Document:

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the "Agreement"), is entered into and made effective as
of December 23, 2005, by and between Walker Financial Corp, Inc., a Delaware
corporation with its principal place of business located at 990 Stewart Avenue -
Suite 60A Garden City, New York 11530 (the "Company"), and the Dutchess Private
Equities Fund, II, LP (the "Secured Party").

WHEREAS, the Company shall issue and sell to the Secured Party, as provided in
the Debenture Agreement of even date herewith between the Company and the
Secured Party (the "Debenture Agreement"), and the Secured Party shall purchase
up to Two Hundred and Twenty Thousand Dollars ($220,000) of secured Debentures
(the "Debentures"), which shall be convertible into shares of the Company's
common stock, par value $0.10 (the "Common Stock") (as converted, the
"Conversion Shares") in the respective amounts set forth opposite each Holder
name on Questionnaire attached to the Subscription Agreement ("Holder");

WHEREAS, to induce the Secured Party to enter into the transaction contemplated
by the Debenture Agreement, 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 promises and the mutual covenants herein
contained, and for other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:

ARTICLE 1. DEFINITIONS AND INTERPRETATIONS

Section 1.1. Recitals.

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

Section 1.2. Interpretations.

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

Section 1.3. Obligations Secured.

Except as described in Public Filings with the Securities and Exchange
Commission, 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
this Agreement, the Transaction Documents, and any other amounts now or
hereafter owed to the Secured Party by the Company thereunder or hereunder
(collectively, the "Obligations").

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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.

             (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,

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                 (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) An Event of Default hereunder shall be deemed to occur upon
an Event of Default under Article 6 of the Convertible Debentures.

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.

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

Section 4.2. Ownership of Pledged Property.

The Company warrants and represents that it is the legal and beneficial owner of
the Pledged Property free and clear of any lien, security interest, option or
other charge or encumbrance.

ARTICLE 5. DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

Section 5.1. Default and Remedies

             (a) If an Event of Default 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, after giving
the Company seven (7) business days to cure said Event of Default, the
Obligations shall become immediately due and payable. If an Event of Default
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 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.

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             (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:

                 (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.

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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 or under its
control.

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, or similar
documents pertaining to the Company's jurisdiction, if so 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.

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The Company shall furnish to the Secured Party within a reasonable time such
financial data as the Secured Party may reasonably request, including, without
limitation, the following:

             (a) The balance sheet of the Company as of the close of each
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 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; and ,

             (b) 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.

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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.

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.

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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 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 material 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
$15,000, instituted by any persons against the Company, or materially 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.

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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. 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 7.2. 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) unless
previously obligated to do so, 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 additional 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 7.3. 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 7.4. 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.

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Section 7.5. 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
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 7.6. 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
$10,000 (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 7.7. 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 7.8. Places of Business.

Without prior written consent of the Secured Party, 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 five (5) 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:

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If to the Secured Party:
                  Douglas Leighton
                  Dutchess Private Equities Fund
                  50 Commonwealth Ave, Suite 2
                  Boston, MA 02116
                  Telephone: 617 301 4700
                  Facsimile: 617 249 0947

And if to the Company:
                  Mitch Segal
                  Walker Financial Corp
                  990 Stewart Avenue - Suite 60A
                  Garden City, New York 11530
                  Telephone: (516) 832-7000
                  Facsimile: (516) 832-7979

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 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.

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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 Commonwealth of Massachusetts without regard to the principles of
conflict of laws. The parties further agree that any action between them shall
be heard in Suffolk County, Massachusetts,

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.

                                      * * *

                                       13
<PAGE>

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

COMPANY:
Walker Financial Corp

By
  ---------------------------------------------------
Name:    Mitchell S Segal
Title:   Chief Executive Officer

SECURED PARTY:
Dutchess Private Equities Fund, II, LP

By:
   ---------------------------------
Douglas H. Leighton, Managing Member
Dutchess Capital Management, LLC;
General Partner to:
Dutchess Private Equities Fund, II, LP

                                       14
<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;

                                       15
<PAGE>

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

(h) all shares of the Company's common stock ("Pledge Shares"), in certificate
form, complete with stock powers assigning the Pledge Shares to the Secured
Party in the event of Default. All shares held by insiders, individually,
jointly or through a corporation due upon Closing. The Certificates shall be
held at a location to be designated by the Secured Party. The Certificates shall
be accompanies by all the proper paperwork including stock powers and
corporation resolutions, if necessary.

                                       16--------------------

                             Walker Financial Corp.
                              --------------------

     This offering consists of $220,000 of the Company's 5 Year Convertible
                         Debentures convertible into the
                             Company's Common Stock.

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

                             SUBSCRIPTION AGREEMENT

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

                                       1
<PAGE>

SUBSCRIPTION PROCEDURES

      Convertible Debentures of Walker Financial Corp. (the "Company") are being
offered (the "Debentures"). This offering is being made in accordance with the
exemptions from registration provided for under Section 4(2) of the Securities
Act of 1933, as amended (the "1933 Act") and Rule 506 of Regulation D
promulgated under the 1933 Act.

      In order to purchase Debentures, each subscriber must complete and execute
a questionnaire (the "Questionnaire") and a subscription agreement (the
"Subscription Agreement"). In addition, the subscriber must make a payment
pursuant to the Funds Authorization Distribution Agreement, for the amount being
purchased or directly by the Holder. All subscriptions are subject to acceptance
by the Company, which shall not occur until the Company has returned the signed
Company Signature Page.

      The Questionnaire is designed to enable the Holder to demonstrate the
minimum legal requirements under federal and state securities laws to purchase
the Debentures. The Signature Page for the Questionnaire and the Subscription
Agreement contain representations relating to the subscription and should be
reviewed carefully by each subscriber.

      If you are a foreign person or foreign entity, you may be subject to a
withholding tax equal to thirty percent (30%) of any dividends paid by the
Company. In order to eliminate or reduce such withholding tax you must submit a
properly executed I.R.S. Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States) or I.R.S. Form 1001 (Ownership Exemption or Reduced Trade Certificate),
claiming exemption from withholding or eligibility for treaty benefits in the
form of a lower rate of withholding tax on interest or dividends.

      Payment of the full subscription amount will be made by wire transfer by
Dutchess Private Equities Fund, II, LP (the "Holder") on or prior to the closing
per the wire instructions that will be established. In the event of a
termination of the offering or the rejection of a subscription, subscription
funds will be returned by the Company without interest or charges.

                                       2
<PAGE>

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS. THE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS PURSUANT TO
REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

SUBSCRIPTION AGREEMENT

To:   Walker Financial Corp.

      This Subscription Agreement is made between Walker Financial Corp., a
Delaware corporation, (the "Company"), and the undersigned prospective Holder
("Holder") who is subscribing hereby for the Company's convertible debentures
(the "Debentures") on December 23, 2005. This subscription is submitted to you
in accordance with and subject to the terms and conditions described in this
Subscription Agreement, together with any Exhibits thereto, relating to an
offering (the "Offering") of Two Hundred and Twenty Thousand dollars ($220,000)
of Debentures. The Offering is limited to accredited Investors and is made in
accordance with the exemptions from registration provided for under Section 4(2)
of the 1933 Act and Rule 506 of Regulation D promulgated under the 1933 Act
("Regulation D").

      Whereas, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Debenture
Registration Rights Agreement, the Debenture Agreement, the Irrevocable Transfer
Agent Agreement between the Company and Dutchess Capital Management, LLC,
Security Agreement and Warrant Agreement (collectively, the "Transaction
Documents").

                                       3
<PAGE>

1.    SUBSCRIPTION.

            (a) The closing shall be deemed to have occurred on the date in the
preamble of this document (the "Closing Date" or a "Closing"). The Company shall
pay twelve percent (12%) annual coupon on the unpaid principal amount of this
Debenture (the "Debenture") at such times and in such amounts as outlined in the
Debenture Agreement.

            (b) Upon receipt by the Company of the requisite payment for the
Debentures being purchased, the Debentures so purchased will be forwarded by the
Company to the Holder or its broker, as listed on the signature page, and the
name of such Holder will be registered on the Debenture transfer books of the
Company as the record owner of such Debentures.

            (c) As long as the Holder owns the Debenture, the Holder shall have
the right to change the terms for the balance of the Debenture it then holds, to
match the terms of any other offering of securities made by the Company.

            (d) The Holders shall fund ninety-five thousand dollars ($95,000)
upon the initial closing and an additional one hundred twenty-five thousand
dollars ($125,000) simultaneously on the date the registration statement
covering this Offering is filed with the United States Securities and Exchange
Commission ("SEC").

2.    REPRESENTATIONS AND WARRANTIES OF THE HOLDER.

      The Holder hereby represents and warrants to, and agrees with, the Company
as follows:

                  (a) The Holder has been furnished with, and has carefully read
            the applicable form of Debenture Registration Rights Agreement, and
            the Debenture and is familiar with and understands the terms of the
            Offering. With respect to tax and other economic considerations
            involved in his investment, the Holder is not relying on the
            Company. The Holder has carefully considered and has, to the extent
            the Holder believes such discussion necessary, discussed with the
            Holder 's professional legal, tax, accounting and financial advisors
            the suitability of an investment in the Company, by purchasing the
            Debentures, for the Holder 's particular tax and financial situation
            and has determined that the investment being made by the Holder is a
            suitable investment for the Holder.

                  (b) The Holder acknowledges that all documents, records, and
            books pertaining to this investment which the Holder has requested
            have been made available for inspection or the Holder has had access
            thereto.

                                       4
<PAGE>

                  (c) The Holder has had a reasonable opportunity to ask
            questions of and receive answers from a person or persons acting on
            behalf of the Company concerning the Offering and if such
            opportunity was taken then all such questions have been answered to
            the full satisfaction of the Holder.

                  (d) The Holder will not sell, or otherwise dispose of the
            Debentures or the Common Stock issued upon conversion of the
            Debentures without registration under the 1933 Act or applicable
            state securities laws or compliance with an exemption therefrom
            including but not limited to: Rule 144A, 144 (k) (herein after
            referred to as an "Exemption"). The Debentures have not been
            registered under the 1933 Act or under the securities laws of any
            state. Resales of the Common Stock underlying the Debentures or
            issued in payment of accrued interest on the Debentures are to be
            registered by the Company pursuant to the terms of the Debenture
            Registration Rights Agreement incorporated herein and made a part
            hereof.

                  (e) The Holder recognizes that an investment in the Debentures
            involves substantial risks, including loss of the entire amount of
            such investment. Further, the Holder has carefully read and
            considered the schedules attached hereto.

                  (f) The Holder acknowledges that each certificate representing
            the Debentures (and the shares of Common Stock issued upon
            conversion of the Debentures, unless registered or with an
            Exemption) or in payment of interest on the Debentures shall be
            stamped or otherwise imprinted with a legend substantially in the
            following form:

            THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
            SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
            EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
            SECURITIES ACT OF 1933, AS AMENDED, (ii) TO THE EXTENT APPLICABLE,
            PURSUANT TO RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH
            ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) PURSUANT TO
            AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

      If Holder sends a Notice of Conversion (See Exhibit A attached hereto),
and provided a registration statement under the Securities Act of 1933 is in
effect as to the sale, then in such event the Company shall have its transfer
agent send Holder the appropriate number of shares of Common Stock without
restrictive legends (other than a legend referring to the resale registration
and prospectus delivery requirements) and the Company is not subject to stop
transfer instructions.

                                       5
<PAGE>

                  (g) If this Subscription Agreement is executed and delivered
            on behalf of a corporation or legal entity other than a natural
            person: (i) such corporation or other entity has the full legal
            right and power and all authority and approval required (a) to
            execute and deliver, or authorize execution and delivery of this
            Subscription Agreement and all other instruments (including, without
            limitation, the Debenture Registration Rights Agreement, Irrevocable
            Transfer Agent Agreement, Security Agreement, Warrant Agreement and
            Debenture Agreements) executed and delivered by or on behalf of such
            corporation in connection with the purchase of the Debentures and
            (b) to purchase and hold the Debentures; and (ii) the signature of
            the party signing on behalf of such corporation or entity is binding
            upon such corporation.

                  (h) The Holder is not subscribing for the Debentures as a
            result of, or pursuant to, any advertisement, article, notice or
            other communication published in any newspaper, magazine or similar
            media or broadcast over television or radio or presented at any
            seminar or meeting.

                  (i) The Holder is purchasing the Debentures for its own
            account for investment, and not with a view toward the resale or
            distribution thereof, except pursuant to sales registered or
            exempted from registration under the 1933 Act. The Holder has not
            offered or sold any portion of the Debentures being acquired nor
            does the Holder have any present intention of dividing the
            Debentures with others or of selling, distributing or otherwise
            disposing of any portion of the Debentures either currently or after
            the passage of a fixed or determinable period of time or upon the
            occurrence or non-occurrence of any predetermined event or
            circumstance in violation of the 1933 Act provided, however, that by
            making the representations herein, Holder does not agree to hold any
            of the Debentures for any minimum or other specific term and
            reserves the right to dispose of the Debentures at any time in
            accordance with or pursuant to a registration statement or an
            exemption under the 1933 Act. Holder is neither an underwriter of,
            nor a dealer in, the Debentures or the Common Stock issuable upon
            conversion thereof or upon the payment of interest thereon and is
            not participating in the distribution or resale of the Debentures or
            the Common Stock issuable upon conversion or exercise thereof.

                  (j) The Holder or the Holder's representatives, as the case
            may be, has such knowledge and experience in financial, tax and
            business matters so as to enable the Holder to utilize the
            information made available to the Holder in connection with the
            Offering to evaluate the merits and risks of an investment in the
            Debentures and to make an informed investment decision with respect
            thereto.

                                       6
<PAGE>

3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

      Except as set forth in the Schedules attached hereto, the Company
represents and warrants to the Holder that:

      a. Organization and Qualification. The Company and its "SUBSIDIARIES"
(which for purposes of this Subscription Agreement means any entity in which the
Company, directly or indirectly, owns capital stock or holds an equity or
similar interest) (a complete list of which is set forth in Schedule 3(a)) are
corporations duly organized and validly existing in good standing under the laws
of the respective jurisdictions of their incorporation, and have the requisite
corporate power and authorization to own their properties and to carry on their
business as now being conducted. Both the Company and its Subsidiaries are duly
qualified to do business and are in good standing in every jurisdiction in which
their ownership of property or the nature of the business conducted by them
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Subscription Agreement, "MATERIAL ADVERSE EFFECT" means any
material adverse effect on the business, properties, assets, operations, results
of operations, financial condition or prospects of the Company and its
Subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements and instruments to be entered into in connection
herewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined in Section 3(b)below).

      b. Authorization; Enforcement; Compliance with Other Instruments. (i) The
Company has the requisite corporate power and authority to enter into and
perform this Subscription Agreement, the Debenture Registration Rights
Agreement, Warrant Agreement, Security Agreement, and the Irrevocable Transfer
Agent Instructions among the Company, the Holder, Transfer Agent, and Dutchess
Capital Management, LLC and the Debenture Agreement, and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Subscription Agreement (collectively, the
"TRANSACTION DOCUMENTS"), and to issue the Debentures in accordance with the
terms hereof and thereof, (ii) the execution and delivery of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation the reservation
for issuance and the issuance of the Debentures pursuant to this Subscription
Agreement, have been duly and validly authorized by the Company's Board of
Directors and no further consent or authorization is required by the Company,
its Board of Directors, or its shareholders, (iii) the Transaction Documents
have been duly and validly executed and delivered by the Company, and (iv) the
Transaction Documents constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.

                                       7
<PAGE>

      c. Capitalization. As of the date hereof, the authorized capital stock of
the Company consists of 100,000,000 shares of Common Stock, of which as of the
date hereof, approximately 13,837,220 shares are issued and outstanding. All of
such outstanding shares have been, or upon issuance will be, validly issued and
are fully paid and nonassessable. Except as disclosed in Schedule 3(c) which is
attached hereto and made a part hereof, (i) no shares of the Company's capital
stock are subject to preemptive rights or any other similar rights or any liens
or encumbrances suffered or permitted by the Company, (ii) there are no
outstanding debt securities, (iii) there are no outstanding shares of capital
stock, options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company or any of its Subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to issue additional shares of
capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, (iv) there are no agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except the
Debenture Registration Rights Agreement), (v) there are no outstanding
securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Subscription Agreement, (vii) the Company
does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement and (viii) there is no dispute as to
the class of any shares of the Company's capital stock. The Company has
furnished to the Holder, or the Holder has had access through EDGAR to, true and
correct copies of the Company's Articles of Incorporation, as in effect on the
date hereof (the "ARTICLES OF INCORPORATION"), and the Company's By-laws, as in
effect on the date hereof (the "BY-LAWS `).

      d. Issuance of Debentures. A sufficient number of Debentures issuable
pursuant to this Subscription Agreement, but not more than 4.99% of the shares
of Common Stock outstanding as of the date hereof (if the Company becomes listed
on Nasdaq or the American Stock Exchange), has been duly authorized and reserved
for issuance pursuant to this Subscription Agreement. Upon issuance in
accordance with this Subscription Agreement, the Debentures will be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. In the event the Company cannot register a
sufficient number of shares of Common Stock, due to the remaining number of
authorized shares of Common Stock being insufficient, the Company will use its
best efforts to register the maximum number of shares it can based on the
remaining balance of authorized shares and will use its best efforts to increase
the number of its authorized shares as soon as reasonably practicable.

                                       8
<PAGE>

      e. No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the Articles of Incorporation, any Certificate of Designations, Preferences
and Rights of any outstanding series of preferred stock of the Company or the
By-laws or (ii) conflict with, or constitute a material default (or an event
which with notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, contract, indenture mortgage,
indebtedness or instrument to which the Company or any of its Subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree, including United States federal and state securities laws and
regulations and the rules and regulations of the principal securities exchange
or trading market on which the Common Stock is traded or listed (the "Principal
Market"), applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected. Except as disclosed in Schedule 3(e), neither the Company nor its
Subsidiaries is in violation of any term of, or in default under, the Articles
of Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws or their
organizational charter or by-laws, respectively, or any contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations that would not individually or in
the aggregate have a Material Adverse Effect. The business of the Company and
its Subsidiaries is not being conducted, and shall not be conducted, in
violation of any law, statute, ordinance, rule, order or regulation of any
governmental authority or agency, regulatory or self-regulatory agency, or
court, except for possible violations the sanctions for which either
individually or in the aggregate would not have a Material Adverse Effect.
Except as specifically contemplated by this Subscription Agreement and as
required under the 1933 Act, the Company is not required to obtain any consent,
authorization, permit or order of, or make any filing or registration (except
the filing of a registration statement) with, any court, governmental authority
or agency, regulatory or self-regulatory agency or other third party in order
for it to execute, deliver or perform any of its obligations under, or
contemplated by, the Transaction Documents in accordance with the terms hereof
or thereof. All consents, authorizations, permits, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof and are
in full force and effect as of the date hereof. Except as disclosed in Schedule
3(e), the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company is not, and will not
be, in violation of the listing requirements of the Principal Market as in
effect on the date hereof and on each of the Closing Dates and is not aware of
any facts which would reasonably lead to delisting of the Common Stock by the
Principal Market in the foreseeable future.

                                       9
<PAGE>

      f. SEC Documents; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission ("SEC") pursuant to the reporting
requirements of the Securities and Exchange Act of 1934 ("1934 Act") (all of the
foregoing filed since the hereof and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the "SEC DOCUMENTS"). The Company has delivered
to the Holder or its representatives, or they have had access through EDGAR, to
true and complete copies of the SEC Documents. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted 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. As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other written information provided by or on behalf of the
Company to the Holder which is not included in the SEC Documents, including,
without limitation, information referred to in Section 3(d) of this Subscription
Agreement, contains any untrue statement of a material fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.

      g. Absence of Certain Changes. Except as disclosed in Schedule 3(g) or the
SEC Documents filed at least thirty (30) days prior to the date hereof, there
has been no change or development in the business, properties, assets,
operations, financial condition, results of operations or prospects of the
Company or its Subsidiaries which has had or reasonably could have a Material
Adverse Effect. The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy law nor
does the Company or its Subsidiaries have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings.

                                       10
<PAGE>

      h. Absence of Litigation. Except as set forth in the Company's SEC
filings, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending or, to the knowledge of the executive officers of Company or any
of its Subsidiaries, threatened against or affecting the Company, the Common
Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, in
which an adverse decision could have a Material Adverse Effect.

      i. Acknowledgment Regarding the Purchase of Debentures. The Company
acknowledges and agrees that the Holder is acting solely in the capacity of an
arm's length investor with respect to the Transaction Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges
that the Holder is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by the Holder
or any of its respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to the Holder's purchase of the Debentures. The Company
further represents to the Holder that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

      j. Intentionally omitted.

      k. Employee Relations. Neither the Company nor any of its Subsidiaries is
involved in any union labor dispute nor, to the knowledge of the Company or any
of its Subsidiaries, is any such dispute threatened. Neither the Company nor any
of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that relations with their employees are
good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has
notified the Company that such officer intends to leave the Company's employ or
otherwise terminate such officer's employment with the Company.

      l. Intellectual Property Rights. All patents, patent applications,
trademark registrations and applications for trademark registration held by the
Company are owned free and clear of all mortgages, liens, charges or
encumbrances whatsoever. No licenses have been granted with respect to these
items and the Company and its Subsidiaries do not have any knowledge of any
infringement by the Company or its Subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of
others, and, except as set forth on Schedule 3(l), there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company or its Subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service mark registrations, trade secret or other infringement;
and the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties.

                                       11
<PAGE>

      m. Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval where, in each of the three
foregoing cases, the failure to so comply would have, individually or in the
aggregate, a Material Adverse Effect.

      n. Title. The Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as are described in Schedule 3(n) or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its Subsidiaries.
Any real property and facilities held under lease by the Company or any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.

      o. Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

      p. Regulatory Permits. The Company and its Subsidiaries have in full force
and effect all certificates, approvals, authorizations and permits from the
appropriate federal, state, local or foreign regulatory authorities and
comparable foreign regulatory agencies, necessary to own, lease or operate their
respective properties and assets and conduct their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
approval, authorization or permit, except for such certificates, approvals,
authorizations or permits which if not obtained, or such revocations or
modifications which, would not have a Material Adverse Effect.

                                       12
<PAGE>

      q. Internal Accounting Controls. The Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. However, the Company's auditors have
recognized a material weakness in the Company's internal control.

      r. No Materially Adverse Contracts, Etc. Neither the Company nor any of
its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company's officers has or is expected in the future to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a
party to any contract or agreement which in the judgment of the Company's
officers has or is expected to have a Material Adverse Effect.

      s. Tax Status. The Company's consolidated 2004 federal income tax return,
the Company and each of its Subsidiaries has made or filed all United States
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and only to the
extent that the Company and each of its Subsidiaries has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and has set
aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

      t. Certain Transactions. Except as set forth in the SEC Documents filed at
least ten days prior to the date hereof and except for arm's length transactions
pursuant to which the Company makes payments in the ordinary course of business
upon terms no less favorable than the Company could obtain from third parties
and other than the grant of stock options disclosed on Schedule 3(c), none of
the officers, directors, or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

                                       13
<PAGE>

      u. Dilutive Effect. The Company understands and acknowledges that the
number of shares of Common Stock issuable upon purchases pursuant to this
Subscription Agreement will increase in certain circumstances including, but not
necessarily limited to, the circumstance wherein the trading price of the Common
Stock declines following the effective date of the registration statement
covering the Common Stock underlying the Debentures (the "Effective Date"). The
Company's executive officers and directors have studied and fully understand the
nature of the transactions contemplated by this Subscription Agreement and
recognize that they have a potential dilutive effect. The board of directors of
the Company has concluded, in its good faith business judgment that such
issuance is in the best interests of the Company. The Company specifically
acknowledges that, subject to such limitations as are expressly set forth in the
Transaction Documents, its obligation to issue shares of Common Stock upon
purchases pursuant to this Subscription Agreement is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.

      v. Additional Financings. The Company shall not, directly nor indirectly,
without the prior written consent of Holder which shall not be unreasonably
withheld, offer, sell, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant or any option to purchase or other disposition)
any of its Common Stock or securities convertible into Common Stock, or file any
registration statement, including those on Form S-8 for any securities, except
for a bona fide employee benefit plan (a "SUBSEQUENT FINANCING"), in either case
ending on the earlier to occur of (i) 360 (three hundred and sixty ) days after
the effective date of the registration statement covering resale of the shares
of Common Stock underlying the Debentures (the "Effective Date") and (ii) the
date on which the full Face Amount, accrued interest and penalties, if any, on
the Debentures have been paid ("Lock Up Period").

      During the twelve (12) month period following Closing, or if there is any
outstanding balance on the Debentures, the Holder shall retain a first right of
refusal for any additional financings. The Company must submit to the Holder a
duly authorized term sheet of the financing and the Holder may elect, in writing
within five (5) days, to exercise its right to finance the Company upon the same
terms and conditions. In the event the Holder does not elect to complete such
financing within such period, the Company may proceed with the proposed
third-party financing on the same terms and conditions as contained in the
notice to Holder.

                                       14
<PAGE>

      The Holder shall also reserve the right to switch to the terms of the new
financing ("Most Favored Nations").

      w. Sarbanes-Oxley Compliance. The Company hereby acknowledges that they
are current with the requirement of Sarbanes-Oxley Act of 2002 ("Sarbox"), and
will remain compliant with Sarbox and its rules and regulations for reporting
requirements in the time frame required by Sarbox, and any updates to deadlines
imposed by Sarbox.

      x. Code of Ethics. The Company has adopted a Code of Ethics and has filed
the Code with the SEC.

4.    COVENANTS OF THE COMPANY

      a. Best Efforts. The Company shall use its best efforts timely to satisfy
each of the conditions to be satisfied by it as provided in this Subscription
Agreement.

      b. Blue Sky. The Company shall, at its sole cost and expense, make all
filings and reports relating to the offer and sale of the Debentures and the
Common Stock underlying the Debentures as required under the applicable
securities or "Blue Sky" laws of such states of the United States as specified
by the Holder.

      c. Reporting Status. Until the earlier of (i) the date that the Holder may
sell all of the Common Stock underlying the Debentures acquired pursuant to this
Subscription Agreement without restriction pursuant to Rule 144(k) promulgated
under the 1933 Act (or successor thereto), or (ii) the date on which the Holder
shall have sold all the Common Stock underlying the Debentures, the Company
shall file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as a reporting company under
the 1934 Act.

      d. Use of Proceeds. The Company shall use the entire proceeds from this
Debenture exclusively to further the growth and interest of the Company. Any
other use of the funds contemplated herein, shall be considered a breach of
contract and an event of Default.

      e. Conditions to Closing, The Company shall sign and comply with the
Transaction Documents with Dutchess Private Equities Fund, II, L.P.

      f. Financial Information. The Company agrees to make available to the
Holder via EDGAR or other electronic means the following: (i) within five (5)
business days after the filing thereof with the SEC, a copy of its Annual
Reports on Form 10-KSB, its Quarterly Reports on Form 10-QSB, any Current
Reports on Form 8-K and any Registration Statements or amendments filed pursuant
to the 1933 Act; (ii) on the same day as the release thereof, facsimile copies
of all press releases issued by the Company or any of its Subsidiaries, (iii)
copies of any notices and other information made available or given to the
shareholders of the Company generally, contemporaneously with the making
available or giving thereof to the shareholders and (iv) within two (2) calendar
days of filing or delivery thereof, copies of all documents filed with, and all
correspondence sent to, the Principal Market, any securities exchange or market,
or the National Association of Securities Dealers, Inc.

                                       15
<PAGE>

      g. Reservation of Common Stock. Subject to the following sentence, the
Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, a sufficient number of shares of Common
Stock to provide for the issuance of the Common Stock underlying the Debentures.
In the event that the Company determines that it does not have a sufficient
number of authorized shares of Common Stock to reserve and keep available for
issuance, the Company shall use its best efforts to increase the number of
authorized shares of Common Stock by seeking shareholder approval for the
authorization of such additional shares. The Holder shall have the right to
determine the amount of shares to be re-registered to satisfy the terms of the
Agreement. Such amount must be usual or customary.

      h. Listing. The Company shall promptly secure the listing of all of the
Common Stock underlying the Debentures upon the Principal Market and each other
national securities exchange and automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance)
and shall maintain, such listing. The Company shall maintain the Common Stock's
authorization for quotation on the Principal Market, unless the Holder and the
Company agree otherwise. Neither the Company nor any of its Subsidiaries shall
take any action which would be reasonably expected to result in the delisting or
suspension of the Common Stock on the Principal Market (excluding suspensions of
not more than one trading day resulting from business announcements by the
Company). The Company shall promptly provide to the Holder copies of any notices
it receives from the Principal Market regarding the continued eligibility of the
Common Stock for listing on such automated quotation system or securities
exchange. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section.

      i. Transactions With Affiliates. During the Lock-Up Period, the Company
shall not, and shall cause each of its Subsidiaries not to, enter into, amend,
modify or supplement, or permit any Subsidiary to enter into, amend, modify or
supplement, any agreement, transaction, commitment or arrangement with any of
its or any Subsidiary's officers, directors, persons who were officers or
directors at any time during the previous two years, shareholders who
beneficially own five percent (5%) or more of the Common Stock, or affiliates or
with any individual related by blood, marriage or adoption to any such
individual or with any entity in which any such entity or individual owns a five
percent (5%) or more beneficial interest (each a "RELATED PARTY") during the
Lock Up Period; except for (i) customary employment arrangements and benefit
programs on reasonable terms (including changes currently under discussion with
the Company's Board of Directors concerning the compensation, to be payable in
stock, of the Chairman of the Board), (ii) any agreement, transaction,
commitment or arrangement on an arms-length basis on terms no less favorable
than terms which would have been obtainable from a person other than such
Related Party, or (iii) any agreement, transaction, commitment or arrangement
which is approved by a majority of the disinterested directors of the Company.
For purposes hereof, any director who is also an officer of the Company or any
Subsidiary of the Company shall not be a disinterested director with respect to
any such agreement, transaction, commitment or arrangement. "AFFILIATE" for
purposes hereof means, with respect to any person or entity, another person or
entity that, directly or indirectly, (i) has a five percent (5%) or more equity
interest in that person or entity, (ii) has five percent (5%) or more common
ownership with that person or entity, (iii) Controls that person or entity, or
(iv) shares common control with that person or entity. "CONTROL" or "CONTROLS"
for purposes hereof means that a person or entity has the power, direct or
indirect, to conduct or govern the policies of another person or entity.

                                       16
<PAGE>

      j. Corporate Existence. The Company shall use its commercially reasonable
best efforts to preserve and continue the corporate existence of the Company.

      k. Notice of Certain Events Affecting Registration. The Company shall
promptly notify Holder upon the occurrence of any of the following events in
respect of a registration statement or related prospectus covering the Common
Stock underlying the Debentures: (i) receipt of any request for additional
information by the SEC or any other federal or state governmental authority
during the period of effectiveness of the registration statement for amendments
or supplements to the registration statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of any registration statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Common Stock underlying the Debentures for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in such
registration statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the registration statement, related
prospectus or documents so that, in the case of a registration statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the registration statement would be appropriate, and the Company
shall promptly make available to Holder any such supplement or amendment to the
related prospectus.

                                       17
<PAGE>

      l. Indemnification. In consideration of the Holder's execution and
delivery of the this Agreement and the Debenture Registration Rights Agreement
and acquiring the Debentures hereunder and in addition to all of the Company's
other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless the Holder and all of its shareholders,
officers, directors, employees and direct or indirect investors and any of the
foregoing person's agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the "Indemnitees") from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys' fees and disbursements
(the "Indemnified Liabilities"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(ii) any breach of any covenant, agreement or obligation of the Company
contained in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (iii) any cause of action, suit or
claim brought or made against such Indemnitee by a third party and arising out
of or resulting from the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (iv) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Debentures or (v) the status of the Holder as an investor in the Company,
except, in the case of any of such clauses, insofar as any such Indemnified
Liability was attributable to gross negligence, willful misconduct or any
illegal activity on the part of Holder and, in the case of clause (v) only,
insofar as any such Indemnified Liability was attributable to an untrue
statement, alleged untrue statement, omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Holder which is specifically intended by the Holder for use in
the preparation of any Registration Statement, preliminary prospectus or
prospectus. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The indemnity provisions contained herein
shall be in addition to any cause of action or similar rights the Holder may
have, and any liabilities to which the Holder may be subject. Notwithstanding
the foregoing, the Company shall have no indemnification responsibility in the
event Holder fails to timely notify the Company of a claim or potential claim
for which indemnification is sought, but only to the extent the Company is
prejudiced thereby. The Company shall have the right to control the defense of
any such claim and the Holder shall not consent to any settlement of any such
claim without the prior written consent of the Company (which shall not be
unreasonably withheld or delayed). The Holder shall provide indemnification
comparable in scope and coverage to the Company and corresponding related
persons in respect of any Indemnified Liability if and to the extent
attributable to gross negligence, willful misconduct or any illegal activity on
the part of Holder, and shall be obligated to reimburse the Company and such
persons to the same extent as the Company's reimbursement obligations under
Section 4(m) below.

                                       18
<PAGE>

      m. Reimbursement. If (i) Holder, other than by reason of its gross
negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by any shareholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Documents, or if Holder is impleaded in any such
action, proceeding or investigation by any person, or (ii) Holder, other than by
reason of its gross negligence or willful misconduct or by reason of its trading
of the Common Stock in a manner that is illegal under the federal securities
laws, becomes involved in any capacity in any action, proceeding or
investigation brought by the SEC against or involving the Company or in
connection with or as a result of the consummation of the transactions
contemplated by the Transaction Documents, or if Holder is impleaded in any such
action, proceeding or investigation by any person, then in any such case, the
Company will reimburse Holder for its reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any matter in which Holder is a named party, the Company will pay to Holder
the charges, as reasonably determined by Holder, for the time of any officers or
employees of Holder devoted to appearing and preparing to appear as witnesses,
assisting in preparation for hearings, trials or pretrial matters, or otherwise
with respect to inquiries, hearing, trials, and other proceedings relating to
the subject matter of this Subscription Agreement. The reimbursement obligations
of the Company under this section shall be in addition to any liability which
the Company may otherwise have, shall extend upon the same terms and conditions
to any affiliates of Holder that are actually named in such action, proceeding
or investigation, and partners, directors, agents, employees, attorneys,
accountants, auditors and controlling persons (if any), as the case may be, of
Holder and any such affiliate, and shall be binding upon and inure to the
benefit of any successors of the Company, Holder and any such affiliate and any
such person.

      n. Transfer Agent. The Company covenants and agrees that, in the event
that the Company's agency relationship with the transfer agent should be
terminated for any reason prior to the Maturity Date (as defined in the
Debenture Agreement), the Company shall immediately appoint a new transfer agent
and shall require that the new transfer agent execute and agree to be bound by
the terms of the Irrevocable Transfer Agent Instructions (as defined herein).
The Company shall be up to date with all payments to the transfer agent, and
continue to pay transfer agent as outlined in the Irrevocable Transfer Agent
Agreement.

                                       19
<PAGE>

5.    OPINION LETTER/BOARD RESOLUTION

      Prior to or on the Closing Date the Company shall deliver to the Holder an
opinion letter signed by counsel for the Company in the form attached hereto as
Exhibit D. If the Company's counsel fails to provide a Rule 144 opinion letter
in a timely manner, then the Company shall: (a) pay the Investor's counsel to
write said Rule 144 opinion letter; and (b) instruct the designated transfer
agent to accept same Rule 144 Opinion letter (attached hereto as Exhibit E).
Also, prior to or on the Closing Date the Company shall deliver to the Holder a
signed Board Resolution authorizing this Offering, which shall be attached
hereto as Exhibit F.

6.    DELIVERY INSTRUCTIONS; FEES

      The Debentures being purchased hereunder shall be delivered to Dutchess
Private Equities Fund, L.P., II, on the Closing Date at which time funds will be
wired to the Company and the Debentures will be delivered to the Holder, per the
Holder's instructions.

7.    UNDERSTANDINGS.

      The undersigned understands, acknowledges and agrees with the Company as
follows:

FOR ALL SUBSCRIBERS:

      a. This Subscription may be rejected, in whole or in part, by the Company
in its sole and absolute discretion at any time before the date set for Closing
unless the Company has given notice of acceptance of the undersigned's
subscription by signing this Subscription Agreement and delivering it to Holder.

      b. No U.S. federal or state agency or any agency of any other jurisdiction
has made any finding or determination as to the fairness of the terms of the
Offering for investment nor any recommendation or endorsement of the Debentures
or the Company.

      c. The representations, warranties and agreements of the undersigned and
the Company contained herein shall be true and correct in all material respects
on and as of the date of the sale of the Debentures as if made on and as of such
date and shall survive the execution and delivery of this Subscription Agreement
and the purchase of the Debentures.

      d. In making an investment decision, Holders must rely on their own
examination of the Company and the terms of the Offering, including the merits
and risks involved. The shares have not been recommended by any federal or state
securities commission or regulatory authority. Furthermore, the foregoing
authorities have not confirmed the accuracy or determined the adequacy of this
document. Any representation to the contrary is a criminal offense.

                                       20
<PAGE>

      e. The Offering is intended to be exempt from registration by virtue of
Section 4(2) of the 1933 Act and the provisions of Regulation D thereunder,
which is in part dependent upon the truth, completeness and accuracy of the
statements made by the undersigned herein and in the Questionnaire.

      f. It is understood that in order not to jeopardize the Offering's exempt
status under Section 4(2) of the 1933 Act and Regulation D, any Holder may, at a
minimum, be required to fulfill the investor suitability requirements
thereunder.

      g. The shares may not be resold except as permitted under the securities
act and applicable state securities laws, pursuant to registration or exemption
therefrom. Holder should be aware that they will be required to bear the
financial risks of this investment for an indefinite period of time.

8.    DISPUTES SUBJECT TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW

      a. All disputes arising under this agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws. The parties to this agreement
will submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA"). The arbitrator shall be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an attorney admitted to practice law in the Commonwealth of Massachusetts. No
party to this agreement will challenge the jurisdiction or venue provisions as
provided in this section.

9.    MISCELLANEOUS.

      a. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Subscription 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 a
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) day after deposit with a
nationally recognized overnight delivery service, 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:

Mitch Segal
Walker Financial Corp
990 Stewart Avenue - Suite 60A
Garden City, New York 11530
Telephone: (516) 832-7000
Facsimile:  (516) 832-7979

                                       21
<PAGE>

If to the Holder:

      At the address listed in the Questionnaire.

      Each party shall provide five (5) business days prior notice to the other
party of any change in address, phone number or facsimile number.

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

      c. Neither this Subscription Agreement nor any provision hereof shall be
waived, modified, changed, discharged, terminated, revoked or canceled, except
by an instrument in writing signed by the party effecting the same against whom
any change, discharge or termination is sought.

      d. Notices required or permitted to be given hereunder shall be in writing
and shall be deemed to be sufficiently given when personally delivered or sent
by facsimile transmission: (i) if to the Company, at it's executive offices or
(ii) if to the Holder, at the address for correspondence set forth in the
Questionnaire, or at such other address as may have been specified by written
notice given in accordance with this paragraph.

      e. This Subscription Agreement shall be enforced, governed and construed
in all respects in accordance with the laws of the Commonwealth of
Massachusetts, as such laws are applied by Massachusetts courts to agreements
entered into, and to be performed in, Massachusetts by and between residents of
Massachusetts, and shall be binding upon the undersigned, the undersigned's
heirs, estate and legal representatives and shall inure to the benefit of the
Company and its successors. If any provision of this Subscription Agreement is
invalid or unenforceable under any applicable statue or rule of law, then such
provisions shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof that may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

      f. This Agreement shall not be assignable.

      g. This Subscription Agreement, together with Exhibits A, B, C, D, E and F
attached hereto and made a part hereof, constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and may be amended
only by a writing executed by both parties hereto.

                                       22
<PAGE>

      h. This Subscription Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
Execution and delivery of this Subscription Agreement by exchange of facsimile
copies bearing the facsimile signature of a party shall constitute a valid and
binding execution and delivery of this Subscription Agreement by such party.
Such facsimile copies shall constitute enforceable original documents.

10.   Transfer Agent Instructions

      The Company shall issue the Irrevocable Transfer Agent Instructions to its
transfer agent irrevocably appointing Dutchess Capital Management, LLC and its
managing members ("DCM"), as its agent for purpose of having certificates
issued, registered in the name of the Holder or its respective nominee(s), for
the issuance of Shares representing such amounts from the respective for
conversions or warrants, as specified from time to time by the Holder to the
Company upon the Conversion Date (as defined in the Debenture Agreement), and
for any and all Liquidated Damages, if any (as this term is defined in the
Debenture Registration Rights Agreement). DCM shall be paid a cash fee of Fifty
Dollars ($50) for every occasion they act pursuant to the Irrevocable Transfer
Agent Instructions. The Company shall not change its transfer agent without the
express written consent of the Holder, which may be withheld by the Holder in
its sole discretion. The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 10, will be
given by the Company to its transfer agent and that the issuance of Shares shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the Debenture Registration Rights
Agreement. Nothing in this Section 10 shall affect in any way the Holder's
obligations and agreement to comply with all applicable securities laws upon
resale of Shares. If the Holder provides the Company with an opinion of counsel,
in form, scope and substance customary for opinions of counsel in comparable
transactions to the effect that registration of a resale by the Holder of any of
the Conversion Shares is not required under the 1933 Act, the Company shall
within two (2) business days instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by the Holder.
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 10 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 10, that the Holder shall be entitled,
in addition to all other available remedies, to an injunction restraining any
breach and requiring immediate issuance and transfer, without the necessity of
showing economic loss and without any bond or other security being required.

                                       23
<PAGE>

11.   Waiver:

The Holder'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 Holder under this Agreement to
demand strict compliance and performance herewith. Any waiver by the Holder of
any Event of Default shall not waive or affect any other Event of Default,
whether such Event of Default is prior or subsequent thereto and whether of the
same or a different type. None of the undertakings, agreements and covenants of
the Company contained in this Agreement, and no Event of Default, shall be
deemed to have been waived by the Holder, 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 Holder.

12.   Waiver of Jury Trial.

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

13.   No Oral Agreements

This Written Agreement and the accompanying Transaction Documents represent the
FINAL AGREEEMENTS between the Company and the Holders and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties, there are no unwritten oral agreements among the
parties.

14.   Change in Par Value

The Company hereby agrees that within sixty (60) days to file a proxy or issue
an information statement amending the articles of incorporation of the Company
to change the par value to .0001 per share.

                  [BALANCE OF PAGE INTENTIONALLY LEFT BLANK)

                                       24
<PAGE>

Walker Financial Corp.

QUESTIONNAIRE

      The information contained in this Questionnaire is being furnished in
order to determine whether the undersigned's subscription to purchase the
Debentures described in the Subscription Agreement may be accepted.

      ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned understands, however, that the Company may
present this Questionnaire to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the Securities is exempt
from registration under the 1933 Act, as amended. Further, the undersigned
understands that the offering is required to be reported to the Securities and
Exchange Commission, and to various state securities and "blue sky" regulators.

      IN ADDITION TO SIGNING THE SIGNATURE PAGE, IF REQUESTED BY THE COMPANY,
THE UNDERSIGNED MUST COMPLETE FORM W-9.

I.    PLEASE CHECK EACH OF THE STATEMENTS BELOW THAT APPLIES.

|_|               1. The undersigned: (a) has total assets in excess of
            $5,000,000; (b) was not formed for the specific purpose of acquiring
            the securities and (c) has its principal place of business in
            ___________.

|_|               2. The undersigned is a natural person whose individual net
            worth* or joint net worth with his or her spouse exceeds $1,000,000.

|_|               3. The undersigned is a natural person who had an individual
            income* in excess of $200,000 in each of the two most recent years
            and who reasonably expects an individual income in excess of
            $200,000 in the current year. Such income is solely that of the
            undersigned and excludes the income of the undersigned's spouse.

|_|               4. The undersigned is a natural person who, together with his
            or her spouse, has had a joint income* in excess of $300,000 in each
            of the two most recent years and who reasonably expects a joint
            income in excess of $300,000 in the current year.

* For purposes of this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In determining "income", an investor should
add to his or her adjusted gross income any amounts attributable to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh retirement plan,
alimony payments and any amount by which income from long-term capital gains has
been reduced in arriving at adjusted gross income.

                                       25
<PAGE>

            5. The undersigned is:

|_|         (a)   a bank as defined in Section 3(a)(2) of the 1933 Act; or

|_|         (b)   a savings and loan association or other institution as defined
                  in Section 3(a)(5)(A) of the 1933 Act whether acting in its
                  individual or fiduciary capacity; or

|_|         (c)   a broker or dealer registered pursuant to Section 15 of the
                  1934 Act; or

|_|         (d)   an insurance company as defined in Section 2(13) of the 1933
                  Act; or

|_|         (e)   An investment company registered under the Investment Company
                  Act of 1940 or a business development company as defined in
                  Section 2(a)(48) of the Investment Company Act of 1940; or

|_|         (f)   a small business investment company licensed by the U.S. Small
                  Business Administration under Section 301 (c) or (d) of the
                  Small Business Investment Act of 1958; or

|X|         6. The undersigned is an entity in which all of the equity owners
            are accredited investors.

                                       26
<PAGE>

II. HOLDER INFORMATION.

    Name of Entity                      Dutchess Private Equities Fund, II, L.P.
                                        ----------------------------------------

    Person's Name Douglas Leighton      Title: Managing Member
                  ----------------            ----------------------------------

    State of Organization               Delaware
                                        ----------------------------------------

    Principal Business Address          50 Commonwealth Ave
                                        ----------------------------------------

    City, State, Zip Code               Boston, MA 02116
                                        ----------------------------------------

    Taxpayer Identification Number      ----------------------------------------

    Phone 617-301-4700                  Fax 617-249-0947
          ----------------------           ------------------------------------

    Send Correspondence to:

                          50 Commonwealth Ave, Suite 2
                                Boston, MA 02116
                  -----------------------------------------------

                                       27
<PAGE>

Walker Financial Corp.
SIGNATURE PAGE

      Your signature on this Signature Page evidences your agreement to be bound
by the Questionnaire, Subscription Agreement and Debenture Registration Rights
Agreement.

      1. The undersigned hereby represents that (a) the information contained in
the Questionnaire is complete and accurate and (b) the undersigned will notify
Company immediately if any material change in any of the information occurs
prior to the acceptance of the undersigned's subscription and will promptly send
Company written confirmation of such change.

      2. The undersigned signatory hereby certifies that he/she has read and
understands the Subscription Agreement and Questionnaire, and the
representations made by the undersigned in the Subscription Agreement and
Questionnaire are true and accurate.

           $220,000                         December 23, 2005
------------------------------              ------------------------
Amount of Debentures being purchased                Date

                                        Dutchess Private Equities Fund  II, LP

                                        By:
                                           -------------------------------------
                                                     (Signature)

                                        Name:    Douglas Leighton
                                        ----------------------------------------
                                        (Please Type or Print)

                                        Title: Managing Member,
                                        Dutchess Capital Management, LLC;
                                        General Partner to:
                                        Dutchess Private Equities Fund, LP and
                                        Dutchess Private Equities Fund  II, LP
                                        ----------------------------------------
                                                (Please Type or Print)

                                       28
<PAGE>

COMPANY ACCEPTANCE PAGE

This Subscription Agreement accepted and agreed to this 23rd day of December,
2005.

By Walker Financial Corp. and duly authorized to sign on behalf of the Company:

By
  -------------------------

Mitchell S. Segal, Chief Executive Officer

                                       29
<PAGE>

LIST OF EXHIBITS
-----------------

EXHIBIT A     Notice of Conversion
EXHIBIT B     Debenture Registration Rights Agreement
EXHIBIT C     Debenture Agreement
EXHIBIT D     Opinion of Company's Counsel
EXHIBIT E     Irrevocable Transfer Agent Agreement
EXHIBIT F     Board Resolution (included as Exhibit 4 on the Irrevocable
              Stock Transfer Agreement)

LIST OF SCHEDULES
-----------------

Schedule 3(a) Subsidiaries
Schedule 3(c) Capitalization
Schedule 3(e) Conflicts
Schedule 3(g) Material Changes
Schedule 3(h) Litigation
Schedule 3(l) Intellectual Property
Schedule 3(n) Liens
Schedule 3(t) Certain Transactions

                                       30
<PAGE>

                                    Exhibit A

                              NOTICE OF CONVERSION

(To be Executed by the Registered Owner in order to Convert Debenture)

TO: WALKER FINANCIAL CORP.

      The undersigned hereby irrevocably elects, as of ________________, to
convert $________________ of its convertible debenture (the "Debenture") into
Common Stock of Walker Financial Corp. (the "Company") according to the
conditions set forth in the Debenture issued by the Company.

Date of Conversion
                  --------------------------------------------------------------

Applicable Conversion Price
                           -----------------------------------------------------

Number of Debentures Issuable upon this Conversion
                                                  ------------------------------

Name(Print) Dutchess Private Equities Fund, II,     LP
            --------------------------------------------------------------------

Address         50 Commonwealth Ave, Boston, MA 02116
       -------------------------------------------------------------------------

Phone     617-301-4700                  Fax     617-249-0947
          ------------                          ------------

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

                                       31
<PAGE>

                     EXHIBIT D OPINION OF COMPANY'S COUNSEL

Holders of [Company] [Describe Securities]                 _______________, 2005

Re:   Walker Financial Corp.
Ladies and Gentlemen:

      As counsel to Walker Financial Corp. (the "Company"), we are familiar with
its Articles of Incorporation and Bylaws and with the corporate proceedings
taken by it in connection with the proposed issuance and sale of convertible
debentures (the "Securities") pursuant to the related Subscription Agreement
(including all Exhibits and Appendices thereto) (collectively the "Agreements").

      We have been furnished with copies, certified or otherwise identified to
our satisfaction, of the Agreements, and have examined such other documents,
agreements and records as we deemed necessary to render the opinions set forth
below.

      In conducting our examination, we have assumed the following: (i) that
each of the Agreements has been executed by each of the parties thereto in the
same form as the forms which we have examined, (ii) the genuineness of all
signatures, the legal capacity of natural persons, the authenticity and accuracy
of all documents submitted to us as originals, and the conformity to originals
of all documents submitted to us as copies, (iii) that each of the Agreements
has been duly and validly authorized, executed and delivered by the party or
parties thereto other than the Company, and (iv) that each of the Agreements
constitutes the valid and binding agreement of the party or parties thereto
other than the Company, enforceable against such party or parties in accordance
with the Agreements' terms.

      Based upon the subject to the foregoing, we are of the opinion that:

      1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to own its properties and conduct
its business as presently conducted.

      2. The authorized capital stock of the Company consists of _______ shares
of Common Stock, .10 par value per share, ("Common Stock").

      3. To our knowledge, (i)the Company's equity securities are not registered
under Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and (ii) the Company is required to file reports
with the Securities and Exchange Commission pursuant to Section 15(d) of the
Exchange Act.;

                                       32
<PAGE>

      4. When duly countersigned by the Company's transfer agent and registrar,
and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of the Agreements, the
Securities [and any Common Stock to be issued upon the conversion of the
Securities] as described in the Agreements represented thereby will be duly
authorized and validly issued, fully paid and nonassessable;

      5 The Company has the requisite corporate power and authority to enter
into the Subscription Agreement and to sell and deliver the Securities and the
Common Stock to be issued upon the conversion of the Securities as described in
the Agreements; each of the Agreements has been duly and validly authorized by
all necessary corporate action by the Company to our knowledge, no approval of
any governmental or other body is required for the execution and delivery of
each of the Agreements by the Company or the consummation of the transactions
contemplated thereby; each of the Agreements has been duly and validly executed
and delivered by and on behalf of the Company, and is a valid and binding
agreement of the Company, enforceable in accordance with its terms, except as
enforceability may be limited by general equitable principles, public policy,
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws affecting creditors rights generally, and except as to compliance
with federal, state, and foreign securities laws, as to which no opinion is
expressed;

      6. Neither the execution, delivery and performance of the Subscription
Agreement and Securities by the Company and the performance of its obligations
thereunder do not and will not constitute a breach or violation of any of the
terms and provisions of, or constitute a default under or conflict with or
violate any provision of (i) the Company's Certificate of Incorporation or
By-Laws, (ii) any indenture, mortgage, deed of trust, agreement or other
instrument to which the Company is party or by which it or any of its property
is bound, (iii) any applicable statute or regulation or as other, (iv) or any
judgment, decree or order of any court or governmental body having jurisdiction
over the Company or any of its property.

      7. To the best of our knowledge, there is no pending or threatened
litigation, investigation or other proceedings against the Company.

      8. The Company complies with the eligibility requirements for the use of
Form SB-2, under the Securities Act of 1933, as amended.

      This opinion is rendered only with regard to the matters set out in the
numbered paragraphs above. No other opinions are intended nor should they be
inferred. This opinion is based solely upon the laws of the United States and
the State of New York and the Delaware General Corporation Law and does not
include an interpretation or statement concerning the laws of any other state or
jurisdiction. Insofar as the enforceability of the Subscription Agreement and
Securities may be governed by the laws of other states, we have assumed that
such laws are identical in all respects to the laws of the State of New York.

                                       33
<PAGE>

      The opinions expressed herein are given to you solely for your use in
connection with the transaction contemplated by the Subscription Agreement and
Securities and may not be relied upon by any other person or entity or for any
other purpose without our prior consent.

                                        Very truly yours,

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

                                       34
<PAGE>

EXHIBIT F

LETTER TO TA

SCHEDULE 3(a)  SUBSIDIARIES

            Name                        State of Incorporation          EIN
            --------                    ----------------------          --------

                                       35
<PAGE>

SCHEDULE 3(c)  CAPITALIZATION

                                       36
<PAGE>

SCHEDULE 3(e) CONFLICTS

                                       37
<PAGE>

SCHEDULE 3(g)  MATERIAL CHANGES

                                       38
<PAGE>

SCHEDULE 3(h)  LITIGATION

                  NONE, EXCEPT AS DISCLOSED IN THE COMPANY'S SEC FILINGS.

                                       39
<PAGE>

SCHEDULE 3(l)  INTELLECTUAL PROPERTY

                                    NONE

                                       40
<PAGE>

SCHEDULE 3(n)  LIENS

                                       41
<PAGE>

SCHEDULE 3(t)  CERTAIN TRANSACTIONS

                                       42

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