Document:

InfoTech USA, Inc. Exhibit 10.1 to Form 8K

     Exhibit 10.1

[INGRAM MICRO INC. LETTERHEAD]

     May 13, 2005

     Mr.Bob Patterson, CFO

InfoTech USA, Inc.

 7 Kingsbridge Road

 Fairfield, NJ 07004

     Re:  Account 30-023815

     Dear Mr. Patterson:

     We are pleased to advise you that Ingram Micro has recently increased the
          credit line of Info Tech USA, Inc., a New Jersey corporation,
          (“Customer”) to $500,000.00. This credit line is subject
          to the following: 

	  	Terms: 	Net 30  

	  	Interest:  	Balances that are ten (10) days past due, i.e., not paid within forty (40) days of
                           invoice, will be charged interest at the rate of 1 1/2% per month or the maximum
                           provided by law, which ever is less, with the accrual date beginning on 31st day after
                           the date of invoice.   

	  	Security: 	(1)   Irrevocable Standby Letter of Credit issued by Wells Fargo Bank in favor of
                           Ingram Micro in the amount of $250,000.00 for a term of no less than 12 months.
                           (Ingram Micro will draw on the Letter of Credit following a demand  to Customer for
                           payment of any outstanding balance then owed to Ingram Micro and payment is not
                           received.); 

	  	  	(2)   Security Agreement signed by Customer and UCC-1 filed on all assets of Customer;
                           and 

	  	  	(3)   Corporate Guarantees from both InfoTech USA, Inc., a Delaware corporation, and
                           Information Technology Services, Inc., a New York corporation. 

     In closing Ingram Micro reserves the right at any time to change or revoke such credit for any reason, in its
sole discretion, including but not limited to, credit policy changes by Ingram Micro, Customer's financial
condition, Customer's payment record, Customer's failure to meet sales volume requirements established by Ingram
Micro, and/or Customer's failure to utilize such credit limit.

     Very truly yours,

     /s/  Chris Sweeney

Chris Sweeney

Director of Credit

     cc:    John BakInfoTech USA, Inc. Exhibit 10.2 to Form 8K

     Exhibit 10.2

SECURITY AGREEMENT 

	        The
undersigned (hereinafter called the “Debtor”) and INGRAM MICRO INC. (hereinafter
called the “Secured Party”), for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, hereby agree as follows: 

             1.   
          SECURITY INTEREST. The Debtor hereby grants to the Secured Party a
          security interest (hereinafter called the “Security Interest”) in all
          property of the following types, wherever located and whether now owned or
          hereafter owned or acquired by the Debtor, whether or not affixed to realty, in
          all Proceeds and Products thereof in any form, in all parts, accessories,
          attachments, special tools, additions, replacements, substitutions and
          accessions thereto or therefor, and in all increases or profits received
          therefrom: all Equipment, Inventory, Accounts and Chattel Paper (hereinafter
          collectively called the “Collateral”). 

             2.   
          OBLIGATIONS SECURED. The Security Interest secures the full and punctual
          payment and performance when due, whether at a stated time, by acceleration or
          otherwise, of any and all indebtedness, obligations and liabilities of the
          Debtor to the Secured Party, whether now existing or hereafter incurred, of
          every kind and character, direct or indirect, and whether such indebtedness,
          liabilities and obligations are from time to time reduced and thereafter
          increased, or entirely extinguished and thereafter reincurred, including,
          without limitation, all now existing or hereafter incurred indebtedness,
          obligations and liabilities of the Debtor to the Secured Party (a) arising out
          of the purchase by the Debtor from the Secured Party of any of the Equipment or
          Inventory constituting a portion of the Collateral, whether for the price
          thereof, transportation charges relating thereto, interest, fees, expenses or
          otherwise, or (b) arising under this Security Agreement (all said indebtedness,
          obligations and liabilities described above in this paragraph, being hereinafter
          collectively called the “Obligations”). 

             3.   
          REPRESENTATIONS AND WARRANTIES OF DEBTOR. The Debtor represents and
          warrants, and, so long as this Security Agreement is in effect, shall be deemed
          continuously to represent and warrant that: (a) to the best knowledge of the
          Debtor, any financial statements and other information heretofore delivered to
          the Secured Party, and any representation, warranty or statement heretofore made
          or furnished to the Secured Party, by or on behalf of the Debtor or any
          endorser, guarantor or any other party liable for, or whose assets or any
          interest therein secures, the payment or performance of all or any portion of
          the Obligations (collectively, the “Third Party Obligor”), in
          connection with the Obligations, this Security Agreement or any document,
          instrument or agreement evidencing, securing or otherwise directly or indirectly
          relating to any of the Obligations, were true and accurate in all material
          respects when so delivered, made or furnished and, in the case of financial
          statements, were prepared in accordance with generally accepted accounting
          principles consistently applied in preceding periods; (b) there has been no
          material, adverse change in the business or properties, or the condition or
          operations, financial or otherwise, of the  
	  	Debtor or any Third Party Obligor
          since the date on which any of the financial statements, information,
          representations, warranties or statements described in clause (a) above were
          delivered, made or furnished to the Secured Party; (c) the Debtor is the owner
          of the Collateral free of all security interests or other encumbrances, except
          the Security Interest and except as specified in Schedule A attached hereto
          and made a part hereof; (d) the Debtor’s business address and chief
          executive office are at the Debtor’s address specified below; and the
          Debtor’s records concerning the Collateral are kept at the Debtor’s
          address specified below; and any and all tradenames, division names, assumed
          names or other names under which the Debtor transacts any part of its business
          are specified in Schedule A attached hereto and made a part hereof; (e) to the
          best knowledge of the Debtor each Account and Chattel Paper constituting the
          Collateral is genuine and enforceable in accordance with its terms against the
          party obligated to pay it (hereinafter called the “Account Debtor”);
          and to the best knowledge of the Debtor, no Account Debtor has any defense,
          setoff, claim or counterclaim against the Debtor which can be asserted against
          the Secured Party, whether in any proceeding to enforce the Collateral or
          otherwise; (f) the amounts represented from time to time by the Debtor to the
          Secured Party as owing by each Account Debtor or by all Account Debtors will be
          and are the correct amounts actually and unconditionally owing by such Account
          Debtor or Debtors individually and in the aggregate, except for normal cash
          discounts where applicable; and (g) the Collateral which consists of Equipment
          or Inventory is located at the Debtor’s address specified below and at any
          other locations specified in Schedule A attached hereto and made a part hereof. 

             4.   
          COVENANTS OF DEBTOR. So long as this Security Agreement is in effect, the
          Debtor: (a) will defend the Collateral against the claims and demands of all
          other parties, including, without limitation, defenses, setoffs, claims and
          counterclaims asserted by any Account Debtor against the Debtor or the Secured
          Party, except, as to Inventory, purchasers and lessees in the ordinary course of
          the Debtor’s business; will keep the Collateral free from all security
          interests or other encumbrances, except the Security Interest and except as
          specified in Schedule A attached hereto and made a part hereof; will not sell,
          transfer, lease, assign, deliver or otherwise dispose of any Collateral or any
          interest therein without the prior written consent of the Secured Party (which
          consent shall not be unreasonably withheld or delayed), except that so long as
          no Event of Default (as hereinafter defined) exists, the Debtor may sell or
          lease Inventory in the ordinary course of the Debtor’s business; and, with
          respect to Collateral which consists of Equipment or Inventory, will keep such
          Collateral only at the location at the Debtor’s address specified below and
          at the locations, if any, specified in Schedule A attached hereto and made a
          part hereof; (b) will notify the Secured Party promptly in writing of any change
          in the Debtor’s business address and chief executive office specified
          below, any change in the address at which records concerning the Collateral are
          kept and any change in the Debtor’s name, identity or corporate or other
          structure; (c) will furnish to the 

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	Secured Party such updated or additional
          financial statements, reports, tax returns and other information as the Secured
          Party may from time to time reasonably request regarding the financial or
          business affairs of the Debtor; will keep, in accordance with generally accepted
          accounting principles consistently applied in preceding periods, accurate and
          complete books and records, including, without limitation, records concerning
          the Collateral; at the Secured Party’s request, will mark any and all such
          books and records to indicate the Security Interest; will permit the Secured
          Party or its agents, at the Secured Party’s cost, at reasonable times and
          on reasonable prior notice, to inspect the Collateral and to audit and make
          extracts from or copies of such books and records and any of the Debtor’s
          ledgers, reports, correspondence or other books and records; and will duly
          account to the Secured Party’s reasonable satisfaction, at such reasonable
          time or times as the Secured Party may require in writing, for any of the
          Collateral; (d) will deliver to the Secured Party upon written demand, all
          Documents and all Chattel Paper (duly endorsed to the Secured Party)
          constituting, representing or relating to the Collateral or any part thereof,
          and any schedules, invoices, shipping documents, delivery receipts, purchase
          orders, contracts or other documents representing or relating to the Collateral
          or any part thereof; (e) will not, without the Secured Party’s prior
          written consent (which consent shall not be unreasonably withheld or delayed),
          make or agree to make any alteration, modification or cancellation of, or
          substitution for, or credits, adjustments or allowances on, Accounts or Chattel
          Paper constituting the Collateral; will furnish to the Secured Party, on written
          request, all credit and other information respecting the financial condition of
          any Account Debtor; and will notify the Secured Party promptly of any default
          (beyond applicable grace and cure periods) by any Account Debtor in payment or
          other performance of obligations with respect to any Collateral; (f) will insure
          the Collateral against risks, in coverage, form and amount, and by insurer,
          reasonably satisfactory to the Secured Party, and will cause each policy to be
          payable to the Secured Party as a named insured and loss payee, as its interest
          may appear, and to contain an agreement by the insurer that such policy shall
          not be canceled or modified without at least thirty (30) days’ prior
          written notice to the Secured Party, and, upon the Secured Party’s written
          request, will deliver each policy or certificate of insurance to the Secured
          Party; (g) in connection herewith, will execute and deliver to the Secured Party
          such financing statements, assignments and other documents and do such other
          things relating to the Collateral and the Security Interest as the Secured Party
          may reasonably request, and pay all reasonable costs of title searches and
          filing financing statements, assignments and other documents in all public
          offices requested in writing by the Secured Party; and will not, without the
          prior written consent of the Secured Party (which consent shall not be
          unreasonably be withheld or delayed), file or authorize or permit to be filed in
          any public office any financing statement naming the Debtor as debtor and not
          naming the Secured Party as secured party; (h) will not place the Collateral in
          any warehouse which may issue a negotiable document with respect thereto; and
          (i) will prevent the Collateral or any part thereof from becoming a Fixture. 

	  	             5.   
          VERIFICATION OF COLLATERAL. The Secured Party shall have the right to
          verify all or any Collateral in any manner and through any medium the Secured
          Party may reasonably consider appropriate, and the Debtor agrees to furnish all
          assistance and information and perform any acts which the Secured Party may
          require in connection therewith and to pay all of the Secured Party’s costs
          therefor. 

             6.   
          NOTIFICATION AND PAYMENTS. After the occurrence and during the
          continuance of any one or more of the Events of Default as hereinafter defined,
          the Secured Party may notify all or any Account Debtors or other parties
          obligated to make payments on and from the Collateral of the Security Interest
          and may also direct such Account Debtors or other parties to make all payments
          on the Collateral to the Secured Party. All payments on and from the Collateral
          received by the Secured Party directly or from the Debtor shall be applied to
          the Obligations in such order and manner and at such time as the Secured Party
          shall, in its sole discretion, determine. The Secured Party may demand of the
          Debtor in writing, before or after notification to such Account Debtors or other
          parties and without waiving in any manner the Security Interest, that any
          payments on and from the Collateral received by the Debtor: (a) shall be held by
          the Debtor in trust for the Secured Party in the same medium in which received;
          (b) shall not be commingled with any assets of the Debtor; and (c) shall be
          delivered to the Secured Party in the form received, properly endorsed to permit
          collection, or, at the option of the Secured Party, shall be deposited in a
          separate bank account designated by, and under the sole control of, the Secured
          Party, not later than the next business day following the day of their receipt;
          and the Debtor shall comply with such demand. The Debtor shall also promptly
          notify the Secured Party of the return or repossession by the Debtor of Goods
          underlying any Collateral, and the Debtor shall hold the same in trust for the
          Secured Party and shall dispose of the same as the Secured Party directs. The
          rights of the Secured Party under this Section 6 are subject to the exercise of
          any similar rights by any secured party having a security interest in the
          Collateral which has priority under the UCC over the Security Interest. 

             7.   
          DEFAULT.

        (a)   
          Any of the following events (hereinafter collectively called the “Events of
          Default” and individually called an “Event of Default”) shall
          constitute an Event of Default hereunder: (i) any of the Obligations shall not
          be paid or performed within fifteen (15) days following the date that such
          payment or performance shall have become due; (ii) any financial statements or
          other information heretofore or hereafter delivered to the Secured Party by or
          on behalf of the Debtor or any Third Party Obligor, or any representation or
          warranty made by the Debtor hereunder, or any representation, warranty or
          statement otherwise heretofore or hereafter made or furnished to the Secured
          Party by or on behalf of the Debtor or any Third Party Obligor, shall prove to
          have been untrue or incorrect in any material respect when so delivered, made or
          furnished; (iii) the Debtor or any Third Party Obligor shall fail to perform or
          observe any term, covenant, agreement or condition contained herein or in any
          document, instrument or agreement evidencing, securing or otherwise directly or
          indirectly relating to 

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	     any of the Obligations and such failure continues uncured
          for fifteen (15) days after written notice thereof from the Secured Party; (iv)
          the Debtor or any Third Party Obligor shall become insolvent, or shall generally
          not pay its debts as such debts become due, or shall admit in writing its
          inability to pay its debts generally, or shall make a general assignment for the
          benefit of creditors; or any proceeding shall be instituted by or against the
          Debtor or any Third Party Obligor seeking to adjudicate it a bankrupt or
          insolvent, or seeking liquidation, winding up, reorganization, arrangement,
          adjustment, protection, relief or composition of it or its debts under any law
          relating to bankruptcy, insolvency or reorganization or relief of debtors, or
          seeking the entry of any order for relief or the appointment of a receiver,
          trustee or other similar official for it or for any substantial part of its
          property; or the Debtor or any Third Party Obligor shall take any corporate or
          other action to authorize any of the actions set forth above in this clause
          (iv); (v) a final judgment or order for the payment of money or a writ or order
          of attachment, which, in either case, exceeds $150,000.00, shall be rendered
          against the Debtor or any Third Party Obligor not specifically covered by
          insurance and either (aa) enforcement proceedings shall have been commenced by
          any creditor upon such judgment, order or writ, or (bb) a stay of enforcement of
          such judgment, order or writ, by reason of a pending appeal or otherwise, shall
          not be in effect for any period of ten (10) consecutive days; or (vi) if the
          Debtor or any Third Party Obligor is an individual, the Debtor or any such Third
          Party Obligor shall die or shall be judicially declared to be incompetent; (vii)
          the Debtor or any Third Party Obligor shall be dissolved, or shall cease doing
          business as a going business concern, or shall make any, or send notice of any
          intended, bulk sale, or shall sell, assign, transfer, lease, convey or otherwise
          dispose of (whether in one transaction or in a series of transactions) all or
          substantially all of its assets (whether now owned or hereafter acquired), or
          shall merge into or be consolidated with any party without the prior written
          consent of the Secured Party; (viii) any indebtedness, obligation or liability
          of the Debtor or any Third Party Obligor to any party other than the Secured
          Party, which exceeds $150,000.00, shall not be paid or performed when due,
          whether at stated maturity, by acceleration or otherwise, or shall be declared
          to be due and payable prior to the stated maturity thereof; or (ix) the Secured
          Party shall in good faith and with a reasonable basis therefor deem itself
          insecure. 

             (b)   
          If any one or more of the Events of Default shall occur and be continuing, all
          or any part of any Obligations not payable on demand shall, at the election of
          the Secured Party, become and be due and payable at once, without presentment,
          demand, protest or further notice of any kind. The provisions of this
          subparagraph are not intended in any way to and do not affect any rights of the
          Secured Party with respect to any Obligations which may now or hereafter be
          payable on demand. 

             (c)   
          The Secured Party’s rights and remedies with respect to the Collateral
          shall be those of a Secured Party under the Uniform Commercial Code and under
          any other applicable law, as the same may from time to time be in effect, in
          addition to those rights and remedies granted herein and in any other document,
          instrument or agreement now or hereafter in effect between the Debtor and the
          Secured Party. If any one 

 	  	or more of the Events of Default shall occur and be
          continuing, the Secured Party may require the Debtor to assemble the Collateral
          and make it available to the Secured Party at the Debtor’s premises, and
          the Secured Party may use and operate the Collateral, and, in this regard, the
          Secured Party shall be entitled as a matter of right, if it shall so elect,
          forthwith, without prior demand or notice, and without declaring any of the
          Obligations to be due and payable, and without regard to the value of the
          Collateral or any part thereof, to the appointment of a receiver or receivers of
          the Collateral or any part thereof, and of all revenues and profits thereof, in
          order to manage, protect and preserve the Collateral or any part thereof and to
          continue the operations and business of the Debtor, with such powers as the
          court making such appointment shall confer, which may comprise any or all of the
          powers that the Secured Party is authorized to exercise hereunder or under
          applicable law. 

             (d)   
          Without in any way requiring notice to be given in the following time and
          manner, the Debtor agrees that any notice by the Secured Party of sale,
          disposition or other intended action hereunder or in connection herewith,
          whether required by the Uniform Commercial Code or otherwise, shall constitute
          reasonable notice to the Debtor if such notice is mailed by regular or certified
          mail, postage prepaid, at least five (5) days prior to such action, to the
          Debtor’s address specified below or to any other address which the Debtor
          has specified in writing to the Secured Party as the address to which notices
          hereunder shall be given to the Debtor. 

             (e)   
          The Debtor agrees to pay on written demand all reasonable costs and expenses
          incurred by the Secured Party in enforcing this Security Agreement, in realizing
          upon or protecting any Collateral and in enforcing and collecting any
          Obligations or any guaranty thereof, including, without limitation, if the
          Secured Party retains counsel for advice, suit, appeal, insolvency or other
          proceedings under the federal Bankruptcy Code or otherwise, or for any of the
          above purposes, the reasonable attorneys’ fees incurred by the Secured
          Party. Payment of all moneys hereunder is secured by the Collateral. 

             8.   
          MISCELLANEOUS.

        (a)   
          The Debtor hereby authorizes the Secured Party, at the Debtor’s expense, to
          file such financing statement or statements relating to the Collateral without
          the Debtor’s signature thereon as the Secured Party at its option may deem
          appropriate, and appoints the Secured Party as the Debtor’s
          attorney-in-fact (without requiring the Secured Party) to execute any such
          financing statement or statements in the Debtor’s name and to perform all
          other acts which the Secured Party reasonably deems appropriate to perfect and
          continue the Security Interest and to protect, preserve and realize upon the
          Collateral. This power of attorney shall be not affected by the subsequent
          disability or incompetence of the Debtor. 

             (b)   
          The Secured Party may demand, collect and sue on any and all Accounts, Chattel
          Paper and Proceeds (in either the Debtor’s or the Secured Party’s name
          at the latter’s option); may enforce, compromise, settle or discharge such
          Collateral without discharging the Obligations or any part thereof; and may
          endorse the Debtor’s name on any and all checks, commercial paper and any
          other Instruments pertaining to or constituting the Collateral. 

 

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             (c)   
          Without limiting any other right of the Secured Party, whenever the Secured
          Party has the right to declare any Obligations to be immediately due and payable
          (whether or not it has so declared), the Secured Party at its sole election may
          set off against the Obligations any and all moneys then or thereafter owed to
          the Debtor by the Secured Party in any capacity, whether or not the Obligations
          or the obligation to pay such moneys owed by the Secured Party is then due, and
          the Secured Party shall be deemed to have exercised such right of set off
          immediately at the time of such election even though any charge therefor is made
          or entered on the Secured Party’s records subsequent thereto. 

             (d)   
          Upon the Debtor’s failure to perform any of its duties hereunder within ten
          (10) days after written notice from the Secured Party, the Secured Party may,
          but shall not be obligated to, perform any or all such duties, including,
          without limitation, payment of taxes, assessments, insurance and other charges
          and expenses as herein provided, and the Debtor shall pay an amount equal to the
          reasonable cost thereof to the Secured Party on demand by the Secured Party.
          Payment of all moneys hereunder is secured by the Collateral. 

             (e)   
          No course of dealing between the Debtor and the Secured Party and no delay or
          omission by the Secured Party in exercising any right or remedy hereunder or
          with respect to any Obligations shall operate as a waiver thereof or of any
          other right or remedy, and no single or partial exercise thereof shall preclude
          any other or further exercise thereof or the exercise of any other right or
          remedy. The Secured Party may remedy any Event of Default by the Debtor
          hereunder or with respect to any Obligations in any reasonable manner without
          waiving the Event of Default remedied and without waiving any other prior or
          subsequent Event of Default by the Debtor. All rights and remedies of the
          Secured Party hereunder are cumulative. 

             (f)   
          The Secured Party shall have no obligation to take, and the Debtor shall have
          the sole responsibility for taking, any and all steps to preserve rights against
          any and all prior parties to any Instrument or Chattel Paper constituting the
          Collateral, whether or not in the Secured Party’s possession. The Secured
          Party shall not be responsible to the Debtor for loss or damage resulting from
          the Secured Party’s failure to enforce or collect any such Collateral or to
          collect any moneys due or to become due thereunder. Debtor waives protest of any
          Instrument constituting the Collateral at any time held by the Secured Party on
          which the Debtor is in any way liable and waives notice of any other action
          taken by the Secured Party. 

             (g)   
          The Debtor authorizes the Secured Party, without notice or demand and without
          affecting the Debtor’s obligations hereunder, from time to time: (i) to
          exchange, enforce or release any collateral or any part thereof (other than the
          Collateral) taken from any party for payment of the Obligations or any part
          thereof; (ii) to release, substitute or modify any obligation of any Third Party
          Obligor; (iii) if any one or more of the Events of Default shall occur, to
          direct the order or manner of disposition of the Collateral and any and all
          other collateral and the enforcement of any and all endorsements, guaranties and
          other obligations relating to the Obligations or any part thereof, as the
          Secured Party, in its sole and absolute discretion, may determine; and (iv) to
          determine how, when and what 
 	  	application of payments and credits, if any, shall
          be made on the Obligations or any part thereof. 

             (h)   
          The rights and benefits of the Secured Party hereunder shall, if the Secured
          Party so directs, inure to any party acquiring any interest in the Obligations
          or any part thereof. 

             (i)   
          This Security Agreement shall be binding upon the Debtor, its legal
          representatives, successors and assigns, and shall inure to the benefit of the
          Secured Party, its legal representatives, successors and assigns. 

             (j)   
          In the event that more than one Debtor shall execute this Security Agreement,
          the term “Debtor” shall include each as well as all of them, and all
          obligations, agreements, representations, warranties and covenants hereunder
          shall be their joint and several obligations, agreements, representations,
          warranties and covenants. Wherever used herein, words of singular neuter import
          shall be read as if written in the plural, masculine or feminine whenever the
          circumstances so require. 

             (k)   
          No recision, waiver, release, modification or amendment of any provision of this
          Security Agreement shall be valid unless the same shall be in writing and signed
          by duly authorized officers of the Debtor and Secured Party. 

             (l)   
          The validity, interpretation and legal effect of this Security Agreement shall
          be governed by, and all rights and liabilities hereunder shall be determined in
          accordance with the laws of the State of New York. THE DEBTOR HEREBY AGREES THAT
          ANY ACTION OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS SECURITY AGREEMENT
          MAY BE COMMENCED, AT THE OPTION OF THE SECURED PARTY, IN COURTS HAVING SUITS
          WITHIN THE STATE OF NEW YORK AND THE DEBTOR HEREBY CONSENTS TO THE JURISDICTION
          OF ANY LOCAL, STATE OR FEDERAL COURT SELECTED BY THE SECURED PARTY WHICH IS
          LOCATED WITHIN THE STATE OF NEW YORK AND AGREES NOT TO DISTURB SUCH CHOICE OF
          FORUM BY THE SECURED PARTY. THE DEBTOR HEREBY AGREES THAT ANY SUMMONS AND
          COMPLAINT OR OTHER PROCESS COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT
          SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED AS
          PROVIDED BY THE LAWS OF THE STATE OF NEW YORK OR THE LAWS OF THE UNITED STATES
          OF AMERICA. THE DEBTOR AND THE SECURED PARTY HEREBY WAIVE TRIAL BY JURY IN ANY
          SUCH ACTION OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS SECURITY AGREEMENT. 

             (m)   
          All notices, requests, demands, directions and other communications which may or
          are required to be given, served or sent by either the Secured Party or the
          Debtor to the other under this Security Agreement shall be in writing and shall
          be deemed to have been properly given or sent if mailed by registered or
          certified mail or by overnight mail via a nationally recognized carrier, with
          postage prepaid, addressed to the applicable party (i) in the case of the
          Secured Party, at 1759 Wehrle Drive, Williamsville, New York 14221 (Attention:
          Vice President — Credit), (ii) in the case of the Debtor, at the address of
          the Debtor at 7 Kingsbridge Road, Fairfield, New Jersey 07004 (Attention: ____),
          or (iii) in the case of each party, at such other address as shall be designated
          by such party 

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	in a written notice to the other party complying as to delivery
          with the terms of this subparagraph. All such notices, requests, demands,
          directions and other communications shall, when mailed in the aforesaid manner,
          be effective when so mailed, except as otherwise provided herein. 

             (n)   
          All terms, unless otherwise defined in this Security Agreement, shall have the
          definitions set forth in the Uniform Commercial Code from time to time in effect
          in the State of New York. 

             (o)   
          The Debtor hereby irrevocably appoints the Secured Party the Debtor’s agent
          with full power, in the same manner, to the same extent and with the same effect
          as if the Debtor were to do the same, such appointment to be effective only upon
          the occurrence and during the continuance of an Event of Default: to receive and
          collect all mail addressed to the Debtor; to direct the place of delivery
          thereof to any location designated by the Secured Party; to open such mail; to
          remove all contents therefrom; to retain all contents thereof constituting or
          relating to the Collateral; and to perform all other acts which the Secured
          Party reasonably deems appropriate to protect, preserve and realize upon the
          Collateral. The agency hereby created is unconditional and shall not terminate
          until all of the Obligations are finally and irrevocably paid in full and until
          all commitments by the Secured Party to extend credit to the Debtor have expired
          or been terminated. This power of attorney shall not be affected by the
          subsequent disability or incompetence of the Debtor. 

             (p)   
          This Security Agreement shall not be deemed or construed to create any
          commitment or other obligation on the part of the Secured Party to make any
          sales or deliveries of Equipment or Inventory to the Debtor and all sales and
          deliveries to be made, if any, shall be made from time to time at the sole
          discretion of the Secured Party upon such terms and conditions as the Debtor and
          the Secured Party shall agree. 

             (q)   
          This Security Agreement is and is intended to be a continuing Security Agreement
          and shall remain in full force and effect until five (5) days after the Secured
          Party shall have actually received from the Debtor written notice of its
          discontinuance; provided, however, that this Security Agreement shall remain in
          full force and effect thereafter until all of the Obligations outstanding, or
          contracted or committed for (whether or not outstanding), before the receipt of
          such notice by 

 	  	the Secured Party and the expiration of such five (5) day period,
          and any extensions or renewals thereof (whether made before or after receipt of
          such notice or before or after the expiration of such five (5) day period),
          together with interest accruing thereon, shall be finally and irrevocably paid
          in full. If after receipt of any payment of all or any part of the Obligations,
          the Secured Party is for any reason compelled to surrender such payment to any
          party, because such payment is determined to be void or voidable as a
          preference, impermissible set off, or a diversion of trust funds, or for any
          other reason, this Security Agreement shall continue in full force and effect
          notwithstanding any contrary action which may have been taken by the Secured
          Party in reliance upon such payment, and any such contrary action so taken shall
          be without prejudice to the Secured Party’s rights under this Security
          Agreement and shall be deemed to have been conditioned upon such payment having
          become final and irrevocable. 

     (r)    
          Debtor agrees not to assume, guarantee, endorse or otherwise become directly,
          indirectly or contingently liable in connection with any obligations of any
          other party, including but not limited to Applied Digital Solutions, except: (a)
          the endorsement of negotiable instruments by Debtor for deposit or collection or
          similar transactions in the ordinary course of business; and (b) guaranties,
          endorsements and other direct, indirect or contingent liabilities in connection
          with the obligations of other parties, in existence on the date hereof and
          listed in Schedule A hereto. Further, Guarantor agrees not to transfer ay assets
          to or accept any transfer of assets from, merge or otherwise combine assets,
          liabilities or equity with, InfoTech USA, Inc. (a Delaware corporation) or
          Information Technology Services, Inc. (a New York corporation), without the
          prior written consent of Ingram, which consent shall not be unreasonably
          withheld. 

             
IN WITNESS WHEREOF,  the Debtor and the Secured Party have duly executed this Security  Agreement
effective as of the 16th day of May, 2005.
 

        SECURED PARTY: 

        INGRAM MICRO INC. 

	By: 	 /s/ Chris Sweeney 
 	  	  
		  (Signature & Title) 	  	  

        DEBTOR: 

        InfoTech USA Inc.,
 
        a New Jersey corporation 

	By: 	 /s/ J. Robert Patterson 
 	  	  
		  (Signature) 	  	  

		 J. Robert Patterson Treas/Sec'y 
 	  	  
		  (Print Name & Title) 	  	  

SCHEDULE A 

	1. 	Security interests or other encumbrances covering the Collateral, if any (paragraphs 3(c)
         and 4(a)):

	 	Check applicable box (if no box is checked, it shall be deemed to mean that there are no
         such security interests or other encumbrances):

	 	   None

   Holders of security interests or other encumbrances covering the Collateral are
                  set forth below:

Wells Fargo Business Credit, Inc. 

	2. 	Other names under which the Debtor transacts business (paragraph 3(d)):

	 	Check applicable box (if no box is checked, it shall be deemed to mean that there are no
         such other names):

	 	   None

   Other names are set forth below:

InfoTech

                  Information Technology Services, Inc.

                  Information Products

                  Information Products Center, Inc.

                  SysComm

                  SysComm International 

	3. 	Other locations of Equipment or Inventory Collateral, if any (paragraphs 3(g) and 4(a)):

	 	Check applicable box (if no box is checked, it shall be deemed to mean that there are no
         such other locations):

	 	   None

   Other locations are set forth below:

1001 6th Ave., 12th Floor, New York, NY 10018

	4. 	Guaranties, endorsements and other direct, indirect or contingent liabilities in connection
         with the obligations of other parties, in existence on the date on the date of this
         Agreement.

	 	Wells Fargo Business Credit, Inc.

                  Tech Data Corporation

                  IMB Credit LLC

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