Document:

Exhibit
      99.12

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (“Agreement”)
      is
      entered into as of December 7, 2006, between USTelematics, Inc., a Delaware
      corporation with offices at 335 Richert Drive, Wood Dale IL 60109 (the
“Company”)
      and
      each of the parties listed under “Holders” hereto (each, a “Holder”).

     

    WITNESSETH:

    

    WHEREAS,
      pursuant to that certain Securities Purchase Agreement, dated on or about the
      date hereof, by and between the Company and each Holder (the “Purchase
      Agreement”)
      of the
      9% Secured Convertible Debentures due December __, 2008 (the “Debentures”)
      issued
      by the Company, the Company has agreed to issue to the Holders, and the Holders
      have agreed to acquire from the Company, (i) Debentures in the aggregate
      principal amount of up to $6.0 million and (ii) Series A Warrants,
      Series B Warrants and Exchange Bonus Warrants to purchase shares (“Shares”)
      of the
      Company’s Common Stock, par value $0.0001 per share (the “Common
      Stock”),
      subject
      to the terms and conditions set forth therein; and

     

    WHEREAS,
      pursuant to that certain Placement Agency Agreement, dated on or about March
      20,
      2006, by and between the Company and Axiom Capital Management LLC (the
“Placement
      Agreement”),
      the
      Company has agreed to issue the Placement Agent Warrant (together with the
      Series A Warrants, the Series B Warrants and the Exchange Bonus Warrants, the
      “Warrants”)
      to
      purchase shares of Common Stock, subject to the terms and conditions set forth
      therein; and

     

    WHEREAS,
      the
      Debentures will be convertible into shares of Common Stock and the Warrants
      will
      be exercisable for shares of Common Stock (the “Common
      Shares”)
      pursuant to the terms and conditions set forth therein.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises, representations, warranties, covenants
      and
      conditions set forth in the Debentures, the Purchase Agreement, the Placement
      Agreement, the Warrants and this Agreement, the Company and each Holder agree
      as
      follows:

     

    1.
       Certain
      Definitions.
      Capitalized terms used herein and not otherwise defined shall have the meaning
      ascribed thereto in the Purchase Agreement or the Debenture. As used in this
      Agreement, the following terms shall have the following respective
      meanings:

     

    “Closing”
and
      “Closing
      Date”
shall
      have the meanings ascribed to such terms in the Purchase Agreement.

     

    “Commission”
or
      “SEC”
shall
      mean the Securities and Exchange Commission or any other federal agency at
      the
      time administering the Securities Act. 

     

    “Effectiveness
      Date”
      means,
      with respect to the initial Registration Statement required to be filed
      hereunder, the 90th
      calendar
      day following the date hereof (or the 120th
      calendar
      day following the date hereof in the event of a “full review” by the Commission
      of the initial Registration Statement) and, with respect to any additional
      Registration Statements which may be required hereunder, the 90th
      calendar
      day (or the 120th
      calendar
      day in the event of a “full review” by the Commission of such additional
      Registration Statement) following the date on which the Company first knows,
      or
      reasonably should have known, that such additional Registration Statement is
      required hereunder; provided,
      however,
      that 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, then 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; provided, further,
      if any
      such Effectiveness Date falls on a day that is not a Trading Day, then such
      Effectiveness Date shall be the Trading Day immediately prior to such
      date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Filing
      Date” means, with respect to the initial Registration Statement required
      hereunder, the 40th calendar day following the date hereof and, with respect
      to
      any additional Registration Statements which may be required pursuant to Section
      2, the 30th calendar day following the date on which the Company first knows,
      or
      reasonably should have known, that such additional Registration Statement is
      required hereunder (but in no event sooner than the 180th calendar day following
      the date the initial Registration Statement is first declared effective by
      the
      Commission unless the filing of such additional Registration Statement sooner
      than such 180th calendar is permitted pursuant to Rule 415); provided, however,
      if any such Filing Date falls on a day that is not a Trading Day, then such
      Filing Date shall be the Trading Day immediately prior to such
      date.

     

    “Holder”
and
      “Holders”
shall
      include each Holder, Axiom Capital Management LLC and any permitted transferee
      or transferees of Registrable Securities (as defined below), the Debentures
      and/or Warrants which have not been sold to the public to whom the registration
      rights conferred by this Agreement have been transferred in compliance with
      this
      Agreement and/or the Purchase Agreement. 

     

    The
      terms
“register,”
      “registered”
and
      “registration”
shall
      refer to a registration effected by preparing and filing a registration
      statement in compliance with the Securities Act and applicable rules and
      regulations thereunder, and the declaration or ordering of the effectiveness
      of
      such registration statement.

     

    “Registrable
      Securities”
shall
      mean: (i) the Shares or other securities issued or issuable to each Holder
      or
      its permitted transferee or designee (a) upon conversion of the Debentures,
      or
      (b) upon any distribution with respect to, any exchange for or any replacement
      of, a Debenture, (c) upon any conversion, exercise or exchange of any
      securities issued in connection with any such distribution, exchange or
      replacement, (d) as payment of any portion of the principal amount or interest
      in lieu of cash with respect to the Debentures (even if not permitted under
      the
      terms of the Debentures or the Purchase Agreement), or (e) issued or issuable
      to
      such Holder or its permitted transferee or designee, under Favored Nations
      4.25(d) provisions of the Purchase Agreement; (ii) securities issued or issuable
      in respect of the foregoing upon any stock split, stock dividend,
      recapitalization or similar event; and (iii) any other security issued as a
      dividend or other distribution with respect to, in exchange for or in
      replacement of the securities referred to in the preceding clauses; provided
      that all such shares shall cease to be Registrable Securities at such time
      as
      they have been sold under a Registration Statement or pursuant to Rule 144
      under
      the Securities Act or otherwise or at such time as they are eligible to be
      sold
      pursuant to Rule 144(k). 

     

    
      
        
        

      

      
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    “Registration
      Expenses”
shall
      mean all expenses to be incurred in connection with each Holder’s registration
      rights under this Agreement not included in Selling Expenses, including, without
      limitation, all registration and filing fees, printing expenses, fees and
      disbursements of counsel for the Company and one counsel for the Holders, blue
      sky fees and expenses, and the expense of any special audits incident to or
      required by any such registration (but excluding the compensation of regular
      employees of the Company, which shall be paid in any event by the
      Company).

     

    “Registration
      Statement”
shall
      have the meaning set forth in Section 2(a) herein.

     

    “Regulation
      D”
shall
      mean Regulation D as promulgated pursuant to the Securities Act, and as
      subsequently amended. 

     

    “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.

     

    “Securities
      Act”
or
      “Act”
shall
      mean the Securities Act of 1933, as amended.

     

    “Selling
      Expenses”
shall
      mean all underwriting discounts and selling commissions applicable to the sale
      of Registrable Securities.

     

    2.
       Registration
      Requirements.
      

     

    The
      Company shall use its best efforts to effect the registration of the Registrable
      Securities (including, without limitation, the execution of an undertaking
      to
      file post-effective amendments, appropriate qualification under applicable blue
      sky or other state securities laws and appropriate compliance with applicable
      regulations issued under the Securities Act) as would permit or facilitate
      the
      sale or distribution of all the Registrable Securities in the manner (including
      manner of sale) and in all states reasonably requested by the Holders. The
      best
      efforts by the Company to effect the registration under each Registration
      Statement shall include, without limitation, the following:

     

    (a)
      Shelf
      Registration.
      On or
      prior to each Filing Date, the Company shall prepare and file with the
      Commission a “Shelf” Registration Statement covering the resale of the
      Registrable Securities not covered by an effective registration statement on
      such Filing Date for an offering to be made on a continuous basis pursuant
      to
      Rule 415; provided,
      however,
      that if
      such Registrable Securities hereunder shall equal or exceed 30% of the issued
      and outstanding Common Stock of the Company (less any shares of Common Stock
      held by Affiliates of the Company) on the actual filing date of the initial
      Registration Statement, the initial Registration Statement shall register
at
      a
      minimum
      a number
      of shares of Common Stock which is equal to 30% of the issued and outstanding
      shares of Common Stock of the Company (less any shares of Common Stock held
      by
      Affiliates of the Company) on such actual filing date, but not less than 100%
      of
      the Common Stock issuable upon conversion of the Debentures (the “Registration
      Cap”)
      and
      the
      remaining Registrable Securities shall be subject to registration at the next
      succeeding Filing Date. In such event, the number of Registrable Securities
      to
      be registered for each Holder shall be reduced pro-rata among all Holders and
      each Holder shall have the right to designate which of its Registrable
      Securities shall be omitted from the initial Registration Statement.
      Notwithstanding anything herein to the contrary, the Company shall continue
      to
      use best efforts to register all Registrable Securities as promptly as possible
      and if requested by Holders holding at least 50% of the then outstanding
      Registrable Securities not registered, shall seek to promptly register
      Registrable Securities in excess of the Registration Cap, provided that no
      Registration Statement filed pursuant to a request made under this sentence
      shall be subject to a required Effectiveness Date. Subject to the terms of
      this
      Agreement and the preceding sentence, 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 p.m. New York City 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 a.m.
      New York City time on the Trading Day after the Effective Date (as defined
      in
      the Purchase Agreement), file a final Prospectus with the Commission as required
      by Rule 424. Failure to so notify the Holder within 1 Trading Day of such
      notification of effectiveness or failure to file a final Prospectus as foresaid
      shall be deemed an Interfering Event under Section 2(d).

     

    
      
        
        

      

      
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    (b)
       The
      Company shall, as expeditiously as possible after the Closing Date:

     

    (i)
       But
      in
      any event no later than thirty (30) days after the Closing Date, prepare and
      file a registration statement with the Commission pursuant to Rule 415 under
      the
      Securities Act on Form SB-2 or Form S-3 under the Securities Act (or in the
      event that the Company is ineligible to use such form, such other form as the
      Company is eligible to use under the Securities Act provided that any other
      form
      shall be converted into an S-3 as soon as Form S-3 becomes available to the
      Company) covering resales by the Holders as selling stockholders (not
      underwriters) of the Registrable Securities (“Registration
      Statement”),
      which
      Registration Statement, to the extent allowable under the Securities Act and
      the
      rules promulgated thereunder (including Rule 416), shall state that such
      Registration Statement also covers such indeterminate number of additional
      shares of Common Stock as may become issuable upon conversion of the Debentures
      and exercise of the Warrants. . Thereafter the Company shall use its best
      efforts to cause such Registration Statement and other filings to be declared
      effective as soon as possible, and in any event no later than the Effectiveness
      Date.
      Without
      limiting the foregoing, the Company will promptly respond to all SEC comments,
      inquiries and requests, and shall request acceleration of effectiveness at
      the
      earliest possible date. 

     

    
      
        
        

      

      
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    (ii)
       Prepare
      and file with the SEC such amendments and supplements to such Registration
      Statement and the prospectus used in connection with such Registration Statement
      as may be necessary to comply with the provisions of the Securities Act with
      respect to the disposition of all securities covered by such Registration
      Statement and notify the Holders of the filing and effectiveness of such
      Registration Statement and any amendments or supplements.

     

    (iii)
       The
      Company shall sell additional Common Stock to at least that number of purchasers
      that qualify as Accredited Investors as defined under Regulation D adopted
      under
      the Securities Act of 1933, as amended, in a manner which complies with Section
      4.4 of the Purchase Agreement, such that the Company shall have no fewer than
      50
      holders of Common Stock of the Company not later than the earlier of: (i) the
      date on which the Company takes the steps required by Section 4.12 (c) of the
      Purchase Agreement, or (ii) the date by which the Company is required to file
      the first registration statement described in Section 2(a)(i) above.

     

    (iv)
       Register
      and qualify the securities covered by such Registration Statement under the
      securities or “Blue Sky” laws of all domestic jurisdictions; provided that the
      Company shall not be required in connection therewith or as a condition thereto
      to qualify to do business or to file a general consent to service of process
      in
      any such states or jurisdictions.

     

    (v)
       Notify
      promptly each Holder that has Registrable Securities included in the
      Registration Statement of the happening of any event (but not the substance
      or
      details of any such event) of which the Company has knowledge as a result of
      which the prospectus (including any supplements thereto or thereof) included
      in
      such Registration Statement, as then in effect, includes an untrue statement
      of
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing (each an “Event”),
      and
      use its best efforts to promptly update and/or correct such prospectus. Each
      Holder will hold in confidence and will not make any disclosure of any such
      Event and any related information disclosed by the Company. 

     

    (vi)
       Notify
      each Holder of the issuance by the Commission or any state securities commission
      or agency of any stop order suspending the effectiveness of the Registration
      Statement or the threat or initiation of any proceedings for that purpose.
      The
      Company shall use its best efforts to prevent the issuance of any stop order
      and, if any stop order is issued, to obtain the lifting thereof at the earliest
      possible time.

     

    
      
        
        

      

      
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    (vii)
       Furnish
      to each Holder that has Registrable Securities included in the Registration
      Statement such numbers of copies of a current prospectus conforming with the
      requirements of the Securities Act, copies of the Registration Statement, any
      amendment or supplement thereto and any documents incorporated by reference
      therein and such other documents as such Holder may reasonably require in order
      to facilitate the disposition of Registrable Securities owned by such
      Holder

     

    (viii)
       List
      the
      Registrable Securities covered by such Registration Statement with all
      securities exchange(s) and/or markets on which the Common Stock is then listed
      and prepare and file any required filings with any exchange or market where
      the
      Common Shares are traded.

     

    (ix)
       Take
      all
      steps reasonably necessary to enable Holders to avail themselves of the
      prospectus delivery mechanism set forth in Rule 153 (or successor thereto)
      under
      the Act. 

     

    (x)
       Furnish
      to each Holder for review a copy of each draft of a registration statement
      to be
      filed under the Agreement at least 5 days before filing of an initial
      registration, and at least two business days before filing of any amendment
      to a
      previously filed amendment.

     

    (c)
       Notwithstanding
      the obligations under Section 2(b)(v) or any provision of this Agreement, if
      (i)
      in the good faith judgment of the Company, following consultation with legal
      counsel, it would be detrimental to the Company and its stockholders for resales
      of Registrable Securities to be made pursuant to the Registration Statement
      due
      to the existence of a material development or potential material development
      involving the Company that the Company would be obligated to disclose in the
      Registration Statement, which disclosure would be premature or otherwise
      inadvisable at such time or would have a material adverse effect upon the
      Company and its stockholders, or (ii) in the good faith judgment of the Company,
      it would adversely affect or require premature disclosure of the filing of
      a
      Company-initiated registration of any class of its equity securities, then
      the
      Company will have the right to suspend the use of the Registration Statement
      for
      one period of not more than 30 calendar days in any 12 month period, but only
      if
      the Company reasonably concludes, after consultation with outside legal counsel,
      that the failure to suspend the use of the Registration Statement as such would
      create a of a material liability or violation under applicable securities laws
      or regulations.

     

    (d)
       Set
      forth
      below in this Section 2(d) are (I) events that may arise that the Purchasers
      consider will interfere with the full rights under this Agreement, the Purchase
      Agreement, and the Debentures (the “Interfering
      Events”),
      and
      (II) certain remedies applicable in each of these events. 

     

    
      
        
        

      

      
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    (i)
       Payments
      by the Company.
      If (i)
      at any time after effectiveness of the Registration Statement, sales thereunder
      during the registration period (as described in Section 5) cannot be made for
      any reason, other than by reason of the operation of Section 2(c),
      for
      a period of more than 10 consecutive business days, (ii)
      at
      any time after effectiveness of the Registration Statement, sales thereunder
      during the Registration Period cannot be made for
      a
      period of time that exceeds the limitations set forth in Section 2(c), or (iii)
      at any time after the Registrable Securities are listed in accordance with
      Section 2(b)(viii), the Common Stock is not listed or included for quotation
      on
      the Trading Market where shares of the Company’s common stock are then traded
      for more than 10 consecutive calendar days, then the Company will thereafter
      make a payment as liquidated damages to each Holder as set forth below (payable
      in the manner described in Section 2(d)(ii) below for Late Registration
      Payment). The amount of the payment made to each Holder will be equal to 2%
      of
      the purchase price paid for (i) the Debentures then held by the Holder and
      not
      previously converted into Registrable Securities and sold by the Holder and
      (ii)
      Registrable Securities obtained upon conversion of the Debentures for each
      30
      calendar days that sales cannot be made under the effective Registration
      Statement or the Common Shares are not listed or included for quotation on
      the
      Trading Market where shares of the Company’s common stock are then traded (but
      any day on which both conditions exist shall count as a single day and no day
      taken into account for purposes of determining whether any payment is due under
      Section 2 (d)(ii) shall be taken into account for purposes of determining
      whether any payment is due under this Section 2(d)(i) or the amount of such
      payment). The number of shares not previously sold as specified in the previous
      sentence shall be determined as of the end of the respective 30-day period.
      In
      no event shall payment pursuant to this Section exceed 30% in the aggregate
      of
      the purchase price paid for (i) the Debentures then held by the Holder and
      (ii)
      Registrable Securities obtained upon conversion of the Debentures (including
      such Holder’s predecessors and successors) for the entire registration period
      (as described in Section 5). These payments will be prorated on a daily basis
      during the 30-day period and will be paid to each Holder within ten business
      days following the end of each 30-day period as to which payment is due
      hereunder or provided that the respective Holder delivered to the Company at
      least two business days prior thereto information with respect to the principal
      amount of Debentures and number of Shares not previously sold by such Holder
      (together with reasonable supporting documentation). The Holders may make a
      claim for additional damages as a remedy for the Company’s failure to comply
      with the timelines set forth in this Section, but acknowledgement of such right
      in this Agreement shall not constitute an admission by the Company that any
      such
      damages exist or may exist. Nothing contained in the preceding sentence shall
      be
      read to limit the ability of the Holders to seek specific performance of this
      Agreement.

     

    
      
        
        

      

      
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    (ii)
       Effect
      of Late Registration.
      If the
      Registration Statement: (i) has not been declared effective by the Required
      Effective Date other than by reason of the operation of Section 2(c), or (ii)
      the Company does not respond to comments received from the Securities and
      Exchange Commission (“SEC”) on a Registration Statement filed as required under
      this agreement within 10 business days after receipt and the registration
      statement does not become effective by the Effectiveness Date, or (iii) the
      Registration Statement does not become effective within 5 business days after
      receipt of notice from the SEC that there will be no further review or no review
      on a registration statement filed pursuant to this agreement, or (iv) if the
      initial Registration Statement is not filed by the Filing Date, then the Company
      will make a payment to each Holder as liquidated damages for such delay (each
      a
“Late
      Registration Payment”).
      Each
      Late Registration Payment will be equal to 2% of the purchase price paid for
      (i)
      the Debentures then held by the Holder and not previously converted into Shares
      and sold by the Holder and (ii) Registrable Securities obtained upon conversion
      of the Debentures, for the first 30 calendar days after the Effectiveness Date,
      and 2% of such purchase price for each period of 30 calendar days thereafter
      (but no day taken into account for purposes of determining whether any payment
      is due under Section 2(d)(i) shall be taken into account for purposes of
      determining whether any payment is due under this Section 2(d)(ii) or the amount
      of such payment). The Late Registration Payment shall be made, at the option
      of
      the Company, in cash or registered Company Common Stock with a value per share
      equal to the lowest reported closing bid price in the Trading Market for the
      Common Stock during the 20 Trading Days immediately before accrual of the
      obligation to make the payment. In no event shall payments pursuant to this
      Section exceed 30% in the aggregate of the purchase price paid for (i) the
      Debentures then held by the Holder and not previously converted into Shares
      and
      sold by the Holder and (ii) Registrable Securities obtained upon conversion
      of
      the Debentures (including such Holder’s predecessors and successors) for the
      entire registration period (as described in Section 5). The Late Registration
      Payments will be prorated on a daily basis during the 30-day period and will
      be
      paid to the initial Holders within ten business days following the end of each
      30-day period as to which payment is due hereunder, provided that, upon request
      from the Company, the respective Holder delivered to the Company within 3
      business days prior thereto information with respect to the principal amount
      of
      Debentures and the number of Shares not previously sold by such Holder (together
      with reasonable supporting documentation). The Holders may make a claim for
      additional damages as a remedy for the Company’s failure to comply with the
      timelines set forth in this Section, but acknowledgement of such right in this
      Agreement shall not constitute an admission by the Company that any such damages
      exist or may exist. Nothing contained in the preceding sentence shall be read
      to
      limit the ability of the Holders to seek specific performance of this Agreement.
      

     

    
      
        
        

      

      
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    (e)
       During
      the registration period, the Company will make available, upon reasonable
      advance notice during normal business hours, for inspection by any Holder whose
      Registrable Securities are being sold pursuant to a Registration Statement,
      all
      pertinent financial and other records, pertinent corporate documents and
      properties of the Company (collectively, the “Records”)
      as
      reasonably necessary to enable each such Holder to exercise its due diligence
      responsibility in connection with or related to the contemplated offering.
      The
      Company will cause its officers, directors and employees to supply all
      information that any Holder may reasonably request for purposes of performing
      such due diligence. 

     

    (f)
       Each
      Holder will hold in confidence, use only in connection with the contemplated
      offering and not make any disclosure of all Records and other information that
      the Company determines in good faith to be confidential, and of which
      determination the Holders are so notified, unless (i) the disclosure of such
      Records is necessary to avoid or correct a misstatement or omission in any
      Registration Statement, (ii) the release of such Records is ordered pursuant
      to
      a subpoena or other order from a court or government body of competent
      jurisdiction, (iii) the information in such Records has been made generally
      available to the public other than by disclosure in violation of this or any
      other agreement (to the knowledge of the relevant Holder), (iv) the Records
      or
      other information were developed independently by the Holder without breach
      of
      this Agreement, (v) the information was known to the Holder before receipt
      of
      such information from the Company, or (vi) the information was disclosed to
      the
      Holder by a third party not under an obligation of confidentiality. However,
      a
      Holder may make disclosure of such Records and other information to any
      attorney, adviser, or other third party retained by it that needs to know the
      information as determined in good faith by the Holder (the “Holder
      Representative”),
      if
      the Holder advises the Holder Representative of the confidentiality provisions
      of this Section 2(f). The Company is not required to disclose any confidential
      information in the Records to any Holder unless and until such Holder has
      entered into a confidentiality agreement (in form and substance satisfactory
      to
      the Company) with the Company with respect thereto, substantially to the effect
      of this Section 2(f). Unless legally prohibited from so doing, each Holder
      will,
      upon learning that disclosure of Records containing confidential information
      is
      sought in or by a court or governmental body of competent jurisdiction or
      through other means, give prompt notice to the Company and allow the Company,
      at
      the Company’s expense, to undertake appropriate action to prevent disclosure of,
      or to obtain a protective order for, the Records deemed confidential. Nothing
      herein will be deemed to limit the Holder’s ability to sell Registrable
      Securities in a manner that is otherwise consistent with applicable laws and
      regulations.

     

    (g)
       The
      Company shall file a Registration Statement with respect to any newly authorized
      and/or reserved Registrable Securities consisting of Shares described in clause
      (i) of the definition of Registrable Securities within ten (10) business days
      of
      any stockholders’ meeting authorizing same and shall use its best efforts to
      cause such Registration Statement to become effective within ninety (90) days
      of
      such stockholders’ meeting. If the Holders become entitled, pursuant to an event
      described in clause (ii) and (iii) of the definition of Registrable Securities,
      to receive any securities in respect of Registrable Securities that were already
      included in a Registration Statement, subsequent to the date such Registration
      Statement is declared effective, and the Company is unable under the securities
      laws to add such securities to the then effective Registration Statement, the
      Company shall promptly file, in accordance with the procedures set forth herein,
      an additional Registration Statement with respect to such newly Registrable
      Securities. The Company shall use its best efforts to (i) cause any such
      additional Registration Statement, when filed, to become effective within 30
      days of that date that the need to file the Registration Statement arose. All
      of
      the registration rights and remedies under this Agreement shall apply to the
      registration of such newly reserved shares and such new Registrable
      Securities.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    (h) If
      at any
      time during the term of this Agreement, the registration statement described
      in
      Section 2(a) is not effective with respect to some or all of the Registrable
      Securities, the Holder shall have the following “piggyback” registration rights.
      If the Company at any time following the Closing Date proposes for any reason
      to
      register Common Shares under the Securities Act (other than on Form S-4 or
      Form S-8 promulgated under the Securities Act or any successor forms
      thereto), it shall promptly give written notice to the Holder of its intention
      to so register such equity securities and, upon the written request, given
      within 20 days after delivery of such notice by the Company, of Holder to
      include in such registration Registrable Securities held by the Holder (which
      request shall specify the number of Registrable Shares proposed to be included
      in such registration by the Holder and shall state the intended method of
      disposition of such Registrable Securities by the Holder), the Company shall
      use
      its best efforts to cause all such Registrable Securities to be included in
      such
      registration on the same terms and conditions as the securities otherwise being
      sold in such registration; provided,
      however,
      that if
      the managing underwriter advises the Company in writing that the inclusion
      of
      all Registrable Securities proposed to be included in such registration would
      interfere materially with the successful marketing (including pricing) of
      primary shares (the “Primary
      Shares”)
      proposed to be registered by the Company, then the number of Primary Shares
      and
      Registrable Securities proposed to be included in such registration shall be
      included in the following order:

    

    (i) first,
      the
      Primary Shares; and

    

    (ii) second,
      the
      Registrable Securities requested to be included in such registration pursuant
      to
      this Section 2(h) 

    

    provided,
      that in
      the case of any such underwritten offering of Common Shares by the Company
      that
      is in satisfaction of a demand registration pursuant to Section 2(i), the
      order for inclusion of Primary Shares and Registrable Securities shall be as
      set
      forth in that section.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    (i) If
      at any
      time during the term of this Agreement, the registration statement described
      in
      Section 2(a) is not effective with respect to some or all of the Registrable
      Securities, the Holder shall have the following demand registration rights.
      If
      the Company shall be requested in writing by the Holder to effect a registration
      on Form S-1 or Form SB-2 under the Securities Act of Registrable
      Securities, then the Company shall promptly use its best efforts to effect
      such
      registration under the Securities Act of such Registrable Securities which
      the
      Company has been so requested to register in the manner described in Section
      2(a); provided,
      however,
      that
      the Company shall not be obligated to effect any registration under this Section
      2(i) except in accordance with the following provisions:

    

    (i) The
      Company shall not be obligated to use its best efforts to file and cause to
      become effective (x) more than two
      registration statements on Form S-1 or Form SB-2 with respect to
      Registrable Securities initiated by a Holder pursuant to this Section 2(i)
      in a 12 month period; (y) any registration statement covering less than $100,000
      in value of Registrable Securities or (z) any registration statement during
      any
      period in which any other registration statement pursuant to which Shares are
      to
      be or were sold has been filed and not withdrawn or has been declared effective
      within the prior 60 days; 

    

    (ii) The
      Company may delay the filing or effectiveness of any registration statement
      for
      a period of up to 30 days after the date of a request for registration pursuant
      to this Section 2(i) if the Company determines in good faith that (A) it is
      in
      possession of material, non-public information concerning an acquisition,
      merger, recapitalization, consolidation, reorganization or other material
      transaction by or of the Company or concerning pending or threatened litigation
      and (B) disclosure of such information would jeopardize any such transaction
      or
      litigation or otherwise materially harm the Company; provided,
      however,
      that
      the Company may not exercise such deferral right more than once in any twelve
      month-period.

    

    (iii) At
      such
      time as the Corporation shall have qualified for the use of Form S-3 promulgated
      under the Securities Act or any successor form thereto, the Holder shall have
      the right to request in writing registrations on Form S-3 or such successor
      form
      of Registrable Securities held by Purchaser in the manner described in Section
      2(a), which request or requests shall (i) specify the number of Registrable
      Securities held by the Holder intended to be sold or disposed of, (ii) state
      the
      intended method of disposition of such Registrable Securities held by the Holder
      and (iii) relate to Registrable Shares having an anticipated aggregate offering
      price of at least $500,000. A requested registration on Form S-3 or any such
      successor form in compliance with Section 4 shall not count as a registration
      statement initiated pursuant to Section 2(i) but shall otherwise be treated
      as a
      registration statement initiated pursuant to, and shall, except as otherwise
      expressly provided in Section 4, be subject to Section 2.

    

    3.
       Expenses
      of Registration. All
      Registration Expenses in connection with any registration, qualification or
      compliance with registration pursuant to this Agreement shall be borne by the
      Company, and all Selling Expenses of a Holder shall be borne by such
      Holder.

     

    4.
       Registration
      on Form S-3.
      The
      Company shall use its reasonable best efforts to meet the “registrant
      eligibility” requirements for a secondary offering set forth in the general
      instructions to Form S-3 or any comparable or successor form or forms, or in
      the
      event that the Company is ineligible to use such form, such form as the Company
      is eligible to use under the Securities Act, provided that if such other form
      is
      used, the Company shall convert such other form to a Form S-3 as soon as the
      Company becomes so eligible.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    5.
       Registration
      Period.
      In the
      case of the registration effected by the Company pursuant to this Agreement,
      the
      Company shall keep such registration effective and current until the earlier
      of
      (a) the date on which all the Holders have completed the sales or distribution
      described in the Registration Statement relating thereto or, if earlier until
      such Registrable Securities may be sold by the Holders under Rule 144(k)
      (provided that the Company’s transfer agent has accepted an instruction from the
      Company to such effect) and (b) the seventh (7th) anniversary of the Closing
      Date.

     

    6.
       Indemnification.
      

     

    (a)
       Company
      Indemnity.
      The
      Company will indemnify each Holder, each of its officers, directors, agents
      and
      partners, and each person controlling each of the foregoing, within the meaning
      of Section 15 of the Securities Act and the rules and regulations thereunder
      with respect to which registration, qualification or compliance has been
      effected pursuant to this Agreement, and each underwriter, if any, and each
      person who controls, within the meaning of Section 15 of the Securities Act
      and
      the rules and regulations thereunder, any underwriter, against all claims,
      losses, damages and liabilities (or actions in respect thereof) arising out
      of
      or based on any untrue statement (or alleged untrue statement) of a material
      fact contained in any final prospectus (as amended or supplemented if the
      Company files any amendment or supplement thereto with the SEC), Registration
      Statement filed pursuant to this Agreement or any post-effective amendment
      thereof or based on any omission (or alleged omission) to state therein a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in light of the circumstances under which they were
      made,
      or any violation by the Company of the Securities Act or any state securities
      law or in either case, any rule or regulation thereunder applicable to the
      Company and relating to action or inaction required of the Company in connection
      with any such registration, qualification or compliance, and will reimburse
      each
      Holder, each of its officers, directors, agents and partners, and each person
      controlling each of the foregoing, for any reasonable legal fees of a single
      counsel and any other expenses reasonably incurred in connection with
      investigating and defending any such claim, loss, damage, liability or action,
      provided that the Company will not be liable in any such case to a Holder to
      the
      extent that any such claim, loss, damage, liability or expense arises out of
      or
      is based on (i) any untrue statement or omission based upon written information
      furnished to the Company by such Holder or underwriter (if any) therefor and
      stated to be specifically for use therein, (ii) any failure by any Holder to
      comply with prospectus delivery requirements or the Securities Act or Exchange
      Act or any other law or legal requirement applicable to them or any covenant
      or
      agreement contained in the Purchase Agreement or this Agreement or (iii) an
      offer or sale of Registrable Securities occurring during a period in which
      sales
      under the Registration Statement are suspended as permitted by this Agreement.
      The indemnity agreement contained in this Section 6(a) shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Company (which consent
      will not be unreasonably withheld).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b)
       Holder
      Indemnity.
      Each
      Holder will, severally but not jointly, if Registrable Securities held by it
      are
      included in the securities as to which such registration, qualification or
      compliance is being effected, indemnify the Company, each of its directors,
      officers, agents and partners, and any other stockholder selling securities
      pursuant to the Registration Statement and any of its directors, officers,
      agents, partners, and any person who controls such stockholder within the
      meaning of the Securities Act or Exchange Act and each underwriter, if any,
      of
      the Company’s securities covered by such a Registration Statement, each person
      who controls the Company or such underwriter within the meaning of Section
      15 of
      the Securities Act and the rules and regulations thereunder, each other Holder
      (if any), and each of their officers, directors and partners, and each person
      controlling such other Holder(s) against all claims, losses, damages and
      liabilities (or actions in respect thereof) arising out of or based on (i)
      any
      untrue statement (or alleged untrue statement) of a material fact contained
      in
      any such final prospectus (as amended or supplemented if the Company files
      any
      amendment or supplement thereto with the SEC), Registration Statement filed
      pursuant to this Agreement or any post-effective amendment thereof or based
      on
      any omission (or alleged omission) to state therein a material fact required
      to
      be stated therein or necessary to make the statement therein not misleading
      in
      light of the circumstances under which they were made or (ii) failure by any
      Holder to comply with prospectus delivery requirements or the Securities Act
      or
      any other law or legal requirement applicable to them or any covenant or
      agreement contained in the Purchase Agreement or this Agreement, and will
      reimburse the Company and such other Holder(s) and their directors, officers
      and
      partners, underwriters or control persons for any reasonable legal fees or
      any
      other expenses reasonably incurred in connection with investigating and
      defending any such claim, loss, damage, liability or action, in each case to
      the
      extent, but only to the extent, that such untrue statement (or alleged untrue
      statement) or omission (or alleged omission) is made in such final prospectus
      (as amended or supplemented if the Company files any amendment or supplement
      thereto with the SEC), Registration Statement filed pursuant to this Agreement
      or any post-effective amendment thereof in reliance upon and in conformity
      with
      written information furnished to the Company by such Holder and stated to be
      specifically for use therein, and provided that the maximum amount for which
      such Holder shall be liable under this indemnity shall not exceed the net
      proceeds received by such Holder from the sale of the Registrable Securities
      pursuant to the registration statement in question. The indemnity agreement
      contained in this Section 6(b) shall not apply to amounts paid in settlement
      of
      any such claims, losses, damages or liabilities if such settlement is effected
      without the consent of such Holder (which consent shall not be unreasonably
      withheld).

     

    (c)
       Procedure.
      Each
      party entitled to indemnification under this Section 6 (the “Indemnified
      Party”)
      shall
      give notice to the party required to provide indemnification (the “Indemnifying
      Party”)
      promptly after such Indemnified Party has actual knowledge of any claim as
      to
      which indemnity may be sought, and shall permit the Indemnifying Party to assume
      the defense of any such claim in any litigation resulting therefrom, provided
      that counsel for the Indemnifying Party, who shall conduct the defense of such
      claim or any litigation resulting therefrom, shall be approved by the
      Indemnified Party (whose approval shall not be unreasonably withheld), and
      the
      Indemnified Party may participate in such defense at its own expense, and
      provided further that the failure of any Indemnified Party to give notice as
      provided herein shall not relieve the Indemnifying Party of its obligations
      under this Section 6 except to the extent that the Indemnifying Party is
      materially and adversely affected by such failure to provide notice. No
      Indemnifying Party, in the defense of any such claim or litigation, shall,
      except with the consent of each Indemnified Party, consent to entry of any
      judgment or enter into any settlement which does not include as an unconditional
      term thereof the giving by the claimant or plaintiff to such Indemnified Party
      of a release from all liability in respect to such claim or litigation. Each
      Indemnified Party shall furnish such non-privileged information regarding itself
      or the claim in question as an Indemnifying Party may reasonably request in
      writing and as shall be reasonably required in connection with the defense
      of
      such claim and litigation resulting therefrom.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    7.
       Contribution.
      If the
      indemnification provided for in Section 6 herein is unavailable to the
      Indemnified Parties in respect of any losses, claims, damages or liabilities
      referred to herein (other than by reason of the exceptions provided therein),
      then each such Indemnifying Party, in lieu of indemnifying such Indemnified
      Party, shall contribute to the amount paid or payable by such Indemnified Party
      as a result of such losses, claims, damages or liabilities as between the
      Company on the one hand and any Holder(s) on the other, in such proportion
      as is
      appropriate to reflect the relative fault of the Company and of such Holder(s)
      in connection with the statements or omissions which resulted in such losses,
      claims, damages or liabilities, as well as any other relevant equitable
      considerations. The relative fault of the Company on the one hand and of any
      Holder(s) on the other shall be determined by reference to, among other things,
      whether the untrue or alleged untrue statement of a material fact or omission
      or
      alleged omission to state a material fact relates to information supplied by
      the
      Company or by such Holder(s).

     

    In
      no
      event shall the obligation of any Indemnifying Party to contribute under this
      Section 7 exceed the amount that such Indemnifying Party would have been
      obligated to pay by way of indemnification if the indemnification provided
      for
      under Section 6(a) or 6(b) hereof had been available under the
      circumstances.

     

    The
      Company and the Holders agree that it would not be just and equitable if
      contribution pursuant to this Section 7 were determined by pro rata allocation
      (even if the Holders were treated as one entity for such purpose) or by any
      other method of allocation which does not take account of the equitable
      considerations referred to in the immediately preceding paragraphs. The amount
      paid or payable by an Indemnified Party as a result of the losses, claims,
      damages and liabilities referred to in the immediately preceding paragraphs
      shall be deemed to include, subject to the limitations set forth above, any
      legal or other expenses reasonably incurred by such Indemnified Party in
      connection with investigating or defending any such action or claim.
      Notwithstanding the provisions of this Section, no Holder shall be required
      to
      contribute any amount in excess of the amount by which in the case of any
      Holder, the net proceeds received by such Holder from the sale of Registrable
      Securities pursuant to the registration statement in question. No person guilty
      of fraudulent misrepresentation (within the meaning of Section 11(f) of the
      Securities Act) shall be entitled to contribution from any person who was not
      guilty of such fraudulent misrepresentation.

     

    8.
       Survival.
      The
      indemnity and contribution agreements contained in Sections 6 and 7 shall remain
      operative and in full force and effect regardless of (i) any termination of
      this
      Agreement, the Purchase Agreement or the Placement Agreement and (ii) the
      consummation of the sale or successive resales of the Registrable
      Securities.

     

    9.
       Information
      by Holders.
      As a
      condition to the obligations of the Company to complete any registration
      pursuant to this Agreement with respect to the Registrable Securities of each
      Holder, such Holder will furnish to the Company such information regarding
      itself, the Registrable Securities held by it and the intended methods of
      disposition of the Registrable Securities held by it as is reasonably required
      by the Company to effect the registration of the Registrable Securities. At
      least five business days prior to the first anticipated filing date of a
      Registration Statement for any registration under this Agreement, the Company
      will notify each Holder of the information the Company requires from that Holder
      whether or not such Holder has elected to have any of its Registrable Securities
      included in the Registration Statement. If the Company has not received the
      requested information from a Holder by the business day prior to the anticipated
      filing date, then the Company may file the Registration Statement without
      including comments from, or requested of, that Holder.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    10.
       Further
      Assurances.
      Each
      Holder will cooperate with the Company, as reasonably requested by the Company,
      in connection with the preparation and filing of any Registration Statement
      hereunder, unless such Holder has notified the Company in writing of such
      Holder’s irrevocable election to exclude all of such Holder’s Registrable
      Securities from such Registration Statement.

     

    11.
       Suspension
      of Sales.
      Upon
      receipt of any notice from the Company under Section 2(b)(v) or 2(c), each
      Holder will immediately discontinue disposition of Registrable Securities
      pursuant to the Registration Statement covering such Registrable Securities
      until (i) it receives copies of a supplemented or amended prospectus
      contemplated by Sections 2(b)(v) or (ii) the Company advises the Holder that
      a
      suspension of sales under Section 2(c) has terminated. If so directed by the
      Company, each Holder will deliver to the Company (at the expense of the Company)
      or destroy all copies in the Holder’ s possession (other than a limited number
      of file copies) of the prospectus covering such Registrable Securities that
      is
      current at the time of receipt of such notice.

     

    12.
       Replacement
      Certificates.
      The
      certificate(s) representing the Registrable Securities held by the Holder may
      be
      exchanged by the Holder at any time and from time to time for certificates
      with
      different denominations representing an equal aggregate number of Registrable
      Securities of the same tenor, as reasonably requested by such Holder upon
      surrendering the same. No service charge will be made for such registration
      or
      transfer or exchange. Upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of certificates
      evidencing any Registrable Securities, and, in the case of loss, theft or
      destruction, of indemnity reasonably satisfactory to it, or upon surrender
      and
      cancellation of such certificate if mutilated, the Company will make and deliver
      a new certificate of like tenor and dated as of such cancellation at no charge
      to the holder.

     

    13.
       Transfer
      or Assignment.
      Except
      as otherwise provided herein, this Agreement shall be binding upon and inure
      to
      the benefit of the parties and their successors and permitted assigns. The
      rights granted to the Holder by the Company under this Agreement to cause the
      Company to register Registrable Securities may be transferred or assigned (in
      whole or in part) to a transferee or assignee of the Debenture, or Registrable
      Securities, and all other rights granted to the Holder by the Company hereunder
      may be transferred or assigned to any transferee or assignee of the Debenture,
      or Registrable Securities; provided in each case that (i) the Company is given
      written notice by the Holder at the time of or within a reasonable time after
      such transfer or assignment, stating the name and address of said transferee
      or
      assignee and identifying the securities with respect to which such registration
      rights are being transferred or assigned; and provided further that the
      transferee or assignee of such rights agrees in writing to be bound by the
      registration provisions of this Agreement, (ii) such transfer or assignment
      is
      not made under the Registration Statement or Rule 144, (iii) such transfer
      is
      made according to the applicable requirements of the Purchase Agreement, and
      (iv) the transferee has provided to the Company an investor questionnaire (or
      equivalent document) evidencing that the transferee is a “qualified
      institutional buyer” as defined in Rule 144A under the Securities Act or an
“accredited investor” as defined in Rule 501(a)(1),(2),(3), or (7) of Regulation
      D.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    14.
       Miscellaneous.

     

    (a)
       Remedies.
      The
      Company and the Holders acknowledge and agree that irreparable damage would
      occur in the event that any of the provisions of this Agreement were not
      performed in accordance with their specific terms or were otherwise breached.
      It
      is accordingly agreed that the parties shall be entitled to an injunction or
      injunctions to prevent or cure breaches of the provisions of this Agreement
      and
      to enforce specifically the terms and provisions hereof, this being in addition
      to any other remedy to which any of them may be entitled by law or
      equity.

     

    (b)
       Jurisdiction.
      The
      Company and each Holder (i) hereby irrevocably submits to the exclusive
      jurisdiction of the United States District Court, the New York state courts
      and
      other courts of the United States sitting in New York County, New York for
      the
      purposes of any suit, action or proceeding arising out of or relating to this
      Agreement and (ii) hereby waives, and agrees not to assert in any such suit
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of such court, that the suit, action or proceeding is brought
      in an
      inconvenient forum or that the venue of the suit, action or proceeding is
      improper. The Company and the Holder consent to process being served in any
      such
      suit, action or proceeding by mailing a copy thereof 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 in this paragraph shall affect or limit any right to serve
      process in any other manner permitted by law.

     

    (c)
       Notices.
      Any
      notice or other communication required or permitted to be given hereunder shall
      be in writing by facsimile, mail or personal delivery and shall be effective
      upon actual receipt of such notice. The addresses for such communications shall
      be:

     

    to
      the
      Company:

     

    USTelematics,
      Inc.

    335
      Richert Drive

    Wood
      Dale, IL 60109

    Attn:
      Howard Leventhal

    Fax:
      (312) 896-9235

    

    with
      a
      copy to:

     

    Alan
      W.
      Peryam, LLC 

    1120
      Lincoln St, Ste 1000 

    Denver
      Colorado 80203  

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    If
      to the
      Purchasers, to the addresses set forth on Schedule I to the Purchase
      Agreement:

    

    with
      a
      copy to:

    

    Wollmuth
      Maher Deutsch LLP

    500
      Fifth
      Avenue, 12th Floor

    New
      York,
      New York 10110

    Facsimile:
      (212) 382-0050

    Attn:
      Rory M. Deutsch

    

    Any
      party
      hereto may from time to time change its address for notices by giving at least
      five days’ written notice of such changed address to the other parties hereto.

     

    (d)
       Waivers.
      No
      waiver by any party of any default with respect to any provision, condition
      or
      requirement of this Agreement shall be deemed to be a continuing waiver in
      the
      future or a waiver of any other provision, condition or requirement hereof,
      nor
      shall any delay or omission of any party to exercise any right hereunder in
      any
      manner impair the exercise of any such right accruing to it thereafter. The
      representations and warranties and the agreements and covenants of the Company
      and each Holder contained herein shall survive the Closing. 

     

    (e)
       Execution
      in Counterpart.
      This
      Agreement may be executed in two or more counterparts, all of which shall be
      considered one and the same agreement, it being understood that all parties
      need
      not sign the same counterpart.

     

    (f)
       Signatures.
      Facsimile signatures shall be valid and binding on each party submitting the
      same.

     

    (g)
       Entire
      Agreement; Amendment.
      This
      Agreement, together with the Purchase Agreement, the Debentures, , and the
      agreements and documents contemplated hereby and thereby, contains the entire
      understanding and agreement of the parties, and may not be amended, modified
      or
      terminated except by a written agreement signed by the Company plus the Holders
      of 85% of the Registrable Securities (determined on a fully-diluted, as
      converted basis).

     

    (h)
       Governing
      Law.
      This
      Agreement and the validity and performance of the terms hereof shall be governed
      by and construed in accordance with the laws of the State of New York applicable
      to contracts executed and to be performed entirely within such state, except
      to
      the extent that the law of the State of Delaware regulates the Company’s
      issuance of securities.

     

    (i)
       Jury
      Trial.
      EACH
      PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.

     

    (j)
       Titles.
      The
      titles used in this Agreement are used for convenience only and are not to
      be
      considered in construing or interpreting this Agreement.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    (k)
       No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rule of strict construction
      will
      be applied against any party.

     

    IN
      WITNESS WHEREOF,
      the
      undersigned have caused this Agreement to be executed as of the date first
      written above.

     

    COMPANY:

     

    

    USTELEMATICS,
      INC. 

    

    By:

    
      
        

      

    

    Name:
      Howard E. Leventhal

    Title:
      Chief Executive Officer, President

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    COUNTERPART
      SIGNATURE PAGE

    TO
      REGISTRATION RIGHTS AGREEMENT,

    DATED
      DECEMBER __, 2006,

    AMONG
      USTELEMATICS, INC. AND

    THE
      “HOLDERS” IDENTIFIED THEREIN

    

    The
      undersigned hereby executes and delivers the Registration Rights Agreement
      to
      which this Signature Page is attached, which, together with all counterparts
      of
      the Registration Rights Agreement and Signature Pages of the Company and other
      “Holders” under the Registration Rights Agreement, shall constitute one and the
      same document in accordance with the terms of the Registration Rights
      Agreement.

    
      	 	 	 
	 	 
	 
 	 HOLDER:
 	
               

              
                

              

              
 

            
	 	
              By:  

            	 
	 	
              
Name:
	 	Title:

    

    

    
      
        
        

      

      
        19Exhibit
      10.4

     

    Exhibit
      D

    

    AMENDED
      AND RESTATED SECURITY AGREEMENT

    

    1. Identification.

    

    This
      Amended and Restated Security Agreement (the “Agreement”), dated as of
December
      7,
      2006,
      is entered into by and between USTelematics,
      Inc., a
      Delaware corporation (“Parent”), the Subsidiaries of the Parent identified on
      Annex I hereto (each, a “Guarantor” and, together with Parent, each, a “Debtor”
and, collectively, the “Debtors”), and Axiom Capital Management, Inc., as
      collateral agent acting in the manner and to the extent described in the
      Collateral Agent Agreement defined below (the “Collateral Agent”), for the
      benefit of the parties identified on Schedule
      A
      hereto
      (collectively, the “Lenders”). This Agreement amends and restates in its
      entirety the Security Agreement dated as of April 14, 2006 by and between the
      Debtors and the Collateral Agent for the benefit of the Lenders identified
      therein. 

    

    2. Recitals.

    

    2.1 The
      Lenders have made, are making and will be making loans to Parent (the “Loans”).
      It is beneficial to each Debtor that the Loans were made and are being
      made.

    

    2.2 The
      Loans
      are and will be evidenced by certain convertible debentures (each a “Debenture”)
      issued by Parent on or about the date of and after the date of this Agreement
      pursuant to a securities purchase agreement (“Securities Purchase Agreement”) to
      which Parent and Lenders are parties. The Debentures are further identified
      on
Schedule
      A
      hereto
      and were and will be executed by Parent as “Borrower” or “Debtor” for the
      benefit of each Lender as the “Holder” or “Lender” thereof. Schedule
      A
      hereto
      may be amended to include such other Lenders who become parties hereto and
      sign
      this Agreement, the Collateral Agent Agreement and any other agreement
      reasonably requested by the Collateral Agent, who will have purchased Debentures
      pursuant to the Securities Purchase Agreement.

    

    2.3 In
      consideration of the Loans made and to be made by Lenders to Parent and for
      other good and valuable consideration, and as security for the performance
      by
      Parent of its obligations under the Debentures and as security for the repayment
      of the Loans and all other sums due from Debtors to Lenders arising under the
      Transaction Documents (as defined in the Securities Purchase Agreement), and
      any
      other agreement between or among them (collectively, the “Obligations”), each
      Debtor, for good and valuable consideration, receipt of which is acknowledged,
      has agreed to grant to the Collateral Agent, for the benefit of the Lenders,
      a
      security interest in the Collateral (as such term is hereinafter defined),
      on
      the terms and conditions hereinafter set forth.

    

    2.4 The
      Lenders have appointed Axiom Capital Management, Inc. as Collateral Agent
      pursuant to that certain Collateral Agent Agreement dated at or about December
      6, 2006, 2006 (“Collateral Agent Agreement”), among the Lenders and Collateral
      Agent.

     

    
      
        
        

      

      
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    2.5 The
      following defined terms which are defined in the Uniform Commercial Code in
      effect in the State of New York on the date hereof are used herein as so
      defined: Accounts, Chattel Paper, Documents, Equipment, General Intangibles,
      Instruments, Inventory and Proceeds.

    

    3. Grant
      of General Security Interest in Collateral.

    

    3.1 
      As
      security for the Obligations of Debtors, each Debtor hereby grants the
      Collateral Agent, for the benefit of the Lenders, a security interest in the
      Collateral.

    

    3.2 “Collateral”
      shall mean all of the following property of Debtors:

    

    (A) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of all Accounts, Goods, real or personal property, all present and
      future books and records relating to the foregoing and all products and Proceeds
      of the foregoing, and as set forth below:

    

    (i) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of all: Accounts, interests in goods represented by Accounts, returned,
      reclaimed or repossessed goods with respect thereto and rights as an unpaid
      vendor; contract rights; Chattel Paper; investment property; General Intangibles
      (including but not limited to, tax and duty claims and refunds, registered
      and
      unregistered patents, trademarks, service marks, certificates, copyrights,
      trade
      names, applications for the foregoing, trade secrets, goodwill, processes,
      drawings, blueprints, customer lists, licenses, whether as licensor or licensee,
      choses in action and other claims, and existing and future leasehold interests
      in equipment, real estate and fixtures); Documents; Instruments; letters of
      credit, bankers’ acceptances or guaranties; cash moneys, deposits; securities,
      bank accounts, deposit accounts, credits and other property now or hereafter
      owned or held in any capacity by Debtors, as well as agreements or property
      securing or relating to any of the items referred to above;

    

    (ii) Goods:
      All now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of goods, including, but not limited to:

    

    (a)
       All
      Inventory, wherever located, whether now owned or hereafter acquired, of
      whatever kind, nature or description, including all raw materials,
      work-in-process, finished goods, and materials to be used or consumed in
      Debtors’ business; finished goods, timber cut or to be cut, oil, gas,
      hydrocarbons, and minerals extracted or to be extracted, and all names or marks
      affixed to or to be affixed thereto for purposes of selling same by the seller,
      manufacturer, lessor or licensor thereof and all Inventory which may be returned
      to any Debtor by its customers or repossessed by any Debtor and all of Debtors’
right, title and interest in and to the foregoing (including all of a Debtor’s
      rights as a seller of goods);

    

    (b) All
      Equipment and fixtures, wherever located, whether now owned or hereafter
      acquired, including, without limitation, all machinery, furniture and fixtures,
      and any and all additions, substitutions, replacements (including spare parts),
      and accessions thereof and thereto (including, but not limited to Debtors’
rights to acquire any of the foregoing, whether by exercise of a purchase option
      or otherwise);

     

    
      
        
        

      

      
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    (iii) Property:
      All now
      owned and hereafter acquired right, title and interests of Debtors in, to and
      in
      respect of any other personal property in or upon which a Debtor has or may
      hereafter have a security interest, lien or right of setoff; 

    

    (iv) Books
      and Records:
      All
      present and future books and records relating to any of the above including,
      without limitation, all computer programs, printed output and computer readable
      data in the possession or control of the Debtors, any computer service bureau
      or
      other third party; and

    

    (v) Products
      and Proceeds:
      All
      products and Proceeds of the foregoing in whatever form and wherever located,
      including, without limitation, all insurance proceeds and all claims against
      third parties for loss or destruction of or damage to any of the
      foregoing.

    

    (B) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of the following:

    

    (i) the
      shares of stock, partnership interests, member interests or other equity
      interests at any time and from time to time acquired by Debtors of any and
      all
      entities now or hereafter existing, (such entities, being hereinafter referred
      to collectively as the “Pledged Issuers” and individually as a “Pledged
      Issuer”), the certificates representing such shares, partnership interests,
      member interests or other interests, all options and other rights, contractual
      or otherwise, in respect thereof and all dividends, distributions, cash,
      instruments, investment property and other property from time to time received,
      receivable or otherwise distributed in respect of or in exchange for any or
      all
      of such shares, partnership interests, member interests or other
      interests;

    

    (ii) all
      additional shares of stock, partnership interests, member interests or other
      equity interests from time to time acquired by Debtors, of any Pledged Issuer,
      the certificates representing such additional shares, all options and other
      rights, contractual or otherwise, in respect thereof and all dividends,
      distributions, cash, instruments, investment property and other property from
      time to time received, receivable or otherwise distributed in respect of or
      in
      exchange for any or all of such additional shares, interests or equity;
      and

    

    (iii) all
      security entitlements of Debtors in, and all Proceeds of any and all of the
      foregoing in each case, whether now owned or hereafter acquired by a Debtor
      and
      howsoever its interest therein may arise or appear (whether by ownership,
      security interest, lien, claim or otherwise).

    

    Notwithstanding
      anything to the contrary contained herein or any Transaction Document,
      Collateral shall not include any personal property which is, or at the time
      of a
      Debtor’s acquisition thereof shall be subject to a purchase money mortgage or
      other purchase money lien or security interest, but only to the extent of the
      initial dollar amount such purchase money mortgage or lien.

     

    
      
        
        

      

      
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    3.3 The
      Collateral Agent is hereby specifically authorized, after the Maturity Date
      (defined in the Debentures) accelerated or otherwise, or after an Event of
      Default (as defined herein) and the expiration of any applicable cure period,
      to
      transfer any Collateral into the name of the Collateral Agent and to take any
      and all action deemed advisable to the Collateral Agent to remove any transfer
      restrictions affecting the Collateral.

    

    4. Perfection
      of Security Interest.

    

    4.1 Each
      Debtor shall prepare, execute and deliver to the Collateral Agent UCC-1
      Financing Statements. The Collateral Agent is instructed to prepare and file
      at
      each Debtor’s cost and expense, financing statements in such jurisdictions
      deemed advisable to the Collateral Agent, including but not limited to the
      State
      of Delaware. The Financing Statements are deemed to have been filed for the
      benefit of the Collateral Agent and Lenders identified on Schedule
      A
      hereto.

    

    4.2 The
      Parent shall deliver to Collateral Agent promptly stock certificates
      representing all of the shares of outstanding capital stock of each Guarantor
      (the “Securities”). All such certificates shall be held by or on behalf of
      Collateral Agent pursuant hereto and shall be delivered in suitable form for
      transfer by delivery, or shall be accompanied by duly executed instruments
      of
      transfer or assignment or undated stock powers executed in blank, all in form
      and substance satisfactory to Collateral Agent. 

    

    4.3 
      All
      other certificates and instruments constituting Collateral from time to time
      required to be pledged to Collateral Agent pursuant to the terms hereof (the
      “Additional Collateral”) shall be delivered to Collateral Agent promptly upon
      receipt thereof by or on behalf of Debtors. All such certificates and
      instruments shall be held by or on behalf of Collateral Agent pursuant hereto
      and shall be delivered in suitable form for transfer by delivery, or shall
      be
      accompanied by duly executed instruments of transfer or assignment or undated
      stock powers executed in blank, all in form and substance satisfactory to
      Collateral Agent. If any Collateral consists of uncertificated securities,
      unless the immediately following sentence is applicable thereto, Debtors shall
      cause Collateral Agent (or its custodian, nominee or other designee) to become
      the registered holder thereof, or cause each issuer of such securities to agree
      that it will comply with instructions originated by Collateral Agent with
      respect to such securities without further consent by Debtors. If any Collateral
      consists of security entitlements, Debtors shall transfer such security
      entitlements to Collateral Agent (or its custodian, nominee or other designee)
      or cause the applicable securities intermediary to agree that it will comply
      with entitlement orders by Collateral Agent without further consent by Debtors.
      

    

    4.4 Within
      five (5) days after the receipt by a Debtor of any Additional Collateral, a
      Pledge Amendment, duly executed by such Debtor, in substantially the form of
      Annex I hereto (a “Pledge Amendment”), shall be delivered to Collateral Agent in
      respect of the Additional Collateral to be pledged pursuant to this Agreement.
      Each Debtor hereby authorizes Collateral Agent to attach each Pledge Amendment
      to this Agreement and agrees that all certificates or instruments listed on
      any
      Pledge Amendment delivered to Collateral Agent shall for all purposes hereunder
      constitute Collateral.

    

    4.5 If
      a
      Debtor shall receive, by virtue of Debtor being or having been an owner of
      any
      Collateral, any (i) stock certificate (including, without limitation, any
      certificate representing a stock dividend or distribution in connection with
      any
      increase or reduction of capital, reclassification, merger, consolidation,
      sale
      of assets, combination of shares, stock split, spin-off or split-off),
      promissory note or other instrument, (ii) option or right, whether as an
      addition to, substitution for, or in exchange for, any Collateral, or otherwise,
      (iii) dividends payable in cash (except such dividends permitted to be retained
      by Debtor pursuant to Section 5.1 hereof) or in securities or other property
      or
      (iv) dividends or other distributions in connection with a partial or total
      liquidation or dissolution or in connection with a reduction of capital, capital
      surplus or paid-in surplus, Debtor shall receive such stock certificate,
      promissory note, instrument, option, right, payment or distribution in trust
      for
      the benefit of Collateral Agent, shall segregate it from Debtor’s other property
      and shall deliver it forthwith to Collateral Agent, in the exact form received,
      with any necessary endorsement and/or appropriate stock powers duly executed
      in
      blank, to be held by Collateral Agent as Collateral and as further collateral
      security for the Obligations.

    

    
      
        
        

      

      
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    5. Distribution.

    

    5.1 So
      long
      as no Event of Default exists, Debtors shall be entitled to exercise all voting
      power and receive payments pertaining to any of the Collateral, provided such
      exercise is not contrary to the interests of the Lenders and does not impair
      the
      Collateral.

    

    5.2. At
      any
      time an Event of Default exists or has occurred, all rights of Debtors, upon
      notice given by Collateral Agent, to exercise the voting power and receive
      payments, which it would otherwise be entitled to pursuant to Section 5.1,
      shall
      cease and all such rights shall thereupon become vested in Collateral Agent,
      which shall thereupon have the sole right to exercise such voting power and
      receive such payments.

    

    5.3 All
      dividends, distributions, interest and other payments which are received by
      Debtors contrary to the provisions of Section 5.2 shall be received in trust
      for
      the benefit of Collateral Agent as security and Collateral for payment of the
      Obligations, shall be segregated from other funds of Debtors, and shall be
      forthwith paid over to Collateral Agent as Collateral in the exact form received
      with any necessary endorsement and/or appropriate stock powers duly executed
      in
      blank, to be held by Collateral Agent as Collateral and as further collateral
      security for the Obligations.

    

    6. Further
      Action By Debtors; Covenants and Warranties.

    

    6.1 Collateral
      Agent at all times shall have a perfected security interest in the Collateral,
      the Securities, and the Additional Collateral (the “Perfected Collateral”). Each
      Debtor has and will continue to have full title to the Collateral free from
      any
      other liens, leases, encumbrances, judgments or other claims. Collateral Agent’s
      security interest in the Collateral constitutes and will continue to constitute
      a first, prior and indefeasible security interest in favor of Collateral Agent.
      Each Debtor will do all acts and things, and will execute and file all
      instruments (including, but not limited to, security agreements, financing
      statements, continuation statements, etc.) reasonably requested by Collateral
      Agent to establish, maintain and continue the perfected security interest of
      Collateral Agent in the Perfected Collateral, and will promptly on demand,
      pay
      all costs and expenses of filing and recording, including the costs of any
      searches reasonably deemed necessary by Collateral Agent from time to time
      to
      establish and determine the validity and the continuing priority of the security
      interest of Collateral Agent, and also pay all other claims and charges that,
      in
      the opinion of Collateral Agent, exercised in good faith, are reasonably likely
      to materially prejudice, imperil or otherwise affect the Collateral or
      Collateral Agent’s or Lenders’ security interests therein.

     

    
      
        
        

      

      
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    6.2 Other
      than in the ordinary course of business, for fair value and in cash, and except
      for Collateral which is substituted by assets of identical or greater value
      (with the consent of the Collateral Agent) or which has become obsolete or
      is of
      inconsequential value, each Debtor will not sell, transfer, assign or pledge
      those items of Collateral (or allow any such items to be sold, transferred,
      assigned or pledged), without the prior written consent of Collateral Agent
      other than a transfer of the Collateral to a wholly-owned subsidiary or to
      another Debtor on prior notice to Collateral Agent, and provided the Collateral
      remains subject to the security interest herein described. Although Proceeds
      of
      Collateral are covered by this Agreement, this shall not be construed to mean
      that Collateral Agent consents to any sale of the Collateral, except as provided
      herein. Sales of Collateral in the ordinary course of business shall be free
      of
      the security interest of Lenders and Collateral Agent and Lenders and Collateral
      Agent shall promptly execute such documents (including without limitation
      releases and termination statements) as may be required by Debtors to evidence
      or effectuate the same.

    

    6.3 Each
      Debtor will, at all reasonable times during regular business hours and upon
      reasonable notice, allow Collateral Agent or its representatives free and
      complete access to the Collateral and all of such Debtor’s records which in any
      way relate to the Collateral, for such inspection and examination as Collateral
      Agent reasonably deems necessary.

    

    6.4 Each
      Debtor, at its sole cost and expense, will protect and defend this Security
      Agreement, all of the rights of Collateral Agent and Lenders hereunder, and
      the
      Collateral against the claims and demands of all other persons.

    

    6.5 Debtors
      will promptly notify Collateral Agent of any levy, distraint or other seizure
      by
      legal process or otherwise of any part of the Collateral, and of any threatened
      or filed claims or proceedings that are reasonably likely to affect or impair
      any of the rights of Collateral Agent under this Security Agreement in any
      material respect.

    

    6.6 Each
      Debtor, at its own expense, will obtain and maintain in force insurance policies
      covering losses or damage to those items of Collateral which constitute physical
      personal property, which insurance shall be of the types customarily insured
      against by companies in the same or similar business, similarly situated, in
      such amounts (with such deductible amounts) as is customary for such companies
      under the same or similar circumstances, similarly situated. Debtors shall
      make
      the Collateral Agent a loss payee thereon to the extent of its interest in
      the
      Collateral. Collateral Agent is hereby irrevocably (until the Obligations are
      paid in full) appointed each Debtor’s attorney-in-fact to endorse any check or
      draft that may be payable to such Debtor as proceeds of such insurance so that
      Collateral Agent may collect the proceeds payable for any loss under such
      insurance. The proceeds of such insurance, less any costs and expenses incurred
      or paid by Collateral Agent in the collection thereof, shall be applied either
      toward the cost of the repair or replacement of the items damaged or destroyed,
      or on account of any sums secured hereby, whether or not then due or
      payable.

     

    
      
        
        

      

      
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    6.7 Collateral
      Agent may, at its option, and without any obligation to do so, pay, perform
      and
      discharge any and all amounts, costs, expenses and liabilities herein agreed
      to
      be paid or performed by Debtor. Upon
      Debtor’s failure
      to do
      so, all amounts expended by Collateral Agent in so doing shall become part
      of
      the Obligations secured hereby, and shall be immediately due and payable by
      Debtor to Collateral Agent upon demand
      and
      shall
      bear interest at the lesser of 15% per annum or the highest legal amount from
      the dates of such expenditures until paid.

    

    6.8 Upon
      the
      request of Collateral Agent, Debtors will furnish to Collateral Agent within
      five (5) business days thereafter, or to any proposed assignee of this Security
      Agreement, a written statement in form reasonably satisfactory to Collateral
      Agent, duly acknowledged, certifying the amount of the principal and interest
      and any other sum then owing under the Obligations, whether to its knowledge
      any
      claims, offsets or defenses exist against the Obligations or against this
      Security Agreement, or any of the terms and provisions of any other agreement
      of
      Debtors securing the Obligations. In connection with any assignment by
      Collateral Agent of this Security Agreement, each Debtor hereby agrees to cause
      the insurance policies required hereby to be carried by such Debtor, if any,
      to
      be endorsed in form satisfactory to Collateral Agent or to such assignee, with
      loss payable clauses in favor of such assignee, and to cause such endorsements
      to be delivered to Collateral Agent within ten (10) calendar days after request
      therefor by Collateral Agent.

    

    6.9 Each
      Debtor will, at its own expense, make, execute, endorse, acknowledge, file
      and/or deliver to the Collateral Agent from time to time such vouchers,
      invoices, schedules, confirmatory assignments, conveyances, financing
      statements, transfer endorsements, powers of attorney, certificates, reports
      and
      other reasonable assurances or instruments and take further steps relating
      to
      the Collateral and other property or rights covered by the security interest
      hereby granted, as the Collateral Agent may reasonably require to perfect its
      security interest hereunder.

    

    6.10 Debtors
      represent and warrant that they are the true and lawful exclusive owners of
      the
      Collateral, free and clear of any liens and encumbrances.

    

    6.11 Each
      Debtor hereby agrees not to divest itself of any right under the Collateral
      except as permitted herein absent prior written approval of the Collateral
      Agent, except to a subsidiary organized and located in the United States on
      prior notice to Collateral Agent provided the Collateral remains subject to
      the
      security interest herein described.

     

    6.12 Each
      Debtor shall cause each Subsidiary of such Debtor in existence on the date
      hereof and each Subsidiary not in existence on the date hereof to execute and
      deliver to Collateral Agent promptly and in any event within 10 days after
      the
      formation, acquisition or change in status thereof (A) a guaranty guaranteeing
      the Obligations and (B) if requested by Collateral Agent, a security and pledge
      agreement substantially in the form of this Agreement together with (x)
      certificates evidencing all of the capital stock of each Subsidiary of and
      any
      entity owned by such Subsidiary, (y) undated stock powers executed in blank
      with
      signatures guaranteed, and (z) such opinion of counsel and such approving
      certificate of such Subsidiary as Collateral Agent may reasonably request in
      respect of complying with any legend on any such certificate or any other matter
      relating to such shares and (C) such other agreements, instruments, approvals,
      legal opinions or other documents reasonably requested by Collateral Agent
      in
      order to create, perfect, establish the first priority of or otherwise protect
      any lien purported to be covered by any such pledge and security agreement
      or
      otherwise to effect the intent that all property and assets of such Subsidiary
      shall become Collateral for the Obligations. For purposes of this Agreement,
      “Subsidiary”
means,
      with respect to any entity at any date, any corporation, limited or general
      partnership, limited liability company, trust, estate, association, joint
      venture or other business entity) of which more than 50% of (A) the
      outstanding capital stock having (in the absence of contingencies) ordinary
      voting power to elect a majority of the board of directors or other managing
      body of such entity, (B) in the case of a partnership or limited liability
      company, the interest in the capital or profits of such partnership or limited
      liability company or (C) in the case of a trust, estate, association, joint
      venture or other entity, the beneficial interest in such trust, estate,
      association or other entity business is, at the time of determination, owned
      or
      controlled directly or indirectly through one or more intermediaries, by such
      entity. Annex
      I annexed hereto contains a list of all Subsidiaries of the Debtors as of the
      date of this Agreement.

     

    
      
        
        

      

      
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    6.13
      Without limiting the generality of the other obligations of the
      Borrower hereunder, the  Borrower  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 Collateral Agent notice whenever it acquires (whether
      absolutely or by license) or creates any additional material intellectual
      property.  

    

    7. Power
      of Attorney.

    

    At
      any
      time an Event of Default exists or has occurred, each Debtor hereby irrevocably
      constitutes and appoints the Collateral Agent as the true and lawful attorney
      of
      such Debtor, with full power of substitution, in the place and stead of such
      Debtor and in the name of such Debtor or otherwise, at any time or times, in
      the
      discretion of the Collateral Agent, to take any action and to execute any
      instrument or document which the Collateral Agent may deem necessary or
      advisable to accomplish the purposes of this Agreement. This power of attorney
      is coupled with an interest and is irrevocable until the Obligations are
      satisfied.

    

    8. Performance
      By The Collateral Agent.

    

    If
      a
      Debtor fails to perform any material covenant, agreement, duty or obligation
      of
      such Debtor under this Agreement, the Collateral Agent may, after any applicable
      cure period, at any time or times in its discretion, take action to effect
      performance of such obligation. All reasonable expenses of the Collateral Agent
      incurred in connection with the foregoing authorization shall be payable by
      Debtors as provided in Paragraph 12.1 hereof. No discretionary right, remedy
      or
      power granted to the Collateral Agent under any part of this Agreement shall
      be
      deemed to impose any obligation whatsoever on the Collateral Agent with respect
      thereto, such rights, remedies and powers being solely for the protection of
      the
      Collateral Agent.

    

    9. Event
      of Default.

    

    An
      event
      of default (“Event of Default”) shall be deemed to have occurred hereunder upon
      the occurrence of any event of default as defined and described in this
      Agreement, in the Debentures, the Securities Purchase Agreement, and any other
      agreement to which Debtor and a Lender are parties. Upon and after any Event
      of
      Default, after the applicable cure period, if any, any or all of the Obligations
      shall become immediately due and payable at the option of the Collateral Agent,
      for the benefit of the Lenders, and the Collateral Agent may dispose of
      Collateral as provided below. A default by Debtor of any of its material
      obligations pursuant to this Agreement and any of the Transaction Documents
      (as
      defined in the Securities Purchase Agreement) shall be an Event of Default
      hereunder and an “Event of Default” as defined in the Debentures, and Securities
      Purchase Agreement.

     

    
      
        
        

      

      
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    10. Disposition
      of Collateral.

    

    Upon
      and
      after any Event of Default which is then continuing,

    

    10.1 The
      Collateral Agent may exercise its rights with respect to each and every
      component of the Collateral, without regard to the existence of any other
      security or source of payment for the Obligations. In addition to other rights
      and remedies provided for herein or otherwise available to it, the Collateral
      Agent shall have all of the rights and remedies of a lender on default under
      the
      Uniform Commercial Code then in effect in the State of New York.

    

    10.2 If
      any
      notice to Debtors of the sale or other disposition of Collateral is required
      by
      then applicable law, five business (5) days prior written notice (which Debtors
      agree is reasonable notice within the meaning of Section 9.612(a) of the Uniform
      Commercial Code) shall be given to Debtors of the time and place of any sale
      of
      Collateral which Debtors hereby agree may be by private sale. The rights granted
      in this Section are in addition to any and all rights available to Collateral
      Agent under the Uniform Commercial Code.

    

    10.3 The
      Collateral Agent is authorized, at any such sale, if the Collateral Agent deems
      it advisable to do so, in order to comply with any applicable securities laws,
      to restrict the prospective bidders or purchasers to persons who will represent
      and agree, among other things, that they are purchasing the Collateral for
      their
      own account for investment, and not with a view to the distribution or resale
      thereof, or otherwise to restrict such sale in such other manner as the
      Collateral Agent deems advisable to ensure such compliance. Sales made subject
      to such restrictions shall be deemed to have been made in a commercially
      reasonable manner.

    

    10.4 All
      proceeds received by the Collateral Agent for the benefit of the Lenders in
      respect of any sale, collection or other enforcement or disposition of
      Collateral, shall be applied (after deduction of any amounts payable to the
      Collateral Agent pursuant to Paragraph 12.1 hereof) against the Obligations
      pro
      rata among the Lenders in proportion to their interests in the Obligations.
      Upon
      payment in full of all Obligations, Debtors shall be entitled to the return
      of
      all Collateral, including cash, which has not been used or applied toward the
      payment of Obligations or used or applied to any and all costs or expenses
      of
      the Collateral Agent incurred in connection with the liquidation of the
      Collateral (unless another person is legally entitled thereto). Any assignment
      of Collateral by the Collateral Agent to Debtors shall be without representation
      or warranty of any nature whatsoever and wholly without recourse. To the extent
      allowed by law, each Lender may purchase the Collateral and pay for such
      purchase by offsetting up to such Lender’s pro rata portion of the purchase
      price with sums owed to such Lender by Debtors arising under the Obligations
      or
      any other source.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    11. Waiver
      of Automatic Stay.
      Debtor
      acknowledges and agrees that should a proceeding under any bankruptcy or
      insolvency law be commenced by or against Debtor, or if any of the Collateral
      should become the subject of any bankruptcy or insolvency proceeding, then
      the
      Collateral Agent should be entitled to, among other relief to which the
      Collateral Agent or Lenders may be entitled under the Debentures, Securities
      Purchase Agreement and any other agreement to which the Debtor, Lenders or
      Collateral Agent are parties, (collectively “Loan Documents”) and/or applicable
      law, an order from the court granting immediate relief from the automatic stay
      pursuant to 11 U.S.C. Section 362 to permit the Collateral Agent to exercise
      all
      of its rights and remedies pursuant to the Loan Documents and/or applicable
      law.
      DEBTOR EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C.
      SECTION 362. FURTHERMORE, DEBTOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER
      11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER
      STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL
      STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE
      COLLATERAL AGENT TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN
      DOCUMENTS AND/OR APPLICABLE LAW. Debtor hereby consents to any motion for relief
      from stay which may be filed by the Collateral Agent in any bankruptcy or
      insolvency proceeding initiated by or against Debtor, and further agrees not
      to
      file any opposition to any motion for relief from stay filed by the Collateral
      Agent. Debtor represents, acknowledges and agrees that this provision is a
      specific and material aspect of this Agreement, and that the Collateral Agent
      would not agree to the terms of this Agreement if this waiver were not a part
      of
      this Agreement. Debtor further represents, acknowledges and agrees that this
      waiver is knowingly, intelligently and voluntarily made, that neither the
      Collateral Agent nor any person acting on behalf of the Collateral Agent has
      made any representations to induce this waiver, that Debtor has been represented
      (or has had the opportunity to be represented) in the signing of this Agreement
      and in the making of this waiver by independent legal counsel selected by Debtor
      and that Debtor has had the opportunity to discuss this waiver with counsel.
      Debtor further agrees that any bankruptcy or insolvency proceeding initiated
      by
      Debtor will only be brought in the Federal Court within the Southern District
      of
      New York.

    

    12. Miscellaneous.

    

    12.1 Expenses.
      Debtors
      shall pay to the Collateral Agent, on demand, the amount of any and all
      reasonable expenses, including, without limitation, attorneys’ fees, legal
      expenses and brokers’ fees, which the Collateral Agent may incur in connection
      with (a) sale, collection or other enforcement or disposition of Collateral;
      (b)
      exercise or enforcement of any of the rights, remedies or powers of the
      Collateral Agent hereunder or with respect to any or all of the Obligations
      upon
      breach or threatened breach; or (c) failure by Debtors to perform and observe
      any agreements of Debtors contained herein which are performed by the Collateral
      Agent.

    

    12.2 Waivers,
      Amendment and Remedies.
      No
      course of dealing by the Collateral Agent and no failure by the Collateral
      Agent
      to exercise, or delay by the Collateral Agent in exercising, any right, remedy
      or power hereunder shall operate as a waiver thereof, and no single or partial
      exercise thereof shall preclude any other or further exercise thereof or the
      exercise of any other right, remedy or power of the Collateral Agent. No
      amendment, modification or waiver of any provision of this Agreement and no
      consent to any departure by Debtors therefrom, shall, in any event, be effective
      unless contained in a writing signed by the Collateral Agent, and then such
      waiver or consent shall be effective only in the specific instance and for
      the
      specific purpose for which given. The rights, remedies and powers of the
      Collateral Agent, not only hereunder, but also under any instruments and
      agreements evidencing or securing the Obligations and under applicable law
      are
      cumulative, and may be exercised by the Collateral Agent from time to time
      in
      such order as the Collateral Agent may elect.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    12.3 Notices.
      All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be personally delivered or deemed delivered the first business day after
      being faxed (provided that a copy is delivered by first class mail) to the
      party
      to receive the same at its address set forth below or to such other address
      as
      either party shall hereafter give to the other by notice duly made under this
      Section:

     

    

      
        	
                To
                  Debtors:

              	
                USTelematics,
                  Inc.

              
	 	
                335
                  Richert Drive

              
	 	
                Wood
                  Dale, IL 60191

              
	 	
                Attn:
                  Howard Leventhal, CEO & President

              
	 	
                Fax:
                  (312) 896-9235

              
	 	 
	
                With
                  a copy by telecopier

              	 
	
                only
                  to:

              	
                Alan
                  W. Peryam, LLC

              
	 	
                1120
                  Lincoln Street, Suite 1000

              
	 	
                Denver,
                  CO 80203

              
	 	
                Fax:
                  (303) 866-0999

              
	 	 
	
                To
                  Lenders:

              	
                To
                  the addresses and telecopier numbers set forth

              
	 	
                on
                  Schedule A

              
	 	 
	
                To
                  the Collateral Agent:

              	
                Axiom
                  Capital Management, Inc.

              
	 	
                ________________________________

              
	 	
                ________________________________

              
	 	
                ________________________________

              

      

    

     

    Any
      party
      may change its address by written notice in accordance with this
      paragraph.

    

    12.4 Term;
      Binding Effect.
      This
      Agreement shall (a) remain in full force and effect until payment and
      satisfaction in full of all of the Obligations; (b) be binding upon each Debtor,
      and its successors and permitted assigns; and (c) inure to the benefit of the
      Collateral Agent, for the benefit of the Lenders and their respective successors
      and assigns. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    12.5 Captions.
      The
      captions of Paragraphs, Articles and Sections in this Agreement have been
      included for convenience of reference only, and shall not define or limit the
      provisions hereof and have no legal or other significance
      whatsoever.

    

    12.6 Governing
      Law; Venue; Severability.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without
      regard to conflicts
      of laws principles
      that
      would result in the application of the substantive laws of another
      jurisdiction,
      except
      to the extent that the perfection of the security interest granted hereby in
      respect of any item of Collateral may be governed by the law of another
      jurisdiction. Any legal action or proceeding against a Debtor with respect
      to
      this Agreement may be brought in the courts in the State of New York or of
      the
      United
      States for the Southern District of New York, and, by execution and delivery
      of
      this Agreement, each Debtor hereby irrevocably accepts for itself and in respect
      of its property, generally and unconditionally, the jurisdiction of the
      aforesaid courts. Each Debtor hereby irrevocably waives any objection which
      they
      may now or hereafter have to the laying of venue of any of the aforesaid actions
      or proceedings arising out of or in connection with this Agreement brought
      in
      the aforesaid courts and hereby further irrevocably waives and agrees not to
      plead or claim in any such court that any such action or proceeding brought
      in
      any such court has been brought in an inconvenient forum. If any provision
      of
      this Agreement, or the application thereof to any person or circumstance, is
      held invalid, such invalidity shall not affect any other provisions which can
      be
      given effect without the invalid provision or application, and to this end
      the
      provisions hereof shall be severable and the remaining, valid provisions shall
      remain of full force and effect.

    

    12.7 Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties and supersedes all other
      agreements and understandings, oral or written, with respect to the matters
      contained herein.

    

    12.8 Counterparts/Execution.
      This
      Agreement may be executed in any number of counterparts and by the different
      signatories hereto on separate counterparts, each of which, when so executed,
      shall be deemed an original, but all such counterparts shall constitute but
      one
      and the same instrument. This Agreement may be executed by facsimile signature
      and delivered by facsimile transmission.

    

    13. Intercreditor
      Terms.
      As
      between the Lenders, any distribution under paragraph 10.4 shall be made
      proportionately based upon the remaining principal amount (plus accrued and
      unpaid interest) to each as to the total amount then owed to the Lenders as
      a
      whole. The rights of each Lender hereunder are pari
      passu
      to the
      rights of the other Lenders hereunder. Any recovery hereunder shall be shared
      ratably among the Lenders according to the then remaining principal amount
      owed
      to each (plus accrued and unpaid interest) as to the total amount then owed
      to
      the Lenders as a whole. 

    

    14. Termination;
      Release.
      When
      the Obligations have been indefeasibly paid and performed in full or
      all
      outstanding Debentures have been converted to common stock pursuant to the
      terms
      of the Debentures and the Securities Purchase Agreements,
      this
      Agreement shall terminate, and the Collateral Agent, at the request and sole
      expense of the Debtors, will execute and deliver to the Debtors the proper
      instruments (including UCC termination statements) acknowledging the termination
      of the Security Agreement, and duly assign, transfer and deliver to the Debtors,
      without recourse, representation or warranty of any kind whatsoever, such of
      the
      Collateral, including, without limitation, Securities and any Additional
      Collateral, as may be in the possession of the Collateral Agent.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    15. Collateral
      Agent.

    

    15.1 Collateral
      Agent Powers.
      The
      powers conferred on the Collateral Agent hereunder are solely to protect its
      interest (on behalf of the Lenders) in the Collateral and shall not impose
      any
      duty on it to exercise any such powers.

    

    15.2 Reasonable
      Care.
      The
      Collateral Agent is required to exercise reasonable care in the custody and
      preservation of any Collateral in its possession; provided, however, that the
      Collateral Agent shall be deemed to have exercised reasonable care in the
      custody and preservation of any of the Collateral if it takes such action for
      that purposes as any owner thereof reasonably requests in writing at times
      other
      than upon the occurrence and during the continuance of any Event of Default,
      but
      failure of the Collateral Agent, to comply with any such request at any time
      shall not in itself be deemed a failure to exercise reasonable
      care.

    

    [THIS
      SPACE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the
      undersigned have executed and delivered this Security Agreement, as of the
      date
      first written above.

     

    
      	“DEBTOR”	 	 	“THE
              COLLATERAL AGENT”
	
               

              USTELEMATICS, INC.

              a Delaware corporation

               

            	 	 	
               

              Axiom Capital Management, Inc. 

            
	By:
	 	 	By:

	
              
                

              
Its:	 	 	
              
                

              
Its: 
	
              
                

              

            	 	 	
              
                

              

            

      	
              “SUBSIDIARY”

               

               

            	 	 	“SUBSIDIARY”
	By:
	 	 	By:

	
              
                

              
Its:	 	 	
              
                

              
Its: 
	
              
                

              

            	 	 	
              
                

              

            

    

     

    APPROVED
      BY “LENDERS”:

    

    
      	 	 	 
	
              
                

              

               

               

            	 	
              
                

              

               

               

            
	
              
                

              

            	 	
              
                

              

            

    

     

    This
      Security Agreement may be signed by facsimile signature
      and

    delivered
      by confirmed facsimile transmission.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A TO SECURITY AGREEMENT

    

    
      	
              LENDER

            	 	
              PRINCIPAL
                AMOUNT OF DEBENTURE

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              TOTALS

            	 	 	 	 

    

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    ANNEX
      I

     

    TO

     

    SECURITY
      AGREEMENT

     

    PLEDGE
      AMENDMENT

     

    This
      Pledge Amendment, dated December __ 2006, is delivered pursuant to Section
      4.3
      of the Amended and Restated Security Agreement referred to below. The
      undersigned hereby agrees that this Pledge Amendment may be attached to the
      Amended and Restated Security Agreement, dated December ___, 2006, as it may
      heretofore have been or hereafter may be amended, restated, supplemented or
      otherwise modified from time to time and that the shares listed on this Pledge
      Amendment shall be hereby pledged and assigned to Collateral Agent and become
      part of the Collateral referred to in such Security Agreement and shall secure
      all of the Obligations referred to in such Security Agreement.

     

    
      	
              NAME
                OF ISSUER

            	
               

            	
              JURISDICTION
                OF INCORPORATION

            	
               

            	
              PERCENT
                OWNED BY PARENT

            	
               

            	
              NUMBER
                OF SHARES

            	
               

            	
              CLASS

            	
               

            	
              CERTIFICATE
                NUMBER(S)

            
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

    

    

    
      	 	 	 
	 	USTELEMATICS,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Howard
                E. Leventhal

              Chief
                Executive Officer, President 

            

    
      
        
        

      

      
        16

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