Document:

EXHIBIT 10.5

                     INVESTOR REGISTRATION RIGHTS AGREEMENT
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     THIS  REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of October
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13,  2004,  by  and  among  INTREPID  TECHNOLOGY  &  RESOURCES,  INC.,  an Idaho
corporation,  with its principal office located at 501 West Broadway, Suite 200,
Idaho  Falls,  ID 83402 (the "Company"), and the undersigned investors (each, an
                              -------
"Investor"  and  collectively,  the  "Investors").
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     WHEREAS:

     A.     In  connection  with  the Securities Purchase Agreement by and among
the  parties hereto of even date herewith (the "Securities Purchase Agreement"),
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the  Company  has  agreed,  upon  the terms and subject to the conditions of the
Securities  Purchase  Agreement,  to  issue  and  sell  to the Investors secured
convertible debentures (the "Convertible Debentures") which shall be convertible
                             ----------------------
into that number of shares of the Company's common stock, par value US$0.005 per
share  (the  "Common  Stock"),  pursuant to the terms of the Securities Purchase
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Agreement  for an aggregate purchase price of up to Seven Hundred Fifty Thousand
U.S.  Dollars  ($750,000).  Capitalized  terms not defined herein shall have the
meaning  ascribed  to  them  in  the  Securities  Purchase  Agreement.

     B.     To  induce  the  Investors  to  execute  and  deliver the Securities
Purchase  Agreement,  the  Company  has  agreed  to provide certain registration
rights  under  the  Securities  Act  of  1933,  as  amended,  and  the rules and
regulations  there  under,  or  any similar successor statute (collectively, the
"1933  Act"),  and  applicable  state  securities  laws.
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     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein  and  other  good  and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged, the Company and the Investors
hereby  agree  as  follows:

     1.     DEFINITIONS.
            -----------

     As  used  in  this  Agreement, the following terms shall have the following
meanings:

          (a)     "Person"  means a corporation, a limited liability company, an
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association,  a  partnership,  an  organization,  a  business,  an individual, a
governmental or political subdivision thereof or a governmental agency.

          (b)     "Register,"  "registered,"  and  "registration"  refer  to  a
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registration  effected  by  preparing  and  filing  one  or  more  Registration
Statements  (as  defined  below) in compliance with the 1933 Act and pursuant to
Rule  415  under  the  1933  Act  or  any  successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration or
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ordering of effectiveness of such Registration Statement(s) by the United States
Securities  and  Exchange  SEC  (the  "SEC").
                                       ---

          (c)     "Registrable  Securities"  means  the  shares  of Common Stock
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issuable  to Investors upon conversion of the Convertible Debentures pursuant to
the  Securities  Purchase

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Agreement  and  the  Investor's  Shares,  as this term is defined in the Standby
Equity  Distribution  Agreement  dated  the  date  hereof.

          (d)     "Registration  Statement" means a registration statement under
                   -----------------------
the 1933 Act which covers the Registrable Securities.

     2.     REGISTRATION.
            ------------

          (a)     Subject  to  the  terms  and conditions of this Agreement, the
Company  shall  prepare  and  file, no later than thirty (30) days from the date
hereof  (the "Scheduled Filing Deadline"), with the SEC a registration statement
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on Form S-1 or SB-2 (or, if the Company is then eligible, on Form S-3) under the
1933  Act  (the  "Initial  Registration Statement") for the registration for the
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resale  by  all  Investors  who purchased Convertible Debentures pursuant to the
Securities  Purchase  Agreement  99,522,292  shares of Common Stock to be issued
upon  conversion of the Convertible Debentures issued pursuant to the Securities
Purchase  Agreement  and  the  Investor's  Shares.  The  Company shall cause the
Registration  Statement  to  remain  effective  until  all  of  the  Registrable
Securities  have  been  sold.  Prior to the filing of the Registration Statement
with  the  SEC,  the  Company  shall  furnish a copy of the Initial Registration
Statement  to  the  Investors for their review and comment.  The Investors shall
furnish  comments  on  the  Initial Registration Statement to the Company within
twenty-four (24) hours of the receipt thereof from the Company.

          (b)     Effectiveness  of  the  Initial  Registration  Statement.  The
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Company  shall  use  its  best  efforts  (i)  to  have  the Initial Registration
Statement declared effective by the SEC no later than ninety (90) days after the
date  hereof  (the  "Scheduled  Effective Deadline") and (ii) to insure that the
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Initial Registration Statement and any subsequent Registration Statement remains
in effect until all of the Registrable Securities have been sold, subject to the
terms  and  conditions  of  this  Agreement.  It  shall  be  an event of default
hereunder if the Initial Registration Statement is not declared effective by the
SEC  within  ninety  (90)  days  after  filing  thereof.

          (c)     Failure  to  File  or Obtain Effectiveness of the Registration
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Statement.  In  the  event  the  Registration  Statement  is  not  filed  by the
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Scheduled  Filing  Deadline or is not declared effective by the SEC on or before
the  Scheduled  Effective  Date, or if after the Registration Statement has been
declared effective by the SEC, sales cannot be made pursuant to the Registration
Statement  (whether  because  of  a  failure  to keep the Registration Statement
effective,  failure to disclose such information as is necessary for sales to be
made  pursuant  to  the  Registration  Statement, failure to register sufficient
shares  of  Common  Stock or otherwise then as partial relief for the damages to
any holder of Registrable Securities by reason of any such delay in or reduction
of its ability to sell the underlying shares of Common Stock (which remedy shall
not  be  exclusive  of any other remedies at law or in equity), the Company will
pay  as  liquidated  damages  (the  "Liquidated  Damages") to the holder, at the
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holder's  option,  either  a cash amount or shares of the Company's Common Stock
within  three  (3)  business  days, after demand therefore, equal to two percent
(2%)  of  the  liquidated  value  of  the  Convertible Debentures outstanding as
Liquidated  Damages  for  each thirty (30) day period after the Scheduled Filing
Deadline or the Scheduled Effective Date as the case may be.

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          (d)     Liquidated  Damages.  The  Company  and  the  Investor  hereto
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acknowledge  and  agree  that the sums payable under subsection 2(c) above shall
constitute liquidated damages and not penalties and are in addition to all other
rights  of  the  Investor,  including  the right to call a default.  The parties
further acknowledge that (i) the amount of loss or damages likely to be incurred
is  incapable  or is difficult to precisely estimate, (ii) the amounts specified
in  such  subsections  bear a reasonable relationship to, and are not plainly or
grossly  disproportionate  to,  the  probable  loss  likely  to  be  incurred in
connection  with  any  failure  by  the  Company  to  obtain  or  maintain  the
effectiveness  of  a  Registration  Statement,  (iii) one of the reasons for the
Company  and  the  Investor  reaching  an  agreement  as to such amounts was the
uncertainty and cost of litigation regarding the question of actual damages, and
(iv)  the  Company  and the Investor are sophisticated business parties and have
been  represented  by  sophisticated  and able legal counsel and negotiated this
Agreement  at  arm's  length.

     3.   RELATED  OBLIGATIONS.
          --------------------

          (a)     The  Company  shall  keep the Registration Statement effective
pursuant  to  Rule  415  at all times until the date on which the Investor shall
have  sold all the Registrable Securities covered by such Registration Statement
(the  "Registration  Period"),  which  Registration  Statement  (including  any
       --------------------
amendments  or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required  to  be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.

          (b)     The  Company  shall  prepare  and  file  with  the  SEC  such
amendments  (including  post-effective  amendments)  and  supplements  to  a
Registration  Statement  and  the  prospectus  used  in  connection  with  such
Registration  Statement,  which  prospectus  is to be filed pursuant to Rule 424
promulgated  under  the  1933 Act, as may be necessary to keep such Registration
Statement  effective  at  all  times during the Registration Period, and, during
such  period,  comply  with  the  provisions of the 1933 Act with respect to the
disposition  of  all  Registrable  Securities  of  the  Company  covered by such
Registration  Statement  until  such  time as all of such Registrable Securities
shall  have  been  disposed  of  in  accordance  with  the  intended  methods of
disposition  by  the seller or sellers thereof as set forth in such Registration
Statement.  In  the  case  of  amendments  and  supplements  to  a  Registration
Statement  which  are required to be filed pursuant to this Agreement (including
pursuant  to  this  Section  3(b)) by reason of the Company's filing a report on
Form  10-KSB,  Form  10-QSB  or  Form  8-K  or  any  analogous  report under the
Securities  Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
                                                   --------
incorporate  such  report  by  reference  into  the  Registration  Statement, if
applicable,  or  shall  file  such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the  Company  to  amend  or  supplement  the  Registration  Statement.

          (c)     The  Company  shall furnish to each Investor whose Registrable
Securities  are  included  in any Registration Statement, without charge, (i) at
least  one  (1) copy of such Registration Statement as declared effective by the
SEC  and any amendment(s) thereto, including financial statements and schedules,
all  documents  incorporated  therein  by  reference,  all  exhibits  and  each
preliminary prospectus, (ii) ten (10) copies of the final prospectus included in
such  Registration Statement and all amendments and supplements thereto (or such
other  number

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<PAGE>
of  copies  as  such  Investor  may  reasonably  request)  and  (iii) such other
documents  as such Investor may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such Investor.

          (d)     The  Company  shall  use  its best efforts to (i) register and
qualify  the  Registrable  Securities  covered by a Registration Statement under
such  other  securities  or  "blue sky" laws of such jurisdictions in the United
States  as  any  Investor  reasonably  requests,  (ii) prepare and file in those
jurisdictions,  such  amendments  (including  post-effective  amendments)  and
supplements  to  such  registrations  and  qualifications as may be necessary to
maintain  the  effectiveness  thereof during the Registration Period, (iii) take
such  other  actions  as  may  be  necessary  to maintain such registrations and
qualifications  in  effect at all times during the Registration Period, and (iv)
take  all  other  actions  reasonably  necessary  or  advisable  to  qualify the
Registrable  Securities  for sale in such jurisdictions; provided, however, that
the  Company  shall  not  be  required in connection therewith or as a condition
thereto  to  (w) make any change to its certificate of incorporation or by-laws,
(x)  qualify  to do business in any jurisdiction where it would not otherwise be
required  to  qualify  but  for this Section 3(d), (y) subject itself to general
taxation  in  any such jurisdiction, or (z) file a general consent to service of
process  in  any  such  jurisdiction.  The  Company  shall  promptly notify each
Investor  who  holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the  initiation  or  threat  of  any  proceeding  for  such  purpose.

          (e)     As  promptly as practicable after becoming aware of such event
or  development,  the  Company  shall  notify  each  Investor  in writing of the
happening  of  any  event  as  a  result  of  which the prospectus included in a
Registration  Statement,  as  then  in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which  they  were  made,  not  misleading  (provided that in no event shall such
notice  contain  any  material,  nonpublic  information), and promptly prepare a
supplement  or  amendment  to such Registration Statement to correct such untrue
statement  or  omission,  and  deliver  ten  (10)  copies  of such supplement or
amendment  to  each  Investor.  The  Company  shall  also  promptly  notify each
Investor  in  writing  (i)  when  a  prospectus  or any prospectus supplement or
post-effective  amendment  has  been filed, and when a Registration Statement or
any  post-effective  amendment  has  become  effective  (notification  of  such
effectiveness  shall  be delivered to each Investor by facsimile on the same day
of  such  effectiveness),  (ii)  of  any  request  by  the SEC for amendments or
supplements  to  a  Registration  Statement  or  related  prospectus  or related
information,  and  (iii)  of  the  Company's  reasonable  determination  that  a
post-effective amendment to a Registration Statement would be appropriate.

          (f)     The Company shall use its best efforts to prevent the issuance
of  any  stop  order  or  other  suspension  of  effectiveness of a Registration
Statement,  or  the  suspension  of  the qualification of any of the Registrable
Securities for sale in any jurisdiction within the United States of America and,
if such an order or suspension is issued, to obtain the withdrawal of such order
or  suspension  at  the earliest possible moment and to notify each Investor who
holds  Registrable  Securities  being sold of the issuance of such order and the
resolution  thereof  or its receipt of actual notice of the initiation or threat
of  any  proceeding  for  such  purpose.

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<PAGE>
          (g)     At  the  reasonable request of any Investor, the Company shall
furnish  to  such Investor, on the date of the effectiveness of the Registration
Statement  and  thereafter  from  time  to time on such dates as an Investor may
reasonably request (i) a letter, dated such date, from the Company's independent
certified  public  accountants  in form and substance as is customarily given by
independent  certified  public  accountants  to  underwriters in an underwritten
public  offering,  and  (ii)  an  opinion,  dated  as  of  such date, of counsel
representing  the  Company for purposes of such Registration Statement, in form,
scope  and substance as is customarily given in an underwritten public offering,
addressed  to  the  Investors.

          (h)     The  Company  shall  make  available for inspection by (i) any
Investor  and  (ii)  one (1) firm of accountants or other agents retained by the
Investors  (collectively,  the  "Inspectors")  all pertinent financial and other
                                 ----------
records,  and  pertinent  corporate  documents  and  properties  of  the Company
(collectively,  the  "Records"), as shall be reasonably deemed necessary by each
                      -------
Inspector,  and  cause the Company's officers, directors and employees to supply
all  information  which any Inspector may reasonably request; provided, however,
that  each  Inspector  shall  agree, and each Investor hereby agrees, to hold in
strict  confidence  and shall not make any disclosure (except to an Investor) or
use  any  Record or other information which the Company determines in good faith
to  be  confidential, and of which determination the Inspectors are so notified,
unless  (a)  the  disclosure  of such Records is necessary to avoid or correct a
misstatement  or omission in any Registration Statement or is otherwise required
under  the  1933  Act,  (b) the release of such Records is ordered pursuant to a
final,  non-appealable  subpoena  or  order  from  a court or government body of
competent  jurisdiction,  or  (c)  the information in such Records has been made
generally  available to the public other than by disclosure in violation of this
or  any  other  agreement of which the Inspector and the Investor has knowledge.
Each  Investor  agrees  that  it  shall,  upon  learning that disclosure of such
Records  is  sought  in  or  by  a  court  or  governmental  body  of  competent
jurisdiction or through other means, give prompt notice to the Company and allow
the  Company,  at  its  expense,  to  undertake  appropriate  action  to prevent
disclosure  of,  or  to  obtain  a  protective  order  for,  the  Records deemed
confidential.

          (i)     The  Company  shall  hold  in  confidence  and  not  make  any
disclosure  of information concerning an Investor provided to the Company unless
(i)  disclosure of such information is necessary to comply with federal or state
securities  laws,  (ii) the disclosure of such information is necessary to avoid
or  correct  a misstatement or omission in any Registration Statement, (iii) the
release  of  such  information is ordered pursuant to a subpoena or other final,
non-appealable  order  from  a  court  or  governmental  body  of  competent
jurisdiction,  or (iv) such information has been made generally available to the
public  other  than  by  disclosure  in violation of this Agreement or any other
agreement.  The  Company  agrees that it shall, upon learning that disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by  a  court or
governmental  body of competent jurisdiction or through other means, give prompt
written  notice  to  such  Investor  and  allow such Investor, at the Investor's
expense,  to undertake appropriate action to prevent disclosure of, or to obtain
a  protective  order  for,  such  information.

          (j)     The Company shall use its best efforts either to cause all the
Registrable  Securities  covered by a Registration Statement (i) to be listed on
each  securities exchange on which securities of the same class or series issued
by  the  Company  are  then  listed,  if any, if the listing of such Registrable
Securities  is  then  permitted  under  the  rules  of  such  exchange  or

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(ii)  the  inclusion  for  quotation  on  the National Association of Securities
Dealers,  Inc.  OTC  Bulletin Board for such Registrable Securities. The Company
shall  pay  all  fees  and expenses in connection with satisfying its obligation
under  this  Section  3(j).

          (k)     The  Company  shall  cooperate  with  the  Investors  who hold
Registrable  Securities  being  offered  and,  to  the  extent  applicable,  to
facilitate  the timely preparation and delivery of certificates (not bearing any
restrictive  legend)  representing  the  Registrable  Securities  to  be offered
pursuant  to a Registration Statement and enable such certificates to be in such
denominations  or  amounts,  as the case may be, as the Investors may reasonably
request and registered in such names as the Investors may request.

          (l)     The  Company  shall  use  its  best  efforts  to  cause  the
Registrable  Securities  covered  by the applicable Registration Statement to be
registered  with  or approved by such other governmental agencies or authorities
as  may  be  necessary  to  consummate  the  disposition  of  such  Registrable
Securities.

          (m)     The  Company  shall  make  generally available to its security
holders  as  soon  as  practical,  but not later than ninety (90) days after the
close  of  the  period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 1933 Act) covering a twelve (12) month
period  beginning  not  later than the first day of the Company's fiscal quarter
next  following  the  effective  date  of  the  Registration  Statement.

          (n)     The  Company  shall  otherwise  use its best efforts to comply
with  all  applicable  rules  and  regulations of the SEC in connection with any
registration  hereunder.

          (o)     Within  two  (2)  business days after a Registration Statement
which  covers  Registrable  Securities  is  declared  effective  by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to  the  transfer  agent  for  such  Registrable  Securities (with copies to the
Investors  whose  Registrable  Securities  are  included  in  such  Registration
Statement)  confirmation  that  such  Registration  Statement  has been declared
effective by the SEC in the form attached hereto as Exhibit A.
                                                    ---------

          (p)     The  Company shall take all other reasonable actions necessary
to  expedite  and  facilitate  disposition  by  the  Investors  of  Registrable
Securities  pursuant  to  a  Registration  Statement.

     4.     OBLIGATIONS  OF  THE  INVESTORS.
            -------------------------------

     Each  Investor  agrees that, upon receipt of any notice from the Company of
the  happening  of  any event of the kind described in Section 3(f) or the first
sentence  of  3(e),  such  Investor  will immediately discontinue disposition of
Registrable  Securities  pursuant to any Registration Statement(s) covering such
Registrable  Securities  until  such  Investor's  receipt  of  the copies of the
supplemented  or  amended  prospectus contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required.  Notwithstanding anything to
the  contrary,  the Company shall cause its transfer agent to deliver unlegended
certificates  for  shares  of  Common  Stock  to  a transferee of an Investor in
accordance  with  the  terms  of the Securities Purchase Agreement in connection
with  any  sale  of Registrable Securities with respect to which an Investor has
entered  into  a  contract  for sale prior to the Investor's receipt of a notice
from  the

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Company  of  the happening of any event of the kind described in Section 3(f) or
the  first  sentence  of  3(e)  and  for which the Investor has not yet settled.

     5.     EXPENSES  OF  REGISTRATION.
            --------------------------

     All  expenses  incurred  in  connection  with  registrations,  filings  or
qualifications  pursuant to Sections 2 and 3, including, without limitation, all
registration,  listing  and  qualifications fees, printers, legal and accounting
fees  shall  be  paid  by  the  Company.

     6.     INDEMNIFICATION.
            ---------------

     With respect to Registrable Securities which are included in a Registration
Statement  under  this  Agreement:

          (a)     To  the fullest extent permitted by law, the Company will, and
hereby  does,  indemnify, hold harmless and defend each Investor, the directors,
officers,  partners,  employees, agents, representatives of, and each Person, if
any,  who  controls  any Investor within the meaning of the 1933 Act or the 1934
Act  (each,  an  "Indemnified  Person"),  against  any  losses, claims, damages,
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liabilities,  judgments, fines, penalties, charges, costs, reasonable attorneys'
fees,  amounts  paid  in settlement or expenses, joint or several (collectively,
"Claims")  incurred  in investigating, preparing or defending any action, claim,
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suit,  inquiry,  proceeding, investigation or appeal taken from the foregoing by
or  before any court or governmental, administrative or other regulatory agency,
body  or  the  SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
                                     -------------------
may  become  subject  insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or  alleged  untrue  statement  of  a material fact in a
Registration  Statement or any post-effective amendment thereto or in any filing
made  in  connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered  ("Blue  Sky  Filing"),  or  the omission or alleged omission to state a
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material  fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of
a  material  fact contained in any final prospectus (as amended or supplemented,
if  the  Company files any amendment thereof or supplement thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to  make  the statements made therein, in light of the circumstances under which
the  statements  therein  were  made,  not misleading; or (iii) any violation or
alleged  violation  by the Company of the 1933 Act, the 1934 Act, any other law,
including,  without  limitation,  any  state  securities  law,  or  any  rule or
regulation  there  under  relating  to  the  offer  or  sale  of the Registrable
Securities  pursuant  to  a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "Violations").  The Company shall
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reimburse  the  Investors  and  each  such  controlling  person promptly as such
expenses  are  incurred  and  are  due  and  payable,  for  any  legal  fees  or
disbursements  or  other reasonable expenses incurred by them in connection with
investigating  or  defending  any  such  Claim.  Notwithstanding anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section  6(a):  (x)  shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with  information furnished in writing to the Company by such Indemnified Person
expressly  for  use  in  connection  with  the  preparation  of the Registration

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Statement  or any such amendment thereof or supplement thereto; (y) shall not be
available  to  the  extent  such  Claim is based on a failure of the Investor to
deliver  or  to  cause  to  be  delivered  the  prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(c); and (z) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full  force  and  effect regardless of any investigation made by or on behalf of
the  Indemnified  Person  and  shall  survive  the  transfer  of the Registrable
Securities  by  the  Investors  pursuant  to  Section  9  hereof.

          (b)     In  connection  with  a  Registration Statement, each Investor
agrees  to severally and not jointly indemnify, hold harmless and defend, to the
same extent and in the same manner as is set forth in Section 6(a), the Company,
each  of  its  directors,  each  of its officers, employees, representatives, or
agents  and  each Person, if any, who controls the Company within the meaning of
the 1933 Act or the 1934 Act (each an "Indemnified Party"), against any Claim or
                                       -----------------
Indemnified Damages to which any of them may become subject, under the 1933 Act,
the  1934  Act  or otherwise, insofar as such Claim or Indemnified Damages arise
out  of  or is based upon any Violation, in each case to the extent, and only to
the  extent,  that such Violation occurs in reliance upon and in conformity with
written  information furnished to the Company by such Investor expressly for use
in  connection  with  such Registration Statement; and, subject to Section 6(d),
such  Investor will reimburse any legal or other expenses reasonably incurred by
them  in  connection  with  investigating or defending any such Claim; provided,
however,  that  the  indemnity  agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts  paid  in settlement of any Claim if such settlement is effected without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably  withheld;  provided,  further, however, that the Investor shall be
liable  under  this  Section 6(b) for only that amount of a Claim or Indemnified
Damages  as does not exceed the net proceeds to such Investor as a result of the
sale  of  Registrable  Securities pursuant to such Registration Statement.  Such
indemnity  shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the  Registrable  Securities  by  the  Investors  pursuant  to  Section  9.
Notwithstanding  anything  to the contrary contained herein, the indemnification
agreement  contained  in  this Section 6(b) with respect to any prospectus shall
not  inure  to  the  benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the prospectus was corrected and such new
prospectus  was  delivered  to each Investor prior to such Investor's use of the
prospectus  to  which  the  Claim  relates.

          (c)     Promptly after receipt by an Indemnified Person or Indemnified
Party  under  this  Section  6  of  notice  of the commencement of any action or
proceeding  (including any governmental action or proceeding) involving a Claim,
such  Indemnified  Person  or  Indemnified  Party  shall,  if a Claim in respect
thereof  is  to  be  made  against  any indemnifying party under this Section 6,
deliver  to the indemnifying party a written notice of the commencement thereof,
and  the  indemnifying party shall have the right to participate in, and, to the
extent  the  indemnifying  party so desires, jointly with any other indemnifying
party  similarly  noticed, to assume control of the defense thereof with counsel
mutually  satisfactory  to  the indemnifying party and the Indemnified Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person  or Indemnified Party shall have the right to retain its own
counsel  with  the  fees  and expenses of not more than one (1) counsel for such
Indemnified  Person  or  Indemnified

                                        8
<PAGE>
Party  to  be  paid  by the indemnifying party, if, in the reasonable opinion of
counsel  retained  by the indemnifying party, the representation by such counsel
of  the Indemnified Person or Indemnified Party and the indemnifying party would
be  inappropriate  due  to  actual or potential differing interests between such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel  in  such  proceeding. The Indemnified Party or Indemnified Person shall
cooperate  fully  with the indemnifying party in connection with any negotiation
or  defense  of  any  such  action  or claim by the indemnifying party and shall
furnish  to  the  indemnifying party all information reasonably available to the
Indemnified  Party  or Indemnified Person which relates to such action or claim.
The  indemnifying  party  shall keep the Indemnified Party or Indemnified Person
fully  apprised  at  all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior written
consent;  provided,  however, that the indemnifying party shall not unreasonably
withhold,  delay  or condition its consent. No indemnifying party shall, without
the  prior  written  consent  of  the  Indemnified  Party or Indemnified Person,
consent  to  entry  of  any  judgment  or  enter  into  any  settlement or other
compromise which does not include as an unconditional term thereof the giving by
the  claimant  or plaintiff to such Indemnified Party or Indemnified Person of a
release  from  all  liability  in respect to such claim or litigation. Following
indemnification  as  provided  for  hereunder,  the  indemnifying party shall be
subrogated  to  all  rights  of the Indemnified Party or Indemnified Person with
respect  to  all third parties, firms or corporations relating to the matter for
which  indemnification  has  been made. The failure to deliver written notice to
the  indemnifying party within a reasonable time of the commencement of any such
action  shall  not  relieve  such  indemnifying  party  of  any liability to the
Indemnified  Person  or  Indemnified  Party  under this Section 6, except to the
extent  that  the indemnifying party is prejudiced in its ability to defend such
action.

          (d)     The  indemnification  required by this Section 6 shall be made
by  periodic  payments  of  the  amount  thereof  during  the  course  of  the
investigation  or defense, as and when bills are received or Indemnified Damages
are  incurred.

          (e)     The indemnity agreements contained herein shall be in addition
to  (i)  any  cause  of  action  or  similar  right  of the Indemnified Party or
Indemnified  Person  against  the  indemnifying  party  or  others, and (ii) any
liabilities  the  indemnifying  party  may  be  subject  to pursuant to the law.

     7.     CONTRIBUTION.
            ------------

     To the extent any indemnification by an indemnifying party is prohibited or
limited  by  law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6  to  the  fullest  extent  permitted  by law; provided, however, that:  (i) no
seller  of Registrable Securities guilty of fraudulent misrepresentation (within
the  meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from  any  seller  of  Registrable  Securities  who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from  the  sale  of  such  Registrable  Securities.

                                        9
<PAGE>
     8.     REPORTS  UNDER  THE  1934  ACT.
            ------------------------------

     With  a  view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any similar rule or regulation of the SEC that
may  at  any  time permit the Investors to sell securities of the Company to the
public  without  registration  ("Rule  144")  the  Company  agrees  to:
                                 ---------

          (a)     make and keep public information available, as those terms are
understood  and  defined  in  Rule  144;

          (b)     file  with  the  SEC  in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the  Company  remains  subject  to  such  requirements (it being understood that
nothing  herein  shall limit the Company's obligations under Section 4(c) of the
Securities  Purchase  Agreement)  and  the  filing  of  such  reports  and other
documents  as  are  required  by  the  applicable  provisions  of  Rule 144; and

          (c)     furnish  to  each  Investor  so  long  as  such  Investor owns
Registrable  Securities,  promptly  upon request, (i) a written statement by the
Company  that  it  has complied with the reporting requirements of Rule 144, the
1933  Act  and  the 1934 Act, (ii) a copy of the most recent annual or quarterly
report  of  the  Company  and  such  other reports and documents so filed by the
Company,  and  (iii)  such  other  information as may be reasonably requested to
permit  the  Investors  to  sell  such  securities  pursuant to Rule 144 without
registration.

     9.     AMENDMENT  OF  REGISTRATION  RIGHTS.
            -----------------------------------

     Provisions  of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively),  only  with the written consent of the Company and Investors
who  then  hold  at  least  two-thirds (2/3) of the Registrable Securities.  Any
amendment  or waiver effected in accordance with this Section 9 shall be binding
upon each Investor and the Company.  No such amendment shall be effective to the
extent  that  it  applies  to  fewer  than all of the holders of the Registrable
Securities.  No consideration shall be offered or paid to any Person to amend or
consent  to  a  waiver or modification of any provision of any of this Agreement
unless  the  same  consideration  also  is offered to all of the parties to this
Agreement.

     10.     MISCELLANEOUS.
             -------------

          (a)     A  Person  is  deemed to be a holder of Registrable Securities
whenever  such  Person  owns  or  is  deemed  to  own of record such Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two  (2)  or  more Persons with respect to the same Registrable
Securities,  the  Company  shall  act  upon the basis of instructions, notice or
election  received  from  the  registered  owner of such Registrable Securities.

          (b)     Any  notices,  consents,  waivers  or  other  communications
required  or  permitted to be given under the terms of this Agreement must be in
writing  and  will  be  deemed  to  have been delivered:  (i) upon receipt, when
delivered  personally;  (ii)  upon  receipt,  when  sent  by facsimile (provided
confirmation  of  transmission  is  mechanically or electronically generated and
kept  on file by the sending party); or (iii) one (1) business day after deposit
with  a  nationally

                                       10
<PAGE>
recognized  overnight  delivery  service, in each case properly addressed to the
party  to  receive  the  same.  The  addresses  and  facsimile  numbers for such
communications  shall  be:

If to the Company, to:  Intrepid Technology & Resources, Inc.
                        501 West Broadway - Suite 200
                        Idaho Falls, ID 83402
                        Attention:  Dr. Dennis D. Keiser
                        Telephone:  (208) 529-5337
                        Facsimile:  (208) 529-1014

                        Kirkpatrick & Lockhart LLP
                        201 South Biscayne Boulevard - Suite 2000
                        Miami, FL  33131-2399
                        Attention:  Clayton E. Parker, Esq.
                        Telephone:  (305) 539-3300
                        Facsimile:  (305) 358-7095

If  to  an  Investor,  to  its  address  and facsimile number on the Schedule of
Investors attached hereto, with copies to such Investor's representatives as set
forth  on  the  Schedule  of Investors or to such other address and/or facsimile
number  and/or  to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness  of such change.  Written confirmation of receipt (A) given by the
recipient  of  such  notice,  consent,  waiver  or  other  communication,  (B)
mechanically  or  electronically  generated  by  the  sender's facsimile machine
containing  the time, date, recipient facsimile number and an image of the first
page  of  such  transmission  or  (C) provided by a courier or overnight courier
service  shall  be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with  clause  (i),  (ii)  or  (iii)  above,  respectively.

          (c)     Failure  of  any  party  to exercise any right or remedy under
this  Agreement  or  otherwise,  or delay by a party in exercising such right or
remedy,  shall  not  operate  as  a  waiver  thereof.

          (d)     The  laws  of  the  State  of  Idaho  shall  govern all issues
concerning  the  relative  rights  of  the  Company  and  the  Investors  as its
stockholders.  All  other  questions  concerning  the  construction,  validity,
enforcement  and  interpretation  of  this  Agreement  shall  be governed by the
internal laws of the State of New Jersey, without giving effect to any choice of
law  or conflict of law provision or rule (whether of the State of New Jersey or
any  other  jurisdiction)  that  would  cause the application of the laws of any
jurisdiction  other than the State of New Jersey.  Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the Superior Courts of the State of
New  Jersey,  sitting  in  Hudson  County, New Jersey and federal courts for the
District  of  New Jersey sitting Newark, New Jersey, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby  or  discussed  herein,  and hereby irrevocably waives, and agrees not to
assert  in  any  suit, action or proceeding, any claim that it is not personally
subject  to  the  jurisdiction  of  any  such  court,  that such suit, action or
proceeding  is  brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper.  Each party hereby irrevocably waives personal
service of

                                       11
<PAGE>
process  and  consents  to  process  being  served  in  any such suit, action or
proceeding  by  mailing  a  copy  thereof  to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good  and  sufficient  service  of process and notice thereof. Nothing contained
herein  shall  be  deemed  to limit in any way any right to serve process in any
manner  permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or  the  validity  or  enforceability  of  any  provision  of this
Agreement  in  any  other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT  IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF  ANY  DISPUTE  HEREUNDER  OR  IN  CONNECTION  HEREWITH OR ARISING OUT OF THIS
AGREEMENT  OR  ANY  TRANSACTION  CONTEMPLATED  HEREBY.

          (e)     This  Agreement,  the Irrevocable Transfer Agent Instructions,
the  Securities  Purchase  Agreement  and  related  documents  including  the
Convertible  Debenture  and  the  Escrow  Agreement dated the date hereof by and
among the Company, the Investors set forth on the Schedule of Investors attached
hereto,  and  David  Gonzalez,  Esq.  (the  "Escrow Agreement") and the Security
                                             ----------------
Agreement dated the date hereof (the "Security Agreement") constitute the entire
                                      ------------------
agreement among the parties hereto with respect to the subject matter hereof and
thereof.  There are no restrictions, promises, warranties or undertakings, other
than  those  set  forth  or referred to herein and therein.  This Agreement, the
Irrevocable  Transfer  Agent Instructions, the Securities Purchase Agreement and
related  documents including the Convertible Debenture, the Escrow Agreement and
the  Security  Agreement supersede all prior agreements and understandings among
the  parties  hereto  with  respect  to  the  subject matter hereof and thereof.

          (f)     This  Agreement  shall  inure to the benefit of and be binding
upon  the  permitted  successors  and  assigns  of  each  of the parties hereto.

          (g)     The  headings  in  this  Agreement  are  for  convenience  of
reference  only  and  shall  not  limit  or otherwise affect the meaning hereof.

          (h)     This Agreement may be executed in identical counterparts, each
of  which  shall be deemed an original but all of which shall constitute one and
the  same agreement.  This Agreement, once executed by a party, may be delivered
to  the other party hereto by facsimile transmission of a copy of this Agreement
bearing  the  signature  of  the  party  so  delivering  this  Agreement.

          (i)     Each  party  shall  do  and  perform,  or cause to be done and
performed,  all  such further acts and things, and shall execute and deliver all
such  other  agreements,  certificates,  instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

     The  language  used  in  this  Agreement  will be deemed to be the language
chosen  by  the  parties  to  express their mutual intent and no rules of strict
construction  will  be  applied  against  any  party.

                                       12
<PAGE>
          (j)     This  Agreement  is  intended  for  the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit  of,  nor  may  any  provision  hereof be enforced by, any other Person.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  have caused this Investor Registration
Rights  Agreement  to  be  duly executed as of day and year first above written.

                                       COMPANY:
                                       INTREPID TECHNOLOGY & RESOURCES, INC.

                                       By:  /s/ Dr. Dennis D. Keiser
                                            ------------------------
                                       Name: Dr. Dennis D. Keiser
                                       Title: President & CEO

                                       14
<PAGE>
                                   SCHEDULE I
                                   ----------

                              SCHEDULE OF INVESTORS
                              ---------------------

<TABLE>
<CAPTION>
                                                                  ADDRESS/FACSIMILE
          NAME                         SIGNATURE                   NUMBER OF BUYER
----------------------------  ----------------------------  ------------------------------
<S>                           <C>                           <C>

Cornell Capital Partners, LP  By:  Yorkville Advisors, LLC  101 Hudson Street - Suite 3700
                              Its:  General Partner         Jersey City, NJ  07303
                                                            Facsimile:  (201) 985-8266

                              By: /s/ Mark A. Angelo
                                  ------------------
                              Name:  Mark A. Angelo
                              Its:   Portfolio Manager

With a copy to:               David Gonzalez, Esq.          101 Hudson Street - Suite 3700
                                                            Jersey City, NJ 07302
                                                            Facsimile:  (201) 985-8266
</TABLE>

<PAGE>
                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT
                            -------------------------

Attention:

     Re:  INTREPID TECHNOLOGY & RESOURCES, INC.
          -------------------------------------

Ladies and Gentlemen:

     We  are  counsel  to  Intrepid  Technology  &  Resources,  Inc.,  an  Idaho
corporation (the "Company"), and have represented the Company in connection with
                  -------
that certain Securities Purchase Agreement (the "Securities Purchase Agreement")
                                                 -----------------------------
entered  into  by  and  among  the  Company  and  the  investors  named  therein
(collectively,  the  "Investors")  pursuant  to  which the Company issued to the
                      ---------
Investors  shares of its Common Stock, par value US$0.005 per share (the "Common
                                                                          ------
Stock").  Pursuant  to the Purchase Agreement, the Company also has entered into
-----
a  Registration  Rights Agreement with the Investors (the "Investor Registration
                                                           ---------------------
Rights  Agreement") pursuant to which the Company agreed, among other things, to
-----------------
register  the  Registrable  Securities  (as  defined  in the Registration Rights
Agreement)  under  the  Securities Act of 1933, as amended (the "1933 Act").  In
                                                                 --------
connection  with  the  Company's  obligations  under  the  Registration  Rights
Agreement,  on  ____________ ____, the Company filed a Registration Statement on
Form  ________  (File No. 333-_____________) (the "Registration Statement") with
                                                   ----------------------
the  Securities  and  Exchange  SEC  (the  "SEC")  relating  to  the Registrable
                                            ---
Securities  which  names  each  of  the Investors as a selling stockholder there
under.

     In  connection with the foregoing, we advise you that a member of the SEC's
staff  has  advised  us by telephone that the SEC has entered an order declaring
the  Registration  Statement  effective  under  the  1933  Act at [ENTER TIME OF
EFFECTIVENESS]  on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic  inquiry  of  a  member  of  the  SEC's  staff,  that  any stop order
suspending  its  effectiveness  has been issued or that any proceedings for that
purpose  are  pending  before,  or  threatened  by,  the SEC and the Registrable
Securities  are  available  for  resale  under  the  1933  Act  pursuant  to the
Registration  Statement.

                                          Very truly yours,

                                          KIRKPATRICK & LOCKHART LLP

                                          By:
                                             ------------------------------

cc:  [LIST NAMES OF INVESTORS]

<PAGE>EXHIBIT 10.7

                               SECURITY AGREEMENT
                               ------------------

     THIS  SECURITY  AGREEMENT  (the  "Agreement"),  is  entered  into  and made
                                       ---------
effective  as  of  October  13,  2004,  by  and  between  INTREPID  TECHNOLOGY &
RESOURCES,  INC.,  an Idaho corporation (the "Company"), and the BUYER(S) listed
                                              -------
on  Schedule  I  attached  to  the  Securities Purchase Agreement dated the date
hereof  (the  "Secured  Party").
               --------------

     WHEREAS, the Company shall issue and sell to the Secured Party, as provided
in  the  Securities  Purchase  Agreement  dated the date hereof, and the Secured
Party  shall  purchase  up to Seven Hundred Fifty Thousand Dollars ($750,000) of
five percent (5%) secured convertible debentures (the "Convertible Debentures"),
                                                       ----------------------
which  shall be convertible into shares of the Company's common stock, par value
$0.005 (the "Common Stock") (as converted, the "Conversion Shares"), for a total
             ------------                       -----------------
purchase  price of up to Seven Hundred Fifty Thousand Dollars ($750,000), in the
respective  amounts set forth opposite each Buyer(s) name on Schedule I attached
to  the  Securities  Purchase  Agreement;

     WHEREAS,  to  induce  the  Secured  Party  to  enter  into  the transaction
contemplated  by  the  Securities  Purchase  Agreement,  the Secured Convertible
Debenture,  the Investor Registration Rights Agreement, the Irrevocable Transfer
Agent  Instructions,  and  the Escrow Agreement (collectively referred to as the
"Transaction  Documents"),  the  Company  hereby  grants  to the Secured Party a
 ----------------------
security  interest  in  and  to  the  pledged property identified on Exhibit "A"
                                                                     -----------
hereto  (collectively  referred  to  as  the  "Pledged  Property")  until  the
                                               -----------------
satisfaction  of  the  Obligations,  as  defined  herein  below.

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

                                   ARTICLE 1.

                         DEFINITIONS AND INTERPRETATIONS
                         -------------------------------

     Section  1.1.     Recitals.
                       --------

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

     Section  1.2.     Interpretations.
                       ---------------

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

<PAGE>
     Section  1.3.     Obligations  Secured.
                       --------------------

     The  obligations  secured hereby are any and all obligations of the Company
now  existing  or  hereinafter  incurred  to  the Secured Party, whether oral or
written  and  whether  arising  before,  on  or after the date hereof including,
without  limitation, those obligations of the Company to the Secured Party under
the  Securities  Purchase  Agreement,  the  Secured  Convertible  Debenture, the
Investor  Registration  Rights  Agreement  and  Irrevocable  Transfer  Agent
Instructions,  and  any other amounts now or hereafter owed to the Secured Party
by  the  Company  thereunder  or  hereunder  (collectively,  the "Obligations").
                                                                  -----------

                                   ARTICLE 2.

                PLEDGED COLLATERAL, ADMINISTRATION OF COLLATERAL
                ------------------------------------------------
                      AND TERMINATION OF SECURITY INTEREST
                      ------------------------------------

     Section  2.1.     Pledged  Property.
                       -----------------

          (a)     Company  hereby  pledges  to the Secured Party, and creates in
the  Secured  Party for its benefit, a security interest for such time until the
Obligations  are  paid  in full, in and to all of the property of the Company as
set forth in Exhibit "A" attached hereto (collectively, the "Pledged Property"):
             -----------                                     ----------------

     The  Pledged Property, as set forth in Exhibit "A" attached hereto, and the
                                            -----------
products thereof and the proceeds of all such items are hereinafter collectively
referred  to  as  the  "Pledged  Collateral."
                        -------------------

          (b)     Simultaneously  with  the  execution  and  delivery  of  this
Agreement,  the  Company  shall  make,  execute,  acknowledge,  file, record and
deliver  to  the Secured Party any documents reasonably requested by the Secured
Party  to perfect its security interest in the Pledged Property.  Simultaneously
with  the  execution  and  delivery  of  this Agreement, the Company shall make,
execute,  acknowledge  and  deliver  to  the  Secured  Party  such documents and
instruments,  including, without limitation, financing statements, certificates,
affidavits  and  forms  as  may,  in the Secured Party's reasonable judgment, be
necessary  to  effectuate, complete or perfect, or to continue and preserve, the
security  interest of the Secured Party in the Pledged Property, and the Secured
Party shall hold such documents and instruments as secured party, subject to the
terms  and  conditions  contained  herein.

     Section  2.2.     Rights;  Interests;  Etc.
                       -------------------------

          (a)     So  long as no Event of Default (as hereinafter defined) shall
have  occurred  and  be  continuing:

               (i)     the  Company  shall  be  entitled to exercise any and all
rights  pertaining  to  the Pledged Property or any part thereof for any purpose
not  inconsistent  with  the  terms  hereof;  and

               (ii)     the  Company shall be entitled to receive and retain any
and all payments paid or made in respect of the Pledged Property.

                                        2
<PAGE>
          (b)     Upon  the occurrence and during the continuance of an Event of
Default:

               (i)     All rights of the Company to exercise the rights which it
would otherwise be entitled to exercise pursuant to Section 2.2(a)(i) hereof and
to receive payments which it would otherwise be authorized to receive and retain
pursuant  to  Section  2.2(a)(ii) hereof shall be suspended, and all such rights
shall  thereupon become vested in the Secured Party who shall thereupon have the
sole right to exercise such rights and to receive and hold as Pledged Collateral
such  payments;  provided,  however,  that  if  the  Secured  Party shall become
entitled  and  shall  elect  to  exercise  its  right  to realize on the Pledged
Collateral  pursuant  to  Article  5  hereof, then all cash sums received by the
Secured  Party, or held by Company for the benefit of the Secured Party and paid
over  pursuant  to  Section  2.2(b)(ii)  hereof,  shall  be  applied against any
outstanding  Obligations;  and

               (ii)     All  interest,  dividends, income and other payments and
distributions  which  are  received by the Company contrary to the provisions of
Section  2.2(b)(i)  hereof  shall  be  received  in trust for the benefit of the
Secured  Party, shall be segregated from other property of the Company and shall
be  forthwith  paid  over  to  the  Secured  Party;  or

               (iii)     The  Secured  Party  in  its  sole  discretion shall be
authorized  to sell any or all of the Pledged Property at public or private sale
in  order  to recoup all of the outstanding principal plus accrued interest owed
pursuant  to  the  Convertible  Debenture  as  described  herein

          (c)     Each  of the following events shall constitute a default under
this  Agreement  (each  an  "Event  of  Default"):
                             ------------------

               (i)     any  default, whether in whole or in part, shall occur in
the payment to the Secured Party of principal, interest or other item comprising
the  Obligations as and when due or with respect to any other debt or obligation
of  the  Company  to  a  party  other  than  the  Secured  Party;

               (ii)     any default, whether in whole or in part, shall occur in
the  due  observance or performance of any obligations or other covenants, terms
or provisions to be performed under this Agreement or the Transaction Documents;

               (iii)     the  Company  shall:  (1) make a general assignment for
the  benefit  of its creditors; (2) apply for or consent to the appointment of a
receiver,  trustee,  assignee,  custodian,  sequestrator,  liquidator or similar
official  for  itself  or  any  of  its  assets  and  properties; (3) commence a
voluntary  case  for relief as a debtor under the United States Bankruptcy Code;
(4)  file  with  or otherwise submit to any governmental authority any petition,
answer  or  other document seeking:  (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future applicable law
respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief
of  debtors, dissolution or liquidation; (5) file or otherwise submit any answer
or  other document admitting or failing to contest the material allegations of a
petition  or  other  document  filed  or  otherwise  submitted against it in any
proceeding  under  any  such applicable law, or (6) be adjudicated a bankrupt or
insolvent  by  a  court  of  competent  jurisdiction;  or

                                        3
<PAGE>
               (iv)     any  case, proceeding or other action shall be commenced
against  the  Company  for  the  purpose  of effecting, or an order, judgment or
decree  shall  be  entered  by any court of competent jurisdiction approving (in
whole  or  in  part)  anything  specified  in Section 2.2(c)(iii) hereof, or any
receiver,  trustee,  assignee,  custodian,  sequestrator,  liquidator  or  other
official  shall  be appointed with respect to the Company, or shall be appointed
to take or shall otherwise acquire possession or control of all or a substantial
part of the assets and properties of the Company, and any of the foregoing shall
continue unstayed and in effect for any period of thirty (30) days.

                                   ARTICLE 3.

                          ATTORNEY-IN-FACT; PERFORMANCE
                          -----------------------------

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

     Upon the occurrence of an Event of Default, the Company hereby appoints the
Secured  Party  as  its  attorney-in-fact,  with full authority in the place and
stead  of  the Company and in the name of the Company or otherwise, from time to
time  in  the  Secured  Party's discretion to take any action and to execute any
instrument  which  the Secured Party may reasonably deem necessary to accomplish
the  purposes  of  this Agreement, including, without limitation, to receive and
collect all instruments made payable to the Company representing any payments in
respect of the Pledged Collateral or any part thereof and to give full discharge
for  the  same.  The  Secured  Party  may  demand, collect, receipt for, settle,
compromise,  adjust,  sue  for, foreclose, or realize on the Pledged Property as
and when the Secured Party may determine.  To facilitate collection, the Secured
Party may notify account debtors and obligors on any Pledged Property or Pledged
Collateral  to  make  payments  directly  to  the  Secured  Party.

     Section  3.2.     Secured  Party  May  Perform.
                       ----------------------------

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

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     Section  4.1.     Authorization;  Enforceability.
                       ------------------------------

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

                                        4
<PAGE>
     Section  4.2.     Ownership  of  Pledged  Property.
                       --------------------------------

     The  Company  warrants  and  represents that it is the legal and beneficial
owner of the Pledged Property subject to liens of other parties.

                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
                    ----------------------------------------

     Section  5.1.     Default  and  Remedies.
                       ----------------------

          (a)     If an Event of Default described in Section 2.2(c)(i) and (ii)
occurs,  then in each such case the Secured Party may declare the Obligations to
be  due and payable immediately, by a notice in writing to the Company, and upon
any  such declaration, the Obligations shall become immediately due and payable.
If  an  Event of Default described in Sections 2.2(c)(iii) or (iv) occurs and is
continuing  for  the  period  set  forth  therein,  then  the  Obligations shall
automatically  become  immediately  due and payable without declaration or other
act  on  the  part  of  the  Secured  Party.

          (b)     Upon  the occurrence of an Event of Default, the Secured Party
shall:  (i) be entitled to receive all distributions with respect to the Pledged
Collateral,  (ii)  to cause the Pledged Property to be transferred into the name
of  the  Secured Party or its nominee, (iii) to dispose of the Pledged Property,
and (iv) to realize upon any and all rights in the Pledged Property then held by
the  Secured  Party.

     Section  5.2.     Method  of  Realizing  Upon  the  Pledged Property: Other
                       ---------------------------------------------------------
Remedies.
--------

     Upon  the  occurrence of an Event of Default, in addition to any rights and
remedies  available  at  law or in equity, the following provisions shall govern
the  Secured  Party's  right  to  realize  upon  the  Pledged  Property:

          (a)     Any item of the Pledged Property may be sold for cash or other
value in any number of lots at brokers board, public auction or private sale and
may  be  sold  without  demand, advertisement or notice (except that the Secured
Party shall give the Company ten (10) days' prior written notice of the time and
place  or  of  the  time  after  which  a  private  sale  may be made (the "Sale
                                                                            ----
Notice")),  which  notice  period  shall  in  any  event  is hereby agreed to be
------
commercially  reasonable.  At  any  sale  or  sales of the Pledged Property, the
Company  may  bid for and purchase the whole or any part of the Pledged Property
and,  upon compliance with the terms of such sale, may hold, exploit and dispose
of  the  same  without further accountability to the Secured Party.  The Company
will  execute  and  deliver,  or  cause  to  be  executed  and  delivered,  such
instruments,  documents,  assignments, waivers, certificates, and affidavits and
supply  or  cause  to be supplied such further information and take such further
action as the Secured Party reasonably shall require in connection with any such
sale.

          (b)     Any cash being held by the Secured Party as Pledged Collateral
and  all  cash  proceeds  received  by the Secured Party in respect of, sale of,
collection  from,  or  other  realization  upon  all  or any part of the Pledged
Collateral  shall  be  applied  as  follows:

                                        5
<PAGE>
               (i)     to  the  payment of all amounts due the Secured Party for
the  expenses reimbursable to it hereunder or owed to it pursuant to Section 8.3
hereof;

               (ii)     to  the  payment of the Obligations then due and unpaid.

               (iii)     the  balance, if any, to the person or persons entitled
thereto,  including,  without  limitation,  the  Company.

          (c)     In  addition  to  all  of  the  rights  and remedies which the
Secured  Party may have pursuant to this Agreement, the Secured Party shall have
all  of  the rights and remedies provided by law, including, without limitation,
those  under  the  Uniform  Commercial  Code.

               (i)     If  the  Company  fails  to pay such amounts due upon the
occurrence  of  an  Event of Default which is continuing, then the Secured Party
may  institute  a  judicial proceeding for the collection of the sums so due and
unpaid,  may  prosecute  such  proceeding  to  judgment  or final decree and may
enforce  the same against the Company and collect the monies adjudged or decreed
to  be  payable  in  the  manner provided by law out of the property of Company,
wherever  situated.

               (ii)     The  Company  agrees  that  it  shall  be liable for any
reasonable  fees, expenses and costs incurred by the Secured Party in connection
with  enforcement,  collection  and  preservation  of the Transaction Documents,
including,  without  limitation,  reasonable  legal  fees and expenses, and such
amounts  shall  be  deemed included as Obligations secured hereby and payable as
set  forth  in  Section  8.3  hereof.

     Section  5.3.     Proofs  of  Claim.
                       -----------------

          In  case of the pendency of any receivership, insolvency, liquidation,
bankruptcy,  reorganization,  arrangement,  adjustment,  composition  or  other
judicial proceeding relating to the Company or the property of the Company or of
such  other obligor or its creditors, the Secured Party (irrespective of whether
the  Obligations  shall  then  be  due  and  payable  as therein expressed or by
declaration  or  otherwise  and  irrespective of whether the Secured Party shall
have made any demand on the Company for the payment of the Obligations), subject
to  the rights of Previous Security Holders, shall be entitled and empowered, by
intervention  in  such  proceeding  or  otherwise:

               (i)     to  file  and  prove  a claim for the whole amount of the
Obligations  and  to  file such other papers or documents as may be necessary or
advisable  in order to have the claims of the Secured Party (including any claim
for  the  reasonable legal fees and expenses and other expenses paid or incurred
by  the  Secured  Party  permitted hereunder and of the Secured Party allowed in
such  judicial  proceeding),  and

               (ii)     to  collect  and  receive  any  monies or other property
payable  or  deliverable  on any such claims and to distribute the same; and any
custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator  or  other
similar  official  in  any  such judicial proceeding is hereby authorized by the
Secured  Party to make such payments to the Secured Party and, in the event that
the  Secured  Party shall consent to the making of such payments directed to the
Secured  Party,  to  pay  to  the  Secured Party any amounts for expenses due it
hereunder.

                                        6
<PAGE>
     Section  5.4.     Duties  Regarding  Pledged  Collateral.
                       --------------------------------------

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

                                   ARTICLE 6.

                              AFFIRMATIVE COVENANTS
                              ---------------------

     The  Company  covenants and agrees that, from the date hereof and until the
Obligations  have  been fully paid and satisfied, unless the Secured Party shall
consent otherwise in writing (as provided in Section 8.4 hereof):

     Section  6.1.     Existence,  Properties,  Etc.
                       -----------------------------

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

     Section  6.2.     Financial  Statements  and  Reports.
                       -----------------------------------

     The  Company  shall furnish to the Secured Party such financial data as the
Secured  Party  may  reasonably  request.  Without  limiting  the foregoing, the
Company  shall  furnish  to  the  Secured Party (or cause to be furnished to the
Secured  Party)  the  following:

          (a)     as  soon  as  practicable  and in any event within ninety (90)
days  after the end of each fiscal year of the Company, the balance sheet of the
Company  as  of  the  close  of  such fiscal year, the statement of earnings and
retained  earnings  of  the  Company  as  of  the close of such fiscal year, and
statement  of cash flows for the Company for such fiscal year, all in reasonable
detail,  prepared  in  accordance  with generally accepted accounting principles
consistently  applied,  certified  by  the  chief  executive and chief financial
officers  of  the  Company  as  being  true  and  correct  and  accompanied by a
certificate  of the chief executive and chief financial officers of the Company,
stating  that  the  Company  has  kept,  observed,  performed and fulfilled each
covenant,  term and condition of this Agreement during such fiscal year and that

                                        7
<PAGE>
no  Event of Default hereunder has occurred and is continuing, or if an Event of
Default  has  occurred  and  is  continuing,  specifying the nature of same, the
period  of  existence  of  same  and  the action the Company proposes to take in
connection  therewith;

          (b)     within  thirty  (30) days of the end of each calendar month, a
balance  sheet  of  the  Company as of the close of such month, and statement of
earnings and retained earnings of the Company as of the close of such month, all
in  reasonable  detail,  and prepared substantially in accordance with generally
accepted  accounting  principles  consistently  applied,  certified by the chief
executive and chief financial officers of the Company as being true and correct;
and

          (c)     promptly  upon  receipt  thereof,  copies  of all accountants'
reports  and  accompanying  financial  reports  submitted  to  the  Company  by
independent  accountants  in  connection  with  each  annual  examination of the
Company.

     Section  6.3.     Accounts  and  Reports.
                       ----------------------

     The  Company  shall  maintain a standard system of accounting in accordance
with  generally accepted accounting principles consistently applied and provide,
at its sole expense, to the Secured Party the following:

          (a)     as  soon  as  available,  a  copy  of  any  notice  or  other
communication  alleging  any  nonpayment or other material breach or default, or
any  foreclosure  or  other action respecting any material portion of its assets
and  properties,  received  respecting any of the indebtedness of the Company in
excess  of  $15,000 (other than the Obligations), or any demand or other request
for  payment  under  any  guaranty,  assumption,  purchase  agreement or similar
agreement or arrangement respecting the indebtedness or obligations of others in
excess  of  $15,000,  including any received from any person acting on behalf of
the  Secured  Party  or  beneficiary  thereof;  and

          (b)     within  fifteen  (15) days after the making of each submission
or  filing, a copy of any report, financial statement, notice or other document,
whether  periodic or otherwise, submitted to the shareholders of the Company, or
submitted  to  or filed by the Company with any governmental authority involving
or affecting (i) the Company that could have a Material Adverse Effect; (ii) the
Obligations;  (iii)  any  part  of  the  Pledged  Collateral; or (iv) any of the
transactions contemplated in this Agreement or the Loan Instruments.

     Section  6.4.     Maintenance  of  Books  and  Records;  Inspection.
                       -------------------------------------------------

     The  Company  shall  maintain its books, accounts and records in accordance
with  generally  accepted accounting principles consistently applied, and permit
the  Secured  Party, its officers and employees and any professionals designated
by  the  Secured  Party  in writing, at any time to visit and inspect any of its
properties  (including  but  not limited to the collateral security described in
the  Transaction  Documents  and/or  the  Loan Instruments), corporate books and
financial  records,  and  to discuss its accounts, affairs and finances with any
employee,  officer  or  director  thereof.

                                        8
<PAGE>
     Section  6.5.     Maintenance  and  Insurance.
                       ---------------------------

          (a)     The  Company  shall maintain or cause to be maintained, at its
own  expense,  all  of  its  assets  and  properties  in  good working order and
condition,  making  all  necessary repairs thereto and renewals and replacements
thereof.

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

     Section  6.6.     Contracts  and  Other  Collateral.
                       ---------------------------------

     The  Company  shall perform all of its obligations under or with respect to
each  instrument,  receivable,  contract  and  other  intangible included in the
Pledged  Property  to  which  the Company is now or hereafter will be party on a
timely  basis and in the manner therein required, including, without limitation,
this  Agreement.

     Section  6.7.     Defense  of  Collateral,  Etc.
                       ------------------------------

     The  Company  shall defend and enforce its right, title and interest in and
to  any  part  of:  (a) the Pledged Property; and (b) if not included within the
Pledged  Property,  those assets and properties whose loss could have a Material
Adverse  Effect,  the  Company shall defend the Secured Party's right, title and
interest in and to each and every part of the Pledged Property, each against all
manner  of  claims and demands on a timely basis to the full extent permitted by
applicable  law.

     Section  6.8.     Payment  of  Debts,  Taxes,  Etc.
                       ---------------------------------

     The  Company  shall  pay,  or cause to be paid, all of its indebtedness and
other  liabilities and perform, or cause to be performed, all of its obligations
in accordance with the respective terms thereof, and pay and discharge, or cause
to  be paid or discharged, all taxes, assessments and other governmental charges
and  levies  imposed upon it, upon any of its assets and properties on or before
the  last  day on which the same may be paid without penalty, as well as pay all
other  lawful  claims  (whether  for  services,  labor,  materials,  supplies or
otherwise)  as  and  when  due

     Section  6.9.     Taxes  and  Assessments;  Tax  Indemnity.
                       ----------------------------------------

     The  Company  shall  (a)  file  all  tax  returns and appropriate schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency,  (b)  pay  and  discharge  all  taxes, assessments and governmental
charges  or levies imposed upon the Company, upon its income and profits or upon
any  properties  belonging  to  it,  prior to the date on which penalties attach
thereto,  and  (c) pay all taxes, assessments and governmental charges or levies
that,  if

                                        9
<PAGE>
unpaid,  might  become  a  lien  or charge upon any of its properties; provided,
however,  that  the  Company in good faith may contest any such tax, assessment,
governmental  charge  or  levy described in the foregoing clauses (b) and (c) so
long as appropriate reserves are maintained with respect thereto.

     Section  6.10.     Compliance  with  Law  and  Other  Agreements.
                        ---------------------------------------------

     The  Company  shall  maintain its business operations and property owned or
used  in  connection  therewith  in  compliance with (a) all applicable federal,
state  and  local  laws,  regulations  and  ordinances  governing  such business
operations  and  the use and ownership of such property, and (b) all agreements,
licenses,  franchises,  indentures and mortgages to which the Company is a party
or by which the Company or any of its properties is bound.  Without limiting the
foregoing,  the Company shall pay all of its indebtedness promptly in accordance
with  the  terms  thereof.

     Section  6.11.     Notice  of  Default.
                        -------------------

     The  Company  shall  give  written  notice  to  the  Secured  Party  of the
occurrence  of  any  default  or  Event  of  Default  under  this Agreement, the
Transaction  Documents  or  any  other Loan Instrument or any other agreement of
Company  for  the  payment  of  money,  promptly  upon  the  occurrence thereof.

     Section  6.12.     Notice  of  Litigation.
                        ----------------------

     The  Company shall give notice, in writing, to the Secured Party of (a) any
actions,  suits  or  proceedings  wherein  the  amount  at issue is in excess of
$50,000,  instituted by any persons against the Company, or affecting any of the
assets  of  the  Company,  and (b) any dispute, not resolved within fifteen (15)
days  of  the  commencement thereof, between the Company on the one hand and any
governmental  or  regulatory  body  on the other hand, which might reasonably be
expected  to  have  a  Material  Adverse  Effect  on  the business operations or
financial  condition  of  the  Company.

                                   ARTICLE 7.

                               NEGATIVE COVENANTS
                               ------------------

     The  Company  covenants  and  agrees  that,  from the date hereof until the
Obligations  have  been  fully paid and satisfied, the Company shall not, unless
the  Secured  Party  shall  consent  otherwise  in  writing:

     Section  7.1.     Indebtedness.
                       ------------

     The Company shall not directly or indirectly permit, create, incur, assume,
permit  to  exist,  increase,  renew  or  extend on or after the date hereof any
indebtedness  on  its  part,  including  commitments,  contingencies  and credit
availabilities, or apply for or offer or agree to do any of the foregoing.

                                       10
<PAGE>
     Section  7.2.     Liens  and  Encumbrances.
                       ------------------------

     The Company shall not directly or indirectly make, create, incur, assume or
permit to exist any assignment, transfer, pledge, mortgage, security interest or
other  lien  or  encumbrance  of  any  nature  in, to or against any part of the
Pledged  Property or of the Company's capital stock, or offer or agree to do so,
or  own  or  acquire  or agree to acquire any asset or property of any character
subject  to  any  of  the foregoing encumbrances (including any conditional sale
contract  or  other  title retention agreement), or assign, pledge or in any way
transfer  or  encumber  its right to receive any income or other distribution or
proceeds  from  any part of the Pledged Property or the Company's capital stock;
or  enter  into  any sale-leaseback financing respecting any part of the Pledged
Property  as  lessee, or cause or assist the inception or continuation of any of
the  foregoing.

     Section  7.3.     Certificate  of  Incorporation,  By-Laws,  Mergers,
                       ---------------------------------------------------
                       Consolidations,  Acquisitions  and  Sales.
                       -----------------------------------------

     Without the prior express written consent of the Secured Party, the Company
shall  not:  (a) Amend its Certificate of Incorporation or By-Laws; (b) issue or
sell  its  stock,  stock  options, bonds, notes or other corporate securities or
obligations;  (c)  be  a  party  to  any  merger,  consolidation  or  corporate
reorganization,  (d)  purchase  or otherwise acquire all or substantially all of
the  assets  or  stock  of, or any partnership or joint venture interest in, any
other  person,  firm  or  entity,  (e)  sell, transfer, convey, grant a security
interest  in  or lease all or any substantial part of its assets, nor (f) create
any subsidiaries nor convey any of its assets to any subsidiary.

     Section  7.4.     Management,  Ownership.
                       ----------------------

     The  Company  shall not materially change its ownership, executive staff or
management  without  the  prior  written  consent  of  the  Secured  Party.  The
ownership, executive staff and management of the Company are material factors in
the Secured Party's willingness to institute and maintain a lending relationship
with  the  Company.

     Section  7.5.     Dividends,  Etc.
                       ---------------

     The  Company  shall not declare or pay any dividend of any kind, in cash or
in  property, on any class of its capital stock, nor purchase, redeem, retire or
otherwise  acquire for value any shares of such stock, nor make any distribution
of  any kind in respect thereof, nor make any return of capital to shareholders,
nor  make  any  payments  in respect of any pension, profit sharing, retirement,
stock  option,  stock  bonus,  incentive compensation or similar plan (except as
required  or  permitted  hereunder),  without  the  prior written consent of the
Secured  Party.

     Section  7.6.     Guaranties;  Loans.
                       ------------------

     The  Company  shall  not  guarantee  nor  be  liable in any manner, whether
directly  or  indirectly,  or  become contingently liable after the date of this
Agreement  in  connection  with the obligations or indebtedness of any person or
persons,  except  for  (i)  the  indebtedness  currently  secured  by  the liens
identified  on  the Pledged Property identified on Exhibit A hereto and (ii) the
endorsement  of  negotiable  instruments  payable  to the Company for deposit or
collection  in  the

                                       11
<PAGE>
ordinary  course  of  business.  The Company shall not make any loan, advance or
extension  of  credit  to  any  person  other  than  in the normal course of its
business.

     Section  7.7.     Debt.
                       ----

     The  Company  shall  not  create,  incur,  assume  or  suffer  to exist any
additional  indebtedness of any description whatsoever in an aggregate amount in
excess  of  $25,000  (excluding  any  indebtedness of the Company to the Secured
Party,  trade  accounts  payable  and  accrued expenses incurred in the ordinary
course  of business and the endorsement of negotiable instruments payable to the
Company,  respectively  for  deposit  or  collection  in  the ordinary course of
business).

     Section  7.8.     Conduct  of  Business.
                       ---------------------

     The Company will continue to engage, in an efficient and economical manner,
in  a  business  of the same general type as conducted by it on the date of this
Agreement.

     Section  7.9.     Places  of  Business.
                       --------------------

     The location of the Company's chief place of business is 501 West Broadway,
Suite  200, Idaho Falls, ID 83402.  The Company shall not change the location of
its  chief  place  of  business, chief executive office or any place of business
disclosed  to  the  Secured  Party  or move any of the Pledged Property from its
current  location  without thirty (30) days' prior written notice to the Secured
Party  in  each  instance.

                                   ARTICLE 8.

                                  MISCELLANEOUS
                                  -------------

     Section  8.1.     Notices.
                       -------

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

          If to the Secured Party:  Cornell Capital Partners, LP
                                    101 Hudson Street-Suite 3700
                                    Jersey City, New Jersey 07302
                                    Attention:   Mark Angelo
                                    Portfolio Manager
                                    Telephone:   (201) 986-8300
                                    Facsimile:   (201) 985-8266

                                       12
<PAGE>
          With a copy to:           David Gonzalez, Esq.
                                    101 Hudson Street - Suite 3700
                                    Jersey City, NJ 07302
                                    Telephone:   (201) 985-8300
                                    Facsimile:   (201) 985-8266

          And if to the Company:    Intrepid Technology & Resources, Inc.
                                    501 West Broadway - Suite 200
                                    Idaho Falls, ID 83402
                                    Attention:   Dr. Dennis D. Keiser
                                    Telephone:   (208) 529-5337
                                    Facsimile:   (208) 529-1014

          With a copy to:           Kirkpatrick & Lockhart LLP
                                    201 South Biscayne Boulevard-Suite 2000
                                    Miami, Florida  33131-2399
                                    Attention:   Clayton E. Parker, Esq.
                                    Telephone:   (305) 539-3300
                                    Facsimile:   (305) 358-7095

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

     Section  8.2.     Severability.
                       ------------

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

     Section  8.3.     Expenses.
                       --------

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

     Section  8.4.     Waivers,  Amendments,  Etc.
                       ---------------------------

     The  Secured  Party's  delay  or  failure at any time or times hereafter to
require  strict  performance  by  Company  of  any  undertakings,  agreements or
covenants  shall  not waiver, affect, or diminish any right of the Secured Party
under  this Agreement to demand strict compliance and

                                       13
<PAGE>
performance  herewith.  Any  waiver by the Secured Party of any Event of Default
shall  not  waive  or  affect  any other Event of Default, whether such Event of
Default  is  prior  or subsequent thereto and whether of the same or a different
type.  None  of  the  undertakings,  agreements  and  covenants  of  the Company
contained  in  this  Agreement, and no Event of Default, shall be deemed to have
been  waived by the Secured Party, nor may this Agreement be amended, changed or
modified,  unless such waiver, amendment, change or modification is evidenced by
an  instrument  in  writing  specifying  such  waiver,  amendment,  change  or
modification  and  signed  by  the  Secured  Party.

     Section  8.5.     Continuing  Security  Interest.
     -------------     ------------------------------

     This  Agreement  shall create a continuing security interest in the Pledged
Property and shall: (i) remain in full force and effect until payment in full of
the  Obligations;  and  (ii)  be binding upon the Company and its successors and
heirs and (iii) inure to the benefit of the Secured Party and its successors and
assigns.  Upon  the  payment  or  satisfaction  in  full of the Obligations, the
Company  shall be entitled to the return, at its expense, of such of the Pledged
Property  as  shall  not have been sold in accordance with Section 5.2 hereof or
otherwise  applied  pursuant  to  the  terms  hereof.

     Section  8.6.     Independent  Representation.
                       ---------------------------

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

     Section  8.7.     Applicable  Law:  Jurisdiction.
                       ------------------------------

     This  Agreement shall be governed by and interpreted in accordance with the
laws  of the State of New Jersey without regard to the principles of conflict of
laws.  The  parties further agree that any action between them shall be heard in
Hudson  County,  New Jersey, and expressly consent to the jurisdiction and venue
of  the  Superior  Court  of New Jersey, sitting in Hudson County and the United
States  District  Court  for  the  District of New Jersey sitting in Newark, New
Jersey  for  the  adjudication  of  any  civil  action asserted pursuant to this
Paragraph.

     Section  8.8.     Waiver  of  Jury  Trial.
                       -----------------------

     AS  A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND  TO  MAKE  THE  FINANCIAL  ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY
WAIVES  ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO
THIS  AGREEMENT  AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

     Section  8.9.     Entire  Agreement.
                       -----------------

     This  Agreement  constitutes  the  entire  agreement  among the parties and
supersedes  any  prior agreement or understanding among them with respect to the
subject  matter  hereof.

                                       14
<PAGE>
     IN  WITNESS  WHEREOF, the parties hereto have executed this Agreement as of
the  date  first  above  written.

                                      COMPANY:
                                      INTREPID TECHNOLOGY & RESOURCES, INC.

                                      By:  /s/ Dr. Dennis D. Keiser
                                           ------------------------
                                      Name:  Dr. Dennis D. Keiser
                                      Title: President & CEO

                                      SECURED PARTY:
                                      CORNELL CAPITAL PARTNERS, LP

                                      BY:  YORKVILLE ADVISORS, LLC
                                      ITS: GENERAL PARTNER

                                      By:  /s/ Mark Angelo
                                           ---------------
                                      Name:  Mark Angelo
                                      Title: Portfolio Manager

                                       15
<PAGE>
                                    EXHIBIT A
                         DEFINITION OF PLEDGED PROPERTY
                         ------------------------------

     For  the purpose of securing prompt and complete payment and performance by
the  Company  of  all  of  the  Obligations,  the  Company  unconditionally  and
irrevocably hereby grants to the Secured Party a continuing security interest in
and to, and lien upon, the following Pledged Property of the Company:

          (a)     all  goods  of  the  Company,  including,  without limitation,
machinery,  equipment,  furniture,  furnishings, fixtures, signs, lights, tools,
parts,  supplies  and  motor  vehicles  of  every  kind  and description, now or
hereafter owned by the Company or in which the Company may have or may hereafter
acquire any interest, and all replacements, additions, accessions, substitutions
and  proceeds  thereof,  arising from the sale or disposition thereof, and where
applicable,  the  proceeds  of insurance and of any tort claims involving any of
the  foregoing;

          (b)     all  inventory  of the Company, including, but not limited to,
all  goods,  wares,  merchandise,  parts,  supplies,  finished  products,  other
tangible  personal  property,  including such inventory as is temporarily out of
Company's  custody  or possession and including any returns upon any accounts or
other  proceeds,  including  insurance  proceeds,  resulting  from  the  sale or
disposition  of  any  of  the  foregoing;

          (c)     all  contract  rights  and general intangibles of the Company,
including,  without limitation, goodwill, trademarks, trade styles, trade names,
leasehold  interests, partnership or joint venture interests, patents and patent
applications,  copyrights,  deposit  accounts  whether  now  owned  or hereafter
created;

          (d)     all  documents,  warehouse  receipts,  instruments and chattel
paper of the Company whether now owned or hereafter created;

          (e)     all accounts and other receivables, instruments or other forms
of  obligations  and  rights  to  payment  of  the  Company (herein collectively
referred  to  as  "Accounts"),  together  with  the  proceeds thereof, all goods
                   --------
represented  by  such  Accounts  and  all such goods that may be returned by the
Company's  customers,  and  all  proceeds  of  any  insurance  thereon,  and all
guarantees,  securities  and liens which the Company may hold for the payment of
any  such  Accounts  including,  without  limitation,  all rights of stoppage in
transit,  replevin and reclamation and as an unpaid vendor and/or lienor, all of
which  the  Company  represents  and  warrants  will  be  bona fide and existing
obligations of its respective customers, arising out of the sale of goods by the
Company  in  the  ordinary  course  of  business;

          (f)     to  the  extent  assignable, all of the Company's rights under
all  present  and future authorizations, permits, licenses and franchises issued
or granted in connection with the operations of any of its facilities;

          (g)     all  products  and  proceeds  (including,  without limitation,
insurance proceeds) from the above-described Pledged Property.

                                      A-1
<PAGE>

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