Exhibit 10.73


                            LAURUS MASTER FUND, LTD.

                                       and

       VENTURES-NATIONAL INCORPORATED D/B/A TITAN GENERAL HOLDINGS, INC.,

                            Dated: November 20, 2003


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                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

1.    (a)   General Definitions .............................................  1

      (b)   Accounting Terms ................................................  1

      (c)   Other Terms .....................................................  1

      (d)   Rules of Construction ...........................................  1

2.    Loans .................................................................  2

3.    Repayment of the Loans Company ........................................  4

4.    Procedure for Loans ...................................................  4

5.    Interest and Payments .................................................  4

      (a)   Interest ........................................................  4

      (b)   Payments ........................................................  5

6.    Security Interest .....................................................  5

7.    Representations, Warranties and Covenants Concerning the Collateral ...  6

8.    Payment of Accounts ...................................................  9

9.    Collection and Maintenance of Collateral ..............................  9

10.   Inspections and Appraisals ............................................ 10

11.   Financial Reporting ................................................... 10

12.   Additional Representations and Warranties ............................. 11

13.   Covenants ............................................................. 14

14.   Further Assurances .................................................... 16

15.   Power of Attorney ..................................................... 16

16.   Term of Agreement ..................................................... 17

17.   Termination of Lien ................................................... 17

18.   Events of Default ..................................................... 17

19.   Remedies .............................................................. 19

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                                                                         PAGE(S)
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20.   Waivers ............................................................... 20

21.   Expenses .............................................................. 20

22.   Assignment By Laurus .................................................. 21

23.   No Waiver; Cumulative Remedies ........................................ 21

24.   Application of Payments ............................................... 22

25.   Indemnity ............................................................. 22

26.   Revival ............................................................... 22

27.   Notices ............................................................... 22

28.   Governing Law, Jurisdiction and Waiver of Jury Trial .................. 23

29.   Limitation of Liability ............................................... 24

30.   Entire Understanding .................................................. 24

31.   Severability .......................................................... 24

32.   Captions .............................................................. 25

33.   Counterparts; Telecopier Signatures ................................... 25

34.   Construction .......................................................... 25

35.   Publicity ............................................................. 25

36.   Legends ............................................................... 25


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                               SECURITY AGREEMENT

              This  Security  Agreement  is made as of November  20, 2003 by and
between LAURUS MASTER FUND,  LTD., a Cayman Islands  corporation  ("Laurus") and
Ventures-National  Incorporated  d/b/a  Titan  General  Holdings,  Inc.,  a Utah
corporation (the "Company").

                                   BACKGROUND

              Company  has  requested  that Laurus make  advances  available  to
Company; and

              Laurus  has agreed to make such  advances  to Company on the terms
and conditions set forth in this Agreement.

                                    AGREEMENT

              NOW,  THEREFORE,  in  consideration  of the mutual  covenants  and
undertakings and the terms and conditions  contained herein,  the parties hereto
agree as follows:

              1.     (a)    General Definitions.  Capitalized terms used in this
Agreement shall have the meanings assigned to them in Annex A.

                     (b)    Accounting  Terms. Any accounting terms used in this
Agreement which are not specifically defined shall have the meanings customarily
given  them in  accordance  with GAAP and all  financial  computations  shall be
computed,   unless  specifically   provided  herein,  in  accordance  with  GAAP
consistently applied.

                     (c)    Other Terms.  All other terms used in this Agreement
and defined in the UCC,  shall have the meaning given therein  unless  otherwise
defined herein.

                     (d)    Rules  of  Construction.   All  Schedules,  Addenda,
Annexes and  Exhibits  hereto or  expressly  identified  to this  Agreement  are
incorporated  herein  by  reference  and  taken  together  with  this  Agreement
constitute but a single agreement.  The words "herein",  hereof" and "hereunder"
or other words of similar import refer to this  Agreement as a whole,  including
the Exhibits,  Addenda,  Annexes and Schedules thereto,  as the same may be from
time  to  time  amended,  modified,  restated  or  supplemented,  and not to any
particular section,  subsection or clause contained in this Agreement.  Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and the plural,  and pronouns stated in the
masculine,  feminine or neuter gender shall include the masculine,  the feminine
and the neuter.  The term "or" is not exclusive.  The term  "including"  (or any
form thereof) shall not be limiting or exclusive. All references to statutes and
related  regulations  shall  include any  amendments  of same and any  successor
statutes and regulations.  All references in this Agreement or in the Schedules,
Addenda,  Annexes  and  Exhibits  to  this  Agreement  to  sections,  schedules,
disclosure schedules, exhibits, and attachments shall refer to the corresponding
sections,  schedules,  disclosure schedules,  exhibits, and attachments of or to
this  Agreement.  All references to any  instruments  or  agreements,  including
references to any of this  Agreement or the Ancillary  Agreements  shall include
any and all  modifications  or amendments  thereto and any and all extensions or
renewals thereof.

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              2.     Loans.

                     (i)    Subject to the terms and conditions set forth herein
and in the Ancillary Agreements,  Laurus may make loans (the "Loans") to Company
from  time  to  time  during  the  Term  which,  in the  aggregate  at any  time
outstanding,  will not  exceed the  lesser of (x) (I) the  Capital  Availability
Amount  minus  (II) such  reserves  as Laurus may  reasonably  in its good faith
judgment deem proper and necessary from time to time (the  "Reserves") or (y) an
amount  equal to (I) the  Accounts  Availability  minus (II) the  Reserves.  The
amount derived at any time from Section 2(a)(i)(y)(I) minus 2(a)(i)(y)(II) shall
be referred to as the "Formula  Amount".  Company  shall  execute and deliver to
Laurus on the Closing Date a Minimum Borrowing Note and a Secured Revolving Note
evidencing the Loans funded on the Closing Date.  From time to time  thereafter,
Company  shall  execute  and  deliver to Laurus  immediately  prior to the final
funding  of  each  additional  $1,000,000  tranche  of  Loans  (calculated  on a
cumulative  basis for each such tranche) an additional  Minimum  Borrowing  Note
evidencing  such tranche,  in the form of Note delivered by Company to Laurus on
the Closing Date.  Notwithstanding  anything  herein to the  contrary,  whenever
during the Term the  outstanding  balance on the Revolving  Note should equal or
exceed  $1,000,000,  to the  extent  that the  outstanding  balance  on  Minimum
Borrowing Note shall be less than  $1,500,000 (the difference of $1,500,000 less
the  actual  balance of the  Minimum  Borrowing  Note,  the  "Available  Minimum
Borrowing"),  such portion of the balance of the  Revolving  Note as shall equal
the  Available   Minimum   Borrowing  shall  be  deemed  to  be   simultaneously
extinguished  on the Revolving  Note and  transferred  to, and evidenced by, the
next additional  Minimum  Borrowing Note (e.g., the Available  Minimum Borrowing
shall remain $0).

                     (ii)   Notwithstanding  the limitations set forth above, if
requested by the Company,  Laurus retains the right to lend to Company from time
to time such amounts in excess of such  limitations  as Laurus may  determine in
its sole discretion.

                     (iii)  Company acknowledges that the exercise of Laurus'
discretionary  rights  hereunder  may  result  during  the  Term  in one or more
increases or decreases in the advance  percentages used in determining  Accounts
Availability  and Company  hereby  consents to any such  increases  or decreases
which may limit or restrict advances requested by Company.

                     (iv)   If Company does not pay any interest, fees, costs or
charges to Laurus when due,  Company shall thereby be deemed to have  requested,
and  Laurus  is  hereby  authorized  at its  discretion  to make and  charge  to
Company's  account, a Loan to Company as of such date in an amount equal to such
unpaid interest, fees, costs or charges.

                     (v)    If  Company  at any time fails to perform or observe
any of the covenants  contained in this  Agreement or any  Ancillary  Agreement,
Laurus may, but need not,  perform or observe such covenant on behalf and in the
name,  place and stead of Company (or, at Laurus'  option,  in Laurus' name) and
may,  but need  not,  take  any and all  other  actions  which  Laurus  may deem
necessary to cure or correct such failure  (including the payment of taxes,  the
satisfaction of Liens,  the performance of obligations  owed to Account Debtors,
lessors or other obligors,  the  procurement  and maintenance of insurance,  the
execution of assignments,  security agreements and financing statements, and the
endorsement of instruments). The amount of all

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monies expended and all costs and expenses (including reasonable attorneys' fees
and legal expenses)  incurred by Laurus in connection with or as a result of the
performance  or  observance  of such  agreements or the taking of such action by
Laurus  shall  be  charged  to  Company's  account  as a Loan  and  added to the
Obligations.  To facilitate Laurus'  performance or observance of such covenants
of Company,  Company hereby  irrevocably  appoints Laurus,  or Laurus' delegate,
acting alone, as Company's  attorney in fact (which  appointment is coupled with
an  interest)  with the right  (but not the duty)  from time to time to  create,
prepare,  complete,  execute, deliver, endorse or file in the name and on behalf
of Company any and all instruments, documents, assignments, security agreements,
financing  statements,  applications  for  insurance  and other  agreements  and
writings required to be obtained, executed delivered or endorsed by Company.

                     (vi)   Laurus  will  account  to  Company  monthly  with  a
statement of all Loans and other advances, charges and payments made pursuant to
this  Agreement,  and such  account  rendered by Laurus  shall be deemed  final,
binding and  conclusive  unless  Laurus is notified by Company in writing to the
contrary  within  thirty  (30)  days  of the  date  each  account  was  rendered
specifying the item or items to which objection is made.

                     (vii)  During the Term, Company may borrow and prepay Loans
in excess of the Minimum Borrowing Amount,  all in accordance with the terms and
conditions hereof.

                     (viii) If any  Eligible  Account is not paid by the Account
Debtor  within  ninety (90) days after the date that such  Eligible  Account was
invoiced or if any Account  Debtor  asserts a deduction,  dispute,  contingency,
set-off,  or counterclaim with respect to any Eligible  Account,  (a "Delinquent
Account"),  the  Company  shall  (i)  reimburse  Laurus  for the  amount  of the
Revolving  Credit Advance made with respect to such  Delinquent  Account plus an
adjustment  fee in an amount  equal to one-half  of one  percent  (0.50%) of the
gross face amount of such  Eligible  Account or (ii)  immediately  replace  such
Delinquent Account with an otherwise Eligible Account.

              (b)    Following  the  occurrence  of an  Event of  Default  which
continues  to exist,  Laurus  may,  at its  option,  elect to convert the credit
facility  contemplated hereby to an accounts receivable purchase facility.  Upon
such  election by Laurus  (subsequent  notice of which Laurus  shall  provide to
Company),  Company shall be deemed to hereby have sold,  assigned,  transferred,
conveyed and delivered to Laurus,  and Laurus shall be deemed to have  purchased
and received  from Company,  all right,  title and interest of Company in and to
all  Accounts  which  shall  at  any  time  constitute  Eligible  Accounts  (the
"Receivables  Purchase").  All  outstanding  Loans  hereunder  shall  be  deemed
obligations under such accounts receivable purchase facility.  The conversion to
an accounts  receivable  purchase  facility in accordance  with the terms hereof
shall not be deemed an exercise by Laurus of its secured  creditor  rights under
Article 9 of the UCC.  Immediately  following  Laurus'  request,  Company  shall
execute  all such  further  documentation  as may be  required by Laurus to more
fully set forth the accounts receivable  purchase facility herein  contemplated,
including,   without  limitation,   account  debtor  notification  letters,  but
Company's  failure  to enter  into any such  documentation  shall not  impair or
affect the Receivables Purchase in any manner whatsoever.

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              (c)    Minimum  Borrowing Amount.  After a registration  statement
registering the Registrable  Securities (as defined in the  Registration  rights
Agreement)  has been declared  effective by the SEC,  conversions of the Minimum
Borrowing  Amount into the Common  Stock of the Company may be  initiated as set
forth in the Notes. From and after the date upon which any outstanding principal
of the Minimum  Borrowing  Amount (as evidenced by the first  Minimum  Borrowing
Note) is  converted  into  Common  Stock  (the  "First  Conversion  Date"),  (i)
corresponding  amounts of all  outstanding  Loans (not  attributable to the then
outstanding  Minimum  Borrowing  Amount)  existing  on or made  after  the First
Conversion  Date will be  aggregated  (and the  corresponding  amounts  shall be
deducted  from  loans  under the  Revolving  Note)  until  they reach the sum of
$1,500,000 and (ii) the Company will issue a new (serialized)  Minimum Borrowing
Note to Laurus in respect of such $1,500,000 aggregation,  and (iii) the Company
shall  prepare  and file a  subsequent  registration  statement  with the SEC to
register such subsequent Minimum Borrowing Note as set forth in the Registration
Rights Agreement.

              3.     Repayment  of  the  Loans.   Company  (a)  may  prepay  the
Obligations  in  excess of the  Minimum  Borrowing  Amount  from time to time in
accordance  with the terms and provisions of the Notes (and Section 16 hereof if
such prepayment is due to a termination of this Agreement);  and (b) shall repay
on the  expiration  of the  Term (i) the then  aggregate  outstanding  principal
balance of the Loans made by Laurus to Company  hereunder  together with accrued
and unpaid interest,  fees and charges and (ii) all other amounts owed to Laurus
under this  Agreement and the Ancillary  Agreements.  Any payments of principal,
interest,  fees or any other  amounts  payable  hereunder or under any Ancillary
Agreement  shall be made  prior to 5:00  p.m.  (New  York  time) on the due date
thereof in immediately available funds.

              4.     Procedure for Loans.  Company may by written notice request
a borrowing of Loans prior to 12:00 p.m.  (New York time) on the Business Day of
its  request to incur,  on the next  business  day, a Loan.  Together  with each
request for a Loan (or at such other  intervals as Laurus may request),  Company
shall deliver to Laurus a borrowing  base  certificate in the form of Exhibit A,
which shall be certified as true and correct by the Chief  Executive  Officer or
Chief Financial  Officer of Company  together with all supporting  documentation
relating  thereto.  All Loans shall be disbursed from whichever  office or other
place Laurus may  designate  from time to time and shall be charged to Company's
account on Laurus' books. The proceeds of each Loan made by Laurus shall be made
available to Company on the Business Day following the Business Day so requested
in  accordance  with the terms of this  Section 4 by way of credit to  Company's
operating account maintained with such bank as Company designated to Laurus. Any
and all Obligations due and owing hereunder may be charged to Company's  account
and shall constitute Loans.

              5.     Interest and Payments.

              (a)    Interest.

                     (i)    Except  as  modified  by  Section  5(a)(iii)  below,
Company shall pay interest at the Contract Rate on the unpaid principal  balance
of each Loan until such time as such Loan is  collected in full in good funds in
dollars of the United States of America.

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                     (ii)   Interest and payments shall be computed on the basis
of actual  days  elapsed in a year of 360 days.  At Laurus'  option,  Laurus may
charge Company account for said interest.

                     (iii)  Effective  upon  the  occurrence  of  any  Event  of
Default  and for so long as any  Event  of  Default  shall  be  continuing,  the
Contract  Rate shall  automatically  be increased by five percent (5%) per annum
(such increased  rate, the "Default  Rate"),  and all  outstanding  Obligations,
including  unpaid  interest,  shall continue to accrue interest from the date of
such Event of Default at the Default Rate applicable to such  Obligations  until
such time as the Event of Default no longer exists or is waived.

                     (iv)   In no event  shall the  aggregate  interest  payable
hereunder  exceed  the  maximum  rate  permitted  under  any  applicable  law or
regulation, as in effect from time to time (the "Maximum Legal Rate") and if any
provision of this Agreement or any Ancillary  Agreement is in  contravention  of
any such law or  regulation,  interest  payable  under this  Agreement  and each
Ancillary Agreement shall be computed on the basis of the Maximum Legal Rate (so
that such interest will not exceed the Maximum Legal Rate).

                     (v)    Company shall pay principal,  interest and all other
amounts  payable  hereunder,  or under  any  Ancillary  Agreement,  without  any
deduction whatsoever, including any deduction for any set-off or counterclaim.

              (b)    Payments.

                     (i)    Closing/Annual  Payments.  Upon  execution  of  this
Agreement by Company and Laurus, Company shall pay to Laurus Capital Management,
LLC a closing  payment in an amount equal to three and six tenths percent (3.6%)
of the Capital Availability Amount. Such payment shall be deemed fully earned on
the Closing Date and shall not be subject to rebate or proration for any reason.

                     (ii)   Unused Line Payment.  If, for any month, the average
outstanding  Loans  (the  "Average  Loan  Amount")  do  not  equal  the  Capital
Availability  Amount,  Company  shall pay to  Laurus at the end of such  month a
payment (calculated on a per annum basis) in an amount equal to one half percent
(0.5%) of the  amount by which  the  Capital  Availability  Amount  exceeds  the
Average  Loan Amount.  Notwithstanding  the  foregoing,  any unpaid fee shall be
immediately due and payable upon termination of this Agreement.

                     (iii)  Overadvance   Payment.   Without  affecting  Laurus'
rights hereunder in the event the Loans exceed the amounts  permitted by Section
2 ("Overadvances"), in the event an Overadvance occurs or is made by Laurus, all
such  Overadvances  shall bear  interest  at an annual rate equal to two percent
(2%) of the amount of such  Overadvances  for each  month or portion  thereof as
such amounts shall be outstanding.

                     (iv)   Financial  Information  Default.  Without  affecting
Laurus'  other rights and  remedies,  in the event  Company fails to deliver the
financial  information  required by Section 11 on or before the date required by
this Agreement, Company shall pay Laurus a fee in the amount of $500.00 per week
(or portion thereof) for each such failure until such failure is

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cured to Laurus'  satisfaction or waived in writing by Laurus. Such fee shall be
charged to Company's account upon the occurrence of each such failure.

              6.     Security Interest.

              (a)    To secure the prompt payment to Laurus of the  Obligations,
Company  hereby  assigns,  pledges  and grants to Laurus a  continuing  security
interest  in and Lien upon all of the  Collateral.  All of  Company's  Books and
Records  relating to the  Collateral  shall,  until  delivered  to or removed by
Laurus,  be kept by Company in trust for Laurus until all Obligations  have been
paid in full. Each confirmatory  assignment schedule or other form of assignment
hereafter  executed by Company shall be deemed to include the  foregoing  grant,
whether or not the same appears therein.

              (b)    Company hereby (i) authorizes  Laurus to file any financing
statements,  continuation statements or amendments thereto that (x) indicate the
Collateral (1) as all assets of Company 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 such jurisdiction,  or (2) as being of an equal
or lesser scope or with greater  detail,  and (y) contain any other  information
required by Part 5 of Article 9 of the UCC for the  sufficiency or filing office
acceptance of any financing statement,  continuation  statement or amendment and
(ii) ratifies its  authorization  for Laurus to have filed any initial financial
statements,  or  amendments  thereto if filed prior to the date hereof.  Company
acknowledges  that it is not  authorized  to file  any  financing  statement  or
amendment or termination statement with respect to any financing statement filed
by or on behalf of Laurus without the prior written consent of Laurus and agrees
that it will not do so without the prior written  consent of Laurus,  subject to
Company's rights under Section 9-509(d)(2) of the UCC.

              (c)    Company   hereby   grants   to   Laurus   an   irrevocable,
non-exclusive license (exercisable upon the termination of this Agreement due to
an occurrence and during the  continuance of an Event of Default without payment
of  royalty or other  compensation  to  Company)  to use,  transfer,  license or
sublicense  any  Intellectual  Property  now owned,  licensed  to, to the extent
permitted by the applicable  license agreement or hereafter acquired by Company,
and wherever the same may be located,  and  including in such license  access to
all media in which any of the  licensed  items may be  recorded or stored and to
all  computer  and  automatic  machinery  software  and  programs  used  for the
compilation or printout  thereof,  and represents,  promises and agrees that, to
the knowledge of the Company, any such license or sublicense is not and will not
be in conflict with the  contractual  or commercial  rights of any third Person;
provided,  that such license will terminate on the termination of this Agreement
and the payment in full of all Obligations.

              7.     Representations,  Warranties  and Covenants  Concerning the
Collateral. Company represents, warrants (each of which such representations and
warranties  shall be deemed  repeated upon the making of each request for a Loan
and made as of the time of each and  every  Loan  hereunder)  and  covenants  as
follows:

              (a)    all of the  Collateral  (i) is  owned by  Company  free and
clear of all Liens  (including  any  claims  of  infringement)  except  those in
Laurus'  favor and  Permitted  Liens and (ii)

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is not subject to any agreement  prohibiting the granting of a Lien or requiring
notice of or consent to the granting of a Lien.

              (b)    Company shall not  encumber,  mortgage,  pledge,  assign or
grant any Lien in any Collateral of Company or any of Company's  other assets to
anyone other than Laurus and except for Permitted Liens.

              (c)    The  Liens  granted   pursuant  to  this  Agreement,   upon
completion  of the filings and other actions  listed on Exhibit 7(c) (which,  in
the case of all filings and other  documents  referred to in said Exhibit,  have
been  delivered to Laurus in duly  executed  form)  constitute  valid  perfected
security  interests in all of the  Collateral in favor of Laurus as security for
the prompt and complete payment and performance of the Obligations,  enforceable
in  accordance  with the terms hereof  against any and all  creditors of and any
purchasers  from Company and such security  interest is prior to all other Liens
in existence on the date hereof.

              (d)    No effective security agreement,  mortgage,  deed of trust,
financing  statement,  equivalent  security or Lien  instrument or  continuation
statement covering all or any part of the Collateral is or will be on file or of
record in any public office, except those relating to Permitted Liens.

              (e)    Company shall not dispose of any of the Collateral  whether
by sale,  lease or  otherwise  except for the sale of  Inventory in the ordinary
course of business and for the disposition or transfer in the ordinary course of
business  during any fiscal year of obsolete  and worn-out  Equipment  having an
aggregate fair market value of not more than $25,000 and only to the extent that
(i) the  proceeds  of any  such  disposition  are  used to  acquire  replacement
Equipment  which is subject to Laurus' first priority  security  interest or are
used to repay Loans or to pay general corporate expenses,  or (ii) following the
occurrence of an Event of Default which continues to exist the proceeds of which
are remitted to Laurus to be held as cash collateral for the Obligations.

              (f)    Company  shall  defend the  right,  title and  interest  of
Laurus in and to the  Collateral  against  the claims and demands of all Persons
whomsoever,  and take such actions, including (i) all actions necessary to grant
Laurus "control" of any Investment Property, Deposit Accounts,  Letter-of-Credit
Rights  or  electronic  Chattel  Paper  owned by  Company,  with any  agreements
establishing  control to be in form and substance  satisfactory to Laurus,  (ii)
the prompt (but in no event later than five (5) Business Days following  Laurus'
request therefor) delivery to Laurus of all original Instruments, Chattel Paper,
negotiable  Documents and certificated Stock owned by the Company (in each case,
accompanied by stock powers,  allonges or other instruments of transfer executed
in blank),  (iii)  notification  of Laurus'  interest in  Collateral  at Laurus'
request,  and (iv) the institution of litigation  against third parties as shall
be prudent in order to protect and preserve Company's and Laurus' respective and
several interests in the Collateral.

              (g)    Company  shall  promptly,  and in any event within five (5)
Business Days after the same is acquired by it, notify Laurus of any  commercial
tort claim (as defined in the UCC) acquired by it and unless otherwise consented
by Laurus,  Company shall enter into a supplement to this Agreement  granting to
Laurus a Lien in such commercial tort claim.

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              (h)    Company  shall place  notations  upon its Books and Records
and  any  financial  statement  of  Company  to  disclose  Laurus'  Lien  in the
Collateral.

              (i)    If  Company  retains  possession  of any  Chattel  Paper or
Instrument  with Laurus'  consent,  upon Laurus'  request such Chattel Paper and
Instruments  shall be  marked  with the  following  legend:  "This  writing  and
obligations  evidenced or secured hereby are subject to the security interest of
Laurus Master Fund, Ltd."

              (j)    Company shall perform in a reasonable  time all other steps
requested  by Laurus to create and maintain in Laurus'  favor a valid  perfected
first Lien in all Collateral subject only to Permitted Liens.

              (k)    Company  shall  notify  Laurus  promptly  and in any  event
within  three (3) Business  Days after  obtaining  knowledge  thereof (i) of any
event or circumstance that to Company's knowledge would cause Laurus to consider
any then existing Account as no longer constituting an Eligible Account; (ii) of
any material  delay in Company's  performance  of any of its  obligations to any
Account  Debtor;  (iii) of any  assertion by any Account  Debtor of any material
claims, offsets or counterclaims;  (iv) of any allowances, credits and/or monies
granted  by  Company  to  any  Account  Debtor;  (v)  of  all  material  adverse
information  relating to the financial  condition of an Account Debtor;  (vi) of
any  material  return  of  goods;  and  (vii) of any  material  loss,  damage or
destruction of any of the Collateral.

              (l)    All   Eligible   Accounts   (i)  which  are   billed  on  a
construction  completion  basis but not payable  until the project is completed,
represent complete bona fide transactions which require no further act under any
circumstances  on Company's  part to make such  Accounts  payable by the Account
Debtors,  (ii) are not  subject to any  present,  future  contingent  offsets or
counterclaims,  and  (iii) do not  represent  bill and hold  sales,  consignment
sales,  guaranteed  sales,  sale or return or other  similar  understandings  or
obligations of any Affiliate or Subsidiary of Company. Company has not made, and
will not make, unless  commercially  reasonable,  any agreement with any Account
Debtor for any extension of time for the payment of any Account,  any compromise
or settlement for less than the full amount thereof,  any release of any Account
Debtor from liability therefor,  or any deduction therefrom except a discount or
allowance for prompt or early payment  allowed by Company in the ordinary course
of its business consistent with historical practice and as previously  disclosed
to Laurus in writing.

              (m)    Company  shall  keep and  maintain  its  Equipment  in good
operating  condition,  except  for  ordinary  wear and tear,  and shall make all
necessary  repairs  and  replacements  thereof  so that the value and  operating
efficiency  shall at all times be maintained  and  preserved.  Company shall not
permit any such items to become a Fixture to real estate or  accessions to other
personal property.

              (n)    Company  shall  maintain  and  keep  all of its  Books  and
Records  concerning  the  Collateral at Company's  executive  offices  listed in
Exhibit 12(d).

              (o)    Company shall maintain and keep the tangible  Collateral at
the addresses  listed in Exhibit 12(d),  provided,  that Company may change such
locations or open a new location,  provided that (i) Company  provides Laurus at
least thirty (30) days prior written notice

                                       8
<PAGE>


of such  changes or new  location  and (ii) prior to such change or opening of a
new  location  where  Collateral  having a value of more  than  $50,000  will be
located,  Company  executes and delivers to Laurus such agreements as Laurus may
request,  including  landlord  agreements,  mortgagee  agreements  and warehouse
agreements, each in form and substance satisfactory to Laurus.

              (p)    Exhibit   7(p)   lists  all   banks  and  other   financial
institutions at which Company maintains deposits and/or other accounts, and such
Exhibit correctly identifies the name, address and telephone number of each such
depository,  the name in which the account is held, a description of the purpose
of the account, and the complete account number. The Company shall not establish
any  depository  or other  bank  account of any with any  financial  institution
(other  than the  accounts  set forth on Exhibit  7(p))  without  Laurus'  prior
written consent.

              8.     Payment of Accounts.

              (a)    Company  will  irrevocably  direct all of its  present  and
future Account Debtors and other Persons obligated to make payments constituting
Collateral to make such payments  directly to the lockbox  maintained by Company
(the "Lockbox") with Commerce Bank (the "Lockbox Bank") pursuant to the terms of
the Clearing  Account  Agreement dated November 20, 2003 or such other financial
institution  accepted by Laurus in writing as may be selected by Company.  On or
prior to the Closing  Date,  Company  shall and shall cause the Lockbox  Bank to
enter into all such documentation  acceptable to Laurus pursuant to which, among
other things,  the Lockbox Bank agrees to: (a) sweep the Lockbox account (number
#7916375160)  on a daily  basis and deposit  all checks  received  therein to an
account   designated  by  Laurus  in  writing  and  (b)  comply  only  with  the
instructions  or other  directions  of Laurus  concerning  the  Lockbox.  All of
Company's invoices,  account statements and other written or oral communications
directing,  instructing,  demanding  or  requesting  payment  of any  Account of
Company or any other amount constituting  Collateral shall conspicuously  direct
that all  payments  be made to the  Lockbox or such other  address as Laurus may
direct in writing.  If,  notwithstanding  the  instructions to Account  Debtors,
Company receives any payments,  Company shall immediately remit such payments to
Laurus  in  their  original  form  with  all  necessary  endorsements.  Until so
remitted,  Company shall hold all such payments in trust for and as the property
of Laurus and shall not  commingle  such payments with any of its other funds or
property.

              (b)    At Laurus'  election,  following the occurrence of an Event
of Default which is continuing,  Laurus may notify Company's  Account Debtors of
Laurus' security interest in the Accounts,  collect them directly and charge the
reasonable collection costs and expenses thereof to Company's account.

              9.     Collection and Maintenance of Collateral.

              (a)    Laurus may verify Company's Accounts from time to time, but
not more often than once every  ninety  (90) days unless an Event of Default has
occurred  and is  continuing,  utilizing an audit  control  company or any other
agent of Laurus.

                                       9
<PAGE>


              (b)    Proceeds  of  Accounts  received  by Laurus  will be deemed
received on the Business Day of Laurus'  receipt of such  proceeds in good funds
in  dollars of the United  States of  America  in  Laurus'  account.  Any amount
received by Laurus after 12:00 noon (New York time) on any Business Day shall be
deemed received on the next Business Day.

              (c)    As Laurus receives the proceeds of Accounts, it shall remit
all such proceeds (net of interest, fees and other amounts then due and owing to
Laurus hereunder) to Company upon request (but no more often than twice a week).
Notwithstanding   the  foregoing,   following  the  occurrence  and  during  the
continuance of an Event of Default,  Laurus,  at its option,  may (a) apply such
proceeds to the  Obligations in such order as Laurus shall elect,  (b) hold such
proceeds as cash  collateral  for the  Obligations  and Company hereby grants to
Laurus a security  interest in such cash collateral  amounts as security for the
Obligations and/or (c) do any combination of the foregoing.

              10.    Inspections  and  Appraisals.  At all times  during  normal
business hours,  Laurus,  and/or any agent of Laurus shall have the right to (a)
have access to, visit, inspect,  review, evaluate and make physical verification
and appraisals of Company's  properties and the Collateral,  (b) inspect,  audit
and copy (or take  originals if  reasonably  necessary)  and make  extracts from
Company's  Books  and  Records,   including   management   letters  prepared  by
independent accountants,  and (c) discuss with Company's principal officers, and
independent  accountants,  Company's business,  assets,  liabilities,  financial
condition, results of operations and business prospects. Company will deliver to
Laurus any  instrument  necessary for Laurus to obtain  records from any service
bureau  maintaining  records for Company.  If any internally  prepared financial
information, including that required under this Section is unsatisfactory in any
manner to Laurus, Laurus may request that the Accountants review the same.

              11.    Financial  Reporting.  Company will deliver, or cause to be
delivered,  to Laurus each of the  following,  which shall be in form and detail
reasonably acceptable to Laurus:

              (a)    As soon as  available,  and in any event within ninety (90)
days after the end of each fiscal year of Company,  Company's  audited financial
statements  with  a  report  of  independent  certified  public  accountants  of
recognized   standing   selected  by  Company  and  acceptable  to  Laurus  (the
"Accountants"),  which  annual  financial  statements  shall  include  Company's
balance  sheet as at the end of such fiscal year and the related  statements  of
Company's  income,  retained  earnings  and cash flows for the fiscal  year then
ended,  prepared,  if Laurus so requests,  on a consolidating  and  consolidated
basis to include all Subsidiaries and Affiliates,  all in reasonable  detail and
prepared  in  accordance  with GAAP,  together  with (i) if and when  available,
copies  of any  management  letters  prepared  by such  accountants;  and (ii) a
certificate of Company's  President,  Chief Executive Officer or Chief Financial
Officer stating that such financial  statements have been prepared in accordance
with GAAP and whether or not such officer has knowledge of the occurrence of any
Default or Event of Default  hereunder and, if so, stating in reasonable  detail
the facts with respect thereto;

              (b)    As soon as  available  and in any event  within  forty five
(45) days after the end of each quarter, an unaudited/internal balance sheet and
statements of income,  retained earnings and cash flows of Company as at the end
of and for such quarter and for the year to date period then ended, prepared, if
Laurus so requests, on a consolidating and consolidated basis to

                                       10
<PAGE>


include all  Subsidiaries  and Affiliates,  in reasonable  detail and stating in
comparative  form the  figures  for the  corresponding  date and  periods in the
previous  year,  all  prepared  in  accordance  with GAAP,  subject to  year-end
adjustments  and  accompanied  by a certificate  of Company's  President,  Chief
Executive  Officer or Chief Financial  Officer,  stating (i) that such financial
statements have been prepared in accordance with GAAP, subject to year-end audit
adjustments,  and  (ii)  whether  or  not  such  officer  has  knowledge  of the
occurrence of any Default or Event of Default hereunder not theretofore reported
and remedied  and, if so,  stating in  reasonable  detail the facts with respect
thereto;

              (c)    Within  thirty  (30) days  after the end of each  month (or
more frequently if Laurus so requests), agings of Company's Accounts,  unaudited
trial  balances  and their  accounts  payable  and a  calculation  of  Company's
Accounts,  Eligible  Accounts  and thirty (30) days after the end of each fiscal
quarter for Inventory ledger as at the end of such month or shorter time period,
provided,  however,  that if Laurus shall request the foregoing information more
often than as set forth in the immediately  preceding clause,  the Company shall
have thirty (30) days from each such request to comply with Laurus' demand; and

              (d)    Promptly after (i) the filing thereof,  copies of Company's
most recent  registration  statements  and annual,  quarterly,  monthly or other
regular reports which Company files with the Securities and Exchange  Commission
(the "SEC"), and (ii) the issuance thereof, copies of such financial statements,
reports and proxy statements as Company shall send to its stockholders.

              12.    Additional   Representations   and   Warranties.    Company
represents and warrants (each of which such representations and warranties shall
be deemed  repeated  upon the making of a request  for a Loan and made as of the
time of each Loan made hereunder), as follows:

              (a)    Company is a  corporation  duly  incorporated  and  validly
existing  under  the  laws of the  jurisdiction  of its  incorporation  and duly
qualified and in good standing in every other state or jurisdiction in which the
nature of Company's business requires such qualification.

              (b)    The execution,  delivery and  performance of this Agreement
and the  Ancillary  Agreements  (i) have been duly  authorized,  (ii) are not in
contravention  of  Company's  certificate  of  incorporation,  by-laws or of any
indenture,  agreement  or  undertaking  to which  Company is a party or by which
Company is bound and (iii) are within Company's corporate powers.

              (c)    This  Agreement and the Ancillary  Agreements  executed and
delivered  by  Company  are  Company's  legal,  valid and  binding  obligations,
enforceable in accordance with their terms.

              (d)    Exhibit  12(d) sets forth  Company's  name as it appears in
official  filing  in the  state  of its  incorporation,  the type of  entity  of
Company, the organizational  identification  number issued by Company's state of
incorporation  or a  statement  that no such number has been  issued,  Company's
state of  incorporation,  and the location of Company's chief executive  office,
corporate offices, warehouses, other locations of Collateral and locations where
records with

                                       11
<PAGE>


respect  to  Collateral  are kept  (including  in each  case the  county of such
locations) and,  except as set forth in such Exhibit 12(d),  such locations have
not changed during the preceding twelve months.  As of the Closing Date,  during
the prior five years, except as set forth in Exhibit 12(d), Company has not been
known as or  conducted  business  in any other  name  (including  trade  names).
Company has only one state of incorporation.

              (e)    Based upon the Employee  Retirement  Income Security Act of
1974 ("ERISA"),  and the regulations and published  interpretations  thereunder:
(i) Company has not engaged in any Prohibited Transactions as defined in Section
406 of ERISA and Section 4975 of the Internal  Revenue  Code,  as amended;  (ii)
Company has met all applicable minimum funding requirements under Section 302 of
ERISA in respect of its plans;  (iii)  Company has no  knowledge of any event or
occurrence  which  would  cause the  Pension  Benefit  Guaranty  Corporation  to
institute  proceedings under Title IV of ERISA to terminate any employee benefit
plan(s);  (iv)  Company has no fiduciary  responsibility  for  investments  with
respect to any plan  existing  for the benefit of persons  other than  Company's
employees; and (v) except as disclosed in Exhibit 12(e) attached hereto, Company
has not withdrawn, completely or partially, from any multi-employer pension plan
so as to incur liability under the Multiemployer  Pension Plan Amendments Act of
1980.

              (f)    There is no pending or threatened litigation,  court order,
judgment, writ, suit, action or proceeding which could reasonably be expected to
have a Material Adverse Effect.

              (g)    All balance  sheets and income  statements  which have been
delivered to Laurus fairly,  accurately and properly state  Company's  financial
condition on a basis consistent with that of previous  financial  statements and
except as  reflected  in such  financial  statements  there has been no material
adverse change in Company's  financial condition as reflected in such statements
since the balance sheet date of the statements last delivered to Laurus and such
statements do not fail to disclose any fact or facts which might have a Material
Adverse Effect on Company's financial condition.

              (h)    Company  possesses  or  has  licenses  to  use  all  of the
Intellectual  Property  necessary  to conduct  its  business.  There has been no
assertion or claim of violation or infringement with respect to any Intellectual
Property. Exhibit 12(i) describes all Intellectual Property of Company.

              (i)    Neither this Agreement,  the exhibits and schedules hereto,
the Ancillary  Agreements nor any other document  delivered by Company to Laurus
or its  attorneys  or agents in  connection  herewith or  therewith  or with the
transactions  contemplated hereby or thereby,  contain any untrue statement of a
material fact nor omit to state a material  fact  necessary in order to make the
statements  contained herein or therein,  in light of the circumstances in which
they are made, not misleading.  Assuming that the representations and warranties
of  Laurus  in the  documentation  relating  to  such  securities  is  accurate,
complete,  and  correct,  tThe  issuance of the Notes and the  Warrants  and the
shares of common stock issued upon  conversion  of the Notes and exercise of the
Warrants will be exempt from the registration requirements of the Securities Act
of 1933, as amended (the  "Securities  Act"),  and will have been  registered or
qualified  (or  are  exempt  from  registration  and  qualification)  under  the
registration,  permit or  qualification  requirements  of all  applicable  state
securities laws. Neither Company nor any of its Affiliates,

                                       12
<PAGE>


nor any person acting on its or their behalf, has engaged in any form of general
solicitation  or general  advertising  (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Securities.

              (j)    The common stock of the Company is  registered  pursuant to
Section  12(b) or 12(g) of the Exchange Act and,  except with respect to certain
matters set forth on Exhibit 12(j) attached hereto, the Company has timely filed
all proxy statements,  reports, schedules, forms, statements and other documents
required to be filed by it under the Exchange Act. The Company has filed (i) its
Annual  Report on Form 10-K for the fiscal  year ended  August 31, 2002 and (ii)
its Quarterly  Reports on Form 10-Q for the fiscal  quarters  ended November 30,
2002,  February 28, 2003, and May 31, 2003  (collectively,  the "SEC  Reports").
Each SEC Report, as it may from time to time be amended, was, at the time of its
filing,  in substantial  compliance with the requirements of its respective form
and  none of the SEC  Reports,  nor the  financial  statements  (and  the  notes
thereto)  included in the SEC  Reports,  as of their  respective  filing  dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading.  The
financial  statements  of the Company  included in the SEC Reports  comply as to
form in all material  respects with applicable  accounting  requirements and the
published rules and regulations of the Commission or other  applicable rules and
regulations with respect thereto.  Such financial  statements have been prepared
in accordance with generally accepted accounting  principles ("GAAP") applied on
a consistent  basis during the periods  involved (except (i) as may be otherwise
indicated in such financial  statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be  condensed)  and fairly  present in all material  respects the  financial
condition,  the results of operations  and the cash flows of the Company and its
subsidiaries,  on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.

              (k)    The common  stock of the  Company is listed for  trading on
the  NASD  Over  the  Counter   Bulletin  Board   ("OTCBB")  and  satisfies  all
requirements for the continuation of such listing.  The Company has not received
any notice  that its common  stock will be  delisted  from the OTCBB or that the
common  stock  does not  meet  all  requirements  for the  continuation  of such
listing.

              (l)    Neither the  Company,  nor any of its  Affiliates,  nor any
person acting on its or their behalf, has directly or indirectly made any offers
or sales of any security or solicited any offers to buy any security (other than
a concurrent  offering to Laurus under a Securities  Purchase  Agreement between
the Company and Laurus dated as of November 20, 2003) under  circumstances  that
would cause the offering of the  Securities  pursuant to this  Agreement and the
Ancillary  Agreements to be integrated  with prior  offerings by the Company for
purposes of the  Securities Act which would prevent the Company from selling the
Securities  pursuant to Rule 506 under the  Securities  Act,  or any  applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its  Affiliates  or  Subsidiaries  take any action or steps that would cause the
offering of the  Securities to be integrated  with other  offerings  (other than
such concurrent offering to Laurus).

              (m)    The  Securities  are all  restricted  securities  under the
Securities Act as of the date of this Agreement.  The Company will not issue any
stop transfer order or other order

                                       13
<PAGE>


impeding  the sale and  delivery of any of the  Securities  at such time as such
Securities are registered for public sale or an exemption from  registration  is
available,  except as  provided  in the  Registration  Rights  Agreement  and as
otherwise required by federal or state securities laws.

              (n)    The  Company  understands  the  nature  of  the  Securities
issuable under the Ancillary Agreements and recognizes that the issuance of such
Securities  may have a  potential  dilutive  effect.  The  Company  specifically
acknowledges  that its  obligation  to issue the  Securities is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company.

              (o)    Except  for  agreements  made  in the  ordinary  course  of
business,  there is no agreement  that has not been filed with the Commission as
an exhibit to a registration  statement or to a form required to be filed by the
Company under the Exchange Act, the breach of which could reasonably be expected
to have a Material Adverse Effect or would prohibit or otherwise  interfere with
the  ability of the  Company to enter into and  perform  any of its  obligations
under this Agreement or the Registration Rights Agreement executed by Company in
favor of Laurus in any material respect.

              13.    Covenants. Company covenants as follows:

              (a)    Company  will not,  without  the prior  written  consent of
Laurus,  change (i) its name as it appears in the official  filings in the state
of its  incorporation  or formation,  (ii) the type of legal entity it is, (iii)
its  organization  identification  number,  if  any,  issued  by  its  state  of
incorporation,  (iv) its state of  incorporation or (v) amend its certificate of
incorporation, by-laws or other organizational document.

              (b)    The operation of Company's business is and will continue to
be in compliance in all material respects with all applicable federal, state and
local laws, rules and ordinances,  including to all laws, rules, regulations and
orders relating to taxes, payment and withholding of payroll taxes, employer and
employee  contributions and similar items,  securities,  employee retirement and
welfare benefits, employee health safety and environmental matters.

              (c)    Company  will  pay  or   discharge   when  due  all  taxes,
assessments  and  governmental  charges or levies imposed upon Company or any of
the Collateral unless such amounts are being diligently  contested in good faith
by  appropriate  proceedings  provided  that (i) adequate  reserves with respect
thereto are maintained on the books of Company in conformity  with GAAP and (ii)
the related  Lien shall have no effect on the  priority of the Liens in favor of
Laurus or the value of the assets in which Laurus has a Lien.

              (d)    Company will promptly  inform Laurus in writing of: (i) the
commencement  of all  proceedings  and  investigations  by or before  and/or the
receipt of any notices from, any  governmental or  nongovernmental  body and all
actions and proceedings in any court or before any arbitrator  against or in any
way concerning any event which could reasonable be expected to have singly or in
the  aggregate,  a Material  Adverse  Effect;  (ii) any  amendment  of Company's
certificate of incorporation,  by-laws or other organizational  document;  (iii)
any change  which has had or could  reasonably  be  expected  to have a Material
Adverse  Effect;  (iv) any Event of Default or  Default;  (v) any default or any
event which with the passage of time or

                                       14
<PAGE>


giving of notice or both would  constitute a default under any agreement for the
payment  of money  to which  Company  is a party or by which  Company  or any of
Company's  properties  may be bound the  breach of which  would  have a Material
Adverse  Effect and (vi) any change in Company's  name or any other name used in
its business.

              (e)    The  Company  will  not (i)  except  for  Permitted  Liens,
create,  incur,  assume or suffer to exist any indebtedness  (exclusive of trade
debt) whether secured or unsecured  other than Company's  indebtedness to Laurus
and as set forth on Exhibit  13(e)(i)  attached  hereto and made a part  hereof;
(ii)  cancel any debt owing to it in excess of $50,000 in the  aggregate  during
any 12 month  period;  (iii)  assume,  guarantee,  endorse or  otherwise  become
directly or contingently  liable in connection with any obligations of any other
Person,  except the  endorsement  of  negotiable  instruments  by a Company  for
deposit  or  collection  or  similar  transactions  in the  ordinary  course  of
business;  (iv)  directly or  indirectly  declare,  pay or make any  dividend or
distribution  on any class of its Stock other than to pay dividends on shares of
its outstanding Preferred Stock or apply any of its funds, property or assets to
the purchase,  redemption or other retirement of any Stock of the Company except
as required under the terms of the Company's  outstanding Preferred Stock issued
and outstanding on the date hereof;  (v) purchase or hold beneficially any Stock
or other securities or evidences of indebtedness of, make or permit to exist any
loans or advances to, or make any investment or acquire any interest  whatsoever
in, any other Person,  including any  partnership or joint  venture,  except (x)
travel advances,  (y) loans to Company's officers and employees not exceeding at
any one time an  aggregate  of $10,000,  and (z)  existing  Subsidiaries  of the
Company;  (vi)  create  or  permit  to  exist  any  Subsidiary,  other  than any
Subsidiary  in  existence  on the date  hereof and  listed in Exhibit  13(e)(ii)
unless such new  Subsidiary is  designated by Laurus as either a co-borrower  or
guarantor  hereunder  and  such  Subsidiary  shall  have  entered  into all such
documentation  required by Laurus to grant to Laurus a first priority  perfected
security interest in such Subsidiary's  assets to secure the Obligations;  (vii)
directly or indirectly, prepay any indebtedness (other than to Laurus and in the
ordinary course of business), or repurchase, redeem, retire or otherwise acquire
any  indebtedness  (other than to Laurus and in the ordinary course of business)
except to make  scheduled  payments of principal  and interest  thereof;  (viii)
enter into any merger,  consolidation or other  reorganization  with or into any
other Person or acquire all or a portion of the assets or Stock of any Person or
permit any other Person to consolidate with or merge with it, unless (1) Company
is the surviving entity of such merger or consolidation, (2) no Event of Default
shall  exist  immediately  prior to and after  giving  effect to such  merger or
consolidation,   (3)  Company   shall  have   provided   Laurus  copies  of  all
documentation  relating to such merger or  consolidation  and (4) Company  shall
have  provided  Laurus with at least thirty (30) days' prior  written  notice of
such merger or consolidation;  (ix) materially change the nature of the business
in which it is presently engaged; (x) change its fiscal year or make any changes
in accounting  treatment and reporting practices without prior written notice to
Laurus except as required by GAAP or in the tax reporting treatment or except as
required by law; (xi) enter into any transaction with any employee,  director or
Affiliate,  except in the ordinary  course on arms-length  terms;  or (xii) bill
Accounts  under any name  except the  present  name of  Company or its  existing
Subsidiaries.

              (f)    None of the  proceeds of the Loans  hereunder  will be used
directly or  indirectly  to  "purchase"  or "carry"  "margin  stock" or to repay
indebtedness  incurred  to  "purchase"  or  "carry"  "margin  stock"  within the
respective  meanings of each of the quoted terms

                                       15
<PAGE>


under  Regulation U of the Board of Governors of the Federal  Reserve  System as
now and from time to time hereafter in effect.

              (g)    Company  will  bear the full  risk of loss from any loss of
any nature whatsoever with respect to the Collateral.  At Company's own cost and
expense in amounts and with  carriers  acceptable  to Laurus,  Company shall (i)
keep all its  insurable  properties  and  properties in which it has an interest
insured against the hazards of fire, sprinkler leakage, those hazards covered by
extended coverage insurance and such other hazards,  and for such amounts, as is
customary in the case of companies  engaged in  businesses  similar to Company's
including business interruption insurance;  (ii) maintain a bond in such amounts
as is  customary  in the case of  companies  engaged  in  businesses  similar to
Company's   insuring   against   larceny,   embezzlement   or   other   criminal
misappropriation  of insured's  officers and  employees who may either singly or
jointly  with  others at any time have  access to the assets or funds of Company
either directly or through Governmental  Authority to draw upon such funds or to
direct  generally the  disposition  of such assets;  (iii)  maintain  public and
product  liability  insurance  against  claims  for  personal  injury,  death or
property damage suffered by others; (iv) maintain all such worker's compensation
or  similar  insurance  as may be  required  under  the  laws  of any  state  or
jurisdiction  in which  Company is engaged in business;  and (v) furnish  Laurus
with (x)  certificates  as to all such  insurance  coverages and evidence of the
maintenance  of such  policies at least  thirty (30) days before any  expiration
date,  (y)  endorsements  to such  policies  naming  Laurus as  "co-insured"  or
"additional  insured"  and  appropriate  loss payable  endorsements  in form and
substance  satisfactory to Laurus, naming Laurus as loss payee, and (z) evidence
that as to Laurus the insurance coverage shall not be impaired or invalidated by
any act or neglect of Company and the insurer will provide  Laurus with at least
thirty (30) days notice prior to  cancellation  or expiration  thereof.  Company
shall instruct the insurance  carriers that in the event of any loss thereunder,
the  carriers  shall make payment for such loss to Laurus and not to Company and
Laurus  jointly.  If any  insurance  losses  are paid by  check,  draft or other
instrument  payable to Company and Laurus jointly,  Laurus may endorse Company's
name thereon and do such other things as Laurus may deem advisable to reduce the
same to cash. Laurus is hereby authorized to adjust and compromise  claims.  All
loss recoveries received by Laurus upon any such insurance may be applied to the
Obligations,  in such order as Laurus in its sole discretion  shall determine or
shall otherwise be delivered to the Company. Any surplus shall be paid by Laurus
to Company  or  applied as may be  otherwise  required  by law.  Any  deficiency
thereon shall be paid by Company to Laurus, on demand.

              (h)    Company  will at all times have  authorized  and reserved a
sufficient number of shares of Common Stock to provide for the conversion of the
Notes and exercise of the Warrants.

              14.    Further Assurances. At any time and from time to time, upon
the written request of Laurus and at the sole expense of Company,  Company shall
promptly and duly execute and deliver any and all such further  instruments  and
documents  and take such further  action as Laurus may request (a) to obtain the
full benefits of this  Agreement and the Ancillary  Agreements,  (b) to protect,
preserve and maintain  Laurus' rights in the Collateral and under this Agreement
or any  Ancillary  Agreement,  or (c) to enable Laurus to exercise all or any of
the rights and powers herein granted or any Ancillary Agreement.

                                       16
<PAGE>


              15.    Power of Attorney.  Company hereby appoints Laurus,  or any
other Person whom Laurus may designate as Company's attorney, with power to: (i)
endorse Company's name on any checks, notes,  acceptances,  money orders, drafts
or other forms of payment or  security  that may come into  Laurus'  possession;
(ii)  sign  Company's  name on any  invoice  or bill of lading  relating  to any
Accounts, drafts against Account Debtors, schedules and assignments of Accounts,
notices  of  assignment,   financing   statements  and  other  public   records,
verifications  of Account and notices to or from Account  Debtors;  (iii) verify
the  validity,  amount or any other  matter  relating  to any  Account  by mail,
telephone,  telegraph or  otherwise  with  Account  Debtors;  (iv) do all things
necessary to carry out this Agreement,  any Ancillary  Agreement and all related
documents;  and (v) on or after the occurrence and  continuation  of an Event of
Default,  notify the post office  authorities to change the address for delivery
of Company's mail to an address designated by Laurus,  and to receive,  open and
dispose of all mail addressed to Company.  Company hereby  ratifies and approves
all acts of the attorney.  Neither  Laurus,  nor the attorney will be liable for
any acts or  omissions  or for any error of  judgment or mistake of fact or law,
except for gross  negligence or willful  misconduct.  This power,  being coupled
with an interest,  is irrevocable so long as Laurus has a security  interest and
until the Obligations have been fully satisfied.

              16.    Term of  Agreement.  Laurus'  agreement  to make  Loans and
extend financial  accommodations  under and in accordance with the terms of this
Agreement or any  Ancillary  Agreement  shall  continue in full force and effect
until the  expiration  of the Initial Term.  At Laurus'  election  following the
occurrence of an Event of Default,  Laurus may  terminate  this  Agreement.  The
termination of the Agreement shall not affect any of Laurus' rights hereunder or
any Ancillary  Agreement and the provisions hereof and thereof shall continue to
be fully  operative  until all  transactions  entered into,  rights or interests
created and the  Obligations  have been  disposed of,  concluded or  liquidated.
Notwithstanding  the foregoing,  Laurus shall release its security  interests at
any time after thirty (30) days notice upon payment to it of all  Obligations if
Company shall have (i) provided  Laurus with an executed  release of any and all
claims which  Company may have or thereafter  have under this  Agreement and all
Ancillary  Agreements  and (ii) paid to Laurus an early payment fee in an amount
equal  to (1) FIVE  PERCENT  (5%) of the  Capital  Availability  Amount  if such
payment  occurs  prior  to the  first  anniversary  of the  Initial  Term or any
applicable renewal term, and (2) FOUR (4%) of the Capital Availability Amount if
such payment  occurs on or after the first  anniversary  and prior to the second
anniversary of the Initial Term or any applicable renewal term and THREE PERCENT
(3%) if such  termination  occurs  thereafter  during the Initial Term; such fee
being  intended  to  compensate  Laurus for its costs and  expenses  incurred in
initially  approving  this Agreement or extending  same.  Such early payment fee
shall be due and payable by Company to Laurus upon  termination by  acceleration
of this Agreement by Laurus due to the occurrence and continuance of an Event of
Default.

              17.    Termination of Lien. The Liens and rights granted to Laurus
hereunder and any Ancillary  Agreements  and the financing  statements  filed in
connection  herewith  or  therewith  shall  continue  in full force and  effect,
notwithstanding  the  termination  of this  Agreement or the fact that Company's
account may from time to time be temporarily in a zero or credit position, until
all of the  Obligations of Company have been paid or performed in full after the
termination of this Agreement.  Laurus shall not be required to send termination
statements to Company, or to file them with any filing office,  unless and until
this Agreement and the

                                       17
<PAGE>


Ancillary  Agreements  shall have been terminated in accordance with their terms
and all Obligations paid in full in immediately available funds.

              18.    Events of Default.  The  occurrence of any of the following
shall constitute an Event of Default:

              (a)    failure  to make  payment  of any of the  Obligations  when
required hereunder;

              (b)    failure  to pay any taxes  when due  unless  such taxes are
being  contested in good faith by  appropriate  proceedings  and with respect to
which adequate reserves have been provided on Company's books;

              (c)    failure to perform  under and/or  committing  any breach of
this Agreement or any Ancillary Agreement or any other agreement between Company
and Laurus  which  shall  continue  for a period of fifteen  (15) days after the
occurrence thereof;

              (d)    the  occurrence  of a default  under any agreement to which
Company is a party with third parties which has a Material Adverse Effect;

              (e)    any  representation,  warranty or statement made by Company
hereunder,  in any Ancillary Agreement,  any certificate,  statement or document
delivered  pursuant to the terms hereof,  or in connection with the transactions
contemplated by this Agreement  should at any time be false or misleading in any
material respect;

              (f)    an attachment or levy is made upon Company's  assets having
an  aggregate  value in excess of  $50,000  or a judgment  is  rendered  against
Company or Company's  property  involving a liability of more than $50,000 which
shall not have been vacated, discharged,  stayed or bonded pending appeal within
thirty (30) days from entry thereof;

              (g)    any change in Company's  condition or affairs (financial or
otherwise) which in Laurus' reasonable,  good faith opinion, could reasonably be
expected to have a Material Adverse Effect;

              (h)    any Lien created hereunder or under any Ancillary Agreement
for any reason ceases to be or is not a valid and perfected  Lien having a first
priority interest;

              (i)    if  Company  shall (i) apply  for,  consent to or suffer to
exist the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property,
(ii) make a general  assignment  for the benefit of creditors,  (iii) commence a
voluntary  case  under  the  federal  bankruptcy  laws (as now or  hereafter  in
effect),  (iv) be  adjudicated  a  bankrupt  or  insolvent,  (v) file a petition
seeking to take  advantage of any other law providing for the relief of debtors,
(vi)  acquiesce  to, or fail to have  dismissed,  within  thirty (30) days,  any
petition filed against it in any involuntary case under such bankruptcy laws, or
(vii) take any action for the purpose of effecting any of the foregoing;

              (j)    Company  shall  admit  in  writing  its  inability,  or  be
generally  unable to pay its debts as they become due or cease operations of its
present business;

                                       18
<PAGE>


              (k)    any  Affiliate or Subsidiary of the Company shall (i) apply
for, consent to or suffer to exist the appointment of, or the taking  possession
by, a  receiver,  custodian,  trustee  or  liquidator  of  itself or of all or a
substantial  part of its property,  (ii) admit in writing its  inability,  or be
generally unable, to pay its debts as they become due or cease operations of its
present business,  (iii) make a general assignment for the benefit of creditors,
(iv)  commence a  voluntary  case under the federal  bankruptcy  laws (as now or
hereafter in effect),  (v) be  adjudicated a bankrupt or insolvent,  (vi) file a
petition  seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, within thirty (30) days,
any petition filed against it in any involuntary case under such bankruptcy laws
or (viii) take any action for the purpose of effecting any of the foregoing;

              (l)    Company directly or indirectly sells,  assigns,  transfers,
conveys,  or  suffers  or permits  to occur any sale,  assignment,  transfer  or
conveyance of any assets of Company or any interest therein, except as permitted
herein;

              (m)    the occurrence of a change in the controlling  ownership of
the Company;

              (n)    a default  by  Company  in the  payment,  when due,  of any
principal  of or interest  on any other  indebtedness  for money  borrowed in an
amount greater than $25,000,  which is not cured within any  applicable  cure or
grace period;

              (o)    the  indictment or threatened  indictment of Company or any
executive  officer of Company under any criminal  statute,  or  commencement  or
threatened  commencement of criminal or civil proceeding  against Company or any
executive  officer of Company pursuant to which statute or proceeding  penalties
or remedies  sought or available  include  forfeiture  of any of the property of
Company;

              (p)    if an Event of Default  shall occur under and as defined in
any Note;

              (q)    any  Guarantor  shall  breach any term or  provision of any
Ancillary  Agreement  which is not cured  within  any  applicable  cure or grace
period;

              (r)    if any  Guarantor  attempts to  terminate,  challenges  the
validity  of, or its  liability  under any  Guaranty or any  Guarantor  Security
Agreement; or

              (s)    should any Guarantor  default in its obligations  under any
Guaranty or any  Guarantor  Security  Agreement  or if any  proceeding  shall be
brought  to  challenge  the  validity,  binding  effect of any  Guaranty  or any
Guarantor Security Agreement or should any Guarantor breach any  representation,
warranty  or covenant  contained  in any  Guaranty  Agreement  or any  Guarantor
Security  Agreement or should any Guaranty or Guarantor Security Agreement cease
to be a valid, binding and enforceable obligation.

              19.    Remedies.  Following the occurrence of an Event of Default,
Laurus  shall  have the right to demand  repayment  in full of all  Obligations,
whether or not otherwise due. Until all Obligations  have been fully  satisfied,
Laurus shall retain its Lien in all  Collateral.  Laurus shall have, in addition
to all other rights provided herein and in each Ancillary Agreement,  the rights
and remedies of a secured party under the UCC, and under other  applicable  law,
all other legal and equitable rights to which Laurus may be entitled,  including
the

                                       19
<PAGE>


right to take  immediate  possession of the  Collateral,  to require  Company to
assemble  the  Collateral,  at  Company's  expense,  and to make it available to
Laurus at a place  designated by Laurus which is  reasonably  convenient to both
parties and to enter any of the premises of Company or wherever  the  Collateral
shall be located, with or without force or process of law, and to keep and store
the same on said  premises  until sold (and if said  premises be the property of
Company, Company agrees not to charge Laurus for storage thereof), and the right
to apply for the  appointment  of a receiver for  Company's  property.  Further,
Laurus may, at any time or times  after the  occurrence  of an Event of Default,
sell and deliver all Collateral  held by or for Laurus at public or private sale
for cash,  upon  credit or  otherwise,  at such  prices  and upon such  terms as
Laurus,  in Laurus' sole  discretion,  deems  advisable or Laurus may  otherwise
recover upon the Collateral in any commercially  reasonable manner as Laurus, in
its sole discretion, deems advisable. The requirement of reasonable notice shall
be met if such notice is mailed postage prepaid to Company at Company's  address
as shown in Laurus' records, at least ten (10) days before the time of the event
of which notice is being given.  Laurus may be the  purchaser at any sale, if it
is public. In connection with the exercise of the foregoing remedies,  Laurus is
granted permission to use all of Company's trademarks, tradenames,  tradestyles,
patents,  patent applications,  licenses (subject to the terms of such license),
franchises and other proprietary  rights.  The proceeds of sale shall be applied
first to all costs and expenses of sale, including  reasonable  attorneys' fees,
and second to the payment (in whatever order Laurus elects) of all  Obligations.
After the  indefeasible  payment and  satisfaction in full in cash of all of the
Obligations, and after the payment by Laurus of any other amount required by any
provision of law, including Section 608(a)(1) of the Code (but only after Laurus
has received what Laurus  considers  reasonable  proof of a subordinate  party's
security  interest),  the  surplus,  if any,  shall  be paid to  Company  or its
representatives or to whosoever may be lawfully entitled to receive the same, or
as a court of competent  jurisdiction may direct. Company shall remain liable to
Laurus for any deficiency.  In addition,  Company shall pay Laurus a liquidation
fee ("Liquidation  Fee") in the amount of five percent (5%) of the actual amount
collected  in  respect  of  each  Account  outstanding  at  any  time  during  a
"liquidation period". For purposes hereof,  "liquidation period" means a period:
(i) beginning on the earliest date of (x) an event  referred to in Section 18(i)
or 18(j),  or (y) the  cessation of Company's  business;  and (ii) ending on the
date on which Laurus has  actually  received  all  Obligations  due and owing it
under this Agreement and the Ancillary Agreements.  The Liquidation Fee shall be
paid on the date on which Laurus  collects the  applicable  Account by deduction
from the  proceeds  thereof.  Company  and  Laurus  acknowledge  that the actual
damages  that would be incurred by Laurus  after the  occurrence  of an Event of
Default  would be  difficult to quantify and that Company and Laurus have agreed
that the fees and  obligations  set forth in this Section and in this  Agreement
would  constitute  fair and appropriate  liquidated  damages in the event of any
such termination.

              20.    Waivers.  To the full extent  permitted by applicable  law,
Company waives (a) presentment,  demand and protest,  and notice of presentment,
dishonor,  intent to accelerate,  acceleration,  protest,  default,  nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all of
this  Agreement  and the  Ancillary  Agreements  or any other notes,  commercial
paper, Accounts, contracts, Documents, Instruments, Chattel Paper and guaranties
at any time held by Laurus on which Company may in any way be liable, and hereby
ratifies and confirms  whatever Laurus may do in this regard;  (b) all rights to
notice and a hearing  prior to Laurus'  taking  possession  or control of, or to
Laurus' replevy, attachment or levy upon, any Collateral or any bond or security
that might be required by any court prior to allowing Laurus to

                                       20
<PAGE>


exercise any of its remedies;  and (c) the benefit of all  valuation,  appraisal
and exemption laws. Company  acknowledges that it has been advised by counsel of
its  choices  and  decisions  with  respect  to this  Agreement,  the  Ancillary
Agreements and the transactions evidenced hereby and thereby.

              21.    Expenses.  Company  shall  pay  all of  Laurus'  reasonable
out-of-pocket costs and expenses, including reasonable fees and disbursements of
in-house or outside counsel and appraisers,  in connection with the preparation,
execution and delivery of this  Agreement and the Ancillary  Agreements,  and in
connection with the prosecution or defense of any action, contest, dispute, suit
or  proceeding  concerning  any matter in any way arising out of,  related to or
connected  with this  Agreement or any Ancillary  Agreement,  provided that such
amount  does  not  exceed  $[39,500].  Company  shall  also  pay all of  Laurus'
reasonable fees, charges,  out-of-pocket costs and expenses,  including fees and
disbursements of counsel and appraisers, in connection with (a) the preparation,
execution and delivery of any waiver,  any amendment thereto or consent proposed
or executed in connection with the  transactions  contemplated by this Agreement
or  the  Ancillary   Agreements,   (b)  Laurus'  obtaining  performance  of  the
Obligations under this Agreement and any Ancillary  Agreements,  including,  but
not  limited  to, the  enforcement  or defense  of Laurus'  security  interests,
assignments of rights and Liens hereunder as valid perfected security interests,
(c) any  attempt to  inspect,  verify,  protect,  collect,  sell,  liquidate  or
otherwise dispose of any Collateral,  (d) any appraisals or re-appraisals of any
property (real or personal)  pledged to Laurus by Company as Collateral  for, or
any other Person as security for,  Company's  Obligations  hereunder and (e) any
consultations  in connection  with any of the foregoing.  Company shall also pay
Laurus' customary bank charges for all bank services  (including wire transfers)
performed or caused to be  performed by Laurus for Company at Company's  request
or in connection  with  Company's  loan account with Laurus.  All such costs and
expenses together with all filing, recording and search fees, taxes and interest
payable by Company to Laurus  shall be payable on demand and shall be secured by
the Collateral. If any tax by any Governmental Authority is or may be imposed on
or as a result of any transaction  between Company and Laurus which Laurus is or
may be required to withhold or pay,  Company agrees to indemnify and hold Laurus
harmless in respect of such taxes,  and Company  will repay to Laurus the amount
of any such taxes which shall be charged to Company's account; and until Company
shall  furnish  Laurus with  indemnity  therefor (or supply Laurus with evidence
satisfactory  to it that due provision  for the payment  thereof has been made),
Laurus may hold without  interest any balance  standing to Company's  credit and
Laurus shall retain its Liens in any and all Collateral.

              22.    Assignment  By Laurus.  Laurus may assign any or all of the
Obligations  together  with any or all of the  security  therefor  to any Person
which is not a competitor of the Company and any such  transferee  shall succeed
to all of Laurus' rights with respect thereto. Upon such transfer,  Laurus shall
be released  from all  responsibility  for the  Collateral to the extent same is
assigned to any transferee. Laurus may from time to time sell or otherwise grant
participations   in  any  of  the   Obligations  and  the  holder  of  any  such
participation  shall,  subject to the terms of any agreement  between Laurus and
such  holder,  be  entitled to the same  benefits as Laurus with  respect to any
security  for the  Obligations  in which such holder is a  participant.  Company
agrees that each such holder may exercise  any and all rights of banker's  lien,
set-off and counterclaim with respect to its participation in the Obligations as
fully as though  Company were directly  indebted to such holder in the amount of
such participation.

                                       21
<PAGE>


              23.    No  Waiver;  Cumulative  Remedies.  Failure  by  Laurus  to
exercise  any  right,  remedy or option  under  this  Agreement,  any  Ancillary
Agreement or any  supplement  hereto or thereto or any other  agreement  between
Company and Laurus or delay by Laurus in exercising  the same,  will not operate
as a waiver;  no waiver by Laurus will be effective  unless it is in writing and
then only to the extent specifically  stated.  Laurus' rights and remedies under
this Agreement and the Ancillary Agreements will be cumulative and not exclusive
of any other right or remedy which Laurus may have.

              24.    Application  of Payments.  Company  irrevocably  waives the
right to direct the  application  of any and all  payments  at any time or times
hereafter  received by Laurus  from or on  Company's  behalf and Company  hereby
irrevocably  agrees that Laurus  shall have the  continuing  exclusive  right to
apply and reapply any and all payments  received at any time or times  hereafter
against the  Obligations  hereunder in such manner as Laurus may deem  advisable
notwithstanding any entry by Laurus upon any of Laurus' books and records.

              25.    Indemnity. Company agrees to indemnify and hold Laurus, and
its  respective   affiliates,   employees,   attorneys  and  agents  (each,   an
"Indemnified  Person"),  harmless  from and against any and all suits,  actions,
proceedings,  claims, damages,  losses,  liabilities and expenses of any kind or
nature whatsoever  (including  attorneys' fees and disbursements and other costs
of investigation or defense, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by any such Indemnified  Person as
the result of credit having been  extended,  suspended or terminated  under this
Agreement or any of the Ancillary  Agreements or with respect to the  execution,
delivery,  enforcement,  performance and  administration of, or in any other way
arising out of or relating to, this Agreement,  the Ancillary  Agreements or any
other documents or transactions contemplated by or referred to herein or therein
and any actions or failures to act with respect to any of the foregoing,  except
to the extent that any such  indemnified  liability is finally  determined  by a
court of competent  jurisdiction to have resulted  solely from such  Indemnified
Person's gross negligence or willful misconduct.  NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE  OR LIABLE TO  COMPANY  OR TO ANY OTHER  PARTY OR TO ANY  SUCCESSOR,
ASSIGNEE  OR THIRD  PARTY  BENEFICIARY  OR ANY  OTHER  PERSON  ASSERTING  CLAIMS
DERIVATIVELY   THROUGH  SUCH  PARTY,  FOR  INDIRECT,   PUNITIVE,   EXEMPLARY  OR
CONSEQUENTIAL  DAMAGES  WHICH MAY BE ALLEGED AS A RESULT OF CREDIT  HAVING  BEEN
EXTENDED,  SUSPENDED  OR  TERMINATED  UNDER  THIS  AGREEMENT  OR  ANY  ANCILLARY
AGREEMENT  OR AS A RESULT OF ANY OTHER  TRANSACTION  CONTEMPLATED  HEREUNDER  OR
THEREUNDER.

              26.    Revival.  Company further agrees that to the extent Company
makes a payment or  payments  to Laurus,  which  payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy act, state or federal law,  common law or equitable  cause,
then, to the extent of such payment or repayment, the obligation or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if said payment had not been made.

              27.    Notices.  Any notice or request  hereunder  may be given to
Company  or  Laurus  at the  respective  addresses  set  forth  below  or as may
hereafter be specified in a notice

                                       22
<PAGE>


designated  as a change of  address  under this  Section.  Any notice or request
hereunder  shall  be given by  registered  or  certified  mail,  return  receipt
requested,  hand  delivery,  overnight  mail or  telecopy  (confirmed  by mail).
Notices and requests shall be, in the case of those by hand delivery,  deemed to
have  been  given  when  delivered  to any  officer  of the  party to whom it is
addressed,  in the case of those by mail or overnight mail,  deemed to have been
given three (3) business days after the date when  deposited in the mail or with
the overnight mail carrier, and, in the case of a telecopy, when confirmed.

Notices shall be provided as follows:

              If to Laurus:               Laurus Master Fund, Ltd.
                                          c/o Laurus Capital Management, LLC
                                          825 Third Avenue 14th Fl.
                                          New York, New York 10022
                                          Attention:  John E. Tucker, Esq.
                                          Telephone:  (212) 541-4434
                                          Telecopier:  (212) 541-5800


              If to Company:              .
                                          Address:

                                          Attention: Chief Financial Officer
                                          Telephone:
                                          Telecopier:

              With a copy to:             Reitler Brown LLC
                                          800 Third Avenue, 21st Floor
                                          New York, New York 10022
                                          Attention:  Robert Steven Brown, Esq.
                                          Telephone:  (212) 209-3050
                                          Telecopier:  (212) 371-5500

or such other address as may be  designated  in writing  hereafter in accordance
with this Section 27 by such Person.

              28.    Governing Law,  Jurisdiction  and Waiver of Jury Trial. (a)
THIS AGREEMENT AND THE ANCILLARY  AGREEMENTS  SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE.

              (b)    COMPANY  HEREBY  CONSENTS  AND  AGREES  THAT  THE  STATE OR
FEDERAL COURTS  LOCATED IN THE COUNTY OF NEW YORK,  STATE OF NEW YORK SHALL HAVE
EXCLUSIVE  JURISDICTION  TO HEAR AND  DETERMINE  ANY CLAIMS OR DISPUTES  BETWEEN
COMPANY AND LAURUS PERTAINING TO THIS

                                       23
<PAGE>


AGREEMENT OR ANY OF THE ANCILLARY  AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS  AGREEMENT OR ANY OF THE ANCILLARY  AGREEMENTS;  PROVIDED,  THAT
LAURUS AND COMPANY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED  OUTSIDE OF THE COUNTY OF NEW YORK,  STATE OF NEW YORK;
AND FURTHER PROVIDED,  THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE
TO PRECLUDE  LAURUS FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION  TO COLLECT THE  OBLIGATIONS,  TO REALIZE ON THE  COLLATERAL OR ANY
OTHER  SECURITY  FOR THE  OBLIGATIONS,  OR TO ENFORCE A JUDGMENT  OR OTHER COURT
ORDER IN FAVOR OF LAURUS.  COMPANY  EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND COMPANY
HEREBY  WAIVES  ANY  OBJECTION  WHICH IT MAY HAVE  BASED  UPON LACK OF  PERSONAL
JURISDICTION,  IMPROPER  VENUE OR FORUM NON  CONVENIENS.  COMPANY  HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS,  COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES  THAT  SERVICE OF SUCH  SUMMONS,  COMPLAINT  AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED  MAIL ADDRESSED TO COMPANY AT THE
ADDRESS  SET  FORTH IN  SECTION  27 AND THAT  SERVICE  SO MADE  SHALL BE  DEEMED
COMPLETED UPON THE EARLIER OF COMPANY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

              (c)    THE  PARTIES  DESIRE  THAT THEIR  DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,  TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL  SYSTEM AND OF  ARBITRATION,  THE PARTIES HERETO
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,  SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE,  WHETHER  ARISING IN CONTRACT,  TORT, OR OTHERWISE  BETWEEN
LAURUS AND COMPANY ARISING OUT OF, CONNECTED WITH,  RELATED OR INCIDENTAL TO THE
RELATIONSHIP  ESTABLISHED  BETWEEN THEM IN CONNECTION WITH THIS  AGREEMENT,  ANY
ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED THERETO.

              29.    Limitation   of   Liability.   Company   acknowledges   and
understands  that in order to  assure  repayment  of the  Obligations  hereunder
Laurus may be required to exercise  any and all of Laurus'  rights and  remedies
hereunder and agrees that,  except as limited by applicable law,  neither Laurus
nor any of Laurus'  agents shall be liable for acts taken or  omissions  made in
connection  herewith or therewith except for actual gross negligence,  bad faith
or willful misconduct.

              30.    Entire  Understanding.  This  Agreement  and the  Ancillary
Agreements contain the entire understanding between Company and Laurus as to the
subject matter hereof and thereof and any promises, representations,  warranties
or  guarantees  not herein  contained  shall have no force and effect  unless in
writing,  signed by  Company's  and Laurus'  respective  officers.  Neither this
Agreement,  the Ancillary Agreements,  nor any portion or provisions thereof may
be changed, modified, amended, waived,  supplemented,  discharged,  cancelled or

                                       24
<PAGE>


terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.

              31.    Severability.  Wherever  possible  each  provision  of this
Agreement or the Ancillary  Agreements shall be interpreted in such manner as to
be  effective  and valid under  applicable  law,  but if any  provision  of this
Agreement or the  Ancillary  Agreements  shall be prohibited by or invalid under
applicable  law  such  provision  shall be  ineffective  to the  extent  of such
prohibition or invalidity,  without invalidating the remainder of such provision
or the remaining provisions thereof.

              32.    Captions. All captions are and shall be without substantive
meaning or content of any kind whatsoever.

              33.    Counterparts;  Telecopier Signatures. This Agreement may be
executed in one or more counterparts, each of which shall constitute an original
and all of which taken together shall constitute one and the same agreement. Any
signature delivered by a party via telecopier transmission shall be deemed to be
any original signature hereto.

              34.    Construction.  The parties  acknowledge that each party and
its  counsel  have  reviewed  this   Agreement  and  that  the  normal  rule  of
construction to the effect that any  ambiguities are to be resolved  against the
drafting party shall not be employed in the  interpretation of this Agreement or
any amendments, schedules or exhibits thereto.

              35.    Publicity.   Company  hereby   authorizes  Laurus  to  make
appropriate  announcements  of the  financial  arrangement  entered  into by and
between Company and Laurus, including,  without limitation,  announcements which
are commonly  known as  tombstones,  in such  publications  and to such selected
parties as Laurus shall in its sole and absolute discretion deem appropriate, or
as required by applicable law.

              36.    Legends. The Securities shall bear legends as follows;

              (a)    The Notes shall bear substantially the following legend:

              "THIS  NOTE  AND  THE  COMMON  STOCK  ISSUABLE  UPON
              CONVERSION  OF THIS  NOTE  HAVE NOT BEEN  REGISTERED
              UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
              APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE
              COMMON STOCK  ISSUABLE UPON  CONVERSION OF THIS NOTE
              MAY  NOT  BE  SOLD,   OFFERED  FOR  SALE,   PLEDGED,
              HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
              OF AN  EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS
              NOTE OR SUCH  SHARES  UNDER SAID ACT AND  APPLICABLE
              STATE  SECURITIES  LAWS  OR AN  OPINION  OF  COUNSEL
              REASONABLY    SATISFACTORY   TO    VENTURES-NATIONAL
              INCORPORATED   THAT   SUCH   REGISTRATION   IS   NOT
              REQUIRED."


                                       25
<PAGE>


              (b)    Any shares of Common Stock issued pursuant to conversion of
the Note or  exercise  of the  Warrants,  shall bear a legend  which shall be in
substantially  the following  form until such shares are covered by an effective
registration statement filed with the SEC:

              "THE  SHARES   REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
              REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  OR ANY
              APPLICABLE,  STATE  SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD,
              OFFERED FOR SALE,  PLEDGED,  HYPOTHECATED OR OTHERWISE DISPOSED OF
              IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT AS TO SUCH
              SECURITIES  UNDER SAID ACT AND APPLICABLE STATE LAWS OR AN OPINION
              OF   COUNSEL   REASONABLY    SATISFACTORY   TO   VENTURES-NATIONAL
              INCORPORATED THAT SUCH REGISTRATION IS NOT REQUIRED."

              (c)    The Warrants shall bear substantially the following legend:

              "THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
              WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
              AS AMENDED,  OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT
              AND THE COMMON  SHARES  ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
              NOT BE SOLD, OFFERED FOR SALE, PLEDGED,  HYPOTHECATED OR OTHERWISE
              DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION STATEMENT
              AS TO THIS WARRANT OR THE UNDERLYING  SHARES OF COMMON STOCK UNDER
              SAID ACT AND  APPLICABLE  STATE  SECURITIES  LAWS OR AN OPINION OF
              COUNSEL REASONABLY SATISFACTORY TO VENTURES-NATIONAL  INCORPORATED
              THAT SUCH REGISTRATION IS NOT REQUIRED."

      [Balance of page intentionally left blank; signature page follows.]

                                       26
<PAGE>


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

                                        VENTURES-NATIONAL INCORPORATED
                                        D/B/A TITAN GENERAL HOLDINGS, INC.

                                        By: /s/ Andrew Glashow
                                            ------------------------------------
                                        Name:  Andrew Glashow
                                               ---------------------------------
                                        Title: President
                                               ---------------------------------



                                        LAURUS MASTER FUND, LTD.

                                        By: /s/ David Grin
                                            ------------------------------------
                                        Name: David Grin
                                              ----------------------------------
                                        Title:
                                              ----------------------------------

                                       27
<PAGE>


                              Annex A - Definitions

              "Account  Debtor" means any Person who is or may be obligated with
respect to, or on account of, an Account.

              "Accountants" has the meaning given to such term in Section 11(a).

              "Accounts"  means all  "accounts",  as such term is defined in the
UCC, now owned or hereafter acquired by any Person,  including: (a) all accounts
receivable, other receivables,  book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments)  (including
any such  obligations  that may be characterized as an account or contract right
under the UCC);  (b) all of such  Person's  rights in, to and under all purchase
orders or receipts for goods or services; (c) all of such Person's rights to any
goods  represented by any of the foregoing  (including unpaid sellers' rights of
rescission,  replevin,  reclamation  and  stoppage  in  transit  and  rights  to
returned, reclaimed or repossessed goods); (d) all rights to payment due to such
Person for Goods or other property sold, leased, licensed, assigned or otherwise
disposed of, for a policy of insurance  issued or to be issued,  for a secondary
obligation  incurred or to be incurred,  for energy  provided or to be provided,
for the use or hire of a vessel under a charter or other  contract,  arising out
of the use of a credit card or charge card,  or for  services  rendered or to be
rendered by such Person or in connection with any other transaction  (whether or
not  yet  earned  by  performance  on the  part  of  such  Person);  and (e) all
collateral  security of any kind given by any Account Debtor or any other Person
with respect to any of the foregoing.

              "Accounts Availability" means the amount of Loans against Eligible
Accounts  Laurus  may from time to time make  available  to Company up to eighty
five percent (85%) of the net face amount of Eligible Accounts based on Accounts
of Company.

              "Affiliate"  of any  Person  means (a) any  Person  (other  than a
Subsidiary) which,  directly or indirectly,  is in control of, is controlled by,
or is under common control with such Person, (b) any Person who is a director or
officer (i) of such Person,  (ii) of any  Subsidiary  of such Person or (iii) of
any Person  described in clause (a) above.  For the purposes of this definition,
control of a Person shall mean the power (direct or indirect) to direct or cause
the direction of the  management and policies of such Person whether by contract
or otherwise.

              "Ancillary  Agreements" means, the Notes,  Warrants,  Registration
Rights Agreements, each Guaranty, each Guaranty Security Agreement and all other
agreements,  instruments,  documents,  mortgages,  pledges,  powers of attorney,
consents, assignments, contracts, notices, security agreements, trust agreements
and guarantees whether heretofore,  concurrently, or hereafter executed by or on
behalf of Company or any other Person or  delivered to Laurus,  relating to this
Agreement or to the  transactions  contemplated  by this  Agreement or otherwise
relating to the relationship between the Company and Laurus.

              "Books and  Records"  means all  books,  records,  board  minutes,
contracts,  licenses, insurance policies,  environmental audits, business plans,
files,  computer files,  computer discs and other data and software  storage and
media devices,  accounting books and records,  financial  statements (actual and
pro forma),  filings with  Governmental  Authorities and any

                                       28
<PAGE>


and  all  records  and  instruments  relating  to the  Collateral  or  otherwise
necessary or helpful in the collection thereof or the realization thereupon.

              "Business  Day" means a day on which  Laurus is open for  business
and that is not a Saturday, a Sunday or other day on which banks are required or
permitted to be closed in the State of New York.

              "Capital Availability Amount" means $4,000,000.

              "Chattel Paper" means all "chattel paper," as such term is defined
in the UCC, including  electronic chattel paper, now owned or hereafter acquired
by any Person.

              "Closing Date" means the date on which Company shall first receive
proceeds of the initial Loans.

              "Collateral" means all of Company's  property and assets,  whether
real or  personal,  tangible or  intangible,  and whether now owned or hereafter
acquired,  or in which it now has or at any time in the future may  acquire  any
right,  title or interests  including all of the following  property in which it
now has or at any time in the future may acquire any right, title or interest:

              (a)    all Inventory;

              (b)    all Equipment;

              (c)    all Fixtures;

              (d)    all General Intangibles;

              (e)    all Accounts;

              (f)    all Deposit Accounts,  other bank accounts and all funds on
deposit therein;

              (g)    all Investment Property;

              (h)    all Stock;

              (i)    all Chattel Paper;

              (j)    all Letter-of-Credit Rights;

              (k)    all Instruments;

              (l)    all commercial tort claims set forth on Exhibit 1(A);

              (m)    all Books and Records;

              (n)    all Supporting  Obligations including letters of credit and
guarantees issued in support of Accounts, Chattel Paper, General Intangibles and
Investment Property;

                                       29
<PAGE>


              (o)    (i)    all money,  cash and cash  equivalents  and (ii) all
cash  held  as  cash  collateral  to  the  extent  not  otherwise   constituting
Collateral,  all other cash or property  at any time on deposit  with or held by
Laurus for the account of Company  (whether for  safekeeping,  custody,  pledge,
transmission or otherwise); and

              (p)    all products  and Proceeds of all or any of the  foregoing,
tort  claims  and all claims and other  rights to  payment  including  insurance
claims against third parties for loss of, damage to, or destruction of, and (ii)
payments due or to become due under  leases,  rentals and hires of any or all of
the foregoing and Proceeds  payable under, or unearned  premiums with respect to
policies of insurance in whatever form.

       "Contract  Rate" means an interest rate per annum equal to the Prime Rate
plus three percent (3.0%) per annum,  but subject to the  immediately  following
sentence,  the  Contract  Rate shall not be less than seven  percent  (7%).  The
Contract  Rate shall be  subject to  adjustment  if (i) the  Company  shall have
registered the shares of the Company's common stock underlying the conversion of
all the Minimum Borrowing Notes issued by the Company to Laurus and that certain
warrant issued to Laurus on a registration  statement  declared effective by the
SEC, and (ii) the volume weighted  average price of the Common Stock as reported
by Bloomberg,  L.P. on the principal market for any of the ten (10) trading days
immediately preceding an interest payment date exceeds the then applicable Fixed
Conversion  Price in such  percentages  as  outlined  in the  table  below,  the
Contract Rate for the succeeding calendar month shall automatically be adjusted:

       --------------------------------------- -----------------------------
                                               Contract Rate
       --------------------------------------- -----------------------------
          125% of the Fixed Conversion Price   Contract Rate minus 0.25%
       --------------------------------------- -----------------------------
          150% of the Fixed Conversion Price   Contract Rate minus 0.25%
       --------------------------------------- -----------------------------
          175% of the Fixed Conversion Price   Contract Rate minus 0.75%
       --------------------------------------- -----------------------------


       And thereafter, for each 25% incremental increase in the Fixed Conversion
Price,  the Contract  Rate will be  correspondingly  reduced by twenty five (25)
basis  points,  PROVIDED,  HOWEVER,  that in no  event  will the  Contract  Rate
hereunder be reduced to less than 0.00%.


              "Default" means any act or event which,  with the giving of notice
or passage of time or both, would constitute an Event of Default.

              "Default  Rate"  has the  meaning  given to such  term in  Section
5(a)(iii).

              "Deposit  Accounts"  means all "deposit  accounts" as such term is
defined in the UCC, now or hereafter held in the name of any Person,  including,
without limitation, the Lockbox Account .

              "Documents" means all "documents",  as such term is defined in the
UCC, now owned or hereafter acquired by any Person, wherever located,  including
all bills of lading, dock

                                       30
<PAGE>


warrants,  dock  receipts,  warehouse  receipts,  and other  documents of title,
whether negotiable or non-negotiable.

              "Eligible Accounts" means and includes each Account which conforms
to the following  criteria:  (a) shipment of the merchandise or the rendition of
services has been  completed;  (b) no return,  rejection or  repossession of the
merchandise  has  occurred;  (c)  merchandise  or  services  shall not have been
rejected  or  disputed  by the  Account  Debtor  and  there  shall not have been
asserted  any  offset,  defense or  counterclaim;  (d)  continues  to be in full
conformity  with the  representations  and warranties  made by Company to Laurus
with respect  thereto;  (e) Laurus is, and continues to be,  satisfied  with the
credit  standing  of the  Account  Debtor in  relation  to the  amount of credit
extended;  (f) there are no facts  existing  or  threatened  which are likely to
result in any adverse change in an Account Debtor's financial condition;  (g) is
documented  by an invoice in a form  approved  by Laurus and shall not be unpaid
more than  ninety (90) days from  invoice  date;  (h) not more than  twenty-five
percent  (25%) of the unpaid  amount of invoices  due from such  Account  Debtor
remains  unpaid  more  than  ninety  (90)  days from  invoice  date;  (i) is not
evidenced by chattel  paper or an  instrument  of any kind with respect to or in
payment  of the  Account  unless  such  instrument  is duly  endorsed  to and in
possession  of Laurus or  represents  a check in payment  of a Account;  (j) the
Account Debtor is located in the United States;  provided,  however, Laurus may,
from  time to time,  in the  exercise  of its sole  discretion  and  based  upon
satisfaction of certain conditions to be determined at such time by Laurus, deem
certain Accounts as Eligible Accounts  notwithstanding  that such Account is due
from an Account  Debtor located  outside of the United States;  (k) Laurus has a
first priority perfected Lien in such Account and such Account is not subject to
any Lien other than Permitted Liens; (l) does not arise out of transactions with
any employee,  officer,  director,  stockholder or Affiliate of Company;  (m) is
payable to Company or a wholly-owned  subsidiary thereof; (n) does not arise out
of a bill and hold sale  prior to  shipment  and does not arise out of a sale to
any Person to which Company is indebted;  (o) is net of any returns,  discounts,
claims,  credits  and  allowances;  (p) if the Account  arises out of  contracts
between Company and the United States,  any state, or any department,  agency or
instrumentality  of any of them,  Company  has so notified  Laurus,  in writing,
prior to the creation of such Account,  and there has been  compliance  with any
governmental  notice or approval  requirements,  including  compliance  with the
Federal  Assignment of Claims Act; (q) is a good and valid account  representing
an undisputed  bona fide  indebtedness  incurred by the Account  Debtor  therein
named, for a fixed sum as set forth in the invoice relating thereto with respect
to an  unconditional  sale and  delivery  upon the stated terms of goods sold by
Company or work, labor and/or services  rendered by Company;  (r) does not arise
out of progress  billings prior to completion of the order; (s) the total unpaid
Accounts from such Account Debtor does not exceed  twenty-five  percent (25%) of
all  Eligible  Accounts;  (t)  Company's  right to payment is  absolute  and not
contingent upon the fulfillment of any condition whatsoever; (u) Company is able
to bring suit and  enforce its  remedies  against  the  Account  Debtor  through
judicial  process;  (v) does not represent  interest  payments,  late or finance
charges  owing  to  Company  and (w) is  otherwise  satisfactory  to  Laurus  as
determined  by  Laurus  in the  exercise  of its sole  discretion.  In the event
Company  requests that Laurus include within Eligible  Accounts certain Accounts
of one or more of  Company's  acquisition  targets,  Laurus shall at the time of
such request  consider such  inclusion,  but any such inclusion  shall be at the
sole  option of Laurus and shall at all times be subject  to the  execution  and
delivery to Laurus of all such  documentation  (including,  without  limitation,
guaranty  and  security  documentation)  as  Laurus  may  require  in  its  sole
discretion.

                                       31
<PAGE>


              "Equipment"  means all  "equipment" as such term is defined in the
UCC, now owned or hereafter acquired by any Person, wherever located,  including
any and all machinery,  apparatus,  equipment,  fittings,  furniture,  fixtures,
motor vehicles and other tangible  personal  property  (other than Inventory) of
every kind and  description  that may be now or hereafter  used in such Person's
operations  or that are owned by such Person or in which such Person may have an
interest,  and all parts,  accessories and accessions  thereto and substitutions
and replacements therefor.

              "ERISA"  shall  have the  meaning  given to such  term in  Section
12(g).

              "Event of Default"  means the  occurrence of any of the events set
forth in Section 18.

              "Fixed  Conversion  Price" has the meaning  given such term in the
Minimum Borrowing Note.

              "Fixtures"  means all  "fixtures"  as such term is  defined in the
UCC, now owned or hereafter acquired by any Person.

              "Formula Amount" has the meaning set forth in Section 2(a)(i).

              "GAAP" means generally accepted accounting  principles,  practices
and procedures in effect from time to time in the United States of America.

              "General Intangibles" means all "general intangibles" as such term
is defined in the UCC, now owned or hereafter  acquired by any Person  including
all right,  title and interest that such Person may now or hereafter  have in or
under  any  contract,   all  Payment  Intangibles,   customer  lists,  Licenses,
Intellectual  Property,  interests  in  partnerships,  joint  ventures and other
business  associations,   permits,   proprietary  or  confidential  information,
inventions  (whether or not  patented  or  patentable),  technical  information,
procedures,  designs,  knowledge,  know-how,  Software, data bases, data, skill,
expertise,  experience,   processes,  models,  drawings,  materials,  Books  and
Records,  Goodwill  (including  the Goodwill  associated  with any  Intellectual
Property),  all  rights  and claims in or under  insurance  policies  (including
insurance for fire,  damage,  loss,  and  casualty,  whether  covering  personal
property,  real property,  tangible rights or intangible  rights, all liability,
life,  key-person,   and  business  interruption  insurance,  and  all  unearned
premiums), uncertificated securities, choses in action, deposit accounts, rights
to  receive  tax  refunds  and other  payments,  rights to  received  dividends,
distributions, cash, Instruments and other property in respect of or in exchange
for pledged Stock and Investment Property, and rights of indemnification.

              "Goods" means all "goods", as such term is defined in the UCC, now
owned or hereafter acquired by any Person, wherever located,  including embedded
software to the extent  included in "goods" as defined in the UCC,  manufactured
homes,  standing  timber that is cut and  removed  for sale and unborn  young of
animals.

              "Goodwill"  means all  goodwill,  trade  secrets,  proprietary  or
confidential information,  technical information,  procedures, formulae, quality
control standards, designs,

                                       32
<PAGE>


operating and training manuals,  customer lists, and distribution agreements now
owned or hereafter acquired by any Person.

              "Guarantor"  means and any  Person  who may  guarantee  payment of
performance of the whole or any part of the Obligations.

              "Guarantor  Security  Agreements"  means all security  agreements,
mortgages,  cash collateral deposit letters,  pledges and other agreements which
are executed by any Guarantor in favor of Laurus.

              "Guaranty"  means all  agreements to perform all or any portion of
the Obligations on behalf of Company.

              "Governmental Authority" means any nation or government, any state
or other  political  subdivision  thereof,  and any agency,  department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

              "Indemnified  Person" shall have the meaning given to such term in
Section 25.

              "Initial  Term"  means  the  Closing  Date  through  the  close of
business on the day immediately  preceding the second anniversary of the Closing
Date,  subject to acceleration at the option of Laurus upon the occurrence of an
Event of Default hereunder or other termination hereunder.

              "Instruments" means all "instruments",  as such term is defined in
the UCC,  now owned or  hereafter  acquired  by any  Person,  wherever  located,
including  all  certificated  securities  and all  promissory  notes  and  other
evidences of indebtedness, other than instruments that constitute, or are a part
of a group of writings that constitute, Chattel Paper.

              "Intellectual  Property"  means  any  and all  Licenses,  patents,
patent registrations, copyrights, copyright registrations, trademarks, trademark
registrations, trade secrets and customer lists.

              "Inventory" means all "inventory",  as such term is defined in the
UCC, now owned or hereafter acquired by any Person, wherever located,  including
all inventory,  merchandise,  goods and other personal property that are held by
or on  behalf of such  Person  for sale or lease or are  furnished  or are to be
furnished under a contract of service or that constitute raw materials,  work in
process,  finished goods,  returned goods, or materials or supplies of any kind,
nature  or  description  used or  consumed  or to be used  or  consumed  in such
Person's  business  or in  the  processing,  production,  packaging,  promotion,
delivery or shipping of the same, including all supplies and embedded software.

              "Investment  Property"  means all "investment  property",  as such
term is defined  in the UCC,  now owned or  hereafter  acquired  by any  Person,
wherever located.

              "Letter-of-Credit  Rights" means "letter-of-credit rights" as such
term is defined  in the UCC,  now owned or  hereafter  acquired  by any  Person,
including rights to payment or

                                       33
<PAGE>


performance  under  a  letter  of  credit,   whether  or  not  such  Person,  as
beneficiary, has demanded or is entitled to demand payment or performance.

              "License"  means any rights  under any  written  agreement  now or
hereafter acquired by any Person to use any trademark,  trademark  registration,
copyright,  copyright  registration  or  invention  for  which  a  patent  is in
existence or other license of rights or interests now held or hereafter acquired
by any Person.

              "Lien" means any mortgage,  security deed, deed of trust,  pledge,
hypothecation,   assignment,  security  interest,  lien  (whether  statutory  or
otherwise),  charge,  claim or  encumbrance,  or  preference,  priority or other
security  agreement or preferential  arrangement  held or asserted in respect of
any asset of any kind or nature  whatsoever  including any  conditional  sale or
other  title  retention  agreement,  any  lease  having  substantially  the same
economic  effect as any of the  foregoing,  and the filing of, or  agreement  to
give,  any  financing   statement  under  the  UCC  or  comparable  law  of  any
jurisdiction.

              "Loans"  shall have the meaning  set forth in Section  2(a)(i) and
shall include all other  extensions of credit  hereunder and under any Ancillary
Agreement.

              "Material  Adverse Effect" means a material  adverse effect on (a)
the  condition,  operations,  assets,  business or  prospects  of  Company,  (b)
Company's ability to pay or perform the Obligations in accordance with the terms
hereof or any Ancillary Agreement, (c) the value of the Collateral, the Liens on
the Collateral or the priority of any such Lien or (d) the practical realization
of the benefits of Laurus'  rights and  remedies  under this  Agreement  and the
Ancillary Agreements.

              "Maximum  Legal Rate" shall have the meaning given to such term in
Section 5(a)(iv).

              "Minimum Borrowing Amount" means $1,500,000,  which such aggregate
amount shall be evidenced by Minimum Borrowing Notes.

              "Minimum  Borrowing  Notes"  shall mean each  Secured  Convertible
Note, which shall be issued in a series,  made by the Company in favor of Laurus
to evidence the Minimum Borrowing Amount.

              "Notes"  means  each  of  the  Minimum  Borrowing  Notes  and  the
Revolving  Note  made by  Company  in favor of  Laurus  in  connection  with the
transactions  contemplated  hereby,  as the same may be  amended,  modified  and
supplemented from time to time, as applicable.

              "Obligations" means all Loans, all advances,  debts,  liabilities,
obligations, covenants and duties owing by Company to Laurus (or any corporation
that  directly or  indirectly  controls or is  controlled  by or is under common
control with Laurus) of every kind and description  (whether or not evidenced by
any note or other  instrument and whether or not for the payment of money or the
performance  or  non-performance  of any act),  direct or indirect,  absolute or
contingent,  due or to  become  due,  contractual  or  tortious,  liquidated  or
unliquidated,  whether existing by operation of law or otherwise now existing or
hereafter arising including any debt, liability or obligation owing from Company
to others which Laurus may have obtained by

                                       34
<PAGE>


assignment or otherwise and further including all interest  (including  interest
accruing  at the then  applicable  rate  provided  in this  Agreement  after the
maturity of the Loans and interest accruing at the then applicable rate provided
in this  Agreement  after  the  filing of any  petition  in  bankruptcy,  or the
commencement of any insolvency,  reorganization  or like proceeding,  whether or
not a claim  for  post-filing  or  post-petition  interest  is  allowed  in such
proceeding), charges or any other payments Company is required to make by law or
otherwise  arising  under or as a result  of this  Agreement  and the  Ancillary
Agreements, together with all reasonable expenses and reasonable attorneys' fees
chargeable  to  Company's  account  or  incurred  by Laurus in  connection  with
Company's account whether provided for herein or in any Ancillary Agreement.

              "Payment Intangibles" means all "payment intangibles" as such term
is defined in the UCC, now owned or hereafter acquired by any Person, including,
a General Intangible under which the Account Debtor's principal  obligation is a
monetary obligation.

              "Permitted  Liens"  means  (a)  Liens of  carriers,  warehousemen,
artisans,  bailees, mechanics and materialmen incurred in the ordinary course of
business securing sums not overdue; (b) Liens incurred in the ordinary course of
business in connection with workmen's  compensation,  unemployment  insurance or
other forms of  governmental  insurance  or  benefits,  relating  to  employees,
securing sums (i) not overdue or (ii) being  diligently  contested in good faith
provided that adequate reserves with respect thereto are maintained on the books
of the applicable Company in conformity with GAAP; (c) Liens in favor of Laurus;
(d) Liens for taxes (i) not yet due or (ii) being  diligently  contested in good
faith by appropriate  proceedings,  provided that adequate reserves with respect
thereto are maintained on the books of the applicable Company in conformity with
GAAP  provided,  that, the Lien shall have no effect on the priority of Liens in
favor of Laurus  or the value of the  assets  in which  Laurus  has a Lien;  (e)
Purchase  Money  Liens  securing  Purchase  Money  Indebtedness  to  the  extent
permitted in this Agreement and (f) Liens specified on Exhibit 2 hereto.

              "Person" means any individual,  sole proprietorship,  partnership,
limited   liability   partnership,    joint   venture,   trust,   unincorporated
organization,  association, corporation, limited liability company, institution,
public  benefit  corporation,  entity or  government  (whether  federal,  state,
county, city, municipal or otherwise,  including any instrumentality,  division,
agency, body or department thereof),  and shall include such Person's successors
and assigns.

              "Prime Rate" means the "prime  rate"  published in The Wall Street
Journal from time to time. The Prime Rate shall be increased or decreased as the
case may be for each  increase or decrease in the Prime Rate in an amount  equal
to such  increase or decrease in the Prime Rate;  each change to be effective as
of the day of the change in such rate.

              "Proceeds"  means  "proceeds",  as such term is defined in the UCC
and, in any event,  shall  include:  (a) any and all proceeds of any  insurance,
indemnity, warranty or guaranty payable to Company or any other Person from time
to time with  respect to any  Collateral;  (b) any and all payments (in any form
whatsoever)  made or due and payable to Company from time to time in  connection
with any requisition,  confiscation,  condemnation, seizure or forfeiture of any
Collateral by any governmental body,  governmental  authority,  bureau or agency
(or any person acting under color of governmental  authority);  (c) any claim of
Company  against third parties (i) for past,  present or future  infringement of
any Intellectual Property or (ii) for past,

                                       35
<PAGE>


present or future infringement or dilution of any trademark or trademark license
or  for  injury  to  the  goodwill  associated  with  any  trademark,  trademark
registration  or  trademark  licensed  under  any  trademark  License;  (d)  any
recoveries by Company  against  third parties with respect to any  litigation or
dispute  concerning any Collateral,  including claims arising out of the loss or
nonconformity  of,  interference with the use of, defects in, or infringement of
rights  in,  or  damage  to,  Collateral;  (e)  all  amounts  collected  on,  or
distributed  on account of, other  Collateral,  including  dividends,  interest,
distributions  and Instruments  with respect to Investment  Property and pledged
Stock;  and (f) any and all other amounts , rights to payment or other  property
acquired  upon the  sale,  lease,  license,  exchange  or other  disposition  of
Collateral and all rights arising out of Collateral.

              "Purchase Money Indebtedness" means (a) any indebtedness  incurred
for the  payment of all or any part of the  purchase  price of any fixed  asset,
including  indebtedness under capitalized leases, (b) any indebtedness  incurred
for the sole purpose of financing or refinancing all or any part of the purchase
price of any fixed  asset,  and (c) any  renewals,  extensions  or  refinancings
thereof (but not any increases in the principal  amounts thereof  outstanding at
that time).

              "Purchase  Money Lien"  means any Lien upon any fixed  assets that
secures the Purchase Money  Indebtedness  related  thereto but only if such Lien
shall at all times be confined  solely to the asset the purchase  price of which
was  financed  or  refinanced  through  the  incurrence  of the  Purchase  Money
Indebtedness  secured  by such  Lien and only if such  Lien  secures  only  such
Purchase Money Indebtedness.

              "Registration  Rights Agreements" means those registration  rights
agreements  from time to time  entered  into  between  Company  and  Laurus,  as
amended, modified and supplemented from time to time.

              "Revolving  Note" means that  secured  revolving  note made by the
Company in favor of Laurus in the aggregate principal amount of two million five
hundred thousand dollars ($2,500,000) .

              "Securities"  means the Notes and the Warrants being issued by the
Company to Laurus  pursuant to this  Agreement and the Ancillary  Agreements and
the shares of the common  stock of the Company  which may be issued  pursuant to
conversion of such Notes in whole or in part or exercise of such Warrants.

              "Software"  means all  "software"  as such term is  defined in the
UCC,  now owned or  hereafter  acquired by any Person,  including  all  computer
programs  and  all  supporting   information   provided  in  connection  with  a
transaction related to any program.

              "Stock" means all certificated and uncertificated shares, options,
warrants,  membership  interests,  general  or  limited  partnership  interests,
participation  or other  equivalents  (regardless of how  designated) of or in a
corporation, partnership, limited liability company or equivalent entity whether
voting or nonvoting,  including  common  stock,  preferred  stock,  or any other
"equity  security"  (as such term is defined in Rule 3a11-1 of the General Rules
and  Regulations  promulgated  by the SEC under the  Securities  Exchange Act of
1934).

                                       36
<PAGE>


              "Subsidiary"  of any Person  means a  corporation  or other entity
whose shares of stock or other ownership  interests having ordinary voting power
(other than stock or other ownership  interests having such power only by reason
of the happening of a contingency)  to elect a majority of the directors of such
corporation,  or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.

              "Supporting  Obligations"  means all  "supporting  obligations" as
such term is defined in the UCC.

              "Term"  means,  as  applicable,  the Initial  Term and any Renewal
Term.

              "UCC" means the Uniform Commercial Code as the same may, from time
be in  effect in the State of New York;  provided,  that in the event  that,  by
reason of mandatory provisions of law, any or all of the attachment,  perfection
or priority of, or remedies with respect to,  Laurus' Lien on any  Collateral is
governed by the Uniform  Commercial  Code as in effect in a  jurisdiction  other
than the State of New York,  the term "UCC"  shall mean the  Uniform  Commercial
Code as in effect in such other  jurisdiction  for purposes of the provisions of
this Agreement relating to such attachment, perfection, priority or remedies and
for purposes of definitions related to such provisions;  provided further,  that
to the  extent  that UCC is used to define any term  herein or in any  Ancillary
Agreement  and  such  term is  defined  differently  in  different  Articles  or
Divisions  of the UCC,  the  definition  of such term  contained  in  Article or
Division 9 shall govern.

              "Warrants"  has the meaning set forth in the  Registration  Rights
Agreements.

                                    EXHIBITS

Exhibit 1(A) - Commercial Tort Claims
Exhibit 2 - Permitted Liens
Exhibit 7(c) - Actions for Perfection
Exhibit 7(p) - Bank Accounts
Exhibit 12(d) - Corporate Information and Locations of Collateral
Exhibit 12(e) - ERISA
Exhibit 12(i) - Licenses, Patents, Trademarks and Copyrights
Exhibit 12(j) - Certain SEC matters
Exhibit 13(e)(i) - Permitted Indebtedness
Exhibit 13(e)(ii) - Existing Subsidiaries
Exhibit A - Form of Borrowing Base Certificate

                                       37
<PAGE>


                                    Exhibit A

                           Borrowing Base Certificate

--------------------------------------------------------------------------------
DATE:                                   CERTIFICATE NUMBER:
--------------------------------------------------------------------------------
BORROWER NAME: VENTURES NATIONAL INC.
D/B/A TITAN GENERAL HOLDINGS, INC.

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

  1.   Period end Accounts as of:                                 $
                                  ---------------------           --------------
       Ineligible Accounts as of:
                                  ---------------------
       Accounts over 90 days from invoice date     $
                                                   --------------
       Intercompany and Affiliate Accounts         $
                                                   --------------
       Contra Accounts                             $
                                                   --------------
       COD Accounts                                $
                                                   --------------
       Foreign Accounts                            $
                                                   --------------
       Discounts, Credits and Allowances           $
                                                   --------------
       25% cross aging exclusion                   $
                                                   --------------
       Bill and Hold invoices                      $
                                                   --------------
       Progress Accounts                           $
                                                   --------------
       Finance/Service/Late Charges                $
                                                   --------------
       Other                                       $
            ----------------------------           --------------

  2.   Total ineligibles                                          $
                                                                  --------------
  3.   Eligible Accounts (Line 1 minus Line 2)                    $
                                                                  --------------
  4.   Eligible Accounts advance rate (85% )
                                                                  --------------
  5.   Accounts Availability (Line 3 multiplied by Line 4)        $
                                                                  --------------
  6.   Borrowing Availability (lesser of sum of lines 5 + 6
       or the Capital Availability Amount)                        $
                                                                  --------------
  7.   Revolving Credit Advances balance                          $
                                                                  --------------
  8.   Reserves (explain)                                         $
                                                                  --------------
  9.   Net Borrowing Availability (Line 6 minus the total
       of Lines 7 and 8)                                          $
                                                                  --------------

The undersigned hereby certifies that all of the foregoing information regarding
the  Eligible  Accounts  is true and  correct  on the date  hereof  and all such
Accounts  listed as Eligible  Accounts are Eligible  Accounts within the meaning
given such term in the Security Agreement dated _____, 2003 between Borrower and
Laurus Master Fund, Ltd.

VENTURES NATIONAL INC. D/B/A TITAN GENERAL HOLDINGS, INC.

By:
   -------------------------------------
   Name:
        --------------------------------
   Title:
         -------------------------------