ITEX CORPORATION
                             SECURED PROMISSORY NOTE
                                                                 October 2, 2003
$300,000                                                          Sacramento, CA


For valuable consideration, receipt of which is hereby acknowledged, ITEX
Corporation, a Nevada Corporation (the "Company"), hereby unconditionally
promises to pay to the order of Steven White, or his registered assigns (the
"Payee") in lawful money of the United States of America and in immediately
available funds at Sacramento, California the principal sum of Three Hundred
Thousand Dollars ($300,000) together with interest in the amount specified
below. The unpaid principal from time to time outstanding shall bear interest
prior to maturity at an annual rate of interest equal to eight percent (8.0%)
per annum, and all interest accrued on the outstanding principal balance of this
Note shall be due and payable as provided below.

The Company agrees to pay the entire amount due hereunder, including principal
and all accrued and unpaid interest, as soon as practicable out of available
cash flow of the Company, but in no event later than October 1, 2004 ("Maturity
Date"). Notwithstanding the foregoing, the entire unpaid principal sum of this
Note, together with accrued and unpaid interest thereon, shall become
immediately due and payable immediately prior to the earlier to occur of (1) a
Change of Control (as defined below) or (2) an Event of Default (as defined
below). Interest hereon shall be calculated on the basis of a 360-day year
applied to the actual number of days elapsed until all accrued and unpaid
interest is paid in full. All payments of principal and interest shall be
payable in lawful currency of the United States.

         1. Principal. The entire unpaid principal amount of this Note shall be
paid, together with accrued and unpaid interest thereon, on or before the
Maturity Date. Promptly following the payment in full of this Note, the Payee
shall surrender this Note to the Company for cancellation.

         2. Payments. All payments shall be made in lawful money of the United
States of America at such place as the Payee may from time to time designate in
writing to the Company. Payment shall be credited first to the accrued interest
then due and payable and the remainder applied to principal. Prepayment of the
principal of this Note is permitted, in whole or in part, at anytime, without
premium or penalty of any kind. All partial prepayments of principal shall
reduce the principal balance hereunder in reverse order of maturity. All amounts
payable under this Note shall be paid free and clear of, and without reduction
by reason of, any deduction, set-off or counterclaim.

         3. Events of Default. "Event of Default," wherever used herein, means
any one of the following events (whatever the reasons for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):

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(a) in the event that payment of the entire unpaid principal amount of this
Note, together with accrued interest, is not made by the Company within 10 days
of the Maturity Date;

(b) any material breach by the Company of any term, condition, obligation,
covenant, representation or warranty contained in this Note;

(c) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (i) is for relief against the Company in an involuntary
case; (ii) appoints a custodian of the Company or for any, all or substantially
all of the property of the Company; or (iii) orders the liquidation of the
Company;

(d) the commencement of any proceeding or the filing of a petition by or against
the Company under any Bankruptcy Law for liquidation, reorganization or
adjustment of debts or for the modification or adjustment of the rights of
creditors;

(e) any material levy, seizure or attachment of any property of the Company;

(f) the Company ceases or threatens to cease to carry on all or a substantial
part of its business;

(g) the Company is in breach of any material term, condition, obligation,
covenant, representation or warranty under any other material agreement to which
the Company is a party; or

(h) the Company is in default of, or materially breached the terms of, any of
its indebtedness.

         4. Change of Control. "Change of Control," wherever used herein, means
an event involving one transaction or event, or a related series of transactions
or events, in which one of the following occurs: (whatever the reasons for such
Change of Control and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any vote or action of stockholders,
act of company directors, or judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):

(a) The Company issues securities equal to 25% or more of the Company's issued
and outstanding voting securities, determined as a single class, to any
individual, firm, partnership or other entity, including a "group" within the
meaning of section 13(d)(3) of the Securities Exchange Act of 1934;

(b) The Company issues securities equal to 25% or more of the issued and
outstanding common stock of the Company in connection with a merger,
consolidation or other business combination;

(c) The Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving company;

(d) All or substantially all of the Company's assets are sold or transferred;

(e) At such time as a majority of the directors of the Company consists of
individuals who were not nominated for election or re-election, or appointed by,
the incumbent Board of Directors of the Company or persons previously serving on
a committee or sub-committee of the Board of Directors;

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(f) If before the Maturity Date at least a majority of the Board of Directors of
the Company is not composed of persons constituting a majority of the persons
serving as directors on October 2, 2003;

(g) Payee's employment with the Company is terminated prior to the Maturity
Date. For purposes of this paragraph, "termination" shall include constructive
termination, which shall be defined as Payee's responsibilities and authority,
benefits, salary or other compensation or working conditions being materially
reduced. Further, for purposes of this paragraph, a "termination" shall be
deemed to occur upon any of the following events: (i) the mutual agreement of
Payee and the Company in writing; (ii) the death or partial or total disability
of Payee, (iii) notice of termination by the Company for cause; (iv) the
Company's cessation of business; (v) notice of termination by the Company
without cause; or (vi) upon a Change in Control (as defined above).

         5. Acceleration of Note. If an Event of Default (as defined in Section
3) or a Change of Control (as defined in Section 4) occurs and is continuing,
then and in every such case the Payee may declare the outstanding principal
amount and accrued interest of this Note to be due and payable immediately, by a
notice in writing to the Company, and upon any such declaration such principal
shall become immediately due and payable. Notwithstanding the foregoing, if an
Event of Default referenced in Section 3.3 or 3.4 or a Change of Control
referenced in Section 4 occurs, the outstanding principal amount and accrued
interest of this Note shall automatically become due and payable immediately
without any declaration or other action on the part of the Payee all of which
are hereby expressly waived by the Company. At any time after the outstanding
principal amount and accrued interest of this Note shall become immediately due
and payable and before a judgment or decree for payment of the money due has
been obtained, the Payee, by written notice to the Company, may rescind and
annul any acceleration and its consequences. Time is of the essence hereof and
if any Event of Default or Change of Control has occurred and is continuing, the
principal amount due under this Note shall continue as an obligation of the
Company until fully paid, and the Company further agrees to pay all costs and
expenses incurred by Payee in collecting or enforcing payment to the extent
allowed by law and all other sums owed by the Company under this Note. Payment
may be enforced and recovered in whole or in part at any time by one or more of
the remedies provided to Payee in this Note. The remedies of Payee shall be
cumulative and concurrent and may be pursued singularly, successively or
together, at the sole discretion of Payee, and may be exercised as often as
occasion therefore shall occur; and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release thereof.

         6. Priority. This Note shall not be subordinate or junior to any of the
Company's obligations incurred prior to or after the date of this Note, except
as required or permitted by law or as otherwise agreed to by the Payee.

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         7. Security Interest. This Note is secured by all of the assets of the
Company in accordance with a separate security agreement dated as of October 2,
2003 (the "Security Agreement"), between the Company and Payee. In case of an
Event of Default (as defined above), the Holder shall have the rights set forth
in the Security Agreement.

         8. Definitions. The following terms shall have the meanings set forth
below:

         "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law or the law of any other jurisdiction for the relief of debtors,
including without limitation, Canadian federal or provincial law.

         "Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of Washington are authorized or obligated to
close.

         9. Successors. The terms and conditions of this Note shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties. This Note may be transferred by the Payee at any time without the
consent of the Company. The Payee shall give prior written notice to the Company
of any transfer of this Note. Upon transfer, Payee shall surrender the original
Note for registration of transfer, duly endorsed, or accompanied by a duly
executed written instrument of transfer in form satisfactory to the Company.
Thereupon, a new note for the same principal amount and interest will be issued
to, and registered in the name of, the transferee. Interest and principal are
payable only to the registered holder of this Note.

         10. Delegation. The Company shall not delegate or assign any of its
obligations hereunder without the prior written consent of Payee.

         11. Waivers. The holder of this Note and all successors thereof shall
have all the rights of a holder in due course as provided by the Uniform
Commercial Code and the other laws of the state of Washington. The Company
waives demand, presentment for payment, notice of dishonor, protest, notice of
protest and notice of non-payment of this Note and all other notices or
requirements that might otherwise be required by law. The Payee shall not be
deemed by any act of omission or commission to have waived any of his rights or
remedies hereunder unless such waiver is in writing and expressly stated as such
and signed by the Payee and then only to the extent specifically set forth in
the writing. A waiver of one event shall not be construed as continuing or a bar
to or wavier of any right or remedy to a subsequent event.

         12. Notices. Any notice required or permitted by this Note shall be in
writing and shall be deemed sufficient upon receipt, when delivered personally
or by courier, overnight delivery service or confirmed facsimile, or 48 hours
after being deposited in the U.S. mail as certified or registered mail with
postage prepaid, if such notice is addressed to the party to be notified at such
party's address or facsimile number as set forth below or as subsequently
modified by written notice.

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         If to Payee:                                If to the Company:

         Steven White                                ITEX Corporation
         3216 162nd Pl. SE                           3400 Cottage Way
         Bellevue, WA  98008                         Sacramento, CA 95825

         13. Amendments, Waivers or Termination. Any term of this Note may be
amended or waived only with the written consent of the Company and the Payee.
Any amendment or waiver affected in accordance with this Section 12 shall be
binding upon the Payee and each transferee of this Note and the Company.

         14. Governing Law. This Note and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.

         15. Action to Collect on Note. If action is instituted to collect on
this Note, the Company promises to pay all costs and expenses, including
reasonable attorney's fees, incurred in connection with such action.

         16. Loss of Note. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and indemnity satisfactory to the Company (in case of loss,
theft or destruction) or surrender and cancellation of such Note (in the case of
mutilation), the Company will make and deliver in lieu of such Note a new Note
of like tenor.


         IN WITNESS WHEREOF, the Company has caused this Note to be signed by
its duly authorized officer as of the date set forth above.


THE COMPANY:

ITEX Corporation

/s/  John Wade
-----------------------------
By:  John Wade, Treasurer


AGREED TO AND ACCEPTED:


Payee:

/s/  Steve White
------------------------------
Steven White, Individually

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                               SECURITY AGREEMENT


This SECURITY AGREEMENT is made on this 2nd day of October, 2003 between ITEX
CORPORATION, a Nevada corporation ("Debtor"), and Steven White, an individual
("Secured Party").

         WHEREAS, the Debtor and the Secured Party are parties to that certain
Secured Promissory Note dated as of October 2, 2003 (the "Secured Promissory
Note") in the original principal amount of $300,000,, pursuant to which the
Secured Party, subject to the terms and conditions contained therein, has acted
to extend credit to the Debtor; and

         WHEREAS, the parties intend that the Debtor's obligations to repay the
Secured Promissory Note be secured by all of the assets of the Debtor;

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

         1. Definitions. All capitalized terms used herein without definitions
shall have the respective meanings provided therefor in the Secured Promissory
Note. The term "State," as used herein, means the State of California. All terms
defined in the Uniform Commercial Code of the State and used herein shall have
the same definitions herein as specified therein. However, if a term is defined
in Article 9 of the Uniform Commercial Code of the State differently than in
another Article of the Uniform Commercial Code of the State, the term has the
meaning specified in Article 9. The term "Obligations," as used herein, means
all of the indebtedness, obligations and liabilities of the Debtor to the
Secured Party, individually or collectively, whether direct or indirect, joint
or several, absolute or contingent, due or to become due, now existing or
hereafter arising under or in respect of the Secured Promissory Note executed
and delivered pursuant thereto or in connection therewith, or this Agreement
(together, the "Loan documents"), and the term "Event of Default," as used
herein, means the failure of the Debtor to pay or perform any of the Obligations
as and when due to be paid or performed under the terms of the Secured
Promissory Note.

2. Grant of Security Interest.

         2.1 The Debtor hereby grants to the Secured Party, to secure the
payment and performance in full of all of the Obligations, a security interest
in and so pledges and assigns to the Secured Party the following properties,
assets and rights of the Debtor, wherever located, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof (all of the
same being hereinafter called the "Collateral"): all personal and fixture
property of every kind and nature including without limitation all goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts (including
health-care-insurance receivables), chattel paper (whether tangible or
electronic), deposit accounts, letter-of-credit rights (whether or not the
letter of credit is evidenced by a writing), commercial tort claims, securities
and all other investment property, supporting obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, and all
general intangibles (including all payment intangibles). The Secured Party
acknowledges that the attachment of its security interest in any additional
commercial tort claim as original collateral is subject to the Debtor's
compliance with Section 4.7.

         2.2 Trademark Security. As additional collateral, Debtor assigns to
Secured Party, a security interest in, and a mortgage upon, all of Debtor's
right, title and interest in, to and under the following property, in each case
whether now or hereafter existing or arising or in which Debtor now has or
hereafter owns, acquires or develops an interest and wherever located:

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         (i) all state (including common law), federal and foreign trademarks,
service marks and trade names, and applications for registration of such
trademarks, service marks and trade names (but excluding any application to
register any trademark, service mark or other mark prior to the filing under
applicable law of a verified statement of use (or the equivalent) for such
trademark, service mark or other mark to the extent the creation of a security
interest therein or the grant of a mortgage thereon would void or invalidate
such trademark, service mark or other mark), all licenses relating to any of the
foregoing and all income and royalties with respect to any licenses, whether
registered or unregistered and wherever registered, all rights to sue for past,
present or future infringement or unconsented use thereof, all rights arising
therefrom and pertaining thereto and all reissues, extensions and renewals
thereof;

         (ii) the entire goodwill of or associated with the businesses now or
hereafter conducted by Debtor connected with and symbolized by any of the
aforementioned properties and assets;

         (iii) all general intangibles and all intangible intellectual or other
similar property of Debtor of any kind or nature, associated with or arising out
of any of the aforementioned properties and assets and not otherwise described
above; and

         (iv) all proceeds of any and all of the foregoing Collateral (including
license royalties, rights to payment, accounts receivable and proceeds of
infringement suits) and, to the extent not otherwise included, all payments
under insurance (whether or not Secured Party is the loss payee thereof) or any
indemnity, warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to the foregoing Collateral.

         2.3 Continuing Security Interest. Debtor agrees that this Agreement
shall create a continuing security interest in the Collateral which shall remain
in effect until terminated in accordance with Section 9.

3. Authorization to File Financing Statements. The Debtor hereby irrevocably
authorizes the Secured Party at any time and from time to time to file in any
filing office in any Uniform Commercial Code jurisdiction any initial financing
statements and amendments thereto that (a) indicate the Collateral (i) as all
assets of the Debtor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the Uniform Commercial Code of the State or such jurisdiction, or (ii) as
being of an equal or lesser scope or with greater detail, and (b) provide any
other information required by part 5 of Article 9 of the Uniform Commercial Code
of the State, or such other jurisdiction, for the sufficiency or filing office
acceptance of any financing statement or amendment, including (i) whether the
Debtor is an organization, the type of organization and any organizational
identification number issued to the Debtor and, (ii) in the case of a financing
statement filed as a fixture filing or indicating Collateral as as-extracted
collateral or timber to be cut, a sufficient description of real property to
which the Collateral relates. The Debtor agrees to furnish any such information
to the Secured Party promptly upon the Secured Party's request.


4. Other Actions. To further the attachment, perfection and first priority of,
and the ability of the Secured Party to enforce, the Secured Party's security
interest in the Collateral, and without limitation on the Debtor's other
obligations in this Agreement, the Debtor agrees, in each case at the Debtor's
expense, to take the following actions with respect to the following Collateral
upon the Secured Party's request:

         4.1. Promissory Notes and Tangible Chattel Paper. If the Debtor shall
at any time hold or acquire any promissory notes or tangible chattel paper, the
Debtor shall forthwith endorse, assign and deliver the same to the Secured
Party, accompanied by such instruments of transfer or assignment duly executed
in blank as the Secured Party may from time to time specify.

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         4.2. Deposit Accounts. For each deposit account that the Debtor at any
time opens or maintains, the Debtor shall, at the Secured Party's request and
option, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (a) cause the depositary bank to comply at any time with
instructions from the Secured Party to such depositary bank directing the
disposition of funds from time to time credited to such deposit account, without
further consent of the Debtor, or (b) arrange for the Secured Party to become
the customer of the depositary bank with respect to the deposit account, with
the Debtor being permitted, only with the consent of the Secured Party, to
exercise rights to withdraw funds from such deposit account. The Secured Party
agrees with the Debtor that the Secured Party shall not give any such
instructions or withhold any withdrawal rights from the Debtor, unless an Event
of Default has occurred and is continuing, or would occur, if effect were given
to any withdrawal not otherwise permitted by the Loan Documents. The provisions
of this paragraph shall not apply to (i) any deposit account for which the
Debtor, the depositary bank and the Secured Party have entered into a cash
collateral agreement specially negotiated among the Debtor, the depositary bank
and the Secured Party for the specific purpose set forth therein, (ii) a deposit
account for which the Secured Party is the depositary bank and is in automatic
control, and (iii) deposit accounts specially and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of the Debtor's salaried employees.

         4.3. Investment Property. If the Debtor shall at any time hold or
acquire any certificated securities, the Debtor shall forthwith endorse, assign
and deliver the same to the Secured Party, accompanied by such instruments of
transfer or assignment duly executed in blank as the Secured Party may from time
to time specify. If any securities now or hereafter acquired by the Debtor are
uncertificated and are issued to the Debtor or its nominee directly by the
issuer thereof, the Debtor shall immediately notify the Secured Party thereof
and, at the Secured Party's request and option, pursuant to an agreement in form
and substance satisfactory to the Secured Party, either (a) cause the issuer to
agree to comply with instructions from the Secured Party as to such securities,
without further consent of the Debtor or such nominee, or (b) arrange for the
Secured Party to become the registered owner of the securities. If any
securities, whether certificated or uncertificated, or other investment property
now or hereafter acquired by the Debtor are held by the Debtor or its nominee
through a securities intermediary or commodity intermediary, the Debtor shall
immediately notify the Secured Party thereof and, at the Secured Party's request
and option, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (i) cause such securities intermediary or (as the case may
be) commodity intermediary to agree to comply with entitlement orders or other
instructions from the Secured Party to such securities intermediary as to such
securities or other investment property, or (as the case may be) to apply any
value distributed on account of any commodity contract as directed by the
Secured Party to such commodity intermediary, in each case without further
consent of the Debtor or such nominee, or (ii) in the case of financial assets
or other investment property held through a securities intermediary, arrange for
the Secured Party to become the entitlement holder with respect to such
investment property, with the Debtor being permitted, only with the consent of
the Secured Party, to exercise rights to withdraw or otherwise deal with such
investment property. The Secured Party agrees with the Debtor that the Secured
Party shall not give any such entitlement orders or instructions or directions
to any such issuer, securities intermediary or commodity intermediary, and shall
not withhold its consent to the exercise of any withdrawal or dealing rights by
the Debtor, unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights not otherwise
permitted by the Loan Documents, would occur. The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which the Secured Party is the securities intermediary.

         4.4. Collateral in the Possession of a Bailee. If any Collateral is at
any time in the possession of a bailee, the Debtor shall promptly notify the
Secured Party thereof and, at the Secured Party's request and option, shall
promptly obtain an acknowledgement from the bailee, in form and substance
satisfactory to the Secured Party, that the bailee holds such Collateral for the
benefit of the Secured Party, and that such bailee agrees to comply, without
further consent of the Debtor, with instructions from the Secured Party as to
such Collateral. The Secured Party agrees with the Debtor that the Secured Party
shall not give any such instructions unless an Event of Default has occurred and
is continuing or would occur after taking into account any action by the Debtor
with respect to the bailee.

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         4.5. Electronic Chattel Paper and Transferable Records. If the Debtor
at any time holds or acquires an interest in any electronic chattel paper or any
"transferable record," as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, the Debtor shall promptly notify the Secured Party thereof and, at
the request and option of the Secured Party, shall take such action as the
Secured Party may reasonably request to vest in the Secured Party control, under
Section 9-105 of the Uniform Commercial Code, of such electronic chattel paper
or control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Secured Party agrees with the Debtor that the Secured
Party will arrange, pursuant to procedures satisfactory to the Secured Party and
so long as such procedures will not result in the Secured Party's loss of
control, for the Debtor to make alterations to the electronic chattel paper or
transferable record permitted under UCC Section 9-105 or, as the case may be,
Section 201 of the federal Electronic Signatures in Global and National Commerce
Act or Section 16 of the Uniform Electronic Transactions Act for a party in
control to make without loss of control, unless an Event of Default has occurred
and is continuing or would occur after taking into account any action by the
Debtor with respect to such electronic chattel paper or transferable record.

         4.6. Letter-of-Credit Rights. If the Debtor is at any time a
beneficiary under a letter of credit, the Debtor shall promptly notify the
Secured Party thereof and, at the request and option of the Secured Party, the
Debtor shall, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (i) arrange for the issuer and any confirmer or other
nominated person of such letter of credit to consent to an assignment to the
Secured Party of the proceeds of the letter of credit, or (ii) arrange for the
Secured Party to become the transferee beneficiary of the letter of credit, with
the Secured Party agreeing, in each case, that the proceeds of the letter to
credit are to be applied as provided in the Loan Documents.

         4.7 Commercial Tort Claims. If the Debtor shall at any time hold or
acquire a commercial tort claim, the Debtor shall immediately notify the Secured
Party in a writing signed by the Debtor of the particulars thereof and grant to
the Secured Party in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to the Secured Party.

         4.8. Other Actions as to Any and All Collateral. The Debtor further
agrees, at the request and option of the Secured Party, to take any and all
other actions the Secured Party may determine to be necessary or useful for the
attachment, perfection and first priority of, and the ability of the Secured
Party to enforce, the Secured Party's security interest in any and all of the
Collateral, including, without limitation, (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under
the Uniform Commercial Code, to the extent, if any, that the Debtor's signature
thereon is required therefor, (b) causing the Secured Party's name to be noted
as secured party on any certificate of title for a titled good if such notation
is a condition to attachment, perfection or priority of, or ability of the
Secured Party to enforce, the Secured Party's security interest in such
Collateral, (c) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Secured Party to enforce, the Secured Party's security interest in such
Collateral, (d) obtaining governmental and other third party waivers, consents
and approvals in form and substance satisfactory to Secured Party, including,
without limitation, any consent of any licensor, lessor or other person
obligated on Collateral, (e) obtaining waivers from mortgagees and landlords in
form and substance satisfactory to the Secured Party and (f) taking all actions
under any earlier versions of the Uniform Commercial Code or under any other
law, as reasonably determined by the Secured Party to be applicable in any
relevant Uniform Commercial Code or other jurisdiction, including any foreign
jurisdiction.

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5. Representations and Warranties Concerning Debtor's Legal Status. The Debtor
has delivered to the Secured Party a certificate signed by the Debtor and
entitled "Perfection Certificate" (the "Perfection Certificate") attached as
Annex A. The Debtor represents and warrants to the Secured Party as follows: (a)
the Debtor's exact legal name is that indicated on the Perfection Certificate
and on the signature page hereof, (b) the Debtor is an organization of the type,
and is organized in the jurisdiction set forth in the Perfection Certificate,
(c) the Perfection Certificate accurately sets forth the Debtor's organizational
identification number or accurately states that the Debtor has none, (d) the
Perfection Certificate accurately sets forth the Debtor's place of business or,
if more than one, its chief executive office, as well as the Debtor's mailing
address, if different, (e) all other information set forth on the Perfection
Certificate pertaining to the Debtor is accurate and complete, and (f) that
there has been no change in any information provided in the Perfection
Certificate since the date on which it was executed by the Debtor.

6. Covenants Concerning Debtor's Legal Status. The Debtor covenants with the
Secured Party as follows: (a) without providing at least 30 days prior written
notice to the Secured Party, the Debtor will not change its name, its place of
business or, if more than one, chief executive office, or its mailing address or
organizational identification number if it has one, (b) if the Debtor does not
have an organizational identification number and later obtains one, the Debtor
shall forthwith notify the Secured Party of such organizational identification
number, and (c) the Debtor will not change its type of organization,
jurisdiction of organization or other legal structure.

7. Covenants Concerning Collateral. The Debtor covenants with the Secured Party
as follows: (a) the Collateral, to the extent not delivered to the Secured Party
pursuant to Section 4, will be kept at those locations listed on the Perfection
Certificate and the Debtor will not remove the Collateral from such locations,
without providing at least thirty days prior written notice to the Secured
Party, (b) except for the security interest herein granted, the Debtor shall be
the owner of or have other rights in the Collateral free from any right or claim
of any other person, lien, security interest or other encumbrance, and the
Debtor shall defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to the Secured
Party, (c) the Debtor shall not pledge, mortgage or create, or suffer to exist
any right of any person in or claim by any person to the Collateral, or any
security interest, lien or encumbrance in the Collateral in favor of any person,
other than the Secured Party, (d) the Debtor will keep the Collateral in good
order and repair and will not use the same in violation of law or any policy of
insurance thereon, (e) the Debtor will permit the Secured Party, or its
designee, to inspect the Collateral at any reasonable time, wherever located,
(f) the Debtor will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement, (g)
the Debtor will continue to operate, its business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances, and (h) the Debtor will not sell or otherwise dispose,
or offer to sell or otherwise dispose, of the Collateral or any interest therein
except for sales and leases of inventory in the ordinary course of business.

8. Insurance.

         8.1. Maintenance of Insurance. The Debtor will maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be in
accordance with general practices of businesses engaged in similar activities in
similar geographic areas. Such insurance shall be in such minimum amounts that
the Debtor will not be deemed a co-insurer under applicable insurance laws,
regulations and policies and otherwise shall be in such amounts, contain such
terms, be in such forms and be for such periods as may be reasonably
satisfactory to the Secured Party. In addition, all such insurance shall be
payable to the Secured Party as loss payee under a "standard" or "Sacramento"
loss payee clause. Without limiting the foregoing, the Debtor will (i) keep all
of its physical property insured with casualty or physical hazard insurance on
an "all risks" basis, with broad form flood and earthquake coverages and
electronic data processing coverage, with a full replacement cost endorsement
and an "agreed amount" clause in an amount equal to 100% of the full replacement
cost of such property, (ii) maintain all such workers' compensation or similar
insurance as may be required by law, and (iii) maintain, in amounts and with
deductibles equal to those generally maintained by businesses engaged in similar
activities in similar geographic areas, general public liability insurance
against claims of bodily injury, death or property damage occurring, on, in or
about the properties of the Debtor; business interruption insurance; and product
liability insurance.

                                       5

<PAGE>

         8.2. Insurance Proceeds. The proceeds of any casualty insurance in
respect of any casualty loss of any of the Collateral shall, subject to the
rights, if any, of other parties with an interest having priority in the
property covered thereby, (i) so long as no Default or Event of Default has
occurred and is continuing and to the extent that the amount of such proceeds is
less than $50,000 be disbursed to the Debtor for direct application by the
Debtor solely to the repair or replacement of the Debtor's property so damaged
or destroyed, and (ii) in all other circumstances, be held by the Secured Party
as cash collateral for the Obligations. The Secured Party may, at its sole
option, disburse from time to time all or any part of such proceeds so held as
cash collateral, upon such terms and conditions as the Secured Party may
reasonably prescribe, for direct application by the Debtor solely to the repair
or replacement of the Debtor's property so damaged or destroyed, or the Secured
Party may apply all or any part of such proceeds to the Obligations with the
commitment (if not then terminated) being reduced by the amount so applied to
the Obligations.

         8.3. Continuation of Insurance. All policies of insurance shall provide
for at least 30 days prior written cancellation notice to the Secured Party. In
the event of failure by the Debtor to provide and maintain insurance as herein
provided, the Secured Party may, at its option, provide such insurance and
charge the amount thereof to the Debtor. The Debtor shall furnish the Secured
Party with certificates of insurance and policies evidencing compliance with the
foregoing insurance provision.


9. Collateral Protection Expenses; Preservation of Collateral.

         9.1. Expenses Incurred by Secured Party. In the Secured Party's
discretion, if the Debtor fails to do so, the Secured Party may discharge taxes
and other encumbrances at any time levied or placed on any of the Collateral,
maintain any of the Collateral, make repairs thereto and pay any necessary
filing fees or insurance premiums. The Debtor agrees to reimburse the Secured
Party on demand for all expenditures so made. The Secured Party shall have no
obligation to the Debtor to make any such expenditures, nor shall the making
thereof be construed as the waiver or cure of any Default or Event of Default.

         9.2. Secured Party's Obligations and Duties. Anything herein to the
contrary notwithstanding, the Debtor shall remain obligated and liable under
each contract or agreement comprised in the Collateral to be observed or
performed by the Debtor thereunder. The Secured Party shall not have any
obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Secured Party of any payment
relating to any of the Collateral, nor shall the Secured Party be obligated in
any manner to perform any of the obligations of the Debtor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Secured Party in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled at
any time or times. The Secured Party's sole duty with respect to the custody,
safe keeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the Uniform Commercial Code of the State or otherwise,
shall be to deal with such Collateral in the same manner as the Secured Party
deals with similar property for its own account.

                                       6

<PAGE>

10. Securities and Deposits. The Secured Party may at any time following and
during the continuance of a Default and Event of Default, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations. Whether or not any Obligations are due, the Secured
Party may following and during the continuance of a Default and Event of Default
demand, sue for, collect, or make any settlement or compromise which it deems
desirable with respect to the Collateral. Regardless of the adequacy of
Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Secured Party to the Debtor may at any
time be applied to or set off against any of the Obligations then due and owing.

11. Notification to Account Debtors and Other Persons Obligated on Collateral.
The Debtor shall, at the request and option of the Secured Party, notify account
debtors and other persons obligated on any of the Collateral of the security
interest of the Secured Party in any account, chattel paper, general intangible,
instrument or other Collateral and that payment thereof is to be made directly
to the Secured Party or to any financial institution designated by the Secured
Party as the Secured Party's agent therefor, and the Secured Party may itself,
without notice to or demand upon the Debtor, so notify account debtors and other
persons obligated on Collateral. After the making of such a request or the
giving of any such notification, the Debtor shall hold any proceeds of
collection of accounts, chattel paper, general intangibles, instruments and
other Collateral received by the Debtor as trustee for the Secured Party without
commingling the same with other funds of the Debtor and shall turn the same over
to the Secured Party in the identical form received, together with any necessary
endorsements or assignments. The Secured Party shall apply the proceeds of
collection of accounts, chattel paper, general intangibles, instruments and
other Collateral received by the Secured Party to the Obligations, such proceeds
to be immediately credited after final payment in cash or other immediately
available funds of the items giving rise to them.

12. Power of Attorney.

         12.1. Appointment and Powers of Secured Party. The Debtor hereby
irrevocably constitutes and appoints the Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of the Debtor or in the Secured Party's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on
behalf of the Debtor, without notice to or assent by the Debtor, to do the
following:

         (a) upon the occurrence and during the continuance of a Default or an
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise dispose of or deal with any of the Collateral in such
manner as is consistent with the Uniform Commercial Code of the State and as
fully and completely as though the Secured Party were the absolute owner thereof
for all purposes, and to do, at the Debtor's expense, at any time, or from time
to time, all acts and things which the Secured Party deems necessary or useful
to protect, preserve or realize upon the Collateral and the Secured Party's
security interest therein, in order to effect the intent of this Agreement, all
at least as fully and effectively as the Debtor might do, including, without
limitation, (i) the filing and prosecuting of registration and transfer
applications with the appropriate federal, state, local or other agencies or
authorities with respect to trademarks, copyrights and patentable inventions and
processes, (ii) upon written notice to the Debtor, the exercise of voting rights
with respect to voting securities, which rights may be exercised, if the Secured
Party so elects, with a view to causing the liquidation of assets of the issuer
of any such securities, and (iii) the execution, delivery and recording, in
connection with any sale or other disposition of any Collateral, of the
endorsements, assignments or other instruments of conveyance or transfer with
respect to such Collateral; and

                                       7

<PAGE>

         (b) to the extent that the Debtor's authorization given in Section 3 is
not sufficient, to file such financing statements with respect hereto, with or
without the Debtor's signature, or a photocopy of this Agreement in substitution
for a financing statement, as the Secured Party may deem appropriate and to
execute in the Debtor's name such financing statements and amendments thereto
and continuation statements which may require the Debtor's signature.

         12.2. Ratification by Debtor. To the extent permitted by law, the
Debtor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

         12.3. No Duty on Secured Party. The powers conferred on the Secured
Party hereunder are solely to protect its interests in the Collateral and shall
not impose any duty upon it to exercise any such powers. The Secured Party shall
be accountable only for the amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Debtor for any act or failure to
act, except for the Secured Party's own gross negligence or willful misconduct.

13. Rights and Remedies. If an Event of Default shall have occurred and be
continuing, the Secured Party, without any other notice to or demand upon the
Debtor have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Uniform Commercial Code of the State and any additional rights
and remedies which may be provided to a secured party in any jurisdiction in
which Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Secured Party may, so far
as the Debtor can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Secured Party may
in its discretion require the Debtor to assemble all or any part of the
Collateral at such location or locations within the jurisdiction(s) of the
Debtor's principal office(s) or at such other locations as the Secured Party may
reasonably designate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, the Secured Party shall give to the Debtor at least five Business Days
prior written notice of the time and place of any public sale of Collateral or
of the time after which any private sale or any other intended disposition is to
be made. The Debtor hereby acknowledges that five Business Days prior written
notice of such sale or sales shall be reasonable notice. In addition, the Debtor
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Secured Party's rights and remedies hereunder,
including, without limitation, its right following an Event of Default to take
immediate possession of the Collateral and to exercise its rights and remedies
with respect thereto.

14. Standards for Exercising Rights and Remedies. To the extent that applicable
law imposes duties on the Secured Party to exercise remedies in a commercially
reasonable manner, the Debtor acknowledges and agrees that it is not
commercially unreasonable for the Secured Party (a) to fail to incur expenses
reasonably deemed significant by the Secured Party to prepare Collateral for
disposition or otherwise to fail to complete raw material or work in process
into finished goods or other finished products for disposition, (b) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (c) to fail to exercise collection remedies against account
debtors or other persons obligated on Collateral or to fail to remove liens or
encumbrances on or any adverse claims against Collateral, (d) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other

                                       8

<PAGE>

collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other persons, whether or not in the
same business as the Debtor, for expressions of interest in acquiring all or any
portion of the Collateral, (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature, (h) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, (k) to purchase insurance or
credit enhancements to insure the Secured Party against risks of loss,
collection or disposition of Collateral or to provide to the Secured Party a
guaranteed return from the collection or disposition of Collateral, or (l) to
the extent deemed appropriate by the Secured Party, to obtain the services of
other brokers, investment bankers, consultants and other professionals to assist
the Secured Party in the collection or disposition of any of the Collateral. The
Debtor acknowledges that the purpose of this Section 14 is to provide
non-exhaustive indications of what actions or omissions by the Secured Party
would fulfill the Secured Party's duties under the Uniform Commercial Code or
other law of the State or any other relevant jurisdiction in the Secured Party's
exercise of remedies against the Collateral and that other actions or omissions
by the Secured Party shall not be deemed to fail to fulfill such duties solely
on account of not being indicated in this Section 14. Without limitation upon
the foregoing, nothing contained in this Section 14 shall be construed to grant
any rights to the Debtor or to impose any duties on the Secured Party that would
not have been granted or imposed by this Agreement or by applicable law in the
absence of this Section 14.

15. No Waiver by Secured Party. The Secured Party shall not be deemed to have
waived any of its rights or remedies in respect of the Obligations or the
Collateral unless such waiver shall be in writing and signed by the Secured
Party. No delay or omission on the part of the Secured Party in exercising any
right or remedy shall operate as a waiver of such right or remedy or any other
right or remedy. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion. All rights and remedies
of the Secured Party with respect to the Obligations or the Collateral, whether
evidenced hereby or by any other instrument or papers, shall be cumulative and
may be exercised singularly, alternatively, successively or concurrently at such
time or at such times as the Secured Party deems expedient. 16. Proceeds of
Dispositions; Expenses. The Debtor shall pay to the Secured Party on demand any
and all expenses, including reasonable attorneys' fees and disbursements,
incurred or paid by the Secured Party in protecting, preserving or enforcing the
Secured Party's rights and remedies under or in respect of any of the
Obligations or any of the Collateral. After deducting all of said expenses, the
residue of any proceeds of collection or sale or other disposition of the
Collateral shall, to the extent actually received in cash, be applied to the
payment of the Obligations in such order or preference as the Secured Party may
determine, proper allowance and provision being made for any Obligations not
then due. Upon the final payment and satisfaction in full of all of the
Obligations and after making any payments required by Sections 9-608(a)(1)(C) or
9-615(a)(3) of the Uniform Commercial Code of the State, any excess shall be
returned to the Debtor. In the absence of final payment and satisfaction in full
of all of the Obligations, the Debtor shall remain liable for any deficiency.

17. Overdue Amounts. Until paid, all amounts due and payable by the Debtor
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, interest at the rate of interest for overdue principal
set forth in the Loan Documents.

18. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA. The Debtor agrees that any
action or claim arising out of, or any dispute in connection with, this
Agreement, any rights, remedies, obligations, or duties hereunder, or the
performance or enforcement hereof or thereof, may be brought in the courts of
the State of California sitting in Sacramento County or any federal court
sitting therein and consents to the non-exclusive jurisdiction of such court and
to service of process in any such suit being made upon the Debtor by mail at the
address specified in the Secured Promissory Note. The Debtor hereby waives any
objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court. In the event
the Debtor commences any action in another jurisdiction or venue under any tort
or contract theory arising directly or indirectly from the relationship created
by this agreement, the Secured Party at its option shall be entitled to have the
case transferred to one of the jurisdictions and venues above-described, or if
such transfer cannot be accomplished under applicable law, to have such case
dismissed without prejudice.

                                       9

<PAGE>

19. Waiver of Jury Trial. THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER, OR THE
PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF. Except as prohibited by law, the
Debtor waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. The Debtor (i) certifies that neither the Secured Party nor any
representative, agent or attorney of the Secured Party has represented,
expressly or otherwise, that the Secured Party would not, in the event of
litigation, seek to enforce the foregoing waivers or other waivers contained in
this Agreement, and (ii) acknowledges that, in entering into the Secured
Promissory Note and the other Loan Documents to which the Secured Party is a
party, the Secured Party is relying upon, among other things, the waivers and
certifications contained in this Section 19.

20. Miscellaneous. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Debtor and its respective successors and assigns, and shall inure to the benefit
of the Secured Party and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Debtor acknowledges receipt
of a copy of this Agreement.

IN WITNESS WHEREOF, intending to be legally bound, the Debtor has caused this
Agreement to be duly executed as of the date first above written. SECURED PARTY:


/s/ Steve White
---------------------------------
STEVEN WHITE, Individually

Date:  October 2, 2003


Accepted:

ITEX CORPORATION


/s/  John Wade
----------------------------------
By:  John Wade, Treasurer


                                       10

<PAGE>

CERTIFICATE OF ACKNOWLEDGMENT
STATE OF CALIFORNIA                         )
                                            ) ss.
COUNTY OF SACRAMENTO                        )

Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this_____ day of October, 2003, personally appeared John Wade, to me known
personally, and who, being by me duly sworn, deposes and says that he is the
treasurer of ITEX CORPORATION, and that said instrument was signed and sealed on
behalf of said corporation by authority of its Board of Directors, and said John
Wade acknowledged said instrument to be the free act and deed of said
corporation.

Notary Public
              ---------------------------------------

My commission expires:
                       ---------------------




                                       11

<PAGE>



                                                                         ANNEX A

                             PERFECTION CERTIFICATE

                           (UCC Financing Statements)

The undersigned, the Treasurer and Director of ITEX CORPORATION, a Nevada
corporation (the "Debtor"), hereby certifies, with reference to a certain
Security Agreement dated October 2, 2003 (the "Security Agreement") (terms
defined in such Security Agreement having the same meanings herein as specified
therein), between the Debtor and Steven White, an individual (the "Secured
Party"), to the Secured Party as follows:

1. Name. The exact legal name of the Debtor as that name appears on its
[Certificate of Incorporation] is as follows: ITEX Corporation

2. Other Identifying Factors.
         (a) The following is a mailing address for the Debtor: 3400 Cottage
Way, Sacramento, CA 95825.

         (b) If different from its indicated mailing address, the Debtor's place
of business or, if more than one, its chief executive office is located at the
following address:

                  Address           County           State

                  N/A

         (c) The following is the type of organization of the Debtor:
         Corporation

         (d) The following is the jurisdiction of the Debtor's organization:
         Nevada

         (e) The following is the Debtor's state issued organizational
         identification number [state "None" if the state does not issue such a
         number]:

         File Number: C6527-1985

3. Other Names.

         (a) The following is a list of all other names (including trade names
or similar appellations) used by the Debtor, or any other business or
organization to which the Debtor became the successor by merger, consolidation,
acquisition, change in form, nature or jurisdiction of organization or
otherwise, now or at any time during the past five years:

         N/A

         (b) Attached hereto as Schedule 3 is the information required in
Section 2 for any other business or organization to which the Debtor became the
successor by merger, consolidation, acquisition of assets, change in form,
nature or jurisdiction of organization or otherwise, now or at any time during
the past five years:

4. Other Current Locations.

         (a) The following are all other locations in the United States of
America in which the Debtor maintains any books or records relating to any of
the Collateral consisting of accounts, instruments, chattel paper, general
intangibles or mobile goods:


<PAGE>

         Address                    County           State

         (1)  address               King             Washington
              Seattle, Washington

         (2)  address                                British Columbia, Canada
              Vancouver, B.C.

         (b)  The following are all other places of business of the Debtor in
              the United States of America:

                  Address           County           State

         same as 4(a) above

         (c) The following are all other locations in the United States of
America where any of the Collateral consisting of inventory or equipment is
located:

                  Address           County           State

         same as (a) above

         (d) The following are the names and addresses of all persons or
entities other than the Debtor, such as lessees, consignees, warehousemen or
purchasers of chattel paper, which have possession or are intended to have
possession of any of the Collateral consisting of instruments, chattel paper,
inventory or equipment:

            Name              Mailing Address           County            State

         none

5. Prior Locations.

         (a) Set forth below is the information required by Section 4 (a) or (b)
with respect to each location or place of business previously maintained by the
Debtor at any time during the past five years in a state in which the Debtor has
previously maintained a location or place of business at any time during the
past four months:

                  Address           County           State

         (1)  address                                New York
              New York, NY

         (1)  address                                Ontario, Canada
              Toronto, Ontario

         (3)  3400 Cottage Way      Sacramento       California
              Sacramento, CA 95825

     (b) Set forth below is the information required by Section 4(c) or (d) with
respect to each other location at which, or other person or entity with which,
any of the Collateral consisting of inventory or equipment has been previously
held at any time during the past twelve months:

                Name             Mailing Address          County           State

         same as 5(a) above

                                     A - 2

<PAGE>


6. Fixtures. Attached hereto as Schedule 6 is the information required by UCC
Section 9-502(b) or Section 9-402(5) of each state in which any of the
Collateral consisting of fixtures are or are to be located and the name and
address of each real estate recording office where a mortgage on the real estate
on which such fixtures are or are to be located would be recorded.

          N/A

7. Unusual Transactions. Except for those purchases, acquisitions and other
transactions described on Schedule 3 or on Schedule 7 attached hereto, all of
the Collateral has been originated by the Debtor in the ordinary course of the
Debtor's business or consists of goods which have been acquired by the Debtor in
the ordinary course from a person in the business of selling goods of that kind.

8. UCC Filings. A duly authorized financing statement, in a form acceptable to
the Secured Party and containing the indication of the Collateral set forth on
Schedule 8(A) has been duly filed in the central Uniform Commercial Code filing
office in the jurisdiction identified in Section 2(d) and in each real estate
recording office referred to on Schedule 6 hereto. Attached hereto as Schedule
8(B) is a true copy of each such filing duly acknowledged or otherwise
identified by the filing office.

9. Schedule of Filing. Attached hereto as Schedule 9 is a schedule setting forth
filing information with respect to the filings described in Section 8.

10. Filing Fees. All filing fees and taxes payable in connection with the
filings described in Section 8 have been paid.

IN WITNESS WHEREOF, I have hereunto signed this Certificate on October ___,
2003.



ITEX CORPORATION


/s/  John Wade
------------------------
By: JOHN WADE, TREASURER


                                     A - 3