Document:

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                                                                    EXHIBIT 4.3

      THIS NOTE AND ANY CAPITAL STOCK INTO WHICH THIS NOTE MAY BE CONVERTED
      (COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF
      ANY OTHER JURISDICTION. NO SALE, OFFER OR TRANSFER OF THIS NOTE SHALL BE
      MADE, AND NO ATTEMPTED SALE, OFFER OR TRANSFER SHALL BE EFFECTIVE, UNTIL
      THE HOLDER DESIRING TO EFFECT SUCH SALE, OFFER OR TRANSFER HAS OBTAINED AN
      OPINION OF COUNSEL ACCEPTABLE TO THE BORROWER TO THE EFFECT THAT THE
      REQUESTED SALE, OFFER OR TRANSFER DOES NOT VIOLATE THE TERMS OF THE ACT OR
      ANY APPLICABLE STATE SECURITIES LAW OF WHICH SUCH COUNSEL IS AWARE.

                   9% CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$10,000,000

                                                                 October 4, 2004

      Unless converted to capital stock pursuant to Section 3 hereof,
Continental Global Group, Inc., a Delaware corporation (the "Borrower"), hereby
unconditionally promises to pay to the order of N.E.S. Investment Co., a
Delaware corporation ("Holder"), in lawful money of the United States of America
and in immediately available funds, the principal amount of Ten Million Dollars
($10,000,000) (the "Loan"), together with accrued and unpaid interest as
provided herein, on the later of (the "Maturity Date") (a) October 2, 2008, and
(b) one business day after all of the Senior Debt (as defined below) is paid in
full, in cash. This Convertible Subordinated Promissory Note (this "Note")
evidences the unpaid principal amount of the Loan together with all accrued and
unpaid interest thereon. The principal of (and, upon the Maturity Date, accrued
interest on) this Note shall be payable in lawful money of the United States of
America by check mailed to the address of the Holder of such Note or by wire
transfer of immediately available funds to such account as the Holder may
designate in writing.

      The Holder agrees to make the Loan on the date hereof subject to and in
accordance with the terms and conditions hereof. This Note is issued in
accordance with and subject to the following terms and conditions:

      1. INTEREST.

            (a) The outstanding principal amount of the Loan and Additional
Principal Amounts (as defined below) shall accrue interest from the date hereof
until all payments hereunder have been irrevocably paid or provided for in full
or this Note has been converted as provided in Section 3 hereof at a per annum
rate equal at all times to the lesser of (i) the maximum lawful rate of interest
in effect at such time under applicable law, and (ii) nine percent (9.0%),
compounded annually. Interest shall be calculated on the basis of a year of 365
days, shall accrue on the outstanding principal amount of this Note until all
payments hereunder have been paid or provided for in full or the Note has been
converted as provided in Section 3 and shall be paid on each April 1 and each
October 1 (each an "Interest Payment Date") hereafter until the Maturity Date as
provided in Section 1(b) below.

            (b) All interest due on any Interest Payment Date will, in lieu of
being paid in cash, be added to the outstanding principal amount of the Note
(such additional principal amount, the "Additional Principal Amount") and shall
be deemed to have been paid in the form of such Additional Principal Amounts.
Additional Principal Amounts shall accrue interest from the Interest Payment
Date on which such Additional Principal Amount was created.

      2. EVENTS OF DEFAULT.

      Each and any of the following events shall constitute an "Event of
Default":

            (i) the Borrower fails to repay the principal amount of this Note,
or any interest thereon, when due; or

                                                                 Promissory Note

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            (ii) the Borrower shall be liquidated, dissolved, adjudicated
insolvent, or shall fail to pay, or shall admit in writing its inability to pay
its debts as they mature, or shall make a general assignment for the benefit of
creditors; or the Borrower shall apply for or consent to the appointment of any
receiver, custodian, trustee or similar officer for it or for all or any
substantial part of its property, or such receiver, custodian, trustee or
similar officer shall be appointed without the application or consent of the
Borrower; or the Borrower shall institute (by petition, application, answer,
consent or otherwise), or take any action to authorize the institution of, any
bankruptcy, insolvency, reorganization, dissolution, liquidation or similar
proceeding relating to the Borrower under the laws of any jurisdiction; or any
such proceeding shall be instituted (by petition, application or otherwise)
against the Borrower and such proceeding shall not be dismissed within sixty
(60) days after being instituted.

Notwithstanding any Event of Default, the Holder shall have no enforcement
rights whatsoever, including, but not limited to, accelerating the date upon
which this Note shall mature, unless and until all of the Senior Debt has been
paid in full, in cash. After the Senior Debt has been paid in full in cash and
in the event that an Event of Default has occurred and is continuing, the unpaid
principal amount of, and accrued and unpaid interest on, this Note shall
automatically become immediately due and payable, together with all other
amounts payable under this Note, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or further notice of any kind, all
of which are hereby expressly waived by the Borrower. Notwithstanding any
provision of section 3 hereof, upon the occurrence and during the continuance of
an Event of Default, no portion of the Total Convertible Amount (as defined
below) shall be convertible into common stock of the Borrower.

      3. CONVERSION.

            (a) Subject to and upon compliance with the provisions hereof, the
Holder shall have the right, from time to time, to convert all or any portion of
the Total Convertible Amount into as many shares of common stock of the Borrower
as the portion of the Total Convertible Amount so converted is a multiple of the
Conversion Price. For the purposes of this Note, the term "Total Convertible
Amount" shall mean, on any date, the sum of the unpaid principal amount of this
Note and the accrued and unpaid interest thereon on such date. For the purposes
of this Note, the term "Conversion Price" shall mean, as of any date, the fair
market value of one share of common stock of the Borrower on such date, as
reasonably determined by the board of directors of the Borrower.

            (b) This Note may be converted on any business day prior to the
Maturity Date (any such date of conversion, a "Conversion Date"). In order to
exercise such conversion privilege, the Holder shall surrender this Note to the
Borrower accompanied by a written statement designating the portion of the Total
Convertible Amount to be converted. If the Holder elects to convert this Note,
or a portion thereof, such conversion (a "Conversion") shall be deemed to have
taken place immediately prior to the close of business on the Conversion Date,
and at such time the rights of the Holder as Holder of this Note shall cease to
the extent of the portion of the Total Convertible Amount so converted and the
Holder shall be treated for all purposes (with respect to such portion) as the
record holder of the common stock issuable upon conversion at such time.

            (c) The Borrower, at its expense (including the payment by it of any
applicable issue taxes, other than any taxes which may then be payable in
respect of the transfer of any such shares), will issue and deliver to the
Holder as promptly as practicable on or after a Conversion Date a certificate or
certificates for the number of shares of common stock of the Borrower issuable
upon the Conversion. If this Note shall be converted only in part, the Borrower
shall, upon such conversion, execute and deliver to the Holder, at the expense
of the Borrower, a new Note in principal amount equal to the unconverted portion
of the Total Convertible Amount (dated as of the Conversion Date). No fractional
shares of common stock shall be issued upon conversion of this Note, nor shall
any Conversion on a Conversion Date prior to the Maturity Date result in a cash
payment to Holder in respect of any fractional portion of the Total Convertible
Amount.

      4. INVESTMENT INTENT. The Holder hereby represents and warrants to the
Borrower that the Holder is (i) an "accredited investor" as defined in
Regulation D of the Securities Act of 1933, as amended (the "Act"), and (ii)
acquiring this Note for investment and not with a view to the distribution
thereof. The Holder understands that this Note is not, and any stock acquired on
conversion hereof at the time of issuance will not be, registered under the Act
on the grounds that the issuance of this Note and such capital stock is exempt
from registration under the Act, and that the Borrower's reliance on such
exemption is predicated on the Holder's representations set forth herein. The
Holder represents that it is experienced in evaluating and investing in
companies such as the Borrower, is

                                                                 Promissory Note

                                       2

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familiar with the risks associated with the business and operations of such
companies, has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its investment, and has
the ability to bear the economic risks of its investment. The Holder understands
that this Note (and any capital stock issued on conversion hereof, may not be
sold, transferred, or otherwise disposed of without registration under the Act
or an exemption therefrom, and that in the absence of an effective registration
statement covering this Note (or the capital stock issued on Conversion thereof,
or an available exemption from registration under the Act, this Note and any
capital stock of the Borrower must be held indefinitely.

      5. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO WITHOUT GIVING EFFECT TO ANY
CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF
THE DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER STATE, AND SHALL BIND AND INURE TO
THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.

      6. NOTICES. All notices provided for herein shall be delivered (a) if to
the Borrower, to it at Continental Global Group, Inc., 438 Industrial Drive,
Winfield, Alabama 35594, Attention: President, and (b) if to the Holder, to it
at N.E.S. Investment Co., 6140 Parkland Boulevard, Mayfield Heights, Ohio 44124,
Attention: Robert Tomsich.

      7. MISCELLANEOUS. No failure or delay on the part of the Holder in
exercising any power or right hereunder, and no course of dealing between the
Borrower and the Holder of this Note, shall operate as a waiver thereof. Any
purported modification or waiver irrespective of the Borrower's consent of any
provision of this Note shall be void ab initio. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances. This Note shall inure to the
benefit of the Holder of this Note and the Borrower and their respective
successors and assigns and be binding upon the Holder of this Note and the
Borrower and their respective successors and assigns. This Note and the
agreements, documents and instruments executed in connection therewith,
constitute the entire understanding between the Borrower and the Holder with
respect to the subject matter hereof and supersede any prior agreements, written
or oral, with respect thereto.

      8. DESCRIPTIVE HEADINGS. Section headings appearing in this Note have been
inserted for convenience of reference only and shall be given no substantive
meaning or significance whatsoever in construing the terms and provisions of
this Note.

      9. SEPARABILITY. Should any provision of this Note be judicially declared
to be invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Note, and the parties hereto agree
that the provision of this Note so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom and the remainder will have the
same force and effectiveness as if such provision had never been included
herein, provided, however the parties hereto shall use their best efforts
replace the provision so deemed to have been stricken herefrom with a provision
that the parties reasonably believe to be valid and enforceable and which has a
substantially identical economic and legal effect as the provision so deemed to
have been stricken herefrom.

      10. TRANSFERABILITY. This Note may not be sold, assigned, pledged, or
otherwise transferred by the Holder without the prior written consent of the
Borrower.

      11. SUBORDINATION OF NOTE TO SENIOR INDEBTEDNESS. (a) All indebtedness
evidenced by this Note shall be subordinated and junior in right of payment to
the prior payment in full in cash of all amounts due under the Senior Debt.
Borrower and Holder agree that, except as provided in section 1(b) hereof, no
payment (whether directly, by purchase, redemption or exercise of any right of
setoff or otherwise) in respect of this Note, whether as principal, interest or
otherwise, and whether in cash, securities or property shall be made by or on
behalf of the Borrower or received, accepted or demanded, directly or
indirectly, by or on behalf of the Holder unless and until all Senior Debt has
been paid in full in cash. The term "Senior Debt" shall mean all of the
following:

                  (i) all obligations (the "Credit Agreement Obligations") of
any kind or nature, including but not limited to principal, interest, fees and
expenses, of the Borrower and any of its subsidiaries pursuant to the

                                                                 Promissory Note

                                       3

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Second Amended and Restated Credit Facility and Security Agreement, dated as of
October 4, 2004, among Bank One, NA ("Bank One"), Continental Conveyor &
Equipment Company ("Conveyor") and Goodman Conveyor Company ("Goodman");

                  (ii) all obligations (the "Note Obligations") of any kind or
nature, including but not limited to principal of and interest on the Borrower's
9% Series A Senior Secured Notes and 13% Series B Senior Secured Notes, fees and
expenses, of the Borrower and any of its subsidiaries pursuant to the Indenture,
dated as of October 4, 2004, among Wells Fargo Bank Minnesota, N.A., as trustee
(the "Trustee"), Borrower, Conveyor and Goodman;

                  (iii) all obligations of any kind or nature, including but not
limited to principal, interest, fees and expenses, of the Borrower and any of
its subsidiaries pursuant to any Refinancing Indebtedness. For the purposes of
this Note, the term "Refinancing Indebtedness" shall mean any indebtedness of
the Borrower or any of its subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace defease ore
refund any or all of the Credit Agreement Obligations and/or the Note
Obligations.

            (b) No cash payment or other distribution on account of the
indebtedness under this Note (other than as provided in section 1(b)) shall be
made by the Borrower unless full payment of amounts due or to become due under
the Senior Debt has been made or duly provided for by the Borrower.

            (c) Upon any payment or distribution of assets of the Borrower of
any kind or character, whether in money, property or securities, to creditors
upon any dissolution or winding up or total or partial liquidation or
reorganization of the Borrower, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Debt of the Borrower shall first be paid in full in
cash, before any payment is made on this Note; and upon any such declaration of
acceleration or dissolution or winding up or liquidation or reorganization, any
distribution of assets of the Borrower of any kind or character, whether in
money, property or securities, to which the Holder of this Note would be
entitled except for the provisions hereof shall be paid by the Borrower or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, or by the Holder of this Note if received
by it directly, to the holders of the Senior Debt, or their representatives, to
the extent necessary to pay all such Senior Debt in full in cash, after giving
effect to any concurrent payment or distribution to or for the benefit of the
holders of such Senior Debt, before any payment or distribution is made
hereunder to the Holder of this Note.

            (d) All rights and interests of the holders of Senior Debt
hereunder, and all agreements and obligations of the Borrower and Holder, shall
remain in full force and effect irrespective of:

                  (i) any lack of validity or enforceability of any instrument
or agreement evidencing the Senior Debt or delivered in conjunction therewith;

                  (ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Senior Debt, or any amendment or waiver
or other modification, whether by course of conduct or otherwise, of, or consent
to departure from, the terms of the Senior Debt as of the date hereof;

                  (iii) any exchange, release or nonperfection of any lien in
any collateral, or any release, amendment, waiver or other modification, whether
in writing or by course of conduct or otherwise, of or consent to departure
from, any guarantee of any of the Senior Debt; or

                  (iv) any other circumstances that might otherwise constitute a
defense available to, or a discharge of the Borrower or any of its subsidiaries
in respect of the Senior Debt, or of the Holder or the Borrower in respect of
this Note.

            (e) Subject to the prior payment in full in cash, of all Senior
Debt, the Holder of this Note shall be subrogated to the rights of the holders
of Senior Debt to receive payment or distributions of assets of the Borrower
applicable to the Senior Debt until this Note shall be paid in full, and no such
payment or distribution to

                                                                 Promissory Note

                                       4

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the holders of Senior Debt shall, as among the Borrower, its creditors other
than the holders of Senior Debt, and the Holder of this Note, be deemed to be a
payment by the Borrower to or on account of this Note.

      12. THIRD PARTY BENEFICIARIES. The Holder and the Borrower each
acknowledge and agree that Bank One, the Trustee, each of their respective
successors in interest and any holder, trustee, agent or representative with
respect to any Refinancing Indebtedness are and shall be third party
beneficiaries of the subordination provisions of this Note and of the obligation
of the parties hereto not to make or accept payments in cash in respect of the
obligations under this Note prior to the Maturity Date.

                            [SIGNATURE PAGE FOLLOWS]

                                                                 Promissory Note

                                       5

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      IN WITNESS WHEREOF, the Borrower has duly executed and delivered this Note
as of the date first written above.

                                        CONTINENTAL GLOBAL INC.

                                        By: ________________________________
                                            Name:
                                            Title:

                                                                 Promissory Note

                                      S-1Exhibit 4.1  Form of Subscription Agreement

                         VELOCITY ASSET MANAGEMENT, INC.

                             SUBSCRIPTION AGREEMENT

         The undersigned (hereinafter "Subscriber") hereby confirms his/her/its
subscription for the purchase of Units (the "Units" or "Securities"), each Unit
consists of (i) one share of common stock, par value $.001 per share (the
"Common Stock") of Velocity Asset Management, Inc., a Delaware corporation (the
"Company") and (ii) a warrant to purchase one-fifth of one share of Common Stock
(the "Warrant"), on the terms described below. Capitalized terms used and not
otherwise defined herein shall have the meanings set forth for such terms in the
Company's Confidential Term Sheet, dated as of August 23, 2004 (as amended or
supplemented, and together with all documents and filings attached thereto, the
"Memorandum").

         In connection with this subscription, Subscriber and the Company agree
as follows:

1.       Purchase and Sale of the Securities.
         -----------------------------------

         (a)      The Company hereby agrees to issue and to sell to Subscriber,
and Subscriber hereby agrees to purchase from the Company, the number of Units
at a price equal to $1.50 per Unit and for the aggregate subscription amount set
forth on the signature page hereto. Upon the acceptance of this Subscription
Agreement by the Company, the Company shall issue and deliver to Subscriber (or
the Escrow Agent if the Minimum Offering has not yet been satisfied) the
following: (i) a share certificate for shares of Common Stock and (ii) a Warrant
Agreement evidencing the right to purchase shares of Common Stock (each
evidencing the number of shares of Common Stock corresponding to the number of
Units subscribed for), against payment in U.S. Dollars of the Purchase Price (as
defined below) to the Company or if the Minimum Offering has not yet been
satisfied, to the Escrow Agent.

         (b)      Subscriber has hereby delivered and paid concurrently herewith
the purchase price (the "Purchase Price") set forth on the signature page hereof
required to purchase the Securities subscribed for hereunder which amount has
been paid in U.S. Dollars by cash, wire transfer or check, subject to
collection, to the order of "Brown Rudnick Berlack Israels LLP as Escrow Agent."

         (c)      Subscriber understands and acknowledges that this subscription
is part of a proposed placement by the Company of up to 3,500,000 Units or such
greater number as will result in net proceeds of $5,250,000, which offering is
being made on a "best efforts - all or none" basis for a minimum of 350,000
Units or such lesser number as will result in net proceeds of $525,000 (the
"Minimum Offering") and a maximum of 3,500,000 Units or such greater number as
will result in net proceeds of $5,250,000 (the "Maximum Offering"). Subscriber
understands that payments hereunder as to the Minimum Offering will be held in
an escrow account established by the Company, and released to the Company if the
Minimum Offering is reached within the Offering Period (as described in the
Memorandum) or any extended period. If the Minimum Offering is not obtained
within the Offering Period or any extended period, the funds held therein will
be returned to the investors without interest or deduction. Subscriber also
understands that all funds received hereunder after the Minimum Offering is
reached will be made immediately available to the Company.

2.       Representations and Warranties of Subscriber. Subscriber represents and
warrants to the Company as follows:

         (a)      Subscriber is an "accredited investor" as defined by Rule 501
under the Securities Act of 1933, as amended (the "Act"), and Subscriber is
capable of evaluating the merits and risks of Subscriber's investment in the
Company and has the capacity to protect Subscriber's own interests.

         (b)      Subscriber understands that the Securities are not presently
registered, but Subscriber is entitled to certain rights with respect to the
registration of the Units (see Section 5 below).

<PAGE>

         (c)      Subscriber acknowledges and understands that the Securities
are being purchased for investment purposes and not with a view to distribution
or resale, nor with the intention of selling, transferring or otherwise
disposing of all or any part thereof for any particular price, or at any
particular time, or upon the happening of any particular event or circumstances,
except selling, transferring, or disposing the Securities made in full
compliance with all applicable provisions of the Act, the rules and regulations
promulgated by the Securities and Exchange Commission ("SEC") thereunder, and
applicable state securities laws; and that an investment in the Securities is
not a liquid investment.

         (d)      Subscriber acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or unless an exemption
from such registration is available. Subscriber is aware of the provisions of
Rule 144 promulgated under the Act which permit limited resale of common stock
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the common stock, the availability of certain current public information about
the Company, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being effected through
a "broker's transaction" or in transactions directly with a "market maker" and
the number of shares of common stock being sold during any three-month period
not exceeding specified limitations.

         (e)      Subscriber acknowledges that Subscriber has had the
opportunity to ask questions of, and receive answers from the Company or any
person acting on its behalf concerning the Company and its business and to
obtain any additional information, to the extent possessed by the Company (or to
the extent it could have been acquired by the Company without unreasonable
effort or expense) necessary to verify the accuracy of the information received
by Subscriber. In connection therewith, Subscriber acknowledges that Subscriber
has had the opportunity to discuss the Company's business, management and
financial affairs with the Company's management or any person acting on its
behalf. Subscriber has received and reviewed the Memorandum, and all the
information, both written and oral, that it desires. Without limiting the
generality of the foregoing, Subscriber has been furnished with or has had the
opportunity to acquire, and to review, (i) copies of all of the Company's
publicly available documents, including but not limited to, those attached to
the Memorandum, and (ii) all information, both written and oral, that it desires
with respect to the Company's business, management, financial affairs and
prospects. In determining whether to make this investment, Subscriber has relied
solely on Subscriber's own knowledge and understanding of the Company and its
business based upon Subscriber's own due diligence investigations and the
information furnished pursuant to this paragraph. Subscriber understands that no
person has been authorized to give any information or to make any
representations which were not furnished pursuant to this paragraph and
Subscriber has not relied on any other representations or information.

         (f)      Subscriber has all requisite legal and other power and
authority to execute and deliver this Subscription Agreement and to carry out
and perform Subscriber's obligations under the terms of this Subscription
Agreement. This Subscription Agreement constitutes a valid and legally binding
obligation of Subscriber, enforceable in accordance with its terms, and subject
to laws of general application relating to bankruptcy, insolvency and the relief
of debtors and rules of law governing specific performance, injunctive relief or
other general principals of equity, whether such enforcement is considered in a
proceeding in equity or law.

         (g)      Subscriber has carefully considered and has discussed with the
Subscriber's professional legal, tax, accounting and financial advisors, to the
extent the Subscriber has deemed necessary, the suitability of this investment
and the transactions contemplated by this Subscription Agreement for the
Subscriber's particular federal, state, local and foreign tax and financial
situation and has determined that this investment and the transactions
contemplated by this Subscription Agreement are a suitable investment for the
Subscriber. Subscriber relies solely on such advisors and not on any statements
or representations of the Company or any of its agents. Subscriber understands
that Subscriber (and not the Company) shall be responsible for Subscriber's own
tax liability that may arise as a result of this investment or the transactions
contemplated by this Subscription Agreement.

         (h)      This Subscription Agreement does not contain any untrue
statement of a material fact concerning Subscriber.

         (i)      There are no actions, suits, proceedings or investigations
pending against Subscriber or Subscriber's properties before any court or
governmental agency (nor, to Subscriber's knowledge, is there any threat
<PAGE>

thereof) which would impair in any way Subscriber's ability to enter into and
fully perform Subscriber's commitments and obligations under this Subscription
Agreement or the transactions contemplated hereby.

         (j)      The execution, delivery and performance of and compliance with
this Subscription Agreement, and the issuance of the Securities will not result
in any material violation of, or conflict with, or constitute a material default
under, any of Subscriber's articles of incorporation or bylaws, if applicable,
or any of Subscriber's material agreements nor result in the creation of any
mortgage, pledge, lien, encumbrance or charge against any of the assets or
properties of Subscriber or the Securities.

         (k)      Subscriber acknowledges that the Securities are speculative
and involve a high degree of risk and that Subscriber can bear the economic risk
of the purchase of the Securities, including a total loss of his/her/its
investment.

         (l)      Subscriber acknowledges that he/she/it has carefully reviewed
and considered the risk factors discussed in the "Risk Factors" section of the
Memorandum.

         (m)      Subscriber recognizes that no federal, state or foreign agency
has recommended or endorsed the purchase of the Securities.

         (n)      Subscriber is aware that the Securities are and will be, when
issued, "restricted securities" as that term is defined in Rule 144 of the
general rules and regulations under the Act.

         (o)      Subscriber understands that any and all certificates
representing the Securities and any and all securities issued in replacement
thereof or in exchange therefor shall bear the following legend or one
substantially similar thereto, which Subscriber has read and understands:

         "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
         NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
         TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
         EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
         OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE."

         (p)      In addition, the certificates representing the Securities, and
any and all securities issued in replacement thereof or in exchange therefor,
shall bear such legend as may be required by the securities laws of the
jurisdiction in which Subscriber resides.

         (q)      Because of the restrictions imposed on resale, Subscriber
understands that the Company shall have the right to note stop-transfer
instructions in its stock transfer records, and Subscriber has been informed of
the Company's intention to do so. Any sales, transfers, or any other
dispositions of the Securities by Subscriber, if any, will be in compliance with
the Act.

         (r)      Subscriber acknowledges that Subscriber has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of an investment in the Securities and of making an
informed investment decision.

         (s)      Subscriber represents that (i) Subscriber is able to bear the
economic risks of an investment in the Securities and to afford the complete
loss of the investment; and (ii) (A) Subscriber could be reasonably assumed to
have the capacity to protect his/her/its own interests in connection with this
subscription; or (B) Subscriber has a pre-existing personal or business

<PAGE>

relationship with either the Company or any affiliate thereof of such duration
and nature as would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general business and financial circumstances of
the Company or such affiliate and is otherwise personally qualified to evaluate
and assess the risks, nature and other aspects of this subscription.

         (t)      Subscriber further represents that the address set forth below
is his/her principal residence (or, if Subscriber is a company, partnership or
other entity, the address of its principal place of business); that Subscriber
is purchasing the Securities for Subscriber's own account and not, in whole or
in part, for the account of any other person; Subscriber is purchasing the
Securities for investment and not with a view to resale or distribution; and
that Subscriber has not formed any entity for the purpose of purchasing the
Securities.

         (u)      Subscriber understands that the Company shall have the
unconditional right to accept or reject this subscription, in whole or in part,
for any reason or without a specific reason, in the sole and absolute discretion
of the Company (even after receipt and clearance of Subscriber's funds). This
Subscription Agreement is not binding upon the Company until accepted by an
authorized officer of the Company. In the event that the subscription is
rejected, then Subscriber's subscription funds will be returned without interest
thereon or deduction therefrom.

         (v)      Subscriber has not been furnished with any oral representation
or oral information in connection with the offering of the Securities that is
not contained in the Memorandum and this Subscription Agreement.

         (w)      Subscriber represents that Subscriber is not subscribing for
Securities as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over the Internet, television or radio or presented at any seminar or
meeting.

         (x)      Subscriber has carefully read this Subscription Agreement and
the Memorandum, and Subscriber has accurately completed the Purchaser
Questionnaire which accompanies this Subscription Agreement.

         (y)      No representations or warranties have been made to Subscriber
by the Company, or any officer, employee, agent, affiliate or subsidiary of the
Company, other than the representations of the Company contained herein, and in
subscribing for the Securities the Subscriber is not relying upon any
representations other than those contained in the Memorandum or in this
Subscription Agreement.

         (z)      Subscriber represents and warrants, to the best of its
knowledge, that other than the Placement Agent, no finder, broker, agent,
financial advisor or other intermediary, nor any purchaser representative or any
broker-dealer acting as a broker, is entitled to any compensation in connection
with the transactions contemplated by this Subscription Agreement.

3.       Representations, Warranties and Covenants of the Company. The Company
represents, warrants and covenants to Subscriber as follows:

         (a)      The Company is duly organized and validly exists as a
corporation in good standing under the laws of the State of Delaware.

         (b)      The Company has all such corporate power and authority to
enter into, deliver and perform this Subscription Agreement.

         (c)      All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of this
Subscription Agreement by the Company, and the issuance and sale of the
Securities to be sold by the Company pursuant to this Subscription Agreement.
This Subscription Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.

<PAGE>

4.       Indemnification. Subscriber agrees to indemnify and hold harmless the
Company, its officers, directors, employees, shareholders and affiliates, and
any person acting on behalf of the Company, from and against any and all damage,
loss, liability, cost and expense (including reasonable attorneys' fees) which
any of them may incur by reason of the failure by Subscriber to fulfill any of
the terms and conditions of this Subscription Agreement, or by reason of any
breach of the representations and warranties made by Subscriber herein, or in
any other document provided by Subscriber to the Company. All representations,
warranties and covenants of each of Subscriber and the Company contained herein
shall survive the acceptance of this subscription.

5.       Registration Rights. In consideration of the investment in the Company
described in this Agreement and the Memorandum, the Company hereby grants to the
Subscriber the registration rights set forth on Annex A attached hereto.

6.       Miscellaneous.
         -------------

         (a)      Subscriber agrees not to transfer or assign this Subscription
Agreement or any of Subscriber's interest herein and further agrees that the
transfer or assignment of the Securities acquired pursuant hereto shall be made
only in accordance with all applicable laws.

         (b)      Subscriber agrees that Subscriber cannot cancel, terminate, or
revoke this Subscription Agreement or any agreement of Subscriber made
hereunder, and this Subscription Agreement shall survive the death or legal
disability of Subscriber and shall be binding upon Subscriber's heirs,
executors, administrators, successors, and permitted assigns.

         (c)      Subscriber has read and has accurately completed this entire
Subscription Agreement.

         (d)      This Subscription Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and may be
amended only by a written execution by all parties.

         (f)      Subscriber acknowledges that it has been advised to consult
with his/her/its own attorney regarding this subscription and Subscriber has
done so to the extent that Subscriber deems appropriate.

         (g)      Any notice or other document required or permitted to be given
or delivered to the Subscriber shall be in writing and sent (i) by fax if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid) or (c) by a recognized
overnight delivery service (with charges prepaid).

                  If to the Company, at:

                  48 S. Franklin Turnpike
                  Ramsey, NJ  07446

Attn: John C. Kleinert
                  Tel: (201) 760-1030; Fax: ____-____________

     or such other address as it shall have specified to the Subscriber in
     writing, with a copy (which shall not constitute notice) to:

                  Brown Rudnick Berlack Israels LLP
                  120 W. 45th Street
                  New York, New York 10036
                  Attn:  Steven Saide, Esq.
                  Tel:  (212) 704-0100, Fax: (212) 704-0196

<PAGE>

     IF TO THE SUBSCRIBER, AT SUBSCRIBER'S ADDRESS SET FORTH ON THE SIGNATURE
     PAGE TO THIS SUBSCRIPTION AGREEMENT, OR SUCH OTHER ADDRESS AS SUBSCRIBER
     SHALL HAVE SPECIFIED TO THE COMPANY IN WRITING, WITH A COPY (WHICH SHALL
     NOT CONSTITUTE NOTICE) TO EACH OF THE FOLLOWING:

         (h)      Failure of the Company to exercise any right or remedy under
this Subscription Agreement or any other agreement between the Company and the
Subscriber, or otherwise, or delay by the Company in exercising such right or
remedy, will not operate as a waiver thereof. No waiver by the Company will be
effective unless and until it is in writing and signed by the Company.

         (i)      This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of New York,
as such laws are applied by the New York courts to agreements entered into and
to be performed in New York by and between residents of New York, and shall be
binding upon the Subscriber, the Subscriber's heirs, estate, legal
representatives, successors and assigns and shall inure to the benefit of the
Company, its successors and assigns.

         (j)      If any provision of this Subscription Agreement is held to be
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed modified to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provisions hereof.

         (k)      The parties understand and agree that money damages would not
be a sufficient remedy for any breach of the Subscription Agreement by the
Company or the Subscriber and that the party against which such breach is
committed shall be entitled to equitable relief, including injunction and
specific performance, as a remedy for any such breach. Such remedies shall not
be deemed to be the exclusive remedies for a breach by either party of the
Subscription Agreement but shall be in addition to all other remedies available
at law or equity to the party against which such breach is committed.

         (l)      All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, singular or plural, as identity of
the person or persons may require.

         (m)      This Subscription Agreement may be executed in counterparts
and by facsimile, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.

                            [Signature Pages Follow]

<PAGE>

Signature Page for Individuals:

         IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement
to be executed as of the date indicated below.

$
  --------------------------                -----------------------------
   Purchase Price                           Number of Units

----------------------------------------
Print or Type Name

----------------------------------------
Signature

----------------------------------------
Date

----------------------------------------
Social Security Number (if applicable)

------------------------------------------------------------------------------
Address

Please check if applicable and include co-owner's information below (name,
address, social security number):

                    Joint Tenancy                      Tenants in Common
            -------                             ------

---------------------------------------

---------------------------------------

---------------------------------------

---------------------------------------

                                      S-1
<PAGE>

Partnerships, Corporations or Other Entities:

         IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement
to be executed as of the date indicated below.

$
  --------------------------                -----------------------------
   Purchase Price                           Number of Units

------------------------------------
Print or Type Name of Entity

------------------------------------------------------------------------------
Address

------------------------------------        ------------------------------------
Taxpayer I.D. No. (if applicable)           Date

------------------------------------        ------------------------------------
Signature                                     Print or Type Name and Indicate
                                              Title or Position with Entity

                                      S-1
<PAGE>

Disposition of Subscription Agreement

         IN WITNESS WHEREOF, the Company has caused this Subscription Agreement
to be executed, and the foregoing subscription accepted, as of the date
indicated below.

                                            VELOCITY ASSET MANAGEMENT, INC.

                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                           Date:               , 2004
                                 ---------- ---

                                      S-2
<PAGE>

                                               Annex A to Subscription Agreement
                                               ---------------------------------

                               REGISTRATION RIGHTS
                               -------------------

         1.       Definitions.
                  -----------

         Capitalized terms used herein without definition shall have the
respective meanings given such terms as set forth in the Subscription Agreement
dated as of _____________ __, 2004 between Velocity Asset Management, Inc. and
the investor signatory thereto (the "Subscription Agreement"). As used herein,
the following terms shall have the following meanings:

                  Business Day: Any day other than a day on which banks are
                  authorized or required to be closed in the State of New York.

                  Commission: The Securities and Exchange Commission.

                  Common Stock: The shares of common stock, par value $.001 per
                  share, of the Company.

                  Exchange Act: The Securities Exchange Act of 1934, as amended,
                  and the rules and regulations of the Commission promulgated
                  thereunder.

                  Holder or Holders: Any holder of the Registrable Securities.

                  Person: Any individual, corporation, partnership, joint
                  venture, association, joint stock company, trust,
                  unincorporated organization or government or other agency or
                  political subdivision thereof.

                  Prospectus: The prospectus included in any Registration
                  Statement (including, without limitation, a prospectus that
                  discloses information previously omitted from a prospectus
                  filed as part of an effective registration statement in
                  reliance upon Rule 430A promulgated under the Securities Act),
                  as amended or supplemented by any prospectus supplement, with
                  respect to the terms of the offering of any portion of the
                  Registrable Securities covered by such Registration Statement,
                  and all other amendments and supplements to the prospectus,
                  including post-effective amendments, and all material
                  incorporated by reference or deemed to be incorporated by
                  reference in such prospectus.

                  Registrable Securities: The shares of Common Stock issued
                  pursuant to the Subscription Agreement and shares of Common
                  Stock issuable upon the exercise of the Warrants issued
                  pursuant to the Subscription Agreement, until such time as (i)
                  a Registration Statement covering such Registrable Securities
                  has been declared effective by the Commission and such
                  Registrable Securities have been disposed of pursuant to such
                  effective Registration Statement or (ii) such Registrable
                  Securities are saleable pursuant to Rule 144 (or any similar
                  provision then in force) under the Securities Act, whichever
                  is earlier.

<PAGE>

                  Registration Statement: Any registration statement of the
                  Company that covers any of the Registrable Securities pursuant
                  to the provisions of this Agreement, including the Prospectus,
                  amendments and supplements to such registration statements,
                  including post effective amendments, all exhibits, and all
                  material incorporated by reference or deemed to be
                  incorporated by reference in such registration statement.

                  Securities Act: The Securities Act of 1933, as amended, and
                  the rules and regulations of the Commission promulgated
                  thereunder.

         2.       Demand Registration. The Company hereby agrees to register the
         Registrable Securities in accordance with the following terms and
         provisions:

                  (a)      The Company will undertake to cause the Registrable
                  Securities to be registered with the Securities and Exchange
                  Commission (the "SEC") pursuant to the Securities Act of 1933,
                  or any similar federal statute, and the rules and regulations
                  of the SEC thereunder, all as the same shall be in effect at
                  the time (the "Securities Act").

                  (b)      In the event that (i) the Company shall fail to file
                  a registration statement covering the Registrable Shares with
                  the SEC under the Securities Act pursuant to this Agreement on
                  or before the 45th day after the final closing or termination
                  of the offering pursuant to which the Registrable Securities
                  were issued and/or (ii) the registration statement covering
                  the Registrable Shares has not been declared effective by the
                  SEC on or before the 180th day after the final closing or
                  termination of the offering pursuant to which the Registrable
                  Securities were issued, the Company shall be in default to the
                  Holder under this Agreement (a "Registration Rights Default").

                  (c)      The Company recognizes and agrees that the Holder
                  will not have an adequate remedy if there shall occur a
                  Registration Rights Default and that damages resulting
                  therefrom may not be readily ascertainable. Therefore, the
                  Company expressly agrees that, in the event of a Registration
                  Rights Default:

                           (i)      it shall not oppose an application by the
                           Holder requiring specific performance of any and all
                           provisions hereof or enjoining the Company from
                           continuing to commit any such breach of this
                           Agreement; and

                           (ii)     as liquidated damages the Company shall
                           issue to the Holders a number of shares of Common
                           Stock equal to one percent (1%) of the number shares
                           of Common Stock included in the Unit purchased by
                           such subscriber per full month from and after the
                           date of a Registration Rights Default until such time
                           as the Registrable Securities have been registered as
                           required by this Section 2.

         3.       Registration Procedures.
                  -----------------------

                  In connection with the registration obligations of the Company
pursuant to the terms and conditions of this Agreement, the Company shall:

<PAGE>

                  (a)      prior to filing a Registration Statement or
                  Prospectus or any amendments or supplements thereto, including
                  documents incorporated by reference after the initial filing
                  of the Registration Statement, the Company will furnish to the
                  Holders covered by such Registration Statement (the "Selling
                  Holders"), Holders' Counsel and the underwriters, if any,
                  draft copies of all such documents proposed to be filed at
                  least three (3) Business Days prior thereto, which documents
                  will be subject to the review of such Holders' Counsel and the
                  underwriters, if any, and the Company will not, unless
                  required by law, file any Registration Statement or amendment
                  thereto or any Prospectus or any supplement thereto (including
                  such documents incorporated by reference) to which Selling
                  Holders of at least a majority of the Registrable Securities
                  (the "Objecting Party") shall object, pursuant to notice given
                  to the Company prior to the filing of such amendment or
                  supplement (the "Objection Notice"). The Objection Notice
                  shall set forth the objections and the specific areas in the
                  draft documents where such objections arise. The Company shall
                  have five (5) Business Days after receipt of the Objection
                  Notice to correct such deficiencies to the satisfaction of the
                  Objecting Party, and will notify each Selling Holder of any
                  stop order issued or threatened by the Commission in
                  connection therewith and take all reasonable actions required
                  to prevent the entry of such stop order or to remove it if
                  entered;

                  (b)      as promptly as practicable prepare and file with the
                  Commission such amendments and post-effective amendments to
                  the Registration Statement as may be necessary to keep such
                  Registration Statement effective for a reasonable period;
                  cause the Prospectus to be supplemented by any required
                  Prospectus supplement, and, as so supplemented, to be filed
                  pursuant to Rule 424 under the Securities Act; and comply with
                  the provisions of the Securities Act applicable to it with
                  respect to the disposition of all Registrable Securities
                  covered by such Registration Statement during the applicable
                  period in accordance with the intended methods of disposition
                  by the Selling Holders set forth in such Registration
                  Statement or supplement to the Prospectus;

                  (c)      as promptly as practicable furnish to any Selling
                  Holder and the underwriters, if any, without charge, such
                  number or conformed copies of such Registration Statement and
                  any post-effective amendment thereto and such number of copies
                  of the Prospectus (including each preliminary Prospectus) and
                  any amendments or supplements thereto, and any documents
                  incorporated by reference therein, as such Selling Holder or
                  underwriter may reasonably request in order to facilitate the
                  disposition of the Registrable Securities being sold by such
                  Selling Holder (it being understood that the Company consents
                  to the use of the Prospectus and any amendment or supplement
                  thereto by each Selling Holder and the underwriters, if any,
                  in connection with the offering and sale of the Registrable
                  Securities covered by the Prospectus or any amendment or
                  supplement thereto); provided, that before filing a
                  Registration Statement or Prospectus relating to the
                  Registrable Securities or any amendments or supplements
                  thereto, the Company will furnish to Holders' Counsel copies
                  of all documents proposed to be filed at least three (3)
                  Business Days prior to the filing thereof, which documents
                  will be subject to the review of such counsel;

<PAGE>

                  (d)      on or prior to the date on which the Registration
                  Statement is declared effective, register or qualify such
                  Registrable Securities under such other securities or "blue
                  sky" laws of such jurisdictions as any Selling Holder,
                  Holders' Counsel or underwriter reasonably requests and do any
                  and all other acts and things which may be necessary or
                  advisable to enable such Selling Holder to consummate the
                  disposition in such jurisdictions of such Registrable
                  Securities owned by such Selling Holder; keep each such
                  registration or qualification (or exemption therefrom)
                  effective during the period which the Registration Statement
                  is required to be kept effective; and do any and all other
                  acts or things reasonably necessary or advisable to enable the
                  disposition in such jurisdictions of the Registrable
                  Securities covered by the applicable Registration Statement;
                  provided that the Company shall not be required to (i) qualify
                  to do business as a foreign corporation or as a broker-dealer
                  in any jurisdiction where it is not then so qualified or (ii)
                  take any action which would subject it to general service of
                  process or to taxation in any jurisdiction where it is not
                  then so subject;

                  (e)      cause the Registrable Securities covered by such
                  Registration Statement to be registered with or approved by
                  such other governmental agencies or authorities as may be
                  necessary by virtue of the business and operations of the
                  Company to enable the Selling Holders to consummate the
                  disposition of such Registrable Securities;

                  (f)      as promptly as practicable notify each Selling
                  Holder, Holders' Counsel and any underwriter and (if requested
                  by any such Person) confirm such notice in writing, (i) when a
                  Prospectus or any Prospectus supplement or post-effective
                  amendment has been filed and, with respect to a Registration
                  Statement or any post-effective amendment, when the same has
                  become effective, (ii) of any request by the Commission or any
                  other federal or state governmental authority for amendments
                  or supplements to a Registration Statement or related
                  Prospectus or for additional information to be included in any
                  Registration Statement or Prospectus or otherwise, (iii) of
                  the issuance by the Commission of any stop order suspending
                  the effectiveness of a Registration Statement or the
                  initiation or threatening of any proceedings for that purpose,
                  (iv) of the issuance by any state securities commission or
                  other regulatory authority of any order suspending the
                  qualification or exemption from qualification of any of the
                  Registrable Securities under state securities or "blue sky"
                  laws or the initiation of any proceedings for that purpose and
                  (v) of the happening of any event which makes any statement
                  made in a Registration Statement or related Prospectus or any
                  document incorporated or deemed to be incorporated by
                  reference therein untrue or which requires the making of any
                  changes in such Registration Statement, Prospectus or
                  documents so that they will not contain any untrue statement
                  of a material fact or omit to state any material fact required
                  to be stated therein or necessary to make the statements
                  therein not misleading; and, as promptly as practicable
                  thereafter, prepare and file with the Commission and furnish a
                  supplement or amendment to such Prospectus so that, as
                  thereafter deliverable to the purchasers of such Registrable
                  Securities, such Prospectus will not contain any untrue
                  statement of a material fact or omit to state a material fact
                  necessary to make the statements therein, in light of the
                  circumstances under which they were made, not misleading;

<PAGE>

                  (g)      make generally available to the Holders an earnings
                  statement satisfying the provisions of Section 10 (a) of the
                  Securities Act no later than thirty (30) days after the end of
                  the 12-month period beginning with the first day of the
                  Company's first fiscal quarter commencing after the effective
                  date of a Registration Statement;

                  (h)      use its reasonable efforts to prevent the issuance of
                  any order suspending the effectiveness of a Registration
                  Statement, and, if one is issued, to obtain the withdrawal of
                  any order suspending the effectiveness of a Registration
                  Statement at the earliest possible moment;

                  (i)      as promptly as practicable after filing with the
                  Commission of any document which is incorporated by reference
                  into a Registration Statement, deliver a copy of such document
                  to Holders' Counsel;

                  (j)      cooperate with the Selling Holders and the managing
                  underwriter or underwriters, if any, to facilitate the timely
                  preparation and delivery of certificates (which shall not bear
                  any restrictive legends and shall be in a form eligible for
                  deposit with the Depository Trust Company) representing
                  securities sold under such Registration Statement, and enable
                  such securities to be in such denominations and registered in
                  such names as the managing underwriter or underwriters, if
                  any, or such Selling Holders may request and make available
                  prior to the effectiveness of such Registration Statement a
                  supply of such certificates;

                  Each Selling Holder, upon receipt of any notice from the
         Company of the happening of any event of the kind described in
         subsection (f) of this Section 3, shall forthwith discontinue
         disposition of the Registrable Securities until such Selling Holder's
         receipt of the copies of the supplemented or amended Prospectus
         contemplated by subsection (f) of this Section 3 or until it is advised
         in writing (the "Advice") by the Company that the use of the Prospectus
         may be resumed, and has received copies of any additional or
         supplemental filings which are incorporated by reference in the
         Prospectus, and, if so directed by the Company, such Selling Holder
         will, or will request the managing underwriter or underwriters, if any,
         to, deliver to the Company (at the Company's expense) all copies, other
         than permanent file copies then in such Selling Holder's possession, of
         the Prospectus covering such Registrable Securities current at the time
         of receipt of such notice. In the event that the Company shall give any
         such notice, the time periods for which a Registration Statement is
         required to be kept effective shall be extended by the number of days
         during the period from and including the date of the giving of such
         notice to and including the date when each Selling Holder shall have
         received (i) the copies of the supplemented or amended Prospectus
         contemplated by Section 3(f) or (ii) the Advice.

         4.       Registration Expenses.
                  ---------------------

                           All expenses incident to the Company's performance
                  of, or compliance with, the provisions hereof, including
                  without limitation, all Commission and securities exchange or
                  NASD registration and filing fees, fees and expenses of
                  compliance with securities or "blue sky" laws (including fees
                  and disbursements of counsel in connection with "blue sky"
                  qualifications of the Registrable Securities), printing
                  expenses, messenger and delivery expenses, internal expenses
                  (including, without limitation, all salaries and expenses of

<PAGE>

                  the Company's officers and employees performing legal or
                  accounting duties), fees and expenses incurred in connection
                  with the listing of the securities to be registered, if any,
                  on each securities exchange on which similar securities issued
                  by the Company are then listed, fees and disbursements of
                  counsel for the Company and its independent certified public
                  accountants (including the expense of any special audit or
                  "cold comfort" letters required by, or incident to, such
                  performance), Securities Act liability insurance (if the
                  Company elects to obtain such insurance), reasonable fees and
                  expenses of any special experts retained by the Company in
                  connection with such registration, fees and expenses of other
                  Persons retained by the Company in connection with each
                  registration hereunder (but not including the fees and expense
                  of legal counsel retained by a Holder or Holders, or any
                  underwriting fees, discounts or commissions attributable to
                  the sale of Registrable Securities) are herein called
                  "Registration Expenses."

                           The Company will pay all Registration Expenses in
                  connection with each Registration Statement filed pursuant to
                  Section 2 except as otherwise set forth therein. All expenses
                  to be borne by the Holders in connection with any Registration
                  Statement filed pursuant to Section 2 (including, without
                  limitation, all underwriting fees, discounts or commissions
                  attributable to such sale of Registrable Securities) shall be
                  borne by the participating Holders pro rata in relation to the
                  number of shares of Registrable Securities to be registered by
                  each Holder.

         5.       Indemnification; Contribution.
                  -----------------------------

                  (a)      Indemnification by the Company. The Company agrees to
                  indemnity and hold harmless, to the full extent permitted by
                  law, each Holder, its officers, directors and each Person who
                  controls such Holder (within the meaning of the Securities
                  Act), and any agent or investment adviser thereof, against all
                  losses, claims, damages, liabilities and expenses (including
                  reasonable attorneys' fees and costs of investigation) arising
                  out of or based upon any untrue or alleged untrue statement of
                  material fact contained in any Registration Statement, any
                  amendment or supplement thereto, any Prospectus or preliminary
                  Prospectus or any omission or alleged omission to state
                  therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading,
                  except insofar as the same arise out of or are based upon any
                  such untrue statement or omission based upon information with
                  respect to such Holder furnished in writing to the Company by
                  or on behalf of such Holder expressly for use therein;
                  provided that, in the event that the Prospectus shall have
                  been amended or supplemented and copies thereof as so amended
                  or supplemented, shall have been furnished to a Holder prior
                  to the confirmation of any sales of Registrable Securities,
                  such indemnity with respect to the Prospectus shall not inure
                  to the benefit of such Holder if the Person asserting such
                  loss, claim, damage or liability and who purchased the
                  Registrable Securities from such holder did not, at or prior
                  to the confirmation of the sale of the Registrable Securities
                  to such Person, receive a copy of the Prospectus as so amended
                  or supplemented and the untrue statement or omission of a
                  material fact contained in the Prospectus was corrected in the
                  Prospectus as so amended or supplemented.

<PAGE>

                           (b)      Indemnification by Holders of Registrable
                  Securities. In connection with any Registration Statement in
                  which a Holder is participating, each such Holder will furnish
                  to the Company in writing such information with respect to the
                  name and address of such Holder and such other information as
                  may be reasonably required for use in connection with any such
                  Registration Statement or Prospectus and agrees to indemnity,
                  to the full extent permitted by law, the Company, its
                  directors and officers and each Person who controls the
                  Company (within the meaning of the Securities Act) against any
                  losses, claims, damages, liabilities and expenses resulting
                  from any untrue statement of a material fact or any omission
                  of a material fact required to be stated in the Registration
                  Statement or Prospectus or any amendment thereof or supplement
                  thereto or necessary to make the statements therein not
                  misleading, to the extent, but only to the extent, that such
                  untrue or alleged untrue statement is contained in or such
                  omission or alleged omission relates to any information with
                  respect to such Holder so furnished in writing by such Holder
                  specifically for inclusion in any Prospectus or Registration
                  Statement; provided, however, that such Holder shall not be
                  liable in any such case to the extent that prior to the filing
                  of any such Registration Statement or Prospectus or amendment
                  thereof or supplement thereto, such Holder has furnished in
                  writing to the Company information expressly for use in such
                  Registration Statement or Prospectus or any amendment thereof
                  or supplement thereto which corrected or made not misleading
                  information previously furnished to the Company. In no event
                  shall the liability of any Selling Holder hereunder be greater
                  in amount than the dollar amount of the proceeds received by
                  such Selling Holder upon the sale of the Registrable
                  Securities giving rise to such indemnification obligation.

                  (c)      Conduct of Indemnification Proceedings. Any Person
                  entitled to indemnification hereunder agrees to give prompt
                  written notice to the indemnifying party after the receipt by
                  such Person of any written notice of the commencement of any
                  action, suit, proceeding or investigation or threat thereof
                  made in writing for which such Person will claim
                  indemnification or contribution pursuant to the provisions
                  hereof and, unless in the judgment of counsel of such
                  indemnified party a conflict of interest may exist between
                  such indemnified party and the indemnifying party with respect
                  to such claim, permit the indemnifying party to assume the
                  defense of such claim. Whether or not such defense is assumed
                  by the indemnifying party, the indemnifying party will not be
                  subject to any liability for any settlement made without its
                  consent (but such consent will not be unreasonably withheld).
                  No indemnifying party will consent to entry of any judgment or
                  enter into any settlement which does not include as an
                  unconditional term thereof the giving by the claimant or
                  plaintiff to such indemnified party of a release from all
                  liability in respect of such claim or litigation. If the
                  indemnifying party is not entitled to, or elects not to,
                  assume the defense of a claim, it will not be obligated to pay
                  the fees and expenses of more than one counsel (plus such
                  local counsel, if any, as may be reasonably required in other
                  jurisdictions) with respect to such claim, unless in the
                  judgment of any indemnified party a conflict of interest may
                  exist between such indemnified party and any other of such
                  indemnified parties with respect to such claim, in which event
                  the indemnifying party shall be obligated to pay the fees and
                  expenses of such additional counsel or counsels. For the
                  purposes of this Section 5(c), the term "conflict of interest"
                  shall mean that there are one or more legal defenses available

<PAGE>

                  to the indemnified party that are different from or additional
                  to those available to the indemnifying party or such other
                  indemnified parties, as applicable, which different or
                  additional defenses make joint representation inappropriate.

                  (d)      Contribution. If the indemnification from the
                  indemnifying party provided for in this Section 5 is
                  unavailable to an indemnified party hereunder in respect of
                  any losses, claims, damages, liabilities or expenses referred
                  to therein, then the indemnifying party, in lieu of
                  indemnifying such indemnified party, shall contribute to the
                  amount paid or payable by such indemnified party as a result
                  of such losses, claims, damages, liabilities or expenses in
                  such proportion as is appropriate to reflect the relative
                  fault of the indemnifying party and indemnified parties in
                  connection with the actions which resulted in such losses,
                  claims, damages, liabilities or expenses, as well as any other
                  relevant equitable considerations. The relative fault of such
                  indemnifying party and indemnified parties shall be determined
                  by reference to, among other things, whether any action in
                  question, including any untrue or alleged untrue statement of
                  a material fact, has been made by, or relates to information
                  supplied by, such indemnifying party or indemnified parties,
                  and the parties intent, knowledge, access to information and
                  opportunity to correct or prevent such action. The amount paid
                  or payable by a party as a result of the losses, claims,
                  damages, liabilities and expenses referred to above shall be
                  deemed to include, subject to the limitations set forth in
                  Section 5(c), any reasonable legal or other fees or expenses
                  reasonably incurred by such party in connection with any
                  investigation or proceeding.

                  The parties hereto agree that it would not be just and
                  equitable if contribution pursuant to this Section 5(d) were
                  determined by pro rata allocation or by any other method of
                  allocation which does not take account of the equitable
                  considerations referred to in the immediately preceding
                  paragraph. Notwithstanding the provisions of this Section
                  5(d), no underwriter shall be required to contribute any
                  amount in excess of the amount by which the total price at
                  which the Registrable Securities underwritten by it and
                  distributed to the public were offered to the public exceeds
                  the amount of any damages which such underwriter has otherwise
                  been required to pay by reason of such untrue or alleged
                  untrue statement or omission or alleged omission, and no
                  Selling Holder shall be required to contribute any amount in
                  excess of the amount by which the total price at which the
                  Registrable Securities of such Selling Holder were offered to
                  the public exceeds the amount of any damages which such
                  Selling Holder has otherwise been required to pay by reason of
                  such untrue statement or omission. No Person guilty of
                  fraudulent misrepresentation (within the meaning of Section I
                  l(f) of the Securities Act) shall be entitled to contribution
                  from any person who was not guilty of such fraudulent
                  misrepresentation.

                  (e)      If indemnification is available under this Section 5,
                  the indemnifying parties shall indemnity each indemnified
                  party to the full extent provided in Sections 5(a) and (b)
                  without regard to the relative fault of said indemnifying
                  party or indemnified party or any other equitable
                  consideration provided for in this Section 5(d).

<PAGE>

         6.       Participation in Underwritten Registrations.
                  -------------------------------------------

                  No Holder may participate in any underwritten registration
         hereunder unless such Holder (a) agrees to sell its Registrable
         Securities on the basis provided in any underwriting arrangements
         approved by the Persons entitled hereunder to approve such arrangements
         and (b) completes and executes all questionnaires, powers of attorney,
         indemnities, underwriting agreements and other documents reasonably
         required under the terms of such underwriting arrangements.

         7.       Transfer of Rights.
                  ------------------

                  The rights to cause the Company to register Registrable
         Securities granted pursuant to the provisions hereof may be transferred
         or assigned by any Holder to a transferee or assignee; provided;
         however, that the transferee or assignee of such rights assumes the
         obligations of such transferor or assignor, as the case may be,
         hereunder.

         8.       Amendment
                  ---------

                  Except as otherwise provided herein, the provisions hereof may
         not be amended, modified or supplemented, and waivers or consents to
         departures from the provisions hereof may not be given unless the
         Company has obtained the written consent of Holders of at least a
         majority of the aggregate number of the Registrable Securities then
         outstanding.

<PAGE>

                                                                       Exhibit B

                        ACCREDITED INVESTOR QUESTIONNAIRE

<PAGE>

                             PURCHASER QUESTIONNAIRE

                         VELOCITY ASSET MANAGEMENT, INC.

                      An offering of up to 3,500,000 Units
    Each Unit consists of one share of Common Stock and a Warrant to purchase
                           1/5th share of Common Stock
                         Offering Price: $1.50 per Unit

                    Return by mail or overnight delivery to:

                       48 S. Franklin Turnpike, 3rd Floor
                                Ramsey, NJ 07446

                           Attention: John C. Kleinert

                                      S-2
<PAGE>

                             PURCHASER QUESTIONNAIRE

                         VELOCITY ASSET MANAGEMENT, INC.

THIS QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED ALONG WITH YOUR COMPLETED
SUBSCRIPTION AGREEMENT IN CONNECTION WITH YOUR PROSPECTIVE PURCHASE OF
SECURITIES FROM VELOCITY ASSET MANAGEMENT, INC. (THE "COMPANY").

         THE INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT
CONFIDENCE. NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT THAT SUCH
DISCLOSURE IS REQUIRED BY LAW OR REGULATION, OTHERWISE DEMANDED BY PROPER LEGAL
PROCESS OR IN LITIGATION INVOLVING THE COMPANY AND ITS CONTROLLING PERSONS.

         (1)      The undersigned represents and warrants that he, she or it
comes within at least one category marked below, and that for any category
marked, he, she or it has truthfully set forth, where applicable, the factual
basis or reason the undersigned comes within that category. The undersigned
agrees to furnish any additional information which the Company deems necessary
in order to verify the answers set forth below.

Category A ____            The undersigned is an individual (not a partnership,
                           corporation, etc.) whose individual net worth, or
                           joint net worth with his or her spouse, presently
                           exceeds $1,000,000.

     Explanation. In calculating net worth you may include equity in personal
     property and real estate, including your principal residence, cash,
     short-term investments, stock and securities. Equity in personal property
     and real estate should be based on the fair market value of such property
     less debt secured by such property.

Category B ____            The undersigned is an individual (not a partnership,
                           corporation, etc.) who had an income in excess of
                           $200,000 in each of the two most recent years, or
                           joint income with his or her spouse in excess of
                           $300,000 in each of those years (in each case
                           including foreign income, tax exempt income and full
                           amount of capital gains and losses but excluding any
                           income of other family members and any unrealized
                           capital appreciation) and has a reasonable
                           expectation of reaching the same income level in the
                           current year.

Category C ____            The undersigned is a director or executive officer of
                           the Company which is issuing and selling the
                           Securities (as defined in the Company's Subscription
                           Agreement delivered along with this Purchaser
                           Questionnaire (the "Subscription Agreement")).

Category D ____            The undersigned is a bank, as defined in Section
                           3(a)(2) of the Securities Act of 1933, as amended
                           (the "Act"); a savings and loan association or other
                           institution as defined in Section 3(a)(5)(A) of the
                           Act, whether acting in its individual or fiduciary
                           capacity; any insurance company as defined in Section
                           2(13) of the Act; any investment company registered
                           under the Investment Company Act of 1940 or a
                           business development company as defined in Section
                           2(a)(48) of that Act; any Small Business Investment
                           Company licensed by the U.S. Small Business
                           Administration under Section 301(c) or (d) of the
                           Small Business Investment Act of 1958; any plan
                           established and maintained by a state, its political
                           subdivisions, or any agency or instrumentality of a
                           state or its political subdivisions, for the benefit
                           of its employees, if such plan has total assets in
                           excess of $5,000,000; any employee benefit plan
                           within the meaning of the Employee Retirement Income
                           Security Act of 1974 if the investment decision is
                           made by a plan fiduciary, as defined in Section 3(21)
                           of such act, which is either a bank, savings and loan
                           association, insurance company, or registered
                           investment advisor, or if the employee benefit plan
                           has total assets in excess of $5,000,000 or, if a
                           self-directed plan, with investment decisions made
                           solely by persons that are accredited investors
                           (describe entity).

                                       1
<PAGE>

                           -----------------------------------------------------

                           -----------------------------------------------------

Category E ____            The undersigned is a private business development
                           company as defined in section 202(a) (22) of the
                           Investment Advisors Act of 1940. (describe entity)

                           -----------------------------------------------------

                           -----------------------------------------------------

Category F ____            The undersigned is either a corporation, partnership,
                           Massachusetts business trust, or non-profit
                           organization within the meaning of Section 501(c)(3)
                           of the Internal Revenue Code, in each case not formed
                           for the specific purpose of acquiring the Securities
                           and with total assets in excess of $5,000,000.
                           (describe entity)

                           -----------------------------------------------------

                           -----------------------------------------------------

Category G ____            The undersigned is a trust with total assets in
                           excess of $5,000,000, not formed for the specific
                           purpose of acquiring the Securities, where the
                           purchase is directed by a "sophisticated investor" as
                           defined in Regulation 506(b)(2)(ii) under the Act.

Category H ____            The undersigned is an entity (other than a trust)
                           in which all of the equity owners are "accredited
                           investors" within one or more of the above
                           categories. If relying upon this Category alone, each
                           equity owner must complete a separate copy of this
                           Purchaser Questionnaire. (describe entity)

                           -----------------------------------------------------

                           -----------------------------------------------------

                           The undersigned agrees that the undersigned will
                           notify the Company at any time on or prior to the
                           Closing (as defined in the Company's ____________,
                           dated __________, relating to the issuance of
                           securities) in the event that the representations and
                           warranties in this Purchaser Questionnaire shall
                           cease to be true, accurate and complete.

         (2)      Suitability (please answer each question)

                  (a)      For an individual, please describe your current
                           employment, including the company by which you are
                           employed and its principal business:

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  (b)      For an individual, please describe any college or
                           graduate degrees held by you:

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  (c)      For all subscribers, please list types of prior
                           investments:

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                                       2
<PAGE>

                  (d)      For all subscribers, please state whether you have
                           you participated in other private placements before:

                           YES                         NO
                               ----------                 ---------

                  (e)      If your answer to question (d) above was "YES",
                           please indicate frequency of such prior participation
                           in private placements of:

                                                Public             Private
                                               Companies          Companies
                                           -----------------  ------------------
                           Frequently
                                           -----------------  ------------------
                           Occasionally
                                           -----------------  ------------------
                           Never
                                           -----------------  ------------------

                  (f)      For individuals, do you expect your current level of
                           income to significantly decrease in the foreseeable
                           future?

                           YES                         NO
                               ----------                 ---------

                   (g)      For trust, corporate, partnership and other
                            institutional subscribers, do you expect your total
                            assets to significantly decrease in the foreseeable
                            future?

                           YES                         NO
                               ----------                 ---------

                   (h)     For all subscribers, do you have any other
                           investments or contingent liabilities which you
                           reasonably anticipate could cause you to need sudden
                           cash requirements in excess of cash readily available
                           to you?

                           YES                         NO
                               ----------                 ---------

                   (i)     For all subscribers, are you familiar with the risk
                           aspects and the non-liquidity of investments such as
                           the Securities for which you seek to purchase?

                           YES                         NO
                               ----------                 ---------

                   (j)     For all subscribers, do you understand that there is
                           no guarantee of financial return on this investment
                           and that you run the risk of losing your entire
                           investment?

                           YES                         NO
                               ----------                 ---------

         (3)      Manner in which title is to be held: (circle one)

                  (a)      Individual Ownership
                  (b)      Community Property
                  (c)      Joint Tenant with Right of Survivorship (both parties
                           must sign)
                  (d)      Partnership
                  (e)      Tenants in Common
                  (f)      Company
                  (g)      Trust
                  (h)      Other

                                       3
<PAGE>

         (4)      NASD Affiliation.

                  Are you affiliated or associated with an NASD member firm
                  (please check one):

                  YES                         NO
                      ----------                 ---------

                  If Yes, please describe:

                  ---------------------------------------------------------

                  ---------------------------------------------------------

                  ---------------------------------------------------------

                  *If subscriber is a Registered Representative with an NASD
                  member firm, have the following acknowledgment signed by the
                  appropriate party:

                  The undersigned NASD member firm acknowledges receipt of the
                  notice required by Article 3, Sections 28(a) and (b) of the
                  Rules of Fair Practice.

                  ---------------------------------
                  Name of NASD Member Firm

                  By:
                      ------------------------------
                           Authorized Officer

                  Date:
                        ----------------------------

                  [Remainder of page intentionally left blank]

                                       4
<PAGE>

         The undersigned is informed of the significance to the Company of the
foregoing representations and answers contained in this Purchaser Questionnaire
and such answers have been provided under the assumption that the Company will
rely on them.

                                                Individual

Date:
      --------------------------           --------------------------------
                                                Name of Individual
                                                (Please type or print)

                                                -------------------------------
                                                Signature of Individual

                                                Partnership, Corporation or
                                                Other Entity

Date:
      --------------------------           --------------------------------
                                              Print or Type Entity Name

                                                By:  Name:
                                                           ---------------------
                                                            Print or Type Name

                                                     Title:
                                                            --------------------

                                                -------------------------------
                                                Signature

                                       5
<PAGE>

                                                                       Exhibit C

                                                                 Form of Warrant

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT MAY BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT OR SUCH SHARES (AS APPLICABLE) UNDER
SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                         VELOCITY ASSET MANAGEMENT, INC.

                              COMMON STOCK WARRANT
                              --------------------

Warrant No. CS -                     Warrant to Purchase        Shares of Common
                                     Stock               ------

                          Void after             , 2009
                                     -------- ---

For value received Velocity Asset Management, Inc., a Delaware corporation
("Company"), subject to the terms and conditions of this warrant (the
"Warrant"), promises to issue to (the "Holder")___________________ shares (the
"Shares") of the Common Stock, $.001 par value per share (the "Common Stock")
during the period specified herein upon the exercise of this Warrant as provided
herein.

         1.       Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, at any time up
and until __________ __, 2009 (the "Expiration Date").

         2.       Exercise Price. The "Exercise Price" at which this Warrant may
be exercised is Two Dollars and Fifty Cents ($2.50) per share of Common Stock.

         3.       Exercise of Warrant. (a) Except as provided in Section 3(b),
the purchase rights represented by this Warrant are exercisable by the Holder in
whole or in part (in accordance with Section 4 hereof), at any time, or from
time to time, during the term hereof as described in Section 1 above, by the
surrender of this Warrant and the Notice of Exercise annexed hereto duly
completed and executed on behalf of the Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the Holder), upon payment of the Exercise Price of the shares to be
purchased (i) in cash or by check acceptable to the Company, (ii) by
cancellation by the Holder of indebtedness or other obligations of the Company
to the Holder, or (iii) by a combination of (i) and (ii).

                      (B)  IN THE EVENT THAT THE COMPANY HAS NOT REGISTERED THE
     COMMON STOCK ON OR BEFORE THE 150TH DAY AFTER THE FINAL CLOSING OR
     TERMINATION OF THE OFFERING PURSUANT TO WHICH THIS WARRANT WAS ISSUED TO
     HOLDER, UPON WRITTEN NOTICE OF EXERCISE FROM THE HOLDER TO THE COMPANY THAT
     THE HOLDER IS EXERCISING THIS WARRANT IN WHOLE OR IN PART AND AS
     CONSIDERATION OF SUCH EXERCISE IS AUTHORIZING THE COMPANY TO WITHHOLD FROM
     ISSUANCE A NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
     WARRANT, THE COMPANY SHALL DELIVER TO THE HOLDER (WITHOUT PAYMENT BY THE
     HOLDER OF THE AGGREGATE EXERCISE PRICE) THAT NUMBER OF SHARES OF COMMON
     STOCK HAVING AN AGGREGATE FAIR MARKET VALUE (AS HEREINAFTER DEFINED) EQUAL
     TO THE QUOTIENT OBTAINED BY DIVIDING (X) THE SPREAD VALUE BY (Y) THE FAIR
     MARKET VALUE OF ONE SHARE OF COMMON STOCK IMMEDIATELY PRIOR TO THE
     EXERCISE. THE SHARES WITHHELD BY THE COMPANY SHALL NO LONGER BE ISSUABLE
     UNDER THIS WARRANT. THE TERM "SPREAD VALUE" SHALL MEAN (I) THE NUMBER OF
     SHARES EXERCISED AT A GIVEN TIME MULTIPLIED BY THE FAIR MARKET VALUE OF ONE
     SHARE OF COMMON STOCK, LESS (II) AGGREGATE APPLICABLE EXERCISE PRICE. FOR
     THE PURPOSES OF THIS AGREEMENT, (I) "TRADING DAY" SHALL MEAN ANY DAY ON
     WHICH THE PRINCIPAL MARKET IS OPEN FOR BUSINESS AND (II) "PRINCIPAL MARKET"

                                       6
<PAGE>

     SHALL MEAN INITIALLY THE OTC BULLETIN BOARD AND SHALL INCLUDE THE AMERICAN
     STOCK EXCHANGE, NASDAQ NATIONAL MARKET, THE NASDAQ SMALLCAP MARKET OR THE
     NEW YORK STOCK EXCHANGE IF THE COMPANY IS LISTED AND TRADES ON SUCH MARKET
     OR EXCHANGE.

                           "Fair Market Value" of a share of Common Stock as of
a particular date (the "Determination Date") shall
mean:
                  (i)      If the Common Stock is traded on a Principal Market,
         then the average of the closing or last sale price, respectively,
         reported for the five trading days immediately preceding the
         Determination Date; or

                  (ii)     If the Common Stock is not traded as provided above,
         then the price determined in good faith by the Board of Directors of
         the Company, which price shall be determined by a review of various
         factors that the Board of Directors deems appropriate including, but
         not limited to, a review of the Company's financial statements, recent
         sales of the Company's securities and the liquidation value of the
         securities provided that (1) the basis or bases of each such
         determination shall be set forth in the corporate records of the
         Company pertaining to meetings and other actions of such board, and (2)
         such records are available to the Holder for inspection during normal
         business hours of the Company upon the giving of reasonable prior
         notice. In the event the price is not acceptable to the Holder then the
         Fair Market Value shall be determined by an appraiser if the Company
         and the Holder can agree upon the appraiser. If the Company and the
         Holder cannot agree, then the value and price shall be determined by
         three appraisers as follows: the Company shall select one appraiser;
         the Holder shall select one appraiser; and the two appraisers shall
         select a third. The decision of a majority of the appraisers shall be
         final and binding upon all parties. The costs of the appraisal shall be
         borne equally by the Holder and the Company.

                                       7
<PAGE>

For example, if the Holder elected to exercise this Warrant for 1,000 shares of
Common Stock and the Fair Market Value as of the date of exercise was $4.00 per
share the following adjustment would be effected:

         Number of
         Shares to be
         Issued                   =      Spread Value/Fair Market Value

                                  =      (1,000 x $4.00) - (1,000 x $2.50)/$4.00

                                  =      (4,000 - 2,500)/$4.00

                                  =      1,500/4.00

                                  =      375

                  In this example, as a result of the "cashless exercise", 600
shares would be issued to the Holder and 400 shares would be cancelled as
payment of the aggregate Exercise Price.

                  If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.

         4.       Partial Exercise. This Warrant may be exercised in part for at
least (i) 1,000 shares or (ii) the number shares remaining subject to this
Warrant if such number of shares is less than 1,000 shares. Upon such partial
exercise, the Holder shall be entitled to receive a new warrant, which shall be
dated as of the date of this Warrant, covering the number of shares in respect
of which this Warrant shall not have been exercised.

         5.       Issuance Date. The person or persons in whose name or names
any certificate representing shares of Common Stock is issued hereunder shall be
deemed to have become the holder of record of the shares represented thereby as
of the close of business on the date this Warrant is exercised with respect to
such shares, whether or not the transfer books of the Company shall be closed.

         6.       Expiration Date. This Warrant shall expire at the close of
business on the Expiration Date.

         7.       Reserved Shares; Valid Issuance. The Company covenants that it
will, at all times from and after the date the Common Stock is increased as
provided above, reserve and keep available such number of its authorized shares
of Common Stock, free from all preemptive or similar rights therein, as will be
sufficient to permit the exercise of this Warrant in full and the conversion of
this Warrant into shares of Common Stock receivable upon such exercise. The
Company further covenants that such shares as may be issued pursuant to such
exercise will, upon issuance, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof.

         8.       Stock Dividends. If after the date of this Warrant the Company
shall subdivide the Common Stock, by split-up or otherwise, or combine the
Common Stock, or issue additional shares of Common Stock in payment of a stock
dividend on the Common Stock, (i) the number of shares issuable on the exercise
of this Warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the case of a
combination, (ii) the Exercise Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination and (iii) the minimum number of shares
subject to a partial exercise of this Warrant will be proportionately increased
in the case of a subdivision or stock dividend, or proportionately decreased in
the case of a combination.

                                       8
<PAGE>

         9.       Mergers and Reclassifications. If after the date of this
Warrant there shall be any reclassification, capital reorganization or change of
the Common Stock (other than as a result of a subdivision, combination or stock
dividend provided for in Section 10 hereof), or any consolidation of the Company
with, or merger of the Company into, another corporation or other business
organization (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification or
change of the outstanding Common Stock), or any sale or conveyance to another
corporation or other business organization of all or substantially all of the
assets of the Company, then, as a condition of such reclassification,
reorganization, change, consolidation, merger, sale or conveyance, lawful
provisions shall be made, and duly executed documents evidencing the same from
the Company or its successor shall be delivered to the Holder, so that the
Holder shall thereafter have the right to purchase, at a total price not to
exceed that payable upon the exercise of this Warrant in full, the kind and
amount of shares of stock and other securities and property receivable upon such
reclassification, reorganization, change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock which might have
been purchased by the Holder immediately prior to such reclassification,
reorganization, change, consolidation, merger, sale or conveyance (or, if there
are no holders of Common Stock at such time, by a holder of the number of shares
of Common Stock which might have been acquired by the Holder immediately prior
to such reclassification, reorganization, change, consolidation, merger, sale or
conveyance upon the exercise of this Warrant in full), and in any such case
appropriate provisions shall be made with respect to the rights and interest of
the Holder to the end that the provisions hereof (including without limitation,
provisions for the adjustment of the Exercise Price and the number of shares
issuable hereunder) shall thereafter be applicable in relation to any shares of
stock or other securities and property thereafter deliverable upon exercise
hereof.

         10.      Fractional Shares. In no event shall any fractional share of
Common Stock be issued upon any exercise of this Warrant. If, upon exercise of
this Warrant as an entirety, the Holder would, except as provided in this
Section 10, be entitled to receive a fractional share of Common Stock, then the
Company shall issue the next higher number of full shares of Common Stock,
issuing a full share with respect to such fractional share.

         11.      Certificate of Adjustment. Whenever the Exercise Price is
adjusted, as herein provided, the Company shall promptly deliver to the Holder a
certificate setting forth the Exercise Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

         12.      Notices of Record Date, Etc. In the event of:

                  (a)      any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right,

                  (b)      any reclassification of the capital stock of the
Company, capital reorganization of the Company, consolidation or merger
involving the Company, or sale or conveyance of all or substantially all of its
assets, or

                  (c)      any voluntary or involuntary dissolution, liquidation
or winding-up of the Company,

then, and in each such event, the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
any such reclassification, reorganization, consolidation, merger, sale or
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record in respect of
such event are to be determined. Such notice shall be mailed at least 10 days
prior to the date specified in such notice on which any such action is to be
taken.

         13.      Transfers.

                  (a)      Warrant Register. The Company will maintain a
register (the "Warrant Register") containing the names and addresses of the
Holder or Holders. Any Holder of this Warrant or any portion thereof may change

                                       9
<PAGE>

his or her address as shown on the Warrant Register by written notice to the
Company requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to such
Holder as shown on the Warrant Register and at the address shown on the Warrant
Register. Until this Warrant is transferred on the Warrant Register of the
Company, the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding any notice
to the contrary.

                  (b)      Warrant Agent. The Company may, by written notice to
the Holder, appoint an agent for the purpose of maintaining the Warrant Register
referred to in Section 13(a) above, issuing the Common Stock or other securities
then issuable upon the exercise of this Warrant, exchanging this Warrant,
replacing this Warrant, or any or all of the foregoing. Thereafter, any such
registration, issuance, exchange, or replacement, as the case may be, shall be
made at the office of such agent.

                  (c)      Transferability and Nonnegotiability of Warrant. This
Warrant may not be transferred or assigned in whole or in part without
compliance with all applicable federal and state securities laws by the
transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, if such are requested by the Company). Subject to compliance with the
Securities Act of 1933, as amended (the "Act"), title to this Warrant may be
transferred by endorsement (by the Holder executing the Assignment Form annexed
hereto) and delivery in the same manner as a negotiable instrument transferable
by endorsement and delivery.

                  (d)      Exchange of Warrant Upon a Transfer. On surrender of
this Warrant for exchange, properly endorsed and subject to the provisions of
this Warrant with respect to compliance with the Act and with the limitations on
assignments and transfers contained in this Section 13, the Company at its
expense shall issue to or on the order of the Holder a new warrant or warrants
of like tenor, in the name of the Holder or as the Holder (on payment by the
Holder of any applicable transfer taxes) may direct, for the number of shares
issuable upon exercise hereof.

                  (e)      Compliance with Securities Laws.

                           (i)      The Holder of this Warrant, by acceptance
hereof, acknowledges that this Warrant and the shares of Common Stock to be
issued upon exercise hereof are being acquired solely for the Holder's own
account and not as a nominee for any other party; and for investment, and that
the Holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Common Stock to be issued upon exercise hereof except under
circumstances that will not result in a violation of the Act or any state
securities laws. Upon exercise of this Warrant, the Holder shall, if requested
by the Company, confirm in writing, in a form satisfactory to the Company, that
the shares of Common Stock so purchased are being acquired solely for the
Holder's own account and not as a nominee for any other party, for investment,
and not with a view toward distribution or resale.

                           (ii)     This Warrant and all shares of Common Stock
issued upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):

         THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
         OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES AND ANY
         SECURITIES ISSUED HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR
         TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
         THEREFROM UNDER SAID ACT AND APPLICABLE LAWS.

         14.      Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor and amount.

                                       10
<PAGE>

         15.      No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reclassification, capital
reorganization, consolidation, merger, sale or conveyance of assets,
dissolution, liquidation, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder.

         16.      Applicable Law. The provisions and terms of this Warrant shall
be governed by and construed in accordance with the internal laws of the State
of Delaware. All actions and proceedings arising out of or relating to this
Warrant shall be heard and determined in any state or Federal court sitting in
the State of New York, County of New York. In any such action or proceeding,
each of the parties hereto hereby absolutely and irrevocably (i) waives any
objection to jurisdiction or venue, (ii) waives personal service of any summons,
complaint, declaration or other process and (iii) agrees that service thereof
may be made by certified or registered first-class mail directed to such party,
as the case may be, at their respective addresses set forth herein

         17.      Waiver of Jury Trial. THE COMPANY AND THE SUBSCRIBER HEREBY
WAIVE A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING
BETWEEN THEM OR THEIR SUCCESSORS OR ASSIGNS, UNDER OR IN CONNECTION WITH THIS
SUBSCRIPTION AGREEMENT OR ANY OF ITS PROVISIONS OR ANY NEGOTIATIONS IN
CONNECTION THEREWITH.

         18.      Successors and Assigns. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.

         19.      Business Days. If the last or appointed day for the taking of
any action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in Massachusetts, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.

                            [SIGNATURE PAGE FOLLOWS]

                                       11
<PAGE>

Dated:             , 2004                VELOCITY ASSET MANAGEMENT, INC.
      ------------

(Corporate Seal)                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
Attest:                                  Title:
                                               ---------------------------------

---------------------------

                                       12
<PAGE>

                                    Exhibit A
                                  Subscription
                                  ------------

To:                                          Date:
   ------------------------                       -------------------------

         The undersigned hereby subscribes for __________ shares of Common Stock
covered by this Warrant. The undersigned represents that these shares of Common
Stock are being acquired solely for the undersigned's own account and not as a
nominee for any other party, for investment, and not with a view toward
distribution or resale.

The certificate(s) for such shares shall be issued in the name of the
undersigned or as otherwise indicated below:

                                            ------------------------------------
                                            Signature

                                            ------------------------------------
                                            Name for Registration

                                            ------------------------------------
                                            Address

                                            ------------------------------------
                                            Name for Registration

                                            ------------------------------------
                                            Address

                                       13

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