Document:

InfoTech USA, Inc. Exhibit 10.4 to Form 8K

Exhibit 10.4

COLLATERAL ASSIGNMENT
OF NOTE 

        THIS
COLLATERAL ASSIGNMENT OF NOTE (this “Assignment”), dated as of June 29, 2004, is
made by and between INFOTECH USA, INC., a Delaware corporation (the “Assignor”),
and WELLS FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the “Assignee”).
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed
to them in the Credit Agreement (as defined below). 

        WHEREAS,
the Assignee, InfoTech USA, Inc., a New Jersey corporation (the “Borrower”),
Assignor and Information Technology Services, Inc., a New York corporation, are parties to
that certain Credit and Security Agreement, dated as of the date hereof (as the same may
hereafter be amended, modified, supplemented or restated from time to time, the
“Credit Agreement”); 

        WHEREAS,
the Borrower is a wholly-owned subsidiary of the Assignor and Applied Digital Solutions,
Inc., a Missouri corporation (“ADS”), owns a majority of the issued and
outstanding shares of capital stock of the Assignor; 

        WHEREAS,
pursuant to that certain Guaranty by Corporations, dated as of the date hereof, made by
Assignor and ITSI in favor of Assignee (the “Guaranty”), Assignor has
unconditionally guaranteed the prompt payment and performance in full of all Obligations
under the Credit Agreement; 

        WHEREAS,
pursuant to that certain Commercial Loan Agreement, dated June 27, 2003, between ADS and
the Assignor (the “Loan Agreement”), ADS executed and delivered to the Assignor
that certain Term Note, dated June 27, 2003, in the principal amount of $1,000,000 (the
“Term Note”), and, as security for the payment thereof, ADS and Assignor entered
into that certain Stock Pledge Agreement, dated June 27, 2003 (the “Stock Pledge
Agreement”), pursuant to which ADS pledged to Assignor 750,000 shares of the common
stock of Digital Angel Corporation owned by ADS, as evidenced by Certificate No. 3471 (the
“Stock Certificate”; together with the Loan Agreement, the Term Note, the Stock
Pledge Agreement, the First Amendment to Loan Documents dated as of June 29, 2004 between
ADS and the Assignor (the “First Amendment”) and all other agreements, documents
and instruments executed in connection with any of the foregoing, in each case as the same
may be amended, modified, supplemented, restated or replaced from time to time,
collectively, the “ADS Loan Documents”); and 

        WHEREAS,
as a condition to making any advances under the Credit Agreement, the Assignee is
requiring that the Assignor grant the Assignee a security interest in all of the
Assignor’s right, title and interest in and to the ADS Loan Documents. 

        Accordingly,
in consideration of the premises and in order to induce the Assignee to make advances
under the Credit Agreement, the Assignor hereby agrees for the benefit of the Assignee as
follows: 

        SECTION 1. Collateral
Assignment. The Assignor hereby pledges, collaterally assigns, transfers, and conveys
to the Assignee, its successors and assigns, for its benefit, with full recourse, and
grants to the Assignee a security interest in, all of Assignor’s right, title, and
interest in and to the following (the “Assigned Collateral”): 

             (a)    
          the Term Note; 

             (b)    
          the Stock Certificate; 

             (c)    
          the Loan Agreement; 

             (d)    
          the Stock Pledge Agreement; 

             (e)    
          the First Amendment; 

             (f)    
          all of the other ADS Loan Documents; 

             (g)    
          all interest, cash, instruments, and other property from time to time received,
          receivable, or otherwise distributed in respect of or in exchange for all or any
          part of the Assigned Collateral or any security or collateral relating to the
          ADS Loan Documents; and 

             (h)    
          all proceeds of any and all of the foregoing Assigned Collateral. 

        SECTION 2. Security for
Obligations. This Assignment (including the pledge of the Assigned Collateral made
pursuant hereto and security interests hereunder) secures the payment of all Obligations
of the Borrower now or hereafter existing under the Credit Agreement and all agreements,
documents or instruments executed in connection therewith or relating thereto,
(collectively, the “Loan Documents”), whether for principal, interest, fees,
expenses, or otherwise, and all obligations of the Assignor now or hereafter existing
under this Assignment or the Guaranty (all such obligations of the Borrower and the
Assignor being the “Secured Obligations”). Without limiting the generality of
the foregoing, this Assignment and the assignment of the Assigned Collateral made pursuant
hereto secure the payment of all amounts that constitute part of the Secured Obligations
and would be owed by the Borrower or the Assignor to the Assignee under the Credit
Agreement and the other Loan Documents or this Assignment but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization, or
similar proceeding involving the Borrower or the Assignor. 

        SECTION 3. Delivery of Assigned
Collateral. The Assignor shall tender immediate physical possession of the original of
each of the ADS Loan Documents to the Assignee, together with, in the case of the Term
Note, an allonge assigning the Term Note to the Assignee substantially in the form
attached hereto as Exhibit A (the “Allonge”), and, in the case of the Stock
Certificate, duly executed instruments of transfer or assignment in blank, in form and
substance satisfactory to the Assignee. 

        The
Assignee shall have no duty or obligation to enforce the Term Note or any of the other ADS
Loan Documents, protect or maintain any security for the payment of the Term Note or any
of the other ADS Loan Documents, or provide any notices required by the Term Note or any
of the other ADS Loan Documents, it being specifically acknowledged and agreed that the
Assignee shall have no duty of care in regard to the Term Note or any of the other ADS
Loan Documents or any security therefor other than the duty of the Assignee to maintain
safe physical possession of the Term Note and the other Assigned Collateral in accordance
with Section 11 hereof. 

–2–

        SECTION 4.
Representations,  Warranties and Covenants.  The Assignor represents,  warrants, and covenants as
follows:

             (a)    
          The Term Note and each of the other ADS Loan Documents has been duly authorized,
          issued, and delivered, is the legal, valid, and binding obligation of ADS and is
          enforceable against ADS in accordance with its terms. 

             (b)    
          The Assignor is and shall be the legal and beneficial owner of the Assigned
          Collateral free and clear of any lien, security interest, option, or other
          charge or encumbrance except for the security interest created by this
          Assignment. 

             (c)    
          The pledge and assignment of the Assigned Collateral pursuant to this Assignment
          creates a valid and enforceable security interest in the Assigned Collateral,
          securing the payment of the Secured Obligations, and all filings and other
          actions necessary or desirable to perfect and protect such security interest
          (including the priority thereof) have been, or, upon (i) the filing of a Uniform
          Commercial Code financing statement in the office of the Secretary of State of
          Delaware, and (ii) the obtaining of possession of all Assigned Collateral the
          possession of which is lawfully required to perfect a security interest therein,
          will have been duly taken to create a valid, enforceable, and perfected first
          priority security interest in the Assigned Collateral. 

             (d)    
          Except for the filing of the aforementioned Uniform Commercial Code financing
          statement in the office of the Secretary of State of Delaware, no consent of,
          authorization, approval, or other action by, notice to, or filing with any other
          person, entity, governmental authority or regulatory body is required for: (x)
          the pledge and assignment by the Assignor of the Assigned Collateral pursuant to
          this Assignment or for the execution, delivery, or performance of this
          Assignment by the Assignor; (y) the perfection or maintenance of the security
          interest created hereby (including the first priority nature of such security
          interest); or (z) the exercise by the Assignee of the rights provided for in
          this Assignment or the remedies in respect of the Assigned Collateral pursuant
          to this Assignment. 

             (e)    
          The Assignor has full right, power, and authority to assign all of its right,
          title, and interest in and to the Assigned Collateral and to perform all other
          obligations required hereunder. 

             (f)    
          The Assignor has previously delivered to the Assignee true, correct, and
          complete copies of any and all written agreements (and summaries of all oral
          agreements) to which it is a party that are presently in effect and that relate
          or pertain to the Assigned Collateral, and none of the terms and conditions of
          the Assigned Collateral have been varied, amended, or changed in any way except
          as stated therein. 

             (g)    
          As of the date hereof, to the Assignor’s knowledge, there is no default or
          any action, event, or condition that would, with the giving of notice, the
          passage of time, or both, constitute a default under the Term Note or any of the
          other Assigned Collateral, and the Assignor will, until the Secured Obligations
          are paid in full, notify the Assignee in writing promptly after the Assignor
          obtains knowledge or receives notice of any default or any action, event, or
          condition that would, with the giving of notice, the passage of time, or both,
          constitute such a default. 

–3–

             (h)    
          To the Assignor’s knowledge, there are no defenses to or counterclaims or
          rights of setoff against the Assignor’s rights under the Assigned
          Collateral. 

             (i)    
          Without the prior written consent of the Assignee, after the date hereof the
          Assignor shall not (i) extend the final maturity date of the Term Note or any
          other date fixed for payment of principal of the Term Note, (ii) reduce the
          amount of principal of, or interest rate under, the Term Note, (iii) cancel,
          terminate or release, or permit or consent to the cancellation, termination or
          release of, any part of the Assigned Collateral, (iv) take, permit or consent to
          any other action that could substantially interfere with the exercise of
          remedies by the Assignee under the Assigned Collateral, or (v) amend or waive
          any of the terms of, modify, settle, compromise, abate, discharge, release,
          terminate, arbitrate, set off, adjust, grant consents with respect to, waive any
          default or event of default under, or otherwise adversely affect (collectively,
          “Adjust” or “Adjustment”) the Assigned Collateral or the
          obligations of ADS or any other person thereunder in any way without the prior
          written consent of the Assignee. 

             (j)    
          Subject to the provisions of Section 12, all cash proceeds received by the
          Assignee or the Assignor (which cash proceeds shall be immediately paid over to
          the Assignee) in respect of any sale of, collection from, payment with respect
          to or realization upon all or any part of the Assigned Collateral shall be
          applied by the Assignee to pay the Secured Obligations in accordance with the
          Credit Agreement and this Assignment. 

             (k)    
          The Assignor shall promptly and diligently exercise and pursue all of its
          rights, remedies, powers, benefits, and privileges, and perform and carry out
          all of its duties, obligations, and functions with respect to the Assigned
          Collateral, unless otherwise directed by the Assignee. 

             (l)    
          The Assignor shall deliver to the Assignee, within three (3) business days of
          the receipt, sending, giving, or execution thereof, copies of all amendments,
          modifications, notices, requests, waivers, approvals and consents with respect
          to the Assigned Collateral. 

             (m)    
          The Term Note is outstanding on the date hereof in the principal amount of One
          Million Dollars ($1,000,000). 

             (n)    
          There are no conditions precedent to the effectiveness of this Assignment that
          have not been satisfied or waived. 

             (o)    
          The Assignor has, independently and without reliance upon the Assignee and based
          on such documents and information as it has deemed appropriate, made its own
          decision to enter into this Assignment. 

        SECTION 5. Further Assurances.
The Assignor agrees that, at any time and from time to time, at the expense of the
Assignor, the Assignor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably necessary or desirable, or
that the Assignee may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or under the Assigned Collateral or to
enable the Assignee to exercise and enforce its rights and remedies hereunder with respect
to any Assigned Collateral. 

–4–

        SECTION 6. Assignment
Immediate. This collateral assignment of the Assigned Collateral is absolute,
unconditional, and immediate and is intended to transfer and convey to the Assignee all of
the Assignor’s present right, title, and interest in, under, and to the Assigned
Collateral. 

        SECTION 7. Transfers and Other
Liens. The Assignor agrees that it will not (i) sell, assign (by operation of law or
otherwise), or otherwise dispose of, or grant any option with respect to, any of the
Assigned Collateral, or (ii) create or permit to exist any lien, security interest,
option, or other charge or encumbrance upon or with respect to any of the Assigned
Collateral, except for the security interest under this Assignment. 

        SECTION 8. The Assignee Appointed
Attorney-in-Fact. The Assignor hereby appoints the Assignee as the Assignor’s
attorney-in-fact, with full authority in the place and stead of the Assignor and in the
name of the Assignor or otherwise, from time to time in the Assignee’s discretion to
take any action and to execute any instrument that the Assignee may deem necessary or
advisable to preserve or protect its interest in the Assigned Collateral and otherwise to
accomplish the purposes of this Assignment, including, without limitation, to: (i) settle,
extend, renew, compromise, compound, exchange, or otherwise Adjust claims or security with
respect to the Assigned Collateral or in connection with any legal proceedings brought
with regard thereof; (ii) take control in any manner of any cash or non-cash items of
payment; and (iii) endorse the name of the Assignor upon any items of payment as to the
Assigned Collateral. This appointment as attorney-in-fact is irrevocable and coupled with
an interest, and shall survive the disability of the Assignor. The appointment of the
Assignee as attorney-in-fact under this Section 8, and the Assignee’s right to take
any actions under this Section 8, shall be effective (a) at any time whether or not a
Default or Event of Default has occurred or exists under the Credit Agreement, but only to
the extent necessary to effect Assignee’s rights under Section 10 hereof or (b) at
any time during a Default Period. The Assignor will indemnify and save harmless the
Assignee from and against any liability or damage that the Assignee or the Assignor may
incur in good faith in the exercise and performance of any of the powers and duties set
forth herein (other than losses, claims, costs or expenses that result from or arise out
of the gross negligence or willful misconduct of the Assignee or its officers, directors,
employees, assigns or representatives). 

        SECTION 9. Assignor to Remain
Liable: Indemnification. Notwithstanding anything to the contrary contained herein,
(a) Assignor shall remain liable under all the contracts, agreements, and documents
included in the Assigned Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Assignment had not been
executed; (b) the exercise by the Assignee of any of its rights hereunder shall not
release the Assignor from any of its duties or obligations under the contracts,
agreements, and documents included in the Assigned Collateral; and (c) the Assignee shall
have no obligation or liability under the contracts, agreements, and documents included in
the Assigned Collateral, nor shall the Assignee be obligated to perform any of the duties
or obligations of the Assignor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder, 

–5–

and the Assignor hereby agrees to defend, indemnify
and hold harmless the Assignee and its officers, directors, employees, assignees, and
representatives from any losses, claims, costs and expenses (including reasonable
attorneys fees and expenses) incurred by the Assignee or its officers, directors,
employees, Assignees, and representatives arising from any of the Assigned Collateral or
the transactions contemplated hereunder (other than losses, claims, costs or expenses that
result from or arise out of the gross negligence or willful misconduct of the Assignee or
its officers, directors, employees, assigns or representatives). 

        SECTION 10. The Assignee May
Perform. If the Assignor fails to perform any agreement contained herein (including,
without limitation, the covenant set forth in Section 4(k) hereof), the Assignee may
itself perform, or cause performance of, such agreement, whether or not a Default or Event
of Default has occurred or exists under the Credit Agreement, and the expenses of the
Assignee incurred in connection therewith shall be payable by the Assignor pursuant to
Section 13 hereof. 

        SECTION 11. The Assignee’s
Duties. The powers conferred on the Assignee hereunder are solely to preserve and
protect its interest in the Assigned Collateral and shall not impose any duty upon the
Assignee to exercise such powers. Except for the safe custody of any Assigned Collateral
in its possession and the accounting for moneys actually received by it hereunder, the
Assignee shall have no duty as to any Assigned Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders, or other
matters relative to any Assigned Collateral (whether or not the Assignee has or is deemed
to have knowledge of such matters), or as to the taking of any necessary steps to preserve
or protect rights against any parties or any other rights pertaining to any Assigned
Collateral. The Assignee shall be deemed to have exercised reasonable care in the custody
and preservation of any Assigned Collateral in its possession if such Assigned Collateral
is accorded treatment substantially equal to that which the Assignee accords its own
property of similar character. 

        SECTION 12.
Remedies Upon Default.  If any Event of Default shall have occurred and be continuing:

             (a)    
          The Assignee, without in any way waiving such Event of Default, at its option
          and without regard to the adequacy of security for the Secured Obligations,
          shall have, in addition to other rights and remedies provided for herein or
          otherwise available to it, the exclusive right, but not the obligation, to
          exercise all of the Assignor’s rights, powers, and privileges with respect
          to the Assigned Collateral, including without limitation the right to declare
          events of default, grant consents, approvals, extensions, permissions, and
          modifications, and to exercise any and all remedies provided for in the Assigned
          Collateral. 

             (b)    
          The Assignee may exercise in respect of the Assigned Collateral, in addition to
          other rights and remedies provided for herein or otherwise available to it, all
          the rights and remedies of a secured party on default under the Uniform
          Commercial Code in effect in the State of New York at that time (the
          “UCC”) (whether or not the UCC applies to the Assigned Collateral),
          and may also, without notice (except as specified below), sell the Assigned
          Collateral or any part thereof in one or more parcels at public or private sale;
          at any exchange, broker’s board, office of the Assignee, or elsewhere; for
          cash, on credit, or for future delivery; and upon such other terms as the
          Assignee may deem commercially reasonable. The Assignor agrees that, 

–6–

     to the
          extent notice of sale shall be required by law, at least five (5) days’
          notice to the Assignor of the time and place of any public sale or the time
          after which any private sale is to be made shall constitute reasonable
          notification. The Assignee shall not be obligated to make any sale of Assigned
          Collateral regardless of notice of sale having been given. The Assignee may
          adjourn any public or private sale from time to time by announcement at the time
          and place fixed therefor, and such sale may, without further notice, be made at
          the time and place to which it was so adjourned. 

             (c)    
          Any cash held by the Assignee as Assigned Collateral and all cash proceeds
          received by the Assignee in respect of any sale of, collection from, or other
          realization upon all or any part of the Assigned Collateral may, in the
          discretion of the Assignee, be held by the Assignee as collateral for, and may
          then or at any time thereafter be applied (after payment of any amounts payable
          to the Assignee pursuant to Section 13 hereof) in whole or in part by the
          Assignee against all or any part of the Secured Obligations in accordance with
          the Credit Agreement. Any surplus of such cash or cash proceeds held by the
          Assignee and remaining after payment in full of all the Secured Obligations
          shall be promptly paid over to the Assignor or to whosoever may be lawfully
          entitled to receive such surplus. 

        SECTION 13. Expenses. The
Assignor will upon demand therefor pay to the Assignee the amount of any and all expenses,
including the reasonable fees and expenses of its counsel, experts, and Assignees, that
the Assignee may incur in connection with: (i) the administration of this Assignment; (ii)
the custody or preservation of, or the sale of, collection from, or other realization
upon, any of the Assigned Collateral; (iii) the exercise or enforcement (whether through
negotiations, legal proceedings, or otherwise) of any of the rights of the Assignee
hereunder or under the Assigned Collateral; or (iv) the failure by the Assignor to perform
or observe any of the provisions hereof. 

        SECTION 14. Security Interest
Absolute. All rights of the Assignee and all security interests hereunder, and all
Secured Obligations of the Assignor hereunder, shall be absolute and unconditional
irrespective of: 

             
        (i)    
          any lack of validity or enforceability of the Credit Agreement or any other Loan
          Document or any other agreement or instrument relating thereto; 

             
        (ii)    
          any change in the time, manner, or place of payment of, or in any other term of,
          all or any of the Secured Obligations, or any other amendment or waiver of or
          any consent to any departure from the Credit Agreement or any other Loan
          Document including, without limitation, any increase in the Secured Obligations
          resulting from the extension of additional credit to the Borrower or otherwise; 

             
        (iii)    
          any taking, exchange, release, or nonperfection of any other collateral securing
          any or all of the Secured Obligations; 

             
        (iv)    
          any manner of application of collateral, or proceeds thereof, to all or any of
          the Secured Obligations, or any manner of sale or other disposition of any
          collateral for all or any of the Secured Obligations or any other assets of the
          Assignor; or 

–7–

             
        (v)    
          any other circumstance that might otherwise constitute a defense available to,
          or a discharge of, the Assignor or a third-party assignor. 

        SECTION 15. Amendments, Etc.
No amendment or waiver of any provision of this Assignment, and no consent to any
departure by the Assignor herefrom, shall in any event be effective unless the same shall
be in writing and signed by the Assignee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given. 

SECTION 16. Addresses for
Notices. All notices and other communications provided for hereunder shall be in
writing (including telecopier communication) and mailed, telecopied, delivered and
received in accordance with Section 8.3 of the Credit Agreement. 

        SECTION 17. Continuing Security
Interest; Assignments Under Loan Documents. This Assignment shall create a continuing
security interest in the Assigned Collateral and shall (i) remain in full force and effect
until the payment in full of the Secured Obligations and all other amounts payable under
this Assignment; (ii) be binding upon the Assignor, its successors and assigns; (iii)
inure to the benefit of the Assignee its successors, transferees, and assigns; and (iv) be
enforceable by the Assignee and its successors, transferees, and assigns. Without limiting
the generality of the foregoing clauses (iii) and (iv), the Assignee may assign or
otherwise transfer all or any portion of its rights and obligations under the Loan
Documents (including, without limitation, all or any portion of the Secured Obligations)
to any other person or entity to the extent permitted by, and in accordance with the
Credit Agreement, and, upon compliance with the Credit Agreement such other person or
entity shall thereupon become vested with all the benefits in respect thereof granted to
the Assignee herein or otherwise. Upon the payment in full of the Secured Obligations and
all other amounts payable under this Assignment, and subject to compliance with Section
3.9 of the Credit Agreement, the security interest granted hereby shall terminate and all
rights to the Assigned Collateral shall revert to the Assignor. Upon any such termination,
the Assignee will, at the Assignor’s expense, return to the Assignor such of the
Assigned Collateral as shall not have been sold or otherwise applied to the Secured
Obligations pursuant to the terms hereof and execute and deliver to the Assignor such
documents as the Assignor shall reasonably request to evidence such termination. 

        SECTION 18. Governing Law;
Terms. This Assignment shall be governed by and construed in accordance with the laws
of the State of New York, except as required by mandatory provisions of law and except to
the extent that the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Assigned Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein, terms
defined in Article 9 of the UCC are used herein as therein defined. 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK] 

–8–

        IN
W1TNESS WHEREOF, the Assignor has caused this Assignment to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written. 

	  	INFOTECH USA, INC., a Delaware corporation 

	 	By: 	  /s/ J. Robert Patterson
 
	 	Name:	 J. Robert Patterson
	 	Title:	 Chief Financial Officer, Vice President and
 Treasurer

	  	WELLS FARGO BUSINESS CREDIT, INC., a Minnesota corporation

	 	By: 	  /s/ Sal Mutone
 
	 	Name:	 Sal Mutone
	 	Title:	 Vice President

–9–InfoTech USA, Inc. Exhibit 10.5 to Form 8K

Exhibit 10.5

AGREEMENT FOR
WHOLESALE FINANCING
(Security Agreement)
(ILOC Collateral) 

This AGREEMENT FOR WHOLESALE
FINANCING (as amended, supplemented or otherwise modified from time to time, this
“Agreement”) is hereby made this 30th day of June, 2004, by and between IBM
Credit LLC, a Delaware limited liability company with a place of business at North
Castle Drive, Armonk, NY 10504 (“IBM Credit”), and Info Tech USA, Inc.,
formerly known as Information Products Center, Inc., (“IPC”) duly organized
under the laws of the State of New Jersey with its principal place of business at 7
Kingsbridge Road, Fairfield, NJ 07004 (“Customer”). This Agreement amends and
restates all prior financing agreements (all such agreements, as amended, restated,
supplemented or otherwise modified from time to time, the “Prior Financing
Agreement.”) 

Pursuant to the terms of Section 17
of this Agreement, Customer warrants and represents that the obligations owed to IBM
Credit by Customer under the Prior Financing Agreement will remain in full force and
effect, 

        In
the course of Customer’s business, Customer acquires products and wants IBM Credit to
finance Customer’s purchase of such products under the following terms and
conditions: 

             1.       
          IBM Credit may in its sole discretion from time to time decide the amount of
          credit IBM Credit extends to Customer, notwithstanding any prior course of
          conduct between IBM Credit and Customer. IBM Credit may combine all of its
          advances to make one debt owed by Customer. 

             2.       
          Customer agrees and understands that provided: (i) Customer’s financing
          agreement with Wells Fargo Business Credit, Inc. dated June 29, 2004
          (“Wells Fargo Financing Agreement”) remains in effect and (ii) no
          default or event of default exists under this Agreement, in the sole discretion
          of IBM Credit, IBM Credit will advance funds under the terms of this Agreement
          up to the full amount available under the terms of the Letter of Credit (at the
          time of the Customer’s request for an advance), as more specifically
          described in Section 4, hereunder. Customer agrees that any decision to finance
          products will not be binding on IBM Credit until such time as the funds are
          actually advanced by IBM Credit. 

             3.       
          In the course of Customer’s operations, Customer intends to purchase from
          persons approved in writing by IBM Credit for the purpose of this Agreement (the
          “Authorized Suppliers”) computer hardware and software products
          manufactured or distributed by or bearing any trademark or trade name of such
          Authorized Suppliers (the “Approved Inventory”). When IBM Credit
          advances funds, IBM Credit may send Customer a Statement of Transaction or other
          statement. If IBM Credit does, Customer will have acknowledged the indebtedness
          to be an account stated and Customer will have agreed to the terms set forth on
          such statement unless Customer notifies IBM Credit in writing of any question or
          objection within seven (7) days after such statement is mailed to Customer. 

             4.       
          To secure payment of all of Customer’s current and future indebtedness to
          IBM Credit whether under this Agreement, any guaranty or surety agreement that
          Customer executes, or any other agreement between Customer and IBM Credit,
          whether direct or contingent, Customer hereby agrees to cause an institution
          acceptable to IBM Credit to issue in IBM Credit’s favor an Irrevocable
          Letter of Credit in a form acceptable to IBM Credit (“Letter of
          Credit”) in the amount of Six Hundred Thousand Dollars ($600,000.00)
          bearing an effective date as of the date of this Agreement and expiring no
          earlier than twelve (12) months from the date hereof. At least sixty (60) days
          prior to the expiration of the Letter of Credit or any subsequent Letter of
          Credit, Customer will renew and extend such Letter of Credit for a term of
          twelve (12) months or longer, or will have a new Letter of Credit issued to IBM
          Credit for a term of twelve (12) months or longer and in an amount, form and
          from an institution acceptable to IBM Credit. 

Page 1  of  8

             5.       
          Customer represents that its business is conducted as a __ SOLE PROPRIETORSHIP,
          __ PARTNERSHIP, __ JOINT VENTURE, XXX CORPORATION, __ COOPERATIVE, ___ LIMITED
          LIABILITY COMPANY (check applicable term). Customer agrees to notify IBM Credit
          immediately of any change in identity, name, form of ownership or management,
          and of any additions or discontinuances of other business locations. 

             6.       
          Customer will execute any and all documents IBM Credit may request to confirm or
          perfect IBM Credit’s title or interest in the Letter of Credit. Customer
          will pay all taxes, license fees, assessments and charges when due. Customer
          warrants and represents that it is not in default in the payment of any
          principal, interest or other charges relating to any indebtedness owed to any
          third party for any reason whatsoever, and no event has occurred under the terms
          or provisions of any agreement, document, promissory note or other instrument,
          which with or without the passage of time and/or the giving of notice
          constitutes or would constitute an event of default thereunder. Each financial
          statement that Customer submits to IBM Credit, is and will be correct and will
          accurately represent Customer’s financial condition. Customer further
          acknowledges IBM Credit’s reliance on the truthfulness and accuracy of each
          and every financial statement that Customer submits to IBM Credit in its
          extension of various financial accommodations to Customer. 

             7.       
          Customer agrees to immediately pay IBM Credit the full amount of the principal
          balance owed IBM Credit, at or before the time payment is required under the
          terms of Customer’s financing program with IBM Credit. Regardless of the
          terms of any scheduled payment program with IBM Credit, if IBM Credit determines
          that the current outstanding indebtedness owed by Customer to IBM Credit exceeds
          the value of the Letter of Credit in IBM Credit’s possession, Customer
          agrees to immediately pay to IBM Credit an amount equal to the difference
          between such outstanding indebtedness and the Letter of Credit. Customer will
          make all payments to IBM Credit according to the remit to instructions in the
          billing statement. Any checks or other instruments delivered to IBM Credit to be
          applied against Customer’s outstanding obligations will constitute
          conditional payment until the funds represented by such instruments are actually
          received by IBM Credit. IBM Credit may apply payments to reduce finance charges
          first and then principal, irrespective of Customer’s instructions. Further,
          IBM Credit may apply principal payments to the oldest (earliest) invoice for the
          Approved Inventory financed by IBM Credit, or to such Approved Inventory which
          is sold, lost, stolen, destroyed, damaged, or otherwise disposed of. If Customer
          signs any instrument for any outstanding obligations, it will be evidence of
          Customer’s obligation to pay and will not be payment. Any discount, rebate,
          bonus, or credit for Approved Inventory granted to Customer by any Authorized
          Supplier will not, in any way, reduce the obligations Customer owes IBM Credit,
          until IBM Credit has received payment in good funds, provided, however, that in
          the event any such discount, rebate, bonus, or credit must be returned or
          disgorged or are otherwise unavailable for application, then Customer’s
          indebtedness will be reinstated as if such discount, rebate, bonus, or credit
          had never been applied. 

             8.       
          Customer will pay IBM Credit finance charges on the total amount of credit
          extended to Customer in the amount agreed to between Customer and IBM Credit
          from time to time. The period of any financing will begin on the invoice date
          for the Approved Inventory whether or not IBM Credit advances payment on such
          date. This period will be included in the calculation of the annual percentage
          rate of the finance charges. Such finance charges may be applied by IBM Credit
          to cover any amounts expended for IBM Credit’s: appraisal and examination
          of the assets; maintenance of facilities for payment; assistance in support of
          Customer’s retail sales; IBM Credit’s commitments to Authorized
          Suppliers to finance shipments of Approved Inventory to Customer; obtaining the
          Letter of Credit and any renewals, extensions or new Letter of Credit; expenses
          incurred in obtaining additional collateral or security; and any costs and
          expenses incurred by IBM Credit arising out of the financing IBM Credit extends
          to Customer. Customer also agrees to pay IBM Credit additional charges which
          will include: late payment fees at a per annum rate equal to the Prime Rate plus
          6.5%; flat charges; charges for receiving NSF checks from Customer; renewal
          charges; and any other charges agreed to by Customer and IBM Credit from time to
          time. For purposes of this Agreement, “Prime Rate” will mean the
          average of the rates of interest announced by banks which IBM Credit uses in its
          normal course of business of determining prime rate. Unless Customer hereafter
          otherwise agrees in writing, the finance charges and additional charges agreed
          upon will be IBM Credit’s applicable finance charges and additional charges
          for the class of Approved Inventory involved prevailing from time to time at IBM
          Credit’s principal place of business, but in no event greater than the

Page 2  of  8

     highest rate from time to time permitted by applicable law. If it is determined
          that amounts received from Customer were in excess of such highest rate, then
          the amount representing such excess will be considered reductions to the
          outstanding principal of IBM Credit’s advances to Customer. IBM Credit will
          send Customer, at monthly or other intervals, a statement of all charges due on
          Customer’s account with IBM Credit. Customer will have acknowledged the
          charges due, as indicated on the statement, to be an account stated, unless
          Customer objects in writing to IBM Credit within seven (7) days after such
          statement is mailed to Customer. This statement may be adjusted by IBM Credit at
          any time to conform to applicable law and this Agreement. IBM Credit shall
          calculate any free financing period utilizing a methodology that is consistent
          with the methodologies used for similarly situated customers of IBM Credit. The
          Customer understands that IBM Credit may not offer, may change or may cease to
          offer a free financing period for the Customer’s purchases of Approved
          Inventory. If any Authorized Supplier fails to provide payment of a finance
          charge for Customer, as agreed, Customer will be responsible for and pay to IBM
          Credit all finance charges billed to Customer’s account. 

             9.       
          Any one or more of the following events shall constitute a default by Customer
          under this Agreement: Customer breaches any of the terms, warranties or
          representations contained in this Agreement or in any other agreements between
          Customer and IBM Credit or between Customer and any of IBM Credit’s
          affiliates; any guarantor or surety of Customer’s indebtedness to IBM
          Credit under this Agreement or any other agreements breaches any of the terms,
          warranties or representations contained in any guaranty, surety agreement or in
          any other agreements between any guarantor or surety and IBM Credit or between
          any guarantor or surety and any of IBM Credit’s affiliates; any
          representation, statement, report or certificate made or delivered by Customer
          or any of Customer’s owners, representatives, employees or agents or any
          guarantor or surety to IBM Credit is not true and correct; Customer fails to pay
          any of the indebtedness owed to IBM Credit or any of IBM Credit’s
          affiliates when due and payable or declared to be due and payable under this
          Agreement or under any other agreements between Customer and IBM Credit or
          between Customer and any of IBM Credit’s affiliates; IBM Credit determines
          that it is insecure with respect to the payment of any part of Customer’s
          indebtedness owed to IBM Credit; Customer or any guarantor or surety becomes in
          default in the payment of any indebtedness owed to any third party, or any event
          occurs under the terms or provisions of any agreement, document, promissory note
          or other instrument, for any reason whatsoever, which with or without the
          passage of time and/or the giving of notice constitutes or would constitute an
          event of default thereunder; a judgment issues on any money demand against
          Customer or any guarantor or surety which is not paid in full within sixty (60)
          days; a writ of capias, attachment, sale or seizure is issued against Customer
          or any of Customer’s assets; any of Customer’s assets are seized or
          taken in execution; the death of the undersigned if the business is operated as
          a sole proprietorship or partnership, or the death of any guarantor or surety;
          Customer ceases or suspends its business; Customer or any guarantor or surety
          makes a general assignment for the benefit of Customer’s or any
          guarantor’s or surety’s creditors; Customer or any guarantor or surety
          become bankrupt or insolvent or voluntarily or involuntarily become subject to
          the provisions of the Federal Bankruptcy Code, state insolvency laws or any act
          or code for the benefit of creditors; any receiver is appointed for any of
          Customer’s or any guarantor’s or surety’s properties, assets,
          businesses or undertakings; any guaranty or surety agreement pertaining to
          Customer’s indebtedness to IBM Credit is terminated for any reason
          whatsoever; Customer loses any franchise, permission, license or right to sell
          or deal in any Approved Inventory; if at least sixty (60) days prior to the
          expiration of the Letter of Credit or any subsequent Letter of Credit, such
          Letter of Credit is not extended for a term of twelve (12) months or longer, or
          a new Letter of Credit in an amount, form and from an institution acceptable to
          IBM Credit and for a term of twelve (12) months or longer is not provided to IBM
          Credit; Customer or any guarantor or surety misrepresents its respective
          financial condition or organizational structure. Following an event of a
          default: 

             (a)       
          IBM Credit may, at any time at IBM Credit’s election, without notice or
          demand to Customer do any one or more of the following: declare all or any part
          of the obligations Customer owes IBM Credit immediately due and payable,
          together with all court costs and all costs and expenses of IBM Credit’s
          repossession and collection activity, including, but not limited to, all
          attorney’s fees; exercise any or all rights of a secured party under
          applicable law; exercise any and all of IBM Credit’s rights to draw upon
          the Letter of Credit; and/or cease making any further financial accommodations
          or extending any additional credit to Customer; and/or exercise any or all
          rights available at law or in equity. All of IBM Credit’s rights and
          remedies are cumulative. 

Page 3  of  8

             (b)       
          Customer waives and releases: any and all claims and causes of action which
          Customer may now or ever have against IBM Credit arising directly or indirectly
          out of this Agreement or Customer’s financing program with IBM Credit. 

If Customer brings any action or
asserts any claim against IBM Credit which arises out of this Agreement, any other
agreement or any of the business dealings between IBM Credit and Customer, in which
Customer does not prevail, Customer agrees to pay IBM Credit all costs and expenses of IBM
Credit’s defense of such action or claim including, but not limited to, all
attorney’s fees. If IBM Credit fails to exercise any of IBM Credit’s rights or
remedies under this Agreement, such failure will in no way or manner waive any of IBM
Credit’s rights or remedies as to any past, current or future default. 

             10.       
          Customer agrees that IBM Credit does not warrant the Approved Inventory.
          Customer will pay IBM Credit in full even if the Approved Inventory is defective
          or fails to conform to any warranties extended by any third party.
          Customer’s obligations to IBM Credit will not be affected by any dispute
          Customer may have with any third party. Customer will not assert against IBM
          Credit any claim or defense Customer may have against any third party. 

             11.       
          Customer will indemnify and hold IBM Credit harmless against any claims or
          defenses asserted by any buyer of the Approved Inventory by reason of: the
          condition of any Approved Inventory; any representations made about the Approved
          Inventory; or for any and all other reasons whatsoever. 

             12.       
          Customer further authorizes IBM Credit to provide to any third party any credit,
          financial or other information about Customer that is in IBM Credit’s
          possession. 

             13.       
          Each party may electronically transmit to or receive from the other party
          certain documents specified in the E-Business Schedule A attached hereto
          (“E-Documents”) via the Internet or electronic data interchange
          (“EDI”). Any transmission of data which is not an E-Document shall
          have no force or effect between the parties. EDI transmissions may be
          transmitted directly or through any third party service provider
          (“Provider”) with which either party may contract. Each party will be
          liable for the acts or omissions of its Provider while handling E-Documents for
          such party, provided, that if both parties use the same Provider, the
          originating party will be liable for the acts or omissions of such Provider as
          to such E-Document. Some information to be made available to Customer will be
          specific to Customer and will require Customer to register with IBM Credit
          before access is provided. After IBM Credit has approved the registration
          submitted by Customer, IBM Credit will provide an ID and password(s) to an
          individual designated by Customer (“Customer Recipient”). Customer
          accepts responsibility for the designated individual’s distribution of the
          ID and password(s) within its organization and Customer will take reasonable
          measures to ensure that passwords are not shared or disclosed to unauthorized
          individuals. Customer will conduct an annual review of all IDs and passwords to
          ensure that they are accurate and properly authorized. IBM CREDIT MAY CHANGE OR
          DISCONTINUE USE OF AN ID OR PASSWORD AT ITS DISCRETION AT ANY TIME. E-Documents
          will not be deemed to have been properly received, and no E-Document will give
          rise to any obligation, until accessible to the receiving party at such
          party’s receipt computer at the address specified herein. Upon proper
          receipt of an E-Document, the receiving party will promptly transmit a
          functional acknowledgment in return. A functional acknowledgment will constitute
          conclusive evidence that an E-Document has been properly received. If any
          transmitted E-Document is received in an unintelligible or garbled form, the
          receiving party will promptly notify the originating party in a reasonable
          manner. In the absence of such a notice, the originating party’s records of
          the contents of such E-Document will control. 

Page 4  of  8

Each party will use those security
procedures which are reasonably sufficient to ensure that all transmissions of E-Documents
are authorized and to protect its business records and data from improper access. Any
E-Document received pursuant to this paragraph 13 will have the same effect as if the
contents of the E-Document had been sent in paper rather than electronic form. The conduct
of the parties pursuant to this paragraph 13 will, for all legal purposes, evidence a
course of dealing and a course of performance accepted by the parties. The parties agree
not to contest the validity or enforceability of E-Documents under the provisions of any
applicable law relating to whether certain agreements are to be in writing or signed by
the party to be bound thereby. The parties agree, as to any E-Document accompanied by
Customer’s ID, that IBM Credit can reasonably rely on the fact that such E-Document
is properly authorized by Customer. E-Documents, if introduced as evidence on paper in any
judicial, arbitration, mediation or administrative proceedings, will be admissible as
between the parties to the same extent and under the same conditions as other business
records originated and maintained in documentary form. Neither party will contest the
admissibility of copies of E-Documents under either the business records exception to the
hearsay rule or the best evidence rule on the basis that the E-Documents were not
originated or maintained in documentary form. 

Neither party will be liable to the
other for any special, incidental, exemplary or consequential damages arising from or as a
result of any delay, omission or error in the electronic transmission or receipt of any
E-Document pursuant to this paragraph 13, even if either party has been advised of the
possibility of such damages. In the event Customer requests IBM Credit to effect a
withdrawal or debit of funds from an account of Customer, then in no event will IBM Credit
be liable for any amount in excess of any amount incorrectly debited, except in the event
of IBM Credit’s gross negligence or willful misconduct. No party will be liable for
any failure to perform its obligations pursuant to this paragraph 14 in connection with
any E-Document, where such failure results from any act of God or other cause beyond such
party’s reasonable control (including, without limitation, any mechanical, electronic
or communications failure) which prevents such party from transmitting or receiving
E-Documents. 

     CUSTOMER RECIPIENT for Internet transmissions:

     (PLEASE PRINT)

Name of Customer's Designated Central Contact Authorized to Receive IDs and Passwords:

	     J.Robert Patterson
 	  

	e-mail Address: 	     bpatterson@infotechusa.com
 	  

	Phone Number: 	     (973)227-8772 x103
 	  

             14.       
          Time is of the essence in this Agreement. This Agreement will be effective from
          (i) the date of its acceptance at IBM Credit’s office, (ii) receipt, in
          form and substance satisfactory to IBM Credit, a fully executed copy of the
          Wells Fargo Financing Agreement and (iii) Customer’s total outstandings
          under the Prior Financing Agreement being reduced to Six Hundred Thousand
          Dollars ($600,000.00). Customer acknowledges receipt of a true copy and waives
          notice of IBM Credit’s acceptance of it. If IBM Credit advances funds under
          this Agreement, IBM Credit will have accepted it. This Agreement will remain in
          force until one of the parties gives ninety (90) day written notice to the other
          that it is terminated. Notwithstanding the previous sentence, in the event that
          the terms of the Letter of Credit are not extended for any reason or Customer
          fails to provide a new Letter of Credit in an amount, form and from an
          institution acceptable to IBM Credit and for a term of twelve (12) months or
          longer, IBM Credit may immediately terminate and accelerate all amounts due
          under this Agreement and otherwise exercise those remedies available to IBM
          Credit under the terms of this Agreement. If Customer terminates this Agreement,
          IBM Credit may declare all or any part of the indebtedness Customer owes IBM
          Credit due and payable immediately. If this Agreement is terminated, Customer
          will not be relieved from any obligations to IBM Credit arising out of IBM
          Credit’s advances or commitments made before the effective date of
          termination. IBM Credit’s rights under this Agreement and IBM Credit’s
          interest and title in present and future Letters of Credit will remain valid,
          binding and enforceable until all Customer’s indebtedness to IBM Credit is
          paid in full. This Agreement shall be binding upon and inure to the benefit of
          IBM Credit and the Customer and their respective successors and assigns;
          provided, that the Customer shall have no 

Page 5  of  8

     right to assign this Agreement without
          the prior written consent of IBM Credit. This Agreement will protect and bind
          IBM Credit’s and Customer’s respective heirs, representatives,
          successors and assigns. It can be varied only by a document signed by IBM
          Credit’s and Customer’s authorized representatives. If any provision
          of this Agreement or its application is invalid or unenforceable, the remainder
          of this Agreement will not be impaired or affected and will remain binding and
          enforceable. This Agreement is executed with the authority of Customer’s
          Board of Directors, and with shareholder approval, if required by the law, if
          Customer is a corporation or if Customer is a limited liability company, with
          the authority of authorized members. All notices IBM Credit sends to Customer
          will be sufficiently given if mailed or delivered to Customer at Customer’s
          address first written above. 

             15.       
          The laws of the State of New York will govern this Agreement. Customer agrees
          that venue for any lawsuit will be in the State or Federal Court within the
          county, parish, or district where IBM Credit’s office, which provides the
          financial accommodations, is located. Customer hereby waives any right to change
          the venue of any action. 

             16.       
          If Customer has previously executed any security agreements with IBM Credit,
          Customer agrees that this Agreement is intended only to amend and supplement
          such written agreements, and will not be deemed to be a novation or termination
          of such written agreements. In the event the terms of this Agreement conflict
          with the terms of any prior security agreement that Customer previously executed
          with IBM Credit, the terms of this Agreement will control in determining the
          agreement between Customer and IBM Credit. 

     17.   
          (A)     Notwithstanding anything contained in any document to the contrary, it is
          understood and agreed by Customer and IBM Credit that the claims of IBM Credit
          arising out of the obligations of Customer under the Prior Financing Agreement
          or any other documents between Customer and IBM Credit and existing as of the
          date hereof constitute continuing claims of IBM Credit. Customer acknowledges
          and agrees that such obligations outstanding as of the date hereof have not been
          satisfied or discharged and that this Agreement is not intended to effect a
          novation of Customer’s obligations under the Prior Financing Agreement or
          any other documents between Customer and IBM Credit. 

           (B)    
          Neither the obtaining of any judgment nor the exercise of any power of seizure
          or sale shall operate to extinguish the obligations of Customer to IBM Credit
          under this Agreement and shall not operate as a merger of any covenant in this
          Agreement, and the acceptance of any payment or alternate security shall not
          constitute or create a novation and the obtaining of a judgment or judgments
          under a covenant herein contained shall not operate as a merger of that covenant
          or affect IBM Credit’s rights under this Agreement. 

Page 6  of  8

             18.       
          CUSTOMER WAIVES ANY STATUTORY RIGHT TO NOTICE OR HEARING PRIOR TO IBM
          CREDIT’S DRAW UPON THE LETTER OF CREDIT. CUSTOMER FURTHER WAIVES ANY AND
          ALL RIGHTS OF SETOFF CUSTOMER MAY HAVE AGAINST IBM CREDIT. CUSTOMER AGREES THAT
          ANY PROCEEDING IN WHICH CUSTOMER, OR IBM CREDIT OR ANY OF IBM CREDIT’S
          AFFILIATES, OR CUSTOMER’S OR IBM CREDIT’S ASSIGNS ARE PARTIES, AS TO
          ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, OR
          THE RELATIONS AMONG THE PARTIES LISTED IN THIS PARAGRAPH WILL BE TRIED IN A
          COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY. EACH PARTY TO THIS
          AGREEMENT HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH PROCEEDING. 

	  	INFO TECH USA, INC. 

	  	By: 	  /s/ J. Robert Patterson
 

	  	Print Name: 	  J. Robert Patterson
 

	  	Title: 	 Secretary / Treasurer 
 

Page 7  of  8

E-BUSINESS SCHEDULE A
(“SCHEDULE A”) 

Customer Name: INFO TECH
USA, INC. 

EFFECTIVE DATE OF THIS
SCHEDULE: June 30, 2004 

DOCUMENTS: 

All documents contained in the IBM
Credit LLC Account Management Tool on the website listed below: 

http://www.ibm.com/financing/commercial/tools.html 

Page 8  of  8

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