Document:

f8k0707ex10i_bedminster.htm

    PROMISSORY
      NOTE

     

    
      	
              FACE
                AMOUNT

            	
              $1,375,000

            
	
              PRICE

            	
              $1,100,000

            
	
              INTEREST
                RATE

            	
              12%
                per annum

            
	
              NOTE
                NUMBER

            	
              June-2007-101

            
	
              ISSUANCE
                DATE

            	
              June
                26, 2007

            
	
              MATURITY
                DATE

            	
              June
                26, 2009

            

    

     

    FOR
      VALUE
      RECEIVED, Bedminster National Corp., a Nevada corporation, and all of its
      subsidiaries (the “Company”) (OTC BB: BMSTA) hereby promises to pay to
      the order of DUTCHESS PRIVATE EQUITIES FUND, LTD., a Cayman Island
      exempted company (the “Holder”), by the Maturity Date, or
      earlier, the Face Amount of One Million Three Hundred and Seventy-Five Thousand
      Dollars ($1,375,000) plus accrued interest U.S., (this “Note”) in such
      amounts, at such times and on such terms and conditions as are specified herein.
      The Company and the Holder are sometimes hereinafter collectively referred
      to as
      the “Parties” and each a “Party” to this Agreement.

     

    The
      closing shall be deemed to have occurred on the date funds are wired to the
      Company (the “Closing Date” or a “Closing”); The Closing shall
      only occur upon the Company’s purchase of eighty percent (80%) of Metropolitan
      Computing Corp. on the terms and conditions deemed acceptable by the
      Holder.

     

    Contemporaneously
      with the execution and delivery of this Note, the parties hereto are executing
      and delivering a Security Agreement and Secured Continuing Unconditional
      Guaranty (“Guaranty”), all of even date herewith (collectively with the
      documents referenced in the foregoing documents, the “Transaction
      Documents”).

     

    
      	
              Article
                1

            	
              Method
                of Payment/Interest

            

    

     

    Section
      1.1 Payments made to the Holder by the Company in satisfaction of this Note
      (referred to as a "Payment," or "Payments") shall be drawn from each Put under
      the Equity Line of Credit provided by Dutchess Private Equities Fund, LP
      (“Investor”) to the Company (“Equity Line”). The Company shall make payments to
      the Holder in the amount of the greater of a) one hundred percent (100%) of
      each
      Put (as defined in the Investment Agreement between the Company and the Investor
      dated June 29, 2006) given to the Investor from the Company; or, b) an amount
      as
      outlined in the table below:

     

    the
      later
      of the Closing Date or July 1, 2007 – Twenty thousand dollars ($20,000) August
      1, 2007 - Thirty thousand dollars ($30,000)

    September
      1, 2007 – Forty Thousand dollars ($40,000)

    October
      1, 2007 – June 1, 2008– Fifty Thousand dollars ($50,000)

    July
      1,
      2008 and each month thereafter until paid the Face Amount is paid in full –
seventy thousand dollars ($70,000)

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    Each
      amount as specified above when and due shall be the “Payment Amount”. The First
      Payment will be due on the later of the Closing Date or July 1, 2007 and each
      subsequent Payment will be made at the Closing of each Put ("Payment Date"
      or
      "Payment Dates") until this Note is paid in full, with a minimum amount of
      the
      Payment Amount due to the Holder per month. Notwithstanding any provision to
      the
      contrary in this Note, the Company may pay in full to the Holder the Face
      Amount, or any balance remaining thereon, in readily available funds at any
      time
      and from time to time without penalty.

     

    Payments
      made during a month that exceeds the Payment Amount due shall reduce the unpaid
      Face Amount of the Note accordingly.

     

    Section
      1.2 If before Maturity the Company raises any funds from a third-party, whether
      involving the issuance of debt or equity, including any equity line agreements
      with the Holder or a third party, in excess of five hundred thousand dollars
      ($500,000) (a “Financing”) except as specifically set forth in Section 5,
      then the Company shall pay to the Holder one hundred percent (100%) of the
      net
      proceeds there from as prepayment of the Face Amount of this Note, Interest
      and
      penalties, if any, then due. A Financing will also include the sale by the
      Company of any of its assets which are deemed to be material to the Company
      (excluding assets sold in the normal course of business). All prepayments
      described in this Section 1.2 shall be made to the Holder within three
      (3) business day of the Company’s receipt of proceeds from the Financing.
      Failure to comply with this Section 1.2 shall constitute an Event of
      Default (as described in Article 4 hereof). The Holder may, but is not
      required to, waive all or part of this Section 1.2 upon request from the
      Company and any such waiver shall not be unreasonably withheld.

     

    Section
      1.3 The Company shall pay twelve percent (12%) annual coupon on the unpaid
      Face
      Amount of this Note, commencing on the Issuance Date (the “Interest”).
The Interest shall compound daily, pro rata for partial
      periods.

     

    
      	
              Article
                2

            	
              Collateral

            

    

     

    Section
      2.1 The Company does hereby agree to issue to the Holder for use as Collateral
      fifty (50) signed Put Notices consistent with the conditions set forth in
      Article 12. The Collateral Put Notices shall be utilized only in the Event
      of
      Default (as hereinafter defined). In the event the Holder uses the Collateral
      in
      full, the Company shall immediately deliver to the Holder additional Put Notices
      to the extent of the outstanding Face Amount as requested by the
      Holder.

     

    Section
      2.2 Upon the completion of the Company's obligation to the Holder of the Face
      Amount of this Note, the Company will not be under any further obligation to
      complete additional Puts. All remaining Put sheets shall be marked “VOID” by the
      Holder and returned to the Company at the Company’s request.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    
      	
              Article
                3

            	
              Unpaid
                Amounts

            

    

     

    Section
      3.1 In the event that the Company has not repaid the Face Amount by the Maturity
      Date (the “Residual Amount”), then as liquidated damages (the
“Liquidated  Damages”), the Face Amount shall be
      increased by ten percent (10.0%) as an initial penalty and
an additional two and one-half percent (2.5%) per
      month (pro rata
      for partial periods), compounded daily, for each month until the Face Amount
      is
      paid in full. Further, if a Residual Amount remains at Maturity, it shall
      constitute an Event of Default hereunder. The Parties acknowledge that the
      Liquidated Damages are not interest under this Note and shall not constitute
      a
      penalty.

     

    
      	
              Article
                4

            	
              Defaults
                and Remedies

            

    

     

    Section
      4.1 Events of Default. An “Event of Default” occurs if any one
      of the following occur:

     

    (a)  The
      Company does not make a Payment within three (3) business days of a Payment
      Date, or a Residual Amount on the Note exists on the Maturity Date;

     

    (b)  The
      Company, pursuant to or within the meaning of any Bankruptcy Law (as defined
      below): (i) commences a voluntary case; (ii) consents to the entry of an order
      for relief against it in an involuntary case; (iii) consents to the appointment
      of a Custodian (as defined below) of the Company or for its property; (iv)
      makes
      an assignment for the benefit of its creditors; or (v) a court of competent
      jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is
      for
      relief against the Company in an involuntary case; (B) appoints a Custodian
      of
      the Company or for its property; or (C) orders the liquidation of the Company,
      and the order or decree remains unstayed and in effect for sixty (60) calendar
      days;

     

    (c)  The
      Company’s $0.0001 par value Class A common stock (the “ Class A Common Stock”)
      is suspended or is no longer listed on any recognized exchange, including an
      electronic over-the-counter bulletin board, in excess of two (2) consecutive
      trading days (excluding suspensions of not more than one (1) trading day
      resulting from business announcements by the Company);

     

    (d)  The
      registration statement for the shares underlying the current Equity Line of
      Credit is not effective for any reason;

     

    (e)  The
      Company breaches a material term of this Agreement or any of the Company’s
      representation or warranties hereunder were false when made;

     

    (f)  The
      Company fails to carry out Puts, including any paperwork needed, in a timely
      manner;

     

    (g)  An
      event
      of default occurs under any agreement given as security for the obligations
      and
      liabilities under this Note.

     

    (h)  The
      occurrence of any event which is described elsewhere in this Note as
      constituting an Event of Default hereunder.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (i)  the
      Company’s failure to pay any taxes when due unless such taxes are being
      contested in good faith by appropriate proceedings and with respect to which
      adequate reserves have been provided on the Company’s books; provided, however,
      that in the event that such failure is curable, the Company shall have ten
      (10)
      business days to cure such failure; or,

     

    (j)  an
      attachment or levy is made upon the Company’s assets having an aggregate value
      in excess of twenty-five thousand dollars ($25,000) or a judgment is rendered
      against the Company or the Company’s property involving a liability of more than
      twenty-five thousand dollars ($25,000) which shall not have been vacated,
      discharged, stayed or bonded pending appeal within ninety (90) days from the
      entry hereof; or,

     

    (k)  any
      change in the Company’s condition or affairs (financial or otherwise) which in
      the Holder’s reasonable, good faith opinion, would have a Material Adverse
      Effect; provided, however, that in the event that such failure is curable,
      the
      Company shall have ten (10) business days to cure such failure; or,

     

    (l)  any
      Lien,
      except for Permitted Liens, created hereunder or under any of the Transaction
      Documents for any reason ceases to be or is not a valid and perfected Lien
      having a first priority interest; or,

     

    (m)  the
      indictment or threatened indictment of the Company, any officer of the Company
      under any criminal statute, or commencement or threatened commencement of
      criminal or civil proceeding against the Company or any officer of the Company
      pursuant to which statute or proceeding penalties or remedies sought or
      available include forfeiture of any of the property of the company.

     

    (n)  the
      Company’s officers’ or directors’ (“Insiders”) compensation exceeds twenty-one
      thousand eight hundred and forty-two dollars ($21,842) per month (“Compensation
      Limit”), of which, no more than fifteen thousand dollars ($15,000) per month,
      may be used from the proceeds of this Note, until such time as an Additional
      Financing is completed, subject to Article 5 below. Upon the completion of
      an
      Additional Financing, the Insiders may increase cash compensation to the
      Compensation Limit, including any cash due for past forbearances.

     

    As
      used
      in this Section 4.1, the term “Bankruptcy Law” means Title 11 of
      the United States Code or any similar federal or state law for the relief of
      debtors, and the term “Custodian” means any receiver, trustee, assignee,
      liquidator or similar official under any Bankruptcy Law.

     

    Section
      4.2 Remedies. Upon the occurrence of each and every Event of Default,
      the Holder may seek any or all of the following remedies to the extent of the
      Residual Amount:

     

    (a)
      The
      Holder may elect to execute the Puts in an amount that will repay the Holder
      and
      fully enforce the Holder’s rights under the Security Agreement as well as the
      Secured Continuing Unconditional Guaranty of even date herewith among the
      subsidiaries as outlined between Company and the Holder (the
“Guaranty”)

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (b)  The
      Holder may increase the Face Amount of the Note by ten percent (10.0%) as an
      initial penalty and an additional two and one-half percent (2.5%) per month
      (pro
      rata for partial periods), compounded daily, until such Event of Default is
      cured (if capable of being cured) or this Note, together with all interest
      thereon, is repaid in full (i.e., exercise the Liquidated Damages option).
      The
      Parties acknowledge that the Liquidated Damages are not interest under this
      Note
      and shall not constitute a penalty.

     

    (c)  The
      Holder may elect to stop any further funding to the Company excluding
      the

     

    Equity
      Line of Credit.

     

    (d)
      The
      Holder may also do either (i) or (ii) below, but not both; provided,
      however, that the Holder may only utilize (i) below in the event of default
      pursuant to Section 4.1 and such default is not cured by the Company within
      ten
      (10) days:

     

    (i)
      Switch Residual Amount, in part or in whole, to a three-year (“Convertible
      Maturity Date”), eighteen percent (18%) interest bearing convertible
      debenture at a floating rate discount of fifty percent (50%) to the prevailing
      market price during conversion, and with such other terms described hereinafter
      (the “Convertible Debenture”). The Convertible Debenture shall be
      considered closed (“Convertible Closing Date”) as of the date of the
      Event of Default. If the Holder chooses to convert the Residual Amount to a
      Convertible Debenture, then the Company shall have ten (10) business days after
      notice of default from the Holder (the “Notice of Convertible Debenture”)
to file a registration statement covering an amount of shares equal
      to three
      hundred percent (300%) of the Residual Amount, plus interest thereon and any
      Liquidated Damages due at such time. In the event the Company does not file
      such
      registration statement within such period of time, or such registration
      statement is not declared by the Commission to be effective under the Securities
      Act within sixty (60) business days of the Convertible Closing Date, then the
      Residual Amount shall increase by five thousand dollars ($5,000) per day. In
      the
      event the Company is given the option for accelerated effectiveness of the
      registration statement, the Company will cause such registration statement
      to be
      declared effective as soon as reasonably practicable and will not take any
      action to delay the registration to become effective. In the event that the
      Company is given the option for accelerated effectiveness of the registration
      statement, but chooses not to cause such registration statement to be declared
      effective on such accelerated basis, the Residual Amount shall increase by
      five
      thousand dollars ($5,000) per day commencing on the earliest date as of which
      such registration statement would have been declared to be effective if subject
      to accelerated effectiveness.

     

    (ii)
      The
      Holder may increase the Payment Amount described under Article 1 hereof
      to fulfill the repayment of the Residual Amount. The Company shall provide
      full
      cooperation to the Holder in directing funds owed to the Holder on any Put
      made
      by the Company to the Investor. The Company agrees to diligently carry out
      the
      terms outlined in the Equity Line for delivery of any such shares. In the event
      the Company is not diligently fulfilling its obligation to direct funds
      owed to the Holder from Puts to the Holder, as reasonably determined by the
      Holder, the Holder may, after giving the Company five (5) business days advance
      notice to cure same, elect to increase the Face Amount of the Note by two and
      one-half percent (2.5%) per day, compounded daily, in addition to and on top
      of
      any additional remedies available to the Holder under this Note.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              Section
                4.3

            	
              Conversion
                Privilege

            

    

     

    (a)  In
      the
      event that a Convertible Debenture is issued by the Company pursuant to Section
      4.2(d)(i), the Holder shall have the right to convert the Convertible Debenture
      into shares of Class A Common Stock at any time following the Convertible
      Closing Date and before the close of business on the Convertible Maturity Date.
      The number of shares of Class A Common Stock issuable upon the conversion of
      the
      Convertible Debenture shall be determined pursuant to Section 4.4 hereof,
      but the number of shares issuable shall be rounded up to the nearest whole
      share.

     

    (b)  In
      the
      event all or any portion of the Convertible Debenture remains outstanding on
      the
      Convertible Maturity Date (the “Debenture Residual Amount”), the
      unconverted portion of such Convertible Debenture will automatically be
      converted into shares of Class A Common Stock on such date in the manner set
      forth in Section 4.4 hereof.

     

    Section
      4.4      Conversion
      Procedure

     

    (a)  The
      Holder may elect to convert the Residual Amount in whole or in part any time
      and
      from time to time following the Convertible Closing Date. Such conversion shall
      be effectuated by providing the Company, or its attorney, with that portion
      of
      the Convertible Debenture to be converted together with a facsimile or
      electronic mail of the signed notice of conversion (the “Notice of
      Conversion”). The date on which the Notice of Conversion is effective
(“Conversion Date”) shall be deemed to be the date on which the Holder
      has delivered to the Company a facsimile or electronically mailed the Notice
      of
      Conversion (receipt being via a confirmation of the time such facsimile or
      electronic mail to the Company as provided by the Holder). The Holder can elect
      to either reissue the Convertible Debenture, or continually convert the
      remaining Residual Amount under the Debenture.

     

    (b)  Common
      Stock to be Issued. Upon the conversion of the Convertible Debenture by the
      Holder, the Company shall instruct its transfer agent to issue stock
      certificates without restrictive legends or stop transfer instructions, if,
      at
      that time, the aforementioned registration statement
      described in Section 4.2 hereof
has been declared effective
      (or with proper restrictive legends if the
      registration statement has not as yet been declared effective), in specified
      denominations representing the number of shares of Class A Common Stock issuable
      upon such conversion. In the event that the Convertible Debenture is deemed
      saleable under Rule 144 of the Securities Act, the Company shall, upon a Notice
      of Conversion, instruct the transfer agent to issue free trading certificates
      without restrictive legends, subject to other applicable securities laws. The
      Company is responsible to for all costs associated with the issuance of the
      shares, including but not limited to the opinion letter, overnight delivery
      of
      the certificates and any other costs that arise. The Company shall act as
      registrar of the Shares of Class A Common Stock
      to
      be issued and shall maintain an appropriate ledger containing the necessary
      information with respect to each Convertible Debenture. The Company warrants
      that no instructions have been given or will be given to the transfer agent
      which limit, or otherwise prevent resale and that the Class A Common Stock
      shall
      otherwise be freely resold, except as may be set forth herein or subject to
      applicable law.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)  Conversion
      Rate. The Holder is entitled to convert the Convertible Debenture Residual
      Amount, plus accrued interest and penalties, anytime following the Convertible
      Closing Date, at the lesser of either (i) fifty percent (50%) of the lowest
      closing bid price during the fifteen (15) trading days immediately preceding
      the
      Notice of Conversion or (ii) 100% of the lowest bid price for the twenty (20)
      trading days immediately preceding the Convertible Closing Date (“Fixed
      Conversion Price”). No fractional shares or scrip representing fractions of
      shares will be issued on conversion, but the number of shares issuable shall
      be
      rounded up to the nearest whole share.

     

    (d)  Nothing
      contained in the Convertible Debenture shall be deemed to establish or require
      the Company to pay interest to the Holder at a rate in excess of the maximum
      rate permitted by applicable law. In the event that the rate of interest
      required to be paid exceeds the maximum rate permitted by governing law, the
      rate of interest required to be paid thereunder shall be automatically reduced
      to the maximum rate permitted under the governing law and such excess shall
      be
      returned with reasonable promptness by the Holder to the Company. In the event
      this Section 4.4(d) applies, the Parties agree that the terms of this
      Note shall remain in full force and effect except as is necessary to make the
      interest rate comply with applicable law.

     

    (e)  The
      Holder shall be treated as a shareholder of record on the date the Company
      is
      required to issue the Class A Common Stock to the Holder. If prior to the
      issuance of stock certificates, the Holder designates another person as the
      entity in the name of which the stock certificates requesting the Convertible
      Debenture are to be issued, the Holder shall provide to the Company evidence
      that either no tax shall be due and payable as a result of such transfer or
      that
      the applicable tax has been paid by the Holder or such person. If the Holder
      converts any part of the Convertible Debentures, or will be, the Company shall
      issue to the Holder a new Convertible Debenture equal to the unconverted amount,
      immediately upon request by the Holder.

     

    (f)  Within
      four (4) business days after receipt of the documentation referred to in this
      Section, the Company shall deliver a certificate for the number of shares of
      Class A Common Stock issuable upon the conversion. In the event the Company
      does
      not make delivery of the Class A Common Stock as instructed by Holder within
      four (4) business days after the Conversion Date, the Company shall pay to
      the
      Holder an additional one percent (1.0%) per day in cash of the full dollar
      value
      of the Debenture Residual Amount then remaining after conversion, compounded
      daily; provided, however, that the Company shall not be liable for any amounts
      under this Section 4.4(f) in the event that the delay in the issuance of the
      Class A Common Stock is as a result of actions by the Holder or outside of
      the
      control of the Company.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (g)            The
      Company shall at all times reserve (or make alternative written arrangements
      for
      reservation or contribution of shares) and have available all Class A Common
      Stock necessary to meet conversion of the Convertible Debentures by the Holder
      of the entire amount of
      Convertible Debentures then outstanding. If, at any time, the Holder submits
      a
      Notice of Conversion and the Company does not have sufficient authorized but
      unissued shares of Class A Common Stock (or alternative shares of Class A Common
      Stock as may be contributed by stockholders of the Company) available to effect,
      in full, a conversion of the Convertible Debentures (a “Conversion Default,”
the date of such default being referred to herein as the “Conversion
      Default Date”), the Company shall issue to the Holder all of the shares of
      Class A Common Stock which are available. Any Convertible Debentures, or any
      portion thereof, which cannot be converted due to the Company’s lack of
      sufficient authorized Class A common stock (the “Unconverted Debentures”),
may be deemed null and void upon written notice sent by the Holder
      to the
      Company. The Company shall provide notice of such Conversion Default
(“Notice  of Conversion Default”) to the Holder, by
      facsimile, within one (1) business days of such default.

     

    (h)  The
      Company agrees to pay the Holder payments for a Conversion Default
(“Conversion Default Payments”) in the amount of (N/365) multiplied by
      0.24, the product of which is then multiplied by the initial issuance price
      of
      the outstanding or tendered but not converted Convertible Debentures held by
      the
      Holder, where N equals the number of days from the Conversion Default Date
      to
      the date (the “Authorization Date”) that the Company authorizes a
      sufficient number of shares of Class A Common Stock to effect conversion of
      all
      remaining Convertible Debentures. The Company shall send notice
(“Authorization Notice”) to the Holder that additional shares of Class A
      Common Stock have been authorized, the Authorization Date, and the amount of
      Holder’s accrued Conversion Default Payments. The accrued Conversion Default
      shall be paid in cash or shall be convertible into Class A Common Stock at
      the
      conversion rate set forth in Section 4.4(c) hereof, upon written notice
      sent by the Holder to the Company, which Conversion Default shall be payable
      as
      follows: (i) in the event the Holder elects to take such payment in cash, cash
      payment shall be made to the Holder within five (5) business days, or (ii)
      in
      the event Holder elects to take such payment in stock, the Holder may convert
      at
      the conversion rate set forth in Section 4.4(c) hereof until the
      expiration of the conversion period.

     

    (i)  The
      Company acknowledges that its failure to maintain a sufficient number of
      authorized but unissued shares of Class A Common Stock to effect in full a
      conversion of the Convertible Debentures in full will cause the Holder to suffer
      irreparable harm, and that the actual damages to the Holder will be difficult
      to
      ascertain. Accordingly, the parties agree that it is appropriate to include
      in
      this Agreement a provision for liquidated damages. The Parties acknowledge
      and
      agree that the liquidated damages provision set forth in this section represents
      the parties’ good faith effort to quantify such damages and, as such, agree that
      the form and amount of such liquidated damages are reasonable, and under the
      circumstances, do not constitute a penalty. The payment of liquidated damages
      shall not relieve the Company from its obligations to deliver the Class A Common
      Stock pursuant to the terms of this Convertible Debenture.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (j)             If,
      by the fourth (4th) business day after the Conversion Date, any portion of
      the
      shares of the Convertible Debentures have not been delivered to the Holder
      and
      the Holder purchases, in an open market transaction or otherwise, shares of
      Class A Common Stock (the “Covering Shares”) necessary to make delivery
      of shares which would had been delivered if the full amount of the shares to
      be
      converted had been delivered to the Holder, then the Company shall
      pay
      to the Holder, in addition to any other amounts due to Holder pursuant to this
      Convertible Debenture, and not in lieu thereof, the Buy-In Adjustment Amount
      (as
      defined below). The “Buy In Adjustment Amount” is the amount equal to the
      excess, if any, of (x) the Holder’s total purchase price (including brokerage
      commissions, if any) for the Covering Shares, minus (y) the net proceeds (after
      brokerage commissions, if any) received by the Holder from the sale of the
      Sold
      Shares. The Company shall pay the Buy-In Adjustment Amount to the Holder in
      immediately available funds within five (5) business days of written demand
      by
      the Holder. By way of illustration only and not in limitation of the foregoing,
      if the Holder purchases shares of Class A Common Stock having a total purchase
      price (including brokerage commissions) of $11,000 to cover a Buy-In with
      respect to shares of Class A Common Stock it sold for net proceeds of $10,000,
      the Buy-In Adjustment Amount which the Company will be required to pay to the
      Holder will be $1,000.

     

    The
      Company does hereby warrant the date of consideration for the Convertible
      Debenture is the Issuance Date of the Note and shall use all commercially
      reasonable best efforts to have an opinion letter stating such for sale under
      Rule 144. In the event that counsel to the Company fails or refuses to render
      an
      opinion as required to issue the Conversion Shares in accordance with this
      Article 4 (either with or without restrictive legends, as applicable), then
      the
      Company irrevocably and expressly authorizes counsel to the Holder to render
      such opinion, attached as Exhibit A and incorporate herein by reference. The
      Transfer Agent shall accept and be entitled to rely on such opinion for the
      purposes of issuing the Conversion Shares and Interest Shares. Any costs
      incurred by Holder for such opinion letter shall be added to the Face Amount
      of
      the Debenture. The Company shall cooperate fully and in a timely manner with
      the
      transfer agent for any Company information requested by the transfer
      agent.

     

    
      	
              Article
                5

            	
              Additional
                Financing and Registration
                Statements

            

    

     

    Section
      5.1 Except for the ability to enter into additional financing agreements whether
      for debt or equity in an aggregate amount up to five hundred thousand ($500,000)
      , which shall require the approval of the Holder, which shall not be
      unreasonably withheld, the Company will not enter into any additional financing
      agreements over five hundred thousand dollars ($500,000), whether for debt
      or
      equity, without prior expressed written consent from the Holder, which may
      be
      given or withheld in Holder’s sole and absolute discretion.

     

    Section
      5.2 The Company agrees that it shall not file any registration statement which
      includes any of its Common Stock (other than registration statements associated
      with registering shares on Form S-4) until such time as the Note is paid in
      full
      (the “Lock-Up Period”) or unless and until Holder gives its prior written
      consent (which may be given or withheld in Holder’s sole and absolute
      discretion).

     

    Section
      5.3 If at any time while this Note is outstanding, the Company issues or agrees
      to issue to any entity or person (“Third-Party”) for any reason
      whatsoever, any common stock or securities convertible into or exercisable
      for
      shares of common stock (or modify any such terms in effect prior to the
      execution of this Note) (a “Third Party Financing”), at terms deemed by
      the Holder to be more favorable to the Third-Party, then the Company grants
      to
      the Holder the right, at the Holder’s election, to modify the terms of this Note
      to match or conform
      to the more favorable term or terms of the Third-Party Financing. The rights
      of
      the Holder in this Section 5.3 are in addition to all other rights the
      Holder has pursuant to this Note and the related Security Agreement between
      the
      Holder and the Company.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Violation
      of any Section under this Article 5 shall constitute an Event of Default
      and the Holder may elect to take the action or actions outlined in Article 4
      hereof.

     

    
      	
              Article
                6

            	
              Notice

            

    

     

    Section
      6.1 Any notices, consents, waivers or other communications required or permitted
      to be given under the terms of this Note must be in writing and will be deemed
      to have been delivered (i) upon delivery, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided a confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one (1) day after deposit with a nationally recognized overnight
      delivery service, so long as it is properly addressed. The addresses and
      facsimile numbers for such communications shall be:

     

    If
      to the
      Company:

     

    Attn:
      Paul Patrizio

    Bedminster
      National Corp. 

    90
      Washington Valley Road Bedminster NJ 07921

    Telephone:
      908-719-8940 Facsimile: 908-234-0608

     

    With
      a
      copy to:

     

    Anslow
      & Jaclin, LLP 

    Attn:
      Gregg E. Jaclin, Esq. 

    195
      Route
      9, Suite 204 

    Manalapan,
      NJ 07726 

    Telephone:
      732-409-1212 

    Facsimile:
      (732)577-1188

     

    If
      to the
      Holder:

     

    Dutchess
      Capital Management, LLC 

    Douglas
      Leighton

    50
      Commonwealth Ave, Suite 2 

    Boston,
      MA 02116

    Telephone:
      (617) 301-4700

    Facsimile:
      (617) 249-0947

     

    Section
      6.2 The Parties are required to provide each other with five (5) business days
      prior notice to the other party of any change in address, phone number or
      facsimile number.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
       

      
        	
                Article
                  7

              	
                Time

              

      

       

    

    Where
      this Note authorizes or requires the payment of money or the performance of
      a
      condition or obligation on a Saturday or Sunday or a holiday on which the United
      States Stock Markets (“US Markets”) are closed (“Holiday”), such
      payment shall be made or condition or obligation performed on the last business
      day preceding such Saturday, Sunday or Holiday. A
“business  day” shall mean a day on which the US Markets are
      open for a full day or half day of trading.

     

    
      	
              Article
                8

            	
              No
                Assignment.

            

    

     

    
      	
               

            	
              This
                Note and the obligations hereunder shall not be
                assigned.

            

    

     

    
      	
              Article
                9

            	
              Rules
                of Construction.

            

    

     

    In
      this
      Note, unless the context otherwise requires, words in the singular number
      include the plural, and in the plural include the singular, and words of the
      masculine gender include the feminine and the neuter, and when the tense so
      indicates, words of the neuter gender may refer to any gender. The numbers
      and
      titles of sections contained in the Note are inserted for convenience of
      reference only, and they neither form a part of this Note nor are they to be
      used in the construction or interpretation hereof. Wherever, in this Note,
      a
      determination of the Company is required or allowed, such determination shall
      be
      made by a majority of the Board of Directors of the Company and, if it is made
      in good faith, it shall be conclusive and binding upon the Company.

     

    
      
        	
                Article
                  10

              	
                Governing
                  Law

              

      

       

    

    The
      validity, terms, performance and enforcement of this Note shall be governed
      and
      construed by the provisions hereof and in accordance with the laws of the
      Commonwealth of Massachusetts applicable to agreements that are negotiated,
      executed, delivered and performed solely in the Commonwealth of
      Massachusetts.

     

    
      
        
          	
                  Article
                    11

                	
                  Disputes
                    Subject to Arbitration

                

        

         

      

    

    The
      Parties shall submit all disputes arising under this Note to arbitration in
      Boston, Massachusetts before a single arbitrator of the American Arbitration
      Association (the “AAA”). The arbitrator shall be selected by application of the
      rules of the AAA, or by mutual agreement of the Parties, except that such
      arbitrator shall be an attorney admitted to practice law in the Commonwealth
      of
      Massachusetts. No Party will challenge the jurisdiction or venue provisions
      provided in this Article 11. Nothing in this Article
      11  shall limit the Holder’s right to obtain an injunction for a
      breach of this Note from any court of law. Any injunction obtained shall remain
      in full force and effect until the arbitrator, as set forth in this Article
      11 fully adjudicates the dispute.

     

    
      
        
          
            	
                    Article
                      12

                  	
                    Conditions
                      to Closing

                  

          

           

        

      

    

    The
      Company shall have delivered the proper Collateral to the Holder before Closing
      of this Note.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Article
                13

            	
              Closing
                Costs

            

    

     

    The
      Company agrees to pay for related expenses associated with the proposed
      transaction of one hundred thousand dollars ($100,000). This amount shall cover,
      but is not limited to, the following: due diligence expenses, document creation
      expenses, closing costs, and transaction administration expenses. All such
      structuring and administration expenses shall be deducted from the first
      Closing.

     

    
      	
              Article
                14

            	
              Indemnification

            

    

     

    In
      consideration of the Holder’s execution and delivery of this Agreement and the
      acquisition and funding by the Holder of this Note and in addition to all of
      the
      Company’s other obligations under the documents contemplated hereby, the Company
      shall defend, protect, indemnify and hold harmless the Holder and all of its
      shareholders, officers, directors, employees, counsel, and direct or indirect
      investors and any of the foregoing person’s agents or other representatives
      (including, without limitation, those retained in connection with the
      transactions contemplated by this Agreement) (collectively, the
“Indemnities”) from and against any and all actions, causes of action,
      suits, claims, losses, costs, penalties, fees, liabilities and damages, and
      expenses in connection therewith (irrespective of whether any such Indemnitee
      is
      a party to the action for which indemnification hereunder is sought), and
      including, without limitation, reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
      arising out of, or relating to (i) any misrepresentation or breach of any
      representation or warranty made by the Company in the Note, or any other
      certificate, instrument or document contemplated hereby or thereby, or (ii)
      any
      breach of any covenant, agreement or obligation of the Company contained in
      the
      Note or any other certificate, instrument or document contemplated hereby or
      thereby, except insofar as any such misrepresentation, breach or any untrue
      statement, alleged untrue statement, omission or alleged omission is made in
      reliance upon and in conformity with written information furnished to the
      Company by, or on behalf of, the Holder or is based on illegal trading of the
      Common Stock by the Holder. To the extent that the foregoing undertaking by
      the
      Company may be unenforceable for any reason, the Company shall make the maximum
      contribution to the payment and satisfaction of each of the Indemnified
      Liabilities that is permissible under applicable law. The indemnity provisions
      contained herein shall be in addition to any cause of action or similar rights
      the Holder may have, and any liabilities the Holder may be subject
      to.

     

    
      	
              Article
                15

            	
              Incentive
                Shares

            

    

     

    The
      Company shall issue to the Holder one million eight hundred and seventy-five
      thousand (1,875,000) shares of unregistered, restricted Class A Common Stock
      (the “Incentive Shares”) as an incentive for the Holder entering into
      this Note. The Incentive Shares shall be issued and delivered to the Escrow
      Agent to be held in escrow in accordance with the Escrow Agreement. The
      Company’s failure to issue the Incentive Shares shall constitute an Event of
      Default and the Holder may elect to enforce the remedies outlined in Article
      4 hereof. The Company’s obligation to provide the Holder with the Incentive
      Shares, as set forth herein, shall survive the termination
      of this Note and any default on this obligation shall provide the Holder with
      all rights, remedies and default provisions set forth in this Note or otherwise
      available by law. The Incentive Shares shall carry piggy back registration
      rights. In the event the Company files a registration statement that does not
      include the Incentive Shares, the Company shall pay to the Holder one million
      (1,000,000) additional shares. The Holder shall have retain the full right
      to
      waive any such piggyback registration rights.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
      Company hereby acknowledges that the date of consideration for the Incentive
      Shares is the same as the Issuance Date of this Note and shall use all
      commercially reasonable best efforts to facilitate the Holder’s sales under Rule
      144 of the Securities Act. The Company shall provide an opinion letter from
      counsel within two (2) business days of written request by the Holder stating
      that the date of consideration for the Debenture is the Issuance Date and
      submission of proper Rule 144 support documentation consisting of a Form 144,
      a
      broker's representation letter and a seller's representation letter. In the
      event the Company does not deliver the opinion letter within two business days,
      the Company shall be in default as outlined in Article 4. In the event that
      counsel to the Company fails or refuses to render an opinion as required to
      issue the Shares in accordance with this paragraph (either with or without
      restrictive legends, as applicable), then the Company irrevocably and expressly
      authorizes counsel to the Holder to render such opinion and shall authorize
      the
      Transfer Agent to accept and to rely on such opinion for the purposes of issuing
      the Shares (which is attached as Exhibit A hereto and incorporated by
      reference). Any costs incurred by Holder for such opinion letter shall be added
      to the Face Amount of the Note.

     

    
      	Article 16	
              Use
                of Proceeds

            

    

     

    The
      Company shall use the funds to consummate the acquisition of Metropolitan
      Computing Corp. and for working capital purposes and the funds shall be held
      in
      escrow pending completion of the acquisition as set forth in the Escrow
      Agreement.

     

    
      	
              Article
                17

            	
              Waiver

            

    

     

    The
      Holder’s delay or failure at any time or times hereafter to require strict
      performance by Company of any obligations, undertakings, agreements or covenants
      shall not waive, affect, or diminish any right of the Holder under this Note
      to
      demand strict compliance and performance herewith. Any waiver by the Holder
      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
      the Company contained in this Note, and no Event of Default, shall be deemed
      to
      have been waived by the Holder, nor may this Note be amended, changed or
      modified, unless such waiver, amendment, change or modification is evidenced
      by
      a separate instrument in writing specifying such waiver, amendment, change
      or
      modification and signed by the Holder.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	Article 18	
              Senior
                Obligation

            

    

     

    The
      Company shall cause this Note to be senior in right of payment to all other
      current or future debt of the Company. The Company warrants that it has taken
      all necessary steps to subordinate its other obligations to the rights of the
      Holder under this Note and the failure to do so shall constitute an Event of
      Default.

     

    
      	
              Article
                19

            	
              Transactions
                With Affiliates

            

    

     

    The
      Company shall not, and shall cause each of its Subsidiaries to not enter into,
      amend, modify or supplement, or permit any Subsidiary to enter into, amend,
      modify or supplement, any agreement, transaction, commitment or arrangement
      with
      any of its or any Subsidiary’s officers, directors, persons who were officers or
      directors at any time during the previous two (2) years, shareholders who
      beneficially own five percent (5%) or more of the Common Stock, or affiliates
      or
      with any individual related by blood, marriage or adoption to any such
      individual or with any entity in which any such entity or individual owns a
      five
      percent (5%) or more beneficial interest (each a “Related Party”) during
      the Lock-Up Period.

     

    
      	Article 20	
              Equity
                Line Obligations

            

    

     

    At
      the
      request of the Holder, at any time after the Company's current effective
      registration statement for the Equity Line of Credit (File No: 333-137023),
has ten million (10,000,000) shares or less remaining for issuance,
      the
      Company shall immediately execute a new Investment Agreement for an Equity
      Line
      of Credit under the same terms and conditions as the previous Equity Line,
      if so
      required. The Company shall immediately prepare and file a registration
      statement for the registration of shares. The Holder shall also retain the
      right
      to determine the date of the filing of such registration statement. As an effort
      to assist the Company with the Payments pursuant to this Note, the Company
      gives
      authorization for the Holder to draw funds directly from the Closing of each
      Put. The Company agrees to fully execute and diligently carry out Puts to the
      Investor, on the terms set forth in the Investment

    Agreement.
      The Company agrees that the Put Amount shall be for the maximum amount allowed
      under the Investment Agreement. Further, the Company agrees to issue Puts to
      the
      Investor for the maximum frequency allowed under the Investment Agreement.
      Failure to comply with the terms of the Investment Agreement with respect to
      the
      Puts will result in an Event of Default as defined in this Agreement in Article
      4.

     

    
      	
              Article
                21

            	
              Security

            

    

     

    This
      Note
      shall be secured by and the Holder shall have full right to exercise its rights
      and remedies under (i) the Security Agreement and (ii) the
      Guaranty.

     

    
      	Article 22	
              Miscellaneous

            

    

     

    Section
      22.1 This Note may be executed in two (2) or more counterparts, all of which
      taken together shall constitute one instrument. Execution and delivery of this
      Note by exchange of facsimile copies bearing the facsimile signature of a Party
      shall constitute a valid and
      binding execution and delivery of this Note by such Party. Such facsimile copies
      shall constitute enforceable original documents.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
      22.2 The Company warrants that the execution, delivery and performance of this
      Note by the Company and the consummation by the Company of the transactions
      contemplated hereby and thereby will not (i) result in a violation of the
      Articles of Incorporation, any Certificate of Designations, Preferences and
      Rights of any outstanding series of preferred stock of the Company or the
      Bylaws, (ii) conflict with, or constitute a material default (or an event which
      with notice or lapse of time or both would become a material default) under,
      or
      give to others any rights of termination, amendment, acceleration or
      cancellation of, any material agreement, contract, indenture mortgage,
      indebtedness or instrument to which the Company or any of its Subsidiaries
      is a
      party, or (iii) result in a violation of any law, rule, regulation, order,
      judgment or decree, including United States federal and state securities laws
      and regulations and the rules and regulations of the principal securities
      exchange or trading market on which the Class A Common Stock is traded or listed
      (the “Principal Market”), applicable to the Company or any of its
      Subsidiaries (which for purposes of this Note means any entity in which the
      Company, directly or indirectly, owns capital stock or holds an equity or
      similar interest) or by which any property or asset of the Company or any of
      its
      Subsidiaries is bound or affected. Neither the Company nor its Subsidiaries
      is
      in violation of any term of, or in default under, the Articles of Incorporation,
      any Certificate of Designations, Preferences and Rights of any outstanding
      series of preferred stock of the Company or the Bylaws or their organizational
      charter or Bylaws, respectively, or any contract, agreement, mortgage,
      indebtedness, indenture, instrument, judgment, decree or order or any statute,
      rule or regulation applicable to the Company or its Subsidiaries, except for
      possible conflicts, defaults, terminations, amendments, accelerations,
      cancellations and violations that would not individually or in the aggregate
      have a Material Adverse Effect (as defined below). The business of the Company
      and its Subsidiaries is not being conducted, and shall not be conducted, in
      violation of any law, statute, ordinance, rule, order or regulation of any
      governmental authority or agency, regulatory or self-regulatory agency, or
      court, except for possible violations the sanctions for which either
      individually or in the aggregate would not have a Material Adverse Effect.
      The
      Company is not required to obtain any consent, authorization, permit or order
      of, or make any filing or registration (except the filing of a registration
      statement) with, any court, governmental authority or agency, regulatory or
      self-regulatory agency or other third party in order for it to execute, deliver
      or perform any of its obligations under, or contemplated by, this Note in
      accordance with the terms hereof or thereof. All consents, authorizations,
      permits, orders, filings and registrations which the Company is required to
      obtain pursuant to the preceding sentence have been obtained or effected on
      or
      prior to the date hereof and are in full force and effect as of the date hereof.
      The Company and its Subsidiaries are unaware of any facts or circumstances
      which
      might give rise to any of the foregoing. The Company is not, and will not be,
      in
      violation of the listing requirements of the Principal Market as in effect
      on
      the date hereof and is not aware of any facts which would lead to delisting
      of
      the Class A Common Stock by the Principal Market.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
      22.3 The Company and its Subsidiaries are corporations duly organized and
      validly existing in good standing under the laws of the respective jurisdictions
      of their

    incorporation,
      and have the requisite corporate power and authorization to own their properties
      and to carry on their business as now being conducted. Both the Company and
      its
      Subsidiaries are duly qualified to do business and are in good standing in
      every
      jurisdiction in which their ownership of property or the nature of the business
      conducted by them makes such qualification necessary, except to the extent
      that
      the failure to be so qualified or be in good standing would not have a Material
      Adverse Effect. As used in this Note, “Material Adverse Effect” means any
      material adverse effect on the business, properties, assets, operations, results
      of operations, financial condition or prospects of the Company and its
      Subsidiaries, if any, taken as a whole, or on the transactions contemplated
      hereby or by the agreements and instruments to be entered into in connection
      herewith, or on the authority or ability of the Company to perform its
      obligations under the Note.

     

    Section
      22.4 Authorization, Enforcement, Compliance with Other Instruments. (i)
      The Company has the requisite corporate power and authority to enter into and
      perform its obligations under this Note, and to issue this Note and Incentive
      Shares in accordance with the terms hereof and thereof; (ii) the execution
      and
      delivery of this Note by the Company and the consummation by it of the
      transactions contemplated hereby and thereby, including without limitation
      the
      reservation for issuance and the issuance of the Incentive Shares pursuant
      to
      this Note, have been duly and validly authorized by the Company’s Board of
      Directors and no further consent or authorization is required by the Company,
      its Board of Directors, or its shareholders; (iii) this Note has been duly
      and
      validly executed and delivered by the Company; and (iv) this Note constitutes
      the valid and binding obligations of the Company enforceable against the Company
      in accordance with their terms, except as such enforceability may be limited
      by
      general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally, the enforcement of creditors’ rights and
      remedies.

     

    Section
      22.5 The execution and delivery of this Note shall not alter the prior written
      agreements between the Company and the Holder. This Note is the final agreement
      between the Company and the Holder with respect to the terms and conditions
      set
      forth herein, and, the terms of this Note may not be contradicted by evidence
      of
      prior, contemporaneous, or subsequent oral agreements of the Parties. The
      execution and delivery of this Note is done in conjunction with the Security
      Agreement (as defined in Article 21 hereof).

     

    Section
      22.6 There are no disagreements of any kind presently existing, or reasonably
      anticipated by the Company to arise, between the Company and the accountants,
      auditors and lawyers formerly or presently used by the Company, including but
      not limited to disputes or conflicts over payment owed to such accountants,
      auditors or lawyers.

     

    Section
      22.7 All representations made by or relating to the Company of a historical
      nature and all undertakings described herein shall relate and refer to the
      Company, its predecessors, and the Subsidiaries.

     

    Section
      22.8 The only officer, director, employee and consultant stock option or stock
      incentive plan currently in effect or contemplated by the Company has been
      submitted to the Holder or is described or within past filings with the SEC.
      The
      Company agrees not to initiate
      or institute any new stock option or stock incentive plan without the prior
      written consent of the Holder.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
      22.9 The Company acknowledges that its failure to timely meet any of its
      obligations hereunder, including, but without limitation, its obligations to
      make Payments, deliver shares and, as necessary, to register and maintain
      sufficient number of Shares, will cause the Holder to suffer irreparable harm
      and that the actual damage to the Holder will be difficult to ascertain.
      Accordingly, the parties agree that it is appropriate to include in this Note
      a
      provision for liquidated damages. The parties acknowledge and agree that the
      liquidated damages provision set forth in this section represents the parties’
good faith effort to quantify such damages and, as such, agree that the form
      and
      amount of such liquidated damages are reasonable and do not constitute a
      penalty. The payment of liquidated damages shall not relieve the Company from
      its obligations to deliver the Common Stock pursuant to the terms of this
      Note.

     

    Section
      22.10 In the event that any rules, regulations, oral or written interpretations
      or comments, whether oral or written, formal or informal from the SEC, NASD,
      NYSE, NASDAQ or other governing or regulatory body, prohibit or hinder any
      operation of this Agreement or the Equity Line, the Parties hereby agree that
      those specific terms and conditions shall be negotiated in good faith on similar
      terms within a commercially reasonable time period, but in no event greater
      than
      five (5) business days, and shall not alter, diminish or affect any other
      rights, duties, obligations or covenants in this Note and that all terms and
      conditions will remain in full force and effect except as is necessary to make
      those specific terms and conditions comply with applicable rule, regulation,
      interpretation or Comment. Failure for the Company to agree to such new terms
      as
      necessary to achieve the intent of the original documents, shall constitute
      an
      Event of Default and the Holder may therefore elect to take actions as outlined
      in Article 4 hereof provided, however, that the Holder must act in a
      commercially reasonable manner for an Event of Default as provided hereunder
      to
      occur.

     

    Section
      22.11 The Company hereby represent and warrants to the Holder that: (i) it
      is
      voluntarily issuing this Note of its own freewill, (ii) it is not issuing this
      Note under economic duress, (iii) the terms of this Note are reasonable and
      fair
      to the Company, and (iv) the Company has had independent legal counsel of its
      own choosing review this Note, advise the Company with respect to this Note,
      and
      represent the Company in connection with its issuance of this Note.

     

    [BALANCE
      OF PAGE LEFT BLANK INTENTIONALLY]

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed by its
      authorized officer as of the date first indicated above.

     

    BEDMINSTER
      NATIONAL CORP.

     

    By:                                            

     

    Name:
      Paul Patrizio

    Title:
      Chief Executive Officer

     

    DUTCHESS
      PRIVATE EQUITIES FUND, LTD.

     

    By:                                                      

     

    Name:
      Douglas H. Leighton

    Title:
      Director

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
      A

     

    Continental
      Stock Transfer & Trust Company 

    17
      Battery Place

    New
      York,
      NY 10004

    RE:
      Issuance of Common Stock

     

    To
      Whom
      It May Concern:

     

    Please
      use this letter as authorization to have the attached request for the issuance
      of shares to be sold pursuant to paragraph Rule 144 of the Securities Act,
      to
      Dutchess Private Equities Fund, Ltd which acquired the fully paid,
      non-assessable securities.

     

    The
      Company does hereby instruct Continental Stock Transfer to rely on the opinion
      for resale of shares from Trombly Business Law or Gersten Savage,
      LLP.

     

    The
      Company represents that Dutchess is not recognized as an affiliate of the
      company. Regards,

     

    Paul
      Patrizio

    Chief
      Executive Officer 

    Bedminster
      National Crop.f8k0707ex10ii_bedminster.htm

    SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT (this “Agreement”) is made as of
      the 26th day of June, 2007, by BEDMINSTER NATIONAL CORP., a
      Nevada corporation, having a mailing address at 90 Washington Valley Road,
      Bedminster, NJ 07921, (the “Company”), Metropolitan
      Computing Corp., a New Jersey corporation, having a mailing address at
      6 Great Meadow Lane, East Hanover, New Jersey 07936 (“MCC”); ( together
Company and MCC, individually and collectively, jointly and
      severally the (“Debtors”), for the benefit and security of
DUTCHESS PRIVATE EQUITIES FUND, LTD., having a mailing address
      at 50 Commonwealth Avenue, Suite 2, Boston, Massachusetts 02116 (the
“Secured Party”).

     

    WHEREAS,
      the Company has executed and delivered to Secured Party a Note or instruments,
      including, without limitation, (i) that certain Note dated June 26, 2007 from
      the Company in favor of the Secured Party (the “Note”) pursuant
      to which the Secured Party has agreed to make certain loans and other financial
      accommodations to the Company;

     

    WHEREAS,
      each of the other Debtors has executed and delivered a guaranty (as amended
      or
      otherwise modified from time to time, the "Guaranty") of
      certain obligations of the Company, including all obligations of the Company
      under the Note; and

     

    WHEREAS,
      the obligations of the Company under the Note and the obligations of each other
      Debtor under the Guaranty are to be secured pursuant to this
      Agreement;

     

    NOW,
      THEREFORE, for and in consideration of any loan, advance or other financial
      accommodation heretofore or hereafter made to or for the benefit of any Debtor
      under or in connection with the Note of any other Finance Documents (as defined
      below), and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

     

    ARTICLE
      I.

     

    CONSTRUCTION
      AND DEFINED TERMS

     

    Section
      1.01 Article and Section Headings. Article and Section
      headings and captions in this Agreement are for convenience only and shall
      not
      affect the construction or interpretation of this Agreement. Unless otherwise
      expressly stated in this Agreement, references in this Agreement to Sections
      shall be read as Sections of this Agreement.

     

    Section
      1.02 Schedules and Exhibits. The references in this
      Agreement to specific Schedules and Exhibits shall be read as references to
      such
      specific Schedules or Exhibits attached, or intended to be attached, to this
      Agreement and any counterpart of this Agreement and regardless of whether they
      are in fact attached to this Agreement, and including any amendments,
      supplements and replacements to such Schedules and Exhibits from time to
      time.

     

    Section
      1.03 Defined Terms.  Unless otherwise
      expressly stated in this Agreement, (a)
      capitalized terms which are not otherwise defined herein shall have the
      respective meanings assigned
      thereto in the UCC (as defined below); and (b) the following terms used in
      this
      Agreement shall have the following meanings:

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Collateral”
      means, with respect to any Debtor, all property and rights of such
      Debtor in which a security interest is granted hereunder.

     

    “Computer
      Hardware and Software” means, with respect to any Debtor, all of such
      Debtor's rights (including rights as licensee and lessee) with respect to (i)
      computer and other electronic data processing hardware, including all integrated
      computer systems, central processing units, memory units, display terminals,
      printers, computer elements, card readers, tape drives, hard and soft disk
      drives, cables, electrical supply hardware, generators, power equalizers,
      accessories, peripheral devices and other related computer hardware; (ii) all
      software programs designed for use on the computers and electronic data
      processing hardware described in clause (i) above, including all
      operating system software, utilities and application programs in whatsoever
      form
      (source code and object code in magnetic tape, disk or hard copy format or
      any
      other listings whatsoever); (iii) any firmware associated with any of the
      foregoing; and (iv) any documentation for hardware, software and firmware
      described in clauses (i), (ii) and (iii) above, including flow charts,
      logic diagrams, manuals, specifications, training materials, charts and pseudo
      codes.

     

    “Equity
      Interest” With respect to any Person, any ownership interest in such
      Person, including shares, partnership interests, joint venture interests,
      membership interests, limited liability company interests, unit interests and
      any other equity or ownership interests of any kind, and any subscriptions,
      options, warrants, commitments, purchase rights, preemptive rights or agreements
      of any kind (including any stockholders’ or voting trust agreements) for the
      issuance, sale, registration or voting of, or for securities convertible into,
      any shares, partnership interests, joint venture interests, membership
      interests, limited liability company interests, and any other equity or
      ownership interests in such Person.

     

    “Finance
      Documents” mean, collectively, the Note, the Guaranty, and any other
      documents or agreements executed in connection therewith or herewith and
      pertaining to the Secured Obligations.

     

    “Lien”
      Any security interest (including security interest within the
      definition of “security interest” in the UCC), encumbrance, lien (including any
      judgment lien, any contract lien, any lien arising or resulting from nonpayment
      of any tax, assessment, charge or other imposition, and any lien arising or
      resulting from nonpayment for labor, materials, or supplies), security agreement
      (including any agreement that creates or provides for a security interest),
      deed
      of trust, mortgage, grant, pledge, assignment, hypothecation, title retention
      contract, or other arrangement for security purposes, and any agricultural
      lien
      (including any agricultural lien within the definition of “agricultural lien” in
      the UCC), and including any of the foregoing arising by operation of statute
      or
      other law or the application of equitable principles, whether perfected or
      unperfected, avoidable or unavoidable, consensual or nonconsensual, and any
      financing statement or other similar notice document, whether or not filed,
      and
      any agreement to give a financing statement or other similar notice
      document.

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Lien
      Proceeding” Any action taken (including self help) or proceeding
      (judicial or otherwise) commenced by any Person other than Secured Party for
      the
      purpose of enforcing or protecting any actual or alleged Lien upon any of the
      Collateral, and including any foreclosure, repossession, attachment, execution
      or other process regarding any of the Collateral.

     

    “Permitted
      Lien” means those Liens described on Schedule 3.07.

     

    “Person”
      Any natural person, corporation, limited liability company,
      partnership, joint venture, entity, association, joint-stock company, trust
      or
      unincorporated organization and any Governmental Authority, including any
      receiver, debtor-in-possession, trustee, custodian, conservator, or
      liquidator.

     

    “Secured
      Obligations” All indebtedness, liabilities and obligations which are
      now or may at any time hereafter be due, owing or incurred in any manner
      whatsoever to Secured Party by any Debtor, whether under this Agreement, any
      Note, the Guaranty or any other Finance Document, in each case howsoever
      created, arising or evidenced, whether direct or indirect, absolute or
      contingent, whether at stated maturity, by acceleration or otherwise (including,
      without limitation, the payment of interest and other amounts which would accrue
      and become due but for the filing of a petition in bankruptcy or the operation
      of the automatic stay under Section 3 62(a) of the Bankruptcy Code, 11 U.S.C.
§
3 62(a)), including, without limitation, all charges, fees, expenses,
      commissions, reimbursements, premiums, indemnities and other payments related
      to
      or in respect of such obligations.

     

    “UCC”
      means the Uniform Commercial Code as in effect in the Commonwealth
      of
      Massachusetts on the date of this Agreement, as may be amended or modified
      from
      time to time after the date hereof; provided that, "UCC" shall
      also mean the Uniform Commercial Code as in effect from time to time in any
      applicable jurisdiction.

     

    ARTICLE
      II.

     

    SECURITY
      INTEREST; PERFECTION

     

    Section
      2.01 Security Interest. To secure the full and timely
      payment, performance and satisfaction of the Secured Obligations, each Debtor
      hereby collaterally assigns to Secured Party, and grants Secured Party a
      security interest in, all of such Debtor’s property, whether now owned or
      hereafter existing or acquired, regardless of where located including, without
      limitation, all of such Debtor’s:

     

    
      
        	
                (a)  

              	
                
                  Accounts;

                

              

      

       

    

    
      
        
          	
                  (b)  

                	
                  
                    
                      Chattel
                        Paper, including Electronic Chattel
                        Paper;

                    

                  

                

        

      

    

     

    
      
        
          
            	
                    (c)  

                  	
                    
                      
                        
                          Computer
                            Hardware and Software and all rights with respect thereto,
                            including, any
                            and all licenses, options, warranties, service contracts,
                            program
                            services, test rights, maintenance rights, support rights,
                            improvement
                            rights, renewal rights and indemnifications, and any
                            substitutions,
                            replacements, additions or model conversions of any of
                            the
                            foregoing

                        

                      

                    

                  

          

        

      

       

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      
        
          
             

            
              	
                      (d)  

                    	
                      
                        
                          
                            
                              Commercial
                                Tort Claims now or hereafter identified on Schedule 2.01(d) to this
                                Agreement;

                            

                          

                        

                      

                    

            

          

        

         

      

    

    
      	
              (e)  

            	
              Deposit
                Accounts;

            

    

     

    
      	
              (f)  

            	
              Documents;

            

    

     

    
      	
              (g)  

            	
              Financial
                Assets;

            

    

     

    
      	
              (h)  

            	
              General
                Intangibles;

            

    

     

    
      	
              (i)  

            	
              Goods
                (including all of its Equipment, Fixtures, Real Estate and Inventory),
                and
                all embedded software, accessions, additions, attachments, improvements,
                substitutions and replacements thereto and
                therefor);

            

    

     

    
      	
              (j)  

            	
              Instruments;

            

    

     

    
      	
              (k)  

            	
              Intellectual
                Property;

            

    

     

    
      	
              (l)  

            	
              Investment
                Property;

            

    

     

    
      	
              (m)  

            	
              Letter
                of Credit Rights;

            

    

     

    
      	
              (n)  

            	
              money
                (of every jurisdiction whatsoever);

            

    

     

    
      	
              (o)  

            	
              Security
                Entitlements;

            

    

     

    
      	
              (p)  

            	
              Supporting
                Obligations

            

    

     

    
      	
              (q)  

            	
              with
                respect to each Person (as hereinafter defined) listed in Schedule
                2.01(q) hereto and each other corporation hereafter acquired or formed
                by such Debtor, the Equity Interests from time to time issued and
                outstanding, including the certificates, if any, representing the
                Equity
                Interests and any interest of such Debtor in the entries on the books
                of
                the issuer thereof or any financial intermediary pertaining to the
                Equity
                Interests, together with all dividends, cash, options, warrants,
                rights,
                instruments, distributions, returns of capital or principal, income,
                interest, profits and other property, interests (debt or equity)
                or
                proceeds as a result of a split, revision, reclassification,
                consolidation, merger or other like change of the Equity Interests
                or any
                issuer thereof, from time to time received, receivable or otherwise
                distributed to such Debtor in respect of or in exchange for any or
                all of
                the Equity Interests;

            

    

     

    
      	
              (r)  
                

            	
              all
                promissory notes or intercompany notes and all certificates or instruments
                evidencing such promissory notes or intercompany notes; and to the
                extent
                not included in the foregoing, other personal property of any kind
                or
                description, together with all books, records, writings, data bases,
                information and other property relating to, used or useful in connection
                with, or evidencing, embodying, incorporating or referring to any
                of the
                foregoing, and all Proceeds, products, rents, issues, profits and
                returns
                of and from any of the foregoing; provided that to the extent that
                the provisions of any lease or license of Computer Hardware and Software
                or Intellectual Property expressly prohibit (which prohibition is
                enforceable under applicable law) the assignment thereof, and the
                grant of
                a security interest therein, the Secured Party will not enforce its
                security interest (other than in respect of the Proceeds thereof)
                for so
                long as such prohibition continues, it being  understood
                that upon request of the Secured Party, such Debtor will in good
                faith
                use reasonable efforts to obtain consent for the creation of a security
                interest in favor of the Secured Party (and to Secured Party’s enforcement
                of such security interest) in such Debtor's rights under such lease
                or
                license. Notwithstanding the above, the shares of stock of MCC held
                by the
                Company are specifically excluded and shall not be held as securities
                pursuant to this Agreement.

            

    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    Section
      2.02 Intentionally Omitted 

     

    Section
      2.03 Perfection by Filing.

     

    
      	
              (a)  

            	
              Each
                Debtor authorizes Secured Party to file any financing statement and
                agrees
                to execute, in recordable form, and deliver to Secured Party any
                other
                document or instrument, and to cause any third party to execute and
                deliver to Secured Party any other document (including financing
                statement
                termination statements), requested by Secured Party to perfect the
                security interests created under this Agreement and to establish,
                maintain, and continue the first priority of the security interests
                created under this Agreement.

            

    

     

    
      	
              (b)  

            	
              Each
                Debtor hereby appoints Secured Party as such Debtor’s attorney-in-fact,
                with power of substitution, which appointment is irrevocable and
                coupled
                with an interest, to execute in the name of Debtor, and to transmit
                to, or
                file, record, or register with, any Person, and at any time, any
                document
                or instrument that Secured Party may deem necessary or advisable
                for the
                purpose of creating, enforcing, defending, protecting, perfecting,
                continuing, or maintaining any security interest, or the perfection
                or
                priority of any security interest, created under this
                Agreement.

            

    

     

    
      	
              (c)  

            	
              Secured
                Party shall not be required to obtain Debtor’s consent or authorization
                for Secured Party to file, and Secured Party shall be entitled to
                file,
                with or without execution by Debtor (or by Secured Party as Debtor’s
                attorney-in-fact), any financing statement, amendment, or other record
                that Secured Party may be authorized to file in accordance with the
                terms
                of the UCC with respect to the security interests created under this
                Agreement.

            

    

     

    
      
        	
                (d)  

              	
                
                  Any
                    financing statement or other document filed to perfect the security
                    interests evidenced by this Agreement may, at Secured Party’s option,
                    describe or indicate the Collateral in the manner that the Collateral
                    is
                    described in this Agreement, or as all assets of Debtor, or as
                    all
                    personal property of Debtor, or by any other description or indication
                    of
                    the Collateral that may be sufficient for a financing statement
                    under the
                    UCC.

                

              

      

       

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
       

      
        
          	
                  (e)  

                	
                  
                    
                      If
                        prior to Debtor’s execution of this Agreement, Secured Party shall have
                        filed in any jurisdiction, or with any governmental authority,
                        any
                        financing statement, amendment, or other document describing
                        or indicating
                        the Collateral, or containing a description or indication
                        of all assets of
                        Debtor or all personal property of Debtor comprising the
                        Collateral, or
                        containing any other description or indication of the Collateral,
                        Debtor,
                        by executing this Agreement, irrevocably (i) authorizes,
                        ratifies,
                        confirms, and adopts (A)  each
                        such previously filed financing statement, amendment or other
                        document,
                        and (B) the
                        filing of each such previously filed financing statement,
                        amendment, or
                        other document, and (ii) agrees that each such previously
                        filed financing
                        statement, amendment, or other document is valid and effective
                        as though
                        it had been authorized by Debtor and filed with Debtor’s
                        authorization.

                    

                  

                

        

         

      

    

    2.04
      Perfection by Possession. If Collateral is of a type as to which it
      is necessary, desirable, or advisable, as determined by Secured Party, for
      Secured Party to take possession of such Collateral in order to protect,
      perfect, or maintain the first priority of Secured Party’s security interest or
      other Lien (subject only to Permitted Security) in such (or any other)
      Collateral, then, promptly upon Secured Party’s request, Debtor shall deliver
      such Collateral to Secured Party.

     

    ARTICLE
      III. 

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Debtor
      makes the following representations and warranties to Secured Party, which
      shall
      each be continuing and in effect at all times, and Secured Party shall be
      entitled to rely upon the truth, accuracy, and completeness of the following
      representations and warranties without regard to any other information that
      may
      be now or hereafter known by or disclosed to Secured Party or any of Secured
      Party’s directors, officers, employees, agents, attorneys or other
      advisors:

     

    Section
      3.01 Debtor’s Name and Identification Number. The name
      of each Debtor set forth on the first page and the signature page of this
      Agreement is Debtor’s correct and complete legal name. The street address for
      Debtor in this Agreement is Debtor’s mailing address. Such Debtor's chief
      executive office and principal place of business are as set forth on Schedule
      3.01  hereto (and such Debtor has not maintained its chief
      executive office and principal place of business at any other location during
      the five (5) years preceding the date hereof, and each other location where
      such
      Debtor maintains a place of business is also set forth on Schedule
      3.01  hereto

     

    Section
      3.02 Permitted Liens; Collateral. (a) No financing
      statement (other than Permitted Liens) covering any of such Debtor’s rights in
      the Collateral is on file in any public office; (b) Secured Party’s security
      interest in the Collateral is a first priority perfected security interest,
      subject to no Liens other than Permitted Liens; (c) such Debtor is and will
      be
      the lawful owner of all Collateral, free of all liens, claims, security
      interests and encumbrances whatsoever, other than the security interest
      hereunder and Permitted Liens, with full power and authority to execute this
      Agreement and perform such Debtor's obligations hereunder, and to subject the
      Collateral to the security interest hereunder and (d) all information with
      respect to the Collateral set forth in any
      schedule, certificate or other writing at any time heretofore or hereafter
      furnished by such Debtor to the Secured Party is and will be true and correct
      in
      all material respects as of the date furnished.

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Section
      3.03 Authorization and No Conflicts. (a) Each Debtor is
      a corporation duly organized, validly existing and in good standing under the
      laws of its state of incorporation as listed on the first page of this
      Agreement; (b) the execution and delivery of this Agreement and the performance
      by such Debtor of its obligations hereunder are within such Debtor's corporate
      powers, have been duly authorized by all necessary corporate action, have
      received all necessary governmental approval (if any shall be required), and
      do
      not and will not contravene or conflict with any provision of law or of the
      articles of incorporation or by-laws of such Debtor or of any material
      agreement, indenture, instrument or other document, or any material judgment,
      order or decree, which is binding upon such Debtor; and (c) this Agreement
      is a
      legal, valid and binding obligation of such Debtor, enforceable in accordance
      with its terms, except that the enforceability of this Agreement may be limited
      by bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
      reorganization, moratorium or other similar laws now or hereafter in effect
      relating to creditors' rights generally and by general principles of equity
      (regardless of whether enforcement is sought in a proceeding in equity or at
      law).

     

    Section
      3.04 Tangible Collateral. Schedule 3.04 hereto
      contains a complete listing of such Debtor’s tangible Collateral located with
      any bailee, warehousemen or other third parties and all of such Debtor’s
      Collateral which is subject to certificate of title statutes.

     

    Section
      3.05 Deposit Accounts. Except as listed on Schedule
      2.02, Debtor has no Deposit Accounts and is not a party to or otherwise
      bound by any Deposit Account Agreement.

     

    Section
      3.06 Leases. Except as listed on Schedule 3.06 (which
      schedule contains a true, accurate and complete list and description of all
      leases to which Debtor is a lessor, lessee, or other party or otherwise bound),
      Debtor is not a lessor or lessee under, or a party to, or otherwise bound by
      the
      terms of, any lease.

     

    Section
      3.07 Commercial Tort Claims. Except as listed on
Schedule 2.01(d), Debtor has no Commercial Tort Claims.

     

    Section
      3.08 Subsidiaries. Schedule 3.08 lists all of the
      current subsidiaries of Debtors. Upon closing of the acquisition of MCC, MCC
      shall become a subsidiary of the Company.

     

    ARTICLE
      IV.

     

    AFFIRMATIVE
      COVENANTS

     

    Debtor
      covenants and agrees to the following:

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    Section
      4.01 Account Debtors. The Secured Party may, at any time
      that an Event of Default exists, whether before or after any revocation of
      such
      power and authority or the maturity of any of the Secured Obligations, notify
      an
      Account Debtor or other Person obligated on Collateral to make
      payment or otherwise render performance to or for the benefit of the Secured
      Party and enforce, by suit or otherwise the obligations of an Account Debtor
      or
      other Person obligated on Collateral and exercise the rights of such Debtor
      with
      respect to the obligation of the Account Debtor or other Person obligated on
      Collateral to make payment or otherwise render performance to such Debtor,
      and
      with respect to any property that secures the obligations of the Account Debtor
      or other Person obligated on the Collateral. In connection with exercise of
      such
      rights and remedies, the Secured Party may surrender, release or exchange all
      or
      any part thereof, or compromise or extend or renew for any period (whether
      or
      not longer than the original period) any indebtedness thereunder or evidenced
      thereby. Upon the request of the Secured Party during the existence of an Event
      of Default, each Debtor will, at its own expense, notify any or all parties
      obligated on any of the Collateral to make payment to the Secured Party of
      any
      amounts due or to become due thereunder. Upon request by the Secured Party
      during the existence of an Event of Default, each Debtor will forthwith, upon
      receipt, transmit and deliver to the Secured Party, in the form received, all
      cash, checks, drafts and other instruments or writings for the payment of money
      (properly endorsed, where required, so that such items may be collected by
      the
      Secured Party) which may be received by such Debtor at any time in full or
      partial payment or otherwise as proceeds of any of the Collateral. Except as
      the
      Secured Party may otherwise consent in writing, any such items which may be
      so
      received by any Debtor will not be commingled with any other of its funds or
      property, but will be held separate and apart from its own funds or property
      and
      upon express trust for the Secured Party until delivery is made to the Secured
      Party. Each Debtor will comply with the terms and conditions of any consent
      given by the Secured Party pursuant to the foregoing sentence.

     

    Section
      4.02  Additional Covenants.   Each
      Debtor:

     

    
      
        
          	
                  (a)  

                	
                  
                    
                      will,
                        at the Secured Party’s request, at any time and from time to time, execute
                        and deliver to the Secured Party such financing statements,
                        amendments and
                        other documents and do such acts as the Secured Party deems
                        necessary in
                        order to establish and maintain valid, attached and perfected
                        first
                        priority security interests in the Collateral in favor of
                        the Secured
                        Party, free and clear of all Liens and claims and rights
                        of third parties
                        whatsoever except Permitted Liens; each Debtor hereby irrevocably
                        authorizes the Secured Party at any time, and from time to
                        time, to file
                        in any jurisdiction any initial financing statements and
                        amendments
                        thereto that (i) indicate the Collateral (x) as all assets
                        of such Debtor
                        or words of similar effect, regardless of whether any particular
                        asset
                        comprised in the Collateral falls within the scope of Article
                        9 of the UCC
                        of the jurisdiction wherein such financing statement or amendment
                        is
                        filed, or (y) as being of an equal or lesser scope or with
                        greater
                        detail;

                    

                  

                

        

         

      

    

    
      
        
          	
                  (b)  

                	
                  
                    
                      will
                        keep all its Inventory at, and will not maintain any place
                        of business at
                        any location other than, its address(es) shown on Schedule 3.01
                        hereto or at such other addresses of which such Debtor
                        shall have
                        given the Secured Party not less than 30 days' prior written
                        notice;

                    

                  

                

        

         

      

    

    
      
        
          	
                  (c)  

                	
                  
                    will
                      keep its records concerning the Collateral in such a manner
                      as will enable
                      the Secured
                      Party or its designees to determine at any time the status
                      of the
                      Collateral;(d) will furnish the Secured Party such information
                      concerning
                      such Debtor, the Collateral and the Account Debtors as the
                      Secured Party
                      may from time to time reasonably
                      request;

                  

                

        

         

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

    

     

    
      	
              (d)  

            	
              will
                permit the Secured Party and its designees, from time to time, on
                reasonable notice and at reasonable times and intervals during normal
                business hours (or at any time without notice during the existence
                of an
                Event of Default) to inspect such Debtor's Inventory and other Goods,
                and
                to inspect, audit and make copies of and extracts from all records
                and
                other papers in the possession of such Debtor pertaining to the Collateral
                and the Account Debtors, and will, upon request of the Secured Party
                during the existence of an Event of Default, deliver to the Secured
                Party
                all of such records and papers;

            

    

     

    
      	
              (e)  

            	
              will,
                upon request of the Secured Party, stamp on its records concerning
                the
                Collateral, and add on all Chattel Paper and Instruments constituting
                a
                portion of the Collateral, a notation, in form satisfactory to the
                Secured
                Party, of the security interest of the Secured Party
                hereunder;

            

    

     

    
      	
              (f)  

            	
              except
                for the sale or lease of Inventory in the ordinary course of its
                business
                and sales of Equipment which is no longer useful in its business
                or which
                is being replaced by similar Equipment, will not sell, lease, assign
                or
                create or permit to exist any Lien on any Collateral other than Permitted
                Liens;

            

    

     

    
      	
              (g)  

            	
              will
                at all times keep all of its Inventory and other Goods insured under
                policies maintained with reputable, financially sound insurance companies
                against loss, damage, theft and other risks to such extent as is
                customarily maintained by companies similarly situated, and cause
                all such
                policies to provide that loss thereunder shall be payable to the
                Secured
                Party as its interest may appear (it being understood that (A) so
                long as
                no Event of Default shall be existing, the Secured Party shall deliver
                any
                proceeds of such insurance which may be received by it to such Debtor
                and
                (B) whenever an Event of Default shall be existing, the Secured Party
                may
                apply any proceeds of such insurance which may be received by it
                toward
                payment of the Secured Obligations, whether or not due, in such order
                of
                application as the Secured Party may determine), and such policies
                or
                certificates thereof shall, if the Secured Party so requests, be
                deposited
                with or furnished to the Secured
                Party;

            

    

     

    
      	
              (h)  

            	
              will
                take such actions as are reasonably necessary to keep its Goods in
                good
                repair and condition;

            

    

     

    
      	
              (i)  

            	
              will
                take such actions as are reasonably necessary to keep its Equipment
                in
                good repair and condition and in good working order, ordinary wear
                and
                tear excepted;

            

    

     

    
      	
              (j)  

            	
              
                will
                  promptly pay when due all license fees, registration fees, taxes,
                  assessments and other charges which may be levied upon or assessed
                  against
                  the ownership, operation, possession, maintenance or use of its
                  Equipment
                  and other Goods;

              

            

    

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
       

      
        	
                (k)  

              	
                
                  
                    will
                      take all steps reasonably necessary to protect, preserve and
                      maintain all
                      of its rights in the Collateral and will keep all of the tangible
                      Collateral in the United
                      States;

                  

                

              

      

       

    

    
      	
              (l)  

            	
              will
                promptly notify the Secured Party in writing upon acquiring or otherwise
                obtaining any Collateral after the date hereof consisting of Deposit
                Accounts, Investment Property, Letter-of-Credit Rights or Electronic
                Chattel Paper and, upon the request of the Secured Party, will promptly
                execute such other documents, and do such other acts or things deemed
                appropriate by the Secured Party to confer upon the Secured Party
                control
                (as defined in the UCC) with respect to such
                Collateral;

            

    

     

    
      	
              (m)  

            	
              promptly
                notify the Secured Party in writing upon acquiring or otherwise obtaining
                any Collateral after the date hereof consisting of Documents or
                Instruments and, upon the request of the Secured Party, will promptly
                execute such other documents, and do such other acts or things deemed
                appropriate by the Secured Party to deliver to the Secured Party
                possession of such Documents which are negotiable and Instruments,
                and,
                with respect to nonnegotiable Documents, to have such nonnegotiable
                Documents issued in the name of the Secured
                Party;

            

    

     

    
      	
              (n)  

            	
              promptly
                notify the Secured Party in writing upon incurring or otherwise obtaining
                a Commercial Tort Claim after the date hereof against any third party,
                and, upon the request of the Secured Party, will promptly enter into
                an
                amendment to this Agreement, and do such other acts or things deemed
                appropriate by the Secured Party to give the Secured Party a security
                interest in such Commercial Tort Claim;
                and

            

    

     

    
      	
              (o)  
                

            	
              further
                agrees to take other action reasonably requested by the Secured Party
                to
                insure the attachment, perfection and first priority of, and the
                ability
                of the Secured Party to enforce, the security interests in any and
                all of
                the Collateral including, without limitation, (i) executing, delivering
                and, where appropriate, filing financing statements and amendments
                relating thereto under the UCC, to the extent, if any, that the Debtor’s
                signature thereon is required therefor, (ii) complying with any provision
                of any statute, regulation or treaty of the United States as to any
                Collateral if compliance with such provision is a condition to attachment,
                perfection or priority of, or ability of the Secured Party to enforce,
                the
                security interests in such Collateral, (iii) obtaining governmental
                and
                other third party consents and approvals, including without limitation
                any
                consent of any licensor, lessor or other Person obligated on Collateral,
                (iv) obtaining waivers from mortgagees and landlords in form and
                substance
                satisfactory to the Secured Party, and (v) taking all actions required
                by
                the UCC in effect from time to time or by other law, as applicable
                in any
                relevant UCC jurisdiction, or by other law as applicable in any foreign
                jurisdiction.

            

    

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Section
      4.03 Taxes, Assessments, Charges, and Other Impositions.
Debtor shall pay and discharge promptly, on or before
      the date due,
      all taxes, assessments, charges, and other impositions imposed by any
      governmental authority on Debtor, or on the Collateral, relating to the
      ownership or use of the Collateral, or relating to any sale, lease, license
      or
      other disposition of the Collateral; provided, however, Debtor shall not be
      required to pay or discharge, or to cause to be paid or discharged, any such
      tax, assessment, charge, or other imposition so long as (a) the validity of
      such
      tax, assessment, charge or other imposition is being contested in good faith
      by
      Debtor by appropriate proceedings.

     

    Section
      4.04 Notice of Lien Proceeding. Debtor shall give
      Secured Party immediate written notice of the threat by any Person to commence
      any proceedings on a material portion of the Collateral or any other Lien
      Proceeding.

     

    Section
      4.05 Delivery of Certificated Equity Interests. All
      certificates, agreements or instruments representing or evidencing the pledged
      Equity Interests, to the extent not previously delivered to the Secured Party,
      shall promptly upon receipt thereof by any Debtor be delivered to and held
      by
      the Secured Party pursuant hereto. All such certificated Collateral shall be
      in
      suitable form for transfer by delivery or shall be accompanied by duly executed
      instruments of transfer or assignment in blank, all in form and substance
      reasonably satisfactory to the Secured Party. Security Party shall have the
      right, at any time after the occurrence and during the continuance of any Event
      of Default, to exchange certificates representing or evidencing such pledged
      Equity Interests for certificates of smaller or larger denominations. If any
      issuer of pledged Equity Interests is organized in a jurisdiction which does
      not
      permit the use of certificates to evidence equity ownership, or if any of such
      pledged Equity Interests are at any time not evidenced by certificates of
      ownership, then each applicable Debtor shall, to the extent permitted by
      applicable law, record such pledge on the equityholder register or the books
      of
      the issuer, execute any customary pledge forms or other documents necessary
      or
      appropriate to complete the pledge and give the Secured Party the right to
      transfer such pledged Equity Interests.

     

    Section
      4.06 Voting Rights: Distributions: etc. So long as no
      Event of Default shall have occurred and be continuing, (i) each Debtor shall
      be
      entitled to exercise any and all voting and other consensual rights pertaining
      to the pledged Equity Interests or any part thereof for any purpose not
      inconsistent with the terms or purposes of this Agreement; provided, however,
that no Debtor shall in any event exercise such rights in any manner
      which
      may have an adverse effect on the security intended to be provided by this
      Agreement and (ii) each Debtor shall be entitled to receive and retain any
      and
      all distributions with respect to such pledged Equity Interests. Upon the
      occurrence and during the continuance of any Event of Default, upon written
      notice from the Secured Party, all rights of each Debtor to exercise such voting
      and other consensual rights it would otherwise be entitled to exercise hereunder
      and all rights of such Debtor to receive distributions otherwise permitted
      hereunder shall cease, and all such rights shall thereupon become vested in
      the
      Secured Party. Any distributions which are received by any Debtor in violation
      of the provisions of this Agreement shall be received in trust for the benefit
      of the Secured Party, shall be segregated from other funds of such Debtor and
      shall immediately be paid over to the Secured Party as Collateral in the same
      form as so received (with any necessary endorsement).

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    ARTICLE
      V.

     

    NEGATIVE
      COVENANTS

     

    Debtor
      covenants and agrees to the following:

     

    Section
      5.01 Identity. Debtor shall not change Debtor’s name or
      corporate structure. If Debtor is organized solely under the law of a single
      state or the United States and as to which the state or the United States must
      maintain a public record showing the organization to have been organized, Debtor
      shall not organize under the laws of another jurisdiction.

     

    Section
      5.02 Deposit Accounts. Debtor shall not open or close
      any Deposit Account or modify, terminate, or supplement any Deposit Account
      Control Agreement, or waive any material rights under any Deposit Account
      Control Agreement, without prior written notice to the Secured
      Party.

     

    Section
      5.03 Liens. Debtor shall not create, incur, assume or suffer to
      exist any Liens upon any Collateral of Debtor other than Permitted
      Liens.

     

    ARTICLE
      VI.

     

    EVENT
      OF DEFAULT; ENFORCEMENT OF SECURITY INTEREST

     

    Section
      6.01 Any one or more of the following events (regardless of the reason therefor)
      shall constitute an "Event of Default" hereunder:

     

    
      	
              (a)  

            	
              Any
                default or event of default shall occur under any of the Note or
                any other
                Finance Documents.

            

    

     

    
      	
              (b)  

            	
              Any
                Debtor shall fail or neglect to perform, keep or observe any provision
                of
                this Agreement or any other Finance Document and the same shall remain
                unremedied for a period of ten (10) days after notice is given to
                such
                Debtor by the Secured Party.

            

    

     

    
      	
              (c)  

            	
              The
                Secured Party shall fail to have an enforceable first priority lien
                on and
                security interest in the
                Collateral.

            

    

     

    
      	
              (d)  

            	
              Any
                Debtor files a bankruptcy petition, a bankruptcy petition is filed
                against
                any Debtor which remains undismissed or unstayed for 30 consecutive
                days,
                or any Debtor makes a general assignment for the benefit of
                creditors.

            

    

     

    Section
      6.02 Right to Enforce Claim; Secured Party in Possession or
      Control.

     

    
      	
              (a)  
                

            	
              Upon
                the occurrence of an Event of Default and during the continuance
                thereof,
                and in addition to such other rights and remedies as Secured Party
                may
                have under other provisions of this Agreement or any other Finance
                Document, or under common or statutory law, Secured Party may reduce
                a
                claim to judgment, foreclose, or otherwise enforce the claim, security
                interest, or agricultural lien by any available judicial procedure,
                and if
                the Collateral is Documents, Secured Party may proceed either as
                to the
                Documents or as to the Goods the Documents
                cover.

            

    

     

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
              (b)  

            	
              If
                Secured Party has possession of Collateral, (i) reasonable expenses,
                including the cost of insurance and payment of taxes or other charges,
                incurred in the custody, preservation, use, or operation of the Collateral
                are chargeable to Debtor and are secured by the Collateral, (ii)
                the risk
                of accidental loss or damage is upon Debtor to the extent of a deficiency
                in any effective insurance coverage, (iii) Secured Party shall keep
                the
                Collateral identifiable, but fungible Collateral may be commingled,
                and
                (iv) Secured Party may use or operate the Collateral (A) for the
                purpose
                of preserving the Collateral or its value, or (B) as permitted by
                an order
                of a court having competent jurisdiction, or (C) for the purpose
                of
                transporting the Collateral, or (D) for the purposes of demonstrating
                the
                use or operation of the Collateral.

            

    

     

    
      	
              (c)  

            	
              If
                Secured Party has possession of Collateral or control of Collateral
                that
                is Deposit Accounts, Electronic Chattel Paper, Investment Property,
                or
                Letter-of-credit rights, then Secured Party (i) may hold as additional
                security any Proceeds, except money or funds, received from the
                Collateral, (ii) shall apply money or funds received from the Collateral
                to reduce the Secured Obligations unless remitted to Debtor, and
                (iii) may
                create a security interest in the
                Collateral.

            

    

     

    
      
        	
                (d)  

              	
                
                  If
                    Secured Party has possession of Collateral that is Chattel Paper
                    or an
                    Instrument, then as to any such Chattel Paper or Instrument,
                    Secured Party
                    shall not be obligated to take any necessary steps to preserve
                    rights
                    against prior parties.

                

              

      

       

    

    Section
      6.03 Collection and Enforcement. After the occurrence of
      an Event of Default and during the continuance thereof (in accordance with
      the
      Facilities Agreement), Secured Party may:

     

    
      	
              (a)  

            	
              notify
                any Account Debtor or other Person obligated on Collateral to make
                payment
                or otherwise render performance to or for the benefit of Secured
                Party;

            

    

     

    
      	
              (b)  

            	
              take
                any Proceeds to which Secured Party is entitled under Section 9-315
                of
                Article 9 of the UCC;

            

    

     

    
      
        	
                (c)  

              	
                
                  enforce
                    the obligations of any Debtor or other Person obligated on Collateral
                    and
                    exercise the rights of Debtor with respect to the obligations
                    of the
                    Debtor or other Person obligated on Collateral to make payment
                    or
                    otherwise render performance to Debtor, and with respect to any
                    property
                    that secures the obligations of the Debtor or other Person obligated
                    on
                    the Collateral;

                

              

      

       

    

    Section
      6.04 Possession of Collateral.

     

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
       

      
        
          	
                  (a)  

                	
                  
                    
                      After
                        the occurrence of an Event of Default and during the continuance
                        thereof,
                        Secured Party may require Debtor to assemble the Collateral
                        and make the
                        Collateral available to Secured Party at a place designated
                        by Secured
                        Party which is reasonably convenient to Secured Party and
                        Debtor. If
                        Secured Party requires Debtor to assemble the Collateral
                        and make the
                        Collateral available to Secured Party, as described in the
                        preceding
                        sentence, Debtor shall do so promptly, and in any event within
                        ten (10)
                        days after Secured Party gives Debtor a notice requesting
                        Debtor to
                        assemble the Collateral and make the Collateral available
                        to Secured Party
                        at the place designated by Secured Party. Without limiting
                        Secured Party’s
                        right to designate any place which is reasonably convenient
                        to Debtor for
                        making Collateral available to Secured Party, Debtor agrees
                        that any place
                        designated by Secured Party and located within one hundred
                        (100) miles of
                        any place where Debtor stores, uses, sells, leases, licenses,
                        or maintains
                        Collateral in the ordinary course of Debtor’s business shall be
                        conclusively deemed to be a place reasonably convenient to
                        Debtor for
                        making the Collateral available to Secured
                        Party.

                    

                  

                

        

         

      

    

    
      
        
          
            	
                    (b)  

                  	
                    
                      
                        
                          After
                            the occurrence of an Event of Default and during the
                            continuance thereof,
                            Secured Party may, pursuant to judicial process, or without
                            judicial
                            process if Secured Party proceeds without breach of peace,
                            (1) take
                            possession of the Collateral and, (2) without removal,
                            render Equipment
                            unusable and dispose of Collateral on Debtor’s
                            premises.

                        

                      

                    

                  

          

           

        

      

    

    Section
      6.05 Disposition of Collateral.

     

    
      	
              (a)  

            	
              After
                the occurrence of an Event of Default and during the continuance
                thereof,
                Secured Party may sell, lease, license, or otherwise dispose of any
                or all
                of the Collateral in its present condition or following any commercially
                reasonable preparation or
                processing.

            

    

     

    
      	
              (b)  

            	
              Secured
                Party may dispose of Collateral by public or private proceedings,
                by one
                or more contracts, as a unit or in parcels, and at any time and place and
                on any terms.

            

    

     

    
      
        	
                (c)  

              	
                
                  Secured
                    Party may purchase Collateral (1) at a public disposition or
                    (2) if the
                    Collateral is of a kind that is customarily sold on a recognized
                    market or
                    the subject of widely distributed standard price quotations,
                    at a private
                    disposition.

                

              

      

       

    

    
      	
              (d)  

            	
              A
                contract for sale, lease, license, or other disposition includes
                the
                warranties relating to title, possession, quiet enjoyment, and the
                like
                which by operation of law accompany a voluntary disposition of property
                of
                the kind subject to the contract; provided, however, Secured Party
                may
                disclaim or modify such warranties (1) in a manner that would be
                effective
                to disclaim or modify the warranties in a voluntary disposition of
                property of the kind subject to the contract of disposition, or (2)
                by
                communicating to the purchaser a Record evidencing the contract for
                disposition and including an express disclaimer or modification of
                the
                warranties, and provided further that a Record is sufficient to disclaim
                such warranties if such Record indicates “There is no warranty relating to
                title, possession, quiet enjoyment, or the like in this disposition” or
                uses words of similar import.

            

    

     

    
      	
              (e)  

            	
              Prior
                to a disposition of Collateral, Secured Party shall give Debtor,
                and any
                other parties required to receive notice under Article 9 of the UCC,
                notification as required under Article 9 of the UCC before a sale,
                lease,
                license, or other disposition of
                Collateral.

            

    

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

     

    Section
      6.06 Additional Provisions Regarding Sales and Other Dispositions.
      In the event that Secured Party shall sell or otherwise dispose
      of
      the Collateral, or any part thereof in accordance with this Agreement, the
      following additional provisions shall be applicable to such sale or other
      disposition:

     

    
      	
              (a)  

            	
              Such
                sale or other disposition may be at public or private sale (or at
                any
                broker’s board or on any securities exchange) for cash, upon credit or for
                future delivery as Secured Party shall deem appropriate. Secured
                Party
                shall be authorized at any such sale (if Secured Party deems it advisable
                to do so with regard to any type or item of Collateral) to restrict
                the
                prospective bidders or purchasers to Persons who will represent and
                agree
                that they are purchasing the Collateral for their own use (or for
                their
                own account for investment, as applicable) and not with a view to
                the
                distribution or sale thereof, and upon consummation of any such sale,
                Secured Party shall have the right to assign, transfer and deliver
                to the
                purchaser or purchasers thereof the Collateral so sold. Each such
                purchaser at any such sale shall hold the property sold absolutely,
                free
                from any claim or right on the part of Debtor, and Debtor hereby
                waives
                (to the extent permitted by law) all rights of redemption, stay and
                appraisal which Debtor now has or may at any time in the future have
                under
                any rule of law or statute now existing or hereafter enacted. Secured
                Party shall give Debtor at least ten (10) days’ written notice (which
                Debtor agrees is reasonable notice) of Secured Party’s intention to make
                any sale of Collateral owned by Debtor. Such notice, in the case
                of a
                public sale, shall state the time and place for such sale and, in
                the case
                of a sale at a broker’s board or on a securities exchange, shall state the
                board or exchange at which such sale is to be made and the day on
                which
                the Collateral, or portion thereof, will first be offered for sale
                at such
                board or exchange. Any such public sale shall be held at such time
                or
                times within ordinary business hours and at such place or places
                as
                Secured Party may fix and state in the notice of such sale, and Secured
                Party shall not be obligated to make any sale of any Collateral if
                Secured
                Party shall determine not to do so, regardless of the fact that notice
                of
                sale of such Collateral shall have been given, and Secured Party
                may,
                without notice or publication, adjourn any public or private sale
                or cause
                the same to be adjourned from time to time by announcement at the
                time and
                place fixed for sale, and such sale may, without further notice to
                Debtor
                or anyone else, be made at the time and place to which the same was
                so
                adjourned.

            

    

     

    
      	
              (b)  

            	
              In
                case any sale of all or any part of the Collateral is made on credit
                or
                for future delivery, the Collateral so sold may be retained by Secured
                Party until the sale price is paid by the purchaser or purchasers
                thereof,
                but Secured Party shall not incur any liability in case any such
                purchaser
                or purchasers shall fail to take up and pay for Collateral so sold
                and, in
                case of any such failure, such of the Collateral may be sold again
                upon
                notice to Debtor as set forth in this
                Section.

            

    

     

    
      
        	
                (c)  

              	
                
                  At
                    any public sale, Secured Party may bid for or purchase, free
                    (to the
                    extent permitted by law) from any right of redemption, stay or
                    appraisal
                    on the part of Debtor (all said rights being also hereby waived
                    and
                    released to the extent permitted by law), the Collateral or any
                    part
                    thereof offered for sale and may make payment on account thereof
                    by using
                    any claim then due and payable to Secured Party from Debtor as
                    a credit
                    against the
                    purchase price, and Secured Party may, upon compliance with the
                    terms of
                    sale, hold, retain and dispose of such property without further
                    accountability to Debtor
                    therefor.

                

              

      

       

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	
              (d)  

            	
              For
                purposes of any sale of Collateral in accordance with this Agreement,
                a
                written agreement to purchase the Collateral or any portion thereof
                shall
                be treated as a sale thereof. Secured Party shall be free to carry
                out
                such sale pursuant to such agreement, and Debtor shall not be entitled
                to
                the return of the Collateral or any portion thereof subject thereto,
                notwithstanding the fact that after Secured Party shall have entered
                into
                such an agreement, all Events of Default shall have been remedied
                and the
                Secured Obligations paid in full.

            

    

     

    
      	
              (e)  

            	
              Upon
                any sale of Collateral by Secured Party (including a sale pursuant
                to a
                power of sale granted by statute or under a judicial proceeding),
                the
                receipt of Secured Party or of the officer making the sale shall
                be a
                sufficient discharge to the purchaser or purchasers of the Collateral
                being sold, and such purchaser or purchasers shall not be obligated
                to see
                to the application of any part of the purchase money paid over to
                Secured
                Party or such officer or be answerable in any way for the misapplication
                thereof.

            

    

     

    ARTICLE
      VII.

     

    POWER
      OF ATTORNEY

     

    Section
      7.01 Power of Attorney; Collections by Secured
      Party.

     

    
      	
               

            	
              (a)

            	
              Debtor
                hereby appoints Secured Party as Debtor’s attorney-in-fact, with power of
                substitution, which appointment is irrevocable and coupled with an
                interest, to do each of the following in the name of Debtor or in
                the name
                of Secured Party or otherwise, for the use and benefit of Secured
                Party,
                but at the cost and expense of Debtor, and with or without notice
                to
                Debtor: (i) notify the Account Debtors and insurers to make payments
                directly to Secured Party, and to take control of the cash and non-cash
                Proceeds of any Collateral or insurance; (ii) renew, extend or compromise
                any of the Collateral or deal with the same as Secured Party may
                deem
                advisable; (iii) release, exchange, substitute, or surrender all
                or any
                part of the Collateral; (iv) remove from Debtor’s places of business all
                Collateral Records without cost or expense to Secured Party; (v)
                make such
                use of Debtor’s places of business as may be reasonably necessary to
                administer, control and collect the Collateral; (vi) repair, alter
                or
                supply Goods, if any, necessary to fulfill in whole or in part the
                purchase order or similar order of any Account Debtor; (vii) demand,
                collect, give receipt for, and give renewals, extensions, discharges
                and
                releases of any of the Collateral; (viii) institute and prosecute
                legal
                and equitable proceedings to enforce collection of, or realize upon,
                any
                of the Collateral; (ix) settle, renew, extend, compromise, compound,
                exchange or adjust claims with respect to any of the Collateral or
                any
                legal proceedings brought with respect thereto; (x) indorse the name
                of
                Debtor upon any item of payment relating to the Collateral or upon
                any
                proof of claim in bankruptcy against any Collateral; and (xi) institute
                and prosecute legal and equitable proceedings to reclaim any of the
                Goods
                sold to any Account Debtor obligated on an Account at a time when
                such
                Account Debtor was insolvent. Secured Party agrees that it shall
                not
                exercise any power or authority granted under this power of attorney
                unless an Event of Default has occurred and is continuing. The foregoing
                power of attorney is in addition to any other power of attorney that
                may
                be granted to Secured Party under any Finance
                Document.

            

    

     

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              (b)

            	
              NONE
                OF SECURED PARTY OR ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
                AGENTS
                OR REPRESENTATIVES SHALL BE RESPONSIBLE TO DEBTOR FOR ANY ACT OR
                FAILURE
                TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT
                OF
                DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL
                MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION,
                NOR
                FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
                DAMAGES.

            

    

     

    ARTICLE
      VIII.

     

    GENERAL
      PROVISIONS

     

    Section
      8.01 Remedies Cumulative. Upon the occurrence and during
      the continuance of any Event of Default, and in addition to such other rights
      and remedies as Secured Party may have under other provisions of this Agreement
      or any other Finance Document, Secured Party may exercise any one or more of
      its
      rights and remedies under common or statutory law. No failure or delay on the
      part of Secured Party in exercising any right, power or privilege hereunder
      or
      under any other Finance Document and no course of dealing between Debtor or
      any
      other Obligor or other Person and Secured Party shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right, power or
      privilege hereunder or under any other Finance Document preclude any other
      or
      further exercise thereof or the exercise of any other right, power or privilege
      hereunder or thereunder. The rights and remedies provided in this Agreement
      are
      cumulative and not exclusive of any rights or remedies which Secured Party
      would
      otherwise have and may be exercised simultaneously. No notice to or demand
      on
      Debtor in any case shall entitle Debtor or any other obligor or any other Person
      to any other or further notice or demand in similar or other circumstances
      or
      constitute a waiver of the rights of Secured Party to any other or further
      action in any circumstances without notice or demand.

     

    ARTICLE
      IX.

     

    MISCELLANEOUS

     

    Section
      9.01 Each of the Debtors agrees to pay all expenses, including reasonable
      attorney's fees and charges (including time charges of attorneys who are
      employees of Secured Party) paid or incurred by Secured Party in endeavoring
      to
      collect the Secured Obligations of such Debtor, or any part thereof, and in
      enforcing this Agreement against such Debtor, and such obligations will
      themselves be Secured Obligations.

     

    Section
      9.02 No delay on the part of Secured Party in the exercise of any right or
      remedy shall operate as a waiver thereof, and no single or partial exercise
      by
      Secured Party of any right or remedy shall preclude other or further exercise
      thereof or the exercise of any other right or remedy.

     

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    Section
      9.03 This Security Agreement shall remain in full force and effect until all
      Secured Obligations have been paid in full. If at any time all or any part
      of
      any payment theretofore applied by the Secured Party to any of the Secured
      Obligations is or must be rescinded or returned by the Secured Party for any
      reason whatsoever (including the insolvency, bankruptcy or reorganization of
      any
      Debtor), such Secured Obligations shall, for the purposes of this Agreement,
      to
      the extent that such payment is or must be rescinded or returned, be deemed
      to
      have continued in existence, notwithstanding such application by the Secured
      Party, and this Agreement shall continue to be effective or be reinstated,
      as
      the case may be, as to such Secured Obligations, all as though such application
      by the Secured Party had not been made.

     

    Section
      9.04 The rights and privileges of Secured Party hereunder shall inure to the
      benefit of its successors and assigns.

     

    Section
      9.05 Secured Party’s Rights to Release Obligors; etc.
Secured Party may take or release other security,
      may release any
      party primarily or secondarily liable for any Secured Obligations or other
      indebtedness to Secured Party, may grant extensions, renewals or indulgences
      with respect to such Secured Obligations or other indebtedness and may apply
      any
      other security therefor held by Secured Party to the satisfaction of such
      Secured Obligations or other indebtedness, all without prejudice to any of
      Secured Party’s rights under this Agreement.

     

    Section
      9.06 Notices. Any notices, consents, waivers or other
      communications required or permitted to be given under the terms of this
      Agreement must be in writing and will be deemed to have been delivered (i)
      upon
      delivery, when delivered personally; (ii) upon receipt, when sent by facsimile
      (provided a confirmation of transmission is mechanically or electronically
      generated and kept on file by the sending party); or (iii) one (1) day after
      deposit with a nationally recognized overnight delivery service, so long as
      it
      is properly addressed. The addresses and facsimile numbers for such
      communications shall be:If to any Debtor:

     

    Bedminster
      National Corp. 

    Paul
      Patrizio

    90
      Washington Valley Road 

    Bedminster,
      NJ 07921 

    Telephone:
      (908) 719-8940 

    Facsimile:
      (908) 234-0608

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    With
      a
      copy to:

     

    Anslow
      & Jaclin, LLP 

    Attn:
      Gregg E. Jaclin, Esq. 

    195
      Route
      9, Suite 204 

    Manalapan,
      NJ 07726 

    Telephone:
      732-409-1212 

    Facsimile:
      (732)577-1188

     

    If
      to the
      Secured Party:

     

    Dutchess
      Capital Management, LLC 

    Douglas
      Leighton

    50
      Commonwealth Ave, Suite 2 

    Boston,
      MA 02116

    Telephone:
      (617) 301-4700

    Facsimile:
      (617) 249-0947

     

    Section
      9.07 Term. The term of this Agreement shall commence with the
      date of this Agreement and shall continue in full force and effect and be
      binding upon Debtor until all Secured Obligations of Debtor to Secured Party
      shall have been fully paid and satisfied and Secured Party shall have given
      Debtor written notice of the termination of this Agreement (excluding provisions
      that by their terms survive termination of other provisions of this Agreement
      or
      survive the termination of the security interest created under this Agreement).
      Secured Party shall not be obligated to give Debtor written notice of
      termination of this Agreement, or to terminate any financing statements or
      other
      Lien Notices, until all Secured Obligations of Debtor to Secured Party shall
      have been fully paid and satisfied and there is no commitment on the part of
      Secured Party to make an advance, incur an obligation or otherwise give value,
      and Debtor shall have given Secured Party a written demand requesting the
      termination of this Agreement and any financing statements at which time Secured
      Party shall execute and deliver such documents, at Debtor’s expense, as are
      necessary to release Secured Party’s liens in the Collateral. Notwithstanding
      anything to the contrary in this Agreement or any other Finance Documents,
      this
      Agreement shall continue to be effective or be reinstated, as the case may
      be,
      if at any time any amount received by Secured Party in respect of the Secured
      Obligations is rescinded or must otherwise be restored or returned by Secured
      Party upon the insolvency, bankruptcy, dissolution, liquidation or
      reorganization of Debtor or upon the appointment of any intervenor or
      conservator of, or trustee or similar official for, Debtor or any substantial
      part of Debtor’s assets, or otherwise, all as though such payments had not been
      made.

     

    Section
      9.08 Further Assurances. Debtor shall execute and
      deliver to Secured Party such further assurances and take such other further
      actions as Secured Party may from time to time request to further the intent
      and
      purpose of this Agreement and to maintain and protect the rights and remedies
      intended to be created in favor of Secured Party under this
      Agreement.

     

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    Section
      9.09 Amendments, Waivers and Consents; Successors and Assigns.
Neither this Agreement nor any other Finance Document
      nor any of
      the terms hereof or thereof may be amended, modified, changed, waived,
      discharged or terminated, nor shall any consent be given, unless
      such amendment, modification, change, waiver, discharge, termination or consent
      is in writing signed by Secured Party and Debtor. This Agreement shall create
      a
      continuing security interest in the Collateral and shall (i) remain in full
      force and effect until the Secured Obligations have been fully paid and
      satisfied and this Agreement has been terminated, (ii) be binding upon Debtor
      and its successors and assigns, and (iii) inure, together with the rights and
      remedies of Secured Party hereunder, to the benefit of Secured Party and Secured
      Party’s successors, transferees and assigns. This Agreement may not be assigned
      by Debtor without prior written consent of Secured Party, which consent may
      be
      withheld in Secured Party’s sole discretion.

     

    Section
      9.10 Entire Agreement. This Agreement and any other
      Finance Documents are a complete and exclusive expression of all the terms
      of
      the matters expressed therein, and all prior agreements, statements, and
      representations, whether written or oral, which relate thereto in any way are
      hereby superseded and shall be given no force and effect. No promise,
      inducement, or representation has been made to Debtor which relates in any
      way
      to the matters expressed in this Agreement and in any other Finance Documents,
      other than what is expressly stated herein and in such Finance
      Documents.

     

    Section
      9.11 No Strict Construction. The parties hereto have
      participated jointly in the negotiation and drafting of this Agreement. In
      the
      event of any ambiguity or question of intent or interpretation arises, this
      Agreement shall be construed as if drafted jointly by the parties hereto and
      no
      presumption or burden of proof shall arise favoring or disfavoring any party
      by
      virtue of the authorship of any provisions of this Agreement.

     

    Section
      9.12 Governing Law. This Agreement and all related
      instruments and documents and the rights and obligations of the parties
      hereunder and thereunder shall, in all respects, be governed by, and construed
      in accordance with, the internal laws of the Commonwealth of Massachusetts,
      without regard to conflicts of law principles, regardless of the location of
      the
      Collateral, excepting, however, that the Uniform Commercial Code (or decisional
      law) of a jurisdiction other than the Commonwealth of Massachusetts may provide
      the method of perfection, the effect of perfection or non-perfection, or the
      priority of liens and security interests created under this
      Agreement.

     

    Section
      9.13 DISPUTES SUBJECT TO ARBITRATION. The parties to
      this Agreement will submit all disputes arising under it to arbitration in
      Boston, Massachusetts before a single arbitrator of the American Arbitration
      Association (“AAA”). The arbitrator shall be selected by application of the
      rules of the AAA, or by mutual agreement of the parties, except that such
      arbitrator shall be an attorney admitted to practice law in the Commonwealth
      of
      Massachusetts. No party to this agreement will challenge the jurisdiction or
      venue provisions as provided in this section. Nothing in this section shall
      limit the Secured Party’s right to obtain an injunction for a breach of this
      Agreement from a court of law.

     

    Section
      9.14 Severability. Any provision of this Agreement, or
      of any other Finance Document, that is prohibited by, or unenforceable under,
      the laws of any jurisdiction shall, as to such jurisdiction, be ineffective
      to
      the extent of such prohibition or unenforceability, without invalidating the
      remaining provisions of this Agreement, and any such prohibition or
      unenforceability in any jurisdiction shall not invalidate or render
      unenforceable such provision in any
      other
      jurisdiction. To the extent permitted by applicable law, Debtor hereby waives
      any provision of law which renders any provision of this Agreement or any other
      Finance Document prohibited or unenforceable in any respect.

     

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    Section
      9.15 Counterparts. This Agreement may be executed in
      counterparts and each shall be effective as an original, and a photocopy,
      facsimile or telecopy of this executed Agreement shall be effective as an
      original. In making proof of this Agreement, it shall not be necessary to
      produce more than one counterpart, photocopy, facsimile, or telecopy of this
      executed Agreement.

     

    
      Section
        9.16 Time. Time is of the essence of this
        Agreement.

    

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

     

     

    IN
      WITNESS WHEREOF, and intending to be legally bound hereby, each Debtor
      has executed this Agreement as of the date first above written.

     

    DEBTOR:

     

    BEDMINSTER
      NATIONAL CORP.

     

    By:  ____________________________________                                                                                                                                     

    Name:  _______________________________                                                                                                                                 

    Title:   _______________________________                                                                                                                                

     

    METROPOLITAN
      COMPUTING CORP.:

     

    
      By:  ____________________________________                                                                                                                                     

      Name:  _______________________________                                                                                                                                 

      Title:   _______________________________                                                                                                                                                                                                                                                             

    

     

    SECURED
      PARTY:

     

    DUTCHESS
      PRIVATE EQUITIES FUND, LTD

     

    
      By:  ____________________________________                                                                                                                                     

      Name:  _______________________________                                                                                                                                 

      Title:   _______________________________                                                                                                                                                                                                                                                         

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              LIST
                OF SCHEDULES

            

    

     

                Schedule
      2.01(d)
      (Commercial Tort claims) Schedule 2.01 (q) (Equity Interests)

                Schedule
      3.01
      (Designated Locations) Schedule 3.04 (Tangible Collateral) Schedule 3.06
      (Leases)

                Schedule
      3.07
      (Permitted Liens)

                Schedule
      3.08
      (Subsidiaries)

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      2.01(d)

    Commercial
      Tort claims

     

    None

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      2.01(q) 

     

     

    Equity
      Interests

     

     

     

    
      	
              Issuer

            	
              Class
                of Stock

            	
              Certificate
                No(s)

            	
              Number
                of Shares

            	
              Percentage
                of all Issued

              Equity
                Interests of

              Issuer

            
	
              Metropolitan

            	 	 	 	 
	
              Computing
                Corp.

            	 	 	 	 
	 	
              Common

            	 	 	
              80%

            
	
              Bedminster

            	 	 	 	 
	
              Financial
                Corp.

            	
              Common

            	 	 	
              100%*

            
	
              Bedminster
                Capital Corp.

            	
              Common

            	 	
               

            	
              100%*

            
	
               

            	 	 	 	 

    

    

     

    *
      Upon
      execution of this agreement, these entities are subsidiaries of the Company.
      However, these entities have filed registration statements to spin off their
      shares of common stock which will be completed after execution of this
      Agreement.

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      3.01

    Designated
      Locations

     

     

     

    
      
        	
                NAME

              	
                MAILING
                  ADDRESS

              

      

    

    

     

     

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      3.04

     

    Tangible
      Collateral

    

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    Schedule
      3.06

     

    Leases

    

     

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

     

    Schedule
      3.07

     

    Permitted
      Liens

    

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

     

    Schedule
      3.08

     

     

    Subsidiaries

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