exhibit_10-15.htm


    
      

    

    Exhibit
      10.15

     

    
      


      SECURITY
        AGREEMENT

       

      THIS
        SECURITY AGREEMENT (the “Agreement”), is
        entered into and made effective as of February 28, 2007, by and between
C-MARK INTERNATIONAL, INC., (the “Company”), and the
BUYER(S) listed on Schedule I attached
        to the Securities
        Purchase Agreement dated the date hereof (the “Secured
        Party”).

       

      WHEREAS,
        the Company shall issue and sell to the Secured Party, as provided
        in
        the Securities Purchase Agreement dated the date hereof, and the Secured
        Party
        shall purchase up to One Million Eight Hundred Thousand Dollars ($1,800,000)
        of
        secured convertible debentures (the “Convertible Debentures”), which
        shall be convertible into shares of the Company’s common stock, par value $.0001
        (the “Common Stock”) (as converted, the “Conversion Shares”), for
        a total purchase price of up to One Million Eight Hundred Thousand
        Dollars ($1,800,000), in the respective amounts set forth opposite each
        Buyer(s) name on Schedule I attached to the Securities Purchase
        Agreement;

       

      WHEREAS,
        to induce the Secured Party to enter into the transaction contemplated
        by the Securities Purchase Agreement, the Secured Convertible Debenture,
        the
        Investor Registration Rights Agreement, the Irrevocable Transfer Agent
        Instructions, and the Escrow Agreement (collectively referred to as the
“Transaction Documents”), the Company hereby grants to the Secured Party
        a security interest in and to the pledged property identified on Exhibit
“A” hereto (collectively referred to as the “Pledged Property”) until
        the satisfaction of the Obligations, as defined herein below.

       

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

       

      ARTICLE
        1.

       

      DEFINITIONS
        AND INTERPRETATIONS

       

      
        	
              	
                Section
                  1.1.

              	
                Recitals.

              


      

       

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

       

      
        	
              	
                Section
                  1.2.

              	
                Interpretations.

              


      

       

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

       

      
        	
              	
                Section
                  1.3.

              	
                Obligations
                  Secured.

              


      

       

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

       

      


      
        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

      

       

      ARTICLE
        2.

       

      PLEDGED
        COLLATERAL, ADMINISTRATION OF COLLATERAL

      AND
        TERMINATION OF SECURITY INTEREST

       

      
        	
              	
                Section
                  2.1.

              	
                Pledged
                  Property.

              


      

       

      (a)           Company
        hereby pledges to the Secured Party, and creates in the Secured Party for
        its
        benefit, a security interest for such time until the Obligations are paid
        in
        full, in and to all of the property of the Company as set forth in
Exhibit “A” attached hereto (collectively, the “Pledged
        Property”):

       

      The
        Pledged Property, as set forth in Exhibit “A” attached hereto, and
        the products thereof and the proceeds of all such items are hereinafter
        collectively referred to as the “Pledged Collateral.”

       

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

       

      
        	
              	
                Section
                  2.2.

              	
                Rights;
                  Interests; Etc.

              


      

       

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

       

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

       

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

       

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

       

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

       

      


      
        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

      

       

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

       

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

       

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

       

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

       

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

       

      (iii)           the
        Company shall:  (1) make a general assignment for the benefit of
        its creditors; (2) apply for or consent to the appointment of a receiver,
        trustee, assignee, custodian, sequestrator, liquidator or similar official
        for
        itself or any of its assets and properties; (3) commence a voluntary case
        for relief as a debtor under the United States Bankruptcy Code; (4) file
        with or otherwise submit to any governmental authority any petition, answer
        or
        other document seeking:  (A) reorganization, (B) an
        arrangement with creditors or (C) to take advantage of any other present or
        future applicable law respecting bankruptcy, reorganization, insolvency,
        readjustment of debts, relief of debtors, dissolution or liquidation;
        (5) file or otherwise submit any answer or other document admitting or
        failing to contest the material allegations of a petition or other document
        filed or otherwise submitted against it in any proceeding under any such
        applicable law, or (6) be adjudicated a bankrupt or insolvent by a court of
        competent jurisdiction; or

       

      (iv)           any
        case, proceeding or other action shall be commenced against the Company for
        the
        purpose of effecting, or an order, judgment or decree shall be entered by
        any
        court of competent jurisdiction approving (in whole or in part) anything
        specified in Section 2.2(c)(iii) hereof, or any receiver, trustee,
        assignee, custodian, sequestrator, liquidator or other official shall be
        appointed with respect to the Company, or shall be appointed to take or shall
        otherwise acquire possession or control of all or a substantial part of the
        assets and properties of the Company, and any of the foregoing shall continue
        unstayed and in effect for any period of thirty (30) days.

       

      


      
        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

      

       

      ARTICLE
        3.

       

      ATTORNEY-IN-FACT;
        PERFORMANCE

       

      
        	
              	
                Section
                  3.1.

              	
                Secured
                  Party Appointed
                  Attorney-In-Fact.

              


      

       

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

       

      
        	
              	
                Section
                  3.2.

              	
                Secured
                  Party May Perform.

              


      

       

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

       

      ARTICLE
        4.

       

      REPRESENTATIONS
        AND WARRANTIES

       

      
        	
              	
                Section
                  4.1.

              	
                Authorization;
                  Enforceability.

              


      

       

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

       

      
        	
              	
                Section
                  4.2.

              	
                Ownership
                  of Pledged Property.

              


      

       

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

       

      


      
        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

      


      ARTICLE
        4.2.1.

       

      DEFAULT;
        REMEDIES; SUBSTITUTE COLLATERAL

       

      
        	
              	
                Section
                  4.3.

              	
                Default
                  and Remedies.

              


      

       

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

       

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

       

      
        	
              	
                Section
                  4.4.

              	
                Method
                  of Realizing Upon the Pledged Property: Other
                  Remedies.

              


      

       

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

       

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

       

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

       

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

       

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

       

      


      
        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

      

      


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

       

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

       

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

       

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

       

      
        	
              	
                Section
                  4.5.

              	
                Proofs
                  of Claim.

              


      

       

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

       

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

       

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

       

      
        	
              	
                Section
                  4.6.

              	
                Duties
                  Regarding Pledged Collateral.

              


      

       

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

       

      


      
        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

      

      


       

       

      ARTICLE
        5.

       

      AFFIRMATIVE
        COVENANTS

       

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

       

      
        	
              	
                Section
                  5.1.

              	
                Existence,
                  Properties, Etc.

              


      

       

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

       

      
        	
              	
                Section
                  5.2.

              	
                Financial
                  Statements and Reports.

              


      

       

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

       

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

       

      


      
        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

      

      


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

       

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

       

      
        	
              	
                Section
                  5.3.

              	
                Accounts
                  and Reports.

              


      

       

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

       

      (a)           as
        soon as available, a copy of any notice or other communication alleging any
        nonpayment or other material breach or default, or any foreclosure or other
        action respecting any material portion of its assets and properties, received
        respecting any of the indebtedness of the Company in excess of $15,000 (other
        than the Obligations), or any demand or other request for payment under any
        guaranty, assumption, purchase agreement or similar agreement or arrangement
        respecting the indebtedness or obligations of others in excess of $15,000,
        including any received from any person acting on behalf of the Secured Party
        or
        beneficiary thereof; and

       

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

       

      
        	
              	
                Section
                  5.4.

              	
                Maintenance
                  of Books and Records;
                  Inspection.

              


      

       

      The
        Company shall maintain its books, accounts and records in accordance with
        generally accepted accounting principles consistently applied, and permit
        the
        Secured Party, its officers and employees and any professionals designated
        by
        the Secured Party in writing, at any time to visit and inspect any of its
        properties (including but not limited to the collateral security described
        in
        the Transaction Documents and/or the Loan Instruments), corporate books and
        financial records, and to discuss its accounts, affairs and finances with
        any
        employee, officer or director thereof.

       

      
        	
              	
                Section
                  5.5.

              	
                Maintenance
                  and Insurance.

              


      

       

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

       

      


      
        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

      

      


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

       

      
        	
              	
                Section
                  5.6.

              	
                Contracts
                  and Other Collateral.

              


      

       

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

       

      
        	
              	
                Section
                  5.7.

              	
                Defense
                  of Collateral, Etc.

              


      

       

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

       

      
        	
              	
                Section
                  5.8.

              	
                Payment
                  of Debts, Taxes, Etc.

              


      

       

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

       

      
        	
              	
                Section
                  5.9.

              	
                Taxes
                  and Assessments; Tax Indemnity.

              


      

       

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

       

      


      
        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

      

       

      
        	
              	
                Section
                  5.9.1.

              	
                Compliance
                  with Law and Other Agreements.

              


      

       

      The
        Company shall maintain its business operations and property owned or used
        in
        connection therewith in compliance with (a) all applicable federal, state
        and local laws, regulations and ordinances governing such business operations
        and the use and ownership of such property, and (b) all agreements,
        licenses, franchises, indentures and mortgages to which the Company is a
        party
        or by which the Company or any of its properties is bound.  Without
        limiting the foregoing, the Company shall pay all of its indebtedness promptly
        in accordance with the terms thereof.

       

      
        	
              	
                Section
                  5.10.

              	
                Notice
                  of Default.

              


      

       

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

       

      
        	
              	
                Section
                  5.11.

              	
                Notice
                  of Litigation.

              


      

       

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

       

      ARTICLE
        6.

       

      NEGATIVE
        COVENANTS

       

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

       

      
        	
              	
                Section
                  6.1.

              	
                Indebtedness.

              


      

       

      The
        Company shall not directly or indirectly permit, create, incur, assume, permit
        to exist, increase, renew or extend on or after the date hereof any indebtedness
        on its part, including commitments, contingencies and credit availabilities,
        or
        apply for or offer or agree to do any of the foregoing.

       

      
        	
              	
                Section
                  6.2.

              	
                Liens
                  and Encumbrances.

              


      

       

      The
        Company shall not directly or indirectly make, create, incur, assume or permit
        to exist any assignment, transfer, pledge, mortgage, security interest or
        other
        lien or encumbrance of any nature in, to or against any part of the Pledged
        Property or of the Company’s capital stock, or offer or agree to do so, or own
        or acquire or agree to acquire any asset or property of any character
        subject to any of the foregoing encumbrances (including any conditional sale
        contract or other title retention agreement), or assign, pledge or in any
        way
        transfer or encumber its right to receive any income or other distribution
        or
        proceeds from any part of the Pledged Property or the Company’s capital stock;
        or enter into any sale-leaseback financing respecting any part of the Pledged
        Property  as lessee, or cause or assist the inception or continuation
        of any of the foregoing.

       

      


      
        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

      

      


       

      
        	
              	
                Section
                  6.3.

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

              


      

       

      Without
        the prior express written consent of the Secured Party, the Company shall
        not:  (a) Amend its Certificate of Incorporation or By-Laws; (b)
        issue or sell its stock, stock options, bonds, notes or other corporate
        securities or obligations; (c) be a party to any merger, consolidation or
        corporate reorganization, (d) purchase or otherwise acquire all or
        substantially all of the assets or stock of, or any partnership or joint
        venture
        interest in, any other person, firm or entity, (e) sell, transfer, convey,
        grant a security interest in or lease all or any substantial part of its
        assets,
        nor (f) create any subsidiaries nor convey any of its assets to any
        subsidiary.

       

      
        	
              	
                Section
                  6.4.

              	
                Management,
                  Ownership.

              


      

       

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

       

      
        	
              	
                Section
                  6.5.

              	
                Dividends,
                  Etc.

              


      

       

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

       

      
        	
              	
                Section
                  6.6.

              	
                Guaranties;
                  Loans.

              


      

       

      The
        Company shall not guarantee nor be liable in any manner, whether directly
        or
        indirectly, or become contingently liable after the date of this Agreement
        in
        connection with the obligations or indebtedness of any person or persons,
        except
        for (i) the indebtedness currently secured by the liens identified on the
        Pledged Property identified on Exhibit A hereto and (ii) the endorsement
        of
        negotiable instruments payable to the Company for deposit or collection in
        the
        ordinary course of business.  The Company shall not make any loan,
        advance or extension of credit to any person other than in the normal course
        of
        its business, without the express written consent of the Secured
        Party.

       

      


      
        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      

       

      
        	
              	
                Section
                  6.6.1.

              	
                Debt.

              


      

       

      The
        Company shall not create, incur, assume or suffer to exist any additional
        indebtedness of any description whatsoever in an aggregate amount in excess
        of
        $25,000 (excluding any indebtedness of the Company to the Secured Party,
        trade
        accounts payable and accrued expenses incurred in the ordinary course of
        business and the endorsement of negotiable instruments payable to the Company,
        respectively for deposit or collection in the ordinary course of business)
        without the express written consent of the Secured Party..

       

      
        	
              	
                Section
                  6.7.

              	
                Conduct
                  of Business.

              


      

       

      The
        Company will continue to engage, in an efficient and economical manner, in
        a
        business of the same general type as conducted by it on the date of this
        Agreement.

       

      
        	
              	
                Section
                  6.8.

              	
                Places
                  of Business.

              


      

       

      The
        location of the Company’s chief place of business is Columbia, South
        Carolina.  The Company shall not change the location of its chief
        place of business, chief executive office or any place of business disclosed
        to
        the Secured Party or move any of the Pledged Property from its current location
        without thirty (30) days' prior written notice to the Secured Party in each
        instance.

       

      ARTICLE
        7.

       

      MISCELLANEOUS

       

      
        	
              	
                Section
                  7.1.

              	
                Notices.

              


      

       

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

       

      
        	 	
                If
                  to the Secured Party:

              	
                Trafalgar
                  Capital Specialized Investment Fund

              
	 	 	
                8-10
                  Rue Mathias Hardt

              
	 	 	
                BP
                  3023

              
	 	 	
                L-1030
                  Luxembourg

              
	 	 	
                Attention:
                  Andrew Garai, Chairman of the Board of

              
	 	 	
                Trafalgar
                  Capital Sarl,
                  General Partner

              
	 	 	
                Facsimile:      011-44-207-405-0161
                  and

                                       001-786-323-1651

              
	 	 	 


      

      


      
        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

      

      


      


      
        	 	
                With
                  a copy to:

              	
                James
                  G. Dodrill II, P.A.

              
	 	 	
                5800
                  Hamilton Way

              
	 	 	
                Boca
                  Raton, FL  33496

              
	 	 	
                Attention: James
                  Dodrill, Esq.

              
	 	 	
                Telephone: (561)
                  862-0529

              
	 	 	
                Facsimile: (561)
                  892-7787

              
	 	 	 
	 	 	 
	 	
                And
                  if to the Company:

              	
                C-Mark
                  International, Inc..

              
	 	 	
                4130
                  E. Van Buren, Suite 325

              
	 	 	
                Phoenix,
                  AZ 85008

              
	 	 	
                Attn:
                  Mr. Charles Jones, CEO

              
	 	 	
                Telephone:
                  (602) 443-8640

              
	 	 	
                Facsimile:
                  (602) 443-8646

              
	 	 	 
	 	
                With
                  a copy to:

              	
                The
                  O’Neal Law Firm, P.C.

              
	 	 	
                17100
                  E. Shea Blvd., Suite 400-D

              
	 	 	
                Fountain
                  Hills, AZ  85268

              
	 	 	
                Attention:  William
                  D. O’Neal, Esq.

              
	 	 	
                Telephone:
                  (480) 812-5058

              
	 	 	
                Facsimile:
                  (480) 816-9241

              


      

      


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

       

      
        	
              	
                Section
                  7.2.

              	
                Severability.

              


      

       

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

       

      
        	
              	
                Section
                  7.3.

              	
                Expenses.

              


      

       

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

       

      


      
        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

      

       

      
        	
              	
                Section
                  7.3.1.

              	
                Waivers,
                  Amendments, Etc.

              


      

       

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

       

      
        	
              	
                Section
                  7.4.

              	
                Continuing
                  Security Interest.

              


      

       

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

       

      
        	
              	
                Section
                  7.5.

              	
                Independent
                  Representation.

              


      

       

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

       

      
        	
              	
                Section
                  7.6.

              	
                Applicable
                  Law:  Jurisdiction.

              


      

       

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

       

      
        	
              	
                Section
                  7.7.

              	
                Waiver
                  of Jury Trial.

              


      

       

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

       

      


      
        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

      

       

      
        	
              	
                Section
                  7.7.1.

              	
                Entire
                  Agreement.

              


      

       

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

       

      


      


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        OF PAGE INTENTIONALLY LEFT BLANK]

      


       

       

       

      
 

      
        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

      

      


      


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

       

      


      
        	 	
                COMPANY:

              
	 	
                CMARK
                  INTERNATIONAL, INC.

              
	 	 
	 	
                By:  
                  /s/   Charles Jones,
                  Jr             
                                                                  

              
	 	
                Name:     Charles
                  Jones, Jr

              
	 	
                Title:        President,
                  CEO

              
	 	 
	 	 
	 	
                SECURED
                  PARTY:

              
	 	
                TRAFALGAR
                  CAPITAL SPECIALIZED

              
	 	
                INVESTMENT
                  FUND, LUXEMBOURG

              
	 	
                By:           Trafalgar
                  Capital Sarl

              
	 	
                Its:           General
                  Partner

              
	 	 
	 	
                By:      /s/  Andrew
                  Garai                     

              
	 	
                Name:       Andrew
                  Garai

              
	 	
                Title:         Chairman
                  of the Board

              


      

      


      


      


      


      


      
        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

      

      


      


       

      EXHIBIT
        A

       

       

      DEFINITION
        OF PLEDGED PROPERTY

       

       

      For
        the
        purpose of securing prompt and complete payment and performance by the Company
        of all of the Obligations, the Company unconditionally and irrevocably hereby
        grants to the Secured Party a continuing security interest in and to, and
        lien
        upon, the following Pledged Property of the Company:

       

       

      (a)           all
        goods of the Company, including, without limitation, machinery, equipment,
        furniture, furnishings, fixtures, signs, lights, tools, parts, supplies and
        motor vehicles of every kind and description, now or hereafter owned by the
        Company or in which the Company may have or may hereafter acquire any interest,
        and all replacements, additions, accessions, substitutions and proceeds thereof,
        arising from the sale or disposition thereof, and where applicable, the proceeds
        of insurance and of any tort claims involving any of the foregoing;

       

       

      (b)           all
        inventory of the Company, including, but not limited to, all goods, wares,
        merchandise, parts, supplies, finished products, other tangible personal
        property, including such inventory as is temporarily out of Company’s custody or
        possession and including any returns upon any accounts or other proceeds,
        including insurance proceeds, resulting from the sale or disposition of any
        of
        the foregoing;

       

       

      (c)           all
        contract rights and general intangibles of the Company, including, without
        limitation, goodwill, trademarks, trade styles, trade names, leasehold
        interests, partnership or joint venture interests, patents and patent
        applications, copyrights, deposit accounts whether now owned or hereafter
        created;

       

       

      (d)           all
        documents, warehouse receipts, instruments and chattel paper of the Company
        whether now owned or hereafter created;

       

       

      (e)           all
        accounts and other receivables, instruments or other forms of obligations
        and
        rights to payment of the Company (herein collectively referred to as
“Accounts”), together with the proceeds thereof, all goods represented by
        such Accounts and all such goods that may be returned by the Company’s
        customers, and all proceeds of any insurance thereon, and all guarantees,
        securities and liens which the Company may hold for the payment of any such
        Accounts including, without limitation, all rights of stoppage in transit,
        replevin and reclamation and as an unpaid vendor and/or lienor, all of which
        the
        Company represents and warrants will be bona fide and existing obligations
        of
        its respective customers, arising out of the sale of goods by the Company
        in the
        ordinary course of business;

       

       

      (f)           to
        the extent assignable, all of the Company’s rights under all present and future
        authorizations, permits, licenses and franchises issued or granted in connection
        with the operations of any of its facilities;

       

       

      (g)           all
        products and proceeds (including, without limitation, insurance proceeds)
        from
        the above-described Pledged Property.

       

       

       A-1