Document:

EXHIBIT 4.59

                            CAPE SYSTEMS GROUP, INC.
                                3619 KENNEDY ROAD
                       SOUTH PLAINFIELD, NEW JERSEY 07080

                                             May 2, 2006

AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millennium Capital Partners II, LLC
1044 Northern Boulevard, Suite 302
Roslyn, New York 11576

         RE:      Waiver of Defaults
                  ------------------

Gentlemen:

This letter shall serve as a waiver to defaults and damages  resulting from such
defaults   under  the   Securities   Purchase   Agreements  and  all  agreements
incorporated therein by reference (collectively, the "Agreements"), between Cape
Systems Group, Inc. (formerly Vertex Interactive, Inc.) (the "Company") and each
of:  (i) AJW  Partners,  LLC;  (ii) AJW  Offshore,  Ltd.;  (iii)  AJW  Qualified
Partners,  LLC; and (iv) New Millennium  Capital Partners II, LLC (collectively,
the  "Purchasers")  dated as of April 28, 2004 and amended  December  30,  2004,
January 11, 2005 and August 10, 2005. The Purchasers hereby consent to waive any
and all defaults by the Company  pursuant to the Agreements  that occurred on or
before March 31, 2006. The Purchasers  hereby waive the right to collect any and
all  liquidated  damages,  penalties  and/or fines  (whether in shares of common
stock or in cash) arising from any default under the Agreements that occurred on
or before March 31, 2006.

                                           CAPE SYSTEMS GROUP, INC.

                                           /s/ NICHOLAS R. TOMS
                                           --------------------
                                           By:  Nicholas R. Toms
                                           Title:  Chief Executive Officer

Accepted to and agreed this 2nd day of May, 2006:

AJW PARTNERS, LLC
By:  SMS Group, LLC

By:  /s/ COREY S. RIBOTSKY
     ---------------------
     Corey S. Ribotsky
     Manager

AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC

By:  /s/ COREY S. RIBOTSKY
     ---------------------
     Corey S. Ribotsky
     Manager

<PAGE>

AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC

By:  /s/ COREY S. RIBOTSKY
     ---------------------
     Corey S. Ribotsky
     Manager

NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  First Street Manager II, LLC

By:  /s/ COREY S. RIBOTSKY
     ---------------------
     Corey S. Ribotsky
     ManagerHARRIS & HARRIS GROUP, INC.
                           2006 EQUITY INCENTIVE PLAN
                                     FORM OF
                        INCENTIVE STOCK OPTION AGREEMENT

      THIS INCENTIVE STOCK OPTION AGREEMENT (the "Agreement"), dated as of
[____________], 20[__], is made between Harris & Harris Group, Inc., a
corporation organized under the laws of the State of New York (the "Company"),
and [_________________] (the "Optionee").

      WHEREAS, the Company has adopted the Harris & Harris Group, Inc., 2006
Equity Incentive Plan (the "Plan"), pursuant to which options may be granted to
purchase Stock;

      WHEREAS, the Company desires to grant to the Optionee an incentive stock
option (or "ISO") to purchase the number of shares of Stock provided for herein;

      NOW, THEREFORE, in consideration of the recitals and the mutual agreements
herein contained, the parties hereto agree as follows:

Section 1. Grant of Option

      (a) Grant of Option. The Company hereby grants to the Optionee an Option
to purchase [______] shares of Stock on the terms and conditions set forth in
this Agreement and as otherwise provided in the Plan. The Option is intended to
be, and to the extent permitted shall be construed as, an ISO within the meaning
of Section 422 of the Code. To the extent the Option does not qualify as an ISO,
the Option shall be treated as a non-qualified stock option.

      (b) Incorporation of Plan. The provisions of the Plan are hereby
incorporated herein by reference. Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any capitalized terms not otherwise defined in this Agreement shall
have the definitions set forth in the Plan. The Board shall have final authority
to interpret and construe the Plan and this Agreement and to make any and all
determinations under them, and its decision shall be binding and conclusive upon
the Optionee and his/her legal representative in respect of any questions
arising under the Plan or this Agreement. To the extent that the Committee has
been given the authority to administer and interpret the Plan, the Committee
shall also have all of the authority otherwise granted to the Board under this
Agreement.

<PAGE>

Section 2. Terms and Conditions of Option

      (a) Exercise Price. The price at which the Optionee shall be entitled to
purchase shares of Stock upon the exercise of all or any portion of the Option
shall be $[______] per share.

      (b) Expiration Date. The Option shall expire at the close of business on
the [tenth] anniversary of the date of this Agreement.

      (c) Exercisability of Option. Subject to the other terms of this Agreement
regarding the exercisability of the Option, the Option shall become exercisable
as of the dates set forth below for the cumulative percentages of Stock subject
to the Option set forth below, provided the Optionee is employed by the Company
as of each such date:

             Date                      Percentage of Shares

         [--------------]                   [-----]

         [--------------]                   [-----]

         [--------------]                   [-----]

         [--------------]                   [-----]

The Board may, but shall not be required to, provide at any time for the
acceleration of the schedule set forth above.

      (d) Method of Exercise. The Option may be exercised only by written notice
in such form as the Company may adopt from time to time, delivered in person or
by mail in accordance with Section 3(a) and accompanied by payment therefor or
pursuant to such other procedure as the Company may adopt from time to time. The
purchase price of the shares of Stock shall be paid to the Company (i) in cash
or its equivalent, (ii) to the extent permitted by law, by a "broker cashless
exercise" procedure approved by the Board, [(iii) by having shares of Stock
otherwise deliverable upon exercise of the Option withheld by the Company,] or
(iii) [(iv)] by a combination of the foregoing methods. If requested by the
Board, the Optionee shall deliver this Agreement evidencing the Option to the
Chief Compliance Officer of the Company who shall endorse thereon a notation of
such exercise and return such Agreement to the Optionee. [A minimum of 100
shares of Stock must be purchased upon the exercise of the Option unless a
lesser number of shares of Stock so purchased constitutes the total number of
shares of Stock then purchasable under the Option.]

      (e) Exercise Following Termination of Employment. Subject to Section 2(g),
in the event that the Optionee ceases to be employed by the Company, that
portion of the Option that is not then exercisable shall immediately terminate
and that portion of the Option that is exercisable at the time of the Optionee's
termination of employment with the Company shall terminate as follows:

                                       2
<PAGE>

                  (i) If the Optionee's termination of employment is due to
         his/her disability (within the meaning of Section 22(e)(3) of the
         Code), the Option (to the extent exercisable at the time of the
         Optionee's termination) shall be exercisable for a period of [no more
         than one year] following such termination of employment, and shall
         thereafter terminate;

                  (ii) If the Optionee's termination of employment is by the
         Company or an Affiliate for Cause (as defined below), the Option shall
         terminate on the date of the Optionee's termination;

                  (iii) If the Optionee voluntarily terminates his/her
         employment (other than by retirement), the Option (to the extent
         exercisable at the time of the Optionee's termination) shall be
         exercisable for a period of [no more than three months] following such
         termination of employment, and shall thereafter terminate;

                  [(iv) If the Optionee (1) voluntarily terminates his/her
         employment or retires pursuant to the Company's mandatory retirement
         program, (2) is an "Entitled Retiree" within the meaning of the
         Company's retiree medical plan as in effect from time to time and (3)
         executes a post-termination non-solicitation agreement in a form
         reasonably acceptable to the Company, the Option (to the extent
         exercisable at the time of the Optionee's termination) shall remain
         exercisable until the expiration of its term set forth in Section 2(b),
         provided, however, that the Optionee acknowledges and agrees that to
         the extent the Option is exercised more than three months following
         such termination of employment, the Option shall not be eligible for
         treatment as an ISO;] and

                  (v) If the Optionee's termination of employment is for any
         other reason, the Option (to the extent exercisable at the time of the
         Optionee's termination) shall be exercisable for a period of [no more
         than three months] following such termination of employment, and shall
         thereafter terminate.

For purposes of this Agreement, "Cause" shall have the meaning ascribed to such
term in the Optionee's individual employment, severance or consulting agreement
with the Company or, in the absence of any such agreement, "Cause" means (i)
that the Optionee has materially failed to perform the duties and
responsibilities of his or her position with the Company for reasons other than
disability or has been insubordinate; (ii) that the Optionee has violated any
securities law or regulation, been convicted of a felony or a crime involving
moral turpitude (regardless of whether involving the Company) or has not
complied to a significant degree with any material policy of the Company; or
(iii) that the Optionee has committed any act of fraud, embezzlement, or similar
conduct against the Company or any of its shareholders constituting dishonesty,
intentional breach of fiduciary obligation, or intentional and material
wrongdoing or gross misfeasance or that results in a material economic detriment
to the assets, business or prospects of the Company.

                                       3
<PAGE>

Notwithstanding the foregoing, no provision in this Section 2(e) shall extend
the exercise period of an Option beyond its original term set forth in Section
2(b).

      (f) Nontransferability. The Option shall not be transferable by the
Optionee other than by will or the laws of descent and distribution.

      (g) Rights as a Stockholder. The Optionee shall not be deemed for any
purpose to be the owner of any shares of Stock subject to the Option unless,
until and to the extent that (i) the Option shall have been exercised pursuant
to its terms, (ii) the Company shall have issued and delivered to the Optionee
the shares of Stock for which the Option shall have been exercised, and (iii)
the Optionee's name shall have been entered as a stockholder of record with
respect to such shares of Stock on the books of the Company.

      (i) Income Taxes. The Company may, in its discretion, require that the
Optionee pay to the Company at or after (as determined by the Board) the time of
exercise of any portion of the Option any such additional amount as the Company
deems necessary to satisfy its liability to withhold federal, state or local
income tax or any other taxes incurred by reason of the exercise or the transfer
of shares of Stock thereupon.

Section 3. Miscellaneous

      (a) Notices. Unless otherwise determined by the Board, any and all
notices, designations, consents, offers, acceptances and any other
communications provided for herein shall be given in writing and shall be
delivered either personally or by registered or certified mail, postage prepaid,
which shall be addressed, in the case of the Company to the General Counsel of
the Company at the principal office of the Company and, in the case of the
Optionee, to Optionee's address appearing on the books of the Company or to
Optionee's residence or to such other address as may be designated in writing by
the Optionee.

      (b) No Right to Continued Employment. Nothing in the Plan or in this
Agreement shall confer upon the Optionee any right to continue in the employ of
the Company or shall interfere with or restrict in any way the right of the
Company, which is hereby expressly reserved, to remove, terminate or discharge
the Optionee at any time for any reason whatsoever, with or without Cause.

      (c) Bound by Plan. By signing this Agreement, the Optionee acknowledges
that he/she has received a copy of the Plan and has had an opportunity to review
the Plan and agrees to be bound by all the terms and provisions of the Plan.

      (d) Company Policies. By signing this Agreement, the Optionee acknowledges
that he/she is subject to the Company's (i) Code of Ethics Pursuant to Rule
17-J-1 and (ii) Stock Ownership Guidelines and that non-compliance with either
such policy may constitute Cause for the termination of the Optionee's
employment with the Company.

                                       4
<PAGE>

      (e) Successors. The terms of this Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, and of the
Optionee and the beneficiaries, executors, administrators, heirs and successors
of the Optionee.

      (f) Validity/Invalidity. The invalidity or unenforceability of any
particular provision hereof shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision had been omitted.

      (g) Modifications. No change, modification or waiver of any provision of
this Agreement shall be valid unless the same be in writing and signed by the
parties hereto.

      (h) Entire Agreement. This Agreement and the Plan contain the entire
agreement and understanding of the parties hereto with respect to the subject
matter contained herein and therein and supersede all prior communications,
representations and negotiations in respect thereto.

      (i) Governing Law. This Agreement and the rights of the Optionee hereunder
shall be construed and determined in accordance with the laws of the State of
New York.

      (j) Headings. The headings of the Sections hereof are provided for
convenience only and are not to serve as a basis for interpretation or
construction, and shall not constitute a part, of this Agreement.

      (k) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                                       5
<PAGE>

      IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto on the ____ day of _________, 20__.

                                          HARRIS & HARRIS GROUP, INC.

                                          By:_______________________
                                          Its_______________________

                                          [OPTIONEE]

                                          Signature: _______________

                                          Printed Name:_____________

                                          Address:__________________

                                          __________________________

                                       6

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