Document:

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                                                                   EXHIBIT 10.24

                               SECURITY AGREEMENT

                  THIS SECURITY AGREEMENT (the "Agreement") is made this 12th
day of June, 2002, but effective as of the 4th day of May 2002, by REYNOLDS C.
FAULKNER ("Mr. Faulkner") and MARY RUTH FAULKNER (Mr. Faulkner and Mary Ruth
Faulkner collectively referred to as the "Pledgors") in favor of KIRKLAND'S,
INC., a Tennessee corporation (the "Secured Party").

                                   Background

                  A.       On the effective date of this Agreement, Mr. Faulkner
borrowed up to $717,000 from the Secured Party pursuant to a Term Note dated the
effective date hereof (as hereafter amended, modified or supplemented, the
"Note").

                  B.       Mr. Faulkner is a director, an Executive Vice
President and the Chief Financial Officer of the Secured Party. In order to
secure Mr. Faulkner's obligations under the Note, the Pledgors have agreed to
pledge and to grant to the Secured Party a security interest in and to (i)
certain marketable securities owned by Mr. Faulkner or the Pledgors and (ii) all
of the shares of Common Stock of the Secured Party ("Common Stock") and all
other securities of the Secured Party owned or hereafter acquired by Mr.
Faulkner or the Pledgors.

                  NOW, THEREFORE, the parties hereto, in consideration of the
consummation of the aforementioned loan by the Secured Party to Mr. Faulkner,
and intending to be legally bound hereby, agree as follows:

         1.       Pledge of Collateral.

                  1.1.     Pledge of Stock. To secure the payment of all amounts
due or to become due to the Secured Party under the Note (collectively the
"Indebtedness"), the Pledgors hereby pledge to the Secured Party and grant to
the Secured Party a first lien on, and security interest in, the Collateral (as
hereinafter defined). In furtherance of this Agreement, the Pledgors have
entered into that certain Control Agreement with Salomon Smith Barney (the
"Brokerage Firm") in favor of the Secured Party (the "Control Agreement")

                  1.2.     Designation of Collateral. The term "Collateral" when
used herein shall include (i) marketable securities owned by Mr. Faulkner or the
Pledgors having a Fair Market Value (as hereinafter defined) as of the date of
this Agreement equal to no less than the principal amount outstanding under the
Note and (ii) any shares of Common Stock and any other securities of the Secured
Party now owned or hereafter acquired by Mr. Faulkner or the Pledgors, or in
which Mr. Faulkner or the Pledgors now has or hereafter acquires any beneficial
interest, together with any securities, instruments or distributions of any kind
issuable, issued or received upon conversion of, in respect of, or in exchange
or in substitution for any such Collateral, including, but not limited to, those
arising from a stock dividend, stock split, reclassification, reorganization,
merger, consolidation, sale of assets or other exchange of securities, or any
dividends, cash, property or other distributions of any kind upon, with respect
to, or in consequence of the ownership of, the Collateral. In the event
subscriptions, warrants, options or other rights are issued in connection with
any Collateral, such subscriptions, warrants, options and rights shall be deemed
to be part of the Collateral. The term "Collateral" shall also include

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any additional Collateral delivered by Mr. Faulkner or the Pledgors to the
Secured Party pursuant to Section 1.3 hereof. As used in this Agreement, the
term "Fair Market Value" shall mean, as of any date: (i) with respect to the
marketable securities, the closing price of such marketable securities as
reported on the principal national securities exchange(s) on which such
marketable securities are traded on such date, or if no price for such
marketable securities are reported on such date, the closing price of such
securities on the last preceding date on which there were reported prices for
such securities; or (ii) with respect to marketable securities that are not
listed or admitted to unlisted trading privileges on a national securities
exchange, the closing price of such securities as reported by The Nasdaq Stock
Market on such date, or if no price for such marketable securities are reported
on such date, the closing price of such securities on the last preceding date on
which there were reported prices for such securities; or (iii) with respect to
any assets that are not marketable securities traded on a national securities
exchange or on The Nasdaq National Stock Market, then the Fair Market Value
shall be determined by the Secured Party, acting in its discretion, which
determination shall be conclusive.

                  1.3.     Delivery of Initial Collateral and Additional
Collateral. Mr. Faulkner has delivered, and by these presents does hereby
deliver, to the Secured Party the certificates representing any shares of Common
Stock and any other securities of the Secured Party owned by Mr. Faulkner as of
the date hereof (collectively with all other certificates representing
securities of the Secured Party owned by Mr. Faulkner or the Pledgors and
delivered from time to time to the Secured Party under the terms of this
Agreement, the "Certificates"), together with stock powers for the Certificates
duly executed in blank for transfer by Mr. Faulkner. The Pledgors agree that
upon the acquisition by Mr. Faulkner or the Pledgors of any additional
securities of the Secured Party included in the definition of Collateral prior
to the termination of this Agreement, Mr. Faulkner or the Pledgors, as the case
may be, shall deliver the Certificates representing such securities, with stock
powers duly endorsed for transfer, to the Secured Party as additional Collateral
to be held by the Secured Party pursuant to the terms of this Agreement. The
Pledgors further agree that, within 10 days after the Secured Party's written
request, they shall deliver additional collateral to the Secured Party from time
to time hereafter to be held pursuant to the terms of this Agreement to the
extent that the Fair Market Value of the Collateral held by the Secured Party,
together with all Collateral pledged pursuant to the Control Agreement, falls
below 125% of the principal amount then outstanding under the Note; provided,
however, to the extent that the additional collateral consists of marketable
securities, Mr. Faulkner or the Pledgors, as the case may be, may subject such
marketable securities to the pledge under the Control Agreement though the
Brokerage Firm. Such additional collateral shall be in such form as shall be
reasonably acceptable to the Secured Party.

         2.       Additional Amounts Secured. In addition to Mr. Faulkner's
prompt and full repayment of the Indebtedness, the security interest and pledge
created hereby shall secure reimbursement to the Secured Party for: (i) all
costs and expenses incurred in collection of all amounts due to the Secured
Party from Mr. Faulkner or the Pledgors, including without limitation, the costs
of suit and attorneys' fees in execution of this Agreement and the Note; (ii)
prompt performance by Mr. Faulkner of his obligations under the Note; (iii)
prompt performance by Mr. Faulkner and the Pledgors of their obligations under
this Agreement; and (iv) interest on all of the foregoing at the rates set forth
in the Note.

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         3.       Covenants. Until the termination of this Agreement and the
security interest and pledge created hereby:

                  3.1.     Except as otherwise permitted under the Control
Agreement, neither Mr. Faulkner nor the Pledgors shall, nor shall either of them
permit, without the prior written consent of the Secured Party, the sale,
transfer, pledge, hypothecation or other encumbrance, or the execution of an
agreement contemplating any of the foregoing for all or any part of the
Collateral;

                  3.2.     The Pledgors shall, at the Pledgors' expense, defend
the Secured Party's right, title, special property and security interest in and
to the Collateral and the proceeds thereof; and

                  3.3.     In the event any of the Collateral ceases to be
certificated and is held by a financial intermediary in electronic form, Mr.
Faulkner or the Pledgors, as the case may be, agree promptly to cause such
financial intermediary to enter into a control agreement satisfactory to the
Secured Party and do all other acts and things reasonably required by the
Secured Party to perfect and maintain perfected the security interest and pledge
created hereby.

         4.       Representations and Warranties of the Pledgors.

                  The Pledgors hereby make the following representations and
warranties to the Secured Party:

                  4.1.     Except for the security interest granted pursuant to
Section 1 hereof, all of the Collateral is owned by Mr. Faulkner or the
Pledgors, free and clear of any and all options, claims, security interests,
liens, pledges, encumbrances and security interests, except that created herein;
and

                  4.2.     The execution and delivery of this Agreement, the
consummation of the transactions provided for herein, and the fulfillment of the
terms hereof, will not result in the breach of any of the terms, conditions or
provisions of, or constitute a default under, or conflict with, or cause any
acceleration of any obligation under, any agreement or other instrument to which
Mr. Faulkner or the Pledgors is a party or by which either of them is bound, or
any judgment, decree, order or award of any court, governmental body or
arbitrator or any applicable law, rule or regulation.

         5.       Voting and Distributions Prior to Default.

                  5.1.     Voting. Prior to the occurrence of an Event of
Default hereunder, Mr. Faulkner or the Pledgors shall have the right to vote the
securities constituting the Collateral owned by Mr. Faulkner or the Pledgors,
respectively, provided, however, neither Mr. Faulkner nor the Pledgors shall in
any event vote such securities in a manner which would cause or constitute an
Event of Default under this Agreement or under the Note or would otherwise be
inconsistent with any of the terms, conditions or provisions of this Agreement
or the Note.

                  5.2.     Distributions. Prior to the occurrence of an Event of
Default, Mr. Faulkner or the Pledgors shall be entitled to receive directly from
the Secured Party all

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dividends, property and cash distributions with respect to, or in consequence of
the ownership of, the Collateral owned by Mr. Faulkner or the Pledgors,
respectively.

         6.       Default

                  6.1.     Events of Default. There shall be an "Event of
Default" for purposes of this Agreement if: (i) any "event of default" (as
defined therein) shall have occurred and be continuing under the Note; or (ii)
Mr. Faulkner or the Pledgors shall fail to observe any agreement, condition,
undertaking, or covenant in this Agreement.

                  6.2.     Consequences of Default. Upon the occurrence of an
Event of Default, and until the termination of this Agreement:

                           6.2.1.   The Secured Party may notify the Pledgors of
the occurrence of such Event of Default;

                           6.2.2.   The Secured Party shall be entitled to
receive and apply in payment of amounts payable by Mr. Faulkner under the Note
all dividends, property and cash distributions with respect to, or in
consequence of the ownership of, the Collateral;

                           6.2.3.   The Secured Party shall be entitled and
authorized to exercise in its discretion all voting rights, if any, pertaining
to the Collateral and in connection therewith, which authorization herein
granted shall be deemed an irrevocable power coupled with an interest;

                           6.2.4.   The Pledgors shall take any action necessary
or required or requested by the Secured Party, in order to allow the Secured
Party fully to enforce the pledge of the security interest in and to the
Collateral hereunder and realize thereon to the fullest possible extent,
including but not limited to the filing of any claims with any court, liquidator
or trustee, custodian, receiver or other like person or party and the execution
of any dividend, payment or brokerage orders or proxies; and

                           6.2.5.   The Secured Party shall have all the rights
and remedies granted or available to it hereunder, under the Uniform Commercial
Code as in effect from time to time, under any other statute or the common law,
or under the Note, including the right to sell the Collateral or any portion
thereof at one or more public or private sales upon twenty (20) days' written
notice and to bid thereat or purchase any part or all thereof in its own or a
nominee's or nominees' names, free and clear of any equity of redemption; and to
apply the net proceeds of the sale, after deduction for any expenses of sale,
including the payment of all the Secured Party's reasonable attorneys' fees in
connection with the Indebtedness and the sale, to the payment of the
Indebtedness in any manner or order which the Secured Party in its sole
discretion may elect, without further notice to or consent of the Pledgors and
without regard to any equitable principles of marshalling or other like
equitable doctrines. To the extent that the proceeds of such sale are
insufficient to satisfy all of the Indebtedness, Mr. Faulkner shall remain
liable for the amount of such deficiency.

         7.       Delay, Non-Waiver and Exclusive Remedies.

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                  7.1.     Non-Exclusive Remedies. No remedy or right herein
conferred upon or reserved to the Secured Party is intended to be to the
exclusion of any other remedy or right, but each and every such remedy or right
shall be cumulative, and shall be in addition to every other remedy or right
given hereunder, and now or hereafter existing at law or in equity.

                  7.2.     Delay and Non-Waiver. No delay or omission by the
Secured Party to exercise any remedy or right accruing upon an Event of Default
shall impair any such remedy or right, or shall be construed to be a waiver of
any such Event of Default, or an acquiescence therein, nor shall it affect any
subsequent Event of Default of the same, or a different nature.

         8.       Indemnification. The Pledgors shall defend, indemnify, and
hold harmless Secured Party from and against any loss, liability, damage, or
expense which the Secured Party may incur as a result of the taking, holding,
and/or disposing of the Collateral and the Certificates, unless such loss,
liability, damage, or expense was caused by the gross negligence or willful
misconduct of the Secured Party or its agents.

         9.       Rights Retained by the Pledgors. So long as no Event of
Default shall have occurred and be continuing hereunder or under the Note, Mr.
Faulkner or the Pledgors shall retain and may exercise all rights of or incident
to the ownership of the Collateral owned by Mr. Faulkner or the Pledgors,
respectively.

         10.      Termination. This Agreement and the security interests and
pledge created hereby shall terminate on the payment in full by Mr. Faulkner of
all of the Indebtedness. Upon termination, the Secured Party shall forthwith
deliver to (i) Mr. Faulkner the Certificates issued in Mr. Faulkner's name, with
the stock powers therefore, delivered by Mr. Faulkner to the Secured Party and
(ii) the Pledgors the Certificates issued in the Pledgors' name, with stock
powers therefore, delivered by the Pledgors to the Secured Party.

         11.      Strict Enforcement. The Secured Party shall at all times have
the right to enforce the provisions of this Agreement in strict accordance with
the terms hereof, notwithstanding any conduct or custom to the contrary. The
failure of the Secured Party at any time to enforce its rights hereunder shall
not be construed as having created a custom contrary to the provisions of this
Agreement, as having modified in any manner the terms hereof, or as having
prevented the Secured Party from thereafter enforcing strict compliance. All
rights and remedies of the Secured Party are cumulative and concurrent and the
exercise of one right or remedy shall not be deemed a waiver or release of any
other right or remedy.

         12.      Entire Agreement. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein and supersedes all prior and contemporaneous agreements and
understandings, oral and written, with respect thereto.

         13.      Modification. This Agreement may be modified or amended only
by means of a writing signed by the party against whom such modification or
amendment is sought to be enforced.

         14.      Severability; Governing Law. If any provision of this
Agreement shall be determined to be illegal and unenforceable by any court of
law, the remaining provisions shall be

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severable and enforceable in accordance with their terms. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of
Tennessee.

         15.      Benefits of Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the parties and their respective heirs, legal
representatives, successors and assigns.

         16.      Counterparts. This Agreement may be signed in any number of
counterparts and by different parties on different counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together shall constitute but one and the
same agreement.

            [The remainder of this page is intentionally left blank.]

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                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 12th day of June, 2002, but effective as of the 4th day of May 2002.

                                           SECURED PARTY

                                           KIRKLAND'S, INC.

                                           By: /s/ Robert E. Alderson
                                              ---------------------------------
                                               Name: Robert E. Alderson
                                               Title: Chief Executive Officer

                                           PLEDGORS

                                           /s/ Reynolds C. Faulkner
                                           ------------------------------------
                                           REYNOLDS C. FAULKNER

                                           /s/ Mary Ruth Faulkner
                                           ------------------------------------
                                           MARY RUTH FAULKNER

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                               CONTROL AGREEMENT

Re: Account No.
               -----------------------------------------------
                                KIRKLAND'S INC.
                               Secured Party FBO
                  REYNOLDS C. FAULKNER and MARY RUTH FAULKNER

         This letter refers to the above-referenced and entitled Salomon Smith
Barney Inc. ("SSB") Account (together with any substitution or replacement
thereof, the "Account") which the undersigned account holder(s) (jointly and
severally if more than one) (the "Account Holder") has instructed SSB (the
"Securities Intermediary") to entitle as referenced above and hold certain of
the undersigned's assets. The Account Holder and the Securities Intermediary
hereby acknowledge and agree that the Account is a cash securities account and
is not a DVP account, a retirement account, as SSB margin account or an SSB
linked account.

         The Account Holder and the Secured Party ("Secured Party") hereby
notify the Securities Intermediary that the Account Holder has granted the
Secured Party a security interest in the Account, all financial assets and other
items therein, all proceeds thereof and distributions in connection therewith
and income received thereon (the "Collateral") pursuant to a Security Agreement
dated even date herewith made by the Account Holder in favor of the Secured
Party (as amended, supplemented or otherwise modified from time to time, the
"Security Agreement"). The Securities Intermediary hereby acknowledges being so
notified and confirms that it has recorded such security interest on its books
and records. Further, the Securities Intermediary confirms that as of the date
hereof, its personnel generally responsible for maintaining records of liens or
security interests with respect to customer securities accounts, have no
knowledge of any restraint, security interest, lien or other adverse claim in
or to the Account or any item therein; provided that the Securities Intermediary
may retain a subordinated lien in connection with any obligations that Account
Holder may have incurred with the Securities Intermediary. In addition, the
Securities Intermediary agrees to use reasonable efforts to notify the Secured
Party and the Account Holder in the event it receives any written notice of any
lien, encumbrance or adverse claim against the Account or any of the other
Collateral.

         Absent written instructions from the Secured Party to the contrary (see
"Notice of Exclusive Control" discussed below), the Account Holder shall be
authorized to operate the Account in accordance with the terms of this Control
Agreement and the Account Holder's existing Client Agreements with the
Securities Intermediary (the "Account Agreements"), subject to Secured Party's
security interest in the Collateral; provided, that the Account Holder may not
withdraw or transfer any Collateral from the Account other than in connection
with "Permitted Trading". "Permitted Trading" for purposes of this Control
Agreement is the right of the Account Holder to sell Collateral in the Account
and invest the proceeds of such sale, as well as other cash available in the
Account from time to time, in marketable securities, cash or cash equivalents,
so

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long as no Collateral is released from the Account as a result of such sale
without being replaced with marketable securities, cash or cash equivalents
with the same market value as the Collateral being released exclusive of
commissions and transaction costs. However, the Account Holder hereby
acknowledges and agrees that the Secured Party's consent to Permitted Trading
in no way constitutes a waiver of any of its rights under the Security
Agreement and that it is the obligation of the Account Holder to ensure at all
times that the type and amount of the Collateral in the Account meets the
maintenance requirements contained in the Security Agreement.

         Notwithstanding anything herein to the contrary, upon written notice
at any time from the Secured Party to the Securities Intermediary (the "Notice
of Exclusive Control")(x) the Account Holder shall have no right, and the
Securities Intermediary will not permit the Account Holder, to trade or in any
other manner withdraw or transfer any or all financial assets or credit
balances in the Account, without the prior written consent of the Secured Party
in each instance, and (y) the Securities Intermediary shall not, accept or
honor any instructions from or on behalf of the Account Holder in respect of
the Account, without the prior written consent of the Secured Party. The
Securities Intermediary agrees that all property in the Account at any time
shall be treated as a financial asset for purposes of the Uniform Commercial
Code in effect in New York as of the date thereof.

         The Account Holder hereby authorizes the Securities Intermediary to,
and the Securities Intermediary shall, provide the Secured Party with both
account statements and trade confirmations when issued and to disclose to the
Secured Party such information relative to the Account and the financial assets
and credit balances therein as the Secured Party may at any time and from time
to time request, without any reference to any further authority for, or
inquiry as to the justification for, such disclosure, with it being agreed
that Securities Intermediary will provide Account information to Secured Party
as frequently as Secured Party may require to permit it to monitor the
Collateral for compliance with the Security Agreement.

        The Securities Intermediary will comply with all entitlement orders
originated by the Secured Party without further action or consent by Account
Holder or any other person and will (x) as frequently as requested in writing
by the Secured Party, transfer all available credit balances and financial
assets in the Account to such account as may be designated by the Secured Party
by wire transfer, depository transfer check, automatic clearing house
electronic transfer, or otherwise, as the Secured Party may direct in its sole
discretion and (y) maintain the Account and all financial assets and other
items therein as the Secured Party may direct in writing from time to time
(including using its best efforts to place or negotiate orders to sell
securities in the Account, including but not limited to sell orders pursuant to
stock powers issued in favor of the Securities Intermediary, and transferring
the proceeds of sale to the Secured Party in accordance herewith), in each case
until such time (if any) as the Notice of Exclusive Control is withdrawn or
rescinded by the Secured Party.

        Any security interest in or lien on the Account or other Collateral, as
defined in this Control Agreement, granted to or otherwise obtained by the
Securities Intermediary (including, without limitation, by operation of law)
shall be junior and subordinate to the security interest and lien of the
Secured Party in and on the Account and other Collateral, as defined in this
Control Agreement, regardless of the order of perfecting any such security
interest or lien, the filing or

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absence of filing any financing statement or the taking or failure to take any
other action. The Securities Intermediary acknowledges the Secured Party's
perfected security interest in the Account and other Collateral, as defined in
this Control Agreement, and agrees that, except as provided herein, it will not
(i) foreclose upon, sell or otherwise dispose of the Account or any such other
Collateral, or exercise any bankers' or other lien or right of setoff or
similar right in connection with the Account or any such other Collateral, in
each case without the prior written consent of the Secured Party or (ii)
receive, accept or apply any proceeds of the Account or any such other
Collateral to or on account of any indebtedness or obligation of the Account
Holder to the Securities Intermediary, in each case until the Secured Party has
released its security interest in the Account and any such other Collateral,
provided, however, that nothing herein shall limit the right of the Securities
Intermediary to debit the Account in payment of its then current commissions,
charges and other such fees associated with the Account and due to the
Securities Intermediary, and from time to time to debit the Account in an amount
equal to the amount of any deposit that the Securities Intermediary has credited
to the Account that is thereafter returned to the Securities Intermediary
because of insufficient funds or is otherwise unpaid. The Securities
Intermediary shall neither advance margin or other credit against the Account,
nor hypothecate any financial assets or other items carried in the Account,
without the prior written consent of the Secured Party. The Securities
Intermediary shall not agree with any other person or entity that it will comply
(and the Securities Intermediary shall not comply) with any withdrawal,
transfer, payment or redemption instruction, or any other entitlement order or
other order, from such person or entity concerning the Account or any financial
assets or other items therein, without the prior written consent of the Secured
Party, and any such agreement entered into without such consent shall be null
and void.

         The Account Holder acknowledges and agrees that this Control Agreement
constitutes written notification to the Securities Intermediary with respect to
the Secured Party's security interest in the Collateral pursuant to Articles 8
and 9 of the Uniform Commercial Code in effect in New York as of the date hereof
and any applicable federal regulations for the Federal Reserve Book Entry
System. The Account Holder and the Secured Party each acknowledge and agree that
the Securities Intermediary shall not be held responsible for (i) any decline in
the market value of the Collateral or the failure to notify the Account Holder
or the Secured Party thereof or (ii) the failure to take any action with respect
to the Collateral, except as expressly provided in this Control Agreement, or as
instructed by the Secured Party to the Securities Intermediary in accordance
with this Control Agreement (which instructions may be oral followed by written
confirmation, (iii) and, except as expressly provided in this Control Agreement,
this Control Agreement shall not abridge any rights the Securities Intermediary
otherwise may have. To the extent that any provisions of this Control Agreement
conflicts with any provisions of the Account Agreements, the provisions of this
Control Agreement shall control.

         Except with respect to the obligations and duties expressly provided in
this Control Agreement, this Control Agreement shall not impose or create any
obligations or duties upon the Securities Intermediary that are greater than or
in addition to the usual and customary obligations and duties, if any, of the
Securities Intermediary with respect to the Account or the Account Holder.
Except as expressly provided in this Control Agreement, the Securities
Intermediary shall have no obligation or duty whatsoever to interpret the terms
of any other agreements between the Account Holder and the Secured Party or to
determine whether any default exists thereunder.

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<PAGE>
         The Account Holder hereby irrevocably authorizes and instructs the
Securities Intermediary to perform and comply with the terms of this Control
Agreement and to the extent there is any conflict between this Control
Agreement and the Account Agreements, the provisions of this Control Agreement
will control. The Account Holder hereby indemnifies and holds harmless the
Securities Intermediary from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
reasonable attorney's fees) and liabilities of every nature and character
arising out of or related to this Control Agreement or the transactions
contemplated hereby or any actions taken or omitted to be taken by the
Securities Intermediary hereunder, including, without limitation, claims
arising out of the Securities Intermediary's failure to permit the Account
Holder or any other party to withdraw funds from the Account other than in
strict compliance with the terms of this Control Agreement, except to the
extent directly caused by the Securities Intermediary's gross negligence or
willful misconduct. The Secured Party shall indemnify and hold harmless the
Securities Intermediary from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
reasonable attorney's fees) and liabilities of every nature and character that
may result by reason of the Securities Intermediary complying with instructions
or requests of the Secured Party as permitted or required under this Control
Agreement, except to the extent directly caused by the Securities
Intermediary's gross negligence or willful misconduct. The foregoing
indemnifications shall survive any termination of this Control Agreement.

         The Securities Intermediary may act upon any instrument or other
writing believed by it in good faith to be genuine and to have been signed or
presented by a person purporting to be the Secured Party or the Account Holder,
as the case may be. The Securities Intermediary shall not be liable in
connection with the performance or non-performance of its duties hereunder,
except for its own gross negligence or willful misconduct. The Securities
Intermediary's duties shall be determined only with reference to this Control
Agreement and applicable laws, and the Securities Intermediary shall not be
charged with knowledge of, or any duties or responsibilities in connection with,
any other document or agreement. If in doubt as to its duties and
responsibilities hereunder, the Securities Intermediary may consult with counsel
of its choice and shall be protected in any action taken or omitted to be taken
in connection with the advice or opinion of such counsel. The Securities
Intermediary shall have no liability to any party for any incidental, punitive
or consequential damages resulting from any breach by the Securities
Intermediary of its obligations hereunder.

         All notices required to be given pursuant to this Control Agreement
shall be in writing and shall be delivered by hand, mailed by United States
registered or certified first class mail, postage prepaid and return receipt
requested, or sent by overnight courier, addressed to the applicable party at
its address set forth on the signature page hereto or, in each case, to such
other address for notices as any of the parties to this Control Agreement shall
last have furnished in writing to the other parties hereto in accordance with
this paragraph. Any such notice or communication shall be deemed to have been
duly given or made and to have become effective at the time of the receipt
thereof by the party to which it is directed, or when delivery is duly
attempted and refused.

         This Control Agreement may not be amended or modified without the
prior written consent of the Securities Intermediary, the Account Holder and
the Secured Party. This Control Agreement shall continue in full force until
the Securities Intermediary receives written notice

                                                                               4
<PAGE>
from the Secured Party terminating this Control Agreement. Upon receipt of such
notice, all obligations of the Securities Intermediary under this Control
Agreement shall cease including without limitation any and all obligations
hereunder with respect to the maintenance of the Account. Thereafter, the
Securities Intermediary may take such steps as the Account Holder may request to
vest full ownership and control of the Account in the Account Holder.

         No delay or omission on the part of the Secured Party or the Securities
Intermediary in exercising any right hereunder shall operate as a waiver of such
right or of any other right under this Control Agreement. No waiver of any right
under this Control Agreement shall be effective unless in writing and signed by
the Secured Party and the Securities Intermediary, and no waiver on one occasion
shall be construed as a bar to or waiver of any such right on any other
occasion.

         This Control Agreement and any waiver or amendment hereto may be
executed in counterparts and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Control
Agreement may be executed and delivered by telecopier or other facsimile
transmission all with the same force and effect as if the same were a fully
executed and delivered original manual counterpart.

         This Control Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without giving effect to the conflicts
of law principles thereof) and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

         This Control Agreement constitutes the entire agreement, and supersedes
any prior agreements, of the parties concerning its subject matter. In the event
a provision of this Control Agreement is unenforceable, this agreement shall be
construed to the extent possible as if the unenforceable provision were omitted.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         Please indicate your agreement with the foregoing by signing below and
returning this Control Agreement to the Secured Party.

             ACCOUNT HOLDER
             REYNOLDS C. FAULKNER and MARY RUTH FAULKNER

             Signature: /s/ Reynolds C. Faulkner       6/11/02
                        _________________________ Date ________

             Address: 20 Deepwood Dr.
                      Jackson, TN 38305

             Signature: /s/ Mary Ruth Faulkner         6/11/02
                        ________________________ Date ________

             Address: 20 Deepwood Dr.
                      Jackson, TN 38305

             SECURED PARTY
             KIRKLAND'S INC

             Signature /s/ Robert E. Alderson         6/11/02
                       _________________________ Date ________

             Authorized Signer: Robert E. Alderson
             Title: President
             Address: 805 North Parkway
                      Jackson, TN 38305

Accepted and Agreed:

SALOMON SMITH BARNEY INC.               SALOMON SMITH BARNEY INC.

By: /s/ Michael Bolen       6/10/02     By: /s/ Sue Long        6/14/02
   ___________________Date:________        _______________Date:________
Name: Michael Bolen                     Name: Sue Long
Title: Branch Office Manager            Title: Regional Director
Address:                                Address:<PAGE>
                                                                   Exhibit 10.20

[{FIRST                            CUSTOMER COPY
  UNION LOGO]

                                 PROMISSORY NOTE

$50,000.00

                                                                January 18, 2002

Newport International Group Inc.
11863 Wimbledon Circle #418
Wellington, Florida 33414
(Individually and collectively "Borrower")

First Union National Bank
214 North Hogan Street - FL0070
Jacksonville, Florida 32202
(Hereinafter referred to as "Bank")

Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Fifty Thousand and No/100 Dollars ($5O,OOO.OO) or such sum
as may be advanced and outstanding from time to time, with interest on the
unpaid principal balance at the rate and on the terms provided in this
Promissory Note (including all renewals, extensions or modifications hereof,
this "Note").

LINE OF CREDIT. Borrower may borrow, repay and reborrow, and Bank may advance
and readvance under this Note respectively from time to time until the maturity
hereof (each an "Advance" and together the "Advances"), so long as the total
principal balance outstanding under this Note at any one time does not exceed
the principal amount stated on the face of this Note, subject to the limitations
described in any loan agreement to which this Note is subject. Bank's obligation
to make Advances under this Note shall terminate if a demand for payment is made
under this Note or if a Default (as defined in the other Loan Documents) under
any Loan Document occurs or in any event, on the first anniversary hereof unless
renewed or extended by Bank in writing upon such terms then satisfactory to
Bank. As of the date of each proposed Advance, Borrower shall be deemed to
represent that each representation made in the Loan Documents is true as of such
date. 30-Day Payout. During the term of the Note, Borrower agrees to pay down
the outstanding balance to a maximum of $100.00 for 30 consecutive days
annually.

If Borrower subscribes to Bank's cash management services and such services are
applicable to this line of credit, the terms of such service shall control the
manner in which funds are transferred between the applicable demand deposit
account and the line of credit for credit or debit to the line of credit.

USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by
this Note for the commercial purposes of Borrower, as follows: for working
capital.

SECURITY. Borrower has granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, personal
property collateral described in that certain Security Agreement of even date
herewith.

<PAGE>

INTEREST RATE. Wall Street Journal Prime-Based Rate. Interest shall accrue on
the unpaid principal balance of this Note from the date hereof at the prime rate
as published in The Wall Street Journal ("WSJ") as of the date of this Note
("WSJ Prime Rate") plus 1.5% per annum ("Interest Rate"). The Interest Rate will
change from time to time as the WSJ Prime Rate changes in an amount equal to the
change in the WSJ Prime Rate, but will not change more often than once a month,
which will occur on the first day of each calendar month and will be based on
the WSJ Prime rate published in the WSJ on the 25th day of the prior calendar
month. If more than one rate is published, the highest rate published shall
apply; and if the 25th day of the prior calendar month or the date of this Note
falls on a day when the WSJ Prime Rate is not published, the WSJ Prime Rate
shall be the rate published on the last day prior to the 25th day of the prior
calendar month or the date of this Note. In the event the WSJ discontinues
publishing the WSJ Prime Rate, Bank shall select another index and provide prior
notice of the name of the new index and in what publication the new index can be
found. Borrower acknowledges and agrees that the WSJ Prime Rate is not
represented or intended to be the lowest or most favorable rate offered by Bank
to any of its borrowers.

OTHER ADJUSTMENTS TO THE INTEREST RATE. Notwithstanding anything in this Note to
the contrary, the Interest Rate will not increase more than 6% per annum during
the term of this Note to a maximum of 18% per annum.

DEFAULT RATE. In addition to all other rights contained in this Note, if a
default in the payment of Obligations occurs, all outstanding Obligations shall
bear interest at the Interest Rate plus 3% ("Default Rate"). The Default Rate
shall also apply from demand until the Obligations or any judgment thereon is
paid in full.

INTEREST AND FEE(S) COMPUTATION. Interest and fees, if any, shall be computed on
the Average Daily Balance using a Monthly Periodic Rate. The "Average Daily
Balance" is the sum of the total liability outstanding each day during the
applicable period, minus unpaid finance charges and late charges, divided by the
number of days in the applicable period. The "Monthly Periodic Rate" is 1/12 of
the annual Interest Rate and is a variable rate subject to change on the first
day of each billing cycle. Each advance shall begin to accrue interest on the
date the transaction is posted by the Bank.

PREPAYMENT ALLOWED. This Note may be prepaid in whole or in part at any time.
Any prepayment shall include accrued interest and all other sums then due under
any of the Loan Documents. No partial prepayment shall affect the obligation of
Borrower to make any payment of principal or interest due under this Note on the
date specified below in the Repayment Terms paragraph of this Note until this
Note has been paid in full.

ACCURATE FINANCIAL INFORMATION. Borrower represents and covenants to Bank that
on and after the date of this Note: (i) all financial statements of Borrower
furnished to Bank are correct and accurately reflect the financial conditions of
Borrower as of the respective dates thereof; and (ii) at such times as Bank
requests, Borrower will furnish Bank with such financial information as Bank may
request.

REPAYMENT TERMS. This Note shall be due and payable in consecutive periodic
payments of accrued interest only, commencing on February 18, 2002, and
continuing each 30 day period thereafter until this Note is fully paid. In any
event, this Note shall be due and payable in full, including all principal and
accrued interest, on demand.

AUTOMATIC DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT. Borrower authorizes Bank
to debit demand deposit account number 2000009504505 or any other account with
Bank (routing number 067006432) designated in writing by Borrower, beginning
February 18, 2002 for any payments

                                     Page 2
<PAGE>

due under this Note. Borrower further certifies that Borrower holds legitimate
ownership of this account and preauthorizes this periodic debit as part of its
right under said ownership.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. Upon the occurrence of a default in the payment of the Obligations
or a Default (as defined in the other Loan Documents) under any other Loan
Document, monies may be applied to the Obligations in any manner or order deemed
appropriate by Bank.

If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.

DEFINITIONS. Loan Documents. The term "Loan Documents" used in this Note and the
other Loan Documents refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C.ss.101). Obligations. The term "Obligations" used in this Note refers to
any and all indebtedness and other obligations under this Note, all other
obligations under any other Loan Document(s), and all obligations under any swap
agreements (as defined in 11 U.S.C.ss.101) between Borrower and Bank whenever
executed. Certain Other Terms. All terms that are used but not otherwise defined
in any of the Loan Documents shall have the definitions provided in the Uniform
Commercial Code.

LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.

Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.

ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEMAND NOTE. This is a demand Note and all Obligations hereunder shall become
immediately due and payable upon demand. In addition, the Obligations shall
automatically become immediately due and payable if Borrower or any guarantor or
endorser of this Note commences or has commenced against it a bankruptcy or
insolvency proceeding.

                                     Page 3
<PAGE>

REMEDIES. Upon the occurrence of a default in the payment of the Obligations or
a Default (as defined in the other Loan Documents) under any other Loan
Document, Bank may at any time thereafter, take the following actions: Bank
Lien. Foreclose its security interest or lien against Borrower's accounts
without notice. Cumulative. Exercise any rights and remedies as provided under
the Note and the other Loan Documents, or as provided by law or equity.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.

ACCESS BY CHECK. Borrower may obtain Advances, subject to all limitations on
Advances herein, by drawing against this Note using an "Access Check" furnished
to Borrower for that purpose. Access Checks may not he used to pay Obligations.
Borrower assumes responsibility for security of all Access Checks and agrees to
indemnify Bank and hold Bank harmless from any claim, loss or expense (including
reasonable attorney's fees) incurred in connection with any Access Check
negotiated without Borrower's express authorization.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default (as defined in the other Loan
Documents) shall operate as a waiver of any other Default or the same Default on
a future occasion. Neither the failure nor any delay on the part of Bank in
exercising any right, power, or remedy under this Note and other Loan Documents
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.

Each Borrower or any person liable under this Note waives presentment, protest,
notice of dishonor, notice of intention to accelerate maturity, notice of
acceleration of maturity, notice of sale and all other notices of any kind.
Further, each agrees that Bank may extend, modify or renew this Note or make a
novation of the loan evidenced by this Note for any period, and grant any
releases, compromises or indulgences with respect to any collateral securing
this Note, or with respect to any other Borrower or any other person liable
under this Note or other Loan Documents, all without notice to or consent of
each Borrower or each person who may be liable under this Note or any other Loan
Document and without affecting the liability of Borrower or any person who may
be liable under this Note or any other Loan Document.

MISCELLANEOUS PROVISIONS. Assignment. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal representatives, successors and assigns. Bank's
interests in and rights under this Note and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other Loan Documents shall prohibit Bank from pledging or assigning
this Note or any of the other Loan Documents or any interest therein to any
Federal Reserve Bank. Borrower shall not assign its rights and interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank's prior written consent is null and void. Any assignment
shall not release Borrower from the Obligations. Applicable Law; Conflict
Between Documents. This Note and, unless otherwise provided in any other Loan
Document, the other Loan Documents shall be governed by and construed under the
laws of the state named in Bank's address shown above without regard to that
state's conflict of laws principles. If the terms of this Note should conflict
with the terms of any loan agreement or any commitment letter that survives
closing, the terms of this Note shall control. Borrower's Accounts. Except as
prohibited by law, Borrower grants Bank a security interest in all of Borrower's
accounts with

                                     Page 4
<PAGE>

Bank and any of its affiliates. Jurisdiction. Borrower irrevocably agrees to
non-exclusive personal jurisdiction in the state named in Bank's address shown
above. Severability. If any provision of this Note or of the other Loan
Documents shall be prohibited or invalid under applicable law, such provision
shall be ineffective but only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Note or other such document. Notices. Any notices to Borrower shall be
sufficiently given, if in writing and mailed or delivered to the Borrower's
address shown above or such other address as provided hereunder, and to Bank, if
in writing and mailed or delivered to Bank's office address shown above or such
other address as Bank may specify in writing from time to time. In the event
that Borrower changes Borrower's address at any time prior to the date the
Obligations are paid in full, Borrower agrees to promptly give written notice of
said change of address by registered or certified mail, return receipt
requested, all charges prepaid. Plural; Captions. All references in the Loan
Documents to Borrower, guarantor, person, document or other nouns of reference
mean both the singular and plural form, as the case may be, and the term
"person" shall mean any individual, person or entity. The captions contained in
the Loan Documents are inserted for convenience only and shall not affect the
meaning or interpretation of the Loan Documents. Advances. Bank may, in its sole
discretion, make other advances which shall be deemed to be advances under this
Note, even though the stated principal amount of this Note may be exceeded as a
result thereof. Posting of Payments. All payments received during normal banking
hours after 2:00 p.m. local time at the office of Bank first shown above shall
be deemed received at the opening of the next banking day. Joint and Several
Obligations. Each person who signs this Note as a Borrower (as defined herein)
is jointly and severally obligated. Fees and Taxes. Borrower shall promptly pay
all documentary, intangible recordation and/or similar taxes on this transaction
whether assessed at closing or arising from time to time.

ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements. Special Rules. All arbitration hearings shall be conducted in the
city named in the address of Bank first stated above. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall conclude within
120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000.00. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein. Preservation and Limitation of
Remedies. Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any real or personal property or other security
by exercising a power of sale or under applicable law by judicial foreclosure
including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to any party's entitlement to such remedies is
a Dispute. Waiver of Exemplary Damages. The parties

                                     Page 5
<PAGE>

agree that they shall not have a remedy of punitive or exemplary damages against
other parties in any Dispute and hereby waive any right or claim to punitive or
exemplary damages they have now or which may arise in the future in connection
with any Dispute whether the Dispute is resolved by arbitration or judicially.
WAIVER OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING
ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL
WITH REGARD TO A DISPUTE.

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.

                          Newport International Group Inc.
                          Taxpayer Identification Number: 23-3030650

                          By:                                         (SEAL)
                              ----------------------------------------
                              Sara Lam, Vice President

                          By:                                         (SEAL)
                              ----------------------------------------
                              Samantha Lam, Vice President

                                     Page 6
<PAGE>
[FIRST UNION LOGO]

                                 CUSTOMER COPY
                               SECURITY AGREEMENT

                                                                January 18, 2002

Newport International Group Inc.
11863 Wimbledon Circle #418
Wellington, Florida 33414
(Individually and collectively "Debtor")

First Union National Bank
214 North Hogan Street - FL0070
Jacksonville, Florida 32202
(Hereinafter referred to as "Bank")

For value received and to secure payment and performance of the Promissory Note
executed by Debtor (also referred to herein as "Borrower") dated January 18,
2002, in the original principal amount of $50,000.00, payable to Bank, and any
extensions, renewals, modifications or novations thereof (the "Note"), this
Security Agreement and the other Loan Documents, and any other obligations of
Debtor to Bank however created, arising or evidenced, whether direct or
indirect, absolute or contingent, now existing or hereafter arising or acquired,
and whether or not evidenced by a Loan Document, including swap agreements (as
defined in 11 U.S.C. ss.101), future advances, and all costs and expenses
incurred by Bank to obtain, preserve, perfect and enforce the security interest
granted herein and to maintain, preserve and collect the property subject to the
security interest (collectively, "Obligations"), Debtor hereby grants to Bank a
continuing security interest in and lien upon the following described property,
whether now owned or hereafter acquired, and any additions, replacements,
accessions, or substitutions thereof and all cash and non-cash proceeds and
products thereof (collectively, "Collateral"):

All of the investment property, financial assets, cash, equity interests,
instruments, and/or general intangibles, which are held in or credited to an
account with First Union Securities, Inc., who is a Securities Intermediary (as
defined herein) of the Debtor (the "Account"), and the Account itself, described
as follows: Account No. 62554953; and all rights to which Debtor now or
hereafter becomes entitled by reason of its interest in any of the previously
described Collateral.

Debtor hereby represents and agrees that:

OWNERSHIP. Debtor owns the Collateral. The Collateral is free and clear of all
liens, security interests, and claims except those previously reported in
writing to and approved by Bank, and Debtor will keep the Collateral free and
clear from all liens, security interests and claims, other than those granted to
or approved by Bank. All securities and security entitlements pledged as
Collateral are fully paid and non-assessable. All income, dividends, earnings
and profits with respect to the Collateral shall be reported for state and
federal income tax purposes as attributable to the Debtor and not Bank and Third
Party (as defined herein), and Bank or any other person authorized to report
income distributions, is authorized to issue IRS Forms 1099 indicating Debtor as
the recipient of such income, earnings and profits.

NAME AND OFFICES; JURISDICTION OF ORGANIZATION. The name and address of Debtor
appearing at the beginning of this Agreement are Debtor's exact legal name and
the address of its chief executive office. There has been no change in the name
of Debtor, or the name under which Debtor conducts business, within the five
years preceding the date hereof except as previously reported in writing to
Bank. Debtor has not moved its chief executive office within the five years
preceding the date hereof except as previously reported in writing to Bank.
Debtor is organized under the laws of the State of Delaware and has not changed
the jurisdiction of its organization within the five years preceding the date
hereof except as previously reported in writing to Bank.

TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims. Debtor will not transfer, sell, or lease
Collateral (except as permitted herein). Debtor

<PAGE>

agrees to pay promptly all taxes and assessments upon or for the use of
Collateral and on this Security Agreement. At its option, Bank may discharge
taxes, liens, security interests or other encumbrances at any time levied or
placed on Collateral. Debtor agrees to reimburse Bank, on demand, for any such
payment made by Bank. Any amounts so paid shall be added to the Obligations.

WAIVERS. Debtor agrees not to assert against Bank as a defense (legal or
equitable), as a set-off, as a counterclaim, or otherwise, any claims Debtor may
have against any seller or lessor that provided personal property or services
relating to any part of the Collateral. Debtor waives all exemptions and
homestead rights with regard to the Collateral. Debtor waives any and all rights
to any bond or security which might be required by applicable law prior to the
exercise of any of Bank's remedies against any Collateral. All rights of Bank
and security interests hereunder, and all obligations of Debtor hereunder, shall
be absolute and unconditional, not discharged or impaired irrespective of (and
regardless of whether Debtor receives any notice of): (i) any lack of validity
or enforceability of any Loan Document; (ii) any change in the time, manner or
place of payment or performance, or in any term, of all or any of the
Obligations or the Loan Documents or any other amendment or waiver of or any
consent to any departure from any Loan Document; (iii) any exchange, release or
non-perfection of any collateral, or any release of or modifications of the
obligations of any guarantor or other obligor; (iv) any amendment or waiver of
or consent to departure from any Loan Document or other agreement. To the extent
permitted by law, Debtor hereby waives any rights under any valuation, stay,
appraisement, extension or redemption laws now existing or which may hereafter
exist and which, but for this provision, might be applicable to any sale or
disposition of the Collateral by Bank; and any other circumstance which might
otherwise constitute a defense available to, or a discharge of any party with
respect to the Obligations.

NOTIFICATIONS; LOCATION OF COLLATERAL. Debtor will notify Bank in writing at
least 30 days prior to any change in: (i) Debtor's chief place of business
and/or residence; (ii) Debtor's name or identity; (iii) Debtor's
corporate/organizational structure; or (iv) the jurisdiction in which Debtor is
organized. In addition, Debtor shall promptly notify Bank of any claims or
alleged claims of any other person or entity to the Collateral or the
institution of any litigation, arbitration, governmental investigation or
administrative proceedings against or affecting the Collateral. Debtor will keep
Collateral at the location(s) previously provided to Bank until such time as
Bank provides written advance consent to a change of location. Debtor will bear
the cost of preparing and filing any documents necessary to protect Bank's
liens.

FINANCING STATEMENTS, POWER OF ATTORNEY. No financing statement (other than any
filed or approved by Bank) covering any Collateral is on file in any public
filing office. On request of Bank, Debtor will execute one or more financing
statements in form satisfactory to Bank and will pay all costs and expenses of
filing the same or of filing this Security Agreement in all public filing
offices, where filing is deemed by Bank to be desirable. Bank is authorized to
file financing statements relating to Collateral without Debtor's signature
where authorized by law. Debtor hereby constitutes and appoints Bank the true
and lawful attorney of Debtor with full power of substitution to take any and
all appropriate action and to execute any and all documents or instruments that
may be necessary or desirable to accomplish the purpose and carry out the terms
of this Security Agreement, including, without limitation, to complete, execute,
and deliver Control Agreement(s) by Bank, Debtor and Third Party(ies) required
in connection herewith (individually and collectively the "Control Agreement"),
instructions to Third Party(ies) regarding, among other things, control and
disposition of any Collateral, and endorsements desirable for transfer or
delivery of any Collateral, registration of any Collateral under applicable
laws, retitling any Collateral, receipt, endorsement and/or collection of all
checks and other orders for payment of money payable to Debtor with respect to
Collateral. The foregoing power of attorney is coupled with an interest and
shall be irrevocable until all of the Obligations have been paid in full.
Neither Bank nor anyone acting on its behalf shall be liable for acts,
omissions, errors in judgment, or mistakes in fact in such capacity as
attorney-in-fact. Debtor ratifies all acts of Bank as attorney-in-fact. Debtor
agrees to take such other actions, at Debtor's expense, as might be requested
for the perfection, continuation and assignment, in whole or in part, of the
security interests granted herein and to assure Bank's intended priority
position. If certificates, passbooks, or other documentation or evidence is/are
issued or outstanding as to any of the Collateral, Debtor will cause the
security interests of Bank to be properly protected, including perfection by
notation thereon or delivery thereof to Bank. Upon Bank's request, Debtor will,
at its own expense: (i) do all things determined by Bank to be desirable to
register such Collateral or qualify for an exemption from

                                     Page 2

<PAGE>

registration, under the provisions of all applicable securities laws, and (ii)
otherwise do or cause to be done all other acts and things as may be necessary
to make the sale of the Collateral valid, binding and in compliance with
applicable law.

STOCK, DIVIDENDS. If, with respect to any securities pledged hereunder, a stock
dividend is declared, any stock split made or right to subscribe is issued, all
the certificates for the shares representing such stock dividend, stock split or
right to subscribe will be immediately delivered, duly endorsed, to the Bank as
additional Collateral, and any cash or non-cash proceeds and products thereof,
including investment property and security entitlements will be immediately
delivered to Bank. Debtor acknowledges that such grant includes all investment
property and security entitlements, now existing or hereafter arising, relating
to such securities. In addition, Debtor agrees to execute such notices and
instructions to securities intermediaries as Bank may reasonably request.

NO TRADING OF COLLATERAL. Until a Default occurs, Debtor shall have the right to
vote the securities pledged hereunder; provided, however, Debtor may not sell,
transfer, exchange for other property or cash ("Trade") or otherwise exercise
rights with respect to such Collateral or receive any distributions, cash
dividends, interest, or proceeds from such Collateral without the prior written
consent of the Bank, and any such distributions, dividends, interest, or
proceeds shall be held in trust for, and immediately delivered to, Bank. Any
consent pursuant to this paragraph shall be in Bank's sole discretion.

CONTROL. Debtor will cooperate with Bank in obtaining control with respect to
Collateral consisting of investment property. Debtor authorizes and directs
Third Party to comply with the terms of this Security Agreement, to enter into a
Control Agreement, to mark its records to show the security interest of and/or
the transfer to Bank of the property pledged hereunder and to mail monthly
statements to the Bank, in addition to Debtor, to the address provided herein.

COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral pledged except as set forth herein; and by way of
explanation and not by way of limitation, Bank shall incur no liability for any
of the following: (i) loss or depreciation of Collateral (unless caused by its
willful misconduct or gross negligence), (ii) failure to present any paper for
payment or protest, to protest or give notice of nonpayment, or any other notice
with respect to any paper or Collateral, (iii) failure to ascertain, notify
Debtor of, or take any action in connection with any conversion, call,
redemption, retirement or any other event relating to any of the Collateral, or
failure to notify any party hereto that Collateral should be presented or
surrendered for any such reason. Debtor acknowledges that Bank is not an
investment advisor or insurer with respect to the Collateral; and Bank has no
duty to advise Debtor of any actual or anticipated changes in the value of the
Collateral.

TRANSFER OF COLLATERAL. Bank may assign its rights in Collateral or any part
thereof to any assignee who shall thereupon become vested with all the powers
and rights herein given to Bank with respect to the property so transferred and
delivered, and Bank shall thereafter be forever relieved and fully discharged
from any liability with respect to such property so transferred, but with
respect to any property not so transferred, Bank shall retain all rights and
powers hereby given.

INSPECTION, BOOKS AND RECORDS. Debtor will at all times keep accurate and
complete records covering each item of Collateral, including the proceeds
therefrom. Bank, or any of its agents, shall have the right, at intervals to be
determined by Bank and without hindrance or delay, at Debtor's expense, to
inspect, audit, and examine the Collateral and to make copies of and extracts
from the books, records, journals, orders, receipts, correspondence and other
data relating to Collateral, Debtor's business or any other transaction between
the parties hereto. Debtor will at its expense furnish Bank copies thereof upon
request.

CROSS COLLATERALIZATION LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor, within the meaning of the Federal Consumer
Credit Protection Act, Bank expressly waives any security interest granted
herein in Collateral that Debtor uses as a principal dwelling and household
goods.

                                     Page 3

<PAGE>

ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Debtor shall pay all of Bank's
reasonable expenses incurred in enforcing this Security Agreement and in
preserving and liquidating Collateral, including but not limited to, reasonable
arbitration, paralegals', attorneys' and experts' fees and expenses, whether
incurred with or without the commencement of a suit, trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.

DEFAULT. If any of the following occurs, a default ("Default") under this
Security Agreement shall exist: Loan Document Default. A default under any Loan
Document. Collateral Loss or Destruction. Any loss, theft, substantial damage,
or destruction of Collateral not fully covered by insurance, or as to which
insurance proceeds are not remitted to Bank within 30 days of the loss.
Collateral Sale, Lease or Encumbrance. Any sale, lease, or encumbrance of any
Collateral not specifically permitted herein without prior written consent of
Bank. Levy, Seizure or Attachment. The making of any levy, seizure, or
attachment on or of Collateral which is not removed within 10 days. Third Party
Breach. Any default or breach by a Third Party of any provision contained in any
Control Agreement executed in connection with any of the Collateral.
Unauthorized Termination. Any attempt to terminate, revoke, rescind, modify, or
violate the terms of this Security Agreement or any Control Agreement without
the prior written consent of Bank.

REMEDIES ON DEFAULT (INCLUDING POWER OF SALE). If a Default occurs, all of the
Obligations shall be immediately due and payable, without notice and Bank shall
have all the rights and remedies of a secured party under the Uniform Commercial
Code. Without limitation thereto, Bank shall have the following rights and
remedies: (i) to take immediate possession of Collateral, without notice or
resort to legal process, and for such purpose, to enter upon any premises on
which Collateral or any part thereof may be situated and to remove the same
therefrom, or, at its option, to render Collateral unusable or dispose of said
Collateral on Debtor's premises; (ii) to require Debtor to assemble the
Collateral and make it available to Bank at a place to be designated by Bank;
(iii) to exercise its right of set-off or bank lien as to any monies of Debtor
deposited in accounts of any nature maintained by Debtor with Bank or affiliates
of Bank, without advance notice, regardless of whether such accounts are general
or special; (iv) to dispose of Collateral, as a unit or in parcels, separately
or with any real property interests also securing the Obligations, in any county
or place to be selected by Bank, at either private or public sale (at which
public sale Bank may be the purchaser) with or without having the Collateral
physically present at said sale. In addition to the foregoing, Bank shall be
authorized to: notify Third Party to terminate immediately any trading, other
rights or entitlements of Debtor with respect to the Collateral and any
distributions to Debtor from the Collateral; transfer into Bank's name or the
name of its nominee, all or any part of the Collateral; receive all interest,
dividends, and other proceeds of the Collateral; notify any person obligated on
any Collateral of the security interest of Bank therein and require such person
to make payment directly to Bank; demand, sue for, collect or receive the
Collateral and any proceeds thereof, and/or make any settlement or compromise as
Bank deems desirable with respect to any Collateral; and exercise any voting,
conversion, registration, purchase or other rights of an owner, holder or
entitlement holder of the Collateral. Debtor agrees that Bank may exercise its
rights under this Security Agreement without regard for the actual or potential
tax consequences to Debtor under federal or state law and without regard to any
instructions or directives given Bank by Debtor.

Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtor's address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank, at least 5 days prior to
such action, shall constitute reasonable notice to Debtor. Notice shall be
deemed given or sent when mailed postage prepaid to Debtor's address as provided
herein. Bank shall be entitled to apply the proceeds of any sale or other
disposition of the Collateral, and the payments received by Bank with respect to
any of the Collateral, to Obligations in such order and manner as Bank may
determine. Collateral that is subject to rapid declines in value and is
customarily sold in recognized markets may be disposed of by Bank in a
recognized market for such collateral without providing notice of sale. Debtor
waives any and all requirements that the Bank sell or dispose of all or any part
of the Collateral at any particular time, regardless of whether Debtor has
requested such sale or disposition.

                                     Page 4
<PAGE>

REMEDIES ARE CUMULATIVE. No failure on the part of Bank to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank or any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law, in equity, or
in other Loan Documents.

MISCELLANEOUS. (i) Amendments and Waivers. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or of the same Default on a future
occasion. (ii) Assignment. All rights of Bank hereunder are freely assignable,
in whole or in part, and shall inure to the benefit of and be enforceable by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and interest hereunder without the prior written consent of Bank, and any
attempt by Debtor to assign without Bank's prior written consent is null and
void. Any assignment shall not release Debtor from the Obligations. This
Security Agreement shall be binding upon Debtor, and the heirs, personal
representatives, successors, and assigns of Debtor. (iii) Applicable Law;
Conflict Between Documents. This Security Agreement shall be governed by and
construed under the law of the jurisdiction named in the address of the Bank
first shown above (the "Jurisdiction") without regard to that Jurisdiction's
conflict of laws principles, except to the extent that the UCC requires the
application of the law of a different jurisdiction, If any terms of this
Security Agreement conflict with the terms of any commitment letter or loan
proposal, the terms of this Security Agreement shall control. (iv) Jurisdiction.
Debtor irrevocably agrees to non-exclusive personal jurisdiction in the
Jurisdiction in which the office of Bank as stated above is located. (v)
Severability. If any provision of this Security Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Security Agreement. (vi)
Notices. Any notices to Debtor shall be sufficiently given, if in writing and
mailed or delivered to the address of Debtor shown above or such other address
as provided hereunder; and to Bank, if in writing and mailed or delivered to
Bank's office address shown above or such other address as Bank may specify in
writing from time to time. In the event that Debtor changes Debtor's mailing
address at any time prior to the date the Obligations are paid in full, Debtor
agrees to promptly give written notice of said change of address by registered
or certified mail, return receipt requested, all charges prepaid. (vii)
Captions. The captions contained herein are inserted for convenience only and
shall not affect the meaning or interpretation of this Security Agreement or any
provision hereof. The use of the plural shall also mean the singular, and vice
versa. (viii) Joint and Several Liability. If more than one party has signed
this Security Agreement, such parties are jointly and severally obligated
hereunder. (ix) Binding Contract. Debtor by execution and Bank by acceptance of
this Security Agreement, agree that each party is bound by all terms and
provisions of this Security Agreement.

DEFINITIONS. Loan Documents. The term "Loan Documents" refers to all documents,
including this Agreement, whether now or hereafter existing, executed in
connection with or related to the Obligations, and may include, without
limitation and whether executed by Debtor or others, commitment letters that
survive closing, loan agreements, promissory notes, guaranty agreements, deposit
or other similar agreements, other security agreements, letters of credit and
applications for letters of credit, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. ss. 101). Third Party. The term "Third Party" means each and every
Broker, Collateral Agent or Securities Intermediary maintaining a securities
account, and acting in such capacity, for Debtor with respect to some or all of
the Collateral. UCC. "UCC" means the Uniform Commercial Code as presently and
hereafter enacted in the Jurisdiction. Terms Defined in the UCC. Any term used
in this Agreement and in any financing statement filed in connection herewith
which is defined in the UCC and not otherwise defined in this Agreement or any
other Loan Document has the meaning given to the term in the UCC. Debtor
acknowledges and understands that any such term relating to the description of
Collateral may be defined in one or both of (i) the version of Article 9 of the
UCC as enacted and in force in the Jurisdiction on the date this Agreement is
signed by Debtor or (ii) a revised version of Article 9 of the UCC
(substantially in the form of Revised Article 9 (2000 Revision) version thereof
promulgated by the National Conference of Commissioners on Uniform State Laws
and the American Law Institute) ("Revised Article

                                      Page 5

<PAGE>

9") enacted and in force in the Jurisdiction at any relevant future time. In
light of the foregoing, Debtor agrees that, if terms defining items or classes
of Collateral change or are added as a result of the enactment of Revised
Article 9 in the Jurisdiction, the meaning to be ascribed to any such term with
respect to any particular item or class of Collateral hereunder and the
interpretation thereof after the date of such enactment shall be (a) if such
term is defined in both versions of Article 9 and such definitions differ, the
broader or more encompassing of the two definitions, regardless of duplication,
and (b) if such term is defined under only one of the versions of Article 9, the
definition in that version.

IN WITNESS WHEREOF, Debtor, on the day and year first written above, has caused
this Security Agreement to be executed under seal.

                     Newport International Group Inc.
                     Taxpayer Identification Number: 23-3030650

                     By:                                                  (SEAL)
                        --------------------------------------------------
                              Sara Lam, Vice President

                     By:                                                  (SEAL)
                        --------------------------------------------------
                              Samantha Lam, Vice President

                     By:                                                  (SEAL)
                        --------------------------------------------------
                              Soloman Lam

Tracking #: 100625328md/hn/cs/ad
 Facility # 100708159

                                     Page 6

<PAGE>

      PAYER'S REQUEST FOR TAXPAYERS IDENTIFICATION NUMBER AND CERTIFICATION

Account Name       Newport International Group Inc.
Address            11863 Wimbledon Circle #418
                   Wellington, Florida 33414

                                 W-9 Substitute

Taxpayer Identification Number 23-3030650

Check this box if you are not subject to backup withholding under the provisions
of Section 3406(a)(1)(C) of the Internal Revenue Code------------[ ]

Check this box if you qualify as a Non-Resident Alien------------[ ]

Date
    --------------

Certification- Under penalties of perjury, I certify that the information
provided on this form is true, correct and complete.

                                        Signature:
                                                  ------------------------------
                                        Print name:
                                                   -----------------------------

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