Document:

Unassociated Document

     

    
 

    SECURITIES
      SUBSCRIPTION AGREEMENT

    

    Date:
      November 10, 2004

    

    1. High
      Road
      International, Inc. (the “Company”), represented by Garry Berg, CEO &
President, 1042 N. El Camino Real, Suite B-311, Encinitas, CA 92024 Telephone
      760-497-5151, Fax 760-632-9947 has offered for sale and the undersigned
      purchaser (the “Purchaser”) Catherine Allen, hereby tenders this subscription
      and applies for the purchase of a Convertible Debenture in the principal amount
      of fifty thousand dollars in the form attached hereto as Exhibit A, (the
“Debenture” or the “Common Stock” or the “Shares” to be issued upon conversion)
      of the Company, at the purchase price of $50,000.

    

    Together
      with this Subscription Agreement, the Purchaser is delivering to the Escrow
      Agent pursuant to the Escrow Agreement attached hereto as Exhibit B, the full
      amount of the purchase price for the Shares which is subscribing by wire
      transfer to:

     

    
      	 	
              Dennis
                Braverman, Attorney at Law

              COLTAF
                Account/U.S. Bank Colorado

              ABA#
                102 000 021/Acct# 103658600053

            	 

    

     

    2. The
      Offering is being conducted in reliance upon the exemption from the registration
      requirements of the Securities Act of 1933 (the Act) set forth in Rule 504
      of
      Regulation D promulgated under the Act and regulations of the State of
      Texas.

    

    3. Representations
      and Warranties of Purchaser.
      In order
      to induce the Company to accept this subscription, the Purchaser hereby
      represents and warrants to, and covenants with, the Company as
      follows;

    

    A. The
      purchaser is purchasing the Debenture and the Common Stock to be issued upon
      conversion for its own account for investment purposes and not with a view
      towards distribution and has no present arrangement or intention to sell the
      Common Stock;

    

    
      	 	
              B.
                

            	
              The
                Purchaser acknowledges and agrees that the Debenture and the Common
                Stock
                has not been registered under the Act and may not be offered or sold
                in
                the United States or to U.S. Persons unless the Debentures or the
                Shares
                are registered under the Act or an exemption from the registration
                requirements of the Act is available. The foregoing notwithstanding,
                the
                Shares issue upon conversion shall be free of stop transfer instructions
                or restrictions and the Purchaser acknowledges that it is the Purchaser
                responsibility to comply with all applicable state and federal securities
                laws regarding resale of the
                Shares;

            

    

    

    

     

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    C. The
      Purchaser is not an officer, director or affiliate (as that term is defined
      in
      Rule 403 under the Act) of the Company, and the Company shall not treat or
      consider the Purchaser as an officer, director or affiliate.

    

    D. Purchaser
      is purchasing the Debenture and the Shares for its own account and Purchaser
      is
      qualified to purchase the Shares under the laws of the State of
      Texas.

    

    E. All
      invitations, [ILLEGIBLE] and sales of or in respect of, the Debenture and any
      of
      the Shares, by Purchaser and any distribution by Purchaser of any documents
      relating to the offer by it of any of the Shares will be in compliance with
      the
      applicable laws and regulations and will be made in such a manner that no
      prospectus need be filed and no other filing need be made by Company with any
      regularity authority or stock exchange in any country or any political
      subdivision of any country;

    

    F. The
      Purchaser has received and carefully reviewed the Company’s Business Plan and
      financial statements and has had the opportunity to ask and receive answers
      to
      any and all questions the Purchaser had with respect to the Company, its
      Business Plan, Management and current financial condition;

    

    G. The
      Purchaser is an accredited investor as defined by Regulation D and has such
      knowledge and expertise in financial and business matters that the Purchaser
      is
      capable of evaluating the merits and risks involved inh an investment in the
      Debenture and Common Stock and acknowledges that an investment in the Debenture
      and Common Stock entails a number of very significant risks and Purchaser is
      able to withstand the total loss of its investment;

    

    H. Except
      as
      set forth in this Agreement, no representations or warranties have been made
      to
      the Purchaser by the Company or any agent, employee or affiliate of the Company
      and in entering into this transaction the Purchaser is not relying upon any
      information, other than that contained in this Agreement, the Company’s
      disclosure materials and the results of independent investigation by the
      Purchaser;

    

    I. The
      Purchaser understands that the Debenture and the Common Stock is being offered
      and sold to it in reliance on specific exemptions from the registration
      requirements of the United States Federal and State securities laws and that
      the
      Company is relying upon the truth and accuracy of the representations,
      warranties, agreements, acknowledgements and understandings of the Purchaser
      set
      forth herein in order to determine the applicability of such exemptions and
      the
      suitability of the Purchaser to aquire the Debenture and the Common Stock,
      and
      the Purchaser acknowledges that it is Purchaser’s responsibility to satisfy
      itself as to the full observance by this Offering and the sale of the Common
      Stock to Purchaser of the laws of any jurisdiction outside the United States
      and
      Purchaser has done so;

    

    
      

    

     

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    J. The
      Purchaser has full power and authority to execute and deliver this Agreement
      and
      to perform its obligations hereunder; and this Agreement is a legally binding
      obligation of the Purchaser enforceable against the Purchaser in accordance
      with
      its terms; and 

    

    K. Purchaser
      understands that in the view of the SEC the statutory basis for the exemption
      claimed for the transaction would no be present if the Offering, although in
      technical compliance with Regulation D, is part of a plan or scheme to evade
      the
      registration provisions of the 1933 Act and Purchaser [ILLEGIBLE] that its
      purchase is not part of any [ILLEGIBLE] plan or scheme. Purchaser has no present
      intention to sell the Common Stock.

    

    4. Representations
      of the Company.

    

    The
      Company represents and warrants:

    

    A. The
      Company is in full compliance, to the extent applicable, with all reporting
      obligations under state and federal law;

    

    B. The
      execution, delivery and performance of this Agreement and the accumulation
      of
      the issuance of the Common Stock and the transactions contemplated by this
      Agreement are within the Company’s corporate powers and have been duly
      authorized by all necessary corporate and stockholder action on behalf of the
      Company;

    

    C. All
      documents provided to the Purchaser do 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 statement therein to light of the circumstances under
      which they were made, not misleading. Prior to signing this agreement the
      Company shall have notified the Purchaser if there is any one group or entity
      that owns greater than 10% of the outstanding common stock;

    

    D. Intercontinental
      Capital Corporation is the Placement Agents for this Subscription.

    

    E. 
      The
      Company agrees to and shall not make any offerings of common stock or securities
      convertible into common stock below the market price, or announce a “reverse
      split” for a period of sixty days, or for the terms of this offering without
      prior written consent of the Purchaser.

    

    F. 
      The
      Company agrees that the purchaser shall have the first right of refusal
      to any offerings at a discount to the market price for a period of sixty
      days. Purchaser and Seller/Issuer agree that they are both sophisticated
      with respect to this type of transaction and have both done their own
      independent due-diligence and agree to hold intermediaries, placement agents,
      financiers, and brokers harmless with respect to any litigation.

    

     

    
      

    

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    G.
      The
      filing of SEC Form D/504 is to be the responsibility of the Issuing Company;
      as
      a courtesy please submit via fax a copy of the properly filled out and
      filed Form D/504 within fifteen days of the completion of this offering to
      the Placement Agents.

    

    H.
      The
      Company is not subject to the reporting requirements of Section 13 or 15(d)
      of
      the Securities Exchange Act of 1934, as amended and was not subject to these
      sections at the time of the sale.

    

    I.
      The
      Company is not an Investment Company or a development stage company with no
      specific business plan.

    

    J.
      Including the Debenture, the Company has raised less than $1,000,000 from all
      sources during the past twelve months.

    

    5.
      Non-Binding
      Until Acceptance.
      The
      Purchaser understands that this subscription is not binding upon the Company
      until the Company accepts it, which acceptance is at the sole discretion of
      the
      Company and is to be evidenced by the Company’s execution of this Agreement
      where indicated. This Agreement shall be null and void if the Company does
      not
      accept it as aforesaid. Upon acceptance by the Company and receipt of the total
      purchase price, the Company will issue one or more certificates for the full
      number of shares of Common Stock subscribed for.

    

    6.
      Non-Assignability.
      Neither
      this Agreement nor any of the rights of the Purchaser hereunder may be
      transferred or assigned by the Purchaser.

    

    7.
      Governing
      Law.
      This
      Agreement will be constituted and enforced in accordance with and governed
      by
      the laws of the State of Texas except for matters arising under the Act, without
      reference to principles of conflict of law. Each of the parties consents to
      the
      exclusive jurisdiction of the federal courts whose districts encompass any
      part of the State of Texas or the state courts of the State of Texas in
      connection with any dispute arising under this Agreement and hereby waives,
      to
      the maximum extent permitted by law, any objection, including any objection
      based on [Illegible], to the bringing of any such proceeding to such
      jurisdictions. At Purchaser’s election, any dispute between the parties may be
      arbitrated rather than litigated in the courts, before the American Arbitration
      Association in Houston, Texas and pursuant to its rules. Upon demand made by
      the
      Holder to the Company, the Company agrees to submit to and participate in such
      arbitration.

    

    8.
      Facsimile
      Signatures.
      Examination of this Agreement and delivery of signed copies thereof by facsimile
      signatories from the parties hereto or their agents is acceptable to the parties
      who waive any objections or defenses based upon lack of an original
      signature.

    
      

       

       

        

      

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    IN
      WITNESS WHEREOF, the Purchaser has executed this Securities Subscription
      Agreement on the date set forth below.

    

    
      	
              /s/
                Catherine Allen

            	
              Date:
                11-12, 2004

            
	
              PURCHASER

            	 

    

    

    Print
      Name(s) and Address as it appears on Corporate Records

    

    CATHERINE
      ALLEN

    4168
      ROSSER SQUARE

    DALLAS,
      TX 75294

    

    

    Fax
      Number for Confirmation of Acceptance: _____________

    

    The
      foregoing Subscription is accepted this 12 day of NOV, 2004 by:

    
      High
        Road
        International, Inc.

    

    
 

    
      	
              BY:
                /s/ Gerry Berg

            	
              CORP
                SEAL

            
	
                     Gerry
                Berg, CEO & President

            	 

    

    

    
      

       

       

        

      

      5 of
        5SECURITY
      AGREEMENT

    

    Security
      Agreement, dated
      as
      of August 26, 2004, by Platinum
      IT Consulting, Inc., a
      Delaware corporation
      (the "Debtor"), and Global
      IT Holdings, Inc., a
      Nevada
      corporation, in favor of Parker,
      Clark Data Processing,
      Inc., a
      New
      York corporation, in its capacity as agent (in such capacity, the "Agent" or
      the
      "Secured Party"),
      on behalf of and for the ratable benefit of Parker,
      Clark Data Processing, Inc. and Platinum I.T. Consulting
      Inc., a
      New
      York corporation, and their respective successors and assigns (hereinafter
      collectively referred
      to as the "Obligees").

    

    WITNESSETH:

    

    WHEREAS,
      each
      of
      the Obligees has agreed to enter into transactions pursuant to which they are
      and will be
      owed
      money by the Debtor on the condition that interalia, Debtor grants
      to Agent for the ratable benefit of the Obligees
      a perfected security interest in the Collateral (defined below) as collateral
      security for, interalia, the payment
      and performance of all indebtedness, liabilities and obligations of any kind
      at
      any time owing by Debtor to any of the Obligees; and

    

    NOW,
      THEREFORE, in
      consideration of the premises, the mutual covenants and agreements contained
      in
this
      Agreement and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged,
      and in order to induce each of the Obligees to enter into the above referenced
      transaction, the parties hereby agree as follows:

    

    ARTICLE
      1. 

    DEFINITIONS

    

    1.1Definitions. Capitalized
      terms and phrases used in this Agreement without definition shall have the
      respective
      meanings set forth below; provided, however, any terms and phrases (whether
      capitalized or not) that are used in this Agreement and are not defined below
      and are defined in Article 8 or 9 of the Uniform Commercial Code as
      now in
      effect in the State of New York (all of such Uniform Commercial Code, the "UCC"
      or the "Code") shall have
      the
      respective meanings set forth in Article 8 or 9 of the UCC, as applicable.
      The
      following terms shall have the
      following meanings:

    

    (a)
      "Affiliate"
      shall mean, with respect to any Person, any other Person directly or indirectly
      controlling,
      controlled by, or under common control with, the first Person. The Parent and
      the Debtor and Persons either
      one controls shall be deemed Affiliates of all of the others.

    

    (b)
      "Ancillary
      Documents" or "Related Documents" shall
      mean the Note, the Asset Purchase Agreement,
      this Agreement, the other Security Documents and all documents now or hereafter
      executed which directly
      or indirectly relate to or are issued or provided in connection with any of
      the
      foregoing, as now or hereafter amended,
      restated, supplemented or otherwise modified from time to time.

    

    
      
        
        

      

      
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    (c)
      "Asset
      Purchase Agreement" shall
      mean the Asset Purchase Agreement dated as of May
      26,
      2004 between Debtor, Parent and the Obligees, as now or hereafter amended,
      restated, supplemented or otherwise
      modified from time to time.

    

    (d) "Business
      Days" shall
      have the meaning set forth in the Note.

    

    (e)
      "Closing
      Account" shall
      mean a Deposit Account established on or before the earlier of the
      effective date of Parent's SB-2 Registration Statement and February 26, 2005
      with a reputable financial institution
      selected by Agent containing at least $300,000 and subject to Agent's first
      priority and only perfected security
      interest.

     

    (f)
"Collateral"
      shall have the
      meaning set forth in Section 2.1 of this Agreement.

     

    (g)
      "Debt"
      shall mean (i) indebtedness or liability for borrowed money, for the purchase
      price of
      property or services (including trade obligations) or evidenced by promissory
      notes or other instruments; (ii) obligations
      as lessee under capital leases; (iii) obligations under letters of credit issued
      for the account of any Person; (iv) obligations arising under bankers' or trade
      acceptance facilities; (v) guarantees, endorsements (other than for collection
      or deposit in the ordinary course of business), and other contingent
      obligations, obligations to provide funds
      for
      payment and/or to supply funds to invest in any Person, or otherwise to assure
      a
      creditor against loss; (vi) obligations
      secured by any Lien on property owned by such Person, whether or not the
      obligations have been assumed;
      (vii) obligations or securities convertible or exchangeable into any of the
      items described in this definition; (viii)
      obligations under any agreement providing for a swap, ceiling rates, ceiling
      and
      floor rates, contingent participation
      or other hedging mechanisms with respect to interest payable on any of the
      items
      described above in this
      definition; and (ix) obligations in connection with any factoring or financing
      arrangement or any arrangement having
      a
      similar effect to any of the foregoing.

     

    (h) "Event
      of Default" shall
      have the meaning set forth in the Note.

    

    (i) Initial
      Paid in Capital" shall
      mean $2,000,000 invested by Parent to Purchaser.

    

    (j)
      "Intellectual
      Property" shall
      mean the collective reference to all rights, priorities and privileges
      relating to intellectual property of any kind, including, without limitation,
      websites, copyrights, if any, copyright
      licenses, if any, patents, if any, patent licenses, if any, the Trademarks
      and
      the Trademark Licenses, if any, computer
      software and licenses with respect thereto, and all rights to sue at law or
      in
      equity for any infringement or other
      impairment, of any of the foregoing, including the right to receive all proceeds
      and damages therefrom.

    

    (k)"Laws"shall
      mean any treaty, federal, state or local statute, law, rule, regulation,
ordinance,
      order, code, policy, approvals, permits, licenses, authorizations, or rule
      of
      common law, now or hereafter in
      effect, and any judicial or administrative interpretation thereof by a
      governmental authority or otherwise, including any
      judicial or administrative order, consent decree or judgment.

     

    
      
        
        

      

      
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    (1)
      "Lien"
      shall mean any mortgage, pledge, hypothecation, security interest, adverse
      claim, collateral assignment, lien (statutory or other), or other security
      interest or encumbrance or claim of any kind or nature
      whatsoever including, without limitation, any conditional sale or other title
      retention agreement, any financing lease having substantially the same economic
      effect as any of the foregoing, and the filing of any financing statement under
      the UCC or Uniform Commercial Code of any jurisdiction.

    

    (m)
      "Note"
      shall mean the Promissory Note dated as of even date herewith executed by the
      Debtor in
      favor
      of Parker, Clark Data Processing, Inc. and Platinum I.T. Consulting Inc., a
      New
      York corporation, as now
      or
      hereafter amended, restated, supplemented or otherwise modified from time to
      time.

    

    (n)
      "Obligations"
      shall
      mean the collective reference to the unpaid purchase price, all amounts
owing
      under the Note or the Asset Purchase Agreement, whether of principal, interest
      or otherwise, and all other debts,
      obligations and liabilities of the Debtor to any or all of the Obligees or
      the
      Agent of any and every kind (including,
      without limitation, interest accruing during or after any Event of Default
      and
      interest accruing during or after
      any
      Event of Default based on the filing of any petition in bankruptcy, or the
      commencement of any insolvency, reorganization
      or like proceeding, whether or not a claim for post-filing or post-petition
      interest is allowed in such proceeding),
      whether direct or indirect, absolute or contingent, due or to become due, or
      now
      existing or hereafter incurred,
      which may arise under, out of, or in connection with, any, certain or all of
      the
      Ancillary Documents or any replacements
      or refinancings of any of the foregoing or otherwise, in each case whether
      on
      account of purchase price,
      principal, interest, adjustments, accounts receivable, security deposits,
      reimbursement obligations, fees, costs, expenses,
      damages, indemnities or otherwise (including, without limitation, all fees
      and
      disbursements of counsel to the Agent or any of the Obligees that are required
      to be paid by the Debtor or the Parent pursuant to the terms of any of the
      Ancillary Documents) and all amounts advanced or spent by Agent or any of the
      Obligees for the maintenance or
      preservation of the Collateral and all other expenditures the Agent or any
      of
      the Obligees may make under the provisions
      of this Agreement or any of the Ancillary Documents for the benefit of Debtor
      or
      the Parent.

     

    (o) "Parent"
      shall
      mean Global IT Holdings, Inc.,a Nevada corporation and its successors and
assigns.

     

    (p)
      "Permitted
      Financing" shall
      mean any one Debt financing secured out of Debtor's assets, solely
      by
      Debtor's accounts receivable securing not in excess of $1,500,000 in the
      aggregate outstanding at any time from
      August 26, 2004 through August 26, 2005, $2,000,000 in the aggregate outstanding
      at any time from August 27, 2005
      through August 26, 2006, $3,000,000 in the aggregate outstanding at any time
      from August 27, 2006 through August
      26, 2007 and $4,000,000 in the aggregate outstanding at any time from August
      27,
      2007 through August 26, 2008.
      The
      aggregate obligations in connection with such Permitted Financing shall not
      exceed any of the above limitations during the applicable periods.

    

    (q) "Person"
      shall
      mean any natural person, corporation, partnership, limited partnership, trust,
      limited
      liability company, association, joint venture, organization or other entity
      or
      association of any kind.

    

    
      
        
        

      

      
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    (r)
      "Receivables"
      shall
      mean any right to payment for goods sold or leased or for services rendered,
      whether or not such right is evidenced by an Instrument or Chattel Paper and
      whether or not it has been earned
      by
      performance, including, without limitation, any Account, accounts receivable,
      contract rights, Chattel Paper,
      Instruments, all Payment Intangibles, acceptances, drafts and other obligations
      of any kind, together with all ledger
      sheets, files, records and documents relating to any of the foregoing, including
      without limitation, all computer
      records, programs, storage media and computer software used or useful in
      connection therewith, all of the foregoing whether now or hereafter owned or
      existing or acquired.

    

    (s)
      "Security
      Documents" shall
      mean this Agreement and any other documents securing or purporting
      to secure obligations of the Debtor and/or the Parent to any of the Obligees
      and/or Agent, as now or hereafter
      amended, restated, supplemented or otherwise modified from time to
      time.

    

    (t)
      "Trademarks
      License" shall
      mean, if any, whether now or hereafterr owned or existing or acquired,
      any agreement, written or oral, as amended, restated, supplemented or otherwise
      modified from time to time,
      providing for the grant by or to the Debtor of any right to use any
      Trademark.

    

    (u)
      "Trademarks"
      shall
      mean, whether now or hereafter owned or existing or acquired, (i) all
trademarks,
      trade names, corporate names, company names, domain names, corporate names,
      business names, fictitious
      business names, trade styles, service marks, logos and other source or business
      identifiers, and the goodwill associated
      therewith, now existing or hereafter adopted or acquired, all registrations
      and
      recordings thereof, and all
      applications
      in connection therewith, whether in the United States Patent and Trademark
      Office or in any similar office
      or
      agency of the United States, any State thereof or any other country or any
      political subdivision thereof,: or otherwise,
      and (ii) all renewals of any of the foregoing.

    

    The
      meanings given to terms defined herein shall be equally applicable to both
      the
      singular and plural forms of
      such
      terms.

    

    
      
        
        

      

      
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    ARTICLE
      2.

    GRANT
      OF SECURITY INTEREST

    

    2.1
      Grant
      of Security Interest. As
      collateral security for the prompt and complete payment and performance
      in full when due (whether at the stated maturity, by acceleration or otherwise)
      of the Obligations, the Debtor
      hereby grants to the Agent, for the ratable benefit of the Obligees, a security
      interest in and to, and hereby so pledges
      and assigns to the Agent, for the ratable benefit of the Obligees, all of the
      Debtor's now or hereafter owned or existing or acquired or created or arising
      assets and properties of any and every kind and nature, wherever located,
including,
      without limitation, all of the Debtor's present and future right, title and
      interest in and to all of the following,
      whether now or hereafter owned or existing or acquired or created or arising,
      wherever located (all of such
      collateral, the "Collateral"):

    

    (a) all
      Accounts;

    

    (b) all
      Chattel Paper;

    

    (c) all
      Deposit Accounts;

    

    (d) all
      Documents;

    

    (e) all
      Electronic Chattel Paper;

    

    (f) all
      Equipment;

    (g) all
      Fixtures;

    

    (h) all
      General Intangibles, Payment Intangibles and Software, including, without
      limitation, customer
      lists, goodwill and licenses and rights under contracts and
      documents;

    

    (i) all
      Intellectual Property;

    

    (j) all
      Instruments and Promissory Notes;

     

    (k)
      all
      Inventory;

    

    
      
        
        

      

      
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    (1) all
      Goods;

    

    (m)
      all
      Investment Property; 

     

    (n) all
      Letter of Credit Rights;

    

    (o) all
      Letters of Credit;

    

    (p) all
      Commercial Tort Claims;

    

    (q) all
      Receivables;

    

    (r) all
      Supporting Obligations;

    

    (s) all
      books
      and records pertaining to the Collateral;

    

    (t) all
      money
      and other property not otherwise described above;

    

    (u) all
      Debt
      and other obligations not described above owing to Debtor; and

    

    (v)
      to
      the extent not otherwise included, the Closing Account, all Proceeds and
      Products of any and
      all
      of the foregoing and all collateral, security and guarantees given by any Person
      with respect to any of the foregoing.

    

    ARTICLE
      3.

    REPRESENTATIONS
      AND WARRANTIES

    

    The
      Debtor hereby represents and warrants to Secured Party as follows:

    

    3.1
      Ownership
      and Liens. No
      financing statement, filing or other public notice against existing or future
      assets
      or
      properties of Debtor is on file or of record in any public office, except such
      as have been filed in favor of the
      Agent
      pursuant to this Agreement and except for any financing statements identified
      on
      Schedule A.

    

    3.2
      Perfected
      Priority Liens. The
      security interests granted pursuant to this Agreement constitute perfected
      security interests in the Collateral in favor of the Agent as collateral
      security for the Obligations prior to all other
      Liens except as identified on Schedule A. The Agent's security interest in
      the
      Closing Account shall at all times
      after the earlier of the effective date of Parent's SB-2 Registration Statement
      and 6 months after the date hereof constitute
      a first priority and only perfected security interest and the Closing Account
      and be subject to Debtor's control
      (as defined in Section 9-104 of the UCC).

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    3.3
      Formation;
      Location. Debtor
      was formed under the laws of Delaware, has a mailing address of c/o Anslow
      & Jaclin, LLP, 195 Route 9, Suite 204, Manalapan, NJ 07726, a taxpayer
      identification number of   and
      an
      organizational identification number of __________ and an organizational
      identification number of __________.

    

    3.4
      Assets. Debtor's
      only assets and properties were purchased from the Obligees.

    

    3.5
      Capital. Debtor
      has complied with all conditions precedent to Closing as set forth in the Asset
      Purchase Agreement, including, without limitation, the Capital Requirement
      and
      the Debt Financing Requirement described
      in the Asset Purchase Agreement, and Debtor has received the Initial Paid in
      Capital. The
      Closing Account
      shall have at least $300,000 in it at all times after the earlier of the
      effective date of Parent's SB-2 Registration
      Statement and February 26, 2005.

     

    ARTICLE
      4.

    COVENANTS

    

    Each
      of
      the Debtor and the Parent jointly and severally covenants and agrees with the
      Agent that from and after the date of this Agreement until the Obligations
      shall
      have been indefeasibly satisfied in full:

    

    4.1
      Delivery
      of Possession Collateral. If
      any of
      the Collateral is evidenced by or constitutes any Instruments,
      Chattel Paper, Investment Property or money, such Collateral shall be
      immediately delivered to Agent duly
      indorsed in a manner satisfactory to Agent, to be held as Collateral pursuant
      to
      this Agreement. If any of the Collateral
      at any time constitutes Deposit Accounts or Securities Accounts or other
      Collateral where perfection may be
      obtained by control, upon Agent's request, Agent shall at all times have control
      of such Collateral pursuant to methods
      and documentation satisfactory to Agent.

    

    4.2
      Maintenance
      of Perfected Security Interest; Further Documentation.

    

    (a)
      The
      Debtor shall at all times have a perfected security interest in all Collateral
      with priority over
      all
      Liens except for the Lien covering Debtor's accounts receivable securing only
      the Debtor's Permitted Financing,
      all as more specifically described on Schedule A. The Debtor shall maintain
      the
      security interest created by this Agreement as a perfected security interest
      in
      all Collateral and shall defend such security interest against the Liens,
      claims and demands of all Persons whomsoever except Agent except the Lien
      covering Debtor's accounts receivable securing only the Debtor's guarantee
      of
      the Permitted Financing, all as more specifically described on Schedule
      A.

     

    (b)
      At
      any
      time and from time to time, upon the written request of the Agent, and at the
      sole expense
      of the Debtor, the Debtor shall promptly and duly execute and deliver such
      further instruments and documents and take such further actions as the Agent
      may
      reasonably request for the purpose of obtaining or preserving the full benefits
      of this Agreement and of the rights and powers herein granted.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.3
      Changes
      in Locations, Name, etc. The
      Debtor shall not:

    

    (a) permit
      any of the tangible Collateral to be kept at a location other than the location
      listed on Schedule B except upon 30 days' prior written notice to Agent;
      or

    

    (b) except
      upon 30 days' prior written notice to Agent, change the location of its only
      offices from
      those listed on Schedule B or open any additional office; or

    

    (c) change
      its name, identity, entity type, structure or its jurisdiction of
      formation.

    

    4.4
      Further
      Identification of Collateral. At
      the
      Agent's request, the Debtor shall furnish to the Agent from
      time
      to time (but in no event later than 30 days after the applicable request)
      statements and schedules further identifying
      and describing the Collateral and such other reports in connection with the
      Collateral as the Agent may request,
      all in reasonable detail.

    

    4.5
      Notices. The
      Debtor shall advise the Agent promptly, in reasonable detail, of:

    

    (a) any
      Lien
      (other than security interests created hereby and the Lien identified on
      Schedule A) on
      any of
      the Collateral; and

     

    (b) of
      the
      occurrence of any other event which could reasonably be expected to result
      in a
material
      adverse change in the aggregate value of the Collateral or on the security
      interests created hereby.

    4.6
      Prohibition
      of Fundamental Changes. The
      Debtor shall not enter into any transaction of merger or consolidation,
      or change its form of organization or business, or engage in any business which
      is a business line or type
      of
      business which is different from the business line or type of business that
      was
      engaged in by Obligees before the date hereof, or liquidate or dissolve (or
      suffer any liquidation or dissolution), or purchase or otherwise acquire all
      or
      substantially all or a material portion of the assets of any Person, or sell,
      assign, lease or otherwise dispose of (whether
      in one transaction or in a series of transactions) all or substantially all
      or a
      material portion of its assets (whether
      now owned or hereafter acquired) to any Person or enter into any transaction
      outside the ordinary course of its business.

    

    4.7
      Transactions
      with Affiliates. The
      Debtor shall not enter into any transaction with any Affiliate or any
other
      Person, including, without limitation, the purchase, sale or exchange of
      property or the rendering of any service or
      any
      other transaction or agreement or payment for overhead or rent or intercompany
      charges, except in the ordinary course of and pursuant to the reasonable
      requirements of the Debtor's business and upon fair and reasonable terms
      no
      less favorable to the Debtor than it would obtain in a comparable arm's length
      transaction with a Person not an
      Affiliate. Without limiting the foregoing, no indemnification or other payment
      shall be made by Debtor to Parent in
      connection with the Share Exchange Requirement as defined in the Asset Purchase
      Agreement or documents now or
      hereafter relating thereto.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    4.8
      Debt. The
      Debtor shall incur or permit to exist or be liable for any Debt except Debt
      in
      favor of the Obligees
      as contemplated by the Ancillary Documents, Debt in respect of trade payables
      and purchase money financing
      for specific items of equipment incurred in the ordinary course of business
      and
      the Permitted Financing secured
      solely by Debtor's accounts receivable. The aggregate amount owing in respect
      of
      the Permitted Financing shall
      not
      exceed $1,500,000 from August 26, 2004 through August 26, 2005, $2,000,000
      from
      August 27, 2005 through
      August 26, 2006, $3,000,000 from August 27, 2006 through August 26, 2007 and
      $4,000,000 from August 27,
      2007
      through August 26, 2008. The Debtor and Parent shall not default in respect
      of
      the Permitted Financing or breach
      any term of any documents relating to said financing.

    

    4.9
      Abandonment. The
      Debtor and the Parent shall not abandon the operation of Debtor's business
      or
otherwise
      cease to diligently pursue the operation of Debtor's business.

    

    4.10
      Amendments. The
      Debtor shall not amend or modify its Certificate of Incorporation or Bylaws
      in
any
      material respect without the prior written consent of Secured
      Party.

    

    4.11
      Distributions. The
      Debtor shall not directly or indirectly, declare or pay any distributions or
      dividends, or purchase, redeem, retire, or otherwise acquire for value any
      of
      its securities now or hereafter outstanding,
      or make any dividends or distribution of assets to its shareholders or other
      shareholders, whether in cash,
      assets, or in obligations or other property of the Debtor, or allocate or
      otherwise set apart any sum for the payment
      of any distribution or dividends on, or for the purchase, redemption, or
      retirement or acquisition of any of its
      stock
      or equity or make any other distribution or dividends by reduction or return
      of
      capital or otherwise in respect
      of any of its stock.

    

    4.12
      Salaries. The
      Debtor shall not directly or indirectly pay or provide any salaries, wages,
      commissions, bonuses
      or other compensation except for services rendered to the extent any such
      salaries, wages, commissions, bonuses
      and compensation are consistent with Obligees' past practice; provided, however,
      the foregoing shall not prohibit
      payments to Ralph Clark consistent with his employment agreement as in effect
      from time to time.

    

    4.13
      Liens. The
      Debtor shall not create or permit or suffer to exist any Lien on any of its
      assets or properties
      except as created pursuant to this Agreement and purchase money liens covering
      only specific items of equipment
      and a security interest on Debtor's accounts receivable securing only the
      Debtor's Permitted Financing.

    

    4.14
      Initial
      Paid in Capital. The
      Initial Paid in Capital shall be used by Debtor in the ordinary course of
its
      business and shall not be paid out until all Obligations have been indefeasibly
      satisfied in full. The Closing Account
      shall at all times after the earlier of the effective date of Parent's SB-2
      Registration Statement and February
      26, 2005 have at least $300,000 in it and shall always be subject to Agent's
      first priority and only perfected security interest.

    

    4.15
      Payment
      of Taxes and Claims. The
      Debtor shall pay and discharge, or cause to be paid and discharged,
      all taxes, assessments and governmental charges or levies imposed upon it or
      upon its income or profits or
      upon
      any of the Collateral, and all claims or obligations that, if unpaid, could
      become a Lien, upon any Collateral or
      any
      part thereof.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    4.16
      No
      Violation of Laws. Debtor
      shall comply in all material respects with all Laws applicable to
      it.

    

    4.17
      Possession. Where
      Collateral is in the possession of a third party, Debtor will join with Agent
      in
notifying
      the third party of Agent's security interest and obtaining an acknowledgement
      from the third party that it is holding the Collateral for the benefit of Agent.
      Debtor shall cooperate with Agent in obtaining third party consents (e.g.,
      landlord consents) to assist Debtor in exercising its rights under this
      Agreement.

    

    4.18
      Control. Debtor
      will cooperate with Agent in obtaining control with respect to Collateral
      consisting of:
      (a)
      Deposit Accounts, (b) Investment Property, (c) Letter of Credit Rights, and
      (d)
      Electronic Chattel Paper. Debtor
      shall promptly notify Agent of any Commercial Tort Claims and cooperate with
      Agent in amending this Agreement
      to describe such Commercial Tort Claims and otherwise perfect Agent's security
      interest in such Commercial
      Tort Claims.

    

    4.19
      Inspection. The
      Agent
      may inspect any Collateral in the Debtor's possession and the Debtor's books
      and
      records, at any time upon reasonable prior notice.

    

    4.20
      Agent's
      Collection Rights. Agent
      shall have the right at any time after or during an Event of Default to enforce
      Debtor's rights in respect of the Accounts and Debtor's rights against its
      account debtors and obligors. Debtor hereby irrevocably authorizes Agent at
      any
      after or during an Event of Default to at any time contact and communicate
      with Debtor's customers, manufacturers, accountants and other professionals
      and
      Debtor shall, upon Agent's
      request, contact all such persons to confirm said authorization.

    

    4.21
      Risk
      of Loss. Debtor
      has the risk of loss of the Collateral.

    

    4.22
      No
      Collection
      Obligation. Agent
      has
      no duty to collect any income accruing on the Collateral or to preserve
      any rights relating to the Collateral.

    

    4.23
      Minimum
      Working Capital. Debtor
      shall at all times maintain a minimum "working capital" of at least $2,000,000.
      "Working Capital" shall mean Debtor's cash plus accounts receivable less all
      current liabilities, all as
      determined in accordance with GAAP, as hereafter defined.

    

    4.24
      No
      Disposition of Collateral. Agent
      does not authorize, and Debtor agrees not to make any sales, leases,
      licenses, transfers or other dispositions of any kind of any of the Collateral
      except for sales of obsolete or worn-out
      equipment.

    

    4.25
      Financial
      Information and Compliance Certificates.

    

    (a) Debtor
      shall keep its books of account in accordance with generally accepted accounting
      principles
      consistently applied ("GAAP");

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b)
      Debtor
      shall deliver to the Agent annually, as soon as available, but in any event
      within 90 days
      after the last day of each of the Debtor's fiscal years, a balance sheet of
      the
      Debtor, as at the last day of such fiscal year, and statements of income and
      retained earnings and statements of cash flows, for such fiscal year, each
      prepared
      in accordance with GAAP consistently applied, and in reasonable detail and
      all
      reviewed by independent certified
      public accountants reasonably satisfactory to the Agent and certified in a
      certificate of the President or chief financial
      officer of the Debtor as fairly presenting the financial position and the
      results of operations of the Debtor for
      the
      period then ended and as having been prepared in accordance with GAAP
      consistently applied;

    

    (c)
      Debtor
      shall deliver to the Agent, as soon as available, but in any event within
      forty-five (45)
      days
      after the end of each of the Debtor's fiscal quarters in each fiscal year,
      a
      balance sheet of the Debtor, as at the last day of such quarter, and statements
      of income and retained earnings and statements of cash flows for such
three
      month period, each prepared in accordance with GAAP consistently applied, in
      reasonable detail and certified in a certificate of the President or chief
      financial officer of the Debtor as fairly presenting the financial position
      and
the
      results of operations of the Debtor for the period then ended and as having
      been
      prepared in accordance with GAAP
      consistently applied; and

    

    (d)
      Debtor
      shall deliver to the Agent at the same time as the Debtor delivers the financial
      statements
      required under the provisions of Sections 4.25(a) and (b) hereof, a certificate
      signed by the President and the
      chief
      financial, or accounting officer of the Debtor, to the effect that no Event
      of
      Default has occurred together with
      calculations demonstrating compliance with Section 4.23 of this Agreement as
      of
      the date of the balance sheet included within said financial statements. Debtor
      shall also deliver to the Agent, within 15 days after the end of each month,
      reasonable calculations demonstrating compliance with Section 4.23 of this
      Agreement as of the end of the immediately
      preceding month.

    

    (e)
      After
      an
      Event of Default, at Agent's request, all of the foregoing financial statements
      (as required
      by Agent) shall be audited and be accompanied by an unqualified opinion of
      a
      firm or certified public accountants
      satisfactory to Agent.

    

    (f)
      Within
      15
      days after expiration of the immediately preceding month, Debtor shall deliver
      to Agent a calculation of the previous month's Gross Profits (as defined in
      the
      Asset Purchase Agreement) and Net Sales
      (as
      defined in the Asset Purchase Agreement) covering each of the 12 months after
      the date hereof together with
      copies of all background information supporting said calculations.

    

    (g) Debtor
      shall also deliver Agent promptly after any request such other financial
      information as shall be requested by Agent.

    

    4.26
      Insurance. Debtor shall maintain
      in full force and effect insurance with responsible and reputable insurance
      companies or associations in accordance with Schedule B hereof and other
      insurance in such amounts and covering such risks as is usually carried by
      companies engaged in similar businesses and owning similar properties in the
      same general areas in which the Debtor operates. Agent shall at all times be
      the
      loss payee on all such casualty or other similar insurance policies and each
      of
      the Agent and the Obligees shall at all times be an additional insured on all
      liability or similar insurance maintained by Debtor and such insurance shall
      provide that it cannot be cancelled without providing 30 days' prior written
      notice to Agent. Upon Agent's request, Debtor shall provide Agent with evidence
      reasonably satisfactory to the Agent that all of the above insurance is in
      full
      force and effect.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    4.27
      SB-2
      Registration Statement. Parent's
      SB-2 Registration Statement shall be effective on or before the date which
      is
      six months after this date.

     

    ARTICLE
      5.

    OTHER
      PROVISIONS

    

    5.1
      Agent Appointed
      Attorney-in-Fact. The Debtor hereby
      irrevocably appoints the Agent as the Debtor's attorney-in-fact, with full
      authority in the place and stead of the Debtor and in the name of the Debtor,
      at
      any time, to take any action and to execute any instrument which the Agent
      may
      deem necessary or advisable to accomplish the purposes of this Agreement,
      including, without limitation:

    

    (a)
      to
      execute and/or file documents to be of public record covering the Collateral
      and
      notify third
      parties of Agent's security interest and take any actions deemed necessary
      or
      advisable by Agent to perfect or protect
      its security interest in the Collateral;

    

    (b)
      after
      an
      Event of Default, to pay and discharge taxes, Liens or other encumbrances levied
      or placed
      on
      or threatened against the Collateral, and to ask, demand, collect, sue for,
      recover, settle, compromise, receive
      and give acquittance and receipts for moneys due and to become due under or
      in
      respect of any of the Collateral;

    

    (c)
      after
      an
      Event of Default, to receive, endorse, assign, and collect any and all checks,
      notes, drafts
      and other negotiable and non-negotiable instruments, Documents and Chattel
      Paper, and the Debtor waives notice
      of
      presentment, protest and non-payment of any Instrument, Document or Chattel
      Paper so endorsed or assigned;

    

    (d)
      after
      an
      Event of Default, to file any claims or take any action or institute any
      proceedings which
      the
      Agent may deem necessary or desirable for the collection of any of the
      Collateral or otherwise to enforce the
      rights of the Agent with respect to any of the Collateral;

     

    (e) after
      an
      Event of Default, to sell, transfer, assign or otherwise deal in or with the
      Collateral or
      the
      proceeds or avails thereof, as a secured party;

    

    (f) after
      an
      Event of Default, to make any reasonable allowances and other reasonable
adjustments
      with respect to any of the Collateral;

    

    (g)
      after
      an
      Event of Default, to sign the Debtor's name on any document, on invoices
      relating to any Account, on drafts against customers, on schedules of
      assignments of Accounts, on checks from investors, on notices
      of assignment, on verifications of accounts, and on notices to
      customers;

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (h) after
      an
      Event of Default, to notify the post office authorities to change the address
      for delivery
      of the Debtor's mail to an address designated by the Agent;

     

    (i)
after
      an
      Event of Default, to receive, open and dispose of all mail addressed to the
      Debtor;

     

    (j) after
      an
      Event of Default, to do all that Agent deems necessary to withdraw any and
      all
monies
      from any Deposit Account or other account;

    

    (k) after
      an
      Event of Default, to send requests for verification of accounts to the
      Debtor's

    customers;

    

    (l) after
      an
      Event of Default, to deliver any notices which Agent deems appropriate to the
      telephone
      company controlling Debtor's telephone lines; and

    
       

      (m)
        after
        an
        Event of Default, to take any and all actions with regard to the
        Receivables.

       

    

    The
      Debtor hereby ratifies and approves all acts of the Agent, as its attorney
      in-fact, taken pursuant to and in
      accordance with this Section 5.1, and the Agent, as its attorney-in-fact, will
      not be liable for any acts of commission
      or omission, nor for any error of judgment or mistake of fact or Law other
      than
      acts constituting intentional
      misconduct. This power, being coupled with an interest, is irrevocable so long
      as this Agreement remains in
      effect.

    

    The
      Debtor hereby agrees to take all actions and execute and file all documents
      deemed necessary or desirable
      by Agent to create, perfect and/or protect Agent's security interest in the
      Collateral and/or the priority thereof.

    

    5.2
      Remedies.

    

    (a)
      Should
      an
      Event of Default occur, Debtor will pay Agent all costs reasonably incurred
      by
the
      Agent
      or the Obligees for the purpose of enforcing its rights hereunder or under
      any
      of the Ancillary Documents, including,
      without limitation:

    

    (i) costs
      of
      foreclosure;

    

    (ii) costs
      of
      obtaining money damages; and

    

    (iii)
      a
      reasonable fee for the services of attorneys employed by Agent or the Obligees
      for
      any
      purpose related to this Agreement, the Ancillary Documents or the Obligations,
      including, without limitation,
      consultation, drafting documents, sending notices or instituting, prosecuting
      or
      defending litigation or arbitration.

    

    (b)
      If
      any
      Event of Default shall have occurred, the Agent may pursue any remedy available
      at law
      (including, without limitation, those available under the provisions of the
      UCC)
      or in equity to collect, enforce or satisfy
      any Obligations then owing, whether by acceleration or otherwise, and all rights
      and remedies of a secured party
      on
      default under any applicable Uniform Commercial Code. Upon any Event of Default,
      Agent shall have the right
      to
      pursue any of the following remedies separately, successively or
      simultaneously:

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (i) File
      suit
      and obtain judgment and, in conjunction with any action, Agent may seek
any
      ancillary remedies provided by law, including levy of attachment and
      garnishment.

    

    (ii)
      Take
      possession of any Collateral if not already in its possession without demand
      and
      without legal process. Upon Agent's demand, Debtor will assemble and make the
      Collateral available to Agent as
      it
      directs. Debtor grants to Agent the right, for this purpose, to enter into
      or on
      any premises where Collateral may
      be
      located.

     

    (iii) Without
      taking possession, sell, lease or otherwise dispose of the Collateral at
public
      or
      private sale in accordance with the UCC or any applicable Uniform Commercial
      Code.

    

    (iv) Exercise
      all rights and remedies of a secured party under any applicable Uniform
Commercial
      Code in respect of the Closing Account and any other Collateral.

    

    (c)
      No
      delay
      or omission by Agent to exercise any right or remedy by accruing upon any Event
      of Default shall: (i) impair any right or remedy, (ii) waive any Event of
      Default or operate as an acquiescence to the Event
      of
      Default, or (iii) affect any subsequent Event of Default of the same or of
      a
      different nature.

    

    (d)
      Agent
      shall give Debtor such notice of any private or public sale as may be required
      by the UCC.

    

    (e) Agent
      has
      no obligation to clean-up or otherwise prepare the Collateral for
      sale.

    

    (f)
      Agent
      has
      no obligation to attempt to satisfy the Obligations by collecting them from
      any
other
      Person liable for them and Agent may release, modify or waive any collateral
      provided by any other Person to secure
      any of the Obligations, all without affecting Agent's rights against Debtor.
      Debtor waives any right it may have
      to
      require Secured Party to pursue any third Person for any of the Obligations.
      Parent hereby guarantees, as a guaranty
      of payment, all of Debtor's obligations under the Ancillary
      Documents.

    

    (g)
      Agent
      may
      comply with any applicable state or federal law requirements in connection
      with
a
      disposition of the Collateral and compliance will not be considered adversely
      to
      affect the commercial reasonableness
      of any sale of the Collateral.

    

    (h)
      Agent
      may
      sell the Collateral without giving any warranties as to the Collateral. Agent
      may specifically disclaim any warranties of title or the like. This procedure
      will not be considered adversely to affect the commercial
      reasonableness of any sale of the Collateral.

    

    (i)
      If
      Agent
      sells any of the Collateral upon credit, Debtor will be credited only with
      payments actually made by the purchaser, received by Agent and applied to the
      indebtedness of the purchaser. In the event the purchaser
      fails to pay for the Collateral, Agent may resell the Collateral and Debtor
      shall be credited with the proceeds
      of the sale.

    

    (j) In
      the
      event Agent or any of the Obligees purchases any of the Collateral being sold,
      Agent or
      the
      Obligees may pay for the Collateral by crediting some or all of the Obligations
      of the Debtor.

    

    (k)
      Agent
      has
      no obligation to marshal any assets in favor of Debtor, or against or in payment
      of any of the Obligations or any other obligation owed to Agent or any of the
      Obligees by Debtor or any other Person.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (1)
      In
      the
      event the Agent seeks to take possession of all or any portion of the Collateral
      by judicial
      process, Debtor irrevocably waives (i) the posting of any bond, surety or
      security with respect thereto which might
      otherwise be required, (ii) any demand for possession prior to the commencement
      of any suit or action to recover the Collateral, and (iii) any requirement
      that
      the Agent retain possession and not dispose of any Collateral until
      after trial or final judgment.

    

    (m)
      The
      Agent
      shall have the right, in addition to any rights and remedies provided hereunder,
      under
      any
      Ancillary Documents, and at law, without prior notice to the Debtor, to set-off
      and appropriate and apply any and all deposits and any other credits,
      indebtedness or claims, whether direct or indirect, absolute or contingent,
      matured
      or unmatured, at any time held or owing by the Agent or any of the Obligees
      to
      or for the credit or the account
      of the Debtor or any of its Affiliates. No right of set-off shall be deemed
      to
      have been waived by any act or conduct on the part of the Agent or the Obligees,
      or by any neglect to exercise such right of set-off, or by any delay
in
      doing
      so. Every right of set-off shall continue in full force and effect until
      specifically waived or released by an instrument
      in writing executed by the Agent.

     

    (n)
      The
      enumeration of the foregoing rights and remedies is not intended to be
      exclusive, and such
      rights and remedies are in addition to and not by way of limitation of any
      other
      rights or remedies the Agent may
      have
      under the UCC or other applicable law or any of the Ancillary Documents. The
      Agent shall have the right, in
      its
      sole discretion, to determine which rights and remedies, and in which order
      any
      of the same, are to be exercised,
      and to determine which Collateral is to be proceeded against and in which order
      and the exercise of any right
      or
      remedy shall not preclude the exercise of any others, all of which shall be
      cumulative.

    

    ARTICLE
      6.

    MISCELLANEOUS
      PROVISIONS

    

    6.1
      Severability. Should
      any provision of this Agreement be found to be void, invalid or unenforceable
      by
a
      court
      of competent jurisdiction, that finding shall only affect the provisions found
      to be void, invalid or unenforceable
      and shall not affect the remaining provisions of this Agreement.

    

    6.2
      Amendments
      in Writing; No Waiver; Cumulative Remedies.

    

    (a)
      Amendments
      in Writing.
      None of
      the terms or provisions of this Agreement may be amended,
      supplemented or otherwise modified except by a written instrument executed
      by
      the Debtor and the Agent.

    

    (b)
      No
      Waiver by Course of Conduct. The
      Agent
      shall not by any act, delay, indulgence, omission
      or otherwise be deemed to have waived any right or remedy hereunder or to have
      acquiesced in any Event of Default. No failure to exercise, nor any delay in
      exercising, on the part of the Agent, any right, power or privilege hereunder
      shall operate as a waiver thereof. No single or partial exercise of any right,
      power or privilege hereunder shall
      preclude any other or further exercise thereof or the exercise of any other
      right, power or privilege. A waiver by the
      Agent
      of any right or remedy hereunder on any one occasion shall not be construed
      as a
      bar to any right or remedy which the Agent would otherwise have on any future
      occasion. Any waiver, to be valid, must be in writing.

    

    (c)
      Remedies
      Cumulative. The
      rights and remedies herein provided are cumulative, may be exercised
      singly or concurrently and are not exclusive of any other rights or remedies
      provided by law or any documents.

    

    6.3
      Further
      Assurances. To
      the
      extent that under existing law, it is impossible for Secured Party to obtain
      a
      perfected security interest in any item of Collateral, and the law is changed
      to
      make it possible for the Agent to obtain
      a
      perfected security interest in such item of Collateral, the Debtor agrees to
      execute such documentation and take all actions as are reasonably requested
      by
      Agent to provide Agent with a perfected security interest in such item
of
      Collateral.

    

    6.4
      Section
      Headings. The
      Section and subsection headings used in this Agreement are for convenience
      of
      reference only and are not to affect the construction hereof or be taken into
      consideration in the interpretation hereof.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    6.5
      Successors
      and Assigns. This
      Agreement shall be binding upon the Debtor and the successors and assigns
      of the Debtor and all persons who become bound as a debtor to this Agreement
      and
      shall inure to the benefit of
      the
      Agent and the Obligees and their respective successors and assigns. Debtor
      may
      not assign, delegate or transfer
      its obligations or rights under this Agreement. Each of Agent and the Obligees
      may assign or transfer its rights
      and/or obligations under this Agreement without notice to Debtor or Debtor's
      consent. If an assignment is made,
      Debtor shall render performance under this Agreement to the assignee. Debtor
      waives and will not assert against
      any assignee any claims, defenses or set offs which Debtor could assert against
      Agent or any Obligee except defenses
      which cannot be waived.

    

    6.6
      Governing
      Law. This
      Agreement shall be governed by, and construed and interpreted in accordance
      with,
      the
      law of the State of New York without giving effect to conflict of laws
      principles, except to the extent that the
      UCC
      requires the application of the laws of other
      jurisdictions.

    6.7
      Addresses
      For Notices. Any
      notice, request, information or other document to be given pursuant to
this
      Agreement shall be in writing and shall be given by hand delivery, telecopier,
      certified or registered U.S. mail, or
      a
      reputable overnight courier service which provides evidence of its receipt
      as
      part of its service, as follows:

    

    
      	 	if to the Agent:	
              c/o Tannenbaum Helpern Syracuse & Hirschtritt LLP
                

              900
                Third Avenue 

              New
                York, NY 10022-4775 

              Attention:
                Joel A. Klarreich, Esq. 

              Telecopier
                No.: (212) 371-1084

            
	 	 	 
	 	if to Debtor:	
              c/o Anslow & Jaclin, LLP 

              195
                Route 9, Suite 204 

              Manalapan,
                NJ 07726 

              Attention:
                Gregg Jaclin, Esq.

              Telecopier
                No.:________________

            

    

     

    Debtor
      or
      Agent may change the address or telecopier number to which notices under this
      Agreement are to
      be
      sent to it by giving written notice of such change as herein provided. Any
      notice given hereunder shall be deemed
      given on the date of hand delivery, transmission by telecopier, deposit with
      the
      U.S. postal service or delivery
      to a courier service, as appropriate. Any notice or document signed or to be
      signed by Agent under or in connection
      with this Agreement, to be effective, must be signed by two officers of
      Agent.

    

    6.8
      Continuing
      Security Interest. This
      Agreement shall create a continuing security interest in the Collateral
      and shall remain in full force and effect until the indefeasible payment in
      full
      of all Obligations.

    

    6.9
      No
      Limitation
      on Remedies. This
      Agreement is in addition to, and not in limitation of, any other rights
      and remedies the Secured Party may have by virtue of any other instrument
      securing the Obligations or any other
      documents or by law or otherwise.

    

    6.10
      Agent. The
      Agent, in its capacity as agent, shall be presumed at all times and in all
      instances to be acting
      on
      behalf of and for the ratable benefit of the Obligees.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    6.11
      Appointment. Each
      Obligee hereby irrevocably designates and appoints Parker, Clark Data
Processing,
      Inc. as the agent of such Obligee under this Agreement, and each such Obligee
      irrevocably authorizes Agent
      as
      the Agent for such Obligee, to take such action on its behalf under the
      provisions of this Agreement and to exercise
      such powers and perform such duties as are expressly delegated to the Agent
      by
      the terms of this Agreement,
      together with such other powers as are reasonably incidental thereto.
      Notwithstanding any provision to the
      contrary elsewhere in this Agreement, the Agent shall not have any duties or
      responsibilities except those expressly
      set forth herein, and no implied covenants, functions, responsibilities, duties,
      obligations or liabilities shall be
      read
      into this Agreement or any other document or otherwise exist against the Agent.
      The Agent, among other things,
      is hereby authorized by the Obligees to act as the agent of the Obligees for
      purposes of perfecting the security interest
      in the Collateral, holding all Collateral and exercising remedies in connection
      therewith. Agent may apply the
      Collateral and the Proceeds of the Collateral to such Obligations and in such
      order and preference as it sees fit in its
      sole
      discretion.

     

    6.12
      Delegation
      of Duties. The
      Agent
      may execute any of its duties under this Agreement by or through agents
      or
      attorneys-in-fact and shall be entitled to advice of counsel concerning all
      matters pertaining to such duties. The Agent shall not be responsible for the
      negligence or misconduct of any agents or attorneys in-fact selected by it
      with
      reasonable care.

     

    6.13
      Exculpatory
      Provisions. To
      the
      maximum extent permitted by applicable law, neither the Agent nor any
      of
      its officers, directors, shareholders, partners, employees, agents or
      attorneys-in-fact shall be liable for any action
      lawfully taken or omitted to be taken by it or such Person under or in
      connection with this Agreement or any other
      document.

    6.14
      Reliance
      by Agent. The
      Agent
      shall be entitled to rely, and shall be fully protected in relying, upon (a)
      any
      note, writing, resolution, notice, consent, certificate, affidavit, letter,
      cablegram, telegram, telex, fax or teletype
      message, statement, order or other document or conversation believed by it
      to be
      genuine and correct and to have
      been
      signed, sent or made by the proper Person or Persons and (b) advice and
      statements of legal counsel (including,
      without limitation, counsel to the Debtor), independent accounts and other
      experts selected by the Agent. The
      parties hereto agree Agent and Obligees can rely on any representation,
      warranty, covenant or agreement in this Agreement
      or any Ancillary Document without regard to any investigation or knowledge
      or
      any other fact or circumstance.

     

    6.15
      Agent
      in Its Individual Capacity. With
      respect to Obligations owing to Agent, the Agent shall have the same rights
      and
      powers under this Agreement and other documents as any Obligee and may exercise
      the same as though
      it
      were not the Agent, and the terms "Obligee" and "Obligees" shall include Parker,
      Clark Data Processing, Inc.
      or
      any other Agent in its individual capacity.

     

    6.16
      Successor
      Agent.

     

    (a)
      The
      Agent may resign as Agent upon ten days' notice to the Obligees. If the Agent
      shall resign
      as
      Agent under this Agreement, then the Obligees, on whatever basis they agree
      to,
      shall appoint from among .the
      Obligees a successor Agent for the Obligees.

    

    (b)
      Upon
      such appointment, (i) the successor agent shall succeed to the rights, powers
      and duties of
      the
      Agent, (ii) the term "Agent" shall mean such successor agent effective upon
      its
      appointment, and (iii) the former
      Agent's rights, powers and duties as Agent shall be terminated, without any
      other or further act or deed on the part
      of
      such former Agent or any of the parties to this Agreement or any holders of
      the
      Obligations.

    

    (c)
      After
      any retiring Agent's resignation as Agent, the provisions of this Section shall
      inure to its benefit
      as to any actions taken or omitted to be taken by it while it was Agent under
      this Agreement.

    

    (d)
      The
      Debtor and the Obligees shall execute all documents reasonably required by
      the
      Obligees to provide the new Agent for the ratable benefit of the Obligees,
      with
      a perfected security interest in the Collateral with
      the
      priority intended by this Agreement and all collateral in which the Agent
      purportedly has a security interest.

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    6.17
      Waiver
      of Trial by Jury; Waiver and Other Agreements. EACH
      OF THE PARTIES HEREBY WAIVES,
      TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE
      TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING
      OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, AND ANY SUCH
TRIAL
      SHALL BE CONDUCTED SOLELY BY A JUDGE. EACH OF THE PARTIES CERTIFIES THAT
NO
      REPRESENTATIVE, AGENT OR ATTORNEY OF EITHER PARTY HAS REPRESENTED,
EXPRESSLY
      OR OTHERWISE, THAT THE OTHER WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK
      TO ENFORCE THE FOREGOING WAIVERS. EACH PARTY AGREES AND ACKNOWLEDGES
THAT
      IT HAS BEEN REPRESENTED BY INDEPENDENT COUNSEL IN CONNECTION WITH THIS
AGREEMENT
      OR BEEN ADVISED THAT IT SHOULD BE REPRESENTED BY INDEPENDENT
COUNSEL
      IN CONNECTION WITH THIS AGREEMENT. IF ANY PARTY HAS DECIDED NOT TO BE
REPRESENTED
      BY INDEPENDENT COUNSEL IN
      CONNECTION
      WITH THIS AGREEMENT, IT IRREVOCABLY
      AND FOREVER WAIVES ANY AND ALL DEFENSES OR RIGHTS ARISING OUT OF
OR
      RELATED TO SAID DECISION.

    

    6.18
      Construction
      of Certain Words. Wherever
      from the context it appears appropriate, each term stated in
      either
      the singular or plural shall include the singular and plural, and pronouns
      stated in either the masculine, the feminine
      and the neuter. The word "will", as used in this Agreement, shall be mandatory
      and have the same meaning as
      the
      word "shall".

    

    6.19
      Jurisdiction. Debtor
      hereby consents to the non-exclusive jurisdiction of any state or federal court
      located
      within the state of New York or New Jersey. Debtor waives any objection that
      it
      may have to the conduct of any
      action or proceeding in any such court based on improper venue or forum non
      conveniens, waives personal service
      of any and all process upon it, and consents that all service of process may
      be
      made by mail or courier service directed to it at the address set forth in
      this
      Agreement and that service so made shall be deemed to be completed
      upon the earlier of actual receipt or ten (10) days after the same shall have
      been posted or dispatched. Nothing
      contained in this paragraph shall affect the right of Agent to enforce any
      judgment obtained in a New York or
      New
      Jersey court in any other court or serve legal process in any other manner
      permitted by law.

    

    6.20
      Drafting
      byAll. This
      Agreement shall be construed without regard to the principal that a contract
      should
      be
      construed against the draftsperson, and the parties to this Agreement shall
      be
      deemed equal draftspersons of
      this
      Agreement.

    

    6.21
      Counterparts. This
      Agreement may be signed in any number of counterparts, each of which shall
      be
an
      original, with the same effect as if the signatures thereto and hereto were
      upon
      the same instrument.

    

    6.22
      Reinstatement. This
      Agreement shall continue to be effective or be reinstated, as the case may
      be,
      if at any time any amount received by the Secured Party or any Obligee hereunder
      or pursuant hereto or under any of the
      Ancillary Documents is rescinded or must otherwise be restored or returned
      by
      the Secured Party or any Obligee upon
      the
      insolvency, bankruptcy, dissolution, liquidation or reorganization of Debtor
      or
      any other Person or upon the appointment of intervenor or conservator of, or
      trustee or similar official for, Debtor or any other Person or any substantial
      part of its or his assets, or upon the entry of an order by a bankruptcy court
      avoiding the payment of such amount,
      all as though such payments had not been made, or for any other
      reason.

    

    6.23
      Costs
      and Expenses. Debtor
      shall promptly pay (a) all filing fees and taxes of any kind or nature and
      in
      connection with the filing of financing statements in connection with any of
      this Agreement or any Ancillary Document, and (b) all costs and expenses of
      the
      Agent and Obligees, including without limitation, reasonable attorneys'
      fees and disbursements, (i) resulting from Debtor's breach of this Agreement
      or
      any Ancillary Document, (ii)
      in
      connection with the enforcement of rights and remedies and collection of amounts
      owing under this Agreement or
      any
      Ancillary Document, and/or (iii) relating to this Agreement or any Ancillary
      Document or the amendment or modification
      of any of the foregoing.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    6.24
      Gender. Wherever
      from the context it appears appropriate, each term stated in either the singular
      or plural shall include the singular and plural, and pronouns stated in either
      the masculine, the feminine and the neuter. Unless
      the context clearly requires otherwise, the word "will" is intended to be
      mandatory and have the same meaning
      as the word "shall", and the words herein or hereunder or words of similar
      import shall mean this Agreement
      as a whole and shall not be a reference to any specific Section or paragraph
      of
      this Agreement.

    

    6.25
      Entire
      Agreement. This
      Agreement (including, without limitation, for clarification purposes, all
      exhibits and schedules to this Agreement which constitute a part of this
      Agreement) contains the entire agreement of the
      parties hereto with respect to the matters addressed in this Agreement and
      there
      are no representations, warranties,
      agreements, understandings or conditions, expressed or implied, relating to
      the
      matters addressed in this Agreement
      except as contained in this Agreement. Nothing contained in this Section shall
      limit the effect of the other
      Ancillary Documents.

    

    6.26
      Closing
      Account. The
      Closing Account shall be subject to Agent's remedies after an Event of
Default.
      After the Obligations have been indefeasibly satisfied in full, the Closing
      Account shall be closed and all remaining
      monies in the Closing Account shall be disbursed to Debtor. Debtor
      and Parent hereby agree and covenant
      not to take any monies out of the Closing Account until all Obligations have
      been indefeasibly satisfied in full.

    

    6.27
      Permitted
      Financing. Without
      limiting Agent's or Obligees' other rights or remedies, each of Debtor
and
      Parent hereby covenants that it shall not assert any subordination or
      intercreditor agreement as a defense to their obligations.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
      executed and delivered as of the date first above written.

    

    
      	  

    

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

     

    None,
      except that Capital Growth Asset Based Bridge Loan Fund II, LLC has a security
      interest in Debtor's accounts receivable only securing the Permitted
      Financing.

     

    

     

    
 

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      B

     

    535
      Fifth
      Avenue

    New
      York,
      NY 10017

    

    Debtor
      shall maintain such insurance which is consistent with the existing Obligees'
      past practice and all such insurance
      shall name the Obligees and this shareholders as additional insureds in receipt
      of all such insurance and loss payee regarding all casualty insurance. The
      foregoing is in addition to the requirements of Section 4.26 of this
Agreement
      and the requirements of the Asset Purchase Agreement.

     

    
      
         

      

      
        22

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