Document:

Exhibit 10.2

                               SECURITY AGREEMENT
                               ------------------

THIS SECURITY AGREEMENT (the "Agreement"), is entered into and made effective as
of  September  30, 2005, by and between Securac Corp., a Nevada corporation with
its  principal  place  of  business  located  at 2500, 520 5th Ave SW,  Calgary,
Alberta,  CA  T2P  3R7  (the "Company"), and the Dutchess Private Equities Fund,
II,  LP  (the  "Secured  Party").

WHEREAS,  the  Company shall issue and sell to the Secured Party, as provided in
the  Subscription  Agreement  of  even date herewith between the Company and the
Secured  Party  (the  "Subscription  Agreement"),  and  the  Secured Party shall
purchase  up  to Five Hundred Thousand Dollars ($500,000) of secured convertible
debentures  (the  "Convertible  Debentures"),  which  shall  be convertible into
shares  of  the Company's common stock, par value $0.01 (the "Common Stock") (as
converted, the "Conversion Shares") in the respective amounts set forth opposite
each  Holder  name  on  Schedule  I  attached  to  the  Subscription  Agreement
("Holder");

WHEREAS,  to induce the Secured Party to enter into the transaction contemplated
by  the  Subscription  Agreement,  the  Debenture  Agreement,  the  Debenture
Registration  Rights Agreement of even date herewith between the Company and the
Secured  Party  (the  "Debenture  Registration  Rights  Agreement"),  among  the
Company, the Secured Party, Transfer Agent, and Dutchess Capital Management, LLC
(the  "Transfer  Agent  Instructions")  (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 promises 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, but limited to those
obligations  of  the  Company  to  the  Secured  Party under this Agreement, the
Transaction  Documents,  and  any  other  amounts  now  or hereafter owed to the
Secured  Party  by  the  Company  thereunder  or  hereunder  (collectively,  the
"Obligations").

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,
(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) An Event of Default hereunder shall be deemed to occur upon an Event of
Default  under Article 6 of the Convertible Debentures, provided that other than
Events  of Default related to solvency and bankruptcy, no Event of Default shall
be  deemed to occur hereunder which, if curable, is cured within 3 business days
of  notice  thereof  by  the  Secured  Party

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.

ARTICLE  5.   DEFAULT;  REMEDIES;  SUBSTITUTE  COLLATERAL
              -------------------------------------------

Section  5.1.  Default  and  Remedies

(a)  If an Event of Default 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 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; it being understood that the Company or other present owner
of  the  Pledged  Property  shall  retain an equity of redemption in the Pledged
Collateral and in the event the Secured Party realizes proceeds from the Pledged
Collateral  in excess of the Obligations, the same shall be promptly refunded to
the  Company or such other person.in accordance with Section 5.2 (b)(iii) below.

Section  5.2.  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 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.
(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  5.3.  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  5.4.  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  or under its
control.

ARTICLE  6.  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  6.1.  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,  or  similar  documents
pertaining to the Company's jurisdiction, if so 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  6.2.  Financial  Statements  and  Reports.

The  Company  shall  furnish  to the Secured Party within a reasonable time such
financial  data  as the Secured Party may reasonably request, including, without
limitation,  the  following:

     (a)  The  balance sheet of the Company as of the close of each 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;  and  ,
(b)  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  6.3.  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  6.4.  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  6.5.  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.

     (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  6.6.  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  6.7.  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  6.8.  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  6.9.  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.

Section  6.10.  Compliance  with  Law  and  Other  Agreements.

The Company shall maintain its business operations and property owned or used in
connection  therewith  in  material  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  6.11.  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  6.12.  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
$15,000,  instituted by any persons against the Company, or materially 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  7.  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  7.1.  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.

Section  7.2.  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
additional  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  7.3.  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  7.4.  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  7.5.  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.

Section  7.6.  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
$10,000  (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).

Section  7.7.  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  7.8.  Places  of  Business.

Without prior written consent of the Secured Party, 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 five (5) days' prior written notice to the
Secured  Party  in  each  instance.

ARTICLE  8.  MISCELLANEOUS
             -------------

Section  8.1.  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:
          Douglas  Leighton
          Dutchess  Private  Equities  Fund,  II,  LP
          312  Stuart  St,  Third  Floor
          Boston,  MA  02116
          Telephone:  617-960-3570
          Facsimile:  617-249-0947

And  if  to  the  Company:
          Terry  Allen
          Securac  Corp.
          Calgary,  Alberta,  CA  T2P  3R7
          Telephone:  403-225-0403
          Facsimile:

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  8.2.  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  8.3.  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.

Section  8.4.  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  8.5.  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  8.6.  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  8.7.  Applicable  Law:  Jurisdiction.

This  Agreement shall be governed by and interpreted in accordance with the laws
of  the  Commonwealth  of  Massachusetts  without  regard  to  the principles of
conflict  of  laws. The parties further agree that any action between them shall
be  heard  in  Suffolk  County,  Massachusetts,

Section  8.8.  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.

Section  8.9.  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.

                                  *  *  *

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

Company:
Securac  Corp.

By:    /s/Terry  W.  Allen
       -------------------
Name:     Terry  W.  Allen
Title: Chief  Executive  Officer

By: /s/Paul  James  Hookham
    -----------------------
Name:  Paul  James  Hookham
Title:     Chief  Financial  Officer

Secured  Party:
Dutchess  Private  Equities  Fund,  II,  L.P.

/s/Douglas H. Leighton
----------------------
Douglas  H.  Leighton,  Managing  Member
Dutchess  Capital  Management,  LLC;
General  Partner  to:
Dutchess  Private  Equities  Fund,  II,  LP

                    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

(h)  a  number  of  shares  of  the Company's common stock ("Pledge Shares"), in
certificate  form, complete with stock powers assigning the Pledge Shares to the
Secured  Party  in  the  event  of Default.  The amount of stock shall equal one
hundred and fifty percent (150%) of the Face Amount (as defined in the Debenture
Agreement)  due  upon  Closing  (based  upon  the Conversion Price of the Common
Stock).  The  Certificates  shall  be held at a location to be designated by the
Secured  Party.Exhibit 10.3

                    DEBENTURE REGISTRATION RIGHTS AGREEMENT

     DEBENTURE  REGISTRATION  RIGHTS  AGREEMENT  (this "Agreement"), dated as of
September  30, 2005, by and between Securac Corp., a company organized under the
laws  of  state  of  Nevada,(the  "Company"),  and  the  undersigned Holder (the
"Holder").

     WHEREAS,  upon  the terms and subject to the conditions of the Subscription
Agreement between the Holder and the Company (the "Subscription Agreement"), the
Company has agreed to issue and sell to the Holder convertible debentures of the
Company  (the  "Debentures"),  which  will  be  convertible  into  shares of the
Company's  common  stock,  $.01 par value per share (the "Common Stock"), of the
Company.

     WHEREAS,  to  induce  the  Holder  to  execute and deliver the Subscription
Agreement,  Warrant  Agreement,  Security  Agreement, Irrevocable Transfer Agent
Agreement and the Debenture Agreement, the Company has agreed to provide certain
registration  rights under the Securities Act of 1933, as amended, and the rules
and  regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws, with respect to the shares of
Common  Stock issuable pursuant to the Subscription Agreement, Warrant Agreement
and  Debenture  Agreement.

     NOW,  THEREFORE,  in consideration of the foregoing premises and the mutual
covenants  contained  hereinafter and other good and valuable consideration, the
receipt  and  sufficiency  of which are hereby acknowledged, the Company and the
Holder  hereby  agree  as  follows:

1.           DEFINITIONS.

     As  used  in  this  Agreement, the following terms shall have the following
meanings:

a.  "Closing  Date"  shall  mean  the  date  in  the preamble of this Agreement.

b.  "Debenture"  or  "Debentures"  mean  the convertible debenture issued by the
Company  to  the  Holder.

c.  "Holder"  shall  mean  Dutchess  Private  Equities  Fund,  II,  LP

d.  "Effective  Date"  shall mean the date the SEC has declared the Registration
Statement  effective  and  the  Company  has  filed  all  necessary  amendments,
including  the  letter  to  request  accelerated effectiveness and the following
Prospectus  covering  the  resale  of  Shares.

e.  "Face  Amount" means five hundred thousand dollars ($500,000) to be invested
by  The  Holder.

f.   "Filing Date" shall mean the date the Registration Statement has been filed
with  the  SEC  and  no  stop  order  of  acceptance has been issued by the SEC.

g.   "Person"  means a corporation, a limited liability company, an association,
a  partnership,  an  organization,  a business, an individual, a governmental or
political  subdivision  thereof  or  a  governmental  agency.

h.  "Potential Material Event" means any of the following: (i) the possession by
the  Company  of  material information not ripe for disclosure in a Registration
Statement, which shall be evidenced by determinations in good faith by the Board
of  Directors  of  the  Company  that  disclosure  of  such  information  in the
Registration  Statement  would be detrimental to the business and affairs of the
Company, or (ii) any material engagement or activity by the Company which would,
in  the  good  faith  determination of the Board of Directors of the Company, be
adversely affected by disclosure in a Registration Statement at such time, which
determination shall be accompanied by a good faith determination by the Board of
Directors  of  the  Company  that the Registration Statement would be materially
misleading  absent  the  inclusion  of  such  information.

i.  "Principal  Market"  means either The American Stock Exchange, Inc., The New
York  Stock  Exchange,  Inc.,  the  Nasdaq  National Market, The Nasdaq SmallCap
Market,  the  National  Association  of Securities Dealer's, Inc. OTC electronic
bulletin  board,  whichever is the principal market on which the Common Stock is
listed.

j.  "Register,"  "Registered,"  and  "Registration"  refer  to  a  registration
effected  by preparing and filing with the United States Securities and Exchange
Commission  (the  "SEC")  one or more Registration Statements in compliance with
the  1933  Act and pursuant to Rule 415 under the 1933 Act or any successor rule
providing  for  offering  securities  on  a  continuous  basis ("Rule 415"), and
effectiveness  of  such  Registration  Statement(s).

k.  "Registrable Securities" means the shares of Common Stock issued or issuable
(i)  pursuant  to  the  Subscription Agreement, (ii) any shares of capital stock
issued  or issuable with respect to such shares of Common Stock and Warrants, if
any,  as a result of any stock split, stock dividend, recapitalization, exchange
or  similar  event  or  otherwise,  which  have  not  been  (x)  included  in  a
Registration  Statement that has been declared effective by the SEC, or (y) sold
under circumstances meeting all of the applicable conditions of Rule 144 (or any
similar  provision  then  in  force)  under  the  1933  Act.

l.  "Registration Statement" means a registration statement of the Company filed
under  the  1933  Act.

     All  capitalized  terms  used  in  this Agreement and not otherwise defined
herein  shall  have  the  same  meaning  ascribed to them as in the Subscription
Agreement  or  Debenture  Agreement.

     2.     REGISTRATION.

a.     Mandatory  Registration.  Within  thirty  (30) days of the Closing Date ,
the  Company  shall  prepare  and  file with the SEC a Registration Statement or
Registration  Statements  (as  is  necessary)  on Form SB-2 (or, if such form is
unavailable for such a registration, on such other form as is available for such
a registration), covering the resale of all of the Registrable Securities, which
Registration  Statement(s)  shall  state  that,  in  accordance  with  Rule  416
promulgated  under  the  1933  Act, such Registration Statement also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon  stock  splits, stock dividends or similar transactions.  The Company shall
initially register for resale an amount of shares of Common Stock which would be
issuable on the date preceding the filing of the Registration Statement based on
the  Fixed  Conversion  Price  (as  defined  in  the Debenture Agreement) of the
Company's  Common  Stock  on such date and the amount reasonably calculated that
represents  the number of shares issuable pursuant to the terms of the Offering,
including  those  Shares  underlying  the Warrant Agreement. The total amount of
Shares shall be both 1) the amount specified in the Warrant Agreement and 2) the
Face  Amount  of  the  Debenture  divided  by  the  Fixed Conversion Price.  For
example,  if the Fixed Conversion Price is fifty-five cents (.55) per share, the
amount  of  Shares  to be registered will be nine hundred and nine thousand  and
ninety shares (909,090) shares.  (500,000/.55).  In the event the Company cannot
register  sufficient  shares  of  Common  Stock,  due to the remaining number of
authorized  shares  of Common Stock being insufficient, the Company will use its
best  efforts  to  register  the  maximum  number  of shares it can based on the
remaining balance of authorized shares and will use its best efforts to increase
the  number  of  its  authorized  shares  as  soon  as  reasonably  practicable.

b.     The Company shall use its best efforts to have the Registration Statement
filed  with  the SEC within thirty (30) calendar days after the Closing Date. If
the  Registration  Statement  covering the Registrable Securities required to be
filed  by the Company pursuant to Section 2(a) hereof is not filed within thirty
(30)  calendar  days  following the Closing Date, then the Company shall pay the
Holder  the  sum  of  two  percent  (2%)  of  the Face Amount of the Debentures,
outstanding  as  liquidated  damages, and not as a penalty, for each thirty (30)
calendar  day  period,  pro  rata,  compounded  daily, following the thirty (30)
calendar day period until the Registration Statement is filed.  In addition, for
each thirty (30) calendar period the Registration Statement goes without filing,
the  Conversion Price of the Debentures will decrease by ten percent (10%).  For
example,  in  the event that upon the thirty-first (31st) day following Closing,
the Registration Statement has not been filed with the SEC, the Conversion Price
shall  decrease  by  five  and one-half cents (.055) per share.  (.55*10%=.055).

     Notwithstanding  the foregoing, the amounts payable by the Company pursuant
to  this  Section  shall not be payable to the extent any delay in the filing of
the  Registration  Statement occurs because of an act of, or a failure to act or
to  act  timely  by  the  Holder.  The  damages  set forth in this Section shall
continue  until  the  obligation is fulfilled and shall be paid within three (3)
business  days  after each thirty (30) day period, or portion thereof, until the
Registration  Statement is filed.  Failure of the Company to make payment within
said  three  (3)  business  days  shall  be  considered  a  default.

     The  Company  acknowledges  that  its  failure  to  have  the  Registration
Statement  filed  within  said  thirty  (30)  calendar day period will cause the
Holder  to  suffer  damages  in  an  amount that will be difficult to ascertain.
Accordingly,  the  parties  agree  that  it  is  appropriate  to include in this
Agreement a provision for liquidated damages.  The parties acknowledge and agree
that  the  liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form  and  amount  of  such  liquidated  damages  are  reasonable  and  will not
constitute  a  penalty.  The payment of liquidated damages shall not relieve the
Company from its obligations to register the Common Stock and deliver the Common
Stock  pursuant  to  the terms of this Agreement, the Subscription Agreement and
the  Debenture.

c.     The Company shall use its best efforts to have the Registration Statement
declared  effective by the SEC within ninety (90) calendar days after the Filing
Date. If the Registration Statement covering the Registrable Securities required
to  be  filed  by  the  Company  pursuant  to Section 2(a) hereof has not become
                                                                  ===     ======
effective  within  ninety (90) calendar days following the Filing Date, then the
Company  shall  pay the Holder the sum of two percent (2%) of the Face Amount as
liquidated  damages  and  not  as  a  penalty  for each thirty (30) calendar day
period,  pro  rata, compounded daily, following the one ninety (90) calendar day
period  until  the  Registration  Statement  is  declared  effective.

     If  the Registration Statement covering the Registrable Securities required
to be filed by the Company pursuant to Section 2(a) hereof has become effective,
                                                           ==========
but  after  the effective date the Holder's right to sell is suspended, then the
Company shall pay the Holder the sum of two percent (2%) of the Face Amount plus
interest and penalties due to the Holder for the Registrable Securities pursuant
to  the  Subscription  Agreement  for  each thirty (30) calendar day period, pro
rata,  compounded  daily, following the suspension until such suspension ceases.

     Notwithstanding  the foregoing, the amounts payable by the Company pursuant
to  this  Section  shall  not  be  payable  to  the  extent  any  delay  in  the
effectiveness  of  the  Registration Statement occurs because of an act of, or a
failure  to  act  or  to act timely by the Holder. The damages set forth in this
Section  shall  continue  until  the  obligation  is fulfilled and shall be paid
within  three  (3)  business  days after each thirty (30) day period, or portion
thereof,  until  the  Registration  Statement  is  declared  effective  or  such
suspension  is  released.  Failure  of  the  Company to make payment within said
three  (3)  business  days  shall  be  considered  a  default.

     The  Company  acknowledges  that  its  failure  to  have  the  Registration
Statement  become  effective  within  said ninety (90) calendar day period or to
           ======
permit  the  suspension of the effectiveness of the Registration Statement, will
cause  the  Holder  to  suffer  damages  in  an amount that will be difficult to
ascertain.  Accordingly,  the parties agree that it is appropriate to include in
this  Agreement a provision for liquidated damages.  The parties acknowledge and
agree that the liquidated damages provision set forth in this section represents
the parties' good faith effort to quantify such damages and, as such, agree that
the  form  and  amount  of  such  liquidated damages are reasonable and will not
constitute  a  penalty.  The payment of liquidated damages shall not relieve the
Company from its obligations to register the Common Stock and deliver the Common
Stock  pursuant  to  the terms of this Agreement, the Subscription Agreement and
the  Debenture.

d.     The  Company  agrees  not  to  include  any  other  securities,  in  this
Registration  Statement  without  Holder  prior  written consent, unless for the
Holder.  Furthermore,  the  Company  agrees  that  it  will  not  file any other
Registration Statement, including those on Form S-8, for other securities (other
than those for existing option holders, strategic partners or in connection with
a  merger  or  acquisition),  until  three hundred and sixty (360) calendar days
after the Effective Date unless it has written approval from the Holder. Failure
to  obtain  written  approval  from  the  Holder will cause the Holder to suffer
damages  that  will  be  difficult to ascertain.  Accordingly, the parties agree
that  it  is  appropriate  to include a provision for liquidated damages and the
Company agrees to pay, the Holder the sum of two percent (2%) of the Face Amount
as  liquidated  damages  and  not as a penalty for each thirty (30) calendar day
period,  pro  rata,  compounded  daily,  until  the  unauthorized  Registration
Statement  is  withdrawn.

     3.     RELATED  OBLIGATIONS.

     At such time as the Company is obligated to prepare and file a Registration
Statement  with  the SEC pursuant to Section 2(a), the Company will use its best
efforts  to  effect the registration of the Registrable Securities in accordance
with  the  intended method of disposition thereof and, with respect thereto, the
Company  shall  have  the  following  obligations:

a.          The  Company  shall  use its best efforts to cause such Registration
Statement  relating  to  the  Registrable  Securities to become effective within
ninety  (90)  calendar  days  after  the  date  and shall keep such Registration
Statement  effective pursuant to Rule 415 until the date on which (A) the Holder
shall  have  sold all the Registrable Securities and (B) the Holder has no right
to  convert  the  Shares  it  owns  into  Common  Stock  under  the Subscription
Agreement,  Debenture  Agreement  or  Warrant  Agreement,  respectively  (the
"Registration  Period"),  which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be  stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. The Company shall respond
to  any  and all SEC comments or correspondence, whether written or oral, direct
or  indirect, formal or informal ("Comments"), within seven (7) business days of
receipt by the Company of such Comments.  If the Company fails to respond within
seven (7) business days of receipt of SEC Comments, the Company shall pay to the
Holder  an  amount  equal  to  two  percent (2%) per month, on a pro rata basis,
compounded daily, of the Face Amount as liquidated damages and not as a penalty;
provided  that  the  seven  (7)  business  day  period  provided herein shall be
extended  as  may  be  required by delays caused by Holder's counsel pursuant to
paragraph  3g  below,  and,  provided  further, that such seven (7) business day
period  shall  be  extended  two  (2)  business  days for responses to SEC staff
accounting  comments.  The  Company  shall  cause  the  Registration  Statement
relating to the Registrable Securities to become effective no later than two (2)
business days after notice from the SEC that the Registration Statement has been
cleared  of all comments. Failure to do so will result in the Face Amount on the
Debentures  to  be  increased  by five percent (5%) per calendar day the Company
does  not  request  acceleration  from  the  SEC,  as  liquidated  damages.

b.     The  Company  shall  prepare  and  file  with  the  SEC  such  amendments
(including  post-effective  amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such  Registration
Statement,  which  prospectus  is  to  be filed pursuant to Rule 424 promulgated
under  the  1933  Act,  as  may be necessary to keep such Registration Statement
effective  during  the Registration Period, and, during such period, comply with
the  provisions  of  the  1933  Act  with  respect  to  the  disposition  of all
Registrable  Securities  of  the  Company covered by such Registration Statement
until  such  time as all of such Registrable Securities shall have been disposed
of  in accordance with the intended methods of disposition by the Holder thereof
as  set forth in such Registration Statement.  In the event the number of shares
of  Common Stock available under a Registration Statement filed pursuant to this
Agreement  is  at  any  time  insufficient  to  cover  all  of  the  Registrable
Securities,  the  Company shall amend such Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover all of the Registrable Securities, in each case, as soon as
practicable,  but  in  any  event  within  thirty  (30)  calendar days after the
necessity  therefor arises (based on the then Purchase Price of the Common Stock
and  other  relevant  factors  on  which the Company reasonably elects to rely),
assuming  the  Company  has sufficient authorized shares at that time, and if it
does  not,  within  thirty  (30) calendar days after such shares are authorized.
The  Company  shall  use  it  best  efforts  to  cause such amendment and/or new
Registration  Statement to become effective as soon as practicable following the
filing  thereof.

     Prior to conversion of all the Shares, if at any time the conversion of all
                                                  ========
the  Shares  outstanding  would  result  in an insufficient number of authorized
shares  of  Common Stock being available to cover all the conversions, or in the
event,  that  Holder  deems that the Shares authorized will become insufficient,
then  in  such  event,  the  Company  will move to call and hold a shareholder's
meeting  within  thirty (30) calendar days of such event for the sole purpose of
authorizing  additional  shares  of  Common Stock to facilitate the conversions.
In  such an event the Company shall recommend to all shareholders and management
of the Company to vote their shares in favor of increasing the authorized number
of  shares  of  Common Stock.  The Company represents and warrants that under no
circumstances  will  it  deny or prevent Holder's right to convert the Shares as
permitted  under  the  terms of this Subscription Agreement or this Registration
Rights Agreement. The Holder retains the right to request additional shares upon
the  determination  the company may not be able to facilitate conversions in the
future.

c     The  Company  shall furnish to the Holder whose Registrable Securities are
included  in any Registration Statement and its legal counsel without charge (i)
promptly  after the same is prepared and filed with the SEC at least one copy of
such  Registration  Statement  and any amendment(s) thereto, including financial
statements  and  schedules,  all documents incorporated therein by reference and
all  exhibits, the prospectus included in such Registration Statement (including
each  preliminary  prospectus)  and,  with  regards  to  such  Registration
Statement(s),  any  correspondence  by or on behalf of the Company to the SEC or
the staff of the SEC and any correspondence from the SEC or the staff of the SEC
to  the  Company  or  its  representatives,  (ii)  upon the effectiveness of any
Registration  Statement,  a copy of the prospectus included in such Registration
Statement  and  all  amendments and supplements thereto (or such other number of
copies  as  the  Holder  may reasonably request) and (iii) such other documents,
including  copies  of  any  preliminary  or  final prospectus, as the Holder may
reasonably  request  from time to time in order to facilitate the disposition of
the  Registrable Securities.  The Company filing the documents described in this
paragraph  through  EDGAR  shall  constitute  delivery.

d.     The  Company shall use reasonable efforts to (i) register and qualify the
Registrable  Securities covered by a Registration Statement under the applicable
securities  or  "blue sky" laws of such states of the United States as specified
by  the  Holder,  (ii)  prepare and file in those jurisdictions, such amendments
(including  post-effective amendments) and supplements to such registrations and
qualifications  as may be necessary to maintain the effectiveness thereof during
the  Registration  Period,  (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration  Period,  and  (iv)  take all other actions reasonably necessary or
advisable  to qualify the Registrable Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not  be  required  in connection
therewith  or  as  a  condition  thereto  to  (x)  qualify to do business in any
jurisdiction  where  it  would not otherwise be required to qualify but for this
Section  3(d),  (y) subject itself to general taxation in any such jurisdiction,
or  (z)  file  a general consent to service of process in any such jurisdiction.
The Company shall promptly notify Holder who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the
registration  or  qualification  of  any  of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or  its  receipt  of  actual  notice  of  the  initiation  or threatening of any
proceeding  for  such  purpose.

e.  As  promptly  as practicable after becoming aware of such event, the Company
shall  notify  Holder  in  writing  of the happening of any event as a result of
which  the  prospectus  included in a Registration Statement, as then in effect,
includes  an untrue statement of a material fact or omission to state a material
fact  required to be stated therein or necessary to make the statements therein,
in  light  of  the  circumstances  under  which  they were made, not misleading,
("Registration  Default")  and  use  all  diligent efforts to promptly prepare a
supplement  or  amendment  to  such  Registration  Statement  and take any other
necessary  steps  to cure the Registration Default, (which, if such Registration
Statement  is  on Form S-3, may consist of a document to be filed by the Company
with  the  SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as
defined below) and to be incorporated by reference in the prospectus) to correct
such  untrue  statement  or  omission,  and  deliver  ten  (10)  copies  of such
supplement  or amendment to Holder (or such other number of copies as Holder may
reasonably  request).  Failure  to cure the Registration Default within five (5)
business  days  shall  result  in  the  Company paying liquidated damages of two
percent  (2%)  of  the price paid to purchase the Shares then held by the Holder
for  each  thirty  (30) calendar day period or portion thereof, beginning on the
date of suspension. The Company shall also promptly notify Holder in writing (i)
when  a  prospectus or any prospectus supplement or post-effective amendment has
been  filed,  and  when a Registration Statement or any post-effective amendment
has  become  effective (notification of such effectiveness shall be delivered to
Holder  by  facsimile  on  the  same  day of such effectiveness and by overnight
mail),  (ii)  of  any  request  by  the  SEC  for amendments or supplements to a
Registration  Statement  or  related prospectus or related information, (iii) of
the  Company's  reasonable  determination  that  a post-effective amendment to a
Registration  Statement would be appropriate, (iv) in the event the Registration
Statement is no longer effective or, (v) the Registration Statement is stale for
a period of more than five (5) Trading Days as a result of the Company's failure
to  timely  file  its  financials.

     The  Company acknowledges that its failure to cure the Registration Default
within  three  (3)  business  days will cause the Holder to suffer damages in an
amount that will be difficult to ascertain.  Accordingly, the parties agree that
it  is  appropriate  to  include  in  this  Agreement a provision for liquidated
damages.  The  parties  acknowledge  and  agree  that  the  liquidated  damages
provision set forth in this section represents the parties' good faith effort to
quantify  such  damages  and,  as  such,  agree that the form and amount of such
liquidated  damages  are  reasonable  and  will  not  constitute  a  penalty.

It  is the intention of the parties that interest payable under any of the terms
of  this  Agreement  shall  not  exceed  the  maximum amount permitted under any
applicable law. If a law, which applies to this Agreement which sets the maximum
interest  amount, is finally interpreted so that the interest in connection with
this  Agreement  exceeds the permitted limits, then: (1) any such interest shall
be  reduced  by  the  amount  necessary  to reduce the interest to the permitted
limit; and (2) any sums already collected (if any) from the Company which exceed
the  permitted limits will be refunded to the Company.  The Holder may choose to
make  this  refund  by  reducing  the  amount  that  the Company owes under this
Agreement or by making a direct payment to the Company.  If a refund reduces the
amount  that  the  Company  owes  the Holder, the reduction will be treated as a
partial  payment.  In case any provision of this Agreement is held by a court of
competent  jurisdiction  to  be  excessive  in  scope  or  otherwise  invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so  that  it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Agreement will not in any way
be  affected  or  impaired  thereby.

f.  The  Company  shall use its best efforts to prevent the issuance of any stop
order  or other  suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale in
any  jurisdiction  and, if such an order or suspension is issued,  to obtain the
withdrawal  of  such  order or suspension at the earliest possible moment and to
notify  Holder  who  holds  Registrable Securities being sold of the issuance of
such  order  and  the  resolution thereof or its receipt of actual notice of the
initiation  or  threat  of  any  proceeding  for  such  purpose.

g.     The  Company shall permit Holder and a single firm of counsel, designated
as  selling  shareholders'  counsel  by  the  Holder  who hold a majority of the
Registrable  Securities  being  sold,  to review and comment upon a Registration
Statement and all amendments and supplements thereto at least seven (7) business
days  prior to their filing with the SEC, and not file any document in a form to
which  such counsel reasonably objects.  The Company shall not submit to the SEC
a  request  for acceleration of the effectiveness of a Registration Statement or
file  with  the  SEC  a  Registration  Statement  or any amendment or supplement
thereto  without the prior approval of such counsel, which approval shall not be
unreasonably  withheld.

h.     At  the request of any Holder, the Company shall cause to be furnished to
Holder,  on  the  date  of  the  effectiveness  of  a Registration Statement, an
opinion, dated as of such date, of counsel representing the Company for purposes
of  such  Registration  Statement,  in  the  form  of  Exhibit D attached to the
Subscription  Agreement.

i.     The  Company  shall  make available for inspection by (i) Holder and (ii)
one  firm  of  attorneys and one firm of accountants or other agents retained by
the  Holder  (collectively,  the "Inspectors") all pertinent financial and other
records,  and  pertinent  corporate  documents  and  properties  of  the Company
(collectively,  the  "Records"), as shall be reasonably deemed necessary by each
Inspector,  and  cause the Company's officers, directors and employees to supply
all  information  which any Inspector may reasonably request; provided, however,
that  each  Inspector  shall  hold  in  strict confidence and shall not make any
disclosure  (except to a Holder) or use of any Record or other information which
the  Company  determines  in  good  faith  to  be  confidential,  and  of  which
determination  the Inspectors are so notified, unless (a) the disclosure of such
Records  is  necessary  to  avoid  or  correct a misstatement or omission in any
Registration  Statement  or  is  otherwise  required under the 1933 Act, (b) the
release  of such Records is ordered pursuant to a final, non-appealable subpoena
or  order  from a court or government body of competent jurisdiction, or (c) the
information  in  such  Records  has  been made generally available to the public
other  than  by  disclosure in violation of this or any other agreement of which
the  Inspector  has  knowledge.  Holder agrees that it shall, upon learning that
disclosure  of  such  Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company
and  allow  the  Company,  at  its  expense,  to undertake appropriate action to
prevent  disclosure  of, or to obtain a protective order for, the Records deemed
confidential.

j.     The  Company  shall  hold  in  confidence  and not make any disclosure of
information concerning a Holder provided to the Company unless (i) disclosure of
such  information  is necessary to comply with federal or state securities laws,
(ii)  the  disclosure  of  such  information  is necessary to avoid or correct a
misstatement  or  omission  in  any Registration Statement, (iii) the release of
such  information  is  ordered  pursuant  to  a  subpoena  or  other  final,
non-appealable  order  from  a  court  or  governmental  body  of  competent
jurisdiction,  or (iv) such information has been made generally available to the
public  other  than  by  disclosure  in violation of this Agreement or any other
agreement.  The  Company  agrees that it shall, upon learning that disclosure of
such  information concerning a Holder is sought in or by a court or governmental
body  of  competent  jurisdiction  or  through  other means, give prompt written
notice  to  Holder  and  allow  Holder,  at  the  Holder's expense, to undertake
appropriate  action  to  prevent  disclosure of, or to obtain a protective order
for,  such  information.

k.     The  Company  shall  use  its  best  efforts  to  secure  designation and
quotation  of  all  the  Registrable  Securities  covered  by  any  Registration
Statement  on the Principal Market.  If, despite the Company's best efforts, the
Company  is  unsuccessful in satisfying the preceding sentence, it shall use its
best efforts to cause all the Registrable Securities covered by any Registration
Statement  to be listed on each other national securities exchange and automated
quotation system, if any, on which securities of the same class or series issued
by  the  Company  are  then  listed,  if any, if the listing of such Registrable
Securities  is  then  permitted under the rules of such exchange or system.  If,
despite  the  Company's  best efforts, the Company is unsuccessful in satisfying
the  two  preceding  sentences,  it  will  use  its  best  efforts to secure the
inclusion  for  quotation with Pink Sheets, LLC.  The Company shall pay all fees
and  expenses  in  connection  with satisfying its obligation under this Section
3(k).

l.     The  Company  shall  cooperate  with  the Holder to facilitate the timely
preparation  and  delivery  of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement  and  enable such certificates to be in such denominations or amounts,
as  the case may be, as the Holder may reasonably request and registered in such
names  of  the  Persons  who  shall acquire such Registrable Securities from the
Holder,  as  the  Holder  may  request.

m.     The  Company  shall  provide  a  transfer  agent  for all the Registrable
Securities  not  later than the Closing Date of the first Registration Statement
filed  pursuant  hereto.

n.     If  requested  by  the  Holder  holding  a  majority  of  the Registrable
Securities, the Company shall (i) as soon as reasonably practical incorporate in
a  prospectus  supplement or post-effective amendment such information as Holder
reasonably  determines  should  be  included  therein  relating  to the sale and
distribution  of  Registrable  Securities,  including,  without  limitation,
information  with  respect  to  the offering of the Registrable Securities to be
sold  in  such  offering;  (ii)  make  all  required  filings of such prospectus
supplement  or post-effective amendment as soon as notified of the matters to be
incorporated  in  such  prospectus  supplement  or post-effective amendment; and
(iii)  supplement or make amendments to any Registration Statement if reasonably
requested  by  Holder.

o.     The  Company  shall  use  its  best  efforts  to  cause  the  Registrable
Securities  covered  by  the  applicable Registration Statement to be registered
with  or  approved  by such other governmental agencies or authorities as may be
necessary  to  consummate  the  disposition  of  such  Registrable  Securities.

p.     The  Company  shall  make  generally available to its security holders as
soon as reasonably practical, but not later than ninety (90) calendar days after
the  close  of  the  period  covered  thereby,  an  earnings  statement (in form
complying  with  the  provisions  of  Rule  158  under  the 1933 Act) covering a
twelve-month  period  beginning  not  later  than the first day of the Company's
fiscal  quarter next following the effective date of any Registration Statement.

q.     The  Company  shall  otherwise  use  its  best efforts to comply with all
applicable  rules and regulations of the SEC in connection with any registration
hereunder.

r.     Within  one  (1)  business  day  after  the  Registration Statement which
includes  Registrable  Securities  is declared effective by the SEC, the Company
shall  deliver, and shall cause legal counsel for the Company to deliver, to the
transfer  agent  for  such  Registrable  Securities,  with copies to the Holder,
confirmation that such Registration Statement has been declared effective by the
SEC  in  the  form attached hereto as Exhibit A. Failure to do so will result in
the  Face Amount on the Debentures to be increased by  two percent (2%) per day,
as  liquidated  damages.

s.     Subsequent  to the SEC declared the Registration Statement cleared of all
comments  and  the Company's acceptance of the effectiveness of the Registration
Statement, the Company shall file a prospectus covering the resale of the Shares
("Prospectus")  within  two (2) trading days.  In the event the Company does not
file  the Prospectus within two (2) trading days of the Effective Date, then the
Company  shall pay the Holder the sum of five percent (5%), per day, of the Face
Amount  due  to  the  Holder  for  each  two  (2)  trading day period, pro rata,
compounded  daily, following the two (2) trading day period until the Prospectus
is  filed

t.     The Company shall take all other reasonable actions necessary to expedite
and facilitate disposition by the Holder of Registrable Securities pursuant to a
Registration  Statement.

     4.     OBLIGATIONS  OF  THE  HOLDER.

a.     At  least  five  (5)  calendar days prior to the first anticipated filing
date  of a Registration Statement  the Company shall notify Holder in writing of
the  information  the  Company  requires  from  Holder.  It shall be a condition
precedent  to  the  obligations  of  the  Company  to  complete the registration
pursuant  to  this  Agreement  with respect to the Registrable Securities of the
Holder  that  Holder  shall  furnish  in writing to the Company such information
regarding  itself, the Registrable Securities held by it and the intended method
of  disposition  of the Registrable Securities held by it as shall reasonably be
required  to  effect  the  registration of such Registrable Securities and shall
execute  such  documents in connection with such registration as the Company may
reasonably  request.  The  Holder  covenants and agrees that, in connection with
any resale of Registrable Securities by it pursuant to a Registration Statement,
it  shall  comply  with  the  "Plan  of  Distribution"  section  of  the current
prospectus  relating  to  such  Registration  Statement.

b.     The  Holder, by Holder's acceptance of the Registrable Securities, agrees
to  cooperate  with  the  Company  as  reasonably  requested  by  the Company in
connection  with  the  preparation  and  filing  of  any  Registration Statement
hereunder.

c.     Holder  agrees  that,  upon receipt of any notice from the Company of the
happening  of  any  event  of  the  kind  described in Section 3(f) or the first
sentence of 3(e), Holder will immediately discontinue disposition of Registrable
Securities  pursuant  to any Registration Statement(s) covering such Registrable
Securities  until  Holder's receipt of the copies of the supplemented or amended
prospectus  contemplated  by  Section  3(f)  or  the  first  sentence  of  3(e).

     5.     EXPENSES  OF  REGISTRATION.

     All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections  2  and 3, including, without limitation, all registration, listing and
qualifications fees, printing and accounting fees, and fees and disbursements of
counsel  for  the  Company  shall  be  paid  by  the  Company.

     6.     INDEMNIFICATION.

     In  the  event  any  Registrable  Securities are included in a Registration
Statement  under  this  Agreement:

a.          To the fullest extent permitted by law, the Company will, and hereby
does,  indemnify,  hold  harmless  and  defend Holder who holds such Registrable
Securities,  the  directors,  officers,  partners,  employees,  agents,
representatives  of,  and  each  Person,  if any, who controls Holder within the
meaning  of the 1933 Act or the Securities Exchange Act of 1934, as amended (the
"1934  Act"),  (each,  an  "Indemnified  Person"),  against  any losses, claims,
damages,  liabilities,  judgments,  fines, penalties, charges, costs, attorneys'
fees,  amounts  paid  in settlement or expenses, joint or several (collectively,
"Claims"),  incurred in investigating, preparing or defending any action, claim,
suit,  inquiry,  proceeding, investigation or appeal taken from the foregoing by
or  before any court or governmental, administrative or other regulatory agency,
body  or  the  SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may  become  subject  insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or  alleged  untrue  statement  of  a material fact in a
Registration  Statement or any post-effective amendment thereto or in any filing
made  in  connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered  ("Blue  Sky  Filing"),  or  the omission or alleged omission to state a
material  fact required to be stated therein or necessary to make the statements
therein,  in  light of the circumstances under which the statements therein were
made, not misleading, (ii) any untrue statement or alleged untrue statement of a
material  fact contained in the final prospectus (as amended or supplemented, if
the  Company  files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make  the statements made therein, in light of the circumstances under which the
statements  therein were made, not misleading, or (iii) any violation or alleged
violation  by  the  Company  of  the  1933  Act,  the  1934  Act, any other law,
including,  without  limitation,  any  state  securities  law,  or  any  rule or
regulation  thereunder  relating  to  the  offer  or  sale  of  the  Registrable
Securities  pursuant  to  a Registration Statement (the matters in the foregoing
clauses  (i)  through  (iii) being, collectively, "Violations").  Subject to the
restrictions  set  forth  in  Section  6(c)  with respect to the number of legal
counsel,  the  Company  shall  reimburse  the  Holder  and each such controlling
person,  promptly as such expenses are incurred and are due and payable, for any
reasonable  legal  fees  or  other  reasonable  expenses  incurred  by  them  in
connection  with  investigating  or  defending  any  such Claim. Notwithstanding
anything  to  the  contrary  contained  herein,  the  indemnification  agreement
contained in this Section 6(a): (i) shall not apply to a Claim arising out of or
based  upon  a  Violation  which  occurs in reliance upon and in conformity with
information  furnished  in  writing  to  the  Company  by any Indemnified Person
expressly  for  use  in  connection  with  the  preparation  of the Registration
Statement  or  any  such  amendment  thereof  or  supplement  thereto,  if  such
prospectus  were  timely made available by the Company pursuant to Section 3(c);
(ii)  shall  not be available to the extent such Claim is based on (a) a failure
of  the  Holder  to  deliver  or  to  cause  to be delivered the prospectus made
available  by  the  Company  or (b) the Indemnified Person's use of an incorrect
prospectus  despite  being promptly advised in advance by the Company in writing
not  to use such incorrect prospectus; and (iii) shall not apply to amounts paid
in  settlement  of  any  Claim  if such settlement is effected without the prior
written  consent  of  the  Company,  which  consent  shall  not  be unreasonably
withheld.  Such  indemnity  shall  remain in full force and effect regardless of
any  investigation  made  by  or on  behalf of the Indemnified Person and  shall
survive  the  resale of the Registrable Securities by the Holder pursuant to the
Registration  Statement.

b.          In  connection  with  any  Registration Statement in which Holder is
participating,  Holder  agrees  to  severally  and  not  jointly indemnify, hold
harmless  and defend, to the  same extent and in the same manner as is set forth
in  Section  6(a), the Company, each of its  directors, each of its officers who
signs  the Registration Statement, each Person, if any, who controls the Company
within  the  meaning  of the 1933 Act or the 1934 Act (collectively and together
with  an  Indemnified  Person,  an  "Indemnified  Party"),  against any Claim or
Indemnified Damages to which any of them may become subject, under the 1933 Act,
the  1934  Act  or otherwise, insofar as such Claim or Indemnified Damages arise
out  of or are based upon any Violation, in each case to the extent, and only to
the  extent,  that such Violation occurs in reliance upon and in conformity with
written  information  furnished  to  the  Company by Holder expressly for use in
connection  with  such  Registration  Statement;  and,  subject to Section 6(c),
Holder will reimburse any legal or other expenses reasonably incurred by them in
connection  with  investigating  or defending any such Claim; provided, however,
that  the  indemnity  agreement contained in this Section 6(b) and the agreement
with  respect  to contribution contained in Section 7 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written  consent  of  Holder,  which consent shall not be unreasonably withheld;
provided,  further,  however, that the Holder shall be liable under this Section
6(b)  for  only that amount of a Claim or Indemnified Damages as does not exceed
the  net  proceeds  to  Holder as a result of the sale of Registrable Securities
pursuant  to  such  Registration Statement.  Such indemnity shall remain in full
force  and  effect  regardless of any investigation made by or on behalf of such
Indemnified  Party and shall survive the resale of the Registrable Securities by
the  Holder  pursuant to the Registration Statement. Notwithstanding anything to
the  contrary  contained herein, the indemnification agreement contained in this
Section  6(b)  with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus were corrected on a timely basis in
the  prospectus,  as  then  amended  or  supplemented.

c.          Promptly after receipt by an Indemnified Person or Indemnified Party
under  this  Section 6 of notice of the commencement of any action or proceeding
(including  any  governmental  action  or  proceeding)  involving  a Claim, such
Indemnified  Person or Indemnified Party shall, if a Claim in respect thereof is
to  be  made against any indemnifying party under this Section 6, deliver to the
indemnifying  party  a  written  notice  of  the  commencement  thereof, and the
indemnifying  party  shall  have the right to participate in, and, to the extent
the  indemnifying  party  so  desires, jointly with any other indemnifying party
similarly  noticed,  to  assume  control  of  the  defense  thereof with counsel
mutually  satisfactory  to  the indemnifying party and the Indemnified Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person  or Indemnified Party shall have the right to retain its own
counsel  with the fees and expenses to be paid by the indemnifying party, if, in
the  reasonable  opinion  of  counsel  retained  by  the indemnifying party, the
representation  by  such  counsel of the Indemnified Person or Indemnified Party
and  the  indemnifying  party  would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other  party  represented  by such counsel in such proceeding.  The indemnifying
party  shall pay for only one separate legal counsel for the Indemnified Persons
or the Indemnified Parties, as applicable, and such counsel shall be selected by
Holder  holding a majority-in-interest of the Registrable Securities included in
the Registration Statement to which the Claim relates, if the Holder is entitled
to  indemnification  hereunder,  or  the Company, if the Company is  entitled to
indemnification  hereunder, as applicable.  The Indemnified Party or Indemnified
Person  shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall  furnish to the indemnifying party all information reasonably available to
the  Indemnified  Party  or  Indemnified  Person which relates to such action or
claim.  The  indemnifying  party shall keep the Indemnified Party or Indemnified
Person  fully  appraised  at  all  times  as to the status of the defense or any
settlement  negotiations  with  respect thereto.  No indemnifying party shall be
liable  for  any  settlement of any action, claim or proceeding effected without
its  written  consent,  provided, however, that the indemnifying party shall not
unreasonably  withhold,  delay  or  condition its consent. No indemnifying party
shall,  without  the  consent  of  the  Indemnified Party or Indemnified Person,
consent  to  entry  of  any  judgment  or  enter  into  any  settlement or other
compromise which does not include as an unconditional term thereof the giving by
the  claimant  or plaintiff to such Indemnified Party or Indemnified Person of a
release  from all liability in respect to such Claim.  Following indemnification
as  provided  for  hereunder,  the indemnifying party shall be surrogated to all
rights  of the Indemnified Party or Indemnified Person with respect to all third
parties,  firms or corporations relating to the matter for which indemnification
has  been made.  The failure to deliver written notice to the indemnifying party
within  a  reasonable  time  of  the  commencement  of any such action shall not
relieve  such  indemnifying  party of any liability to the Indemnified Person or
Indemnified  Party  under  this  Section  6,  except  to  the  extent  that  the
indemnifying  party  is  prejudiced  in  its  ability  to  defend  such  action.

d.          The  indemnification  required  by  this  Section 6 shall be made by
periodic  payments  of the amount thereof during the course of the investigation
or  defense, as and when bills are received or Indemnified Damages are incurred.

e.          The  indemnity  agreements  contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person  against  the  indemnifying party or others, and (ii) any liabilities the
indemnifying  party  may  be  subject  to  pursuant  to  the  law.

     7.     CONTRIBUTION.

     To the extent any indemnification by an indemnifying party is prohibited or
limited  by  law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6  to  the  fullest  extent  permitted  by  law; provided, however, that: (i) no
contribution  shall  be  made under circumstances where the maker would not have
been  liable  for indemnification under the fault standards set forth in Section
6;  (ii)  no  seller  of  Registrable  Securities  guilty  of  fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled  to  contribution from any seller of Registrable Securities who was not
guilty  of fraudulent misrepresentation; and (iii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received  by  such  seller  from  the  sale  of  such  Registrable  Securities.

          8.     REPORTS  UNDER  THE  EXHANGE  ACT.
With  a  view  to  making  available  to  the Investors the benefits of Rule 144
promulgated  under  the  Securities Act or any similar rule or regulation of the
SEC  that may at any time permit the Investors to sell securities of the Company
to  the  public  without  registration  ("Rule  144")  the  Company  agrees  to:
(a)  make  and  keep public information available, as those terms are understood
and  defined  in  Rule  144;
(b)  file  with  the  SEC  in  a  timely  manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so long as
the  Company  remains  subject  to  such  requirements (it being understood that
nothing  herein  shall limit the Company's obligations under Section 4(c) of the
Securities  Purchase  Agreement)  and  the  filing  of  such  reports  and other
documents  as  are  required  by  the  applicable  provisions  of  Rule 144; and
(c)  furnish  to  each  Investor  so  long  as  such  Investor  owns Registrable
Securities,  promptly  upon request, (i) a written statement by the Company that
it  has complied with the reporting requirements of Rule 144, the Securities Act
and  the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company, and
(iii)  such  other  information  as  may  be  reasonably requested to permit the
Investors  to  sell  such  securities pursuant to Rule 144 without registration.

     9.     NO  ASSIGNMENT  OF  REGISTRATION  RIGHTS.

     The  rights  under  this  Agreement  shall  not  be  assignable.

     10.     AMENDMENT  OF  REGISTRATION  RIGHTS.

     Provisions  of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively),  only  with the written consent of the Company and Holder of
the  Registrable Securities. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon Holder and the Company.  No such amendment
shall  be effective to the extent that it applies to less than all of the Holder
of the Registrable Securities.  No consideration shall be offered or paid to any
Person  to  amend or consent to a waiver or modification of any provision of any
of  this  Agreement  unless the same consideration also is offered to all of the
parties  to  this  Agreement.

     11.     MISCELLANEOUS.

a.     A Person is deemed to be a Holder of Registrable Securities whenever such
Person  owns  of  record  such  Registrable Securities.  If the Company receives
conflicting  instructions,  notices  or  elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the basis
of  instructions,  notice or election received from the registered owner of such
Registrable  Securities.

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

If  to  the  Company:

Terry  Allen
Securac  Corp
1700  University  Drive,  Suite  200
Coral  Spring  FL  330712500,  520  5th  Ave  SW
Calgary,  Alberta,  CA  T2P  3R7
Telephone:  (954)  575-2522403-225-0403
Facsimile:

If  to  the  Holder:

     At  the  address  listed  in  the  Questionnaire.

     Each  party  shall provide five (5) business days prior notice to the other
party  of  any  change  in  address,  phone  number  or  facsimile  number.

c.     Failure of any party to exercise any right or remedy under this Agreement
or  otherwise, or delay by a party in exercising such right or remedy, shall not
operate  as  a  waiver  thereof.

d.     All  disputes  arising  under  this  agreement  shall  be governed by and
interpreted  in  accordance  with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws.  The parties to this agreement
will  submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA").  The  arbitrator  shall  be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an  attorney  admitted to practice law in the Commonwealth of Massachusetts.  No
party  to  this agreement will challenge the jurisdiction or venue provisions as
provided  in  this  section.

e.     This  Agreement  and  the  Transaction  Documents(as  defined  in  the
                                                        =====================
Subscription Agreement) constitute the entire agreement among the parties hereto
          =============
with  respect  to  the  subject  matter  hereof  and  thereof.  There  are  no
restrictions,  promises,  warranties or undertakings, other than those set forth
or  referred  to  herein  and  therein.

f.     This  Agreement  and  the  Transaction  Documents  supersede  all  prior
agreements  and  understandings  among  the  parties  hereto with respect to the
subject  matter  hereof  and  thereof.

g.     The  headings in this Agreement are for convenience of reference only and
shall  not  limit  or  otherwise  affect  the  meaning  hereof.

h.     This  Agreement may be executed in two or more counterparts, all of which
taken  together shall constitute one instrument.  Execution and delivery of this
Agreement  by  exchange of facsimile copies bearing the facsimile signature of a
party  shall  constitute  a  valid  and  binding  execution and delivery of this
Agreement  by  such  party.  Such  facsimile copies shall constitute enforceable
original  documents.

i.     Each  party  shall do and perform, or cause to be done and performed, all
such  further  acts  and  things,  and  shall execute and deliver all such other
agreements,  certificates,  instruments  and  documents,  as the other party may
reasonably  request in order to carry out the intent and accomplish the purposes
of  this Agreement and the consummation of the transactions contemplated hereby.

j.     All  consents  and other determinations to be made by the Holder pursuant
to  this  Agreement shall be made, unless otherwise specified in this Agreement,
by  Holder  holding  a  majority  of  the  Registrable  Securities.

k.     The  language  used  in  this Agreement will be deemed to be the language
chosen  by  the  parties  to  express their mutual intent and no rules of strict
construction  will  be  applied  against  any  party.

          12.  Waiver

The  Holder'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 Holder under this Agreement to
demand  strict  compliance and performance herewith. Any waiver by the Holder 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 Holder, 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  Holder.

          13.  Payment  of  Penalties

Any  accrued  penalties  incurred  herein by the Company for failure to act in a
timely  manner,  as  described  in  this Agreement, shall be charged to the Face
Amount of the Debenture (as defined in the Debenture), unless specifically noted
otherwise.

          14.  Waiver  of  Jury  Trial.

AS  A  MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
PARTIES  HERETO  HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED  IN  ANY  WAY  TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED  WITH  THIS  TRANSACTION.

                                      * * *

IN  WITNESS  WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of the day and year first above written.  Duly authorized
to  sign  on  behalf  of:

SECURAC  CORP.

By: /s/Terry  W.  Allen
   --------------------
Name:     Terry  W.  Allen
Title:     Chief  Executive  Financial  Officer

By:  /s/Paul  James  Hookham
Name:  Paul  James  Hookham
Title:     Chief  Financial  Officer

                    DUTCHESS  PRIVATE  EQUITIES  FUND,  II,  L.P.
                    BY  ITS  GENERAL  PARTNER  DUTCHESS
                    CAPITAL  MANAGEMENT,  LLC

By:  /s/Douglas  H.  Leighton
Name:  Douglas  H.  Leighton
Title:  A  Managing  Member

                                    EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

                                             Date:  __________
[TRANSFER  AGENT]

     Re:     Securac  Corp.
             --------------

Ladies  and  Gentlemen:

     We  are counsel to Securac Corp., a Nevada corporation (the "Company"), and
                        --------------
have  represented  the  Company  in  connection  with  that certain Subscription
Agreement  (the "Subscription  Agreement") entered into by and among the Company
and  _________________________  (the "Holder") pursuant to which the Company has
agreed  to  issue  to  the Holder shares of the Company's common stock, $.01 par
value  per  share  (the "Common Stock") on the terms and conditions set forth in
the Subscription Agreement.  Pursuant to the Subscription Agreement, the Company
also  has  entered  into  a  Registration  Rights Agreement with the Holder (the
"Registration  Rights  Agreement")  pursuant  to which the Company agreed, among
other  things,  to  register  the  Registrable  Securities  (as  defined  in the
Registration  Rights  Agreement), including the shares of Common Stock issued or
issuable  under  the Subscription Agreement under the Securities Act of 1933, as
amended  (the  "1933  Act").  In connection with the Company's obligations under
the  Registration Rights Agreement, on ____________ ___, 2005, the Company filed
a  Registration  Statement  on  Form  S-  ___  (File  No.  333-________)  (the
"Registration  Statement")  with  the  Securities  and  Exchange Commission (the
"SEC")  relating  to  the  Registrable  Securities  which  names the Holder as a
selling  shareholder  thereunder.

     In connection with the foregoing, we advise you that [a member of the SEC's
                                                          =
staff  has  advised  us by telephone that the SEC has entered an order declaring
the  Registration  Statement  effective]  [the Registration Statement has become
                                       =========================================
effective] under the 1933 Act at [enter the time of effectiveness] on [enter the
   =======                        -------------------------------      ---------
date  of  effectiveness]  and  to  the  best  of our knowledge, after telephonic
-----------------------
inquiry  of  a  member  of  the  SEC's  staff,  no  stop  order  suspending  its
------
effectiveness  has  been  issued and no proceedings for that purpose are pending
------
before,  or  threatened by, the SEC and the Registrable Securities are available
--
for  resale  under  the  1933  Act  pursuant  to  the  Registration  Statement.

                                   Very  truly  yours,

                                   [Company  Counsel]

     By:     ____________________
cc:     [Holder]

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