Document:

Unassociated Document

    WARRANT

     

    THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
      SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR
      APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
      SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
      SAID
      ACT. 

     

    INTREPID
      TECHNOLOGY AND RESOURCES, INC.

     

    Warrant
      To Purchase Common Stock

     

    
      	
              Warrant
                No.: IESV-03-03

            	
              Number
                of Shares:

            	
              1,400,000

            
	 	
              Warrant
                Exercise Price:

            	
              $0.035

            
	 	
              Expiration
                Date:

            	
              March
                28, 2013

            

    

    

    Date
      of
      Issuance: March 28, 2008

    

    Intrepid
      Technology and Resources, Inc.,
      an
      Idaho corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, YA
      Global Investments, L.P.
      (the
“Holder”),
      the
      registered holder hereof or its permitted assigns, is entitled, subject to
      the
      terms set forth below, to purchase from the Company upon surrender of this
      Warrant, at any time or times on or after the date hereof, but not after
      11:59 P.M. Eastern Time on the Expiration Date (as defined herein) up to
      One Million Four Hundred Thousand (1,400,000) fully paid and nonassessable
      shares of Common Stock (as defined herein) of the Company (the “Warrant
      Shares”)
      at the
      exercise price per share provided in Section 1(b) below or as subsequently
      adjusted; provided, however, that in no event shall the holder be entitled
      to
      exercise this Warrant for a number of Warrant Shares in excess of that number
      of
      Warrant Shares which, upon giving effect to such exercise, would cause the
      aggregate number of shares of Common Stock beneficially owned by the holder
      and
      its affiliates to exceed 4.99% of the outstanding shares of the Common Stock
      following such exercise, except within sixty (60) days of the Expiration Date
      (however, such restriction may be waived by Holder (but only as to itself and
      not to any other holder) upon not less than sixty-five (65) days prior notice
      to
      the Company). For purposes of the foregoing proviso, the aggregate number of
      shares of Common Stock beneficially owned by the holder and its affiliates
      shall
      include the number of shares of Common Stock issuable upon exercise of this
      Warrant with respect to which the determination of such proviso is being made,
      but shall exclude shares of Common Stock which would be issuable upon
      (i) exercise of the remaining, unexercised Warrants beneficially owned by
      the holder and its affiliates and (ii) exercise or conversion of the
      unexercised or unconverted portion of any other securities of the Company
      beneficially owned by the holder and its affiliates (including, without
      limitation, any convertible notes or preferred stock) subject to a limitation
      on
      conversion or exercise analogous to the limitation contained herein. Except
      as
      set forth in the preceding sentence, for purposes of this paragraph, beneficial
      ownership shall be calculated in accordance with Section 13(d) of the Securities
      Exchange Act of 1934, as amended. For purposes of this Warrant, in determining
      the number of outstanding shares of Common Stock a holder may rely on the number
      of outstanding shares of Common Stock as reflected in (1) the Company’s most
      recent Form 10-QSB or Form 10-KSB, as the case may be, (2) a more recent public
      announcement by the Company or (3) any other notice by the Company or its
      transfer agent setting forth the number of shares of Common Stock outstanding.
      Upon the written request of any holder, the Company shall promptly, but in
      no
      event later than one (1) Business Day following the receipt of such notice,
      confirm in writing to any such holder the number of shares of Common Stock
      then
      outstanding. In any case, the number of outstanding shares of Common Stock
      shall
      be determined after giving effect to the exercise of Warrants (as defined below)
      by such holder and its affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      1.  

     

    (a)  This
      Warrant is issued pursuant to the Securities Purchase Agreement (“Securities
      Purchase Agreement”)
      dated
      the date hereof between the Company and the Buyers listed on Schedule I thereto
      or issued in exchange or substitution thereafter or replacement thereof. Each
      Capitalized term used, and not otherwise defined herein, shall have the meaning
      ascribed thereto in the Securities Purchase Agreement.

     

    (b)  Definitions.
      The
      following words and terms as used in this Warrant shall have the following
      meanings:

     

    (i)  “Approved
      Stock Plan”
means
      a
      stock option plan that has been approved by the Board of Directors of the
      Company prior to the date of the Securities Purchase Agreement, pursuant to
      which the Company’s securities may be issued only to any employee, officer or
      director for services provided to the Company.

     

    (ii)  “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      the City of New York are authorized or required by law to remain
      closed.

     

    (iii)  “Closing
      Bid Price”
means
      the closing bid price of Common Stock as quoted on the Principal Market (as
      reported by Bloomberg Financial Markets (“Bloomberg”)
      through its “Volume at Price” function).

     

    (iv)  “Common
      Stock”
means
      (i) the Company’s common stock, par value $0.005 per share, and
      (ii) any capital stock into which such Common Stock shall have been changed
      or any capital stock resulting from a reclassification of such Common
      Stock.

     

    (v)  “Event
      of Default”
means
      an event of default under the Securities Purchase Agreement or the Convertible
      Debentures issued in connection therewith.

     

    
      
        
        

      

      
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    (vi)  “Excluded
      Securities”
means,
      (a) shares issued or deemed to have been issued by the Company pursuant to
      an
      Approved Stock Plan, (b) shares of Common Stock issued or deemed to be issued
      by
      the Company upon the conversion, exchange or exercise of any right, option,
      obligation or security outstanding on the date prior to date of the Securities
      Purchase Agreement, provided that the terms of such right, option, obligation
      or
      security are not amended or otherwise modified on or after the date of the
      Securities Purchase Agreement, and provided that the conversion price, exchange
      price, exercise price or other purchase price is not reduced, adjusted or
      otherwise modified and the number of shares of Common Stock issued or issuable
      is not increased (whether by operation of, or in accordance with, the relevant
      governing documents or otherwise) on or after the date of the Securities
      Purchase Agreement, and (c) the shares of Common Stock issued or deemed to
      be issued by the Company upon conversion of the Convertible Debentures or
      exercise of the Warrants. 

     

    (vii)  “Expiration
      Date”
means
      March 28,
      2013.

     

    (viii)  “Issuance
      Date”
means
      the date hereof.

     

    (ix)  “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities. 

     

    (x)  “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    (xi)  “Primary
      Market”
means
      on any of (a) the American Stock Exchange, (b) New York Stock Exchange, (c)
      the
      Nasdaq Global Select Market, (d) the Nasdaq Global Market, (e) the Nasdaq
      Capital Market, or (e) the Over-the-Counter Bulletin Board (“OTCBB”)
      

     

    (xii)  “Securities
      Act”
means
      the Securities Act of 1933, as amended. 

     

    (xiii)  “Warrant”
means
      this Warrant and all Warrants issued in exchange, transfer or replacement
      thereof. 

     

    (xiv)  “Warrant
      Exercise Price”
shall
      be $0.035 or as subsequently adjusted as provided in Section 8 hereof.

     

    (c)  Other
      Definitional Provisions. 

     

    (i)  Except
      as
      otherwise specified herein, all references herein (A) to the Company shall
      be deemed to include the Company’s successors and (B) to any applicable law
      defined or referred to herein shall be deemed references to such applicable
      law
      as the same may have been or may be amended or supplemented from time to time.
      

     

    (ii)  When
      used
      in this Warrant, the words “herein”,
      “hereof”,
      and
“hereunder”
      and
      words of similar import, shall refer to this Warrant as a whole and not to
      any
      provision of this Warrant, and the words “Section”,
      “Schedule”,
      and
“Exhibit”
shall
      refer to Sections of, and Schedules and Exhibits to, this Warrant unless
      otherwise specified. 

     

    
      
        
        

      

      
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    (iii)  Whenever
      the context so requires, the neuter gender includes the masculine or feminine,
      and the singular number includes the plural, and vice versa. 

     

    Section
      2.  Exercise
      of Warrant.
      

     

    (a)  Subject
      to the terms and conditions hereof, this Warrant may be exercised by the holder
      hereof then registered on the books of the Company, pro rata as hereinafter
      provided, at any time on any Business Day on or after the opening of business
      on
      such Business Day, commencing with the first day after the date hereof, and
      prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of
      a written notice, in the form of the subscription notice attached as
Exhibit
      A
      hereto
      (the “Exercise
      Notice”),
      of
      such holder’s election to exercise this Warrant, which notice shall specify the
      number of Warrant Shares to be purchased, payment to the Company of an
      amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares
      being purchased, multiplied by the number of Warrant Shares (at the
      applicable Warrant Exercise Price) as to which this Warrant is being
      exercised (plus any applicable issue or transfer taxes) (the “Aggregate
      Exercise Price”)
      in
      cash or wire transfer of immediately available funds and the surrender of this
      Warrant (or an indemnification undertaking with respect to this Warrant in
      the
      case of its loss, theft or destruction) to a common carrier for overnight
      delivery to the Company as soon as practicable following such date
      (“Cash
      Basis”)
      or
      (ii) if at the time of exercise, the Warrant Shares are not subject to an
      effective registration statement or if an Event of Default has occurred, by
      delivering an Exercise Notice and in lieu of making payment of the Aggregate
      Exercise Price in cash or wire transfer, elect instead to receive upon such
      exercise the “Net Number” of shares of Common Stock determined according to the
      following formula (the “Cashless
      Exercise”):
      

     

    
      	
              Net
                Number = 

            	
              (A
                x B) - (A x C)

            
	
               

            	
              B

            

    

    

    For
      purposes of the foregoing formula: 

    

    A
      = the
      total number of Warrant Shares with respect to which this Warrant is then being
      exercised. 

    

    B
      = the
      Closing Bid Price of the Common Stock on the date of exercise of the
      Warrant.

    

    C
      = the
      Warrant Exercise Price then in effect for the applicable Warrant Shares at
      the
      time of such exercise. 

    

    In
      the
      event of any exercise of the rights represented by this Warrant in compliance
      with this Section 2, the Company shall on or before the fifth (5th)
      Business Day following the date of receipt of the Exercise Notice, the Aggregate
      Exercise Price and this Warrant (or an indemnification undertaking with respect
      to this Warrant in the case of its loss, theft or destruction) and the receipt
      of the representations of the holder specified in Section 6 hereof, if requested
      by the Company (the “Exercise
      Delivery Documents”),
      and
      if the Common Stock is DTC eligible, credit such aggregate number of shares
      of
      Common Stock to which the holder shall be entitled to the holder’s or its
      designee’s balance account with The Depository Trust Company; provided, however,
      if the holder who submitted the Exercise Notice requested physical delivery
      of
      any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible
      then the Company shall, on or before the fifth (5th)
      Business Day following receipt of the Exercise Delivery Documents, issue and
      surrender to a common carrier for overnight delivery to the address specified
      in
      the Exercise Notice, a certificate, registered in the name of the holder, for
      the number of shares of Common Stock to which the holder shall be entitled
      pursuant to such request. Upon delivery of the Exercise Notice and Aggregate
      Exercise Price referred to in clause (i) or (ii) above the holder of this
      Warrant shall be deemed for all corporate purposes to have become the holder
      of
      record of the Warrant Shares with respect to which this Warrant has been
      exercised. In the case of a dispute as to the determination of the Warrant
      Exercise Price, the Closing Bid Price or the arithmetic calculation of the
      Warrant Shares, the Company shall promptly issue to the holder the number of
      Warrant Shares that is not disputed and shall submit the disputed determinations
      or arithmetic calculations to the holder via facsimile within one (1) Business
      Day of receipt of the holder’s Exercise Notice. 

     

    
      
        
        

      

      
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    (b)  If
      the
      holder and the Company are unable to agree upon the determination of the Warrant
      Exercise Price or arithmetic calculation of the Warrant Shares within one (1)
      day of such disputed determination or arithmetic calculation being submitted
      to
      the holder, then the Company shall immediately submit via facsimile (i) the
      disputed determination of the Warrant Exercise Price or the Closing Bid Price
      to
      an independent, reputable investment banking firm or (ii) the disputed
      arithmetic calculation of the Warrant Shares to its independent, outside
      accountant. The Company shall cause the investment banking firm or the
      accountant, as the case may be, to perform the determinations or calculations
      and notify the Company and the holder of the results no later than forty-eight
      (48) hours from the time it receives the disputed determinations or
      calculations. Such investment banking firm’s or accountant’s determination or
      calculation, as the case may be, shall be deemed conclusive absent manifest
      error.

     

    (c)  Unless
      the rights represented by this Warrant shall have expired or shall have been
      fully exercised, the Company shall, as soon as practicable and in no event
      later
      than five (5) Business Days after any exercise and at its own expense, issue
      a
      new Warrant identical in all respects to this Warrant exercised except it shall
      represent rights to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant exercised, less the number
      of Warrant Shares with respect to which such Warrant is exercised.

     

    (d)  No
      fractional Warrant Shares are to be issued upon any pro rata exercise of this
      Warrant, but rather the number of Warrant Shares issued upon such exercise
      of
      this Warrant shall be rounded up or down to the nearest whole
      number.

     

    (e)  If
      the
      Company or its Transfer Agent shall fail for any reason or for no reason to
      issue to the holder within ten (10) days of receipt of the Exercise
      Delivery Documents, a certificate for the number of Warrant Shares to which
      the
      holder is entitled or to credit the holder’s balance account with The Depository
      Trust Company for such number of Warrant Shares to which the holder is entitled
      upon the holder’s exercise of this Warrant, the Company shall, in addition to
      any other remedies under this Warrant or otherwise available to such holder,
      pay
      as additional damages in cash to such holder on each day the issuance of such
      certificate for Warrant Shares is not timely effected an amount equal to 0.025%
      of the product of (A) the sum of the number of Warrant Shares not issued to
      the
      holder on a timely basis and to which the holder is entitled, and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Common Stock
      to
      the holder without violating this Section 2.

     

    
      
        
        

      

      
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    (f)  If
      within
      ten (10) days after the Company’s receipt of the Exercise Delivery Documents,
      the Company fails to deliver a new Warrant to the holder for the number of
      Warrant Shares to which such holder is entitled pursuant to Section 2 hereof,
      then, in addition to any other available remedies under this Warrant, or
      otherwise available to such holder, the Company shall pay as additional damages
      in cash to such holder on each day after such tenth (10th)
      day
      that such delivery of such new Warrant is not timely effected in an amount
      equal
      to 0.25% of the product of (A) the number of Warrant Shares represented by
      the portion of this Warrant which is not being exercised and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Warrant to
      the
      holder without violating this Section 2.

     

    Section
      3.  Covenants
      as to Common Stock.
      The
      Company hereby covenants and agrees as follows:

     

    (a)  This
      Warrant is, and any Warrants issued in substitution for or replacement of this
      Warrant will upon issuance be, duly authorized and validly issued.

     

    (b)  All
      Warrant Shares which may be issued upon the exercise of the rights represented
      by this Warrant will, upon issuance, be validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof.

     

    (c)  During
      the period within which the rights represented by this Warrant may be exercised,
      the Company will at all times have authorized and reserved at least one hundred
      percent (100%) of the number of shares of Common Stock needed to provide for
      the
      exercise of the rights then represented by this Warrant and the par value of
      said shares will at all times be less than or equal to the applicable Warrant
      Exercise Price. If at any time the Company does not have a sufficient number
      of
      shares of Common Stock authorized and available, then the Company shall call
      and
      hold a special meeting of its stockholders within sixty (60) days of that
      time for the sole purpose of increasing the number of authorized shares of
      Common Stock.

     

    (d)  If
      at any
      time after the date hereof the Company shall file a registration statement,
      the
      Company shall include the Warrant Shares issuable to the holder, pursuant to
      the
      terms of this Warrant and shall maintain, so long as any other shares of Common
      Stock shall be so listed, such listing of all Warrant Shares from time to time
      issuable upon the exercise of this Warrant; and the Company shall so list on
      each national securities exchange or automated quotation system, as the case
      may
      be, and shall maintain such listing of, any other shares of capital stock of
      the
      Company issuable upon the exercise of this Warrant if and so long as any shares
      of the same class shall be listed on such national securities exchange or
      automated quotation system.

     

    (e)  The
      Company will not, by amendment of its Articles of Incorporation or through
      any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms to be observed or performed by
      it
      hereunder, but will at all times in good faith assist in the carrying out of
      all
      the provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilution or other
      impairment, consistent with the tenor and purpose of this Warrant. The Company
      will not increase the par value of any shares of Common Stock receivable upon
      the exercise of this Warrant above the Warrant Exercise Price then in effect,
      and (ii) will take all such actions as may be necessary or appropriate in
      order that the Company may validly and legally issue fully paid and
      nonassessable shares of Common Stock upon the exercise of this
      Warrant.

     

    
      
        
        

      

      
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    (f)  This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation or acquisition of all or substantially all of the Company’s
      assets.

     

    Section
      4.  Taxes.
      The
      Company shall pay any and all taxes, except any applicable withholding, which
      may be payable with respect to the issuance and delivery of Warrant Shares
      upon
      exercise of this Warrant.

     

    Section
      5.  Warrant
      Holder Not Deemed a Stockholder.
      Except
      as otherwise specifically provided herein, no holder, as such, of this Warrant
      shall be entitled to vote or receive dividends or be deemed the holder of shares
      of capital stock of the Company for any purpose, nor shall anything contained
      in
      this Warrant be construed to confer upon the holder hereof, as such, any of
      the
      rights of a stockholder of the Company or any right to vote, give or withhold
      consent to any corporate action (whether any reorganization, issue of stock,
      reclassification of stock, consolidation, merger, conveyance or otherwise),
      receive notice of meetings, receive dividends or subscription rights, or
      otherwise, prior to the issuance to the holder of this Warrant of the Warrant
      Shares which he or she is then entitled to receive upon the due exercise of
      this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on such holder to purchase any securities (upon
      exercise of this Warrant or otherwise) or as a stockholder of the Company,
      whether such liabilities are asserted by the Company or by creditors of the
      Company. Notwithstanding this Section 5, the Company will provide the holder
      of
      this Warrant with copies of the same notices and other information given to
      the
      stockholders of the Company generally, contemporaneously with the giving thereof
      to the stockholders.

     

    Section
      6.  Representations
      of Holder.
      The
      holder of this Warrant, by the acceptance hereof, represents that it is
      acquiring this Warrant and the Warrant Shares for its own account for investment
      only and not with a view towards, or for resale in connection with, the public
      sale or distribution of this Warrant or the Warrant Shares, except pursuant
      to
      sales registered or exempted under the Securities Act; provided, however, that
      by making the representations herein, the holder does not agree to hold this
      Warrant or any of the Warrant Shares for any minimum or other specific term
      and
      reserves the right to dispose of this Warrant and the Warrant Shares at any
      time
      in accordance with or pursuant to a registration statement or an exemption
      under
      the Securities Act. The holder of this Warrant further represents, by acceptance
      hereof, that, as of this date, such holder is an “accredited investor” as such
      term is defined in Rule 501(a) of Regulation D promulgated by the
      Securities and Exchange Commission under the Securities Act (an “Accredited
      Investor”).
      Upon
      exercise of this Warrant the holder shall, if requested by the Company, confirm
      in writing, in a form satisfactory to the Company, that the Warrant Shares
      so
      purchased are being acquired solely for the holder’s own account and not as a
      nominee for any other party, for investment, and not with a view toward
      distribution or resale and that such holder is an Accredited Investor. If such
      holder cannot make such representations because they would be factually
      incorrect, it shall be a condition to such holder’s exercise of this Warrant
      that the Company receive such other representations as the Company considers
      reasonably necessary to assure the Company that the issuance of its securities
      upon exercise of this Warrant shall not violate any United States or state
      securities laws.

     

    
      
        
        

      

      
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    Section
      7.  Ownership
      and Transfer.

     

    (a)  The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee. The Company may treat the person in whose
      name any Warrant is registered on the register as the owner and holder thereof
      for all purposes, notwithstanding any notice to the contrary, but in all events
      recognizing any transfers made in accordance with the terms of this
      Warrant.

     

    Section
      8.  Adjustment
      of Warrant Exercise Price and Number of Shares.
      The
      Warrant Exercise Price and the number of shares of Common Stock issuable upon
      exercise of this Warrant shall be adjusted from time to time as
      follows:

     

    (a)  Adjustment
      of Warrant Exercise Price and Number of Shares upon Issuance of Common
      Stock.
      If and
      whenever on or after the Issuance Date of this Warrant, the Company issues
      or
      sells, or is deemed to have issued or sold, any shares of Common
      Stock (other than Excluded Securities) for a consideration per share less
      than a price (the “Applicable
      Price”)
      equal
      to the Warrant Exercise Price in effect immediately prior to such issuance
      or
      sale, then immediately after such issue or sale the Warrant Exercise Price
      then
      in effect shall be reduced to an amount equal to such consideration per share.
      Upon each such adjustment of the Warrant Exercise Price hereunder, the number
      of
      Warrant Shares issuable upon exercise of this Warrant shall be adjusted to
      the
      number of shares determined by multiplying the Warrant Exercise Price in effect
      immediately prior to such adjustment by the number of Warrant Shares issuable
      upon exercise of this Warrant immediately prior to such adjustment and dividing
      the product thereof by the Warrant Exercise Price resulting from such
      adjustment.

     

    (b)  Effect
      on Warrant Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Warrant Exercise Price under Section 8(a)
      above, the following shall be applicable:

     

    (i)  Issuance
      of Options.
      If
      after the date hereof, the Company in any manner grants any Options and the
      lowest price per share for which one share of Common Stock is issuable upon
      the
      exercise of any such Option or upon conversion or exchange of any convertible
      securities issuable upon exercise of any such Option is less than the Applicable
      Price, then such share of Common Stock shall be deemed to be outstanding and
      to
      have been issued and sold by the Company at the time of the granting or sale
      of
      such Option for such price per share. For purposes of this Section 8(b)(i),
      the
      lowest price per share for which one share of Common Stock is issuable upon
      exercise of such Options or upon conversion or exchange of such Convertible
      Securities shall be equal to the sum of the lowest amounts of consideration
      (if
      any) received or receivable by the Company with respect to any one share of
      Common Stock upon the granting or sale of the Option, upon exercise of the
      Option or upon conversion or exchange of any convertible security issuable
      upon
      exercise of such Option. No further adjustment of the Warrant Exercise Price
      shall be made upon the actual issuance of such Common Stock or of such
      convertible securities upon the exercise of such Options or upon the actual
      issuance of such Common Stock upon conversion or exchange of such convertible
      securities.

     

    
      
        
        

      

      
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    (ii)  Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any convertible securities and the lowest
      price per share for which one share of Common Stock is issuable upon the
      conversion or exchange thereof is less than the Applicable Price, then such
      share of Common Stock shall be deemed to be outstanding and to have been issued
      and sold by the Company at the time of the issuance or sale of such convertible
      securities for such price per share. For the purposes of this
      Section 8(b)(ii), the lowest price per share for which one share of Common
      Stock is issuable upon such conversion or exchange shall be equal to the sum
      of
      the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to one share of Common Stock upon the issuance or sale
      of
      the convertible security and upon conversion or exchange of such convertible
      security. No further adjustment of the Warrant Exercise Price shall be made
      upon
      the actual issuance of such Common Stock upon conversion or exchange of such
      convertible securities, and if any such issue or sale of such convertible
      securities is made upon exercise of any Options for which adjustment of the
      Warrant Exercise Price had been or are to be made pursuant to other provisions
      of this Section 8(b), no further adjustment of the Warrant Exercise Price shall
      be made by reason of such issue or sale. 

     

    (iii)  Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion or exchange of any convertible
      securities, or the rate at which any convertible securities are convertible
      into
      or exchangeable for Common Stock changes at any time, the Warrant Exercise
      Price
      in effect at the time of such change shall be adjusted to the Warrant Exercise
      Price which would have been in effect at such time had such Options or
      convertible securities provided for such changed purchase price, additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold and the number of Warrant Shares issuable
      upon
      exercise of this Warrant shall be correspondingly readjusted. For purposes
      of
      this Section 8(b)(iii), if the terms of any Option or convertible security
      that
      was outstanding as of the Issuance Date of this Warrant are changed in the
      manner described in the immediately preceding sentence, then such Option or
      convertible security and the Common Stock deemed issuable upon exercise,
      conversion or exchange thereof shall be deemed to have been issued as of the
      date of such change. No adjustment pursuant to this Section 8(b) shall be
      made if such adjustment would result in an increase of the Warrant Exercise
      Price then in effect.

     

    (iv)  Calculation
      of Consideration Received.
      If any
      Common Stock, Options or convertible securities are issued or sold or deemed
      to
      have been issued or sold for cash, the consideration received therefore will
      be
      deemed to be the net amount received by the Company therefore. If any Common
      Stock, Options or convertible securities are issued or sold for a consideration
      other than cash, the amount of such consideration received by the Company will
      be the fair value of such consideration, except where such consideration
      consists of marketable securities, in which case the amount of consideration
      received by the Company will be the market price of such securities on the
      date
      of receipt of such securities. If any Common Stock, Options or convertible
      securities are issued to the owners of the non-surviving entity in connection
      with any merger in which the Company is the surviving entity, the amount of
      consideration therefore will be deemed to be the fair value of such portion
      of
      the net assets and business of the non-surviving entity as is attributable
      to
      such Common Stock, Options or convertible securities, as the case may be. The
      fair value of any consideration other than cash or securities will be determined
      jointly by the Company and the holders of Warrants representing at least
      two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
      then
      outstanding. If such parties are unable to reach agreement within ten (10)
      days after the occurrence of an event requiring valuation (the “Valuation
      Event”),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the holders of Warrants representing at least
      two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
      then
      outstanding. The determination of such appraiser shall be final and binding
      upon
      all parties and the fees and expenses of such appraiser shall be borne jointly
      by the Company and the holders of Warrants.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (v)  Integrated
      Transactions.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $0.01.

     

    (vi)  Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time does not include
      shares owned or held by or for the account of the Company, and the disposition
      of any shares so owned or held will be considered an issue or sale of Common
      Stock.

     

    (vii)  Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (1) to receive a dividend or other distribution payable in
      Common Stock, Options or in convertible securities or (2) to subscribe for
      or purchase Common Stock, Options or convertible securities, then such record
      date will be deemed to be the date of the issue or sale of the shares of Common
      Stock deemed to have been issued or sold upon the declaration of such dividend
      or the making of such other distribution or the date of the granting of such
      right of subscription or purchase, as the case may be.

     

    (c)  Adjustment
      of Warrant Exercise Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company at any time after the date of issuance of this Warrant subdivides (by
      any stock split, stock dividend, recapitalization or otherwise) one or more
      classes of its outstanding shares of Common Stock into a greater number of
      shares, any Warrant Exercise Price in effect immediately prior to such
      subdivision will be proportionately reduced and the number of shares of Common
      Stock obtainable upon exercise of this Warrant will be proportionately
      increased. If the Company at any time after the date of issuance of this Warrant
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its outstanding shares of Common Stock into a smaller number of shares,
      any
      Warrant Exercise Price in effect immediately prior to such combination will
      be
      proportionately increased and the number of Warrant Shares issuable upon
      exercise of this Warrant will be proportionately decreased. Any adjustment
      under
      this Section 8(c) shall become effective at the close of business on the
      date the subdivision or combination becomes effective.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (d)  Distribution
      of Assets.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Stock, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement or other similar transaction)
      (a
“Distribution”),
      at
      any time after the issuance of this Warrant, then, in each such
      case:

     

    (i)  any
      Warrant Exercise Price in effect immediately prior to the close of business
      on
      the record date fixed for the determination of holders of Common Stock
      entitled to
      receive the Distribution shall be reduced, effective as of the close of business
      on such record date, to a price determined by multiplying such Warrant Exercise
      Price by a fraction of which (A) the numerator shall be the Closing Sale Price
      of the Common Stock on the trading day immediately preceding such record date
      minus the value of the Distribution (as determined in good faith by the
      Company’s Board of Directors) applicable to one share of Common Stock, and (B)
      the denominator shall be the Closing Sale Price of the Common Stock on the
      trading day immediately preceding such record date; and

     

    (ii)  either
      (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall
      be increased to a number of shares equal to the number of shares of Common
      Stock
      obtainable immediately prior to the close of business on the record date fixed
      for the determination of holders of Common Stock entitled to receive the
      Distribution multiplied by the reciprocal of the fraction set forth in the
      immediately preceding clause (i), or (B) in the event that the Distribution
      is
      of common stock of a company whose common stock is traded on a national
      securities exchange or a national automated quotation system, then the holder
      of
      this Warrant shall receive an additional warrant to purchase Common Stock,
      the
      terms of which shall be identical to those of this Warrant, except that such
      warrant shall be exercisable into the amount of the assets that would have
      been
      payable to the holder of this Warrant pursuant to the Distribution had the
      holder exercised this Warrant immediately prior to such record date and with
      an
      exercise price equal to the amount by which the exercise price of this Warrant
      was decreased with respect to the Distribution pursuant to the terms of the
      immediately preceding clause (i).

     

    (e)  Certain
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 8
      but not expressly provided for by such provisions (including, without
      limitation, the granting of stock appreciation rights, phantom stock rights
      or
      other rights with equity features), then the Company’s Board of Directors will
      make an appropriate adjustment in the Warrant Exercise Price and the number
      of
      shares of Common Stock obtainable upon exercise of this Warrant so as to protect
      the rights of the holders of the Warrants; provided, except as set forth in
      section 8(c),that no such adjustment pursuant to this Section 8(e) will increase
      the Warrant Exercise Price or decrease the number of shares of Common Stock
      obtainable as otherwise determined pursuant to this Section 8.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (f)  Voluntary
      Adjustments By Company.
      The
      Company may at any time during the term of this Warrant reduce the then current
      Exercise Price to any amount and for any period of time deemed appropriate
      by
      the Board of Directors of the Company.

     

    (g)  Notices.

     

    (i)  Immediately
      upon any adjustment of the Warrant Exercise Price, the Company will give written
      notice thereof to the holder of this Warrant, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

     

    (ii)  The
      Company will give written notice to the holder of this Warrant at least ten
      (10)
      days prior to the date on which the Company closes its books or takes a record
      (A) with respect to any dividend or distribution upon the Common Stock,
      (B) with respect to any pro rata subscription offer to holders of Common
      Stock or (C) for determining rights to vote with respect to any Organic
      Change (as defined below), dissolution or liquidation, provided that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to such holder.

     

    (iii)  The
      Company will also give written notice to the holder of this Warrant at least
      ten
      (10) days prior to the date on which any Organic Change, dissolution or
      liquidation will take place, provided that such information shall be made known
      to the public prior to or in conjunction with such notice being provided to
      such
      holder.

     

    Section
      9.  Purchase
      Rights; Reorganization, Reclassification, Consolidation, Merger or
      Sale.

     

    (a)  In
      addition to any adjustments pursuant to Section 8 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of Common Stock (the “Purchase
      Rights”),
      then
      the holder of this Warrant will be entitled to acquire, upon the terms
      applicable to such Purchase Rights, the aggregate Purchase Rights which such
      holder could have acquired if such holder had held the number of shares of
      Common Stock acquirable upon complete exercise of this Warrant immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

     

    (b)  Any
      recapitalization, reorganization, reclassification, consolidation, merger,
      sale
      of all or substantially all of the Company’s assets to another Person or other
      transaction in each case which is effected in such a way that holders of Common
      Stock are entitled to receive (either directly or upon subsequent liquidation)
      stock, securities or assets with respect to or in exchange for Common Stock
      is
      referred to herein as an “Organic
      Change”.
      Prior
      to the consummation of any (i) sale of all or substantially all of the Company’s
      assets to an acquiring Person or (ii) other Organic Change following which
      the
      Company is not a surviving entity, the Company will secure from the Person
      purchasing such assets or the successor resulting from such Organic Change
      (in
      each case, the “Acquiring
      Entity”)
      a
      written agreement (in form and substance satisfactory to the holders of Warrants
      representing at least two-thirds (iii) of the Warrant Shares issuable upon
      exercise of the Warrants then outstanding) to deliver to each holder of Warrants
      in exchange for such Warrants, a security of the Acquiring Entity evidenced
      by a
      written instrument substantially similar in form and substance to this Warrant
      and satisfactory to the holders of the Warrants (including an adjusted warrant
      exercise price equal to the value for the Common Stock reflected by the terms
      of
      such consolidation, merger or sale, and exercisable for a corresponding number
      of shares of Common Stock acquirable and receivable upon exercise of the
      Warrants without regard to any limitations on exercise, if the value so
      reflected is less than any Applicable Warrant Exercise Price immediately prior
      to such consolidation, merger or sale). Prior to the consummation of any other
      Organic Change, the Company shall make appropriate provision (in form and
      substance satisfactory to the holders of Warrants representing a
      majority of
      the
      Warrant Shares issuable upon exercise of the Warrants then outstanding) to
      insure that each of the holders of the Warrants will thereafter have the right
      to acquire and receive in lieu of or in addition to (as the case may be) the
      Warrant Shares immediately theretofore issuable and receivable upon the exercise
      of such holder’s Warrants (without regard to any limitations on exercise),
      such shares of stock, securities or assets that would have been issued or
      payable in such Organic Change with respect to or in exchange for the number
      of
      Warrant Shares which would have been issuable and receivable upon the exercise
      of such holder’s Warrant as of the date of such Organic Change (without taking
      into account any limitations or restrictions on the exercisability of this
      Warrant).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      10.  Lost,
      Stolen, Mutilated or Destroyed Warrant.
      If this
      Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
      on
      receipt of an indemnification undertaking (or, in the case of a mutilated
      Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
      this Warrant so lost, stolen, mutilated or destroyed.

     

    Section
      11.  Notice.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Warrant must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally;
      (ii) upon receipt, when sent by facsimile (provided confirmation of receipt
      is received by the sending party transmission is mechanically or electronically
      generated and kept on file by the sending party); or (iii) one Business Day
      after deposit with a nationally recognized overnight delivery service, in each
      case properly addressed to the party to receive the same. The addresses and
      facsimile numbers for such communications shall be:

     

    
      	
              If
                to Holder:

            	
              YA
                Global Investments, L.P.

            
	
               

            	
              101
                Hudson Street - Suite 3700

            
	
               

            	
              Jersey
                City, NJ 07302

            
	
               

            	
              Attention: Mark
                A. Angelo

            
	
               

            	
              Telephone: (201)
                985-8300

            
	
               

            	
              Facsimile: (201)
                985-8266

            
	
               

            	
               

            
	
              With
                Copy to:

            	
              David
                Gonzalez, Esq.

            
	
               

            	
              101
                Hudson Street - Suite 3700

            
	
               

            	
              Jersey
                City, NJ 07302

            
	
               

            	
              Telephone: (201)
                985-8300

            
	
               

            	
              Facsimile: (201)
                985-8266

            
	
               

            	
               

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
               

            
	
              If
                to the Company, to:

            	
              Intrepid
                Technology and Resources, Inc.

            
	
               

            	
              501West
                Broadway, Suite 200

            
	
               

            	
              Idaho
                Falls, ID 83402

            
	
               

            	
              Attention:
                Jacob D. Dustin

            
	
               

            	
              Telephone:
                (208) 529-5337

            
	
               

            	
              Facsimile:
                (208) 529-1014

            
	
               

            	
               

            
	
              With
                a copy to:

            	
              Kirkpatrick
                & Lockhart Preston Gates Ellis LLP

            
	
               

            	
              200
                South Biscayne Boulevard, Suite 2000

            
	
               

            	
              Miami,
                Florida 33131

            
	
               

            	
              Attention: Clayton
                E. Parker, Esq.

            
	
               

            	
              Telephone: (305)
                539-3306

            
	
               

            	
              Facsimile: (305)
                358-7095

            

    

    

    If
      to a
      holder of this Warrant, to it at the address and facsimile number set forth
      in
      this Section 11, or at such other address and facsimile as shall be delivered
      to
      the Company upon the issuance or transfer of this Warrant. Each party shall
      provide five days’ prior written notice to the other party of any change in
      address or facsimile number. Written confirmation of receipt (A) given by
      the recipient of such notice, consent, facsimile, waiver or other communication,
      (or (B) provided by a nationally recognized overnight delivery service
      shall be rebuttable evidence of personal service, receipt by facsimile or
      receipt from a nationally recognized overnight delivery service in accordance
      with clause (i), (ii) or (iii) above, respectively.

     

    Section
      12.  Date.
      The
      date of this Warrant is set forth on page 1 hereof. This Warrant, in all
      events, shall be wholly void and of no effect after the close of business on
      the
      Expiration Date, except that notwithstanding any other provisions hereof, the
      provisions of Section 8(b) shall continue in full force and effect after
      such date as to any Warrant Shares or other securities issued upon the exercise
      of this Warrant.

     

    Section
      13.  Amendment
      and Waiver.
      Except
      as otherwise provided herein, the provisions of the Warrants may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the holders of Warrants representing at least two-thirds
      of
      the Warrant Shares issuable upon exercise of the Warrants then outstanding;
      provided that, except for Section 8(d), no such action may increase the Warrant
      Exercise Price or decrease the number of shares or class of stock obtainable
      upon exercise of any Warrant without the written consent of the holder of such
      Warrant.

     

    Section
      14.  Descriptive
      Headings; Governing Law.
      The
      descriptive headings of the several sections and paragraphs of this Warrant
      are
      inserted for convenience only and do not constitute a part of this Warrant.
      The
      corporate laws of the State of New Jersey shall govern all issues concerning
      the
      relative rights of the Company and its stockholders. All other questions
      concerning the construction, validity, enforcement and interpretation of this
      Agreement shall be governed by the internal laws of the State of New Jersey,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of New Jersey or any other jurisdictions) that would
      cause
      the application of the laws of any jurisdictions other than the State of New
      Jersey. Each party hereby irrevocably submits to the exclusive jurisdiction
      of
      the state and federal courts sitting in Hudson County and the United States
      District Court for the District of New Jersey, for the adjudication of any
      dispute hereunder or in connection herewith or therewith, or with any
      transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper. Each party hereby
      irrevocably waives personal service of process and consents to process being
      served in any such suit, action or proceeding by mailing a copy thereof to
      such
      party at the address for such notices to it under this Agreement and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      15.  Waiver
      of Jury Trial.
      AS
      A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
      PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
      ASSOCIATED WITH THIS TRANSACTION.

     

    REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed as of the date first set forth
      above.

     

    
      	 	 	
              INTREPID
                TECHNOLOGY AND RESOURCES, INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                Jacob D. Dustin

            
	 	
              Name:

            	
              Jacob
                D. Dustin

            
	 	
              Title:

            	
              President

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A TO WARRANT

     

    EXERCISE
      NOTICE

     

    TO
      BE EXECUTED 

    BY
      THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

     

    INTREPID
      TECHNOLOGY AND RESOURCES, INC.

     

    The
      undersigned holder hereby exercises the right to purchase ______________ of
      the
      shares of Common Stock (“Warrant
      Shares”)
      of
      Intrepid Technology and Resources, Inc. (the “Company”),
      evidenced by the attached Warrant (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

     

    Specify
      Method of exercise by check mark:

     

    1.
      ___ Cash
      Exercise

     

    (a)
      Payment
      of Warrant Exercise Price.
      The
      holder shall pay the Aggregate Exercise Price of $______________ to the Company
      in accordance with the terms of the Warrant. 

     

    (b)
      Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

    2.
      ___ Cashless
      Exercise

     

    (a)
      Payment
      of Warrant Exercise Price.
      In lieu
      of making payment of the Aggregate Exercise Price, the holder elects to receive
      upon such exercise the Net Number of shares of Common Stock determined in
      accordance with the terms of the Warrant. 

     

    (b)
      Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

    Date:
      _______________ __, ______

    

    Name
      of
      Registered Holder

    

    By:__________________________

    Name:________________________

    Title:_________________________

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B TO WARRANT

     

    FORM
      OF WARRANT POWER

     

    FOR
      VALUE RECEIVED,
      the
      undersigned does hereby assign and transfer to ________________, Federal
      Identification No. __________, a warrant to purchase ____________ shares of
      the capital stock of Intrepid Technology and Resources, Inc. represented by
      warrant certificate no. _____, standing in the name of the undersigned on
      the books of said corporation. The undersigned does hereby irrevocably
      constitute and appoint ______________, attorney to transfer the warrants of
      said
      corporation, with full power of substitution in the premises.

     

    
      	
              Dated:

            	 	 	 
	 	 	 	 
	 	 	
              By:

            	 
	 	 	
              Name:

            	 
	 	 	
              Title:

            	 
	 	 	 	 

    

    

    
      
        
        

      

      
        
          B-1SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT
      (the
“Agreement”), is
      entered into and made effective as of March 28, 2008, by and among INTREPID
      TECHNOLOGY AND RESOURCES, INC., an
      Idaho
      corporation with its principal place of business located at 501 West Broadway
      -
      Suite 200 Idaho Falls, Idaho 83402 (the “Company”),
      and
      the undersigned subsidiaries of the Company (each a “Guarantor”
and
      collectively together with the Company, the “Grantors”),
      in
      favor YA
      GLOBAL INVESTMENTS, L.P.
      (the
“Secured
      Party”).

     

    WHEREAS,
      in
      connection with the Securities Purchase Agreement, of even date herewith, by
      and
      among the Company and the Secured Party (the “Securities
      Purchase Agreement”),
      the
      Company has agreed, upon the terms and subject to the conditions of the
      Securities Purchase Agreement, to issue to the Secured Party (i) an aggregate
      original principal amount of Five Hundred Eight Five Thousand Dollars ($585,000)
      of secured convertible debentures (the “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value
      $0.0005 per share (“Common
      Stock”);
      and
      (ii) warrants (the “Warrants”)
      to be
      exercisable to acquire additional shares of Common Stock initially in that
      number of shares of Common Stock set forth in the Securities Purchase
      Agreement;

     

    WHEREAS,
      each of
      the Guarantors (other than the Company) has executed and delivered a Guaranty,
      dated the date hereof (the “Guaranty”),
      in
      favor of the Secured Party with respect to the Company’s obligations under the
      Transaction Documents; and

     

    WHEREAS,
      in
      connection with the financial accommodations to the Company by the Secured
      Party
      under the Convertible Debentures or otherwise, each of the Guarantors shall
      receive a direct benefit from the execution of such financial accommodations
      as
      part of the affiliated business operations of the Company and the Guarantors;
      and 

     

    WHEREAS,
      it
      is a
      condition precedent to the Secured Party purchasing the Convertible Debentures
      and Warrants pursuant to the Securities Purchase Agreement that the Grantors
      shall have executed and delivered to the Secured Party this Agreement providing
      for the grant to the Secured Party of a security interest in all assets and
      personal property of each Grantor to secure all of the Grantors’ obligations
      under the Transaction Documents; 

     

    NOW,
      THEREFORE, in
      consideration of the promises and the mutual covenants herein contained, and
      for
      other good and valuable consideration, the adequacy and receipt of which are
      hereby acknowledged, the parties hereto hereby agree as follows:

     

    ARTICLE
      1.

     

    DEFINITIONS
      AND INTERPRETATIONS

     

    Section
      1.1. Recitals.
      The
      above recitals are true and correct and are incorporated herein, in their
      entirety, by this reference.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      1.2. Interpretations.
      Nothing
      herein expressed or implied is intended or shall be construed to confer upon
      any
      person other than the Secured Party any right, remedy or claim under or by
      reason hereof.

     

    Section
      1.3. Definitions. 

     

    To
      the
      extent used in this Agreement and not defined herein, terms defined in the
      Code
      shall have the meanings (such meanings to be equally applicable to both the
      singular and plural forms of the terms defined) ascribed to such terms in the
      Code. To the extent the definition of any category or type of “collateral” or
      Pledged Property is expanded by any amendment, modification or revision to
      the
      Code, such expanded definition will apply automatically as of the date of such
      amendment, modification or revision.

     

    As
      used
      in this Agreement, the following terms shall have the respective meanings
      indicated below (such meanings to be applicable equally to both the singular
      and
      plural forms of such terms):

     

    “Code”
means
      the
      Uniform Commercial Code as in effect from time to time in the State of New
      Jersey; provided,
      however,
      that if
      a term is defined in Article 9 of the Uniform Commercial Code differently than
      in another Article thereof, the term shall have the meaning set forth in Article
      9 of the Code; provided further
      that, if
      by reason of mandatory provisions of law, perfection, or the effect of
      perfection or non-perfection, of a security interest in any Pledged Property
      or
      the availability of any remedy hereunder is governed by the Uniform Commercial
      Code as in effect in a jurisdiction other than New Jersey, “Uniform Commercial
      Code” means the Uniform Commercial Code as in effect in such other jurisdiction
      for purposes of the provisions hereof relating to such perfection or effect
      of
      perfection or non-perfection or availability of such remedy, as the case may
      be.

     

    “Deposit
      Account”
has
      the
      meaning set forth in Section 6.15.

     

    “Deposit
      Account Control Agreement”
has
      the
      meaning set forth in Section 6.15.

     

    “Event
      of Default”
shall
      be deemed to have occurred under this Agreement upon the failure by the Grantors
      to perform, observe, or comply with any of the covenants, agreements, terms
      or
      conditions set forth herein or in the other Transaction Documents.

     

    “GAAP”
means
      generally accepted accounting principles in the United States of
      America.

     

    “Intellectual
      Property”
shall
      mean all present and future trade secrets, know-how and other proprietary
      information; trademarks, trademark applications, internet domain names, service
      marks, trade dress, trade names, business names, designs, logos, slogans (and
      all translations, adaptations, derivations and combinations of the foregoing)
      indicia and other source and/or business identifiers, and all registrations
      or
      applications for registrations which have heretofore been or may hereafter
      be
      issued thereon throughout the world; copyrights and copyright applications;
      (including copyrights for computer programs) and all tangible and intangible
      property embodying the copyrights, unpatented inventions (whether or not
      patentable); patents and patent applications; industrial design applications
      and
      registered industrial designs; license agreements related to any of the
      foregoing and income therefrom; books, records, writings, computer tapes or
      disks, flow diagrams, specification sheets, computer software, source codes,
      object codes, executable code, data, databases and other physical
      manifestations, embodiments or incorporations of any of the foregoing; all
      other
      intellectual property; and all common law and other rights throughout the world
      in and to all of the foregoing.

     

    
      
        
        

      

      
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    “Lien”
has
      the
      meaning set forth in Section 4.2.

     

    “Loan
      Instruments”
has
      the
      meaning set forth in Section 6.1.

     

    “Material
      Adverse Effect”
has
      the
      meaning set forth in Section 6.1.

     

    “Obligations”
has
      the
      meaning set forth in Section 2.1.

     

    “Permitted
      Indebtedness”
has
      the
      meaning set forth in Section 7.3.

     

    “Permitted
      Liens”
has
      the
      meaning set forth in Section 4.2

     

    “Pledged
      Property”
has
      the
      meaning set forth in Section 2.1.

     

    “Transaction
      Documents”
means
      (i) the Convertible Debentures, (ii) the Securities Purchase Agreement, (iii)
      the Warrants, (iv) the Loan Instruments and (v) any other or related
      documents.

     

    ARTICLE
      2.

     

    PLEDGED
      PROPERTY

     

    Section
      2.1.Grant
      of Security Interest.

     

    (a) As
      collateral security for the payment or performance in full of the Obligations,
      each Grantor hereby pledges and assigns to the Secured Party, its successors
      and
      assigns, and grants to the Secured Party, its successors and assigns, a
      continuing security interest in and to all assets and personal property of
      each
      Grantor, wherever located and whether now or hereinafter existing and whether
      now owned or hereafter acquired, of every kind and description, tangible or
      intangible, including without limitation, all Goods, Inventory, Equipment,
      Fixtures, Instruments (including promissory notes), Documents, Accounts
      (including health-care-insurance receivables, and license fees), Contracts,
      Contract Rights, Chattel Paper (whether tangible or electronic), Deposit
      Accounts (and in and to any deposits or other sums at any time credited to
      each
      such Deposit Account), Money, Letters of Credit and Letter-of-Credit Rights
      (whether or not the letter of credit is evidenced by a writing), Commercial
      Tort
      Claims, Securities and all other Investment Property, General Intangibles
      (including payment intangibles and software), Farm Products, all books and
      records relating to any of the foregoing, and all Supporting Obligations, and
      any and all proceeds and products of any thereof, including proceeds of
      insurance covering any or all of the foregoing, wherever located, whether now
      owned, or now due, in which a Grantor has an interest or the power to transfer
      rights, or hereafter acquired, arising, or to become due, or in which a Grantor
      obtains an interest, or the power to transfer rights, and as more particularly
      described on Exhibit
      A
      attached
      hereto (collectively, the “Pledged
      Property”).

     

    
      
        
        

      

      
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    (b) Simultaneously
      with the execution and delivery of this Agreement, each Grantor shall make,
      execute, acknowledge, file, record and deliver to the Secured Party such
      documents, instruments, and agreements, including, without limitation, financing
      statements, certificates, affidavits and forms as may, in the Secured Party’s
      reasonable judgment, be necessary to effectuate, complete or perfect, or to
      continue and preserve, the security interest of the Secured Party in the Pledged
      Property.

     

    Section
      2.2 Security
      for Obligations.
      The
      security interest created hereby in the Pledged Property constitutes continuing
      collateral security for all of the following obligations, whether now existing
      or hereinafter incurred (collectively, the “Obligations”):

     

    (a)
      (i)
      the payment by the Company, as and when due and payable (by scheduled maturity,
      acceleration, demand or otherwise), of all amounts from time to time owing
      by it
      in respect of the Convertible Debentures, the other Transaction Documents,
      or
      any other amounts owing by it to the Secured Party, or (ii) in the case of
      any
      Guarantor, the payment by such Guarantor, as and when due and payable of all
      “Guaranteed Obligations” under (and as defined in) the Guaranty;
      and

     

    (b)
      the
      due performance and observance by each Grantor of all of its other debts,
      liabilities, obligations, covenants and duties owing by any Grantor to the
      Secured Party, of every nature, type and description, whether liquidated,
      unliquidated, primary, secondary, secured, unsecured, direct, indirect,
      absolute, or contingent, and whether or not evidenced by a note, guaranty or
      other instrument, and any amendments, extensions, renewals or increases thereof,
      including, without limitation, all those under the Transaction Documents or
      any
      agreement or document related to the Transaction Documents, including without
      limitation, (i) with respect to any conversion or redemption rights of the
      Secured Party under the Convertible Debentures; or (ii) any interest accruing
      thereon after insolvency, reorganization or like proceeding relating to the
      Grantors, whether or not a claim for post petition interest is allowed in such
      proceeding, and all costs and expenses of the Secured Party incurred in the
      enforcement, collection or otherwise in connection with any of the foregoing,
      including, but not limited to, reasonable attorneys’ fees and
      expenses.

     

    ARTICLE
      3.

     

    ATTORNEY-IN-FACT;
      PERFORMANCE

     

    Section
      3.1.Secured
      Party Appointed Attorney-In-Fact.

     

    Each
      Grantor hereby appoints the Secured Party as its attorney-in-fact, with full
      authority in the place and stead of such Grantor and in the name of each Grantor
      or otherwise, exercisable after and during the continuance of an Event of
      Default, from time to time in the Secured Party’s discretion to take any action
      and to execute any instrument which the Secured Party may reasonably deem
      necessary to accomplish the purposes of this Agreement, or for the purpose
      of
      perfecting, confirming, continuing , enforcing or protecting the security
      interest in the Pledged Property, including, without limitation, to (a) file
      one
      or more financing statements, continuing statements, filings with the United
      States Patent and Trademark Office or United States Copyright Office (or any
      successor office) or other documents; (b) receive and collect all instruments
      made payable to the Grantor representing any payments in respect of the Pledged
      Property or any part thereof and to give full discharge for the same; (c)
      demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose,
      or
      realize on the Pledged Property as and when the Secured Party may determine;
      and
      (d) to facilitate collection, the Secured Party may notify account debtors
      and
      obligors on any Pledged Property to make payments directly to the Secured Party.
      The foregoing power of attorney is a power coupled with an interest and shall
      be
      irrevocable until all Obligations are paid and performed in full. The Grantors
      agree that the powers conferred on the Secured Party hereunder are solely to
      protect the Secured Party’s interests in the Pledged Property and shall not
      impose any duty upon the Secured Party to exercise any such powers.

     

    
      
        
        

      

      
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    Section
      3.2.Secured
      Party May Perform.

     

    If
      a
      Grantor fails to perform any agreement contained herein, the Secured Party,
      at
      its option, may itself perform, or cause performance of, such agreement, and
      the
      expenses of the Secured Party incurred in connection therewith shall be included
      in the Obligations secured hereby and payable by such Grantor under
      Section 8.3.

     

    ARTICLE
      4.

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      4.1.Authorization;
      Enforceability.

     

    Each
      of
      the parties hereto represents and warrants that it has taken all action
      necessary to authorize the execution, delivery and performance of this Agreement
      and the transactions contemplated hereby; and upon execution and delivery,
      this
      Agreement shall constitute a valid and binding obligation of the respective
      party, subject to applicable bankruptcy, insolvency, reorganization, moratorium
      and similar laws affecting creditors’ rights or by the principles governing the
      availability of equitable remedies.

     

    
      Section
        4.2.Ownership
        of Pledged Property; Priority of Security Interest.

       

      Each
        Grantor represents and warrants that it is the legal and beneficial owner
        of the
        Pledged Property free and clear of any lien, security interest, option or
        other
        charge or encumbrance (each, a “Lien”)
        except
        for the security interest created by this Agreement and other Permitted Liens.
        For purposes of this Agreement, “Permitted
        Liens”
means:
        (1) the security interest created by this Agreement, (2) existing Liens which
        have been disclosed by the Grantors to the Secured Party on Schedule
        4.2 attached
        hereto; (3) inchoate Liens for taxes, assessments or governmental charges
        or
        levies not yet due, as to which the grace period, if any, related thereto
        has
        not yet expired, or being contested in good faith and by appropriate proceedings
        for which adequate reserves have been established in accordance with GAAP;
        (4)
        Liens of carriers, materialmen, warehousemen, mechanics and landlords and
        other
        similar Liens which secure amounts which are not yet overdue or which are
        being
        contested in good faith by appropriate proceedings for which adequate reserves
        have been established in accordance with GAAP; (5) licenses, sublicenses,
        leases
        or subleases granted to other persons not materially interfering with the
        conduct of the business of the Grantors; (6) Liens securing capitalized lease
        obligations and purchase money indebtedness incurred solely for the purpose
        of
        financing an acquisition or lease; (7) easements, rights-of-way, restrictions,
        encroachments, municipal zoning ordinances and other similar charges or
        encumbrances, and minor title deficiencies, in each case not securing debt
        and
        not materially interfering with the conduct of the business of the Grantors
        and
        not materially detracting from the value of the property subject thereto;
        (8)
        Liens arising out of the existence of judgments or awards which judgments
        or
        awards do not constitute an Event of Default; (9) Liens incurred in the ordinary
        course of business in connection with workers compensation claims, unemployment
        insurance, pension liabilities and social security benefits and Liens securing
        the performance of bids, tenders, leases and contracts in the ordinary course
        of
        business, statutory obligations, surety bonds, performance bonds and other
        obligations of a like nature (other than appeal bonds) incurred in the ordinary
        course of business (exclusive of obligations in respect of the payment for
        borrowed money); (10) Liens in favor of a banking institution arising by
        operation of law encumbering deposits (including the right of set-off) and
        contractual set-off rights held by such banking institution and which are
        within
        the general parameters customary in the banking industry and only burdening
        deposit accounts or other funds maintained with a creditor depository
        institution; (11) usual and customary set-off rights in leases and other
        contracts; and (12) escrows in connection with acquisitions and
        dispositions.

    

     

    
      
        
        

      

      
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    Section
      4.3 Location
      of Pledged Property.
      

     

    The
      Pledged Property is or will be kept at the address(es) of each Grantor set
      forth
      on the signature pages hereof, or such other locations as the Grantors have
      given the Secured Party written notice prior to the date hereof, and, unless
      otherwise provided herein, the Grantors will not remove any Pledged Property
      from such locations without the prior written consent of the Secured Party
      which
      consent shall not be unreasonably withheld.

     

    Section
      4.4 Location,
      State of Incorporation and Name of Grantors.

     

    Each
      Grantor’s principal place of business, state of incorporation or organization,
      organization identification number, and exact legal name is as set forth on
      each
      such Grantor’s signature page to this Agreement. 

     

    Section
      4.5 Priority
      of Security Interest. 

     

    The
      security interest granted to the Secured Party hereunder shall be a first
      priority security interest subject to no other Liens. Except for the Permitted
      Liens, no financing statement covering any of the Pledged Property or any
      proceeds thereof is on file in any public office.

     

    
      
        
        

      

      
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    ARTICLE
      5.

     

    DEFAULT;
      REMEDIES

     

    Section
      5.1Method
      of Realizing Upon the Pledged Property: Other Remedies.

     

    If
      any
      Event of Default shall have occurred and be continuing:

     

    (a) The
      Secured Party may exercise in respect of the Pledged Property, in addition
      to
      any other rights and remedies provided for herein or otherwise available to
      it,
      all of the rights and remedies of a secured party upon default under the Code
      (whether or not the Code applies to the affected Pledged Property), and also
      may
      (i) take absolute control of the Pledged Property, including, without
      limitation, transfer into the Secured Party's name or into the name of its
      nominee or nominees (to the extent the Secured Party has not theretofore done
      so) and thereafter receive, for the benefit of the Secured Party, all payments
      made thereon, give all consents, waivers and ratifications in respect thereof
      and otherwise act with respect thereto as though it were the outright owner
      thereof, (ii) require each Grantor to assemble all or part of the Pledged
      Property as directed by the Secured Party and make it available to the Secured
      Party at a place or places to be designated by the Secured Party that is
      reasonably convenient to both parties, and the Secured Party may enter into
      and
      occupy any premises owned or leased by a Grantor where the Pledged Property or
      any part thereof is located or assembled for a reasonable period in order to
      effectuate the Secured Party's rights and remedies hereunder or under law,
      without obligation to such Grantor in respect of such occupation, and
      (iii) without notice except as specified below and without any obligation
      to prepare or process the Pledged Property for sale, (A) sell the Pledged
      Property or any part thereof in one or more parcels at public or private sale,
      at any of the Secured Party's offices or elsewhere, for cash, on credit or
      for
      future delivery, and at such price or prices and upon such other terms as the
      Secured Party may deem commercially reasonable and/or (B) lease, license or
      dispose of the Pledged Property or any part thereof upon such terms as the
      Secured Party may deem commercially reasonable. Each Grantor agrees that, to
      the
      extent notice of sale or any other disposition of the Pledged Property shall
      be
      required by law, at least ten (10) days' notice to such Grantor of the time
      and
      place of any public sale or the time after which any private sale or other
      disposition of the Pledged Property is to be made shall constitute reasonable
      notification. The Secured Party shall not be obligated to make any sale or
      other
      disposition of any Pledged Property regardless of notice of sale having been
      given. The Secured Party may adjourn any public or private sale from time to
      time by announcement at the time and place fixed therefor, and such sale may,
      without further notice, be made at the time and place to which it was so
      adjourned. Each Grantor hereby waives any claims against the Secured Party
      arising by reason of the fact that the price at which the Pledged Property
      may
      have been sold at a private sale was less than the price which might have been
      obtained at a public sale or was less than the aggregate amount of the
      Obligations, even if the Secured Party accepts the first offer received and
      does
      not offer such Pledged Property to more than one offeree, and waives all rights
      that such Grantor may have to require that all or any part of such Pledged
      Property be marshaled upon any sale (public or private) thereof. Each Grantor
      hereby acknowledges that (i) any such sale of the Pledged Property by the
      Secured Party may be made without warranty, (ii) the Secured Party may
      specifically disclaim any warranties of title, possession, quiet enjoyment
      or
      the like, and (iii) such actions set forth in clauses (i) and (ii)
      above shall not adversely affect the commercial reasonableness of any such
      sale
      of Pledged Property. 

     

    
      
        
        

      

      
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    (b) Any
      cash
      held by the Secured Party as Pledged Property and all cash proceeds received
      by
      the Secured Party in respect of any sale of or collection from, or other
      realization upon, all or any part of the Pledged Property shall be applied
      (after payment of any amounts payable to the Secured Party pursuant to Section
      8.3 hereof) by the Secured Party against, all or any part of the Obligations
      in
      such order as the Secured Party shall elect, consistent with the provisions
      of
      the Securities Purchase Agreement. Any surplus of such cash or cash proceeds
      held by the Secured Party and remaining after the indefeasible payment in full
      in cash of all of the Obligations shall be paid over to whomsoever shall be
      lawfully entitled to receive the same or as a court of competent jurisdiction
      shall direct.

     

    (c) In
      the
      event that the proceeds of any such sale, collection or realization are
      insufficient to pay all amounts to which the Secured Party is legally entitled,
      each Grantor shall be liable for the deficiency, together with interest thereon
      at the rate specified in the Convertible Debentures for interest on overdue
      principal thereof or such other rate as shall be fixed by applicable law,
      together with the costs of collection and the reasonable fees, costs, expenses
      and other client charges of any attorneys employed by the Secured Party to
      collect such deficiency.

     

    (d) Each
      Grantor hereby acknowledges that if the Secured Party complies with any
      applicable state, provincial, or federal law requirements in connection with
      a
      disposition of the Pledged Property, such compliance will not adversely affect
      the commercial reasonableness of any sale or other disposition of the Pledged
      Property.

     

    (e) The
      Secured Party shall not be required to marshal any present or future collateral
      security (including, but not limited to, this Agreement and the Pledged
      Property) for, or other assurances of payment of, the Obligations or any of
      them
      or to resort to such collateral security or other assurances of payment in
      any
      particular order, and all of the Secured Party's rights hereunder and in respect
      of such collateral security and other assurances of payment shall be cumulative
      and in addition to all other rights, however existing or arising. To the extent
      that it lawfully may, each Grantor hereby agrees that it will not invoke any
      law
      relating to the marshaling of collateral which might cause delay in or impede
      the enforcement of the Secured Party's rights under this Agreement or under
      any
      other instrument creating or evidencing any of the Obligations or under which
      any of the Obligations is outstanding or by which any of the Obligations is
      secured or payment thereof is otherwise assured, and, to the extent that it
      lawfully may, each Grantor hereby irrevocably waives the benefits of all such
      laws.

     

    Section
      5.2Duties
      Regarding Pledged Property.

     

    The
      Secured Party shall have no duty as to the collection or protection of the
      Pledged Property or any income thereon or as to the preservation of any rights
      pertaining thereto, beyond the safe custody and reasonable care of any of the
      Pledged Property actually in the Secured Party’s possession.

     

    
      
        
        

      

      
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    ARTICLE
      6.

     

    AFFIRMATIVE
      COVENANTS

     

    So
      long
      as any of the Obligations shall remain outstanding, unless the Secured Party
      shall otherwise consent in writing:

     

    Section
      6.1.Existence,
      Properties, Etc.

     

    (a)
      Each
      Grantor shall do, or cause to be done, all things, or proceed with due diligence
      with any actions or courses of action, that may be reasonably necessary
      (i) to maintain Grantor’s due organization, valid existence and good
      standing under the laws of its state of incorporation, and (ii) to preserve
      and keep in full force and effect all qualifications, licenses and registrations
      in those jurisdictions in which the failure to do so could have a Material
      Adverse Effect; and (b) each Grantor shall not do, or cause to be done, any
      act impairing the Grantor’s corporate power or authority (i) to carry on
      such Grantor’s business as now conducted, and (ii) to execute or deliver
      this Agreement or any other agreement or document delivered in connection
      herewith, including, without limitation, the Guaranty , any other collateral
      documents, any UCC-1 Financing Statements required by the Secured
      Party (which documents, instruments, and agreements collectively shall be
      referred to as the “Loan
      Instruments”) to
      which it is or will be a party, or perform any of its obligations hereunder
      or
      thereunder. For purpose of this Agreement, the term “Material
      Adverse Effect”
means
      any material and adverse affect as determined by Secured Party in its reasonable
      discretion, whether individually or in the aggregate, upon (a) the
      Grantors’ assets, business, operations, properties or condition, financial or
      otherwise; (b) the Grantors’ ability to make payment as and when due of all
      or any part of the Obligations; or (c) the Pledged Property.

     

    Section
      6.2.Financial
      Statements and Reports.

     

    Each
      Grantor shall furnish to the Secured Party within a reasonable time such
      financial data as the Secured Party may reasonably request.

     

    Section
      6.3.Accounts
      and Reports.

     

    Each
      Grantor shall maintain a standard system of accounting in accordance with
GAAP
      and
      provide, at its sole expense, to the Secured Party the following:

     

    (a) as
      soon
      as available, a copy of any notice or other communication alleging any
      nonpayment or other material breach or default, or any foreclosure or other
      action respecting any material portion of its assets and properties, received
      respecting any of the indebtedness of such Grantor in excess of $500,000 (other
      than the Obligations), or any demand or other request for payment under any
      guaranty, assumption, purchase agreement or similar agreement or arrangement
      respecting the indebtedness or obligations of others in excess of $500,000;
      and

     

    (b) within
      fifteen (15) days after the making of each submission or filing, a copy of
      any report, financial statement, notice or other document, whether periodic
      or
      otherwise, submitted to the shareholders of the Grantors, or submitted to or
      filed by the Grantors with any governmental authority involving or affecting
      (i)
      the Grantors that could reasonably be expected to have a Material Adverse
      Effect; (ii) the Obligations; (iii) any part of the Pledged Property;
      or (iv) any of the transactions contemplated in this Agreement or the Loan
      Instruments (except, in each case, to the extent any such submission, filing,
      report, financial statement, notice or other document is posted on EDGAR
      Online).

     

    
      
        
        

      

      
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    Section
      6.4.Maintenance
      of Books and Records; Inspection.

     

    Each
      Grantor shall maintain its books, accounts and records in accordance with GAAP,
      and permit the Secured Party, its officers and employees and any professionals
      designated by the Secured Party in writing, at any time during normal business
      hours and upon reasonable notice to visit and inspect any of its properties
      (including but not limited to the collateral security described in the
      Transaction Documents and/or the Loan Instruments), corporate books and
      financial records, and to discuss its accounts, affairs and finances with any
      employee, officer or director thereof (it being agreed that, unless an Event
      of
      Default shall have occurred and be continuing, there shall be no more than
      two
      (2) such visits and inspections in any fiscal year).

     

    Section
      6.5.Maintenance
      and Insurance.

     

    (a) Each
      Grantor shall maintain or cause to be maintained, at its own expense, all of
      its
      material assets and properties in good working order and condition, ordinary
      wear and tear excepted, making all necessary repairs thereto and renewals and
      replacements thereof.

     

    (b) The
      Grantors shall maintain or cause to be maintained, at their own expense,
      insurance in form, substance and amounts (including deductibles), which the
      Grantors deems reasonably necessary to the Grantors’ business, (i) adequate
      to insure all assets and properties of the Grantors of a character usually
      insured by persons engaged in the same or similar business against loss or
      damage resulting from fire or other risks included in an extended coverage
      policy; (ii) against public liability and other tort claims that may be
      incurred by the Grantors; (iii) as may be required by the Transaction
      Documents and/or applicable law and (iv) as may be reasonably requested by
      Secured Party, all with financially sound and reputable insurers.

     

    Section
      6.6.Contracts
      and Other Collateral.

     

    Each
      Grantor shall perform all of its obligations under or with respect to each
      instrument, receivable, contract and other intangible included in the Pledged
      Property to which such Grantor is now or hereafter will be party on a timely
      basis and in the manner therein required, including, without limitation, this
      Agreement, except to the extent the failure to so perform such obligations
      would
      not reasonably be expected to have a Material Adverse Effect.

     

    Section
      6.7.Defense
      of Collateral, Etc.

     

    Each
      Grantor shall defend and enforce its right, title and interest in and to any
      part of: (a) the Pledged Property; and (b) if not included within the
      Pledged Property, those assets and properties whose loss would reasonably be
      expected to have a Material Adverse Effect, each against all manner of claims
      and demands on a timely basis to the full extent permitted by applicable law
      (other than any such claims and demands by holders of Permitted
      Liens).

     

    Section
      6.8.Taxes
      and Assessments.

     

    Each
      Grantor shall (a) file all material tax returns and appropriate schedules
      thereto that are required to be filed under applicable law, prior to the date
      of
      delinquency (taking into account any extensions of the original due date),
      (b) pay and discharge all material taxes, assessments and governmental
      charges or levies imposed upon a Grantor, upon its income and profits or upon
      any properties belonging to it, prior to the date on which penalties attach
      thereto, and (c) pay all material taxes, assessments and governmental
      charges or levies that, if unpaid, might become a lien or charge upon any of
      its
      properties; provided,
      however,
      that
      the Grantors in good faith may contest any such tax, assessment, governmental
      charge or levy described in the foregoing clauses (b) and (c) so long as
      appropriate reserves are maintained with respect thereto if and to the extent
      required by GAAP. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      6.9.Compliance
      with Law and Other Agreements.
      

     

    Each
      Grantor shall maintain its business operations and property owned or used in
      connection therewith in compliance with (a) all applicable federal, state
      and local laws, regulations and ordinances governing such business operations
      and the use and ownership of such property, and (b) all agreements,
      licenses, franchises, indentures and mortgages to which a Grantor is a party
      or
      by which such Grantor or any of its properties is bound, except where the
      failure to so comply would not reasonably be expected to have a Material Adverse
      Effect.

     

    Section
      6.10.Notice
      of Default.
      

     

    The
      Grantors will immediately notify the Secured Party of any event causing a
      substantial loss or diminution in the value of all or any material part of
      the
      Pledged Property and the amount or an estimate of the amount of such loss or
      diminution. The Grantors shall promptly notify the Secured Party of any
      condition or event which constitutes, or would constitute with the passage
      of
      time or giving of notice or both, an Event of Default, and promptly inform
      the
      Secured Party of any events or changes in the financial condition of any Grantor
      occurring since the date of the last financial statement of such Grantor
      delivered to the Secured Party, which individually or cumulatively when viewed
      in light of prior financial statements, which might reasonably be expected
      to
      have a Material Adverse Effect on the business operations or financial condition
      of the Grantors.

     

    Section
      6.11.Notice
      of Litigation.

     

    Each
      Grantor shall give notice, in writing, to the Secured Party of (a) any
      actions, suits or proceedings wherein the amount at issue is in excess of
      $250,000, instituted by any persons against a Grantor, or affecting any of
      the
      assets of such Grantor, and (b) any dispute, not resolved within fifteen
      (15) days of the commencement thereof, between a Grantor on the one hand and
      any
      governmental or regulatory body on the other hand, which might reasonably be
      expected to have a Material Adverse Effect on the business operations or
      financial condition of such Grantor.

     

    Section
      6.13. Future
      Subsidiaries.

     

    If
      any
      Grantor shall hereafter create or acquire any subsidiary, simultaneously with
      the creation or acquisition of such subsidiary, such Grantor shall cause such
      subsidiary to become a party to this Agreement as an additional "Grantor"
      hereunder, and to duly execute and deliver a guaranty of the Obligations in
      favor of the Secured Party in form and substance reasonably acceptable to the
      Secured Party, and to duly execute and/or deliver such opinions of counsel
      and
      other documents, in form and substance reasonably acceptable to the Secured
      Party, as the Secured Party shall reasonably request with respect
      thereto.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      6.14. Changes
      to Identity.

     

    Each
      Grantor will (a) give the Secured Party at least 30 days' prior written notice
      of any change in such Grantor's name, identity or organizational structure,
      (b)
      maintain its jurisdiction of incorporation, organization or formation as set
      forth on its respective signature page attached hereto, (c) immediately notify
      the Secured Party upon obtaining an organizational identification number, if
      on
      the date hereof such Grantor did not have such identification
      number.

     

    Section
      6.15. Establishment
      of Deposit Account, Account
      Control Agreements. 
      

     

    Within
      ten (10) days of the date hereof, each Grantor, the Secured Party, and each
      applicable bank or other depository institution shall enter into a deposit
      account control agreement (“Deposit
      Account Control Agreement”)
      in the
      form of Exhibit
      B
      with
      respect to each of the Grantor’s deposit accounts, including, without
      limitation, all savings, passbook, money market or other depository accounts,
      and all certificates of deposit, maintained by each Grantor with any bank,
      savings and loan association, credit union or other depository institution
      maintained or used by each Grantor (the “Deposit
      Accounts”)
      providing dominion and control over such accounts to the Secured Party such
      that
      upon notice by the Secured Party to such bank or other depository institution
      of
      the occurrence of an Event of Default all actions under such account shall
      be
      taken solely at the Secured Party’s direction. Each Grantor’s current Deposit
      Accounts are set forth on Schedule
      6.15
      attached
      hereto. 

     

    Each
      Grantor shall cause all cash, all collections and proceeds from accounts
      receivable, all receipts from credit card payments, and all proceeds from the
      sale of any Pledged Property to be deposited only into its Deposit Accounts
      in
      the ordinary course of business and consistent with past practices.

     

    Each
      Grantor shall have valid and effective Deposit Account Control Agreements in
      place at all times with respect to all of its Deposit Accounts. No Deposit
      Account shall be established, used or maintained by a Grantor unless it first
      enters into a Deposit Account Control Agreement. 

     

    With
      respect to each Deposit Account, from an after the occurrence of an Event of
      Default, the Secured Party shall have the right, at any time and from time
      to
      time, to exercise its rights under such Deposit Account Control Agreement,
      including, for the avoidance of any doubt, the exclusive right to give
      instructions to the financial institution at which such Deposit Account is
      maintained as to the disposition of funds or other property on deposit therein
      or credited thereto. The Secured Party hereby covenants and agrees that it
      will
      not send any such notice to a financial institution at which any such Deposit
      Account is maintained directing the disposition of funds or other property
      therein unless and until the occurrence of an Event of Default. 

     

    In
      connection with the foregoing, each Grantor hereby authorizes and directs each
      bank or other depository institution which maintains any Deposit Account to
      pay
      or deliver to the Secured Party upon the Secured Party’s written demand thereof
      made at any time after the occurrence of an Event of Default has occurred all
      balances in each Deposit Account with such depository for application to the
      Obligations then outstanding. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      6.16 Perfection
      of Security Interests.

     

    (a) Financing
      Statements.
      The
      Grantors hereby irrevocably authorize the Secured Party, at the sole cost and
      expense of the Grantors, at any time and from time to time to file in any filing
      office in any jurisdiction any initial financing statements and amendments
      thereto that (a) indicate the Pledged Property (i) as all assets of Grantors
      or
      words of similar effect, regardless of whether any particular asset comprised
      in
      the Pledged Property falls within the scope of Article 9 of the Code of such
      jurisdiction, or (ii) as being of an equal or lesser scope or with greater
      detail, and (b) contain any other information required by Part 5 of Article
      9 of
      the Code for the sufficiency or filing office acceptance of any financing
      statement or amendment, including (i) whether such Grantor is an organization,
      the type of organization and any organization identification number issued
      to
      such Grantor, and (ii) in the case of a financing statement filed as a fixture
      filing, a sufficient description of real property to which the Pledged Property
      relates. Grantors agree to furnish any such information to the Secured Party
      promptly upon request. Grantors also ratify their authorization for the Secured
      Party to have filed in any jurisdiction any initial financing statements or
      amendments thereto if filed prior to the date hereof. The Grantors acknowledge
      that they are not authorized to file any financing statement or amendment or
      termination statement with respect to any financing statement without the prior
      written consent of the Secured Party and agree that they will not do so without
      the prior written consent of the Secured Party. The Grantors acknowledge and
      agree that this Agreement constitutes an authenticated record.

     

    (b) Possession.
      The
      Grantors (i) shall have possession of the Pledged Property, except where
      expressly otherwise provided in this Agreement or where the Secured Party
      chooses to perfect its security interest by possession in addition to the filing
      of a financing statement; and (ii) will, where Pledged Property is in the
      possession of a third party, join with the Secured Party in notifying the third
      party of the Secured Party’s security interest and obtaining an acknowledgment
      from the third party that it is holding the Pledged Property for the benefit
      of
      the Secured Party.

     

    (c) Control. In
      addition to the provisions set forth in Section 6.15 above, the Grantors will
      cooperate with the Secured Party in obtaining control with respect to the
      Pledged Property consisting of (i) Investment Property, (ii) Letters of Credit
      and Letter-of-Credit Rights and (iii) electronic Chattel Paper.

     

    (d) Chattel
      Paper; Marking of Chattel Paper.
      The
      Grantors will not create any Chattel Paper without placing a legend on the
      Chattel Paper acceptable to the Secured Party indicating that the Secured Party
      has a security interest in the Chattel Paper.

     

    Section
      6.17 Notice
      of Commercial Tort Claims.
      Attached as Schedule
      6.17
      is a
      list of all Commercial Tort Claims of the Grantors (as
      such
      Schedule may be amended, modified or supplemented from time to time).
      If any
      Grantor shall at any time acquire a Commercial Tort Claim, such Grantor shall
      immediately notify the Secured Party in a writing signed by such Grantor which
      shall (a) provide brief details of said claim and (b) grant to the Secured
      Party
      a security interest in said claim and in the proceeds thereof, all upon the
      terms of this Agreement, in such form and substance satisfactory to the Secured
      Party.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      7.

     

    NEGATIVE
      COVENANTS

     

    So
      long
      as any of the Obligations shall remain outstanding, unless the Secured Party
      shall otherwise consent in writing each Grantor covenants and agrees that it
      shall not:

     

    Section
      7.1. Transfers,
      Liens and Encumbrances.

     

    (a) Sell,
      assign (by operation of law or otherwise), lease, license, exchange or otherwise
      transfer or dispose of any of the Pledged
      Property, except Grantors may (i) sell or dispose of Inventory in the ordinary
      course of business, and (ii) sell or dispose of assets the Grantors have
      determined, in good faith, not to be useful in the conduct of its business,
      and
      (iii) sell or dispose of accounts in the course of collection in the ordinary
      course of business consistent with past practice.

     

    (b) Directly
      or indirectly make, create, incur, assume or permit to exist any Lien in, to
      or
      against any part of the Pledged Property other than Permitted
      Liens.

     

    Section
      7.2. Restriction
      on Redemption and Cash Dividends

     

    Directly
      or indirectly, redeem, repurchase or declare or pay any cash dividend or
      distribution on its capital stock without the prior express written consent
      of
      the Secured Party.

     

    Section
      7.3. Incurrence
      of Indebtedness.

     

    Directly
      or indirectly, incur or guarantee, assume or suffer to exist any indebtedness,
      other than the indebtedness evidenced by the Convertible Debentures and other
      Permitted Indebtedness. “Permitted
      Indebtedness”
means:
      (i) indebtedness evidenced by Convertible Debentures; (ii) existing indebtedness
      disclosed by each Grantor on Schedule
      7.3;
      (iii)
      indebtedness incurred solely for the purpose of financing the acquisition or
      lease of any equipment by the Company, including capital lease obligations
      with
      no recourse other than to such equipment; (iv) indebtedness (A) the repayment
      of
      which has been subordinated to the payment of the Obligations on terms and
      conditions acceptable to the Secured Party, including with regard to interest
      payments and repayment of principal, (B) which does not mature or otherwise
      require or permit redemption or repayment prior to or on the 91st
      day
      after the maturity date of any Convertible Debentures then outstanding; and
      (C)
      which is not secured by any assets of the Grantors; (v) indebtedness solely
      between a Grantor and/or one of its domestic subsidiaries, on the one hand,
      and
      a Grantor and/or one of its domestic subsidiaries, on the other which
      indebtedness is not secured by any assets of the Grantor or any of its
      subsidiaries, provided that (x) in each case a majority of the equity of any
      such domestic subsidiary is directly or indirectly owned by the Grantor, such
      domestic subsidiary is controlled by the Grantor and such domestic subsidiary
      has executed a security agreement in the form of this Agreement and (y) any
      such
      loan shall be evidenced by an intercompany note that is pledged by such Grantor
      or its subsidiary, as applicable, as collateral pursuant to this Agreement;
      (vi)
      reimbursement obligations in respect of letters of credit issued for the account
      of the Grantor or any of its subsidiaries for the purpose of securing
      performance obligations of such Grantor or its subsidiaries incurred in the
      ordinary course of business so long as the aggregate face amount of all such
      letters of credit does not exceed $500,000 at any one time; and (vii) renewals,
      extensions and refinancing of any indebtedness described in clause (i) or (iii)
      of this subsection.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      7.4. Places
      of Business.

     

    (i)
      Change its state of organization or incorporation, or (ii) change the location
      of its chief place of business, chief executive office or any place of business
      disclosed to the Secured Party, unless such change in location is to a different
      location within the United States and such Grantor provides notice to the
      Secured Party of new location within 10 days’ of such change in
      location.

     

    ARTICLE
      8.

     

    MISCELLANEOUS

     

    Section
      8.1.Notices.

     

    All
      notices or other communications required or permitted to be given pursuant
      to
      this Agreement shall be in writing and shall be considered as duly given on:
      (a) the date of delivery, if delivered in person or by nationally
      recognized overnight delivery service or (b) five (5) days after
      mailing if mailed from within the continental United States by certified mail,
      return receipt requested to the party entitled to receive the same:

     

    
      	
              If
                to the Secured Party:

            	
              YA
                Global Investments, L.P.

            
	 	
              101
                Hudson Street-Suite 3700 

            
	 	
              Jersey
                City, New Jersey 07302 

            
	 	
              Attention: Mark
                Angelo

            
	 	
              Portfolio
                Manager

            
	 	
              Telephone: (201)
                986-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	
              With
                a copy to:

            	
              David
                Gonzalez, Esq. 

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

       

      
        
        

      

    

    
      	
              If
                to the Company:

            	
              Intrepid
                Technology and Resources, Inc.

            
	 	
              501
                West Broadway, Suite 200

            
	 	
              Idaho
                Falls, ID 83402

            
	 	
              Attention:
                Jacob D. Dustin

            
	 	
              Telephone:
                (208)
                529-5337

            
	 	
              Facsimile:
                (208)
                529-1014

            
	 	 
	
              With
                a copy to:

            	
              Kirkpatrick
                & Lockhart Preston Gates Ellis LLP

            
	 	
              200
                South Biscayne Boulevard, Suite 2000

            
	 	
              Miami,
                Florida 33131

            
	 	
              Attention: Clayton
                E. Parker, Esq.

            
	 	
              Telephone: (305)
                539-3306

            
	 	
              Facsimile: (305)
                358-7095

            
	 	 
	
              If
                to any other Grantor

            	
              To
                the address listed on the respective signature pages attached
                hereto

            

    

    

    Any
      party
      may change its address by giving notice to the other party stating its new
      address. Commencing on the tenth (10th) day
      after the giving of such notice, such newly designated address shall be such
      party’s address for the purpose of all notices or other communications required
      or permitted to be given pursuant to this Agreement.

     

    Section
      8.2.Severability.

     

    If
      any
      provision of this Agreement shall be held invalid or unenforceable, such
      invalidity or unenforceability shall attach only to such provision and shall
      not
      in any manner affect or render invalid or unenforceable any other severable
      provision of this Agreement, and this Agreement shall be carried out as if
      any
      such invalid or unenforceable provision were not contained herein.

     

    Section
      8.3.Expenses.

     

    In
      the
      event of an Event of Default, the Grantors will pay to the Secured Party the
      amount of any and all reasonable out-of-pocket expenses, including the
      reasonable fees and expenses of its counsel, which the Secured Party may incur
      in connection with: (i) the custody or preservation of, or the sale,
      collection from, or other realization upon, any of the Pledged Property;
      (ii) the exercise or enforcement of any of the rights of the Secured Party
      hereunder or (iii) the failure by a Grantor to perform or observe any of
      the provisions hereof.

     

    Section
      8.4.Waivers,
      Amendments, Etc.

     

    The
      Secured Party’s delay or failure at any time or times hereafter to require
      strict performance by a Grantor of any undertakings, agreements or covenants
      shall not waive, affect, or diminish any right of the Secured Party under this
      Agreement to demand strict compliance and performance herewith. Any waiver
      by
      the Secured Party of any Event of Default shall not waive or affect any other
      Event of Default, whether such Event of Default is prior or subsequent thereto
      and whether of the same or a different type. None of the undertakings,
      agreements and covenants of a Grantor contained in this Agreement, and no Event
      of Default, shall be deemed to have been waived by the Secured Party, nor may
      this Agreement be amended, changed or modified, unless such waiver, amendment,
      change or modification is evidenced by an instrument in writing specifying
      such
      waiver, amendment, change or modification and signed by the Secured Party in
      the
      case of any such waiver, and signed by the Secured Party and the Grantors in
      the
      case of any such amendment, change or modification. Further, no such document,
      instrument, and/or agreement purported to be executed on behalf of the Secured
      Party shall be binding upon the Secured Party unless executed by a duly
      authorized representative of the Secured Party.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Section
      8.5.Continuing
      Security Interest.

     

    This
      Agreement shall create a continuing security interest in the Pledged Property
      and shall: (i) remain in full force and effect so long as any of the
      Obligations shall remain outstanding; (ii) be binding upon each Grantor and
      its successors and assigns; and (iii) inure to the benefit of the Secured
      Party and its successors and assigns. Upon the payment or satisfaction in full
      of the Obligations, this Agreement and the security interest created hereby
      shall terminate, and, in connection therewith, each Grantor shall be entitled
      to
      the return, at its expense, of such of the Pledged Property as shall not have
      been sold in accordance with Section 5.1 hereof or otherwise applied
      pursuant to the terms hereof and the Secured Party shall deliver to the Company
      such documents as the Company shall reasonably request to evidence such
      termination.

     

    Section
      8.6.Independent
      Representation.

     

    Each
      party hereto acknowledges and agrees that it has received or has had the
      opportunity to receive independent legal counsel of its own choice and that
      it
      has been sufficiently apprised of its rights and responsibilities with regard
      to
      the substance of this Agreement.

     

    Section
      8.7.Applicable
      Law: Jurisdiction.

     

    This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of New Jersey without regard to the principles of conflict of laws.
      The parties further agree that any action between them shall be heard in Hudson
      County, New Jersey, and expressly consent to the jurisdiction and venue of
      the
      Superior Court of New Jersey, sitting in Hudson County and the United States
      District Court for the District of New Jersey sitting in Newark, New Jersey
      for
      the adjudication of any civil action asserted pursuant to this Paragraph,
provided,
      however,
      that
      nothing herein shall prevent the Secured Party from enforcing its rights and
      remedies (including, without limitation, by filing a civil action) with respect
      to the Pledged Property and/or the Grantors in any other jurisdiction in which
      the Pledged Property and/or the Grantors may be located.

     

    Section
      8.8.Waiver
      of Jury Trial.

     

    AS
      A
      FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT AND TO
      MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, EACH GRANTOR HEREBY WAIVES,
      TO
      THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL
      BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR
      ANY
      AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION. 

     

    Section
      8.9 Right
      of Set Off.

     

    The
      Grantors each hereby grant to the Secured Party, a lien, security interest
      and
      right of setoff as security for all liabilities and obligations to the Secured
      Party, whether now existing or hereafter arising, upon and against all deposits,
      credits, collateral and property, now or hereafter in the possession, custody,
      safekeeping or control of the Secured Party or any of its affiliates, or any
      entity under the control of the Secured Party, or in transit to any of them.
      At
      any time, without demand or notice, the Secured Party may set off the same
      or
      any part thereof and apply the same to any liability or obligation of the
      Grantors even though unmatured and regardless of the adequacy of any other
      collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE THE SECURED
      PARTY TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
      WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
      RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE GRANTORS, ARE HEREBY
      KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

     

    Section
      8.10 Security
      Interest Absolute.
      All
      rights of the Secured Party hereunder, the security interest in the Pledged
      Property and all obligations of the Grantors hereunder shall be absolute and
      unconditional irrespective of (a) any lack of validity or enforceability of
      the
      Transaction Documents, any agreement with respect to any of the Obligations
      or
      any other agreement or instrument relating to any of the foregoing, (b) any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Obligations, or any other amendment or waiver of or any consent
      to
      any departure from the Transaction Documents or any other agreement or
      instrument, (c) any exchange, release or non-perfection of any Lien on other
      collateral, or any release or amendment or waiver of or consent under or
      departure from any guarantee, securing or guaranteeing all or any of the
      Obligations, or (d) the
      existence of any claim, set-off or other right which any Grantor may have at
      any
      time against any other Grantor or the Secured Party.

     

    Section
      8.11 Indemnification. The
      Grantors shall indemnify, defend, and hold the Secured Party, or any agent,
      employee, officer, attorney, or representative of the Secured Party, harmless
      of
      and from any claim brought or threatened against the Secured Party or any such
      person so indemnified by any Grantor, any other obligor or endorser of the
      Obligations or any other person (as well as from attorneys' fees and expenses
      in
      connection therewith) on account of the Secured Party's relationship with the
      Grantors, or any other obligor or endorser of the Obligations.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
      8.12. Liability
      of Grantors.
      Notwithstanding any provision herein or in any other Loan Instrument, the
      Grantors, and each of them, are and shall be jointly and severally liable for
      any and all Obligations (whether any such Obligation is specified as an
      obligation of the Grantors or of any of them).

     

    Section
      8.13.  Counterparts;
      Facsimile Signatures.
      This
      Agreement may be executed and delivered by exchange of facsimile signatures
      of
      the Secured Party and the Grantors, and those signatures need not be affixed
      to
      the same copy. This Agreement may be executed in any number of
      counterparts.

     

    Section
      8.14 Entire
      Agreement.

     

    This
      Agreement and the other documents and agreements delivered in connection
      herewith constitute the entire understanding among the parties and supersede
      any
      prior agreement or understanding among them with respect to the subject matter
      hereof.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

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

    
      	 	 	 
	 	
              COMPANY:

              
                INTREPID
                  TECHNOLOGY AND RESOURCES, INC.

              

            
	 
 	 
 	 
 
	
            	By:  	/s/ Jacob
              D.
              Dustin
	 	
              

              Name: Jacob
                D. Dustin

            
	 	
              Title: President

            
	 	 
	 	
              Jurisdiction
                of Incorporation, Organization or 

              Formation:
                Idaho

            
	 	 
	 	
              Organizational
                ID: 82-0230842

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	 	
              GUARANTOR:

              
                INTREPID
                  TECHNOLOGY AND RESOURCES BIOGAS, LLC

              

            
	 
 	 
 	 
 
	
            	By:  	/s/ Jacob
              D.
              Dustin
	 	
              

              Name: Jacob
                D. Dustin

            
	 	
              Title: Manager

            
	 	 
	 	
              
                Address
                  For Notices:

                501
                  West Broadway, Suite 200

                Idaho
                  Falls, ID 83402

                Jurisdiction
                  of Incorporation, Organization or 

                Formation:
                  Idaho

              

            
	 	 
	 	
              Organizational
                ID: 32-0183568

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

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

    
      	 	 	 
	 	
              GUARANTOR:

              
                Intrepid
                  Engineering Services,
                  Inc.

              

            
	 
 	 
 	 
 
	
            	By:  	/s/ Jacob D. Dustin
	 	
              

              Name: Jacob
                D. Dustin

            
	 	
              Title: President

            
	 	 
	 	
              
                Address
                  For Notices:

                501
                  West Broadway, Suite 200

                Idaho
                  Falls, ID 83402

              

            
	 	 
	 	
              
                Jurisdiction
                  of Incorporation, Organization or 

                Formation:
                  Idaho

              

            
	 	 
	 	
              Organizational
                ID: 82-0488989

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

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

    
      	 	 	 
	 	
              GUARANTOR:

              
                Magic
                  Valley Energy Company,
                  LLC

              

            
	 
 	 
 	 
 
	 	By:  	/s/ Jacob D. Dustin
	 	
              

              Name: Jacob
                D. Dustin

            
	 	
              Title: Manager

            
	 	 
	 	
              
                Address
                  For Notices:

                501
                  West Broadway, Suite 200

                Idaho
                  Falls, ID 83402

              

            
	 	 
	 	
              
                Jurisdiction
                  of Incorporation, Organization or 

                Formation:
                  Idaho

              

            
	 	 
	 	
              Organizational
                ID: 37-1460426

            

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

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

    
      
        	 	 	 
	 	
                GUARANTOR:

                
                  Yakima
                    Valley Biogas, LLC

                

              
	 
 	 
 	 
 
	
              	By:  	/s/ Jacob
                D.
                Dustin
	 	
                

                Name: Jacob
                  D. Dustin

              
	 	
                Title: Manager

              
	 	 
	 	
                
                  Address
                    For Notices:

                  501
                    West Broadway, Suite 200

                  Idaho
                    Falls, ID 83402

                

              
	 	 
	 	
                
                  Jurisdiction
                    of Incorporation, Organization or 

                  Formation:
                    Idaho

                

              
	 	 
	 	
                Organizational
                  ID: 4207011 (no EIN)

              

      

       

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

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

    
      
        
          	 	 	 
	 	
                  SECURED
                    PARTY:

                  
                    YA
                      GLOBAL INVESTMENTS, L.P.

                  

                
	 	 
	 	
                  By: Yorkville
                    Advisors, LLC

                
	 	
                  Its: Investment
                    Manager

                
	 
 	 
 	 
 
	
                	By:  	/s/
                  Mark
                  Angelo
	 	
                  

                  Name: Mark
                    Angelo

                
	 	
                  Title: Portfolio
                    Manager

                

        

         

      

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    DEFINITION
      OF PLEDGED PROPERTY

     

    For
      the
      purpose of securing prompt and complete payment and performance by the Grantors
      of all of the Obligations, the Grantors each unconditionally and irrevocably
      hereby grant to the Secured Party a continuing security interest in and to,
      and
      lien upon, the following “Pledged
      Property”
of
      each
      Grantor (all capitalized terms used herein and not defined in the Agreement
      shall have the respective meanings ascribed thereto in the Code):

     

    All
      personal property of each Grantor, wherever located and whether now or
      hereinafter existing and whether now owned or hereafter acquired, of every
      kind
      and description, tangible or intangible, including without limitation,
      all:

     

    1. Goods;

     

    2.
       Inventory,
      including, without limitation, all goods, merchandise and other personal
      property now owned or hereafter acquired by a Grantor which are held for sale
      or
      lease, or are furnished or to be furnished under any contract of service or
      are
      raw materials, work-in-process, supplies or materials used or consumed in such
      Grantor’s business, and all products thereof, and all substitutions,
      replacements, additions or accessions therefor and thereto; and any cash or
      non-cash Proceeds of all of the foregoing;

     

    3.
       Equipment,
      including, without limitation, all machinery, equipment, furniture, parts,
      tools
      and dies, of every kind and description, of the Grantors (including automotive
      equipment and motor vehicles), now owned or hereafter acquired by the Grantors,
      and used or acquired for use in the business of the Grantors, together with
      all
      accessions thereto and all substitutions and replacements thereof and parts
      therefor and all cash or non-cash Proceeds of the foregoing;

     

    4. Fixtures,
      including, without limitation, all goods which are so related to particular
      real
      estate that an interest in them arises under real estate law and all accessions
      thereto, replacements thereof and substitutions therefor, including, but not
      limited to, plumbing, heating and lighting apparatus, mantels, floor coverings,
      furniture, furnishings, draperies, screens, storm windows and doors, awnings,
      shrubbery, plants, boilers, tanks, machinery, stoves, gas and electric ranges,
      wall cabinets, appliances, furnaces, dynamos, motors, elevators and elevator
      machinery, radiators, blinds and all laundry, refrigerating, gas, electric,
      ventilating, air-refrigerating, air-conditioning, incinerating and sprinkling
      and other fire prevention or extinguishing equipment of whatsoever kind and
      nature and any replacements, accessions and additions thereto, Proceeds thereof
      and substitutions therefor;

     

    5. Instruments
      (including promissory notes);

     

    6. Documents;

     

    7. Accounts,
      including, without limitation, all Contract Rights and accounts receivable,
      health-care-insurance receivables, and license fees; any other obligations
      or
      indebtedness owed to the Grantors from whatever source arising; all rights
      of
      Grantors to receive any payments in money or kind; all guarantees of Accounts
      and security therefor; all cash or non-cash Proceeds of all of the foregoing;
      all of the right, title and interest of Grantors in and with respect to the
      goods, services or other property which gave rise to or which secure any of
      the
      accounts and insurance policies and proceeds relating thereto, and all of the
      rights of the Grantors as an unpaid seller of goods or services, including,
      without limitation the rights of stoppage in transit, replevin, reclamation
      and
      resale and all of the foregoing, whether now existing or hereafter created
      or
      acquired;

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    8.
       Contracts
      and Contract Rights, including, to the extent not included in the definition
      of
      Accounts, all rights to payment or performance under a contract not yet earned
      by performance and not evidenced by an Instrument or Chattel Paper;

     

    9.
       Chattel
      Paper (whether tangible or electronic);

     

    10. Deposit
      Accounts (and in and to any deposits or other sums at any time credited to
      each
      such Deposit Account);

     

    11. Money,
      cash and cash equivalents;

     

    12. Letters
      of Credit and Letter-of-Credit Rights (whether or not the Letter of Credit
      is
      evidenced by a writing);

     

    13. Commercial
      Tort Claims (if any);

     

    14. Securities
      Accounts, Security Entitlements, Securities, Financial Assets and all other
      Investment Property, including, without limitation, all ownership or membership
      interests in any subsidiaries or affiliates (whether or not controlled by the
      Grantors);

     

    15. General
      Intangibles, including, without limitation, all Payment Intangibles,
      Intellectual Property (to the extent to which the Company is not prohibited
      from
      granting a security interest in and to such Intellectual Property), tax refunds
      and other claims of the Grantors against any governmental authority, and all
      choses in action, insurance proceeds, goodwill, customer lists, formulae,
      licenses, permits, franchises, research and literary rights now owned or
      hereafter acquired;

     

    16. Farm
      Products;

     

    17. All
      books
      and records and information (including all ledger sheets, files, computer
      programs, tapes and related data processing software) evidencing an interest
      in
      or relating to any of the foregoing and/or to the operation of the Grantors’
business, and all rights of access to such books and records, and information,
      and all property in which such books and records, and information are stored,
      recorded and maintained;

     

    18. To
      the
      extent not already included above, all Supporting Obligations, and any and
      all
      cash and non-cash Proceeds, products, accessions, and/or replacements of any
      of
      the foregoing, including proceeds of insurance covering any or all of the
      foregoing. 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    FORM
      OF DEPOSIT ACCOUNT CONTROL AGREEMENT

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    DISCLOSURE
      SCHEDULE

    

    Schedule
      4.2 - Existing Liens

    

    Leased
      Idaho Falls office:

    KeyCorp
      Corporate Real Estate

    Key
      Bank
      National Association

    P.O.
      Box
      6367

    Cleveland,
      OH 44101

    

    Leased
      compressed natural gas vehicle fueling station:

    Ardent
      Properties, LLC

    PO
      Box
      1683

    Idaho
      Falls, Idaho 83403-1683

    

    Leased
      postage meter:

    Pitney
      Bowes

    PO
      Box
      856390

    Louisville,
      KY 40285-6390

    

    Leased
      Toyota Camry:

    Toyota
      Financial Services

    P.
      O. Box
      60116

    City
      of
      Industry, CA 91716-0116

    

    Three
      leased compressed natural gas tube trailers:

    FIBA
      Canning, Inc.

    2651
      Markham Road

    Scarborough,
      ON M1X 1M4

    CANADA

    

    Leased
      front-end loader:

    Cesco
      Rentals

    2000
      E.
      Overland Rd.

    Meridian,
      ID 83642

    

    Leased
      Semi-Truck:

    Schow's
      Auto Parts

    P.
      O. Box
      94

    Rupert,
      ID 83350

    

    Intrepid
      Technology and Resources Biogas, LLC assets:

    VanKampen

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    Schedule
      6.15 - Deposit Accounts

    

    Intrepid
      Technology and Resources, Inc. Checking Account:

    Zions
      First National Bank

    Idaho
      Falls Office

    1235
      S.
      Utah Avenue

    Idaho
      Falls, ID 83402

    Acct:
      73007326

    

    Intrepid
      Technology and Resources, Inc. Checking Account: 

    Wells
      Fargo Bank, N.A.

    4594
      North Eagle Road

    Boise,
      ID
      83713

    Acct:
      3522162027

    

    Intrepid
      Technology and Resources Biogas, LLC. Checking Account:

    Acct:

    Wells
      Fargo Bank, N.A.

    4594
      North Eagle Road

    Boise,
      ID
      83713

    Acct:
      6001015996

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Schedule
      6.17 - Commercial Tort Claims

    

    None.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    Schedule
      7.3 - Existing Indebtedness

     

    
      Schedule
        7.3 Existing Indebtedness 

    

    
      As
        of 2008-03-25

       

    

    
      	
              Liability
                

            	 	
              Amount
                

            	 
	
              Yorkville
                

            	 	
              $

            	
              3,419,167.65

            	 
	
              Cannon
                Builders 

            	 	
              $

            	
              1,959,243.66

            	 
	
              Biogas
                Bond 

            	 	
              $

            	
              7,878,750.00

            	 
	
              Biogas
                Accounts Payable 

            	 	
              $

            	
              177,882.52

            	 
	
              Intrepid
                Inc. Accounts Payable 

            	 	
              $

            	
              143,990.40

            	 
	
              Payroll
                for two weeks ending 2008-03-28 

            	 	
              $

            	
              27,600.00

            	 
	
              Accrued
                Payroll Liabilities 

            	 	
              $

            	
              636,676.61

            	 
	
              Total
                Existing Indebtedness 

            	 	
              $

            	
              14,243,310.84

            	 

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF DEPOSIT ACCOUNT CONTROL AGREEMENT

     

    (____________
      Company)

     

    This
      Agreement is entered into as of _______________________, , among _____________,
      a _______________ corporation ("Company"),
      _________________("Lender"),
      and
      __________________ ("Bank")
      with
      respect to the following:

     

    A. Bank
      has
      agreed to establish and maintain for Company deposit account number
      ______________ (the "Account").

     

    B. Company
      has assigned to Lender a security interest in the Account and in checks, wire
      transfers, ACH, EFT and other payment instructions ("Checks")
      deposited in the Account.

     

    C. Company,
      Lender and Bank are entering into this Agreement to evidence Lender's security
      interest in the Account and such Checks and to provide for the disposition
      of
      net proceeds of Checks deposited in the Account.

     

    Accordingly,
      Company, Lender and Bank agree as follows:

     

    1. 1) This
      Agreement evidences Lender's control over the Account. Notwithstanding anything
      to the contrary in the agreement between Bank and Company governing the Account,
      Bank will comply with instructions originated by Lender as set forth herein
      directing the disposition of funds in the Account without further consent of
      the
      Company.

     

    (b) Company
      represents and warrants to Lender and Bank that it has not assigned or granted
      a
      security interest in the Account or any Check deposited in the Account, except
      to Lender.

     

    (c) Company
      will not permit the Account to become subject to any other pledge, assignment,
      lien, charge or encumbrance of any kind, other than Lender's security interest
      referred to herein.

     

    2. During
      the Activation Period (as defined below), Bank shall deny any requests from
      Company to make any withdrawals from the Account. Prior to the Activation
      Period, Company may operate and transact business through the Account in its
      normal fashion, including making withdrawals from the Account, but covenants
      to
      Lender it will not close the Account. On the first Business Day following the
      commencement of the Activation Period, and continuing on each Business Day
      thereafter, Bank shall transfer all collected, good and "available" balances
      in
      the Account to Lender at its account specified in the Notice (as defined below).
      The "Activation
      Period"
      means
      the period after Bank's receipt of a written notice from Lender in the, form
      of
      Exhibit A (the "Notice").
      A
      "Business
      Day"
      is each
      day except Saturdays, Sundays and Bank holidays. Funds are not "available"
      if, in
      the reasonable determination of Bank, they are subject to a hold, dispute or
      legal process preventing their withdrawal.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    3. Bank
      agrees it shall not offset charge, deduct or otherwise withdraw funds from
      the
      Account, except as permitted by Section 4, until it has been advised in writing
      by Lender that all of Company's obligations that are secured by the Checks
      and
      the Account are paid in full. Lender shall notify Bank promptly in writing
      upon
      payment in full of Company's obligations.

     

    4. Bank
      is
      permitted to charge the Account:

     

    (a) For
      its
      normal and customary fees and charges relating to the Account or associated
      with
      this Agreement;

     

    (b) in
      the
      event any Check deposited into the Account is returned unpaid for any reason
      or
      for any breach of warranty claim; and

     

    (c) for
      any
      other fees or costs permitted under the Lock Box and Blocked Account Agreement
      between mid among the parties (the "Lock
      Box Agreement'').

     

    5.
      (a) If
      the
      balances in the Account are not sufficient to compensate Bank for any fees
      or
      charges due Bank in connection with the Account or this Agreement, Company
      agrees to pay Bank on demand the amount due Bank.

     

    (b) If
      the
      balances in the Account are not sufficient to compensate Bank for any returned
      Check, Company agrees to pay Bank on demand the amount due Bank. If Company
      fails to so pay Bank immediately upon demand, Lender agrees to pay Bank any
      amount received by Lender with respect to such returned Check in accordance
      with
      the Lock Box Agreement. The failure to so pay Bank shall constitute a breach
      of
      this Agreement.

     

    (c) Company
      hereby authorizes Bank, without prior notice, from time to time to debit any
      other account Company may have with Bank for the amount or amounts due Bank
      under subsection 5(a) or 5(b).

     

    6.
      (a) Bank
      will
      make available online or telephonically information to Lender regarding deposits
      to the Account.

     

    (b) In
      addition to the original Bank statement provided to Company, Bank will provide
      Lender with a duplicate of such statement.

     

    7.
      (a) Bank
      will
      not be liable to Company or Lender for any expense, claim, loss, obligation,
      liability, damage, or cost ("Damages")
      arising out of or relating to its performance under this Agreement other than
      those Damages which result directly from its acts or omissions constituting
      gross negligence or intentional misconduct.

     

    (b) In
      no
      event will Bank be liable for any special, indirect, exemplary or consequential
      damages, including but not limited to lost profits, or any other matter
      disclaimed or excluded in the Lock Box Agreement, including but not limited
      to
      as provided in Section 7 thereof.

     

    (c) Notwithstanding
      anything to the contrary in this Agreement, Bank will be excused from failing
      to
      act or delay in acting, and no such failure or delay shall constitute a breach
      of this Agreement or otherwise give rise to any liability of Bank, if such
      failure or delay is caused by circumstances beyond Bank's reasonable control,
      including but not limited to legal constraint, emergency conditions, action
      or
      inaction of governmental, civil or military authority, fire, strike, lockout
      or
      other labor dispute, war, riot, theft, flood, earthquake, or other natural
      disaster, breakdown of public or private or common carrier communications or
      transmission facilities, computer virus, worm or denial of service attack,
      equipment failure, or negligence or default of Company.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (d) Bank
      shall have no duty to inquire or determine whether Company's obligations to
      Lender are in default or whether Lender is entitled to provide the Notice to
      Bank. Bank may rely on notices and communications it believes in good faith
      to
      be genuine and given by the appropriate party.

     

    (e) Notwithstanding
      any of the other provisions in this Agreement, in the event of the commencement
      of a case pursuant to Title 11, United States Code, filed by or against Company,
      or in the event of the commencement of any similar case under then applicable
      federal or state law providing for the relief of debtors or the protection
      of
      creditors by or against Company, Bank may act as Bank deems necessary to comply
      with all applicable provisions of governing statutes and shall not be in
      violation of this Agreement as a result.

     

    (f) Bank
      shall be permitted to comply with any writ, levy order or other similar judicial
      or regulatory order or process concerning the Account or any Check and shall
      not
      be in violation of this Agreement for so doing.

     

    8. Company
      shall indemnify Bank against, and hold it harmless from, any and all
      liabilities, losses, obligations, claims, costs, expenses and damages of any
      nature (including but not limited to allocated costs of staff counsel, other
      reasonable attorneys fees and any fees and expenses) in any way arising out
      of
      or relating to disputes or legal actions concerning Bank's provision of the
      services described in this Agreement. This section does not apply to any cost
      or
      damage attributable to the gross negligence or intentional misconduct of Bank.
      Company's obligations under this section shall survive termination of this
      Agreement.

     

    9. Company
      shall pay to Bank, upon receipt of Bank's invoice, all costs, expenses and
      attorneys' fees (including allocated costs for in-house legal services) incurred
      by Bank in connection with the enforcement of this Agreement and any instrument
      or agreement required hereunder, including but not limited to any such costs,
      expenses and fees arising out of the resolution of any conflict, dispute, motion
      regarding entitlement to rights or rights of action, or other action to enforce
      Bank's rights in a case arising under Title 11, United States Code.. Company
      agrees to pay Bank, upon receipt of Bank's invoice, all costs, expenses and
      attorneys' fees (including allocated costs for in-house legal services) incurred
      by Bank in the preparation and administration of this Agreement (including
      any
      amendments hereto or instruments or agreements required hereunder).

     

    10. Termination
      and Assignment of this Agreement shall be as follows:

     

    (a) Lender
      may terminate this Agreement by providing notice to Company and Bank that all
      of
      Company's obligations which are secured by Checks and the Account are paid
      in
      full, Lender may also terminate or it may assign this Agreement upon 30 days'
      prior written notice to Company and Bank. Bank may terminate this Agreement
      upon
      30 days' prior written notice to Company and Lender. Company may not terminate
      this Agreement except with the written consent of Lender and upon prior written
      notice to Bank.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (b) Notwithstanding
      subsection 10(a), Bank may terminate this Agreement at any time by written
      notice to Company and Lender if either Company or Lender breaches any of the
      terms of this Agreement, or any other agreement with Bank.

     

    11.
      (a) Each
      party represents and warrants to the other parties that (i) this Agreement
      constitutes its duly authorized, legal, valid, binding and enforceable
      obligation; (ii) the performance of its obligations under this Agreement and
      the
      consummation of the transactions contemplated hereunder will not (A) constitute
      or result in a breach of its certificate or articles of incorporation, by-laws
      or partnership agreement, as applicable, or the provisions of any material
      contract to which it is a party or by which it is bound or (B) result in the
      violation of any law, regulation, judgment, decree or governmental order
      applicable to it; and (iii) all approvals and authorizations required to permit
      the execution, delivery, performance and consummation of this Agreement and
      the
      transactions contemplated hereunder have been obtained.

     

    (b) The
      parties each agree that it shall be deemed to make and renew each representation
      and warranty in subsection 11(a) on and as of each day on which Company uses
      the
      services set forth in this Agreement.

     

    12.
      (a) This
      Agreement may be amended only by a writing signed by Company, Lender and Bank;
      except that Bank's fees and charges are subject to change by Bank upon 30 days'
      prior written notice to Company.

     

    (b) This
      Agreement may be executed in counterparts; all such counterparts shall
      constitute but one and the same agreement.

     

    (c) This
      Agreement, together with the Lock Box Agreement, and 1st Century Bank, N.A.
      Account Terms and Conditions, constitute the entire, agreement regarding the
      subject matter hereof, and supersedes all prior understandings, writings,
      proposals, representations and communications, oral or written, of any party
      relating to the subject matter hereof.

     

    (d) This
      Agreement shall be interpreted in accordance with California law without
      reference to that state's principles of conflicts of law.

     

    13. Any
      written notice or other written communication to be given under this Agreement
      shall be addressed to each party at its address set forth on the signature
      page
      of this Agreement or to such other address as a party may specify in writing.
      Except as otherwise expressly provided herein, any such notice shall be
      effective upon receipt.

     

    14. Nothing
      contained in the Agreement shall create any agency, fiduciary, joint venture
      or
      partnership relationship between Bank and Company or Lender.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly
      authorized officers as of the day and year first above written.

     

    
      	
               

              
                

              

              ("Company")

            	 	 	
              Address
                for Notices:

            
	
            	 	 	
              
                

              

               

            
	
            	 	 	
              
                

              

               

            
	
              By:

              
                

              

              Name:

              
                

              

            	 	 	
              

            
	
              
                Title:

                
                  
                    

                  

                

              

            	 	 	
              

            
	
               

            	 	 	
              T:

              
                

              

               

            
	
               

            	 	 	
              F:

              
                

              

               

            

    

    

    
      	
              

              ("Lender")

            	 	 	
              Address
                for Notices:

            
	
            	 	 	
              
                

              

               

            
	 	 	 	
              
                

              

               

            
	
              By:

              
                

              

              Name:

              
                

              

            	 	 	
              

            
	
              
                Title:

                
                  
                    

                  

                

              

            	 	 	
              Attn:

              
                

              

            
	
               

            	 	 	
              T:

              
                

              

            
	
               

            	 	 	
              F:

              
                

              

            

    

     

    
      	
              

              ("Bank")

            	 	 	
              Address
                for Notices:

            
	
            	 	 	
            
	 	 	 	 
	By:	 	 	
            
	
              
                

              
Name:	 	 	
              Attn:

            
	
              
                

              

              Title:

            	 	 	
              T:

            
	
              
                

              

            	 	 	
              F:

            

    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    DEPOSIT
      ACCOUNT CONTROL AGREEMENT

    

    [Letterhead
      of Lender]

     

    To: [Bank]
      

    [Address]

     

    Re: [Name
      of
      Company]

    Account
      No. _______________________________

    

    Ladies
      and Gentlemen:

    

    Reference
      is made to the Deposit Account Control Agreement dated (the "Agreement")
      among
      [Company Name], us and you regarding the above-described account (the
      "Account").
      In
      accordance with Section 2 of the Agreement, we hereby give you notice of our
      exercise of control of the Account and we hereby instruct you to transfer funds
      to our account as follows:

     

    
      	
              Bank
                Name:

            	 	
              
                

              

            
	
              ABA
                No.:

            	 	
              
                

              

            
	
              Account
                Name:

            	 	
              
                

              

            
	
              Account
                No.:

            	 	
              
                

              

            

    

     

    
      	 	 	
              Very
                truly yours,

            
	 	 	 
	 	 	
            
	
            	 	
              

              as
                Lender

            

    

     

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	
            	By:  	 
	 	
              

              Name:

            
	 	Title:

    

     

    
      
        
        

      

      
        37

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]