Document:

SECURED
      PROMISSORY NOTE

    

    
      	
              $
                750,000

            	
              March
                12, 2006

            

    

    

    FOR
      VALUE
      RECEIVED, the undersigned, StarInvest Group, Inc., a
      Delaware corporationa
      Nevada
      corporation (the “Company”), hereby promises to pay to the order of Strasbourg
      Pension Tulchin & Wolff (hereinafter,
      with any subsequent holder, the “Holder”), at its principal office located at 33
      Whitehall Street, New York, New York 10004, or at such other place or to such
      other party as the Holder of this Note may from time to time designate in
      writing, the principal sum of Seven Hundred Fifty Thousand dollars ($ 750,000)
      together with interest on the principal balance outstanding from time to time
      at
      the fixed rate of eight percent (8%) per annum, computed daily (the “Loan”). All
      payments of the Loan shall be made in lawful currency of the United States
      and
      in immediately available funds. Interest shall be calculated on the basis of
      the
      actual number of days elapsed over a 360-day year. Except as otherwise defined
      herein, all capitalized terms shall have the meanings ascribed to them in the
      Loan Agreement (as herein defined).

    1. Loan
      Agreement.
      This
      Secured Promissory Note (the “Note”) is being issued under and is entitled to
      the benefits of the Loan and Security Agreement dated as of March 12, 2006
      (the
“Loan Agreement”), to which Loan Agreement reference is hereby made for a
      statement of the rights in respect thereto of the Holder of this Note. The
      Note
      is one of a series of Notes for an aggregate principal amount of up to $ 750,000
      offered by the Company (the “Loans”).

     

    This
      Note
      will be secured by the collateral identified and described in Section 2 of
      the
      Loan Agreement (the “Collateral”), to which Loan Agreement reference is hereby
      made for a statement of the rights in respect thereto of the Holder of this
      Note.

     

    2. Payments/Maturity
      Date.
      Unless
      sooner paid in full, the entire unpaid principal of this Note, together with
      all
      accrued, but unpaid, interest and all other fees, costs, and charges, if any,
      shall be due and payable in full on March 12, 2007 (the “Maturity Date”). No
      payments of principal or interest are required hereunder until the Maturity
      Date
      except as otherwise provided herein or in the Loan Agreement. If any amounts
      due
      under this Note are due on a day which is not a business day, then such amounts
      shall be due on the next following day which is a regular business
      day.

     

    3. Purpose.
      The
      Company shall use the principal of the Loans solely for the purpose of paying
      off outstanding loans and claims against the Company as stated on Schedule
      A
      attached to this Note and up to $300,000 for working capital, for no other
      purpose except upon prior written approval of the Holders of at least 75% of
      the
      principal amount of the Loans. 

     

    4. Application
      of Payments.
      All
      payments on account of the Loan prior to demand or acceleration shall be applied
      first, to any and all costs, expenses, or charges then owed the Holder by the
      Company, including but not limited to any costs incurred by the Holder under
      any
      other document executed as Collateral security for this Note; second, to accrued
      and unpaid interest; third, to the payment of late charges provided herein;
      and
      the balance to the unpaid principal until the full amount of principal and
      interest has been paid in full. All payments so received after demand or
      acceleration shall be applied in such manner as the Holder may determine in
      its
      sole and absolute discretion.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5. Costs
      of Collections.
      If all
      sums due under this Note are not paid in full when due, the Company agrees
      to
      pay, in addition to the sums due hereunder, all costs of collection (including
      reasonable attorneys’ fees and expenses), whether suit be brought or
      not.

     

    6. Prepayment/Acceleration.
      The
      Loan may be prepaid at any time prior to the Maturity Date without premium
      or
      penalty. Any prepayments will be applied as provided in Section 4 of this
      Note.

     

    7. Certain
      Default Remedies.
      Upon
      the occurrence of any event constituting an Event of Default under the terms
      of
      the Loan Agreement, the entire balance of the principal and interest upon this
      Note then owing and unpaid, at the option of the Holder, shall immediately
      become due and payable. Delay on the part of the Holder of this Note in
      execution of the right to declare this obligation due shall not be a waiver
      thereof. In addition, the Holder shall have all other rights and remedies
      available under law and within the terms and provisions of the Loan
      Agreement.

     

    8. Default
      Interest Rate.
      Upon
      the occurrence, and during the continuance of, an Event of Default, the rate
      of
      interest accruing on the unpaid principal balance hereof and accrued interest
      thereon shall be increased to a fixed rate of fifteen percent (15%) per
      annum.

     

    9. Maximum
      Rate of Interest.
      This
      Note is subject to the express condition that at no time shall the Company
      be
      obligated or required to pay interest hereunder at a rate that could subject
      the
      Company to either civil or criminal liability as a result of being in excess
      of
      the maximum rate which the Company is permitted by law to contract or agree
      to
      pay. If, by the terms of this Note, the Company is at any time required or
      obligated to pay interest at a rate in excess of such maximum rate, the rate
      of
      interest under this Note shall be deemed to be immediately reduced to such
      maximum rate and interest payable hereunder shall be computed at such maximum
      rate and the portion of all prior interest payments in excess of such maximum
      rate shall be applied and shall be deemed to have been payments in reduction
      of
      the principal balance of this Note.

     

    10. Preferred
      Stock.
      As an
      incentive for the Holder to make the Loan to the Company, the Holder is entitled
      to receive from Isaac H Sutton, the President and CEO of the Company (“Sutton”)
      and Mr. Sutton shall issue to the Holder on the date hereof, 200,000 shares
      of
      preferred stock, $.001 par value per share (the “Preferred Stock”) for each
      $100,000 of the principal amount of the Holder’s Loan to the Company (prorated
      for amounts not in $100,000 units) solely from Mr. Sutton’s Preferred Stock
      ownership of the Company. The Preferred Stock shall be restricted stock as
      that
      term is defined in Rule 144(a) (3) of the Securities Act of 1933, as amended
      (the “Act”), and cannot be sold, pledged, hypothecated, assigned or otherwise
      disposed of (collectively “Transfer”) without compliance with the registration
      requirements of the Act, and those securities laws of the states of the United
      States which might then be applicable unless an exemption from such registration
      is available and is satisfactory to the Company. Restrictive legends will be
      placed on the certificates representing such Preferred Stock indicating the
      aforementioned Transfer restrictions, and stop transfer instructions will be
      placed against such certificates on the books and transfer records of the
      Company precluding any Transfer of such Preferred Stock. The Holder will provide
      the Company with an Investment Letter in form attached to the Note as Schedule
      B
      referencing the Transfer restrictions as provided in this Section 10. No
      registration rights are applicable or have been provided to the Holder with
      respect to the Preferred Stock which the Holder is obtaining from Mr. Sutton
      as
      provided herein.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    11. Waivers.
      All
      parties to the Loan evidenced by this Note hereby jointly and severally waive
      all exemption rights, whether under any state constitution, homestead exemption
      or otherwise, and also jointly and severally waive demand, presentment for
      payment, notice of dishonor, protest valuation and appraisal, notice of protest,
      notice of dishonor, and any other notice required to be given by law in
      connection with the delivery, acceptance, performance, default or enforcement
      of
      this Note, and consent to all forbearance or waiver of any term hereof or
      release or discharge by the Holder hereof of the Company, substitution or
      exchange of any security for the payment hereof or the failure to act on the
      part of the Holder or any other indulgence shown by the Holder from time to
      time, in one or more instances (without notice to or further assent from the
      Company) and the Company agrees that no such action, failure to act or failure
      to exercise any right or remedy on the part of the Holder shall in any way
      affect or impair the obligations of the Company hereunder or be construed as
      a
      waiver by the Holder of or otherwise affect any of the Holder’s rights under
      this Note, or under any document or instrument evidencing any security for
      payment of this Note. The Company expressly agrees that the Maturity Date hereof
      may be extended from time to time by the written consent of the Holder without
      in any way affecting the liability of the Company.

     

    12. Governing
      Law.
      This
      Note shall be governed by, and construed in accordance with, the laws of the
      State of New York.

     

    13. Severability.
      In the
      event any one or more of the provisions contained in this Note shall, for any
      reason, be held to be invalid, illegal, or unenforceable in any respect, such
      invalidity, illegality, or unenforceability shall not affect any other provision
      of this Note and this Note shall be construed as if such invalid, illegal,
      or
      unenforceable provision had never been contained herein.

     

    14. No
      Oral Modifications or Waivers.
      This
      Note may not be changed orally, but only by an agreement in writing signed
      by
      the parties against whom enforcement of any waiver, change, modification or
      discharge is sought.

     

    15. Due
      Authority and Enforceability.
      The
      representative of the Company subscribing below represents that he has full
      power, authority and legal right to execute and deliver this Note and that
      the
      Loan constitutes a valid and binding obligation of Company.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    16. CONFESSION
      OF JUDGMENT.
      IF THIS
      NOTE IS NOT PAID WHEN DUE AND AFTER THE EXPIRATION WITHOUT CURE OF ANY GRACE
      PERIODS, THE COMPANY HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY CLERK OF
      ANY
      COURT OF RECORD OR ANY ATTORNEY TO ENTER IN ANY COURT OF COMPETENT JURISDICTION
      IN THE STATE OF NEW YORK, OR ANY OTHER STATE OR TERRITORY OF THE UNITED STATES,
      WITHOUT COMPLAINT FILED, JUDGMENT BY CONFESSION AGAINST THE COMPANY AND IN
      FAVOR
      OF THE HOLDER OF THIS NOTE FOR THE ENTIRE AMOUNT OF THIS NOTE THEN REMAINING
      UNPAID (INCLUDING PRINCIPAL, ACCRUED INTEREST AND LATE CHARGES), TOGETHER WITH
      REASONABLE ATTORNEY’S FEES AND COURT COSTS, WITHOUT ISSUANCE OR SERVICE OF
      PROCESS, STAY OF EXECUTION OR RIGHT OF APPEAL, AND EXPRESSLY WAIVING THE BENEFIT
      OF ALL EXEMPTION LAWS (WHETHER BY STATE CONSTITUTION, HOMESTEAD EXEMPTION OR
      OTHERWISE) AND ALL IRREGULARITY OR ERROR IN ENTERING SAID JUDGMENT OR THE
      EXECUTION THEREON AND ALL RIGHTS OF APPEAL AND STAYS OF EXECUTION, AND WILL
      REPRESENT A DEBT JUSTLY DUE THE HOLDER. NO SINGLE EXERCISE OF THE FOREGOING
      POWER TO CONFESS JUDGMENT SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR
      NOT
      ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE OR VOID,
      BUT THE POWER SHALL CONTINUE UNDIMINISHED, AND IT MAY BE EXERCISED FROM TIME
      TO
      TIME AS OFTEN AS THE HOLDER OF THIS NOTE SHALL ELECT, UNTIL SUCH TIME AS THE
      HOLDER OF THIS NOTE SHALL HAVE RECEIVED PAYMENT IN FULL OF ALL INDEBTEDNESS
      OF
      THE COMPANY TO THE HOLDER OF THIS NOTE UNDER THE TERMS HEREOF. THE EXECUTION
      OF
      THIS NOTE WILL BE DEEMED THE EXECUTION OF THE AFFIDAVIT OF CONFESSION OF
      JUDGMENT FOR ENTRY OF THE JUDGMENT WHICH HOLDER MAY ENFORCE IN ANY COURT OF
      COMPETENT JURISDICTION.

     

    17. WAIVER
      OF JURY TRIAL.
      THE
      COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND
      INTENTIONALLY WAIVES THE RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION
      BASED HEREON, OR ARISING OUT OF, OR IN CONNECTION WITH THIS NOTE, THE LOAN,
      THE
      LOAN AGREEMENT AND RELATED DOCUMENTS.
      THIS
      PROVISION WAS SPECIFICALLY BARGAINED FOR AND IS A MATERIAL INDUCEMENT FOR THE
      HOLDER TO EXTEND CREDIT AND MAKE THE LOAN TO THE COMPANY.

     

    18. Assignment.
      This
      Note and the Loan may not be assigned by the Company without the prior written
      consent of the Holder.

     

    19. Binding
      Effect.
      This
      Note shall be binding upon the Company and its successors and assigns and shall
      inure to the benefit of the Holder and its successors and assigns.

     

    20. Headings.
      The
      headings in this Note are for convenience of reference only and shall not define
      or limit any terms or provisions hereof.

     

    21. Company’s
      Acknowledgement.
      The
      Company acknowledges that it has read and understood all the provisions of
      this
      Note, including the Confession of Judgment and Waiver of Jury Trial, and has
      been advised by counsel as necessary and appropriate.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has duly executed this Note as of the day and
      year
      first above written.

     

     

    
      	 	 	 
	ATTEST:	COMPANY:
	 	 
	 	STARINVEST GROUP, INC., a Nevada
              corporation
	 
 	 
 	 
 
	Date: 	By:  	Isaac
              H
              Sutton (SEAL)
	 	
              

              Name: Isaac
                H Sutton

              Title: President
                and CEO

            
	 	 

    

    
      	STATE OF NEW YORK 	)	 	 
	 	)     SS:	 	 
	COUNTY OF NEW YORK 	)	 	 

    

     

    The
      foregoing instrument was acknowledged before me this ____ day of March, 2006
      by
      Isaac H Sutton, the President and CEO of StarInvest Group, Inc., a Nevada
      corporation, on behalf of the corporation.

    

    
      
        	 	 	 
	 	 	 
	 	
                
Notary
                Public
	 	 

      

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Schedule
      A

    

    

    Outstanding
      Indebtedness with Loans/Claims to be Paid

    

     

    Holders

    

    

    
      	 	 	 
	
              Name
                & Address

            	
              Loan

            	
              Preferred
                Stock

            
	 	 	 
	
              Aqua
                Alta Ltd.

              c/o
                Casa Aqua Alta Costa Careyes

              Jalisco,
                Mexico

            	
              $200,000

            	
              400,000
                shs.

            
	 	 	 
	
              David
                L. Cohen

              1800
                Rockaway Avenue

              Hewlett,
                New York 11557-1645

            	
              $150,000

            	
              300,000
                shs.

            
	 	 	 
	
              Marc
                Finkelstein

              26
                Allevard Street

              Lido
                Beach, New York 11561

            	
              $100,000

            	
              200,000
                shs.

            
	 	 	 
	
              Scaroborough
                Ltd.

              c/o
                Euroba Management Ltd.

              73
                Front Street, 4th
                Floor

              Hamilton,
                HM12

              Bermuda

            	
              $
                50,000

            	
              100,000
                shs.

            
	 	 	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      B (To Promissory Note)

    

    

    INVESTMENT
      LETTER

    

    

    STARINVEST
      GROUP, INC.

    

    March
      __,
      2006

    

    

    StarInvest
      Group, Inc.

    122
      East
      42nd
      Street

    Suite2715

    New
      York,
      NY 10168

    

    Gentlemen:

    

    In
      connection with the acquisition by the undersigned of _______ shares of
      preferred stock, $.001 par value (the “Preferred Stock”) of StarInvest Group,
      Inc. (the “Company”), the undersigned, for himself and his successors and
      assigns, represents and agrees as to the following:

    

    The
      undersigned is acquiring the Preferred Stock from Isaac H. Sutton, President
      and
      CEO of the Company, with a view toward investment and not with a view toward
      the
      distribution thereof. The undersigned has acquired the Preferred Stock for
      his
      account and not for the account of any other person or entity.

    

    The
      undersigned understands that he is acquiring and will be owning and holding
      “restricted” shares of Preferred Stock as that term is defined under the federal
      securities laws of the United States and more particularly under Rule 144(a)(3)
      promulgated by the Securities and Exchange Commission (“SEC”) under the
      Securities Act of 1933, as amended (the “Act”). Therefore, the undersigned
      understands and agrees that he will not be able to sell, pledge, hypothecate,
      assign or otherwise dispose of (collectively referred to as “transfer”) the
      Preferred Stock without compliance with the registration requirements of the
      Act, and those securities laws of the states of the United States which might
      then be applicable, unless an exemption therefrom is available and is
      satisfactory to you and your counsel.

    

    The
      undersigned is aware of the fact that restrictive legends shall be placed on
      the
      face of the certificate for the Preferred Stock indicating that the Preferred
      Stock cannot be transferred without such registration or an available exemption;
      and the undersigned is further aware of the fact that stop transfer instructions
      shall be placed against the certificates representing the Preferred Stock on
      the
      books and transfer records of the Company precluding any transfer of the
      Preferred Stock.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      undersigned has been advised and understands that the Preferred Stock has not
      been registered under the Act, nor pursuant to the provisions of the securities
      or other laws of any applicable jurisdiction, and that the Preferred Stock
      has
      been issued to the undersigned in reliance on exemptions for non-public
      offerings as contained in Sections 4(2) or 4(6) of the Act (“private placement”)
      and/or Regulation D thereunder and of the laws of such other jurisdiction as
      may
      be applicable. The undersigned is fully aware that the Preferred Stock is issued
      to the undersigned in reliance upon such exemptions based upon the undersigned’s
      representations set forth herein. The undersigned is fully aware of the
      restrictions on the transferability of the Preferred stock based on the Act
      and
      the state securities laws, and that the undersigned must bear the economic
      risk
      of his investment in the Preferred Stock for an indefinite period of
      time.

    

    The
      undersigned hereby agrees not to make any transfer of the Preferred Stock in
      violation of the Act or the rules promulgated thereunder or under state
      securities laws.

    

    The
      undersigned understands and acknowledges that the Company has not granted him
      the right to include his Preferred Stock in any registration statement or
      qualification (collectively “registration”) with respect to any of his
      securities under federal or state securities laws and the undersigned further
      understands that he has no independent right to request or demand registration
      of the Preferred Stock.

    

    The
      undersigned agrees that the Company may refuse to permit the undersigned to
      transfer any of the Preferred Stock unless (i) there is an effective
      registration statement under the Act covering such transfer; or (ii) the
      undersigned furnishes the Company with an opinion of counsel satisfactory to
      you
      to the effect that registration under the Act or under the law of any applicable
      jurisdiction is not required for such transfer; or (iii) the undersigned
      furnishes proof satisfactory to you that he will make such transfer only in
      compliance with Rule 144 under the Act, and the rules of any other applicable
      jurisdiction if and as then applicable to the Preferred Stock.

    

    The
      undersigned further represents and warrants that he has carefully read this
      investment letter and understands its requirements and other applicable
      limitations upon the transfer of the Preferred Stock.

    

    The
      undersigned is familiar with the Company’s operations and affairs and, in
      particular, its present financial condition. The undersigned further represents
      to you that he has knowledge and experience in financial and business matters
      and is capable of evaluating the risks in participating with and making the
      investment in the Company and acquiring the Preferred Stock. The undersigned
      is
      familiar with the material facts and financial information necessary to make
      an
      informed judgment as to the merits of making this investment in the
      Company.

    

    The
      foregoing representations and warranties are true and accurate as of this date
      and each such representation and warranty shall survive the acquisition of
      the
      Preferred Stock. The undersigned recognizes that if any of the above
      representations or statements are untrue or misleading or if he violates any
      of
      the terms of this investment letter or the federal securities laws and the
      regulations of the SEC, he may bring about a violation of the federal and state
      securities laws, both on the undersigned’s part and that of the
      Company.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      undersigned agrees to indemnify and hold the Company harmless and your
      respective officers, directors and affiliated persons from any and all damages,
      losses, costs and expenses (including reasonable attorney’s fees) which it, or
      any of them, may incur by reason of a breach of any of the undersigned’s
      representations and warranties contained herein.

    

    All
      references in this Investment Letter to the single number and neuter gender
      shall be deemed to mean and include the plural number and all genders, and
      vice
      versa, unless the context shall otherwise require.

    

    Very
      truly yours,

    

    

    By:
      __________________________________Loan
      and Security Agreement

     

    LOAN
      AND
      SECURITY AGREEMENT made as of the 12th day of March, 2006 between StarInvest
      Group, Inc.,
      a
      Nevada corporation whose principal place of business is located at 3300 North
      A
      Street, Suite 2-210, Midland Texas 79705 (the “Company”), in favor of
      Strasbourger Pearson Tulcin & Wolff Inc., having an address at 33 Whitehall
      Street, 17th
      Floor,
      New York, New York 10004, as agent for the Note holders (the “Secured
      Party”).

     

    Recitals

     

    A. The
      Holders identified in Schedule A attached hereto have loaned monies (the “Loan”
or plural “Loans” and sometimes referred to as “Obligations”) and hold
      promissory notes dated of even date herewith (the “Notes” and singular “Note”)
      in an aggregate principal amount of up to $750,000.

     

    B. As
      an
      inducement to the Holders to make the Loans to the Company, the Company has
      agreed to secure the payment and performance of its obligations under the Notes
      and this Loan Agreement.

     

    C. The
      Holders have appointed the Secured Party to act as their agent under this Loan
      Agreement for the benefit of all Holders.

     

    D. In
      consideration of the Loans and for other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the Company wishes
      to
      grant a security interest in the Collateral to the Secured Party for the benefit
      of all Holders.

     

    Accordingly,
      the parties agree as follows:

     

    
      	
              1.

            	
              Loan
                and Interest.

            

    

     

    
      	 	
              (a)

            	
              Holders
                hereby make Loans to the Company for a term of one (1) year at an
                annual
                interest rate of 8%, as more particularly defined in the Notes, each
                Holder’s Loan, as evidenced by the Note, is reflected on Schedule A
                attached hereto.

            

    

     

    
      	 	
              (b)

            	
              All
                payment of the Obligations shall be made by the Company in United
                States
                currency and in immediately available funds at the respective offices
                or
                residences of the Holders listed on Schedule A attached hereto or
                as
                otherwise noticed by Holders to the Company in accordance with Section
                17
                of this Loan Agreement.

            

    

     

    
      	 	
              (c)

            	
              The
                Company promises to use the proceeds of the Loans solely for (i)
                the
                payment of indebtedness and claims as provided for on Schedule A
                to the
                Notes, and (ii) working capital, the later up to a maximum of $300,000
                of
                the Loans.

            

    

     

    
      	
              2.

            	
              Security
                Interest.

            

    

     

    
      	 	
              (a)

            	
              To
                secure prompt and complete payment and performance of the Obligations
                (as
                defined below), the Company hereby pledges, assigns, transfers and
                grants
                to Secured Party a continuing security interest in all properties,
                assets
                and rights of the Company now owned or at any time hereafter acquired
                by
                the Company or in which the Company now has or at any time in the
                future
                may acquire any right, title or interest, wherever located or situated
                (hereinafter, collectively called the “Collateral”). Without limitation of
                the foregoing, the Collateral includes, among all the assets of the
                Company, the following:

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              i)
                

            	
              all
                Accounts;

            
	
              ii)
                

            	
              all
                As-Extracted Collateral;

            
	
              iii)
                

            	
              all
                Chattel Paper;

            
	
              iv)

            	
              all
                Commercial Tort Claims;

            
	
              v)

            	
              all
                Consignments;

            
	
              vi)

            	
              all
                Contracts; 

            
	
              vii)
                

            	
              all
                Copyrights;

            
	
              viii)

            	
              all
                Copyright Licenses;

            
	
              ix)

            	
              all
                Deposit Accounts;

            
	
              x)

            	
              all
                Documents;

            
	
              xi)

            	
              all
                Encumbrance(s);

            
	
              xii)

            	
              all
                Equipment;

            
	
              xiii)

            	
              all
                Fixtures;

            
	
              xiv)

            	
              all
                Goods;

            
	
              xv)

            	
              all
                General Intangibles;

            
	
              xvi)

            	
              all
                Health-Care-Insurance Receivables;

            
	
              xvii)

            	
              all
                Instruments;

            
	
              xviii)

            	
              all
                Inventory;

            
	
              xix)

            	
              all
                Investment Property;

            
	
              xx)

            	
              all
                Letter-of-Credit Rights;

            
	
              xxi)

            	
              all
                Letters of Credit;

            
	
              xxii)

            	
              all
                Patents;

            
	
              xxiii)

            	
              all
                Patent Licenses;

            
	
              xxiv)

            	
              all
                Payment Intangibles;

            
	
              xxv)

            	
              all
                Promissory Note(s);

            
	
              xxvi)

            	
              all
                Software;

            
	
              xxvii)

            	
              all
                Supporting Obligations;

            
	
              xxviii)

            	
              all
                Tangible Chattel Paper;

            
	
              xxix)

            	
              all
                Trademarks;

            
	
              xxx)

            	
              all
                Trademark Licenses;

            
	
              xxxi)

            	
              all
                Vehicles; and

            
	
              xxxii)

            	
              to
                the extent not otherwise included, all Proceeds (including condemnation
                proceeds), all Accessions and additions thereto and all substitutions
                and
                replacements therefore and products of any and all of the
                foregoing.

            

    

     

    
      	 	
              (b)

            	
              The
                Company expressly acknowledges that the security interest granted
                hereunder shall remain as security for payment and performance of
                the
                Obligations, whether now existing or which may hereafter be incurred
                by
                future advances, or otherwise. The notice of the continuing grant
                of this
                security interest therefore shall not be required to be stated on
                the face
                of any document representing any such Obligations, nor otherwise
                identify
                it as being secured hereby. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      security interest granted herein to the Secured Party is for the ratable benefit
      of all Holders and each Holder may realize upon the Collateral to the extent
      of
      its Note Percentage, as computed from time to time. The amount of each Holder’s
“Note Percentage” shall be the percentage computed by dividing the Obligations
      owed to such Holder by the aggregate Obligations owed to all
      Holders.

     

    
      	
              3.

            	
              Priority
                of Lien.
                The Company represents and warrants to the Secured Party that (a)
                the lien
                granted by the Company to the Secured Party in the Collateral is
                a first
                priority security interest subject only to the lien granted in favor
                of
                New Canaan Investment Partners, LLC (“New Canaan”), pursuant to a Security
                Agreement dated December 31, 2001 between New Canaan and the Company
                as
                security for a $218,700 loan provided by New Canaan (hereinafter
                the
                “Permitted Encumbrance”). The lien granted herein shall also be senior to
                any and all other Company credit facilities, debts, obligations,
                liabilities, financings or refinancings, whether existing or with
                a new
                lender.

            

    

     

    
      	
              4.

            	
              Cross-Collateralization.
                All Collateral which Secured Party may at any time acquire from the
                Company or from any other source in connection with any of the Obligations
                shall constitute Collateral for each and every Obligation, without
                apportionment or designation as to particular Obligations, and all
                Obligations, however and whenever incurred, shall be secured by all
                Collateral, however and whenever acquired, and Secured Party shall
                have
                the right, in its sole discretion, to determine the order in which
                Secured
                Party's rights in, or remedies against, any Collateral are to be
                exercised, and which type or which portions of Collateral are to
                be
                proceeded against and the order of application of Proceeds of Collateral
                as against particular Obligations.

            

    

     

    
      	
              5.

            	
              Definitions.
                The following terms shall have the following
                meanings

            

    

     

    
      	
              (a)

            	
              “Accessions”
                means all Accessions as that term is defined in Article 9 of the
                UCC;

            
	
              (b)

            	
              “Accounts”
                means all Accounts as that term is defined in Article 9 of the
                UCC;

            
	
              (c)

            	
              “As-Extracted
                Collateral” means all As-Extracted Collateral as that term is defined in
                Article 9 of the UCC;

            
	
              (d)

            	
              “Chattel
                Paper” means all Chattel Paper as that term is defined in Article 9 of the
                UCC;

            
	
              (e)

            	
              “Collateral”
                shall have the meaning assigned to it in Section 1 of this Loan
                Agreement;

            
	
              (f)

            	
              “Commercial
                Tort Claims” means all Commercial Tort Claims as that term is defined in
                Article 9 of the UCC, including without limitation, those more
                specifically described on Schedule 5(f) attached hereto and made
                a part
                hereof;

            
	
              (g)

            	
              “Consignments”
                means all Consignments as that term is define in Article 9 of the
                UCC;

            
	
              (h)

            	
              “Contracts”
                means all contracts, undertakings, franchise agreements or other
                agreements (other than rights evidenced by Chattel Paper, Documents
                or
                Instruments, as those terms are defined above and below) in or under
                which
                the Company may now or hereafter have any right, title or interest,
                including, without limitation, with respect to an Account, and any
                agreement relating to the terms of payment or the terms of performance
                thereof;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (i)

            	
              “Copyrights”
                means (a) all copyrights of the United States or any other country;
                (b)
                all copyright registrations filed in the United States or in any
                other
                country; and (c) all proceeds thereof;

            
	
              (j)

            	
              “Copyright
                License” means all agreements, whether written or oral, providing for the
                grant by the Company of any right to use any Copyright;

            
	
              (k)

            	
              “Deposit
                Accounts” means all Deposit Accounts at that term is defined in Article 9
                of the UCC;

            
	
              (l)

            	
              “Documents”
                means all Documents as that term is defined in Article 9 of the
                UCC;

            
	
              (m)

            	
              “Encumbrance(s)”
                means all Encumbrance(s) as that term is defined in Article 9 of
                the
                UCC;

            
	
              (n)

            	
              “Equipment”
                means all Equipment as that term is defined in Article 9 of the
                UCC;

            
	
              (o)

            	
              “Financing
                Agreements” means this Loan Agreement, and any and all agreements, notes,
                guaranties, instruments, security agreements and documents evidencing,
                governing, securing or relating in any way to the Notes in favor
                of
                Secured Party;

            
	
              (p)

            	
              “Fixtures”
                means all Fixtures as that term is defined in Article 9 of the
                UCC;

            
	
              (q)

            	
              “General
                Intangibles” means all General Intangibles as that term is defined in
                Article 9 of the UCC;

            
	
              (r)

            	
              “Goods”
                means all Goods as that term is defined in Article 9 of the
                UCC;

            
	
              (s)

            	
              “Health-Care-Insurance
                Receivables” means all Health-Care-Insurance Receivables as that term is
                defined in Article 9 of the UCC;

            
	
              (t)

            	
              “Instruments”
                means all Instruments as that term is defined in Article 9 of the
                UCC;

            
	
              (u)

            	
              “Inventory”
                means all Inventory as that term is defined in Article 9 of the
                UCC;

            
	
              (v)

            	
              “Investment
                Property” means all Investment Property as that term is defined in Article
                9 of the UCC;

            
	
              (w)

            	
              “Letters
                of Credit” means all Letters of Credit as that term is defined in the
                UCC;

            
	
              (x)

            	
              “Letter-of-Credit
                Rights” means all Letter-of-Credit Rights as that term is defined in
                Article 9 of the UCC;

            
	
              (y)

            	
              “Obligations”
                means any and all obligations, indebtedness, liabilities, guaranties,
                covenants and duties owing by the Company to the Holders and/or Secured
                Party, including without limitation, the Notes and any obligations
                under
                any of the Financing Agreements, whether due or to become due, absolute
                or
                contingent, now existing or hereafter incurred or arising, whether
                or not
                otherwise guaranteed or secured and whether evidenced by any note
                or draft
                or documented on the books and records of Secured Party or otherwise
                on
                open account, including without limitation, all costs, expenses,
                fees,
                charges and attorneys' and other professional fees incurred by Secured
                Party in connection with, involving or related to the administration,
                protection, modification, collection, enforcement, preservation or
                defense
                of any of the Secured Party's rights with respect to any of the
                Obligations, the Collateral or any agreement, instrument or document
                evidencing, governing, securing or relating to any of the foregoing,
                including without limitation, all costs and expenses incurred in
                inspecting or surveying mortgaged real estate, if any, or conducting
                environmental studies or tests, and in connection with any “workout” or
                default resolution negotiations involving legal counsel or other
                professionals and any re-negotiation or restructuring of any of the
                Obligations;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (z)

            	
              “Patents”
                means (a) all letters patent of the United States and all reissues
                and
                extensions thereof, (b) all applications for letters patent of the
                United
                States and all divisions, continuations and continuations-in-part
                thereof
                or any other country, including, without limitation, any thereof
                referred
                to in any schedule attached hereto and (c) all proceeds thereof,
                including
                the goodwill of the business connected with the use of and symbolized
                by
                the Patents;

            
	
              (aa)

            	
              “Patent
                License” means all agreements, whether written or oral, providing for the
                grant by the Company of any right to manufacture, use or sell any
                invention covered by a Patent, including, without limitation, any
                thereof
                referred to in any schedule attached hereto;

            
	
              (bb)

            	
              “Payment
                Intangibles” means all Payment Intangibles as that term is defined in
                Article 9 of the UCC;

            
	
              (cc)

            	
              “Proceeds”
                means all Proceeds as that term is defined in Article 9 of the
                UCC;

            
	
              (dd)

            	
              “Promissory
                Note(s)” means all Promissory Note(s) as that term is defined in Article 9
                of the UCC;

            
	
              (ee)

            	
              “Software”
                means all Software as that term is defined in Article 9 of the
                UCC;

            
	
              (ff)

            	
              “Supporting
                Obligations” means all Supporting Obligations as that term is defined in
                Article 9 of the UCC;

            
	
              (gg)

            	
              “Tangible
                Chattel Paper” means all Tangible Chattel Paper as that term is defined in
                Article 9 of the UCC;

            
	
              (hh)

            	
              “Trademarks”
                means (a) all trademarks, trade names, corporate names, company names,
                business names, fictitious business names, trade styles, service
                marks,
                logos and other source or business identifiers and the goodwill associated
                therewith, now existing or hereafter adopted or acquired, all
                registrations and recordings thereof, and all applications in connection
                therewith, whether registered in the United States Patent and Trademark
                Office or in any similar office or agency of the United States, any
                State
                thereof or any other country or any political subdivision thereof
                or
                otherwise; (b) all renewals thereof; and (c) all proceeds thereof,
                including the goodwill of the business connected with the use of
                and
                symbolized by the Trademarks;

            
	
              (ii)

            	
              “Trademark
                License” means any agreement, written or oral, providing for the grant by
                the Company of any right to use any Trademark;

            
	
              (jj)

            	
              “UCC”
                means the Uniform Commercial Code as in effect from time-to-time
                in the
                State of New York; and

            
	
              (kk)

            	
              “Vehicles”
                means all cars, trucks, trailers, construction and earth moving equipment
                and other vehicles owned by the Company and covered by a certificate
                of
                title law of any state and, in any event, shall include, without
                limitation, the vehicles listed in any schedule attached hereto and
                all
                tires and other appurtenances to any of the
                foregoing.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              6.

            	
              The
                Company’s Representations and Warranties.
                The Company represents and warrants to Secured Party and the Holders
                as
                follows:

            

    

     

    
      	
              (a)

            	
              Good
                Standing and Qualification/Legal Capacity.
                The Company is a corporation duly organized, validly existing and
                in good
                standing under the laws of the State of Nevada (“Company’s State”) and has
                all requisite corporate power and authority to own and operate its
                properties and to carry on its business as now being conducted. The
                Company is not organized under the laws of any jurisdiction other
                than the
                Company’s State. The Company is duly qualified as a foreign corporation
                and is in good standing and duly authorized to do business in every
                jurisdiction wherever the nature of its properties or the conduct
                of its
                business requires such qualification and authorization.

            
	
              (b)

            	
              Authority.
                The Company has full power and authority to enter into and perform
                the
                obligations under this Loan Agreement, to execute and deliver the
                Financing Agreements and to incur the obligations provided for herein
                and
                therein, all of which have been duly authorized by all necessary
                and
                proper corporate or partnership action, if and as the case may be.
                No
                other consent or approval or the taking of any other action is required
                as
                a condition to the validity or enforceability of this Loan Agreement
                or
                any of the other Financing Agreements.

            
	
              (c)

            	
              Binding
                Agreements.
                This Loan Agreement and the other Financing Agreements constitute
                the
                valid and legally binding obligations of the Company, enforceable
                in
                accordance with their respective terms, except as enforcement may
                be
                limited by bankruptcy, insolvency or similar laws affecting the
                enforcement of creditors' rights generally. 

            
	
              (d)

            	
              Litigation.
                There are no actions, suits, proceedings or investigations pending
                or
                threatened against the Company before any court or administrative
                agency,
                which either in any case or in the aggregate, if adversely determined,
                would materially and adversely affect the financial condition, assets
                or
                operations of the Company, or which question the validity of this
                Loan
                Agreement or any of the other Financing Agreements, or any action
                to be
                taken in connection with the transactions contemplated hereby or
                thereby
                except to matters noted in the Company’s December 31, 2005 annual 10K
                report.

            
	
              (e)

            	
              No
                Conflicting Law or Agreements.
                The execution, delivery and performance by the Company of this Loan
                Agreement and the other Financing Agreements: (i) do not violate
                any
                provision of the Articles of Incorporation and By-laws of the Company,
                as
                amended or restated, (ii) do not violate any order, decree or judgment,
                or
                any provision of any statute, rule or regulation, (iii) do not, violate
                or
                conflict with, result in a breach of or constitute (with notice or
                lapse
                of time, or both) a default under any shareholder agreement, partnership
                agreement, stock preference agreement, mortgage, indenture, contract
                or
                other agreement to which the Company is a party, or by which any
                of the
                Company’s properties are bound, which breach or default would result in
                the creation, imposition or enforcement of any lien against any of
                the
                Collateral, or would have a material adverse effect on the conduct
                of the
                Company’s business as it is now being conducted and proposed to be
                conducted while this Loan Agreement is in effect, or would otherwise
                impair the value of the security interest granted to the Secured
                Party on
                behalf of the Holders hereunder; or (iv) except for the liens and
                mortgages granted to Secured Party hereunder, do not result in the
                creation or imposition of any lien, charge or encumbrance of any
                nature
                whatsoever upon any property or assets of the
                Company.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (f)

            	
              Taxes.
                With respect to all taxable periods of the Company, the Company has
                not
                filed all tax returns which are required to be filed and all federal,
                state, municipal, franchise and other taxes to be filed on such filed
                returns have not been paid.

            
	
              (g)

            	
              Compliance.
                The Company is not in default with respect to or in violation of
                any
                order, writ, injunction or decree of any court or of any federal,
                state,
                municipal or other governmental department, commission, board, bureau,
                agency, authority or official, or in violation of any law, statute,
                rule
                or regulation to which the Company is or the Company’s properties are
                subject, where such default or violation would materially and adversely
                affect the financial condition of the Company. The Company represents
                that
                it has not received notice of any such default or violation from
                any
                party. The Company is not in default in the payment or performance
                of any
                of the Company’s obligations to any third parties or in the performance of
                any mortgage, indenture, lease, contract or other agreement to which
                the
                Company is a party or by which any of the Company’s assets or properties
                are bound, where such default would materially and adversely affect
                the
                financial condition of the Company.

            
	
              (h)

            	
              Office.
                The chief executive office and principal place of business of the
                Company,
                and the office where the Company’s books and records concerning Collateral
                are kept, and is as set forth in the first paragraph of this Loan
                Agreement.

            
	
              (i)

            	
              Places
                of Business.
                The Company has no other places of business and locates no Collateral,
                specifically including books and records, at any location other than
                at
                the Company’s place of business set forth in the first paragraph of this
                Loan Agreement.

            
	
              (j)

            	
              Contingent
                Liabilities.
                The Company is not a party to any suretyship, guarantyship, or other
                similar type agreement; nor has the Company offered its endorsement
                to any
                individual, concern, corporation or other entity or acted or failed
                to act
                in any manner which would in any way create a contingent liability
                (except
                for endorsement of negotiable instruments in the ordinary course
                of
                business).

            
	
              (k)

            	
              Licenses.
                The Company has all licenses, permits and other permissions required
                by
                any government, agency or subdivision thereof, or from any licensing
                entity necessary for the conduct of the Company’s business, all of which
                the Company represents to be in good standing and in full force and
                effect.

            
	
              (l)

            	
              Collateral.
                The Company is and shall continue to be the sole owner of the Collateral
                free and clear of all liens, encumbrances, security interests and
                claims
                except the liens granted to Secured Party hereunder; the Company
                is fully
                authorized to sell, transfer, pledge and/or grant a security interest
                in
                each and every item of the Collateral to Secured Party; all documents
                and
                agreements related to the Collateral shall be true and correct and
                in all
                respects what they purport to be; all signatures and endorsements
                that
                appear thereon shall be genuine and all signatories and endorsers
                shall
                have full capacity to contract; none of the transactions underlying
                or
                giving rise to the Collateral shall violate any applicable state
                or
                federal laws or regulations; all documents relating to the Collateral
                shall be legally sufficient under such laws or regulations and shall
                be
                legally enforceable in accordance with their terms; and the Company
                agrees
                to defend the Collateral against the claims of all persons other
                than
                Secured Party.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (m)

            	
              Environmental,
                Health, Safety Laws.
                The Company has not received any notice, order, petition or similar
                document in connection with or arising out of any violation of any
                environmental, health or safety law, regulation, rule or order, and
                the
                Company knows of no basis for any claim of such violation or of any
                threat
                thereof.

            
	
              (n)

            	
              Accounts.
                The amount represented by the Company to Secured Party from time
                to time
                as owing by each account debtor or by all account debtors in respect
                of
                the Accounts will at such time, to the best of the Company’s knowledge, be
                the correct amount actually owing by such account debtor or debtors
                thereunder in all material respects. No amount payable to the Company
                under or in connection with any Account is evidenced by any Instrument
                or
                Chattel Paper (other than customer contracts constituting Chattel
                Paper)
                which has not been delivered to Secured Party.

            
	
              (o)

            	
              Contracts.
                No consent of any party (other than the Company) to any Contract
                is
                required, or purports to be required, in connection with the execution,
                delivery and performance of this Loan Agreement. Each Contract is
                in full
                force and effect and constitutes a valid and legally enforceable
                obligation of the parties thereto, except as enforceability may be
                limited
                by bankruptcy, insolvency, reorganization, moratorium or similar
                laws
                affecting the enforcement of creditor’s rights generally. No consent or
                authorization of, filing with or other act by or in respect of any
                governmental authority is required in connection with the execution,
                delivery, performance, validity or enforceability of any of the Contracts
                by any party thereto other than those which have been duly obtained,
                made
                or performed, are in full force and effect and do not subject the
                scope of
                any such Contract to any material adverse limitation, either specific
                or
                general in nature. Neither the Company nor (to the best of the Company’s
                knowledge) any other party to any Contract is in default in a manner
                which
                could reasonably be expected to materially adversely affect the value
                of
                all such Contracts as Collateral or is reasonably likely to become
                in
                default in the performance or observance of any of the terms thereof
                in
                any material respect. The Company has fully performed all its current
                obligations under each Contract. The right, title and interest of
                the
                Company in, to and under each Contract are not subject to any defense,
                offset, counterclaim or claim which in the aggregate could reasonably
                be
                expected to have a material adverse effect to the Collateral, the
                Company’s operations or the Company’s ability to satisfy its obligations
                hereunder. No amount payable to the Company under or in connection
                with
                any Contract is evidenced by any Instrument or Chattel Paper (other
                than
                customer contracts constituting Chattel Paper) which has not been
                delivered to Secured Party.

            
	
              (p)

            	
              Copyrights,
                Patents and Trademarks.
                All Copyrights, Copyright Licenses, Patents and Patent Licenses owned
                by
                the Company in its own name as of the date hereof are listed on Schedule
                6(p) attached hereto and made a part hereof, which listing includes
                all
                Trademarks and Trademark Licenses owned by the Company in its own
                name as
                of the date hereof. Each Copyright, Patent and Trademark is valid,
                subsisting, unexpired, enforceable and has not been abandoned. Except
                as
                set forth in Schedule 6(p), none of such Copyrights, Patents and
                Trademarks is the subject of any licensing or franchise agreement.
                No
                holding, decision or judgment has been rendered by any governmental
                authority which would limit, cancel or question the validity of any
                Copyright, Patent or Trademark. No action or proceeding is pending
                seeking
                to limit, cancel or question the validity of any Copyright, Patent
                or
                Trademark.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (q)

            	
              Governmental
                Obligors.
                None of the obligors on any Accounts, and none of the parties to
                any
                Contracts, is a governmental authority with respect to which the
                Federal
                Assignment of Claims Act is applicable.

            
	
              (r)

            	
              Government
                Consent.
                The execution and delivery of this Loan Agreement and the Notes and
                the
                other Loan Documents and the performance of the transactions contemplated
                hereby and thereby do not require any approval or consent of any
                governmental agency or authority.

            
	
              (s)

            	
              Financial
                Statements.
                The Company has delivered to each Holder copies of its annual report
                on
                Form 10-K for the year ended December 31, 2004, and its quarterly
                reports
                for the first three quarters of fiscal 2005, ending March 31, 2005,
                June
                30, 2005 and September 30, 2005, respectively (collectively the “Financial
                Statements”). All of these Financial Statements are true and correct,
                present fairly and completely the financial condition of the Company
                in
                all material respects for the periods covered therein and are in
                accordance with the books of account and records of the
                Company.

            
	
              (t)

            	
              No
                change in Financial Condition.
                Since the ending date of the Financial Statements, September 30,
                2005,
                described in subsection (s) above, there has been no material adverse
                change in the assets, liabilities, financial condition or operations
                of
                the Company, other than changes in the ordinary course of
                business.

            
	
              (u)

            	
              No
                Other Liabilities.
                Except to the extent reflected in the Financial Statements described
                in
                subsection (s) above, the Company, as of the date of this Loan Agreement,
                does not know or have reasonable grounds to know of any basis for
                the
                assertion against it of any liabilities or obligations of any nature,
                direct or indirect, accrued, absolute or contingent, including, without
                limitation, liabilities for taxes then due or to become due whether
                incurred in respect of or measured by the income of the Company for
                any
                period prior to the date of this Loan Agreement or arising out of
                transactions entered into, or any state of facts existing prior
                thereto.

            
	
              (v)

            	
              Accuracy
                of Representations.
                No representation or warranty by or with respect to the Company contained
                herein or in any certificate or other document furnished by the Company
                pursuant hereto contains any untrue statement of a material fact
                or omits
                to state a material fact necessary to make such representation or
                warranty
                not misleading in light of the circumstances under which it was
                made.

            
	
              (w)

            	
              Representations
                as Inducement to Holders.
                The foregoing representations and warranties are made by the Company
                with
                the knowledge and intention that the Secured Party and the Holders
                will
                rely thereon, and shall survive the execution and delivery of this
                Loan
                Agreement.

            

     

    
      	
              7.

            	
              Affirmative
                Covenants of the Company.
                The Company covenants and agrees that from the date hereof until
                full and
                final payment and performance of all Obligations, the Company
                shall:

            

    

     

    
      	
              (a)

            	
              Perform
                Obligations.
                Pay and perform all of the Obligations secured by this Loan Agreement
                according to their terms.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              Financial
                Information.
                Deliver to Secured Party: promptly upon Secured Party's request,
                such
                documentation and information about the Company’s financial condition,
                business and/or operations as Secured Party may, at any time and
                from time
                to time, reasonably request, including without limitation, copies
                of
                federal and state income tax returns and all schedules thereto, a
                listing
                of Company’s Accounts and accounts payable and a listing of Company’s
                Inventory and Equipment, all of which shall be in form, scope and
                content
                reasonably satisfactory to Secured Party, in its sole
                discretion.

            
	
              (c)

            	
              Insurance
                and Endorsement.
                (i) Keep the Collateral and Company’s other properties insured against
                loss or damage by flood (if applicable) and by fire and other hazards
                (so-called “All Risk” coverage) in amounts and with companies satisfactory
                to Secured Party to the same extent and covering such risks as is
                customary in the same or a similar business; maintain public liability
                coverage, including without limitation, products liability coverage,
                against claims for personal injuries or death; and maintain all worker's
                compensation, employment or similar insurance as may be required
                by
                applicable law; (ii) All insurance shall contain such terms, be in
                such
                form, and be for such periods reasonably satisfactory to Secured
                Party,
                and be written by such carriers duly licensed and reasonably satisfactory
                to Secured Party. Without limiting the generality of the foregoing,
                such
                insurance must provide that it may not be canceled without ten (10)
                days
                prior written notice to Secured Party. The Company shall cause Secured
                Party to be endorsed as a loss payee with a long form Holder’s loss
                payable clause, in form and substance reasonably acceptable to Secured
                Party on all such insurance. In the event of a failure to provide
                and
                maintain insurance as herein provided, Secured Party may, at its
                option,
                provide such insurance and charge the amount thereof to the Company.
                The
                Company shall furnish to Secured Party certificates or other satisfactory
                evidence of compliance with the foregoing insurance provisions. The
                Company hereby irrevocably appoints Secured Party as its attorney-in-fact,
                coupled with an interest, to make proofs of loss and claims for insurance,
                and to receive payments of the insurance and execute all documents,
                checks
                and drafts in connection with payment of the insurance. Any Proceeds
                received by Secured Party shall be applied to the Obligations in
                such
                order and manner as Secured Party shall determine in its sole discretion,
                or shall be remitted to the Company, in either event at Secured Party's
                sole discretion.

            
	
              (d)

            	
              Tax
                and Other Liens.
                Comply with all statutes and government regulations and pay all taxes
                (including withholdings), assessments, governmental charges or levies,
                or
                claims for labor, supplies, rent and other obligations made against
                it or
                its property which, if unpaid, might become a lien or charge against
                the
                Company or its properties, unless and to the extent being contested
                in
                good faith with the prior written consent of Secured Party and against
                which, if requested by Secured Party as a condition to its consent,
                the
                Company shall set up a cash reserve or post a surety bond in an amount
                equal to the total amount of the tax or lien being contested. Keep
                the
                Collateral free and clear of all liens, encumbrances, and security
                interests of any kind other than the security interest granted hereby
                and
                the Permitted Encumbrance.

            
	
              (e)

            	
              Permitted
                Encumbrance.
                Pay and perform all of the obligations secured by the Permitted
                Encumbrance when due.

            
	
              (f)

            	
              Litigation.
                Promptly advise Secured Party of the commencement or threat of litigation,
                including arbitration proceedings and any proceedings before any
                governmental agency (collectively, “Litigation”), which is instituted
                against the Company and which, if adversely determined, would have
                a
                material adverse affect on the Company or its
                assets.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (g)

            	
              Maintenance
                of Existence.
                Maintain its corporate existence and comply with all valid and applicable
                statutes, rules and regulations, and maintain its properties and
                the
                Collateral in good repair, working order and operating condition.
                The
                Company shall immediately notify Secured Party of any event causing
                material loss in the value of its assets.

            
	
              (h)

            	
              Collateral
                Duties.
                Do whatever Secured Party may request from time to time by way of
                obtaining, executing, delivering and filing financing statements,
                assignments, landlord's or mortgagee's waivers, and other notices
                and
                amendments and renewals thereof, and the Company will take any and
                all
                steps and observe such formalities as Secured Party may request in
                order
                to create and maintain a valid and enforceable first lien upon, pledge
                of,
                and first priority security interest in, any and all of the Collateral.
                Secured Party is authorized to file financing statements without
                the
                signature of the Company and to execute and file such financing statements
                on behalf of the Company as specified by the UCC to perfect or maintain
                Secured Party's security interest in all of the Collateral. All charges,
                expenses and fees Secured Party may incur in filing any of the foregoing,
                together with reasonable costs and expenses of any lien search required
                by
                Secured Party, and any taxes relating thereto, shall be charged to
                the
                Company and added to the Obligations. Take all commercially reasonable
                action necessary to defend the title to the Collateral against all
                persons
                and against all claims and demands whatsoever. Keep the Collateral
                and the
                records relating to the Collateral available for inspection at all
                reasonable times during normal business hours.

            
	
              (i)

            	
              Notice
                of Default.
                Provide to Secured Party, within one business day after becoming
                aware of
                the occurrence or existence of an Event of Default or a condition
                which
                would constitute an Event of Default but for the giving of notice
                or
                passage of time or both, notice in writing of such Event of Default
                or
                condition.

            
	
              (j)

            	
              Location.
                Promptly advise the Secured Party in writing prior to any change
                in the
                location of the Company’s place of business and chief executive office in
                order to permit the Secured Party to take such actions as it may
                deem
                necessary or advisable to protect and preserve the security interests
                of
                the Holders.

            

    

     

    
      	
              8.

            	
              Negative
                Covenants of the Company.
                The Company covenants and agrees that from the date hereof until
                full and
                final payment and performance of all Obligations, the Company shall
                not
                without the prior written consent of Secured
                Party:

            

    

     

    
      	
              (a)

            	
              Encumbrances.
                Incur or permit to exist any lien, mortgage, charge or other encumbrance
                against any of the Collateral which is prior to that of Secured Party,
                whether now owned or hereafter acquired, except: (i) liens required
                or
                expressly permitted by this Loan Agreement; (ii) pledges or deposits
                in
                connection with or to secure worker's compensation, unemployment
                or
                liability insurance; and (iii) tax liens which are being contested
                in good
                faith with the prior written consent of Secured Party and against
                which,
                if requested by Secured Party as a condition to its consent, the
                Company
                shall set up a cash reserve or post a surety bond in an amount equal
                to
                the total amount of the lien being
                contested.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              Consolidation,
                Merger, Conversion, or Transfer.
                Merge into or consolidate with or into any corporation or other entity,
                convert into any other entity or transfer to or domesticate in any
                jurisdiction other than the jurisdiction set forth in Section 5(a)
                of this
                Loan Agreement.

            
	
              (c)

            	
              Sale,
                Lease, and/or License of Assets.
                Sell, lease, license or otherwise dispose of any of its assets, except
                in
                the ordinary course of business.

            
	
              (d)

            	
              Name
                Changes.
                Change its corporate name, identity or structure, or conduct its
                business
                under any trade name or style other than as set forth in this Loan
                Agreement.

            
	
              (e)

            	
              Maintenance
                of Collateral.
                Permit to incur or suffer any loss, theft, substantial damage or
                destruction of any of the Collateral which is not immediately replaced
                with Collateral of equal or greater value, or which is not fully
                covered
                by insurance, the proceeds of which shall have been endorsed over
                to
                Secured Party in accordance with Section 7(c) hereof.

            
	
              (f)

            	
              Maintenance
                of Existence.
                Fail to preserve and maintain its corporate existence in the jurisdiction
                of its incorporation, organization or formation.

            
	
              (g)

            	
              UCC-3
                Termination Statements.
                File any UCC-3 termination statement affecting any UCC-1 Financing
                Statement in favor of Secured Party.

            
	
              (h)

            	
              Chattel
                Paper.
                Create any Chattel Paper without placing a legend thereon acceptable
                to
                Secured Party indicating that Secured Party has a security interest
                therein.

            

    

    
    

     

    
      	
              9.

            	
              Rights
                of Secured Party.
                Upon the occurrence of any Event of Default, Secured Party shall
                have the
                right to declare all of the Obligations to be immediately due and
                payable
                and shall then have the rights and remedies of a secured party under
                the
                UCC or under any other applicable law, including, without limitation,
                the
                right to take possession of the Collateral, and in addition thereto,
                the
                right to enter upon any premises on which the Collateral or any part
                thereof may be situated and remove the same therefrom and the right
                to
                occupy the Company’s premises for the purposes of liquidating Collateral,
                including without limitation, conducting an auction thereon. Secured
                Party
                may require the Company to make the Collateral (to the extent the
                same is
                moveable) available to Secured Party at a place to be designated
                by
                Secured Party. Secured Party may, at its option, sell the Collateral
                on
                credit, and furthermore may sell the Collateral without giving any
                warranties as to the Collateral and may specifically disclaim any
                warranties of title or the like, which shall not be considered to
                adversely affect the commercial reasonableness of any sale of the
                Collateral. Unless the Collateral is perishable or threatens to decline
                speedily in value or is of a type customarily sold on a recognized
                market,
                Secured Party will give the Company at least ten (10) days' prior
                written
                notice at the address of the Company set forth above (or at such
                other
                address or addresses as the Company shall specify in writing to Secured
                Party) of the time and place of any public sale thereof or of the
                time
                after which any private sale or any other intended disposition thereof
                is
                to be made. Any such notice shall be deemed to meet any requirement
                hereunder or under any applicable law (including the UCC) that reasonable
                notification be given of the time and place of such sale or other
                disposition. After deducting all costs and expenses of collection,
                storage, custody, sale or other disposition and delivery (including
                reasonable attorneys' fees) and all other reasonable charges against
                the
                Collateral, the residue of the Proceeds of any such sale or disposition
                shall be applied to the payment of the Obligations in such order
                of
                priority as Secured Party shall determine and any surplus shall be
                returned to the Company or to any person or party lawfully entitled
                thereto. In the event the Proceeds of any sale, lease or other disposition
                of the Collateral hereunder, including without limitation, the Proceeds
                from the collection of Accounts, are insufficient to pay all of the
                Obligations in full, the Company will be liable for the deficiency,
                together with interest thereon, at the maximum rate allowable by
                law, and
                the costs and expenses of collection of such deficiency, including
                (to the
                extent permitted by law) without limitation, attorneys' fees, expenses
                and
                disbursements. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              Right
                of Secured Party to Use and Operate Collateral, Etc.
                Upon the occurrence of any Event of Default, Secured Party shall
                have the
                right and power to take possession of all or any part of the Collateral,
                and to exclude the Company and all persons claiming under the Company
                wholly or partly therefrom, and thereafter to hold, store, and/or
                use,
                operate, manage and control the same. Upon any such taking of possession,
                Secured Party without obligation to do so, may, from time to time,
                at the
                expense of the Company, make all such repairs, replacements, alterations,
                additions and improvements to the Collateral as Secured Party may
                deem
                proper. The Company hereby expressly waives any obligation of the
                Secured
                Party to process and/or prepare any Collateral prior to any sale
                or other
                disposition thereof. Upon any taking of possession of all or any
                part of
                the Collateral, Secured Party shall have the right to manage and
                control
                the Collateral and to carry on the business and to exercise all rights
                and
                powers of the Company in respect thereto as Secured Party shall reasonably
                deem best, including the right to enter into any and all such agreements
                with respect to the operation of the Collateral or any part thereof
                as
                Secured Party may see fit; and Secured Party shall be entitled to
                collect
                and receive all issues, profits, fees, revenues and other income
                of the
                same and every part thereof. Such issues, profits, fees, revenues
                and
                other income shall be applied to pay the expenses of holding and
                operating
                the Collateral and of conducting the business thereof, and of all
                maintenance, repairs, replacements, alterations, additions and
                improvements, and to make all payments which Secured Party may be
                required
                or may elect to make, if any, for taxes, assessments, insurance and
                other
                charges upon the Collateral or any part thereof, and all other payments
                which Secured Party may be required or authorized to make under any
                provision of this Loan Agreement (including legal costs and attorneys'
                fees). The remainder of such issues, profits, fees, revenues and
                other
                income shall be applied to the payment of the Obligations in such
                order of
                priority as Secured Party shall determine. Without limiting the generality
                of the foregoing, Secured Party shall have the right to apply for
                and have
                a receiver appointed by a court of competent jurisdiction in any
                action
                taken by Secured Party to enforce its rights and remedies hereunder
                in
                order to manage, protect and preserve the Collateral and continue
                the
                operation of the business of the Company and to collect all revenues
                and
                profits thereof and apply the same to the payment of all expenses
                and
                other charges of such receivership including the compensation of
                the
                receiver and to the payment of the Obligations as aforesaid until
                a sale
                or other disposition of such Collateral shall be finally made and
                consummated. 

            

    

     

    
      	 	
              (a)

            	
              At
                any time after an Event of Default, Secured Party shall have the
                right to
                require the Company to and the Company shall, upon written notice
                from
                Secured Party:

            

    

     

    
      	
              i)

            	
              Make
                collections of Proceeds upon its Accounts, hold the Proceeds received
                from
                collections in trust for Secured Party and turn over such Proceeds
                to
                Secured Party daily in the exact form in which they are received,
                together
                with a collection report in form satisfactory to Secured Party. Secured
                Party shall immediately apply, subject to collection, such Proceeds
                and
                any Proceeds of Accounts received by it pursuant to the following
                provisions of this Section 10, to the payment of the Obligations
                in such
                order of priority as Secured Party shall
                determine;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              ii)

            	
              Assign
                or endorse the Accounts to Secured Party, and notify account debtors
                that
                the Accounts have been assigned and should be paid directly to Secured
                Party;

            
	
              iii)

            	
              Turn
                over to Secured Party all Inventory returned in connection with any
                of the
                Accounts;

            
	
              iv)

            	
              Mark
                or stamp each of its individual ledger sheets or cards pertaining
                to its
                Accounts with the legend “Assigned to Strasbourger Pearson Tulcin Wolff
                Inc.,” and stamp or otherwise mark and keep its books, records, documents
                and instruments relating to the Accounts in such manner as Secured
                Party
                may require; and

            
	
              v)

            	
              Mark
                or stamp all invoices with a legend satisfactory to Secured Party
                so as to
                indicate that the same should be paid directly to Secured
                Party.

            

    

     

    Notwithstanding
      the foregoing, Secured Party shall have the right, at any time after the
      occurrence of an Event of Default, to itself so notify such account debtors
      to
      make such payments of the Accounts directly to Secured Party and Secured Party
      shall have the further right to notify the post office authorities to change
      the
      address for delivery of mail of the Company to an address designated by Secured
      Party and to receive, open and dispose of all mail addressed to the
      Company.

     

    For
      the
      purposes of this Section 10, the Company hereby irrevocably constitutes Secured
      Party as the Company’s attorney-in-fact to issue in the name and execute or
      endorse on behalf of the Company each and every notice, instrument and document
      necessary to carry out the purposes of the provisions of this Section 10, and
      to
      take such action in connection with the collection of the Accounts or the
      promissory note(s), including without limitation, suing thereon, compromising
      or
      adjusting the same, as Secured party, in its sole discretion, deems necessary.
      The power of attorney granted hereby shall be self-executing, but the Company
      shall promptly execute and deliver to Secured Party, upon written request of
      Secured Party, such additional separate powers of attorney as Secured Party
      may
      from time to time request.

     

    
      	
              11.

            	
              Events
                of Default.
                The Company shall be in default under this Loan Agreement upon the
                happening of any of the following events or conditions (herein
                individually called an “Event of Default” and collectively called “Events
                of Default”);

            

    

     

    
      	
              (a)

            	
              Failure
                by the Company to do anything required by the Note and other Financing
                Agreements and, if curable, the Company’s failure to fully cure such
                failure within thirty (30) days of written notice thereof from Secured
                Party;

            
	
              (b)

            	
              Failure
                by the Company to preserve, or account to Secured Party’s reasonable
                satisfaction for, any of the Collateral or its proceeds and, if curable,
                the Company’s not curing such failure within thirty (30) days of written
                notice thereof from Secured Party;

            
	
              (c)

            	
              Default
                by the Company on any loan or agreement with another creditor, if
                Secured
                Party reasonably believes the default may materially affect the Company’s
                ability to pay the Note; 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)

            	
              Other
                than as otherwise provided in this Section 11, breach of or failure
                in the
                due observance or performance of any covenants, condition or agreement
                on
                the part of the Company to be observed or performed pursuant to this
                Loan
                Agreement, and, if curable, the failure to cure any such breach or
                failure
                within thirty (30) days after written notice thereof from Secured
                Party to
                the Company; 

            
	
              (e)

            	
              The
                Company’s becoming the subject of a proceeding under any bankruptcy or
                insolvency law;

            
	
              (f)

            	
              The
                Company’s having a receiver or liquidator appointed for any part of its
                business or property;

            
	
              (g)

            	
              The
                Company’s making an assignment for the benefit of
                creditors;

            
	
              (h)

            	
              Reorganization,
                merger, consolidation or other change of ownership or business structure
                of the Company without Secured Party’s prior written
                consent;

            
	
              (i)

            	
              The
                Secured Party receiving at any time after the date hereof, a UCC
                lien
                search report indicating that the Secured Party’s security interest in the
                Collateral is not prior to all other security interests or other
                interests
                reflected in the report, and the Company’s failure to have any such prior
                security or other interests fully released, terminated or subordinated
                within 45 days of written notice of such report from Secured Party
                to the
                Company; or

            
	
              (j)

            	
              Any
                representation or warranty of the Company set forth herein or in
                the Note
                shall have been false or misleading in any material
                respect.

            

    

    
    

     

    
      	
              12.

            	
              Perfection
                by Filing.
                The Secured Party may at any time and from time to time, at the Company’s
                expense, file financing statements, continuation statements and amendments
                thereto that describe the Collateral as all assets of the Company
                or words
                of similar effect and which contain any other information required
                by the
                UCC for the sufficiency or filing office acceptance of any financing
                statement, continuation statement or amendment, including whether
                the
                Company is an organization, the type of organization and any tax
                and/or
                organization identification number issued to the Company. The Company
                agrees to furnish any such information to the Secured Party promptly
                upon
                request. Any such financing statements, continuation statements or
                amendments may be signed, if so required, by the Secured Party on
                behalf
                of the Company, and may be filed at any time in any jurisdiction
                as
                necessary. The Company hereby irrevocably appoints the Secured Party,
                through any of its chosen agents or designees, as the Company’s
                Attorney-In-Fact, coupled with an interest, for the purposes
                hereof.

            

    

     

    
      	
              13.

            	
              Other
                Perfection, etc.
                The Company shall at any time and from time to time, at Company’s expense,
                take such steps as the Secured Party may reasonably request for the
                Secured Party (a) to obtain an acknowledgement, in form and substance
                satisfactory to the Secured Party, of any bailee having possession
                of any
                of the Collateral that the bailee holds such Collateral for the Secured
                Party, (b) to obtain “control” of any Investment Property, Deposit
                Accounts, Letter-Of-Credit Rights or electronic Chattel Paper, with
                any
                agreements establishing control to be in form and substance satisfactory
                to the Secured Party, (c) to obtain possession of all or any portion
                of
                the Collateral in order to perfect its security interest therein
                in
                addition to the filing of a financing statement, and (d) otherwise
                to
                insure the continued perfection and priority of the Secured Party’s
                security interest in any of the Collateral and of the preservation
                of its
                rights therein.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              14.

            	
              Application
                of Payments.
                To the extent that the Company uses the proceeds of the loan secured
                hereby to purchase any Collateral, the Company’s repayment shall be
                applied on a “first-in-first-out” basis so that the portion of said loan
                used to purchase a particular item of Collateral shall be paid in
                the
                chronological order the Company purchased such
                Collateral.

            

    

     

    
      	
              15.

            	
              The
                Secured Party.

            

    

     

    
      	 	
              (a)

            	
              Authorization.

            

    

     

    
      	
              i)

            	
              Each
                Holder irrevocably authorizes Secured Party to take such action on
                his
                behalf and as his agent under this Loan Agreement, the Note executed
                in
                favor of such Holder and all other documents executed in connection
                therewith (collectively, the “Loan Documents”), and to exercise such
                powers as are specifically delegated to it hereunder and thereunder,
                including, without limitation, powers with respect to the enforcement
                and
                collection of the Obligations, and to exercise such other powers
                as are
                reasonably incidental thereto; provided, however, that Secured Party
                shall
                not, without the express authorization of the Holders of 75% of the
                aggregate principal amount of all outstanding Notes (the “Required
                Holders”), be authorized to waive any payment default under the
                Notes.

            
	
              ii)

            	
              Except
                as set forth in subparagraph i) hereinabove, Secured Party shall
                not be
                required to but may, in its sole discretion, exercise any discretion
                or
                take any action, but shall be required to act or refrain from acting
                (and
                shall be fully protected in so acting or refraining from acting)
                upon the
                instructions of the Required Holders, and such instructions shall
                be
                binding upon all Holders, provided, however, that Secured Party shall
                not
                be required to take any action that exposes Secured Party to personal
                liability or which is contrary to this Loan Agreement or applicable
                law.

            

    

     

    
      	 	
              (b)

            	
              Notices.

            

    

     

    
      	
              i)

            	
              Secured
                Party shall transmit promptly to each Holder each notice received
                by it
                from the Company that the Company is not required to furnish to the
                Holders and each of the Holders shall transmit promptly to Secured
                Party
                each notice received by it from the Company that is not otherwise
                required
                to be delivered to Secured Party by the terms hereof. Secured Party
                shall
                be under no obligation toward any Holder to ascertain or inquire
                as to the
                performance or observance of any of the terms, covenants or conditions
                hereof to be performed or observed by the Company, but Secured Party
                and
                each Holder shall promptly notify one another of any Event of Default
                of
                which it has actual notice.

            
	
              ii)

            	
              Each
                Holder expressly authorizes Secured Party to collect all sums due
                such
                Holder under the Loan Documents. Secured Party shall promptly disburse
                to
                the Holders (to the extent of their ratable interest therein according
                to
                the outstanding Note Percentage of each Holder) available funds received
                by it for the benefit of the
                Holders.

            

    

    
    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              Exculpation.
                In exercising its duties and powers hereunder, the Secured Party
                shall
                exercise the same care that it would exercise in dealing with loans
                for
                its own account, but neither Secured Party nor any of its directors,
                officers, employees or attorneys shall be responsible for the truth
                or
                accuracy of any representations or warranties given or made herein
                or for
                the validity, effectiveness, sufficiency or enforceability of this
                Loan
                Agreement, or any other Loan Documents, and Secured Party or any
                of its
                directors, officers, employees or attorneys shall not be liable to
                any of
                the Holders for any action taken or omitted to be taken by it or
                any of
                them under the Loan Documents, except in the case of its or their
                willful
                misconduct or gross negligence. Each of the Holders represents and
                warrants to Secured Party that it has made its own independent judgment
                with respect to entering into this Loan Agreement and the other Loan
                Documents and undertaking its obligations hereunder and thereunder.
                Each
                Holder also acknowledges that it will, independently and without
                reliance
                upon the Secured Party or any other Holder and based on such documents
                and
                information as it shall deem appropriate at the time, continue to
                make its
                own credit decisions in taking or not taking action under this Loan
                Agreement and the Loan Documents. The powers conferred by this Loan
                Agreement on Secured Party hereunder are solely to protect the Holders’
                interest in the Collateral and shall not impose any duty upon Secured
                Party to exercise any such powers. Except for the safe custody of
                any
                Collateral in its possession and the accounting for monies actually
                received by it hereunder, Secured Party shall have no duty as to
                any
                Collateral or as to the taking of any necessary steps to preserve
                rights
                against prior parties or any other rights pertaining to the Collateral.
                Neither Secured Party nor any of its directors, officers, employees
                (excluding any independent contractors employed by Secured Party)
                or
                attorneys shall have any responsibility (1) to the Company on account
                of
                the failure or delay in performance or breach of any Holder of any
                of its
                obligations hereunder, or (2) to any Holder on account of the failure
                of
                or delay in performance or breach by any other Holder or the Company
                of
                any of their obligations hereunder.

            

    

     

    
      	 	
              (d)

            	
              Reliance.
                Secured Party:

            

    

     

    
      	
              i)

            	
              shall
                be entitled to rely on any communication, instrument or document
                believed
                by it to be genuine or correct and to have been signed or sent by
                a person
                or persons believed by it to be the proper person or
                persons;

            
	
              ii)

            	
              shall
                be entitled to consult with legal counsel, independent public accountants
                and other professional advisers and experts selected by it, and shall
                not
                be liable for any action taken or omitted to be taken in good faith
                by
                Secured Party in accordance with the advice of such counsel, accountants
                or experts;

            
	
              iii)

            	
              makes
                no warranty or representation to any Holder and shall not be responsible
                to any Holder for any statements, warranties or representations made
                in or
                in connection with this Loan Agreement;

            
	
              iv)

            	
              shall
                not have any duty to ascertain or to inquire as to the performance
                or
                observance of any of the terms, covenants or conditions of this Loan
                Agreement on the part of the Company or to inspect the property (including
                the books and records) of the Company;

            
	
              v)

            	
              shall
                not be responsible to any Holder for the due execution, legality,
                validity, enforceability, genuineness, sufficiency or venue of this
                Loan
                Agreement or any other instrument or document furnished pursuant
                hereto;
                and

            
	
              vi)

            	
              shall
                incur no liability under or in respect of this Loan Agreement by
                acting
                upon notice, consent, certificate or other instrument or writing
                (which
                may be by telegram, telecopier, cable or telex) believed by it to
                be
                genuine and signed or sent by the proper party or
                parties.

            

    

    
    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              Expenses
                and Indemnification.
                Each Holder agrees:

            

    

     

    
      	
              i)

            	
              to
                reimburse Secured Party, as agent hereunder, on demand, pro rata
                in
                accordance with its Note Percentage, for all reasonable expenses
                incurred
                by Secured Party in connection with the preparation, execution, operation
                and enforcement of, or legal advice in respect of rights or
                responsibilities under, this Loan Agreement and any document delivered
                in
                connection herewith, to the extent that such expenses are not timely
                reimbursed or reimbursable by the Company, and

            
	
              ii)

            	
              to
                indemnify and hold harmless Secured Party and any of its directors,
                officers or employees, on demand, pro rata in accordance with its
                Note
                Percentage, from and against all liabilities, obligations, losses,
                damages, penalties, actions, judgments, suits, costs, expenses or
                disbursements of any kind or nature whatsoever that may be imposed
                on,
                incurred by, or asserted against Secured Party in any way relating
                to or
                arising out of the Loan Documents or any action taken or omitted
                by
                Secured Party under the Loan Documents, to the extent that expenses
                and
                costs incurred by it in connection with such liability are not reimbursed
                by the Company; provided that no Holder shall be liable for any portion
                of
                such liabilities, obligations, losses, damages, penalties, actions,
                judgments, suits, costs, expenses or disbursements resulting from
                the
                Secured Party’s gross negligence or willful
                misconduct.

            

    

     

    
      	 	
              (f)

            	
              Other
                Holders.
                None of the Holders shall be deemed to be an agent of any other Holder;
                none of such Holders or any of their respective directors, officers
                or
                employees shall have any responsibility to the Company on account
                of the
                failure or delay in performance or breach of any other Holder of
                any of
                its obligations hereunder or to any other Holder on account of the
                failure
                of or delay in performance or breach by any other Holder or the Company
                of
                its obligations hereunder.

            

    

     

    
      	 	
              (g)

            	
              Removal
                or Resignation of Secured Party.
                Secured Party may resign at any time by giving written notice thereof
                to
                the Holders and the Company and upon any such resignation the Required
                Holders shall have the right to appoint a successor Secured Party.
                If no
                successor Secured Party shall have been so appointed by the Required
                Holders, and shall have accepted such appointment, within thirty
                (30) days
                after the retiring Secured Party’s giving of notice of resignation or the
                Required Holders’ removal of the retiring Secured Party, then the retiring
                Secured Party may, on behalf of the Holders, appoint a successor
                Secured
                Party. Upon the acceptance by a successor Secured Party of its appointment
                as Secured Party hereunder, such successor Secured Party shall thereupon
                succeed to and become vested with all the rights, powers, privileges
                and
                duties of the retiring Secured Party, and the retiring Secured Party
                shall
                be discharged from its duties and obligations under this Loan Agreement.
                After any retiring Secured Party’s resignation or removal hereunder as
                Secured Party, the provisions of this Section 15 shall inure to its
                benefit as to any actions taken or omitted to be taken by it while
                it was
                Secured Party under this Loan
                Agreement.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              16.

            	
              Termination;
                Assignment, Etc.
                This Loan Agreement and the security interest in the Collateral created
                hereby shall terminate when all of the Obligations have been fully
                and
                finally paid, performed and discharged, whereupon Secured Party will
                promptly provide the Company with appropriate releases/terminations
                of the
                security interests granted hereby. No waiver by Secured Party or
                by any
                other holder of the Obligations of any default shall be effective
                unless
                in writing signed by Secured Party nor shall any waiver granted on
                any one
                occasion operate as a waiver of any other default or of the same
                default
                on a future occasion. In the event of a sale or assignment by Secured
                Party of all or any of the Obligations held by Secured Party, Secured
                Party may assign or transfer its respective rights and interests
                under
                this Loan Agreement in whole or in part to the purchaser or purchasers
                of
                such Obligations, whereupon such purchaser or purchasers shall become
                vested with all of the powers and rights hereunder, and Secured Party
                shall thereafter be forever released and fully discharged from any
                liability or responsibility hereunder with respect to the rights
                and
                interests so assigned except that Secured Party shall be liable for
                damages suffered by the Company as a result of actions taken by Secured
                Party in bad faith or with willful misconduct.

            

    

     

    
      	
              17.

            	
              Notices.
                Except as otherwise provided herein, notice to the Company or to
                Secured
                Party shall be in writing and shall be deemed to have been sufficiently
                given or served for all purposes hereof when (a) delivered personally,
                (b)
                deposited with a commercially recognizable national overnight courier,
                or
                (c) mailed by certified or registered mail, postage prepaid and return
                receipt requested, when deposited in the U.S. mail, to the parties
                as
                follows (or to such other address as a party may have signified by
                notice
                given to the other party in accordance with this provision):
                

            

    

     

    
      	 	
              (a)

            	
              if
                to the Company:

            

    

     

    StarInvest
      Group, Inc.

    3300
      North A Street Suite 2-210

    Midland,
      Texas 79705

    Attn:
      Isaac H. Sutton, CEO

     

    
      	 	
              (b)

            	
              if
                to Secured Party:

            

    

     

    Strasbourger
      Pearson Tulcin Wolff Inc.

    33
      Whitehall Street

    17th
      Floor

    New
      York,
      NY 10004

    Attn:
      Ron
      Moschetta

     

    
      	
              18.

            	
              Miscellaneous.
                This Loan Agreement shall inure to the benefit of and be binding
                upon
                Secured Party and the Company and their respective successors and
                assigns.
                In case any provision in this Loan Agreement shall be invalid, illegal
                or
                unenforceable, the validity, legality, and enforceability of the
                remaining
                provisions shall not in any way be affected or impaired thereby.
                This Loan
                Agreement may be executed in any number of counterparts and by the
                different parties hereto on separate counterparts, each of which
                shall be
                an original, but all of which together shall constitute one instrument.
                The paragraph headings used in this Loan Agreement are for convenience
                of
                reference only and are not to affect the construction hereof or to
                be
                taken into consideration in the interpretation hereof. This Loan
                Agreement
                may not be amended except in
                writing.

            

    

     

    
      	
              19.

            	
              Governing
                Law.
                This Loan Agreement shall be governed by the laws of the State of
                New York
                (but not its conflicts of law provisions except to the extent that
                Part 3
                of the UCC requires the application of the laws of another jurisdiction
                with regard to the perfection and priority of security
                interests).

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              20.

            	
              Waiver.
                IN ANY ACTION TO ENFORCE THIS LOAN AGREEMENT OR TO COLLECT THE NOTE
                SECURED HEREBY OR TO COLLECT A DEFICIENCY AFTER THE ENFORCEMENT OF
                THIS
                LOAN AGREEMENT, THE COMPANY HEREIN SPECIFICALLY WAIVES ITS RIGHT
                TO ANY
                NOTICE OF HEARING OR HEARING, OR THE ESTABLISHMENT OF A BOND, WITH
                OR
                WITHOUT SURETY, WHICH THE COMPANY WOULD OTHERWISE BE ENTITLED TO
                UNDER
                STATE OR FEDERAL LAW PRIOR TO AN ATTACHMENT BEING PLACED AGAINST
                ANY
                PROPERTY OWNED BY THE COMPANY IN THE STATES OF NEW YORK OR NEVADA,
                OR
                PRIOR TO SECURED PARTY’S RESORT TO ANY OTHER PREJUDGMENT REMEDY ALLOWED BY
                LAW. THE COMPANY ACKNOWLEDGES THAT THIS LOAN AGREEMENT AND THE NOTE
                SECURED HEREBY EVIDENCE A COMMERCIAL TRANSACTION. THE COMPANY EXPRESSLY
                WAIVES ALL REQUIREMENTS OF PRESENTMENT, PROTEST, NOTICE OF DISHONOR
                OR
                NON-PAYMENT, NOTICE OF PROTEST AND ALL
                DILIGENCE.

            

    

     

    
      	
              21.

            	
              Jury
                Waiver.
                THE COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT,
                ACTION
                OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY
                WAY
                RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS LOAN AGREEMENT
                IS A
                PART AND/OR THE ENFORCEMENT OF ANY OF SECURED PARTY'S RIGHTS AND
                REMEDIES,
                INCLUDING WITHOUT LIMITATION, TORT CLAIMS. THE COMPANY ACKNOWLEDGES
                THAT
                THE COMPANY MAKES THIS WAIVER VOLUNTARILY, INTELLIGENTLY, KNOWINGLY,
                WITHOUT DURESS AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS
                THEREOF.

            

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Loan Agreement as a sealed
      instrument as of the date first above written.

     

    
      	
              Witnessed
                by:

               

               

              _____________________________________

            	
              StarInvest
                Group, Inc.

               

              By:
                _____________________________________

              Isaac
                H. Sutton

              Its
                CEO

              Duly
                Authorized

            
	
               

               

               

              _____________________________________

            	
              STRASBOURGER
                PEARSON TULCIN WOLFF INC.

               

              By:
                _____________________________________

              Ron
                Moschetta

              Its
                ____________________ 

              Duly
                Authorized

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