Document:

EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (this "Agreement") is made and
entered into as of October 27, 2005, among Velocity Asset Management Inc., a
Delaware corporation (the "Company"), and the purchasers signatory hereto (each
such purchaser is a "Purchaser" and collectively, the "Purchasers").

         This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the "Purchase
Agreement").

         The Company and the Purchasers hereby agree as follows:

         1. Definitions
            -----------

         Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:

                  "Advice" shall have the meaning set forth in Section 6(d).

                  "Effectiveness Date" means, with respect to the initial
         Registration Statement required to be filed hereunder, the 90th
         calendar day following the date hereof (the 120th calendar day in the
         case of a "full review" by the Commission) and, with respect to any
         additional Registration Statements which may be required pursuant to
         Section 3(c), the 60th calendar day following the date on which the
         Company first knows, or reasonably should have known, that such
         additional Registration Statement is required hereunder; provided,
         however, in the event the Company is notified by the Commission that
         one of the above Registration Statements will not be reviewed or is no
         longer subject to further review and comments, the Effectiveness Date
         as to such Registration Statement shall be the fifth Trading Day
         following the date on which the Company is so notified if such date
         precedes the dates required above.

                  "Effectiveness Period" shall have the meaning set forth in
         Section 2(a).

                  "Event" shall have the meaning set forth in Section 2(b).

                  "Event Date" shall have the meaning set forth in Section 2(b).

                  "Filing Date" means, with respect to the initial Registration
         Statement required hereunder, the 30th calendar day following the date
         hereof and, with respect to any additional Registration Statements
         which may be required pursuant to Section 3(c), the 30th day following
         the date on which the Company first knows, or reasonably should have
         known that such additional Registration Statement is required
         hereunder.
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                  "Holder" or "Holders" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "Indemnified Party" shall have the meaning set forth in
         Section 5(c).

                  "Indemnifying Party" shall have the meaning set forth in
         Section 5(c).

                  "Losses" shall have the meaning set forth in Section 5(a).

                  "Plan of Distribution" shall have the meaning set forth in
         Section 2(a).

                  "Proceeding" means an action, claim, suit, investigation or
         proceeding (including, without limitation, an investigation or partial
         proceeding, such as a deposition), whether commenced or threatened.

                  "Prospectus" means the prospectus included in a Registration
         Statement (including, without limitation, a prospectus that includes
         any information previously omitted from a prospectus filed as part of
         an effective registration statement in reliance upon Rule 430A
         promulgated under the Securities Act), as amended or supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the Registrable Securities covered by a Registration
         Statement, and all other amendments and supplements to the Prospectus,
         including post-effective amendments, and all material incorporated by
         reference or deemed to be incorporated by reference in such Prospectus.

                  "Registrable Securities" means (i) all of the shares of Common
         Stock issuable upon conversion in full of the Debentures, (ii) all
         shares issuable as interest on the Debentures assuming all permissible
         interest payments are made in shares of Common Stock and the Debentures
         are held until maturity, (iii) all Warrant Shares, (iv) any securities
         issued or issuable upon any stock split, dividend or other
         distribution, recapitalization or similar event with respect to the
         foregoing and (v) any additional shares issuable in connection with any
         anti-dilution provisions in the Debentures or the Warrants (in each
         case, without giving effect to any limitations on conversion set forth
         in the Debenture or limitations on exercise set forth in the Warrant,.

                  "Registration Statement" means the registration statements
         required to be filed hereunder and any additional registration
         statements contemplated by Section 3(c), including (in each case) the
         Prospectus, amendments and supplements to such registration statement
         or Prospectus, including pre- and post-effective amendments, all
         exhibits thereto, and all material incorporated by reference or deemed
         to be incorporated by reference in such registration statement.

                  "Rule 415" means Rule 415 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same purpose and effect as such
         Rule.

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                  "Rule 424" means Rule 424 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same purpose and effect as such
         Rule.

                  "Selling Shareholder Questionnaire" shall have the meaning set
         forth in Section 3(a).

         2. Shelf Registration
            ------------------

                  (a)      On or prior to each Filing Date, the Company shall
         prepare and file with the Commission a "Shelf" Registration Statement
         covering the resale of 130% of the Registrable Securities on such
         Filing Date for an offering to be made on a continuous basis pursuant
         to Rule 415. The Registration Statement shall be on Form SB-2 (except
         if the Company is not then eligible to register for resale the
         Registrable Securities on Form SB-2, in which case such registration
         shall be on another appropriate form in accordance herewith) and shall
         contain (unless otherwise directed by the Holders) substantially the
         "Plan of Distribution" attached hereto as Annex A. Subject to the terms
         of this Agreement, the Company shall use its best efforts to cause a
         Registration Statement to be declared effective under the Securities
         Act as promptly as possible after the filing thereof, but in any event
         prior to the applicable Effectiveness Date, and shall use its best
         efforts to keep such Registration Statement continuously effective
         under the Securities Act until all Registrable Securities covered by
         such Registration Statement have been sold or may be sold without
         volume restrictions pursuant to Rule 144(k) as determined by the
         counsel to the Company pursuant to a written opinion letter to such
         effect, addressed and acceptable to the Company's transfer agent and
         the affected Holders (the "Effectiveness Period"). The Company shall
         telephonically request effectiveness of a Registration Statement as of
         5:00 pm Eastern Time on a Trading Day. The Company shall immediately
         notify the Holders via facsimile of the effectiveness of a Registration
         Statement on the same Trading Day that the Company telephonically
         confirms effectiveness with the Commission, which shall be the date
         requested for effectiveness of a Registration Statement. The Company
         shall, by 9:30 am Eastern Time on the Trading Day after the Effective
         Date (as defined in the Purchase Agreement), file a Form 424(b)(5) with
         the Commission. Failure to so notify the Holder within 1 Trading Day of
         such notification shall be deemed an Event under Section 2(b).

                  (b)      If: (i) a Registration Statement is not filed on or
         prior to its Filing Date (if the Company files a Registration Statement
         without affording the Holders the opportunity to review and comment on
         the same as required by Section 3(a), the Company shall not be deemed
         to have satisfied this clause (i)), or (ii) the Company fails to file
         with the Commission a request for acceleration in accordance with Rule
         461 promulgated under the Securities Act, within five Trading Days of
         the later of (a) the date that the Company is notified (orally or in
         writing, whichever is earlier) by the Commission that a Registration
         Statement will not be "reviewed," or not subject to further review or
         (b) if the Secondary Offering is included for registration on the
         Registration Statement, the date that the filing with NASD Regulation,
         Inc. pursuant to the NASD Rule 2710 in connection with the Secondary

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         Offering is approved, or (iii) prior to its Effectiveness Date, the
         Company fails to file a pre-effective amendment and otherwise respond
         in writing to comments made by the Commission in respect of such
         Registration Statement within 20 calendar days after the receipt of
         comments by or notice from the Commission that such amendment is
         required in order for a Registration Statement to be declared
         effective, or (iv) a Registration Statement filed or required to be
         filed hereunder is not declared effective by the Commission by its
         Effectiveness Date, or (v) after the Effectiveness Date, a Registration
         Statement ceases for any reason to remain continuously effective as to
         all Registrable Securities for which it is required to be effective, or
         the Holders are not permitted to utilize the Prospectus therein to
         resell such Registrable Securities for 20 consecutive calendar days but
         no more than an aggregate of 30 calendar days during any 12-month
         period (which need not be consecutive Trading Days) (any such failure
         or breach being referred to as an "Event", and for purposes of clause
         (i) or (iv) the date on which such Event occurs, or for purposes of
         clause (ii) the date on which such five Trading Day period is exceeded,
         or for purposes of clause (iii) the date which such 20 calendar day
         period is exceeded, or for purposes of clause (v) the date on which
         such 20 or 30 calendar day period, as applicable, is exceeded being
         referred to as "Event Date"), then in addition to any other - rights
         the Holders may have hereunder or under applicable law, on each such
         Event Date and on each monthly anniversary of each such Event Date (if
         the applicable Event shall not have been cured by such date) until the
         applicable Event is cured, the Company and J. Holder Inc.
         (collectively, with the Company, the "Sellers") shall jointly and
         severally pay to each Holder an amount in cash, as partial liquidated
         damages and not as a penalty, equal to 1.5% of the aggregate purchase
         price paid by such Holder pursuant to the Purchase Agreement for any
         Registrable Securities then held by such Holder. If the Sellers fail to
         pay any partial liquidated damages pursuant to this Section in full
         within seven days after the date payable, the Sellers will pay interest
         thereon at a rate of 18% per annum (or such lesser maximum amount that
         is permitted to be paid by applicable law) to the Holder, accruing
         daily from the date such partial liquidated damages are due until such
         amounts, plus all such interest thereon, are paid in full. The partial
         liquidated damages pursuant to the terms hereof shall apply on a daily
         pro-rata basis for any portion of a month prior to the cure of an
         Event.

         3. Registration Procedures.
            -----------------------

         In connection with the Company's registration obligations hereunder,
the Company shall:

                  (a)      Not less than five Trading Days prior to the filing
         of each Registration Statement or any related Prospectus or any
         amendment or supplement thereto (including any document that would be
         incorporated or deemed to be incorporated therein by reference), the
         Company shall, (i) furnish to each Holder copies of all such documents
         proposed to be filed, which documents (other than those incorporated or
         deemed to be incorporated by reference) will be subject to the review
         of such Holders, and (ii) cause its officers and directors, counsel and
         independent certified public accountants to respond to such inquiries
         as shall be necessary, in the reasonable opinion of respective counsel
         to conduct a reasonable investigation within the meaning of the

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         Securities Act. The Company shall not file a Registration Statement or
         any such Prospectus or any amendments or supplements thereto to which
         the Holders of a majority of the Registrable Securities shall
         reasonably object in good faith, provided that, the Company is notified
         of such objection in writing no later than 5 Trading Days after the
         Holders have been so furnished copies of such documents. Each Holder
         agrees to furnish to the Company a completed Questionnaire in the form
         attached to this Agreement as Annex B (a "Selling Shareholder
         Questionnaire") not less than two Trading Days prior to the Filing Date
         or by the end of the fourth Trading Day following the date on which
         such Holder receives draft materials in accordance with this Section.

                  (b)      (i) Prepare and file with the Commission such
         amendments, including post-effective amendments, to a Registration
         Statement and the Prospectus used in connection therewith as may be
         necessary to keep a Registration Statement continuously effective as to
         the applicable Registrable Securities for the Effectiveness Period and
         prepare and file with the Commission such additional Registration
         Statements in order to register for resale under the Securities Act all
         of the Registrable Securities; (ii) cause the related Prospectus to be
         amended or supplemented by any required Prospectus supplement (subject
         to the terms of this Agreement), and as so supplemented or amended to
         be filed pursuant to Rule 424; (iii) respond as promptly as reasonably
         possible to any comments received from the Commission with respect to a
         Registration Statement or any amendment thereto and as promptly as
         reasonably possible provide the Holders true and complete copies of all
         correspondence from and to the Commission relating to a Registration
         Statement; and (iv) comply in all material respects with the provisions
         of the Securities Act and the Exchange Act with respect to the
         disposition of all Registrable Securities covered by a Registration
         Statement during the applicable period in accordance (subject to the
         terms of this Agreement) with the intended methods of disposition by
         the Holders thereof set forth in such Registration Statement as so
         amended or in such Prospectus as so supplemented.

                  (c)      If during the Effectiveness Period, the number of
         Registrable Securities at any time exceeds 90% of the number of shares
         of Common Stock then registered in a Registration Statement, then the
         Company shall file as soon as reasonably practicable but in any case
         prior to the applicable Filing Date, an additional Registration
         Statement covering the resale by the Holders of not less than 130% of
         the number of such Registrable Securities.

                  (d)      Notify the Holders of Registrable Securities to be
         sold (which notice shall, pursuant to clauses (ii) through (vi) hereof,
         be accompanied by an instruction to suspend the use of the Prospectus
         until the requisite changes have been made) as promptly as reasonably
         possible (and, in the case of (i)(A) below, not less than five Trading
         Days prior to such filing) and (if requested by any such Person)
         confirm such notice in writing no later than one Trading Day following
         the day (i)(A) when a Prospectus or any Prospectus supplement or
         post-effective amendment to a Registration Statement is proposed to be
         filed; (B) when the Commission notifies the Company whether there will
         be a "review" of such Registration Statement and whenever the
         Commission comments in writing on such Registration Statement (the

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         Company shall provide true and complete copies thereof and all written
         responses thereto to each of the Holders); and (C) with respect to a
         Registration Statement or any post-effective amendment, when the same
         has become effective; (ii) of any request by the Commission or any
         other Federal or state governmental authority for amendments or
         supplements to a Registration Statement or Prospectus or for additional
         information; (iii) of the issuance by the Commission or any other
         federal or state governmental authority of any stop order suspending
         the effectiveness of a Registration Statement covering any or all of
         the Registrable Securities or the initiation of any Proceedings for
         that purpose; (iv) of the receipt by the Company of any notification
         with respect to the suspension of the qualification or exemption from
         qualification of any of the Registrable Securities for sale in any
         jurisdiction, or the initiation or threatening of any Proceeding for
         such purpose; (v) of the occurrence of any event or passage of time
         that makes the financial statements included in a Registration
         Statement ineligible for inclusion therein or any statement made in a
         Registration Statement or Prospectus or any document incorporated or
         deemed to be incorporated therein by reference untrue in any material
         respect or that requires any revisions to a Registration Statement,
         Prospectus or other documents so that, in the case of a Registration
         Statement or the Prospectus, as the case may be, it will not contain
         any untrue statement of a material fact or omit to state any material
         fact required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading; and (vi) the occurrence or existence of any pending
         corporate development with respect to the Company that the Company
         believes may be material and that, in the determination of the Company,
         makes it not in the best interest of the Company to allow continued
         availability of a Registration Statement or Prospectus; provided that
         any and all of such information shall remain confidential to each
         Holder until such information otherwise becomes public, unless
         disclosure by a Holder is required by law; provided, further,
         notwithstanding each Holder's agreement to keep such information
         confidential, the Holders make no acknowledgement that any such
         information is material, non-public information.

                  (e)      Use its best efforts to avoid the issuance of, or, if
         issued, obtain the withdrawal of (i) any order suspending the
         effectiveness of a Registration Statement, or (ii) any suspension of
         the qualification (or exemption from qualification) of any of the
         Registrable Securities for sale in any jurisdiction, at the earliest
         practicable moment.

                  (f)      Furnish to each Holder, without charge, at least one
         conformed copy of each such Registration Statement and each amendment
         thereto, including financial statements and schedules, all documents
         incorporated or deemed to be incorporated therein by reference to the
         extent requested by such Person, and all exhibits to the extent
         requested by such Person (including those previously furnished or
         incorporated by reference) promptly after the filing of such documents
         with the Commission.

                  (g)      Promptly deliver to each Holder, without charge, as
         many copies of the Prospectus or Prospectuses (including each form of
         prospectus) and each amendment or supplement thereto as such Persons
         may reasonably request in connection with resales by the Holder of
         Registrable Securities. Subject to the terms of this Agreement, the
         Company hereby consents to the use of such Prospectus and each

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         amendment or supplement thereto by each of the selling Holders in
         connection with the offering and sale of the Registrable Securities
         covered by such Prospectus and any amendment or supplement thereto,
         except after the giving on any notice pursuant to Section 3(d).

                  (h)      If NASDR Rule 2710 requires any broker-dealer to make
         a filing prior to executing a sale by a Holder, the Company shall (i)
         make an Issuer Filing with the NASDR, Inc. Corporate Financing
         Department pursuant to NASDR Rule 2710(b)(10)(A)(i), (ii) respond
         within five Trading Days to any comments received from NASDR in
         connection therewith, (iii) and pay the filing fee required in
         connection therewith.

                  (i)      Prior to any resale of Registrable Securities by a
         Holder, use its commercially reasonable efforts to register or qualify
         or cooperate with the selling Holders in connection with the
         registration or qualification (or exemption from the Registration or
         qualification) of such Registrable Securities for the resale by the
         Holder under the securities or Blue Sky laws of such jurisdictions
         within the United States as any Holder reasonably requests in writing,
         to keep each registration or qualification (or exemption therefrom)
         effective during the Effectiveness Period and to do any and all other
         acts or things reasonably necessary to enable the disposition in such
         jurisdictions of the Registrable Securities covered by each
         Registration Statement; provided, that the Company shall not be
         required to qualify generally to do business in any jurisdiction where
         it is not then so qualified, subject the Company to any material tax in
         any such jurisdiction where it is not then so subject or file a general
         consent to service of process in any such jurisdiction.

                  (j)      If requested by the Holders, cooperate with the
         Holders to facilitate the timely preparation and delivery of
         certificates representing Registrable Securities to be delivered to a
         transferee pursuant to a Registration Statement, which certificates
         shall be free, to the extent permitted by the Purchase Agreement, of
         all restrictive legends, and to enable such Registrable Securities to
         be in such denominations and registered in such names as any such
         Holders may request.

                  (k)      Upon the occurrence of any event contemplated by this
         Section 3, as promptly as reasonably possible under the circumstances
         taking into account the Company's good faith assessment of any adverse
         consequences to the Company and its stockholders of the premature
         disclosure of such event, prepare a supplement or amendment, including
         a post-effective amendment, to a Registration Statement or a supplement
         to the related Prospectus or any document incorporated or deemed to be
         incorporated therein by reference, and file any other required document
         so that, as thereafter delivered, neither a Registration Statement nor
         such Prospectus will contain an untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein, in light of the circumstances
         under which they were made, not misleading. If the Company notifies the
         Holders in accordance with clauses (ii) through (vi) of Section 3(d)
         above to suspend the use of any Prospectus until the requisite changes

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         to such Prospectus have been made, then the Holders shall suspend use
         of such Prospectus. The Company will use its best efforts to ensure
         that the use of the Prospectus may be resumed as promptly as is
         practicable. The Company shall be entitled to exercise its right under
         this Section 3(k) to suspend the availability of a Registration
         Statement and Prospectus, subject to the payment of partial liquidated
         damages pursuant to Section 2(b), for a period not to exceed 60 days
         (which need not be consecutive days) in any 12 month period.

                  (l)      Comply with all applicable rules and regulations of
         the Commission.

                  (m)      The Company may require each selling Holder to
         furnish to the Company a certified statement as to the number of shares
         of Common Stock beneficially owned by such Holder and, if required by
         the Commission, the person thereof that has voting and dispositive
         control over the Shares. During any periods that the Company is unable
         to meet its obligations hereunder with respect to the registration of
         the Registrable Securities solely because any Holder fails to furnish
         such information within three Trading Days of the Company's request,
         any liquidated damages that are accruing at such time as to such Holder
         only shall be tolled and any Event that may otherwise occur solely
         because of such delay shall be suspended as to such Holder only, until
         such information is delivered to the Company.

         4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, (B) in compliance with applicable state securities or Blue
Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as requested by the Holders) and (C) if not
previously paid by the Company in connection with an Issuer Filing, with respect
to any filing that may be required to be made by any broker through which a
Holder intends to make sales of Registrable Securities with NASD Regulation,
Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no more
than a customary brokerage commission in connection with such sale, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder. In no event shall the Company be responsible for any broker
or similar commissions or, except to the extent provided for in the Transaction
Documents, any legal fees or other costs of the Holders.

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         5. Indemnification
            ---------------

                  (a)      Indemnification by the Company. The Company shall,
         notwithstanding any termination of this Agreement, indemnify and hold
         harmless each Holder, the officers, directors, agents, brokers
         (including brokers who offer and sell Registrable Securities as
         principal as a result of a pledge or any failure to perform under a
         margin call of Common Stock), investment advisors and employees of each
         of them, each Person who controls any such Holder (within the meaning
         of Section 15 of the Securities Act or Section 20 of the Exchange Act)
         and the officers, directors, agents and employees of each such
         controlling Person, to the fullest extent permitted by applicable law,
         from and against any and all losses, claims, damages, liabilities,
         costs (including, without limitation, reasonable attorneys' fees) and
         expenses (collectively, "Losses"), as incurred, arising out of or
         relating to any untrue or alleged untrue statement of a material fact
         contained in a Registration Statement, any Prospectus or any form of
         prospectus or in any amendment or supplement thereto or in any
         preliminary prospectus, or arising out of or relating to any omission
         or alleged omission of a material fact required to be stated therein or
         necessary to make the statements therein (in the case of any Prospectus
         or form of prospectus or supplement thereto, in light of the
         circumstances under which they were made) not misleading, except to the
         extent, but only to the extent, that (i) such untrue statements or
         omissions are based solely upon information regarding such Holder
         furnished in writing to the Company by such Holder expressly for use
         therein, or to the extent that such information relates to such Holder
         or such Holder's proposed method of distribution of Registrable
         Securities and was reviewed and expressly approved in writing by such
         Holder expressly for use in a Registration Statement, such Prospectus
         or such form of Prospectus or in any amendment or supplement thereto
         (it being understood that the Holder has approved Annex A hereto for
         this purpose) or (ii) in the case of an occurrence of an event of the
         type specified in Section 3(d)(ii)-(vi), the use by such Holder of an
         outdated or defective Prospectus after the Company has notified such
         Holder in writing that the Prospectus is outdated or defective and
         prior to the receipt by such Holder of the Advice contemplated in
         Section 6(d). The Company shall notify the Holders promptly of the
         institution, threat or assertion of any Proceeding arising from or in
         connection with the transactions contemplated by this Agreement of
         which the Company is aware.

                  (b)      Indemnification by Holders. Each Holder shall,
         severally and not jointly, indemnify and hold harmless the Company, its
         directors, officers, agents and employees, each Person who controls the
         Company (within the meaning of Section 15 of the Securities Act and
         Section 20 of the Exchange Act), and the directors, officers, agents or
         employees of such controlling Persons, to the fullest extent permitted
         by applicable law, from and against all Losses, as incurred, to the
         extent arising out of or based solely upon: (x) such Holder's failure
         to comply with the prospectus delivery requirements of the Securities
         Act or (y) any untrue or alleged untrue statement of a material fact
         contained in any Registration Statement, any Prospectus, or any form of

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         prospectus, or in any amendment or supplement thereto or in any
         preliminary prospectus, or arising out of or relating to any omission
         or alleged omission of a material fact required to be stated therein or
         necessary to make the statements therein not misleading (i) to the
         extent, but only to the extent, that such untrue statement or omission
         is contained in any information so furnished in writing by such Holder
         to the Company specifically for inclusion in such Registration
         Statement or such Prospectus or (ii) to the extent that (1) such untrue
         statements or omissions are based solely upon information regarding
         such Holder furnished in writing to the Company by such Holder
         expressly for use therein, or to the extent that such information
         relates to such Holder or such Holder's proposed method of distribution
         of Registrable Securities and was reviewed and expressly approved in
         writing by such Holder expressly for use in a Registration Statement
         (it being understood that the Holder has approved Annex A hereto for
         this purpose), such Prospectus or such form of Prospectus or in any
         amendment or supplement thereto or (2) in the case of an occurrence of
         an event of the type specified in Section 3(d)(ii)-(vi), the use by
         such Holder of an outdated or defective Prospectus after the Company
         has notified such Holder in writing that the Prospectus is outdated or
         defective and prior to the receipt by such Holder of the Advice
         contemplated in Section 6(d). In no event shall the liability of any
         selling Holder hereunder be greater in amount than the dollar amount of
         the net proceeds received by such Holder upon the sale of the
         Registrable Securities giving rise to such indemnification obligation.

                  (c)      Conduct of Indemnification Proceedings. If any
         Proceeding shall be brought or asserted against any Person entitled to
         indemnity hereunder (an "Indemnified Party"), such Indemnified Party
         shall promptly notify the Person from whom indemnity is sought (the
         "Indemnifying Party") in writing, and the Indemnifying Party shall have
         the right to assume the defense thereof, including the employment of
         counsel reasonably satisfactory to the Indemnified Party and the
         payment of all fees and expenses incurred in connection with defense
         thereof; provided, that the failure of any Indemnified Party to give
         such notice shall not relieve the Indemnifying Party of its obligations
         or liabilities pursuant to this Agreement, except (and only) to the
         extent that it shall be finally determined by a court of competent
         jurisdiction (which determination is not subject to appeal or further
         review) that such failure shall have prejudiced the Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall reasonably believe that a material conflict of interest is likely to exist
if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of one

                                       10
<PAGE>

separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

         Subject to the terms of this Agreement, all reasonable fees and
expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party; provided, that the Indemnified Party shall
promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is not
entitled to indemnification hereunder, determined based upon the relative faults
of the parties.

                  (d)      Contribution. If the indemnification under Section
         5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to
         hold an Indemnified Party harmless for any Losses, then each
         Indemnifying Party shall contribute to the amount paid or payable by
         such Indemnified Party, in such proportion as is appropriate to reflect
         the relative fault of the Indemnifying Party and Indemnified Party in
         connection with the actions, statements or omissions that resulted in
         such Losses as well as any other relevant equitable considerations. The
         relative fault of such Indemnifying Party and Indemnified Party shall
         be determined by reference to, among other things, whether any action
         in question, including any untrue or alleged untrue statement of a
         material fact or omission or alleged omission of a material fact, has
         been taken or made by, or relates to information supplied by, such
         Indemnifying Party or Indemnified Party, and the parties' relative
         intent, knowledge, access to information and opportunity to correct or
         prevent such action, statement or omission. The amount paid or payable
         by a party as a result of any Losses shall be deemed to include,
         subject to the limitations set forth in this Agreement, any reasonable
         attorneys' or other reasonable fees or expenses incurred by such party
         in connection with any Proceeding to the extent such party would have
         been indemnified for such fees or expenses if the indemnification
         provided for in this Section was available to such party in accordance
         with its terms.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.

                                       11
<PAGE>

                           The indemnity and contribution agreements contained
         in this Section are in addition to any liability that the Indemnifying
         Parties may have to the Indemnified Parties.

         6. Miscellaneous
            -------------

                  (a)      Remedies. In the event of a breach by the Company or
         by a Holder, of any of their obligations under this Agreement, each
         Holder or the Company, as the case may be, in addition to being
         entitled to exercise all rights granted by law and under this
         Agreement, including recovery of damages, will be entitled to specific
         performance of its rights under this Agreement. The Company and each
         Holder agree that monetary damages would not provide adequate
         compensation for any losses incurred by reason of a breach by it of any
         of the provisions of this Agreement and hereby further agrees that, in
         the event of any action for specific performance in respect of such
         breach, it shall waive the defense that a remedy at law would be
         adequate.

                  (b)      No Piggyback on Registrations. Except as set forth on
         Schedule 6(b) attached hereto, neither the Company nor any of its
         security holders (other than the Holders in such capacity pursuant
         hereto) may include securities of the Company in the initial
         Registration Statement other than the Registrable Securities. Except as
         set forth on the Disclosure Schedules, no Person has any right to cause
         the Company to effect the registration under the Securities Act of any
         securities of the Company. The Company shall not file any other
         registration statements until 90 days after the initial Registration
         Statement required hereunder is declared effective by the Commission,
         provided that this Section 6(b) shall not prohibit the Company from
         filing amendments to registration statements already filed.

                  (c)      Compliance. Each Holder covenants and agrees that it
         will comply with the prospectus delivery requirements of the Securities
         Act as applicable to it in connection with sales of Registrable
         Securities pursuant to a Registration Statement.

                  (d)      Discontinued Disposition. Each Holder agrees by its
         acquisition of such Registrable Securities that, upon receipt of a
         notice from the Company of the occurrence of any event of the kind
         described in Section 3(d), such Holder will forthwith discontinue
         disposition of such Registrable Securities under a Registration
         Statement until such Holder's receipt of the copies of the supplemented
         Prospectus and/or amended Registration Statement, or until it is
         advised in writing (the "Advice") by the Company that the use of the
         applicable Prospectus may be resumed, and, in either case, has received
         copies of any additional or supplemental filings that are incorporated
         or deemed to be incorporated by reference in such Prospectus or
         Registration Statement. The Company will use its best efforts to ensure
         that the use of the Prospectus may be resumed as promptly as it
         practicable. The Company agrees and acknowledges that any periods
         during which the Holder is required to discontinue the disposition of
         the Registrable Securities hereunder shall be subject to the provisions
         of Section 2(b).

                                       12
<PAGE>

                  (e)      Piggy-Back Registrations. If at any time during the
         Effectiveness Period there is not an effective Registration Statement
         covering all of the Registrable Securities and the Company shall
         determine to prepare and file with the Commission a registration
         statement relating to an offering for its own account or the account of
         others under the Securities Act of any of its equity securities, other
         than on Form S-4 or Form S-8 (each as promulgated under the Securities
         Act) or their then equivalents relating to equity securities to be
         issued solely in connection with any acquisition of any entity or
         business or equity securities issuable in connection with the stock
         option or other employee benefit plans, then the Company shall send to
         each Holder a written notice of such determination and, if within
         fifteen days after the date of such notice, any such Holder shall so
         request in writing, the Company shall include in such registration
         statement all or any part of such Registrable Securities such Holder
         requests to be registered; provided, however, that the Company shall
         not be required to register any Registrable Securities pursuant to this
         Section 6(e) that are eligible for resale pursuant to Rule 144(k)
         promulgated under the Securities Act or that are the subject of a then
         effective Registration Statement.

                  (f)      Amendments and Waivers. The provisions of this
         Agreement, including the provisions of this sentence, may not be
         amended, modified or supplemented, and waivers or consents to
         departures from the provisions hereof may not be given, unless the same
         shall be in writing and signed by the Company and each Holder of the
         then outstanding Registrable Securities. Notwithstanding the foregoing,
         a waiver or consent to depart from the provisions hereof with respect
         to a matter that relates exclusively to the rights of Holders and that
         does not directly or indirectly affect the rights of other Holders may
         be given by Holders of all of the Registrable Securities to which such
         waiver or consent relates; provided, however, that the provisions of
         this sentence may not be amended, modified, or supplemented except in
         accordance with the provisions of the immediately preceding sentence.

                  (g)      Notices. Any and all notices or other communications
         or deliveries required or permitted to be provided hereunder shall be
         delivered as set forth in the Purchase Agreement.

                  (h)      Successors and Assigns. This Agreement shall inure to
         the benefit of and be binding upon the successors and permitted assigns
         of each of the parties and shall inure to the benefit of each Holder.
         The Company may not assign its rights or obligations hereunder without
         the prior written consent of all of the Holders of the then-outstanding
         Registrable Securities. Each Holder may assign their respective rights
         hereunder in the manner and to the Persons as permitted under the
         Purchase Agreement.

                  (i)      No Inconsistent Agreements. Neither the Company nor
         any of its subsidiaries has entered, as of the date hereof, nor shall
         the Company or any of its subsidiaries, on or after the date of this
         Agreement, enter into any agreement with respect to its securities,
         that would have the effect of impairing the rights granted to the
         Holders in this Agreement or otherwise conflicts with the provisions
         hereof. Except as set forth on Schedule 6(i), neither the Company nor
         any of its subsidiaries has previously entered into any agreement
         granting any registration rights with respect to any of its securities
         to any Person that have not been satisfied in full.

                                       13
<PAGE>

                  (j)      Execution and Counterparts. This Agreement may be
         executed in any number of counterparts, each of which when so executed
         shall be deemed to be an original and, all of which taken together
         shall constitute one and the same Agreement. In the event that any
         signature is delivered by facsimile transmission, such signature shall
         create a valid binding obligation of the party executing (or on whose
         behalf such signature is executed) the same with the same force and
         effect as if such facsimile signature were the original thereof.

                  (k)      Governing Law. All questions concerning the
         construction, validity, enforcement and interpretation of this
         Agreement shall be determined with the provisions of the Purchase
         Agreement.

                  (l)      Cumulative Remedies. The remedies provided herein are
         cumulative and not exclusive of any remedies provided by law.

                  (m)      Severability. If any term, provision, covenant or
         restriction of this Agreement is held by a court of competent
         jurisdiction to be invalid, illegal, void or unenforceable, the
         remainder of the terms, provisions, covenants and restrictions set
         forth herein shall remain in full force and effect and shall in no way
         be affected, impaired or invalidated, and the parties hereto shall use
         their commercially reasonable efforts to find and employ an alternative
         means to achieve the same or substantially the same result as that
         contemplated by such term, provision, covenant or restriction. It is
         hereby stipulated and declared to be the intention of the parties that
         they would have executed the remaining terms, provisions, covenants and
         restrictions without including any of such that may be hereafter
         declared invalid, illegal, void or unenforceable.

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

                  (o)      Independent Nature of Holders' Obligations and
         Rights. The obligations of each Holder hereunder are several and not
         joint with the obligations of any other Holder hereunder, and no Holder
         shall be responsible in any way for the performance of the obligations
         of any other Holder hereunder. Nothing contained herein or in any other
         agreement or document delivered at any closing, and no action taken by
         any Holder pursuant hereto or thereto, shall be deemed to constitute
         the Holders as a partnership, an association, a joint venture or any
         other kind of entity, or create a presumption that the Holders are in
         any way acting in concert with respect to such obligations or the
         transactions contemplated by this Agreement. Each Holder shall be
         entitled to protect and enforce its rights, including without
         limitation the rights arising out of this Agreement, and it shall not
         be necessary for any other Holder to be joined as an additional party
         in any proceeding for such purpose.

                              ********************

                                       14
<PAGE>

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

                                       VELOCITY ASSET MANAGEMENT INC.

                                       By: /s/ JAMES J. MASTRIANI
                                           -------------------------------------
                                           Name: James J. Mastriani
                                           Title: CFO and Chief Legal Counsel

                                       J. HOLDER INC.

                                       By: /s/ W. PETER RAGAN, SR.
                                           -------------------------------------
                                           Name: W. Peter Ragan, Sr.
                                           Title: President

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       15
<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO VCYA RRA]

            Name of Purchaser: DKR SoundShore Oasis Holding Fund, Ltd.
            Signature of Authorized Signatory of Purchaser: /s/ BRAD CASWELL
            Name of Authorized Signatory: Brad Caswell
            Title of Authorized Signatory: Director

                                       16
<PAGE>

                              Plan of Distribution
                              --------------------

         Each Selling Stockholder (the "Selling Stockholders") of the common
stock ("Common Stock") of Velocity Asset Management Inc., a Delaware corporation
(the "Company") and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their shares of Common Stock on the
Trading Market or any other stock exchange, market or trading facility on which
the shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. A Selling Stockholder may use any one or more of the
following methods when selling shares:

         o        ordinary brokerage transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        block trades in which the broker-dealer will attempt to sell
                  the shares as agent but may position and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a broker-dealer as principal and resale by the
                  broker-dealer for its account;

         o        an exchange distribution in accordance with the rules of the
                  applicable exchange;

         o        privately negotiated transactions;

         o        settlement of short sales entered into after the effective
                  date of the registration statement of which this prospectus is
                  a part;

         o        broker-dealers may agree with the Selling Stockholders to sell
                  a specified number of such shares at a stipulated price per
                  share;

         o        a combination of any such methods of sale;

         o        through the writing or settlement of options or other hedging
                  transactions, whether through an options exchange or
                  otherwise; or

         o        any other method permitted pursuant to applicable law.

         The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available, rather
than under this prospectus.

         Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.

                                       17
<PAGE>

         In connection with the sale of the Common Stock or interests therein,
the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
Common Stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the Common Stock short and deliver these
securities to close out their short positions, or loan or pledge the Common
Stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

         The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholder has
informed the Company that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).

         The Company is required to pay certain fees and expenses incurred by
the Company incident to the registration of the shares. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.

         Because Selling Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this prospectus.
Each Selling Stockholder has advised us that they have not entered into any
written or oral agreements, understandings or arrangements with any underwriter
or broker-dealer regarding the sale of the resale shares. There is no
underwriter or coordinating broker acting in connection with the proposed sale
of the resale shares by the Selling Stockholders.

         We agreed to keep this prospectus effective until the earlier of (i)
the date on which the shares may be resold by the Selling Stockholders without
registration and without regard to any volume limitations by reason of Rule
144(e) under the Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

                                       18
<PAGE>

         Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the resale shares may not simultaneously
engage in market making activities with respect to the Common Stock for the
applicable restricted period, as defined in Regulation M, prior to the
commencement of the distribution. In addition, the Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of shares of the Common Stock by the Selling Stockholders or
any other person. We will make copies of this prospectus available to the
Selling Stockholders and have informed them of the need to deliver a copy of
this prospectus to each purchaser at or prior to the time of the sale.

                                       19
<PAGE>

                                                                         Annex B

                         VELOCITY ASSET MANAGEMENT INC.

                 Selling Securityholder Notice and Questionnaire

         The undersigned beneficial owner of common stock, par value $.001 per
share (the "Common Stock"), of Velocity Asset Management Inc., a Delaware
corporation (the "Company"), (the "Registrable Securities") understands that the
Company has filed or intends to file with the Securities and Exchange Commission
(the "Commission") a registration statement on Form SB-2 (the "Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of the Registrable Securities, in
accordance with the terms of the Registration Rights Agreement, dated as of
October 27, 2005 (the "Registration Rights Agreement"), among the Company and
the Purchasers named therein. A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.

         Certain legal consequences arise from being named as a selling
securityholder in the Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.

                                     NOTICE

         The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise specified under such Item 3)
in the Registration Statement.

                                       20
<PAGE>

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.          Name.

            (a)         Full Legal Name of Selling Securityholder

                        ________________________________________________________

            (b)         Full Legal Name of Registered Holder (if not the same as
                        (a) above) through which Registrable Securities Listed
                        in Item 3 below are held:

                        ________________________________________________________

            (c)         Full Legal Name of Natural Control Person (which means a
                        natural person who directly or indirectly alone or with
                        others has power to vote or dispose of the securities
                        covered by the questionnaire):

                        ________________________________________________________

2.  Address for Notices to Selling Securityholder:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Telephone: _____________________________________________________________________

Fax:       _____________________________________________________________________

Contact Person: ________________________________________________________________

3.  Beneficial Ownership of Registrable Securities:

            (a)         Type and Principal Amount of Registrable Securities
                        beneficially owned:

                        ________________________________________________________

                        ________________________________________________________

                        ________________________________________________________

                                       21
<PAGE>

4.  Broker-Dealer Status:

            (a)         Are you a broker-dealer?

                           Yes  [ ]       No[ ]

            (b)         If "yes" to Section 4(a), did you receive your
                        Registrable Securities as compensation for investment
                        banking services to the Company.

                           Yes  [ ]       No[ ]

            Note:       If no, the Commission's staff has indicated that you
                        should be identified as an underwriter in the
                        Registration Statement.

            (c)         Are you an affiliate of a broker-dealer?

                           Yes  [ ]       No[ ]

            (d)         If you are an affiliate of a broker-dealer, do you
                        certify that you bought the Registrable Securities in
                        the ordinary course of business, and at the time of the
                        purchase of the Registrable Securities to be resold, you
                        had no agreements or understandings, directly or
                        indirectly, with any person to distribute the
                        Registrable Securities?

                           Yes  [ ]       No[ ]

            Note:       If no, the Commission's staff has indicated that you
                        should be identified as an underwriter in the
                        Registration Statement.

5.  Beneficial Ownership of Other Securities of the Company Owned by the Selling
    Securityholder.

            Except as set forth below in this Item 5, the undersigned is not the
            beneficial or registered owner of any securities of the Company
            other than the Registrable Securities listed above in Item 3.

            (a)         Type and Amount of Other Securities beneficially owned
                        by the Selling Securityholder:

                        ________________________________________________________

                        ________________________________________________________

                                       22
<PAGE>

6.  Relationships with the Company:

         Except as set forth below, neither the undersigned nor any of its
         affiliates, officers, directors or principal equity holders (owners of
         5% of more of the equity securities of the undersigned) has held any
         position or office or has had any other material relationship with the
         Company (or its predecessors or affiliates) during the past three
         years.

         State any exceptions here:

            ____________________________________________________________________

            ____________________________________________________________________

         The undersigned agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Registration Statement
remains effective.

         By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items 1 through 6 and the
inclusion of such information in the Registration Statement and the related
prospectus and any amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and
the related prospectus.

         IN WITNESS WHEREOF the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.

Dated:  __________________          Beneficial Owner:___________________________

                                    By: ________________________________________
                                        Name:
                                        Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                                       23EXHIBIT 10.3

                               SECURITY AGREEMENT

         SECURITY AGREEMENT, dated as of October 27, 2005 (this "Agreement"),
among Velocity Asset Management Inc., a Delaware corporation (the "Company"), J.
Holder Inc., a New Jersey corporation and a wholly-owned Subsidiary of the
Company ("Holder"), and all of the other Subsidiaries of the Company other than
Velocity Investments, LLC ("Velocity Investments") (such subsidiaries, the
"Guarantors") (the Company and Guarantors are collectively referred to as the
"Debtors") and the holder or holders of the Company's 10% Convertible Secured
Debenture due April 27, 2007 in the original aggregate principal amount of up to
$1,800,000 (the "Debenture"), signatory hereto, their endorsees, transferees and
assigns (collectively referred to as, the "Secured Parties"). Notwithstanding
anything herein to the contrary, DKR SoundShore Oasis Holding Fund Ltd. is the
only Secured Party and references hereunder to "Secured Parties" or multiple
Secured Parties shall be disregarded.

                              W I T N E S S E T H:

         WHEREAS, pursuant to the Purchase Agreement (as defined in the
Debenture), the Secured Parties have severally agreed to purchase the Debenture;

         WHEREAS, pursuant to a certain Subsidiary Guarantee dated as of the
date hereof (the "Guaranty"), the Guarantors have jointly and severally agreed
to guaranty and act as surety for payment of the obligations underlying the
Debentures;

         WHEREAS, in order to induce the Secured Parties to purchase the
Debentures, each Debtor has agreed to execute and deliver to the Secured Parties
this Agreement and to grant the Secured Parties, pari passu with each other
Secured Party, a perfected (other than as provided herein) security interest in
certain property of such Debtor to secure the prompt payment, performance and
discharge in full of all of the Company's obligations under the Debenture and
the other Debtor's obligations under the Guaranty.

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

         1.       Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "account", "chattel paper", "commercial tort claim", "deposit account",
"document", "equipment", "fixtures", "general intangibles", "goods",
"instruments", "inventory", "investment property", "letter-of-credit rights",
"proceeds" and "supporting obligations") shall have the respective meanings
given such terms in Article 9 of the UCC.

                                       1
<PAGE>

                  (a)      "Collateral" means the collateral in which the
         Secured Parties are granted a security interest by this Agreement and
         which shall include the following personal property of the Debtors,
         whether presently owned or existing or hereafter acquired or coming
         into existence, wherever situated, and all additions and accessions
         thereto and all substitutions and replacements thereof, and all
         proceeds, products and accounts thereof, including, without limitation,
         all proceeds from the sale or transfer of the Collateral and of
         insurance covering the same and of any tort claims in connection
         therewith, and all dividends, interest, cash, notes, securities, equity
         interest or other property at any time and from time to time acquired,
         receivable or otherwise distributed in respect of, or in exchange for,
         any or all of the Pledged Securities (as defined below):

                           (i)      All goods, including, without limitations,
                  (A) all machinery, equipment, computers, motor vehicles,
                  trucks, tanks, boats, ships, appliances, furniture, special
                  and general tools, fixtures, test and quality control devices
                  and other equipment of every kind and nature and wherever
                  situated, together with all documents of title and documents
                  representing the same, all additions and accessions thereto,
                  replacements therefor, all parts therefor, and all substitutes
                  for any of the foregoing and all other items used and useful
                  in connection with any Debtor's businesses and all
                  improvements thereto; and (B) all inventory;

                           (ii)     All contract rights and other general
                  intangibles, including, without limitation, all partnership
                  interests, membership interests, stock or other securities,
                  rights under any of the Organizational Documents, agreements
                  related to the Pledged Securities, licenses, distribution and
                  other agreements, computer software (whether "off-the-shelf",
                  licensed from any third party or developed by any Debtor),
                  computer software development rights, leases, franchises,
                  customer lists, quality control procedures, grants and rights,
                  goodwill, trademarks, service marks, trade styles, trade
                  names, patents, patent applications, copyrights, and income
                  tax refunds;

                           (iii)    All accounts, together with all instruments,
                  all documents of title representing any of the foregoing, all
                  rights in any merchandising, goods, equipment, motor vehicles
                  and trucks which any of the same may represent, and all right,
                  title, security and guaranties with respect to each account,
                  including any right of stoppage in transit;

                           (iv)     All documents, letter-of-credit rights,
                  instruments and chattel paper;

                           (v)      All commercial tort claims;

                           (vi)     All deposit accounts and all cash (whether
                  or not deposited in such deposit accounts);

                           (vii)    All investment property;

                           (viii)   All supporting obligations; and

                                       2
<PAGE>

                           (ix)     All files, records, books of account,
                  business papers, and computer programs; and

                           (x)      The products and proceeds of all of the
                  foregoing Collateral set forth in clauses (i)-(ix) above.

                           Without limiting the generality of the foregoing, the
                  "Collateral" shall include all investment property and general
                  intangibles respecting ownership and/or other equity interests
                  in each Guarantor, including, without limitation, the shares
                  of capital stock and the other equity interests listed on
                  Schedule H hereto (as the same may be modified from time to
                  time pursuant to the terms hereof), and any other shares of
                  capital stock and/or other equity interests of any other
                  direct or indirect subsidiary of any Debtor obtained in the
                  future, and, in each case, all certificates representing such
                  shares and/or equity interests and, in each case, all rights,
                  options, warrants, stock, other securities and/or equity
                  interests that may hereafter be received, receivable or
                  distributed in respect of, or exchanged for, any of the
                  foregoing (all of the foregoing being referred to herein as
                  the "Pledged Securities") and all rights arising under or in
                  connection with the Pledged Securities, including, but not
                  limited to, all dividends, interest and cash.

                           Notwithstanding the foregoing, nothing herein shall
                  be deemed to constitute an assignment of any asset which, in
                  the event of an assignment, becomes void by operation of
                  applicable law or the assignment of which is otherwise
                  prohibited by applicable law (in each case to the extent that
                  such applicable law is not overridden by Sections 9-406, 9-407
                  and/or 9-408 of the UCC or other similar applicable law);
                  provided, however, that to the extent permitted by applicable
                  law, this Agreement shall create a valid security interest in
                  such asset and, to the extent permitted by applicable law,
                  this Agreement shall create a valid security interest in the
                  proceeds of such asset.

                  (b)      "Intellectual Property" means the collective
         reference to all rights, priorities and privileges relating to
         intellectual property, whether arising under United States,
         multinational or foreign laws or otherwise, including, without
         limitation, (i) all copyrights arising under the laws of the United
         States, any other country or any political subdivision thereof, whether
         registered or unregistered and whether published or unpublished, all
         registrations and recordings thereof, and all applications in
         connection therewith, including, without limitation, all registrations,
         recordings and applications in the United States Copyright Office, (ii)
         all letters patent of the United States, any other country or any
         political subdivision thereof, all reissues and extensions thereof, and
         all applications for letters patent of the United States or any other
         country and all divisions, continuations and continuations-in-part
         thereof, (iii) all trademarks, trade names, corporate names, company
         names, business names, fictitious business names, trade dress, service
         marks, logos, domain names and other source or business identifiers,
         and all goodwill associated therewith, now existing or hereafter
         adopted or acquired, all registrations and recordings thereof, and all
         applications in connection therewith, whether in the United States
         Patent and Trademark Office or in any similar office or agency of the

                                       3
<PAGE>

         United States, any State thereof or any other country or any political
         subdivision thereof, or otherwise, and all common law rights related
         thereto, (iv) all trade secrets arising under the laws of the United
         States, any other country or any political subdivision thereof, (v) all
         rights to obtain any reissues, renewals or extensions of the foregoing,
         (vi) all licenses for any of the foregoing, and (vii) all causes of
         action for infringement of the foregoing.

                  (c)      "Majority in Interest" shall mean, at any time of
         determination, the majority in interest (based on then-outstanding
         principal amounts of Debentures at the time of such determination) of
         the Secured Parties.

                  (d)      "Necessary Endorsement" shall mean undated stock
         powers endorsed in blank or other proper instruments of assignment duly
         executed and such other instruments or documents as the Secured Parties
         may reasonably request.

                  (e)      "Obligations" means all of the liabilities and
         obligations (primary, secondary, direct, contingent, sole, joint or
         several) due or to become due, or that are now or may be hereafter
         contracted or acquired, or owing to, of any Debtor to the Secured
         Parties, including, without limitation, all obligations under this
         Agreement, the Debentures, the Guaranty and any other instruments,
         agreements or other documents executed and/or delivered in connection
         herewith or therewith, in each case, whether now or hereafter existing,
         voluntary or involuntary, direct or indirect, absolute or contingent,
         liquidated or unliquidated, whether or not jointly owed with others,
         and whether or not from time to time decreased or extinguished and
         later increased, created or incurred, and all or any portion of such
         obligations or liabilities that are paid, to the extent all or any part
         of such payment is avoided or recovered directly or indirectly from any
         of the Secured Parties as a preference, fraudulent transfer or
         otherwise as such obligations may be amended, supplemented, converted,
         extended or modified from time to time. Without limiting the generality
         of the foregoing, the term "Obligations" shall include, without
         limitation: (i) principal of, and interest on the Debentures; (ii) any
         and all other fees, indemnities, costs, obligations and liabilities of
         the Debtors from time to time under or in connection with this
         Agreement, the Debentures, the Guaranty and any other instruments,
         agreements or other documents executed and/or delivered in connection
         herewith or therewith; and (iii) all amounts (including but not limited
         to post-petition interest) in respect of the foregoing that would be
         payable but for the fact that the obligations to pay such amounts are
         unenforceable or not allowable due to the existence of a bankruptcy,
         reorganization or similar proceeding involving any Debtor.

                  (f)      "Organizational Documents" means with respect to any
         Debtor, the documents by which such Debtor was organized (such as a
         certificate of incorporation, certificate of limited partnership or
         articles of organization, and including, without limitation, any
         certificates of designation for preferred stock or other forms of
         preferred equity) and which relate to the internal governance of such
         Debtor (such as bylaws, a partnership agreement or an operating,
         limited liability or members agreement).

                                       4
<PAGE>

                  (g)      "UCC" means the Uniform Commercial Code of the State
         of New York and or any other applicable law of any state or states
         which has jurisdiction with respect to all, or any portion of, the
         Collateral or this Agreement, from time to time. It is the intent of
         the parties that defined terms in the UCC should be construed in their
         broadest sense so that the term "Collateral" will be construed in its
         broadest sense. Accordingly if there are, from time to time, changes to
         defined terms in the UCC that broaden the definitions, they are
         incorporated herein and if existing definitions in the UCC are broader
         than the amended definitions, the existing ones shall be controlling.

         2.       Grant of Perfected Security Interest. As an inducement for the
Secured Parties to purchase the Debentures and to secure the complete and timely
payment, performance and discharge in full, as the case may be, of all of the
Obligations, each Debtor hereby unconditionally and irrevocably pledges, grants
and hypothecates to the Secured Parties a continuing and perfected (other than
as provided herein) security interest in and to, a lien upon and a right of
set-off against all of their respective right, title and interest of whatsoever
kind and nature in and to, the Collateral (the "Security Interest").

         3.       Delivery of Certain Collateral. Contemporaneously or prior to
the execution of this Agreement, each Debtor shall deliver or cause to be
delivered to the Secured Parties (a) any and all certificates and other
instruments representing or evidencing the Pledged Securities, and (b) any and
all certificates and other instruments or documents representing any of the
other Collateral, in each case, together with all Necessary Endorsements (other
than any such items that have been delivered or are required to be delivered to
Wells Fargo Foothill, Inc. pursuant to the Wells Fargo Security Interest (as
defined below) which items will be delivered as soon as they are no longer
subject to such security interest). The Debtors are, contemporaneously with the
execution hereof, delivering to the Secured Parties, or have previously
delivered to the Secured Parties, a true and correct copy of each Organizational
Document governing any of the Pledged Securities.

         4.       Representations, Warranties, Covenants and Agreements of the
Debtors. Each Debtor represents and warrants to, and covenants and agrees with,
the Secured Parties as follows:

                  (a)      Each Debtor has the requisite corporate, partnership,
         limited liability company or other power and authority to enter into
         this Agreement and otherwise to carry out its obligations hereunder.
         The execution, delivery and performance by each Debtor of this
         Agreement and the filings contemplated therein have been duly
         authorized by all necessary action on the part of such Debtor and no
         further action is required by such Debtor. This Agreement has been duly
         executed by each Debtor. This Agreement constitutes the legal, valid
         and binding obligation of each Debtor, enforceable against each Debtor
         in accordance with its terms except as such enforceability may be
         limited by applicable bankruptcy, insolvency, reorganization and
         similar laws of general application relating to or affecting the rights
         and remedies of creditors and by general principles of equity.

                                       5
<PAGE>

                  (b)      The Debtors have no place of business or offices
         where their respective books of account and records are kept (other
         than temporarily at the offices of its attorneys or accountants) or
         places where Collateral is stored or located, except as set forth on
         Schedule A attached hereto. Except as specifically set forth on
         Schedule A, each Debtor is the record owner of the real property where
         such Collateral is located, and there exist no mortgages or other liens
         on any such real property except for Permitted Liens (as defined in the
         Debentures). Except as disclosed on Schedule A, none of such Collateral
         is in the possession of any consignee, bailee, warehouseman, agent or
         processor.

                  (c)      Except for Permitted Liens (as defined in the
         Debentures) and except as set forth on Schedule B attached hereto, the
         Debtors are the sole owner of the Collateral (except for non-exclusive
         licenses granted by any Debtor in the ordinary course of business),
         free and clear of any liens, security interests, encumbrances, rights
         or claims, and are fully authorized to grant the Security Interest.
         There is not on file in any governmental or regulatory authority,
         agency or recording office an effective financing statement, security
         agreement, license or transfer or any notice of any of the foregoing
         (other than those that will be filed in favor of the Secured Parties
         pursuant to this Agreement and other than as to the security interest
         of the Company, Velocity Investments and TLOP Acquisition Company,
         Inc., a New Jersey corporation and wholly owned Subsidiary of the
         Company in favor of Wells Fargo Foothill, Inc. (the "Wells Fargo
         Security Interest")) covering or affecting any of the Collateral. So
         long as this Agreement shall be in effect, the Debtors shall not
         execute and shall not knowingly permit to be on file in any such office
         or agency any such financing statement or other document or instrument
         (except to the extent filed or recorded in favor of the Secured Parties
         pursuant to the terms of this Agreement or filings with respect to the
         existing Wells Fargo Security Interest).

                  (d)      No written claim has been received that any
         Collateral or Debtor's use of any Collateral violates the rights of any
         third party. There has been no adverse decision to any Debtor's claim
         of ownership rights in or exclusive rights to use the Collateral in any
         jurisdiction or to any Debtor's right to keep and maintain such
         Collateral in full force and effect, and there is no proceeding
         involving said rights pending or, to the best knowledge of any Debtor,
         threatened before any court, judicial body, administrative or
         regulatory agency, arbitrator or other governmental authority.

                  (e)      Each Debtor shall at all times maintain its books of
         account and records relating to the Collateral at its principal place
         of business and its Collateral at the locations set forth on Schedule A
         attached hereto and may not relocate such books of account and records
         or tangible Collateral unless it delivers to the Secured Parties at
         least 30 days prior to such relocation (i) written notice of such
         relocation and the new location thereof and (ii) evidence that
         appropriate financing statements or other applicable documentation
         under the UCC or other applicable recordation system and other
         necessary documents have been filed and recorded and other steps have
         been taken to perfect the Security Interest to create in favor of the
         Secured Parties a valid, perfected and continuing perfected lien in the
         Collateral, which lien shall be a first priority lien in all of such

                                       6
<PAGE>

         Collateral other than the Collateral subject to the Wells Fargo
         Security Interest (as to which the Secured Parties shall have a second
         priority lien).

                  (f)      This Agreement creates in favor of the Secured
         Parties a valid, security interest in the Collateral, subject only to
         Permitted Liens (as defined in the Debentures) securing the payment and
         performance of the Obligations. Upon making the filings described in
         the immediately following paragraph, all security interests created
         hereunder in any Collateral which may be perfected by filing Uniform
         Commercial Code financing statements shall have been duly perfected.
         Except for the filing of the Uniform Commercial Code financing
         statements referred to in the immediately following paragraph, the
         recordation of the Intellectual Property Security Agreement (as defined
         below) with respect to copyrights and copyright applications in the
         United States Copyright Office referred to in paragraph (m), the
         execution and delivery of deposit account control agreements satisfying
         the requirements of Section 9-104(a)(2) of the UCC with respect to each
         deposit account of the Debtors, and the delivery of the certificates
         and other instruments provided in Section 3, no action is necessary to
         create, perfect or protect the security interests created hereunder.
         Without limiting the generality of the foregoing, except for the filing
         of said financing statements, the recordation of said Intellectual
         Property Security Agreement, and the execution and delivery of said
         deposit account control agreements, no consent of any third parties and
         no authorization, approval or other action by, and no notice to or
         filing with, any governmental authority or regulatory body is required
         for (i) the execution, delivery and performance of this Agreement, (ii)
         the creation or perfection of the Security Interests created hereunder
         in the Collateral or (iii) the enforcement of the rights of the Secured
         Parties hereunder.

                  (g)      Each Debtor hereby authorizes the Secured Parties, or
         any of them, to file one or more financing statements or other
         applicable documents under the UCC or other applicable recordation
         system, with respect to the Security Interest with the proper filing
         and recording agencies in any jurisdiction deemed proper by them.

                  (h)      The execution, delivery and performance of this
         Agreement by the Debtors does not (i) violate any of the provisions of
         any Organizational Documents of any Debtor or any judgment, decree,
         order or award of any court, governmental body or arbitrator or any
         applicable law, rule or regulation applicable to any Debtor or (ii)
         conflict with, or constitute a default (or an event that with notice or
         lapse of time or both would become a default) under, or give to others
         any rights of termination, amendment, acceleration or cancellation
         (with or without notice, lapse of time or both) of, any agreement,
         credit facility, debt or other instrument (evidencing any Debtor's debt
         or otherwise) or other understanding to which any Debtor is a party or
         by which any property or asset of any Debtor is bound or affected. No
         consent (including, without limitation, from stockholders or creditors
         of any Debtor) is required for any Debtor to enter into and perform its
         obligations hereunder.

                  (i)      The capital stock and other equity interests listed
         on Schedule H hereto represent all of the capital stock and other
         equity interests of the Guarantors, and represent all capital stock and
         other equity interests owned, directly or indirectly, by the Company.

                                       7
<PAGE>

         All of the Pledged Securities are validly issued, fully paid and
         nonassessable, and the Company is the legal and beneficial owner of the
         Pledged Securities, free and clear of any lien, security interest or
         other encumbrance except for the security interests created by this
         Agreement and other Permitted Liens (as defined in the Debenture).

                  (j)      The ownership and other equity interests in
         partnerships and limited liability companies (if any) included in the
         Collateral (the "Pledged Interests") by their express terms do not
         provide that they are securities governed by Article 8 of the UCC and
         are not held in a securities account or by any financial intermediary.

                  (k)      Each Debtor shall at all times maintain the liens and
         Security Interest provided for hereunder as valid and perfected first
         priority liens and security interests in the Collateral in favor of the
         Secured Parties until this Agreement and the Security Interest
         hereunder shall be terminated pursuant to Section 11 hereof. Each
         Debtor hereby agrees to defend the same against the claims of any and
         all persons and entities. Each Debtor shall safeguard and protect all
         Collateral for the account of the Secured Parties. At the request of
         the Secured Parties, each Debtor will sign and deliver to the Secured
         Parties at any time or from time to time one or more financing
         statements or other applicable documents pursuant to the UCC or other
         applicable recordation system in form reasonably satisfactory to the
         Secured Parties and will pay the cost of filing the same in all public
         offices wherever filing is, or is deemed by the Secured Parties to be,
         necessary or desirable to effect the rights and obligations provided
         for herein. Without limiting the generality of the foregoing, each
         Debtor shall pay all fees, taxes and other amounts necessary to
         maintain the Collateral and the Security Interest hereunder, and each
         Debtor shall obtain and furnish to the Secured Parties from time to
         time, upon demand, such releases and/or subordinations of claims and
         liens which may be required to maintain the priority of the Security
         Interest hereunder.

                  (l)      No Debtor will transfer, pledge, hypothecate,
         encumber, license, sell or otherwise dispose of any of the Collateral
         (except for non-exclusive licenses granted by a Debtor in its ordinary
         course of business and sales of inventory by a Debtor in its ordinary
         course of business) without the prior written consent of a Majority in
         Interest.

                  (m)      Each Debtor shall keep and preserve its equipment,
         inventory and other tangible Collateral in good condition, repair and
         order and shall not operate or locate any such Collateral (or cause to
         be operated or located) in any area excluded from insurance coverage.

                  (n)      Each Debtor shall maintain with financially sound and
         reputable insurers, insurance with respect to the Collateral against
         loss or damage of the kinds and in the amounts customarily insured
         against by entities of established reputation having similar properties
         similarly situated and in such amounts as are customarily carried under
         similar circumstances by other such entities and otherwise as is
         prudent for entities engaged in similar businesses but in any event
         sufficient to cover the full replacement cost thereof. Each Debtor
         shall cause each insurance policy issued in connection herewith to
         provide, and the insurer issuing such policy to certify to the Secured
         Parties that (a) the Secured Parties will be named as lender loss payee

                                       8
<PAGE>

         and additional insured under each such insurance policy; (b) if such
         insurance be proposed to be cancelled or materially changed for any
         reason whatsoever, such insurer will promptly notify the Secured
         Parties and such cancellation or change shall not be effective as to
         the Secured Parties for at least thirty (30) days after receipt by the
         Secured Parties of such notice, unless the effect of such change is to
         extend or increase coverage under the policy; and (c) the Secured
         Parties will have the right (but no obligation) at its election to
         remedy any default in the payment of premiums within thirty (30) days
         of notice from the insurer of such default. If no Event of Default (as
         defined in the Debenture) exists and if the proceeds arising out of any
         claim or series of related claims do not exceed $100,000, loss payments
         in each instance will be applied by the applicable Debtor to the repair
         and/or replacement of property with respect to which the loss was
         incurred to the extent reasonably feasible, and any loss payments or
         the balance thereof remaining, to the extent not so applied, shall be
         payable to the applicable Debtor, provided, however, that payments
         received by any Debtor after an Event of Default occurs and is
         continuing or in excess of $100,000 for any occurrence or series of
         related occurrences shall be paid to the Secured Parties and, if
         received by such Debtor, shall be held in trust for and immediately
         paid over to the Secured Parties unless otherwise directed in writing
         by the Secured Parties. Copies of such policies or the related
         certificates, in each case, naming the Secured Parties as lender loss
         payee and additional insured shall be delivered to the Secured Parties
         at least annually and at the time any new policy of insurance is
         issued.

                  (o)      Each Debtor shall, within ten (10) days of obtaining
         knowledge thereof, advise the Secured Parties promptly, in sufficient
         detail, of any substantial change in the Collateral, and of the
         occurrence of any event which would have a material adverse effect on
         the value of the Collateral or on the Secured Parties' security
         interest therein.

                  (p)      Each Debtor shall promptly execute and deliver to the
         Secured Parties such further assignments, security agreements,
         financing statements or other instruments, documents, certificates and
         assurances and take such further action as the Secured Parties may from
         time to time request and may in its sole discretion deem necessary to
         perfect, protect or enforce its security interest in the Collateral
         including, without limitation, if applicable, the execution and
         delivery of a separate security agreement with respect to each Debtor's
         Intellectual Property ("Intellectual Property Security Agreement") in
         which the Secured Parties have been granted a security interest
         hereunder, substantially in a form acceptable to the Secured Parties,
         which Intellectual Property Security Agreement, other than as stated
         therein, shall be subject to all of the terms and conditions hereof.

                  (q)      Each Debtor shall permit the Secured Parties and
         their representatives and agents to inspect the Collateral at any time,
         on reasonable notice, and to make copies of records pertaining to the
         Collateral as may be requested by a Secured Party from time to time.

                                       9
<PAGE>

                  (r)      Each Debtor shall take all steps reasonably necessary
         to diligently pursue and seek to preserve, enforce and collect any
         rights, claims, causes of action and accounts receivable in respect of
         the Collateral.

                  (s)      Each Debtor shall promptly notify the Secured Parties
         in sufficient detail upon becoming aware of any attachment,
         garnishment, execution or other legal process levied against any
         Collateral and of any other information received by such Debtor that
         may materially affect the value of the Collateral, the Security
         Interest or the rights and remedies of the Secured Parties hereunder.

                  (t)      All information heretofore, herein or hereafter
         supplied to the Secured Parties by or on behalf of any Debtor with
         respect to the Collateral is accurate and complete in all material
         respects as of the date furnished.

                  (u)      The Debtors shall at all times preserve and keep in
         full force and effect their respective valid existence and good
         standing and any rights and franchises material to its business.

                  (v)      No Debtor will change its name, type of organization,
         jurisdiction of organization, organizational identification number (if
         it has one), legal or corporate structure, or identity, or add any new
         fictitious name unless it provides at least 30 days prior written
         notice to the Secured Parties of such change and, at the time of such
         written notification, such Debtor provides any financing statements or
         fixture filings necessary to perfect and continue perfected the
         perfected security interest granted and evidenced by this Agreement.

                  (w)      No Debtor may consign any of its Inventory or sell
         any of its Inventory on bill and hold, sale or return, sale on
         approval, or other conditional terms of sale without the consent of a
         Majority in Interest which shall not be unreasonably withheld, except
         to the extent such consignment or sale does not exceed 15% of the total
         value of all of the Company's finished goods in Inventory.

                  (x)      No Debtor may relocate its chief executive office to
         a new location without providing 30 days prior written notification
         thereof to the Secured Parties and so long as, at the time of such
         written notification, such Debtor provides any financing statements or
         fixture filings necessary to perfect and continue perfected the
         perfected security Interest granted and evidenced by this Agreement.

                  (y)      Each Debtor was organized and remains organized
         solely under the laws of the state set forth next to such Debtor's name
         in the first paragraph of this Agreement. Schedule D attached hereto
         sets forth each Debtor's organizational identification number or, if
         any Debtor does not have one, states that one does not exist.

                  (z)      (i) The actual name of each Debtor is the name set
         forth in the signature lines hereto; (ii) no Debtor has any trade names
         except as set forth on Schedule E attached hereto; (iii) no Debtor has
         used any name other than that stated in the preamble hereto or as set

                                       10
<PAGE>

         forth on Schedule E for the preceding five years; and (iv) no entity
         has merged into any Debtor or been acquired by any Debtor within the
         past five years except as set forth on Schedule E.

                  (aa)     At any time and from time to time that any Collateral
         consists of instruments, certificated securities or other items that
         require or permit possession by the secured party to perfect the
         security interest created hereby, the applicable Debtor shall deliver
         such Collateral to the Secured Parties. In the event that any such
         instruments, certificated securities or other items are held by Wells
         Fargo Foothill, Inc. pursuant to the Wells Fargo Security Interest,
         such items will be delivered to the Secured Parties as soon as such
         items are no longer subject to such security interest.

                  (bb)     Each Debtor, in its capacity as issuer, hereby agrees
         to comply with any and all orders and instructions of Secured Parties
         regarding the Pledged Interests consistent with the terms of this
         Agreement without the further consent of any Debtor as contemplated by
         Section 8-106 (or any successor section) of the UCC. Further, each
         Debtor agrees that it shall not enter into a similar agreement (or one
         that would confer "control" within the meaning of Article 8 of the UCC)
         with any other person or entity.

                  (cc)     Each Debtor shall cause all tangible chattel paper
         constituting Collateral to be delivered to the Secured Parties, or, if
         such delivery is not possible, then to cause such tangible chattel
         paper to contain a legend noting that it is subject to the security
         interest created by this Agreement. To the extent that any Collateral
         consists of electronic chattel paper, the applicable Debtor shall cause
         the underlying chattel paper to be "marked" within the meaning of
         Section 9-105 of the UCC (or successor section thereto).

                  (dd)     If there is any investment property or deposit
         account included as Collateral that can be perfected by "control"
         through an account control agreement, the applicable Debtor shall cause
         such an account control agreement, in form and substance in each case
         satisfactory to the Secured Parties, to be entered into and delivered
         to the Secured Parties.

                  (ee)     To the extent that any Collateral consists of
         letter-of-credit rights, the applicable Debtor shall cause the issuer
         of each underlying letter of credit to consent to an assignment of the
         proceeds thereof to the Secured Parties.

                  (ff)     To the extent that any Collateral is in the
         possession of any third party, the applicable Debtor shall join with
         the Secured Parties in notifying such third party of the Secured
         Parties' security interest in such Collateral and shall use its best
         efforts to obtain an acknowledgement and agreement from such third
         party with respect to the Collateral, in form and substance
         satisfactory to the Secured Parties.

                  (gg)     If any Debtor shall at any time hold or acquire a
         commercial tort claim, such Debtor shall promptly notify the Secured
         Parties in a writing signed by such Debtor of the particulars thereof
         and grant to the Secured Parties in such writing a security interest
         therein and in the proceeds thereof, all upon the terms of this
         Agreement, with such writing to be in form and substance satisfactory
         to the Secured Parties.

                                       11
<PAGE>

                  (hh)     Each Debtor shall immediately provide written notice
         to the Secured Parties of any and all accounts which arise out of
         contracts with any governmental authority and, to the extent necessary
         to perfect or continue the perfected status of the Security Interest in
         such accounts and proceeds thereof, shall execute and deliver to the
         Secured Parties an assignment of claims for such accounts and cooperate
         with the Secured Parties in taking any other steps required, in their
         judgment, under the Federal Assignment of Claims Act or any similar
         federal, state or local statute or rule to perfect or continue the
         perfected status of the Security Interest in such accounts and proceeds
         thereof.

                  (ii)     Each Debtor shall cause each subsidiary (other than
         Velocity Investments) of such Debtor to immediately become a party
         hereto (an "Additional Debtor"), by executing and delivering an
         Additional Debtor Joinder in substantially the form of Annex A attached
         hereto and comply with the provisions hereof applicable to the Debtors.
         Concurrent therewith, the Additional Debtor shall deliver replacement
         schedules for, or supplements to all other Schedules to (or referred to
         in) this Agreement, as applicable, which replacement schedules shall
         supersede, or supplements shall modify, the Schedules then in effect.
         The Additional Debtor shall also deliver such opinions of counsel,
         authorizing resolutions, good standing certificates, incumbency
         certificates, organizational documents, financing statements and other
         information and documentation as the Secured Parties may reasonably
         request. Upon delivery of the foregoing to the Secured Parties, the
         Additional Debtor shall be and become a party to this Agreement with
         the same rights and obligations as the Debtors, for all purposes hereof
         as fully and to the same extent as if it were an original signatory
         hereto and shall be deemed to have made the representations, warranties
         and covenants set forth herein as of the date of execution and delivery
         of such Additional Debtor Joinder, and all references herein to the
         "Debtors" shall be deemed to include each Additional Debtor.

                  (jj)     Each Debtor shall vote the Pledged Securities to
         comply with the covenants and agreements set forth herein and in the
         Debentures.

                  (kk)     Each Debtor shall register the pledge of the
         applicable Pledged Securities on the books of such Debtor. Each Debtor
         shall notify each issuer of Pledged Securities to register the pledge
         of the applicable Pledged Securities in the name of the Secured Parties
         on the books of such issuer Debtor as soon as such securities are
         delivered to the Secured Parties. Further, except with respect to
         certificated securities delivered to the Secured Parties, the
         applicable Debtor shall deliver to Secured Parties an acknowledgement
         of pledge (which, where appropriate, shall comply with the requirements
         of the relevant UCC with respect to perfection by registration) signed
         by the issuer of the applicable Pledged Securities, which
         acknowledgement shall confirm that: (a) it has registered the pledge on
         its books and records; and (b) at any time directed by the Secured
         Parties during the continuation of an Event of Default, such issuer
         will transfer the record ownership of such Pledged Securities into the
         name of any designee of the Secured Parties, will take such steps as
         may be necessary to effect the transfer, and will comply with all other
         instructions of the Secured Parties regarding such Pledged Securities
         without the further consent of the applicable Debtor.

                                       12
<PAGE>

                  (ll)     In the event that, upon an occurrence of an Event of
         Default, the Secured Parties shall have possession of, and sell all or
         any of the Pledged Securities to another party or parties (herein
         called the "Transferee") or shall purchase or retain all or any of the
         Pledged Securities, each Debtor shall, to the extent applicable: (i)
         deliver to the Secured Parties or the Transferee, as the case may be,
         the articles of incorporation, bylaws, minute books, stock certificate
         books, corporate seals, deeds, leases, indentures, agreements,
         evidences of indebtedness, books of account, financial records and all
         other Organizational Documents and records of the Debtors and their
         direct and indirect subsidiaries; (ii) use its best efforts to obtain
         resignations of the persons then serving as officers and directors of
         the Debtors and their direct and indirect subsidiaries, if so
         requested; and (iii) use its best efforts to obtain any approvals that
         are required by any governmental or regulatory body in order to permit
         the sale of the Pledged Securities to the Transferee or the purchase or
         retention of the Pledged Securities by the Secured Parties and allow
         the Transferee or the Secured Parties to continue the business of the
         Debtors and their direct and indirect subsidiaries.

                  (mm)     Without limiting the generality of the other
         obligations of the Debtors hereunder, each Debtor shall promptly (i)
         cause to be registered at the United States Copyright Office all of its
         material copyrights, (ii) cause the security interest contemplated
         hereby with respect to all Intellectual Property registered at the
         United States Copyright Office or United States Patent and Trademark
         Office to be duly recorded at the applicable office, and (iii) give the
         Secured Parties notice whenever it acquires (whether absolutely or by
         license) or creates any additional material Intellectual Property.

                  (nn)     Each Debtor will from time to time, at the joint and
         several expense of the Debtors, promptly execute and deliver all such
         further instruments and documents, and take all such further action as
         may be necessary or desirable, or as the Secured Parties may reasonably
         request, in order to perfect (to the extent provided herein) and
         protect any security interest granted or purported to be granted hereby
         or to enable the Secured Parties to exercise and enforce their rights
         and remedies hereunder and with respect to any Collateral or to
         otherwise carry out the purposes of this Agreement.

                  (oo)     Schedule F attached hereto lists all of the patents,
         patent applications, trademarks, trademark applications, registered
         copyrights, and domain names owned by any of the Debtors as of the date
         hereof. Schedule F lists all material licenses in favor of any Debtor
         for the use of any patents, trademarks, copyrights and domain names as
         of the date hereof. All material patents and trademarks of the Debtors
         have been duly recorded at the United States Patent and Trademark
         Office and all material copyrights of the Debtors have been duly
         recorded at the United States Copyright Office.

                  (pp)     Except as set forth on Schedule G attached hereto,
         none of the account debtors or other persons or entities obligated on
         any of the Collateral is a governmental authority covered by the

                                       13
<PAGE>

         Federal Assignment of Claims Act or any similar federal, state or local
         statute or rule in respect of such Collateral.

         5.       Effect of Pledge on Certain Rights. If any of the Collateral
subject to this Agreement consists of nonvoting equity or ownership interests
(regardless of class, designation, preference or rights) that may be converted
into voting equity or ownership interests upon the occurrence of certain events
(including, without limitation, upon the transfer of all or any of the other
stock or assets of the issuer), it is agreed that the pledge of such equity or
ownership interests pursuant to this Agreement or the enforcement of any of the
Secured Parties' rights hereunder shall not be deemed to be the type of event
which would trigger such conversion rights notwithstanding any provisions in the
Organizational Documents or agreements to which any Debtor is subject or to
which any Debtor is party.

         6.       Defaults. The following events shall be "Events of Default":

                  (a)      The occurrence of an Event of Default (as defined in
         the Debenture) under the Debenture;

                  (b)      Any representation or warranty of any Debtor in this
         Agreement shall prove to have been incorrect in any material respect
         when made;

                  (c)      The failure by any Debtor to observe or perform any
         of its obligations hereunder for ten (10) days after delivery to such
         Debtor of notice of such failure by or on behalf of a Secured Party
         unless such default is capable of cure but cannot be cured within such
         time frame and such Debtor is using best efforts to cure same in a
         timely fashion; or

                  (d)      If any provision of this Agreement shall at any time
         for any reason be declared to be null and void, or the validity or
         enforceability thereof shall be contested by any Debtor, or a
         proceeding shall be commenced by any Debtor, or by any governmental
         authority having jurisdiction over any Debtor, seeking to establish the
         invalidity or unenforceability thereof, or any Debtor shall deny that
         any Debtor has any liability or obligation purported to be created
         under this Agreement.

         7.       Duty To Hold In Trust.

                  (a)      Upon the occurrence of any Event of Default and at
         any time thereafter, each Debtor shall, upon receipt of any revenue,
         income, dividend, interest or other sums subject to the Security
         Interest, whether payable pursuant to the Debenture or otherwise, or of
         any check, draft, note, trade acceptance or other instrument evidencing
         an obligation to pay any such sum, hold the same in trust for the
         Secured Parties and shall forthwith endorse and transfer any such sums
         or instruments, or both, to the Secured Parties, pro-rata in proportion
         to their initial purchases of Debentures for application to the
         satisfaction of the Obligations (and if any Debenture is not
         outstanding, pro-rata in proportion to the initial purchases of the
         remaining Debentures).

                                       14
<PAGE>

                  (b)      If any Debtor shall become entitled to receive or
         shall receive any securities or other property (including, without
         limitation, shares of Pledged Securities or instruments representing
         Pledged Securities acquired after the date hereof, or any options,
         warrants, rights or other similar property or certificates representing
         a dividend, or any distribution in connection with any
         recapitalization, reclassification or increase or reduction of capital,
         or issued in connection with any reorganization of such Debtor or any
         of its direct or indirect subsidiaries) in respect of the Pledged
         Securities (whether as an addition to, in substitution of, or in
         exchange for, such Pledged Securities or otherwise), such Debtor agrees
         to (i) accept the same as the agent of the Secured Parties; (ii) hold
         the same in trust on behalf of and for the benefit of the Secured
         Parties; and (iii) to deliver any and all certificates or instruments
         evidencing the same to the Secured Parties on or before the close of
         business on the fifth business day following the receipt thereof by
         such Debtor, in the exact form received together with the Necessary
         Endorsements, to be held by the Secured Parties subject to the terms of
         this Agreement as Collateral.

         8.       Rights and Remedies Upon Default.

                  (a)      Upon the occurrence of any Event of Default and at
         any time thereafter, the Secured Parties, acting through any agent
         appointed by them for such purpose, shall have the right to exercise
         all of the remedies conferred hereunder and under the Debentures, and
         the Secured Parties shall have all the rights and remedies of a secured
         party under the UCC. Without limitation, the Secured Parties shall have
         the following rights and powers:

                           (i)      The Secured Parties shall have the right to
                  take possession of the Collateral and, for that purpose,
                  enter, with the aid and assistance of any person, any premises
                  where the Collateral, or any part thereof, is or may be placed
                  and remove the same, and each Debtor shall assemble the
                  Collateral and make it available to the Secured Parties at
                  places which the Secured Parties shall reasonably select,
                  whether at such Debtor's premises or elsewhere, and make
                  available to the Secured Parties, without rent, all of such
                  Debtor's respective premises and facilities for the purpose of
                  the Secured Parties taking possession of, removing or putting
                  the Collateral in saleable or disposable form.

                           (ii)      Upon notice to the Debtors by the Secured
                  Parties, all rights of each Debtor to exercise the voting and
                  other consensual rights which it would otherwise be entitled
                  to exercise and all rights of each Debtor to receive the
                  dividends and interest which it would otherwise be authorized
                  to receive and retain, shall cease. Upon such notice, the
                  Secured Parties shall have the right to receive any interest,
                  cash dividends or other payments on the Collateral and, at the
                  option of the Secured Parties, to exercise in such the Secured
                  Parties' discretion all voting rights pertaining thereto.
                  Without limiting the generality of the foregoing, the Secured
                  Parties shall have the right (but not the obligation) to
                  exercise all rights with respect to the Collateral as it were
                  the sole and absolute owners thereof, including, without
                  limitation, to vote and/or to exchange, at its sole

                                       15
<PAGE>

                  discretion, any or all of the Collateral in connection with a
                  merger, reorganization, consolidation, recapitalization or
                  other readjustment concerning or involving the Collateral or
                  any Debtor or any of its direct or indirect subsidiaries.

                           (iii)    The Secured Parties shall have the right to
                  operate the business of each Debtor using the Collateral and
                  shall have the right to assign, sell, lease or otherwise
                  dispose of and deliver all or any part of the Collateral, at
                  public or private sale or otherwise, either with or without
                  special conditions or stipulations, for cash or on credit or
                  for future delivery, in such parcel or parcels and at such
                  time or times and at such place or places, and upon such terms
                  and conditions as the Secured Parties may deem commercially
                  reasonable, all without (except as shall be required by
                  applicable statute and cannot be waived) advertisement or
                  demand upon or notice to any Debtor or right of redemption of
                  a Debtor, which are hereby expressly waived. Upon each such
                  sale, lease, assignment or other transfer of Collateral, the
                  Secured Parties may, unless prohibited by applicable law which
                  cannot be waived, purchase all or any part of the Collateral
                  being sold, free from and discharged of all trusts, claims,
                  right of redemption and equities of any Debtor, which are
                  hereby waived and released.

                           (iv)     The Secured Parties shall have the right
                  (but not the obligation) to notify any account debtors and any
                  obligors under instruments or accounts to make payments
                  directly to the Secured Parties and to enforce the Debtors'
                  rights against such account debtors and obligors.

                           (v)      The Secured Parties may (but are not
                  obligated to) direct any financial intermediary or any other
                  person or entity holding any investment property to transfer
                  the same to the Secured Parties or their designee.

                           (vi)     The Secured Parties may (but are not
                  obligated to) transfer any or all Intellectual Property
                  registered in the name of any Debtor at the United States
                  Patent and Trademark Office and/or Copyright Office into the
                  name of the Secured Parties or any designee or any purchaser
                  of any Collateral.

                  (b)      The Secured Parties may comply with any applicable
         law in connection with a disposition of Collateral and such compliance
         will not be considered adversely to affect the commercial
         reasonableness of any sale of the Collateral. The Secured Parties may
         sell the Collateral without giving any warranties and may specifically
         disclaim such warranties. If the Secured Parties sells any of the
         Collateral on credit, the Debtors will only be credited with payments
         actually made by the purchaser. In addition, each Debtor waives any and
         all rights that it may have to a judicial hearing in advance of the
         enforcement of any of the Secured Parties' rights and remedies
         hereunder, including, without limitation, its right following an Event
         of Default to take immediate possession of the Collateral and to
         exercise its rights and remedies with respect thereto.

                  (c)      For the purpose of enabling the Secured Parties to
         further exercise rights and remedies under this Section 8 or elsewhere
         provided by agreement or applicable law, each Debtor hereby grants to
         the Secured Parties, an irrevocable, nonexclusive license (exercisable

                                       16
<PAGE>

         without payment of royalty or other compensation to such Debtor) to
         use, license or sublicense following an Event of Default, any
         Intellectual Property now owned or hereafter acquired by such Debtor,
         and wherever the same may be located, and including in such license
         access to all media in which any of the licensed items may be recorded
         or stored and to all computer software and programs used for the
         compilation or printout thereof.

         9.       Applications of Proceeds. The proceeds of any such sale, lease
or other disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Parties in enforcing their
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations pro rata among the
Secured Parties (based on then-outstanding principal amounts of Debentures at
the time of any such determination), and to the payment of any other amounts
required by applicable law, after which the Secured Parties shall pay to the
applicable Debtor any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are insufficient to pay all
amounts to which the Secured Parties are legally entitled, the Debtors will be
liable for the deficiency, together with interest thereon, at the rate of 10%
per annum or the lesser amount permitted by applicable law (the "Default Rate"),
and the reasonable fees of any attorneys employed by the Secured Parties to
collect such deficiency. Except as otherwise provided herein and to the extent
permitted by applicable law, each Debtor waives all claims, damages and demands
against the Secured Parties arising out of the repossession, removal, retention
or sale of the Collateral, unless due solely to the gross negligence or willful
misconduct of the Secured Parties as determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction.

         10.      Securities Law Provision. Each Debtor recognizes that the
Secured Parties may be limited in its ability to effect a sale to the public of
all or part of the Pledged Securities by reason of certain prohibitions in the
Securities Act of 1933, as amended, or other federal or state securities laws
(collectively, the "Securities Laws"), and may be compelled to resort to one or
more sales to a restricted group of purchasers who may be required to agree to
acquire the Pledged Securities for their own account, for investment and not
with a view to the distribution or resale thereof. Each Debtor agrees that sales
so made may be at prices and on terms less favorable than if the Pledged
Securities were sold to the public, and that the Secured Parties has no
obligation to delay the sale of any Pledged Securities for the period of time
necessary to register the Pledged Securities for sale to the public under the
Securities Laws. Each Debtor shall cooperate with the Secured Parties in its
attempt to satisfy any requirements under the Securities Laws (including,
without limitation, registration thereunder if requested by the Secured Parties)
applicable to the sale of the Pledged Securities by the Secured Parties.

         11.      Costs and Expenses. Each Debtor agrees to pay all reasonable
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements
pursuant to the UCC, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches
reasonably required by the Secured Parties. The Debtors shall also pay all other
claims and charges which in the reasonable opinion of the Secured Parties might
prejudice, imperil or otherwise affect the Collateral or the Security Interest

                                       17
<PAGE>

therein. The Debtors will also, upon demand, pay to the Secured Parties the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Secured Parties
may incur in connection with (i) the enforcement of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Secured Parties under the Debentures. Until so paid,
any fees payable hereunder shall be added to the principal amount of the
Debentures and shall bear interest at the Default Rate.

         12.      Responsibility for Collateral. The Debtors assume all
liabilities and responsibility in connection with all Collateral, and the
Obligations shall in no way be affected or diminished by reason of the loss,
destruction, damage or theft of any of the Collateral or its unavailability for
any reason. Without limiting the generality of the foregoing, (a) no Secured
Party (i) has any duty (either before or after an Event of Default) to collect
any amounts in respect of the Collateral or to preserve any rights relating to
the Collateral, or (ii) has any obligation to clean-up or otherwise prepare the
Collateral for sale, and (b) each Debtor shall remain obligated and liable under
each contract or agreement included in the Collateral to be observed or
performed by such Debtor thereunder. No Secured Party shall have any obligation
or liability under any such contract or agreement by reason of or arising out of
this Agreement or the receipt by any Secured Party of any payment relating to
any of the Collateral, nor any Secured Party be obligated in any manner to
perform any of the obligations of any Debtor under or pursuant to any such
contract or agreement, to make inquiry as to the nature or sufficiency of any
payment received by any Secured Party in respect of the Collateral or as to the
sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Parties or to which any Secured Party may be entitled at
any time or times.

         13.      Security Interest Absolute. All rights of the Secured Parties
and all obligations of the Debtors hereunder, shall be absolute and
unconditional, irrespective of: (a) any lack of validity or enforceability of
this Agreement, the Debentures or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time,
manner or place of payment or performance of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Debentures or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the Obligations; (d) any action by the Secured Parties to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters made or arising in connection with the Collateral; or (e) any other
circumstance which might otherwise constitute any legal or equitable defense
available to a Debtor, or a discharge of all or any part of the Security
Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Parties shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. Each Debtor expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand for performance. In the event that at any time any transfer of any

                                       18
<PAGE>

Collateral or any payment received by the Secured Parties hereunder shall be
deemed by final order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy or insolvency
laws of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Parties, then, in any such event, each Debtor's
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. Each Debtor waives all right
to require the Secured Parties to proceed against any other person or entity or
to apply any Collateral which the Secured Parties may hold at any time, or to
marshal assets, or to pursue any other remedy. Each Debtor waives any defense
arising by reason of the application of the statute of limitations to any
obligation secured hereby.

         14.      Term of Agreement. This Agreement and the Security Interest
shall terminate on the date on which all payments under the Debentures have been
indefeasibly paid in full and all other Obligations have been paid or
discharged; provided, however, that all indemnities of the Debtors contained in
this Agreement shall survive and remain operative and in full force and effect
regardless of the termination of this Agreement.

         15.      Power of Attorney; Further Assurances.

                  (a)      Each Debtor authorizes the Secured Parties, and does
         hereby make, constitute and appoint the Secured Parties and their
         respective officers, agents, successors or assigns with full power of
         substitution, as such Debtor's true and lawful attorney-in-fact, with
         power, in the name of the various Secured Parties or such Debtor, to,
         after the occurrence and during the continuance of an Event of Default,
         (i) endorse any note, checks, drafts, money orders or other instruments
         of payment (including payments payable under or in respect of any
         policy of insurance) in respect of the Collateral that may come into
         possession of the Secured Parties; (ii) to sign and endorse any
         financing statement pursuant to the UCC or any invoice, freight or
         express bill, bill of lading, storage or warehouse receipts, drafts
         against debtors, assignments, verifications and notices in connection
         with accounts, and other documents relating to the Collateral; (iii) to
         pay or discharge taxes, liens, security interests or other encumbrances
         at any time levied or placed on or threatened against the Collateral;
         (iv) to demand, collect, receipt for, compromise, settle and sue for
         monies due in respect of the Collateral; (v) to transfer any
         Intellectual Property or provide licenses respecting any Intellectual
         Property; and (vi) generally, at the option of the Secured Parties, and
         at the expense of the Debtors, at any time, or from time to time, to
         execute and deliver any and all documents and instruments and to do all
         acts and things which the Secured Parties deem necessary to protect,
         preserve and realize upon the Collateral and the Security Interest
         granted therein in order to effect the intent of this Agreement and the
         Debentures all as fully and effectually as the Debtors might or could
         do; and each Debtor hereby ratifies all that said attorney shall
         lawfully do or cause to be done by virtue hereof. This power of
         attorney is coupled with an interest and shall be irrevocable for the
         term of this Agreement and thereafter as long as any of the Obligations
         shall be outstanding. The designation set forth herein shall be deemed
         to amend and supersede any inconsistent provision in the Organizational
         Documents or other documents or agreements to which any Debtor is

                                       19
<PAGE>

         subject or to which any Debtor is a party. Without limiting the
         generality of the foregoing, after the occurrence and during the
         continuance of an Event of Default, each Secured Party is specifically
         authorized to execute and file any applications for or instruments of
         transfer and assignment of any patents, trademarks, copyrights or other
         Intellectual Property with the United States Patent and Trademark
         Office and the United States Copyright Office.

                  (b)      On a continuing basis, each Debtor will make,
         execute, acknowledge, deliver, file and record, as the case may be,
         with the proper filing and recording agencies in any jurisdiction,
         including, without limitation, the jurisdictions indicated on Schedule
         C attached hereto, all such instruments, and take all such action as
         may reasonably be deemed necessary or advisable, or as reasonably
         requested by the Secured Parties, to perfect the Security Interest
         granted hereunder and otherwise to carry out the intent and purposes of
         this Agreement, or for assuring and confirming to the Secured Parties
         the grant or perfection of a perfected security interest in all the
         Collateral under the UCC.

                  (c)      Each Debtor hereby irrevocably appoints the Secured
         Parties as such Debtor's attorney-in-fact, with full authority in the
         place and instead of such Debtor and in the name of such Debtor, from
         time to time in the Secured Parties' discretion, to take any action and
         to execute any instrument which the Secured Parties may deem necessary
         or advisable to accomplish the purposes of this Agreement, including
         the filing, in its sole discretion, of one or more financing or
         continuation statements and amendments thereto, relative to any of the
         Collateral without the signature of such Debtor where permitted by law,
         which financing statements may (but need not) describe the Collateral
         as "all assets" or "all personal property" or words of like import, and
         ratifies all such actions taken by the Secured Parties. This power of
         attorney is coupled with an interest and shall be irrevocable for the
         term of this Agreement and thereafter as long as any of the Obligations
         shall be outstanding.

         16.      Notices. All notices, requests, demands and other
communications hereunder shall be subject to the notice provision of the
Purchase Agreement (as such term is defined in the Debentures).

         17.      Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Parties shall have the right, in its sole discretion, to
pursue, relinquish, subordinate, modify or take any other action with respect
thereto, without in any way modifying or affecting any of the Secured Parties'
rights and remedies hereunder.

         18.      [RESERVED].

         19.      Miscellaneous.

                  (a)      No course of dealing between the Debtors and the
         Secured Parties, nor any failure to exercise, nor any delay in
         exercising, on the part of the Secured Parties, any right, power or
         privilege hereunder or under the Debentures shall operate as a waiver

                                       20
<PAGE>

         thereof; nor shall any single or partial exercise of any right, power
         or privilege hereunder or thereunder preclude any other or further
         exercise thereof or the exercise of any other right, power or
         privilege.

                  (b)      All of the rights and remedies of the Secured Parties
         with respect to the Collateral, whether established hereby or by the
         Debentures or by any other agreements, instruments or documents or by
         law shall be cumulative and may be exercised singly or concurrently.

                  (c)      This Agreement constitutes the entire agreement of
         the parties with respect to the subject matter hereof and is intended
         to supersede all prior negotiations, understandings and agreements with
         respect thereto. Except as specifically set forth in this Agreement, no
         provision of this Agreement may be modified or amended except by a
         written agreement specifically referring to this Agreement and signed
         by the parties hereto.

                  (d)      In the event any provision of this Agreement is held
         to be invalid, prohibited or unenforceable in any jurisdiction for any
         reason, unless such provision is narrowed by judicial construction,
         this Agreement shall, as to such jurisdiction, be construed as if such
         invalid, prohibited or unenforceable provision had been more narrowly
         drawn so as not to be invalid, prohibited or unenforceable. If,
         notwithstanding the foregoing, any provision of this Agreement is held
         to be invalid, prohibited or unenforceable in any jurisdiction, such
         provision, as to such jurisdiction, shall be ineffective to the extent
         of such invalidity, prohibition or unenforceability without
         invalidating the remaining portion of such provision or the other
         provisions of this Agreement and without affecting the validity or
         enforceability of such provision or the other provisions of this
         Agreement in any other jurisdiction.

                  (e)      No waiver of any breach or default or any right under
         this Agreement shall be considered valid unless in writing and signed
         by the party giving such waiver, and no such waiver shall be deemed a
         waiver of any subsequent breach or default or right, whether of the
         same or similar nature or otherwise.

                  (f)      This Agreement shall be binding upon and inure to the
         benefit of each party hereto and its successors and assigns.

                  (g)      Each party shall take such further action and execute
         and deliver such further documents as may be necessary or appropriate
         in order to carry out the provisions and purposes of this Agreement.

                  (h)      All questions concerning the construction, validity,
         enforcement and interpretation of this Agreement shall be governed by
         and construed and enforced in accordance with the internal laws of the
         State of New York, without regard to the principles of conflicts of law
         thereof. Each Debtor agrees that all proceedings concerning the
         interpretations, enforcement and defense of the transactions
         contemplated by this Agreement and the Debenture (whether brought
         against a party hereto or its respective affiliates, directors,

                                       21
<PAGE>

         officers, shareholders, partners, members, employees or agents) shall
         be commenced exclusively in the state and federal courts sitting in the
         City of New York, Borough of Manhattan. Each Debtor hereby irrevocably
         submits to the exclusive jurisdiction of the state and federal courts
         sitting in the City of New York, Borough of Manhattan for the
         adjudication of any dispute hereunder or in connection herewith or with
         any transaction contemplated hereby or discussed herein, and hereby
         irrevocably waives, and agrees not to assert in any proceeding, any
         claim that it is not personally subject to the jurisdiction of any such
         court, that such proceeding is improper. Each party hereto hereby
         irrevocably waives personal service of process and consents to process
         being served in any such proceeding by mailing a copy thereof via
         registered or certified mail or overnight delivery (with evidence of
         delivery) to such party at the address in effect for notices to it
         under this Agreement and agrees that such service shall constitute good
         and sufficient service of process and notice thereof. Nothing contained
         herein shall be deemed to limit in any way any right to serve process
         in any manner permitted by law. Each party hereto hereby irrevocably
         waives, to the fullest extent permitted by applicable law, any and all
         right to trial by jury in any legal proceeding arising out of or
         relating to this Agreement or the transactions contemplated hereby. If
         any party shall commence a proceeding to enforce any provisions of this
         Agreement, then the prevailing party in such proceeding shall be
         reimbursed by the other party for its reasonable attorney's fees and
         other costs and expenses incurred with the investigation, preparation
         and prosecution of such proceeding.

                  (i)      This Agreement may be executed in any number of
         counterparts, each of which when so executed shall be deemed to be an
         original and, all of which taken together shall constitute one and the
         same Agreement. In the event that any signature is delivered by
         facsimile transmission, such signature shall create a valid binding
         obligation of the party executing (or on whose behalf such signature is
         executed) the same with the same force and effect as if such facsimile
         signature were the original thereof.

                  (j)      All Debtors shall jointly and severally be liable for
         the obligations of each Debtor to the Secured Parties hereunder.

                  (k)      Each Debtor shall indemnify, reimburse and hold
         harmless the Secured Parties and their respective partners, members,
         shareholders, officers, directors, employees and agents (collectively,
         "Indemnitees") from and against any and all losses, claims,
         liabilities, damages, penalties, suits, costs and expenses, of any kind
         or nature, (including fees relating to the cost of investigating and
         defending any of the foregoing) imposed on, incurred by or asserted
         against such Indemnitee in any way related to or arising from or
         alleged to arise from this Agreement or the Collateral, except any such
         losses, claims, liabilities, damages, penalties, suits, costs and
         expenses which result from the gross negligence or willful misconduct
         of the Indemnitee as determined by a final, nonappealable decision of a
         court of competent jurisdiction. This indemnification provision is in
         addition to, and not in limitation of, any other indemnification
         provision in the Debentures, the Purchase Agreement (as such term is
         defined in the Debentures) or any other agreement, instrument or other
         document executed or delivered in connection herewith or therewith.

                                       22
<PAGE>

                  (l)      Nothing in this Agreement shall be construed to
         subject any Secured Party to liability as a partner in any Debtor or
         any if its direct or indirect subsidiaries that is a partnership or as
         a member in any Debtor or any of its direct or indirect subsidiaries
         that is a limited liability company, nor shall any Secured Party be
         deemed to have assumed any obligations under any partnership agreement
         or limited liability company agreement, as applicable, of any such
         Debtor or any if its direct or indirect subsidiaries or otherwise,
         unless and until any such Secured Party exercises its right to be
         substituted for such Debtor as a partner or member, as applicable,
         pursuant hereto.

                  (m)      To the extent that the grant of the security interest
         in the Collateral and the enforcement of the terms hereof require the
         consent, approval or action of any partner or member, as applicable, of
         any Debtor or any direct or indirect subsidiary of any Debtor or
         compliance with any provisions of any of the Organizational Documents,
         the Debtors hereby grant such consent and approval and waive any such
         noncompliance with the terms of said documents.

                  (n)      Notwithstanding anything herein to the contrary, the
         security interest created hereunder and the exercise by the Secured
         Parties of their rights and remedies with respect to the Pledged
         Securities are subject to the Wells Fargo Security Interest and the
         rights and remedies of the holders of the Wells Fargo Security Interest
         with respect to the Pledged Securities subject to the Wells Fargo
         Security Interest.

                            [SIGNATURE PAGES FOLLOW]

                                       23
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.

VELOCITY ASSET MANAGEMENT INC.

By: /s/ JAMES J. MASTRIANI
    ----------------------------------
    Name:  James J. Mastriani
    Title: CFO and Chief Legal Counsel

J. HOLDER INC.

By: /s/ W. PETER RAGAN, SR.
    ----------------------------------
     Name:  W. Peter Ragan, Sr.
     Title: President

TLOP ACQUISITION COMPANY, LLC

By: /s/ JAMES J. MASTRIANI
    ----------------------------------
    Name:  James J. Mastriani
    Title: CFO and Chief Legal Counsel

VOM, LLC

By: /s/ W. PETER RAGAN, SR.
    ----------------------------------
    Name:  W. Peter Ragan, Sr.
    Title: President

SH SALES, INC.

By: /s/ W. PETER RAGAN, SR.
    ----------------------------------
    Name:  W. Peter Ragan, Sr.
    Title: President

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       24
<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO VCYA SA]

            Name of Purchaser: DKR SoundShore Oasis Holding Fund, Ltd.
            Signature of Authorized Signatory of Purchaser: /s/ BRAD CASWELL
            Name of Authorized Signatory: Brad Caswell
            Title of Authorized Signatory: Director

                                       25
<PAGE>

                                   SCHEDULE A

Principal Place of Business of Debtors:

Locations Where Collateral is Located or Stored:

                                       26
<PAGE>

                                   SCHEDULE B

                                       27
<PAGE>

                                   SCHEDULE C

                                       28
<PAGE>

                                   SCHEDULE D

                      Organizational Identification Numbers

                                       29
<PAGE>

                                   SCHEDULE E

                         Names; Mergers and Acquisitions

                                       30
<PAGE>

                                   SCHEDULE F

                              Intellectual Property

                                       31
<PAGE>

                                   SCHEDULE G

                                 Account Debtors

                                       32
<PAGE>

                                   SCHEDULE H

                               Pledged Securities

                                       33
<PAGE>

                                     ANNEX A
                                       to
                                    SECURITY
                                    AGREEMENT

                        FORM OF ADDITIONAL DEBTOR JOINDER

             Security Agreement dated as of [_____ ___, 2005 made by
                         Velocity Asset Management, Inc.
        and its subsidiaries party thereto from time to time, as Debtors
                               to and in favor of
        the Secured Parties identified therein (the "Security Agreement")

         Reference is made to the Security Agreement as defined above;
capitalized terms used herein and not otherwise defined herein shall have the
meanings given to such terms in, or by reference in, the Security Agreement.

         The undersigned hereby agrees that upon delivery of this Additional
Debtor Joinder to the Secured Parties referred to above, the undersigned shall
(a) be an Additional Debtor under the Security Agreement, (b) have all the
rights and obligations of the Debtors under the Security Agreement as fully and
to the same extent as if the undersigned was an original signatory thereto and
(c) be deemed to have made the representations and warranties set forth in
Section ___ therein as of the date of execution and delivery of this Additional
Debtor Joinder. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN
THE COLLATERAL AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND
ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH
THEREIN.

         Attached hereto are supplemental and/or replacement Schedules to the
Security Agreement, as applicable.

         An executed copy of this Joinder shall be delivered to the Secured
Parties, and the Secured Parties may rely on the matters set forth herein on or
after the date hereof. This Joinder shall not be modified, amended or terminated
without the prior written consent of the Secured Parties.

<PAGE>

         IN WITNESS WHEREOF, the undersigned has caused this Joinder to be
executed in the name and on behalf of the undersigned.

                                       [Name of Additional Debtor]

                                       By:

                                       Name:
                                       Title:

                                       Address:

Dated:

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