisition of MCC, MCC
      shall become a subsidiary of the Company.

     

    ARTICLE
      IV.

     

    AFFIRMATIVE
      COVENANTS

     

    Debtor
      covenants and agrees to the following:

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    Section
      4.01 Account Debtors. The Secured Party may, at any time
      that an Event of Default exists, whether before or after any revocation of
      such
      power and authority or the maturity of any of the Secured Obligations, notify
      an
      Account Debtor or other Person obligated on Collateral to make
      payment or otherwise render performance to or for the benefit of the Secured
      Party and enforce, by suit or otherwise the obligations of an Account Debtor
      or
      other Person obligated on Collateral and exercise the rights of such Debtor
      with
      respect to the obligation of the Account Debtor or other Person obligated on
      Collateral to make payment or otherwise render performance to such Debtor,
      and
      with respect to any property that secures the obligations of the Account Debtor
      or other Person obligated on the Collateral. In connection with exercise of
      such
      rights and remedies, the Secured Party may surrender, release or exchange all
      or
      any part thereof, or compromise or extend or renew for any period (whether
      or
      not longer than the original period) any indebtedness thereunder or evidenced
      thereby. Upon the request of the Secured Party during the existence of an Event
      of Default, each Debtor will, at its own expense, notify any or all parties
      obligated on any of the Collateral to make payment to the Secured Party of
      any
      amounts due or to become due thereunder. Upon request by the Secured Party
      during the existence of an Event of Default, each Debtor will forthwith, upon
      receipt, transmit and deliver to the Secured Party, in the form received, all
      cash, checks, drafts and other instruments or writings for the payment of money
      (properly endorsed, where required, so that such items may be collected by
      the
      Secured Party) which may be received by such Debtor at any time in full or
      partial payment or otherwise as proceeds of any of the Collateral. Except as
      the
      Secured Party may otherwise consent in writing, any such items which may be
      so
      received by any Debtor will not be commingled with any other of its funds or
      property, but will be held separate and apart from its own funds or property
      and
      upon express trust for the Secured Party until delivery is made to the Secured
      Party. Each Debtor will comply with the terms and conditions of any consent
      given by the Secured Party pursuant to the foregoing sentence.

     

    Section
      4.02  Additional Covenants.   Each
      Debtor:

     

    
      
        
          	
                  (a)  

                	
                  
                    
                      will,
                        at the Secured Party’s request, at any time and from time to time, execute
                        and deliver to the Secured Party such financing statements,
                        amendments and
                        other documents and do such acts as the Secured Party deems
                        necessary in
                        order to establish and maintain valid, attached and perfected
                        first
                        priority security interests in the Collateral in favor of
                        the Secured
                        Party, free and clear of all Liens and claims and rights
                        of third parties
                        whatsoever except Permitted Liens; each Debtor hereby irrevocably
                        authorizes the Secured Party at any time, and from time to
                        time, to file
                        in any jurisdiction any initial financing statements and
                        amendments
                        thereto that (i) indicate the Collateral (x) as all assets
                        of such Debtor
                        or words of similar effect, regardless of whether any particular
                        asset
                        comprised in the Collateral falls within the scope of Article
                        9 of the UCC
                        of the jurisdiction wherein such financing statement or amendment
                        is
                        filed, or (y) as being of an equal or lesser scope or with
                        greater
                        detail;

                    

                  

                


        

         

      

    

    
      
        
          	
                  (b)  

                	
                  
                    
                      will
                        keep all its Inventory at, and will not maintain any place
                        of business at
                        any location other than, its address(es) shown on Schedule 3.01
                        hereto or at such other addresses of which such Debtor
                        shall have
                        given the Secured Party not less than 30 days' prior written
                        notice;

                    

                  

                


        

         

      

    

    
      
        
          	
                  (c)  

                	
                  
                    will
                      keep its records concerning the Collateral in such a manner
                      as will enable
                      the Secured
                      Party or its designees to determine at any time the status
                      of the
                      Collateral;(d) will furnish the Secured Party such information
                      concerning
                      such Debtor, the Collateral and the Account Debtors as the
                      Secured Party
                      may from time to time reasonably
                      request;

                  

                


        

         

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

    

     

    
      	
              (d)  

            	
              will
                permit the Secured Party and its designees, from time to time, on
                reasonable notice and at reasonable times and intervals during normal
                business hours (or at any time without notice during the existence
                of an
                Event of Default) to inspect such Debtor's Inventory and other Goods,
                and
                to inspect, audit and make copies of and extracts from all records
                and
                other papers in the possession of such Debtor pertaining to the Collateral
                and the Account Debtors, and will, upon request of the Secured Party
                during the existence of an Event of Default, deliver to the Secured
                Party
                all of such records and papers;

            


    

     

    
      	
              (e)  

            	
              will,
                upon request of the Secured Party, stamp on its records concerning
                the
                Collateral, and add on all Chattel Paper and Instruments constituting
                a
                portion of the Collateral, a notation, in form satisfactory to the
                Secured
                Party, of the security interest of the Secured Party
                hereunder;

            


    

     

    
      	
              (f)  

            	
              except
                for the sale or lease of Inventory in the ordinary course of its
                business
                and sales of Equipment which is no longer useful in its business
                or which
                is being replaced by similar Equipment, will not sell, lease, assign
                or
                create or permit to exist any Lien on any Collateral other than Permitted
                Liens;

            


    

     

    
      	
              (g)  

            	
              will
                at all times keep all of its Inventory and other Goods insured under
                policies maintained with reputable, financially sound insurance companies
                against loss, damage, theft and other risks to such extent as is
                customarily maintained by companies similarly situated, and cause
                all such
                policies to provide that loss thereunder shall be payable to the
                Secured
                Party as its interest may appear (it being understood that (A) so
                long as
                no Event of Default shall be existing, the Secured Party shall deliver
                any
                proceeds of such insurance which may be received by it to such Debtor
                and
                (B) whenever an Event of Default shall be existing, the Secured Party
                may
                apply any proceeds of such insurance which may be received by it
                toward
                payment of the Secured Obligations, whether or not due, in such order
                of
                application as the Secured Party may determine), and such policies
                or
                certificates thereof shall, if the Secured Party so requests, be
                deposited
                with or furnished to the Secured
                Party;

            


    

     

    
      	
              (h)  

            	
              will
                take such actions as are reasonably necessary to keep its Goods in
                good
                repair and condition;

            


    

     

    
      	
              (i)  

            	
              will
                take such actions as are reasonably necessary to keep its Equipment
                in
                good repair and condition and in good working order, ordinary wear
                and
                tear excepted;

            


    

     

    
      	
              (j)  

            	
              
                will
                  promptly pay when due all license fees, registration fees, taxes,
                  assessments and other charges which may be levied upon or assessed
                  against
                  the ownership, operation, possession, maintenance or use of its
                  Equipment
                  and other Goods;

              

            


    

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
       

      
        	
                (k)  

              	
                
                  
                    will
                      take all steps reasonably necessary to protect, preserve and
                      maintain all
                      of its rights in the Collateral and will keep all of the tangible
                      Collateral in the United
                      States;

                  

                

              


      

       

    

    
      	
              (l)  

            	
              will
                promptly notify the Secured Party in writing upon acquiring or otherwise
                obtaining any Collateral after the date hereof consisting of Deposit
                Accounts, Investment Property, Letter-of-Credit Rights or Electronic
                Chattel Paper and, upon the request of the Secured Party, will promptly
                execute such other documents, and do such other acts or things deemed
                appropriate by the Secured Party to confer upon the Secured Party
                control
                (as defined in the UCC) with respect to such
                Collateral;

            


    

     

    
      	
              (m)  

            	
              promptly
                notify the Secured Party in writing upon acquiring or otherwise obtaining
                any Collateral after the date hereof consisting of Documents or
                Instruments and, upon the request of the Secured Party, will promptly
                execute such other documents, and do such other acts or things deemed
                appropriate by the Secured Party to deliver to the Secured Party
                possession of such Documents which are negotiable and Instruments,
                and,
                with respect to nonnegotiable Documents, to have such nonnegotiable
                Documents issued in the name of the Secured
                Party;

            


    

     

    
      	
              (n)  

            	
              promptly
                notify the Secured Party in writing upon incurring or otherwise obtaining
                a Commercial Tort Claim after the date hereof against any third party,
                and, upon the request of the Secured Party, will promptly enter into
                an
                amendment to this Agreement, and do such other acts or things deemed
                appropriate by the Secured Party to give the Secured Party a security
                interest in such Commercial Tort Claim;
                and

            


    

     

    
      	
              (o)  
                

            	
              further
                agrees to take other action reasonably requested by the Secured Party
                to
                insure the attachment, perfection and first priority of, and the
                ability
                of the Secured Party to enforce, the security interests in any and
                all of
                the Collateral including, without limitation, (i) executing, delivering
                and, where appropriate, filing financing statements and amendments
                relating thereto under the UCC, to the extent, if any, that the Debtor’s
                signature thereon is required therefor, (ii) complying with any provision
                of any statute, regulation or treaty of the United States as to any
                Collateral if compliance with such provision is a condition to attachment,
                perfection or priority of, or ability of the Secured Party to enforce,
                the
                security interests in such Collateral, (iii) obtaining governmental
                and
                other third party consents and approvals, including without limitation
                any
                consent of any licensor, lessor or other Person obligated on Collateral,
                (iv) obtaining waivers from mortgagees and landlords in form and
                substance
                satisfactory to the Secured Party, and (v) taking all actions required
                by
                the UCC in effect from time to time or by other law, as applicable
                in any
                relevant UCC jurisdiction, or by other law as applicable in any foreign
                jurisdiction.

            


    

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Section
      4.03 Taxes, Assessments, Charges, and Other Impositions.
Debtor shall pay and discharge promptly, on or before
      the date due,
      all taxes, assessments, charges, and other impositions imposed by any
      governmental authority on Debtor, or on the Collateral, relating to the
      ownership or use of the Collateral, or relating to any sale, lease, license
      or
      other disposition of the Collateral; provided, however, Debtor shall not be
      required to pay or discharge, or to cause to be paid or discharged, any such
      tax, assessment, charge, or other imposition so long as (a) the validity of
      such
      tax, assessment, charge or other imposition is being contested in good faith
      by
      Debtor by appropriate proceedings.

     

    Section
      4.04 Notice of Lien Proceeding. Debtor shall give
      Secured Party immediate written notice of the threat by any Person to commence
      any proceedings on a material portion of the Collateral or any other Lien
      Proceeding.

     

    Section
      4.05 Delivery of Certificated Equity Interests. All
      certificates, agreements or instruments representing or evidencing the pledged
      Equity Interests, to the extent not previously delivered to the Secured Party,
      shall promptly upon receipt thereof by any Debtor be delivered to and held
      by
      the Secured Party pursuant hereto. All such certificated Collateral shall be
      in
      suitable form for transfer by delivery or shall be accompanied by duly executed
      instruments of transfer or assignment in blank, all in form and substance
      reasonably satisfactory to the Secured Party. Security Party shall have the
      right, at any time after the occurrence and during the continuance of any Event
      of Default, to exchange certificates representing or evidencing such pledged
      Equity Interests for certificates of smaller or larger denominations. If any
      issuer of pledged Equity Interests is organized in a jurisdiction which does
      not
      permit the use of certificates to evidence equity ownership, or if any of such
      pledged Equity Interests are at any time not evidenced by certificates of
      ownership, then each applicable Debtor shall, to the extent permitted by
      applicable law, record such pledge on the equityholder register or the books
      of
      the issuer, execute any customary pledge forms or other documents necessary
      or
      appropriate to complete the pledge and give the Secured Party the right to
      transfer such pledged Equity Interests.

     

    Section
      4.06 Voting Rights: Distributions: etc. So long as no
      Event of Default shall have occurred and be continuing, (i) each Debtor shall
      be
      entitled to exercise any and all voting and other consensual rights pertaining
      to the pledged Equity Interests or any part thereof for any purpose not
      inconsistent with the terms or purposes of this Agreement; provided, however,
that no Debtor shall in any event exercise such rights in any manner
      which
      may have an adverse effect on the security intended to be provided by this
      Agreement and (ii) each Debtor shall be entitled to receive and retain any
      and
      all distributions with respect to such pledged Equity Interests. Upon the
      occurrence and during the continuance of any Event of Default, upon written
      notice from the Secured Party, all rights of each Debtor to exercise such voting
      and other consensual rights it would otherwise be entitled to exercise hereunder
      and all rights of such Debtor to receive distributions otherwise permitted
      hereunder shall cease, and all such rights shall thereupon become vested in
      the
      Secured Party. Any distributions which are received by any Debtor in violation
      of the provisions of this Agreement shall be received in trust for the benefit
      of the Secured Party, shall be segregated from other funds of such Debtor and
      shall immediately be paid over to the Secured Party as Collateral in the same
      form as so received (with any necessary endorsement).

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    ARTICLE
      V.

     

    NEGATIVE
      COVENANTS

     

    Debtor
      covenants and agrees to the following:

     

    Section
      5.01 Identity. Debtor shall not change Debtor’s name or
      corporate structure. If Debtor is organized solely under the law of a single
      state or the United States and as to which the state or the United States must
      maintain a public record showing the organization to have been organized, Debtor
      shall not organize under the laws of another jurisdiction.

     

    Section
      5.02 Deposit Accounts. Debtor shall not open or close
      any Deposit Account or modify, terminate, or supplement any Deposit Account
      Control Agreement, or waive any material rights under any Deposit Account
      Control Agreement, without prior written notice to the Secured
      Party.

     

    Section
      5.03 Liens. Debtor shall not create, incur, assume or suffer to
      exist any Liens upon any Collateral of Debtor other than Permitted
      Liens.

     

    ARTICLE
      VI.

     

    EVENT
      OF DEFAULT; ENFORCEMENT OF SECURITY INTEREST

     

    Section
      6.01 Any one or more of the following events (regardless of the reason therefor)
      shall constitute an "Event of Default" hereunder:

     

    
      	
              (a)  

            	
              Any
                default or event of default shall occur under any of the Note or
                any other
                Finance Documents.

            


    

     

    
      	
              (b)  

            	
              Any
                Debtor shall fail or neglect to perform, keep or observe any provision
                of
                this Agreement or any other Finance Document and the same shall remain
                unremedied for a period of ten (10) days after notice is given to
                such
                Debtor by the Secured Party.

            


    

     

    
      	
              (c)  

            	
              The
                Secured Party shall fail to have an enforceable first priority lien
                on and
                security interest in the
                Collateral.

            


    

     

    
      	
              (d)  

            	
              Any
                Debtor files a bankruptcy petition, a bankruptcy petition is filed
                against
                any Debtor which remains undismissed or unstayed for 30 consecutive
                days,
                or any Debtor makes a general assignment for the benefit of
                creditors.

            


    

     

    Section
      6.02 Right to Enforce Claim; Secured Party in Possession or
      Control.

     

    
      	
              (a)  
                

            	
              Upon
                the occurrence of an Event of Default and during the continuance
                thereof,
                and in addition to such other rights and remedies as Secured Party
                may
                have under other provisions of this Agreement or any other Finance
                Document, or under common or statutory law, Secured Party may reduce
                a
                claim to judgment, foreclose, or otherwise enforce the claim, security
                interest, or agricultural lien by any available judicial procedure,
                and if
                the Collateral is Documents, Secured Party may proceed either as
                to the
                Documents or as to the Goods the Documents
                cover.

            


    

     

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
              (b)  

            	
              If
                Secured Party has possession of Collateral, (i) reasonable expenses,
                including the cost of insurance and payment of taxes or other charges,
                incurred in the custody, preservation, use, or operation of the Collateral
                are chargeable to Debtor and are secured by the Collateral, (ii)
                the risk
                of accidental loss or damage is upon Debtor to the extent of a deficiency
                in any effective insurance coverage, (iii) Secured Party shall keep
                the
                Collateral identifiable, but fungible Collateral may be commingled,
                and
                (iv) Secured Party may use or operate the Collateral (A) for the
                purpose
                of preserving the Collateral or its value, or (B) as permitted by
                an order
                of a court having competent jurisdiction, or (C) for the purpose
                of
                transporting the Collateral, or (D) for the purposes of demonstrating
                the
                use or operation of the Collateral.

            


    

     

    
      	
              (c)  

            	
              If
                Secured Party has possession of Collateral or control of Collateral
                that
                is Deposit Accounts, Electronic Chattel Paper, Investment Property,
                or
                Letter-of-credit rights, then Secured Party (i) may hold as additional
                security any Proceeds, except money or funds, received from the
                Collateral, (ii) shall apply money or funds received from the Collateral
                to reduce the Secured Obligations unless remitted to Debtor, and
                (iii) may
                create a security interest in the
                Collateral.

            


    

     

    
      
        	
                (d)  

              	
                
                  If
                    Secured Party has possession of Collateral that is Chattel Paper
                    or an
                    Instrument, then as to any such Chattel Paper or Instrument,
                    Secured Party
                    shall not be obligated to take any necessary steps to preserve
                    rights
                    against prior parties.

                

              


      

       

    

    Section
      6.03 Collection and Enforcement. After the occurrence of
      an Event of Default and during the continuance thereof (in accordance with
      the
      Facilities Agreement), Secured Party may:

     

    
      	
              (a)  

            	
              notify
                any Account Debtor or other Person obligated on Collateral to make
                payment
                or otherwise render performance to or for the benefit of Secured
                Party;

            


    

     

    
      	
              (b)  

            	
              take
                any Proceeds to which Secured Party is entitled under Section 9-315
                of
                Article 9 of the UCC;

            


    

     

    
      
        	
                (c)  

              	
                
                  enforce
                    the obligations of any Debtor or other Person obligated on Collateral
                    and
                    exercise the rights of Debtor with respect to the obligations
                    of the
                    Debtor or other Person obligated on Collateral to make payment
                    or
                    otherwise render performance to Debtor, and with respect to any
                    property
                    that secures the obligations of the Debtor or other Person obligated
                    on
                    the Collateral;

                

              


      

       

    

    Section
      6.04 Possession of Collateral.

     

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
       

      
        
          	
                  (a)  

                	
                  
                    
                      After
                        the occurrence of an Event of Default and during the continuance
                        thereof,
                        Secured Party may require Debtor to assemble the Collateral
                        and make the
                        Collateral available to Secured Party at a place designated
                        by Secured
                        Party which is reasonably convenient to Secured Party and
                        Debtor. If
                        Secured Party requires Debtor to assemble the Collateral
                        and make the
                        Collateral available to Secured Party, as described in the
                        preceding
                        sentence, Debtor shall do so promptly, and in any event within
                        ten (10)
                        days after Secured Party gives Debtor a notice requesting
                        Debtor to
                        assemble the Collateral and make the Collateral available
                        to Secured Party
                        at the place designated by Secured Party. Without limiting
                        Secured Party’s
                        right to designate any place which is reasonably convenient
                        to Debtor for
                        making Collateral available to Secured Party, Debtor agrees
                        that any place
                        designated by Secured Party and located within one hundred
                        (100) miles of
                        any place where Debtor stores, uses, sells, leases, licenses,
                        or maintains
                        Collateral in the ordinary course of Debtor’s business shall be
                        conclusively deemed to be a place reasonably convenient to
                        Debtor for
                        making the Collateral available to Secured
                        Party.

                    

                  

                


        

         

      

    

    
      
        
          
            	
                    (b)  

                  	
                    
                      
                        
                          After
                            the occurrence of an Event of Default and during the
                            continuance thereof,
                            Secured Party may, pursuant to judicial process, or without
                            judicial
                            process if Secured Party proceeds without breach of peace,
                            (1) take
                            possession of the Collateral and, (2) without removal,
                            render Equipment
                            unusable and dispose of Collateral on Debtor’s
                            premises.

                        

                      

                    

                  


          

           

        

      

    

    Section
      6.05 Disposition of Collateral.

     

    
      	
              (a)  

            	
              After
                the occurrence of an Event of Default and during the continuance
                thereof,
                Secured Party may sell, lease, license, or otherwise dispose of any
                or all
                of the Collateral in its present condition or following any commercially
                reasonable preparation or
                processing.

            


    

     

    
      	
              (b)  

            	
              Secured
                Party may dispose of Collateral by public or private proceedings,
                by one
                or more contracts, as a unit or in parcels, and at any time and place and
                on any terms.

            


    

     

    
      
        	
                (c)  

              	
                
                  Secured
                    Party may purchase Collateral (1) at a public disposition or
                    (2) if the
                    Collateral is of a kind that is customarily sold on a recognized
                    market or
                    the subject of widely distributed standard price quotations,
                    at a private
                    disposition.

                

              


      

       

    

    
      	
              (d)  

            	
              A
                contract for sale, lease, license, or other disposition includes
                the
                warranties relating to title, possession, quiet enjoyment, and the
                like
                which by operation of law accompany a voluntary disposition of property
                of
                the kind subject to the contract; provided, however, Secured Party
                may
                disclaim or modify such warranties (1) in a manner that would be
                effective
                to disclaim or modify the warranties in a voluntary disposition of
                property of the kind subject to the contract of disposition, or (2)
                by
                communicating to the purchaser a Record evidencing the contract for
                disposition and including an express disclaimer or modification of
                the
                warranties, and provided further that a Record is sufficient to disclaim
                such warranties if such Record indicates “There is no warranty relating to
                title, possession, quiet enjoyment, or the like in this disposition” or
                uses words of similar import.

            


    

     

    
      	
              (e)  

            	
              Prior
                to a disposition of Collateral, Secured Party shall give Debtor,
                and any
                other parties required to receive notice under Article 9 of the UCC,
                notification as required under Article 9 of the UCC before a sale,
                lease,
                license, or other disposition of
                Collateral.

            


    

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

     

    Section
      6.06 Additional Provisions Regarding Sales and Other Dispositions.
      In the event that Secured Party shall sell or otherwise dispose
      of
      the Collateral, or any part thereof in accordance with this Agreement, the
      following additional provisions shall be applicable to such sale or other
      disposition:

     

    
      	
              (a)  

            	
              Such
                sale or other disposition may be at public or private sale (or at
                any
                broker’s board or on any securities exchange) for cash, upon credit or for
                future delivery as Secured Party shall deem appropriate. Secured
                Party
                shall be authorized at any such sale (if Secured Party deems it advisable
                to do so with regard to any type or item of Collateral) to restrict
                the
                prospective bidders or purchasers to Persons who will represent and
                agree
                that they are purchasing the Collateral for their own use (or for
                their
                own account for investment, as applicable) and not with a view to
                the
                distribution or sale thereof, and upon consummation of any such sale,
                Secured Party shall have the right to assign, transfer and deliver
                to the
                purchaser or purchasers thereof the Collateral so sold. Each such
                purchaser at any such sale shall hold the property sold absolutely,
                free
                from any claim or right on the part of Debtor, and Debtor hereby
                waives
                (to the extent permitted by law) all rights of redemption, stay and
                appraisal which Debtor now has or may at any time in the future have
                under
                any rule of law or statute now existing or hereafter enacted. Secured
                Party shall give Debtor at least ten (10) days’ written notice (which
                Debtor agrees is reasonable notice) of Secured Party’s intention to make
                any sale of Collateral owned by Debtor. Such notice, in the case
                of a
                public sale, shall state the time and place for such sale and, in
                the case
                of a sale at a broker’s board or on a securities exchange, shall state the
                board or exchange at which such sale is to be made and the day on
                which
                the Collateral, or portion thereof, will first be offered for sale
                at such
                board or exchange. Any such public sale shall be held at such time
                or
                times within ordinary business hours and at such place or places
                as
                Secured Party may fix and state in the notice of such sale, and Secured
                Party shall not be obligated to make any sale of any Collateral if
                Secured
                Party shall determine not to do so, regardless of the fact that notice
                of
                sale of such Collateral shall have been given, and Secured Party
                may,
                without notice or publication, adjourn any public or private sale
                or cause
                the same to be adjourned from time to time by announcement at the
                time and
                place fixed for sale, and such sale may, without further notice to
                Debtor
                or anyone else, be made at the time and place to which the same was
                so
                adjourned.

            


    

     

    
      	
              (b)  

            	
              In
                case any sale of all or any part of the Collateral is made on credit
                or
                for future delivery, the Collateral so sold may be retained by Secured
                Party until the sale price is paid by the purchaser or purchasers
                thereof,
                but Secured Party shall not incur any liability in case any such
                purchaser
                or purchasers shall fail to take up and pay for Collateral so sold
                and, in
                case of any such failure, such of the Collateral may be sold again
                upon
                notice to Debtor as set forth in this
                Section.

            


    

     

    
      
        	
                (c)  

              	
                
                  At
                    any public sale, Secured Party may bid for or purchase, free
                    (to the
                    extent permitted by law) from any right of redemption, stay or
                    appraisal
                    on the part of Debtor (all said rights being also hereby waived
                    and
                    released to the extent permitted by law), the Collateral or any
                    part
                    thereof offered for sale and may make payment on account thereof
                    by using
                    any claim then due and payable to Secured Party from Debtor as
                    a credit
                    against the
                    purchase price, and Secured Party may, upon compliance with the
                    terms of
                    sale, hold, retain and dispose of such property without further
                    accountability to Debtor
                    therefor.

                

              


      

       

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	
              (d)  

            	
              For
                purposes of any sale of Collateral in accordance with this Agreement,
                a
                written agreement to purchase the Collateral or any portion thereof
                shall
                be treated as a sale thereof. Secured Party shall be free to carry
                out
                such sale pursuant to such agreement, and Debtor shall not be entitled
                to
                the return of the Collateral or any portion thereof subject thereto,
                notwithstanding the fact that after Secured Party shall have entered
                into
                such an agreement, all Events of Default shall have been remedied
                and the
                Secured Obligations paid in full.

            


    

     

    
      	
              (e)  

            	
              Upon
                any sale of Collateral by Secured Party (including a sale pursuant
                to a
                power of sale granted by statute or under a judicial proceeding),
                the
                receipt of Secured Party or of the officer making the sale shall
                be a
                sufficient discharge to the purchaser or purchasers of the Collateral
                being sold, and such purchaser or purchasers shall not be obligated
                to see
                to the application of any part of the purchase money paid over to
                Secured
                Party or such officer or be answerable in any way for the misapplication
                thereof.

            


    

     

    ARTICLE
      VII.

     

    POWER
      OF ATTORNEY

     

    Section
      7.01 Power of Attorney; Collections by Secured
      Party.

     

    
      	
               

            	
              (a)

            	
              Debtor
                hereby appoints Secured Party as Debtor’s attorney-in-fact, with power of
                substitution, which appointment is irrevocable and coupled with an
                interest, to do each of the following in the name of Debtor or in
                the name
                of Secured Party or otherwise, for the use and benefit of Secured
                Party,
                but at the cost and expense of Debtor, and with or without notice
                to
                Debtor: (i) notify the Account Debtors and insurers to make payments
                directly to Secured Party, and to take control of the cash and non-cash
                Proceeds of any Collateral or insurance; (ii) renew, extend or compromise
                any of the Collateral or deal with the same as Secured Party may
                deem
                advisable; (iii) release, exchange, substitute, or surrender all
                or any
                part of the Collateral; (iv) remove from Debtor’s places of business all
                Collateral Records without cost or expense to Secured Party; (v)
                make such
                use of Debtor’s places of business as may be reasonably necessary to
                administer, control and collect the Collateral; (vi) repair, alter
                or
                supply Goods, if any, necessary to fulfill in whole or in part the
                purchase order or similar order of any Account Debtor; (vii) demand,
                collect, give receipt for, and give renewals, extensions, discharges
                and
                releases of any of the Collateral; (viii) institute and prosecute
                legal
                and equitable proceedings to enforce collection of, or realize upon,
                any
                of the Collateral; (ix) settle, renew, extend, compromise, compound,
                exchange or adjust claims with respect to any of the Collateral or
                any
                legal proceedings brought with respect thereto; (x) indorse the name
                of
                Debtor upon any item of payment relating to the Collateral or upon
                any
                proof of claim in bankruptcy against any Collateral; and (xi) institute
                and prosecute legal and equitable proceedings to reclaim any of the
                Goods
                sold to any Account Debtor obligated on an Account at a time when
                such
                Account Debtor was insolvent. Secured Party agrees that it shall
                not
                exercise any power or authority granted under this power of attorney
                unless an Event of Default has occurred and is continuing. The foregoing
                power of attorney is in addition to any other power of attorney that
                may
                be granted to Secured Party under any Finance
                Document.

            


    

     

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              (b)

            	
              NONE
                OF SECURED PARTY OR ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
                AGENTS
                OR REPRESENTATIVES SHALL BE RESPONSIBLE TO DEBTOR FOR ANY ACT OR
                FAILURE
                TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT
                OF
                DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL
                MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION,
                NOR
                FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
                DAMAGES.

            


    

     

    ARTICLE
      VIII.

     

    GENERAL
      PROVISIONS

     

    Section
      8.01 Remedies Cumulative. Upon the occurrence and during
      the continuance of any Event of Default, and in addition to such other rights
      and remedies as Secured Party may have under other provisions of this Agreement
      or any other Finance Document, Secured Party may exercise any one or more of
      its
      rights and remedies under common or statutory law. No failure or delay on the
      part of Secured Party in exercising any right, power or privilege hereunder
      or
      under any other Finance Document and no course of dealing between Debtor or
      any
      other Obligor or other Person and Secured Party shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right, power or
      privilege hereunder or under any other Finance Document preclude any other
      or
      further exercise thereof or the exercise of any other right, power or privilege
      hereunder or thereunder. The rights and remedies provided in this Agreement
      are
      cumulative and not exclusive of any rights or remedies which Secured Party
      would
      otherwise have and may be exercised simultaneously. No notice to or demand
      on
      Debtor in any case shall entitle Debtor or any other obligor or any other Person
      to any other or further notice or demand in similar or other circumstances
      or
      constitute a waiver of the rights of Secured Party to any other or further
      action in any circumstances without notice or demand.

     

    ARTICLE
      IX.

     

    MISCELLANEOUS

     

    Section
      9.01 Each of the Debtors agrees to pay all expenses, including reasonable
      attorney's fees and charges (including time charges of attorneys who are
      employees of Secured Party) paid or incurred by Secured Party in endeavoring
      to
      collect the Secured Obligations of such Debtor, or any part thereof, and in
      enforcing this Agreement against such Debtor, and such obligations will
      themselves be Secured Obligations.

     

    Section
      9.02 No delay on the part of Secured Party in the exercise of any right or
      remedy shall operate as a waiver thereof, and no single or partial exercise
      by
      Secured Party of any right or remedy shall preclude other or further exercise
      thereof or the exercise of any other right or remedy.

     

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    Section
      9.03 This Security Agreement shall remain in full force and effect until all
      Secured Obligations have been paid in full. If at any time all or any part
      of
      any payment theretofore applied by the Secured Party to any of the Secured
      Obligations is or must be rescinded or returned by the Secured Party for any
      reason whatsoever (including the insolvency, bankruptcy or reorganization of
      any
      Debtor), such Secured Obligations shall, for the purposes of this Agreement,
      to
      the extent that such payment is or must be rescinded or returned, be deemed
      to
      have continued in existence, notwithstanding such application by the Secured
      Party, and this Agreement shall continue to be effective or be reinstated,
      as
      the case may be, as to such Secured Obligations, all as though such application
      by the Secured Party had not been made.

     

    Section
      9.04 The rights and privileges of Secured Party hereunder shall inure to the
      benefit of its successors and assigns.

     

    Section
      9.05 Secured Party’s Rights to Release Obligors; etc.
Secured Party may take or release other security,
      may release any
      party primarily or secondarily liable for any Secured Obligations or other
      indebtedness to Secured Party, may grant extensions, renewals or indulgences
      with respect to such Secured Obligations or other indebtedness and may apply
      any
      other security therefor held by Secured Party to the satisfaction of such
      Secured Obligations or other indebtedness, all without prejudice to any of
      Secured Party’s rights under this Agreement.

     

    Section
      9.06 Notices. Any notices, consents, waivers or other
      communications required or permitted to be given under the terms of this
      Agreement must be in writing and will be deemed to have been delivered (i)
      upon
      delivery, when delivered personally; (ii) upon receipt, when sent by facsimile
      (provided a confirmation of transmission is mechanically or electronically
      generated and kept on file by the sending party); or (iii) one (1) day after
      deposit with a nationally recognized overnight delivery service, so long as
      it
      is properly addressed. The addresses and facsimile numbers for such
      communications shall be:If to any Debtor:

     

    Bedminster
      National Corp. 

    Paul
      Patrizio

    90
      Washington Valley Road 

    Bedminster,
      NJ 07921 

    Telephone:
      (908) 719-8940 

    Facsimile:
      (908) 234-0608

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    With
      a
      copy to:

     

    Anslow
      & Jaclin, LLP 

    Attn:
      Gregg E. Jaclin, Esq. 

    195
      Route
      9, Suite 204 

    Manalapan,
      NJ 07726 

    Telephone:
      732-409-1212 

    Facsimile:
      (732)577-1188

     

    If
      to the
      Secured Party:

     

    Dutchess
      Capital Management, LLC 

    Douglas
      Leighton

    50
      Commonwealth Ave, Suite 2 

    Boston,
      MA 02116

    Telephone:
      (617) 301-4700

    Facsimile:
      (617) 249-0947

     

    Section
      9.07 Term. The term of this Agreement shall commence with the
      date of this Agreement and shall continue in full force and effect and be
      binding upon Debtor until all Secured Obligations of Debtor to Secured Party
      shall have been fully paid and satisfied and Secured Party shall have given
      Debtor written notice of the termination of this Agreement (excluding provisions
      that by their terms survive termination of other provisions of this Agreement
      or
      survive the termination of the security interest created under this Agreement).
      Secured Party shall not be obligated to give Debtor written notice of
      termination of this Agreement, or to terminate any financing statements or
      other
      Lien Notices, until all Secured Obligations of Debtor to Secured Party shall
      have been fully paid and satisfied and there is no commitment on the part of
      Secured Party to make an advance, incur an obligation or otherwise give value,
      and Debtor shall have given Secured Party a written demand requesting the
      termination of this Agreement and any financing statements at which time Secured
      Party shall execute and deliver such documents, at Debtor’s expense, as are
      necessary to release Secured Party’s liens in the Collateral. Notwithstanding
      anything to the contrary in this Agreement or any other Finance Documents,
      this
      Agreement shall continue to be effective or be reinstated, as the case may
      be,
      if at any time any amount received by Secured Party in respect of the Secured
      Obligations is rescinded or must otherwise be restored or returned by Secured
      Party upon the insolvency, bankruptcy, dissolution, liquidation or
      reorganization of Debtor or upon the appointment of any intervenor or
      conservator of, or trustee or similar official for, Debtor or any substantial
      part of Debtor’s assets, or otherwise, all as though such payments had not been
      made.

     

    Section
      9.08 Further Assurances. Debtor shall execute and
      deliver to Secured Party such further assurances and take such other further
      actions as Secured Party may from time to time request to further the intent
      and
      purpose of this Agreement and to maintain and protect the rights and remedies
      intended to be created in favor of Secured Party under this
      Agreement.

     

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    Section
      9.09 Amendments, Waivers and Consents; Successors and Assigns.
Neither this Agreement nor any other Finance Document
      nor any of
      the terms hereof or thereof may be amended, modified, changed, waived,
      discharged or terminated, nor shall any consent be given, unless
      such amendment, modification, change, waiver, discharge, termination or consent
      is in writing signed by Secured Party and Debtor. This Agreement shall create
      a
      continuing security interest in the Collateral and shall (i) remain in full
      force and effect until the Secured Obligations have been fully paid and
      satisfied and this Agreement has been terminated, (ii) be binding upon Debtor
      and its successors and assigns, and (iii) inure, together with the rights and
      remedies of Secured Party hereunder, to the benefit of Secured Party and Secured
      Party’s successors, transferees and assigns. This Agreement may not be assigned
      by Debtor without prior written consent of Secured Party, which consent may
      be
      withheld in Secured Party’s sole discretion.

     

    Section
      9.10 Entire Agreement. This Agreement and any other
      Finance Documents are a complete and exclusive expression of all the terms
      of
      the matters expressed therein, and all prior agreements, statements, and
      representations, whether written or oral, which relate thereto in any way are
      hereby superseded and shall be given no force and effect. No promise,
      inducement, or representation has been made to Debtor which relates in any
      way
      to the matters expressed in this Agreement and in any other Finance Documents,
      other than what is expressly stated herein and in such Finance
      Documents.

     

    Section
      9.11 No Strict Construction. The parties hereto have
      participated jointly in the negotiation and drafting of this Agreement. In
      the
      event of any ambiguity or question of intent or interpretation arises, this
      Agreement shall be construed as if drafted jointly by the parties hereto and
      no
      presumption or burden of proof shall arise favoring or disfavoring any party
      by
      virtue of the authorship of any provisions of this Agreement.

     

    Section
      9.12 Governing Law. This Agreement and all related
      instruments and documents and the rights and obligations of the parties
      hereunder and thereunder shall, in all respects, be governed by, and construed
      in accordance with, the internal laws of the Commonwealth of Massachusetts,
      without regard to conflicts of law principles, regardless of the location of
      the
      Collateral, excepting, however, that the Uniform Commercial Code (or decisional
      law) of a jurisdiction other than the Commonwealth of Massachusetts may provide
      the method of perfection, the effect of perfection or non-perfection, or the
      priority of liens and security interests created under this
      Agreement.

     

    Section
      9.13 DISPUTES SUBJECT TO ARBITRATION. The parties to
      this Agreement will submit all disputes arising under it to arbitration in
      Boston, Massachusetts before a single arbitrator of the American Arbitration
      Association (“AAA”). The arbitrator shall be selected by application of the
      rules of the AAA, or by mutual agreement of the parties, except that such
      arbitrator shall be an attorney admitted to practice law in the Commonwealth
      of
      Massachusetts. No party to this agreement will challenge the jurisdiction or
      venue provisions as provided in this section. Nothing in this section shall
      limit the Secured Party’s right to obtain an injunction for a breach of this
      Agreement from a court of law.

     

    Section
      9.14 Severability. Any provision of this Agreement, or
      of any other Finance Document, that is prohibited by, or unenforceable under,
      the laws of any jurisdiction shall, as to such jurisdiction, be ineffective
      to
      the extent of such prohibition or unenforceability, without invalidating the
      remaining provisions of this Agreement, and any such prohibition or
      unenforceability in any jurisdiction shall not invalidate or render
      unenforceable such provision in any
      other
      jurisdiction. To the extent permitted by applicable law, Debtor hereby waives
      any provision of law which renders any provision of this Agreement or any other
      Finance Document prohibited or unenforceable in any respect.

     

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    Section
      9.15 Counterparts. This Agreement may be executed in
      counterparts and each shall be effective as an original, and a photocopy,
      facsimile or telecopy of this executed Agreement shall be effective as an
      original. In making proof of this Agreement, it shall not be necessary to
      produce more than one counterpart, photocopy, facsimile, or telecopy of this
      executed Agreement.

     

    
      Section
        9.16 Time. Time is of the essence of this
        Agreement.

    

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

     

     

    IN
      WITNESS WHEREOF, and intending to be legally bound hereby, each Debtor
      has executed this Agreement as of the date first above written.

     

    DEBTOR:

     

    BEDMINSTER
      NATIONAL CORP.

     

    By:  ____________________________________                                                                                                                                     

    Name:  _______________________________                                                                                                                                 

    Title:   _______________________________                                                                                                                                

     

    METROPOLITAN
      COMPUTING CORP.:

     

    
      By:  ____________________________________                                                                                                                                     

      Name:  _______________________________                                                                                                                                 

      Title:   _______________________________                                                                                                                                                                                                                                                             

    

     

    SECURED
      PARTY:

     

    DUTCHESS
      PRIVATE EQUITIES FUND, LTD

     

    
      By:  ____________________________________                                                                                                                                     

      Name:  _______________________________                                                                                                                                 

      Title:   _______________________________                                                                                                                                                                                                                                                         

    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    
      	
              LIST
                OF SCHEDULES

            


    

     

                Schedule
      2.01(d)
      (Commercial Tort claims) Schedule 2.01 (q) (Equity Interests)

                Schedule
      3.01
      (Designated Locations) Schedule 3.04 (Tangible Collateral) Schedule 3.06
      (Leases)

                Schedule
      3.07
      (Permitted Liens)

                Schedule
      3.08
      (Subsidiaries)

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      2.01(d)

    Commercial
      Tort claims

     

    None

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      2.01(q) 

     

     

    Equity
      Interests

     

     

     

    
      	
              Issuer

            	
              Class
                of Stock

            	
              Certificate
                No(s)

            	
              Number
                of Shares

            	
              Percentage
                of all Issued

              Equity
                Interests of

              Issuer

            
	
              Metropolitan

            	 	 	 	 
	
              Computing
                Corp.

            	 	 	 	 
	 	
              Common

            	 	 	
              80%

            
	
              Bedminster

            	 	 	 	 
	
              Financial
                Corp.

            	
              Common

            	 	 	
              100%*

            
	
              Bedminster
                Capital Corp.

            	
              Common

            	 	
               

            	
              100%*

            
	
               

            	 	 	 	 


    

    


     

    *
      Upon
      execution of this agreement, these entities are subsidiaries of the Company.
      However, these entities have filed registration statements to spin off their
      shares of common stock which will be completed after execution of this
      Agreement.

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      3.01

    Designated
      Locations

     

     

     

    
      
        	
                NAME

              	
                MAILING
                  ADDRESS

              


      

    

    


     

     

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      3.04

     

    Tangible
      Collateral

    


     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      3.06

     

    Leases

    


     

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

     

    Schedule
      3.07

     

    Permitted
      Liens

    


     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

     

    Schedule
      3.08

     

     

    Subsidiaries