Document:

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                                                                   EXHIBIT 10.37

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is entered into as of the 1st day of May, 2002, by and
between Joseph A. Wagda (the "Executive") and Brightstar Information Technology
Group, Inc. (the "Company").

SECTION 1.        TERM OF EMPLOYMENT

(a)      Basic Rule. The Company agrees to continue the Executive's employment,
         and the Executive agrees to remain in employment with the Company, from
         May 1, 2002, until the earliest of:

         (1)      The date of the Executive's death;

         (2)      April 30, 2004; or

         (3)      The date when the Executive's employment terminates pursuant
                  to Subsection (b), (c), (d) or (e) below.

(b)      Early Termination or Resignation. The Company may terminate the
         Executive's employment at any time and for any reason by giving the
         Executive 30 days' advance notice in writing or 30 days payment of Base
         Compensation in lieu of notice. The Executive may terminate the
         Executive's employment for any reason by giving the Company not less
         than 30 days' advance notice in writing.

(c)      Termination for Cause. The Company may terminate the Executive's
         employment at any time for Cause shown. For all purposes under this
         Agreement, "Cause" shall mean (1) a failure by the Executive to
         substantially perform the Executive's duties under this Agreement,
         other than a failure resulting from the Executive's complete or partial
         incapacity due to physical or mental illness or impairment, (2) an
         intentional act by the Executive that constitutes gross misconduct and
         that is materially injurious to the Company, (3) a breach by the
         Executive of a material provision of this Agreement or (4) a material
         violation of a federal or state law or regulation applicable to the
         business of the Company that is materially and demonstrably injurious
         to the Company. No act, or failure to act, by the Executive shall be
         considered "intentional" unless committed without good faith and
         without a reasonable belief that the act or omission was in the
         Company's best interest.

(d)      Termination for Disability. The Company may terminate the Executive's
         employment for Disability by giving the Executive written notice. For
         all purposes under this Agreement, "Disability" shall mean that the
         Executive, at the time the notice is given, has

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         been unable to perform the Executive's duties under this Agreement for
         a period of not less than three consecutive months as a result of the
         Executive's incapacity due to physical or mental illness. In the event
         that the Executive resumes the performance of substantially all of the
         Executive's duties under this Agreement before the termination of the
         Executive's employment under this Section becomes effective, the notice
         of termination shall automatically be deemed to have been revoked.

(e)      Termination of Agreement. Unless this agreement has been extended prior
         to October 31, 2003, this Agreement shall expire on the earlier of
         April 30, 2004 or when all obligations of the parties hereunder have
         been satisfied. In addition, either the Company or the Executive may
         terminate this Agreement for any reason, and without affecting the
         Executive's status as an Executive, by giving the other party
         one-year's advance notice in writing. A termination of this Agreement
         pursuant to the preceding sentence shall be effective for all purposes,
         except that such termination shall not affect the payment or provision
         of compensation or benefits under this Agreement on account of a
         termination of employment occurring prior to the termination of this
         Agreement.

SECTION 2. DUTIES AND SCOPE OF EMPLOYMENT

(a)      Position. The Company and each of its subsidiaries agree to employ the
         Executive for the term of employment under this Agreement in the
         position of President and Chief Executive Officer. Executive shall be
         given such duties, responsibilities and authorities as are appropriate
         to his position.

(b)      Obligations. During the term of employment under this Agreement, the
         Executive shall devote the Executive's full business efforts and time
         to the business and affairs of the Company as needed to carry out his
         duties and responsibilities hereunder subject to the overall
         supervision of the Company's Board of Directors. The foregoing shall
         not preclude the Executive from engaging in appropriate civic,
         charitable or religious activities or from devoting a reasonable amount
         of time to private investments or from serving on the boards of
         directors of other entities, as long as such activities and service do
         not interfere or conflict with the Executive's responsibilities to the
         Company.

(c)      Board of Directors. During the term of employment under this Agreement,
         the Executive shall also be appointed to and serve on the Board of
         Directors of the Company.

SECTION 3. COMPENSATION

(a)      Base Compensation. During the term of employment under this Agreement,
         the Company agrees to pay the Executive as compensation for services a
         base salary at the annual rate of $300,000 for the first year of
         employment and $350,000 for the second year of employment. Such salary
         shall be payable in accordance with the standard payroll procedures of
         the Company. Once the Company's Compensation/Option Committee of the
         Board of Directors has increased such salary, it thereafter shall not
         be reduced; provided, however, that if a Change in Control has not
         occurred, such salary (including any increases) may be reduced by the
         Company if (1) the Executive commits an act or omission that meets the
         definition of Cause, as defined in Section 1 (c), or

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         (2) the Executive and all other executive officers of the Company who
         are parties to written employment agreements containing substantially
         the same provisions as this Agreement have their salaries (including
         any increases) reduced by the same percentage amount for the same time
         period. The annual compensation specified in this Section 3, together
         with any increases in such compensation that the Compensation/Option
         Committee of the Board of Directors may grant from time to time, and
         together with any reductions made in accordance with this Section 3, is
         referred to in this Agreement as "Base Compensation."

(b)      Bonus Compensation. During the term of employment under this Agreement,
         the Executive shall receive annual bonus payments of 0 to 200% of Base
         Compensation. For the calendar year of employment hereunder ending
         12/31/02, the bonus will be at the complete discretion of the board.
         For the calendar year of employment hereunder ending 12/31/03, the
         bonus will be based upon such Metrics as may be agreed upon with the
         Executive. Bonus Compensation shall be paid not later March 31 of the
         year following the year for which the bonus was awarded.

SECTION 4. COMPANY STOCK AND STOCK OPTIONS

(a)      Up-Front Stock Grant. Executive received seven hundred fifty thousand
         (750,000) restricted shares of common stock in the Company effective
         February 15, 2002, a pro rata portion of which shall vest monthly over
         the succeeding 24 month period or immediately upon death, disability,
         termination without cause or a change of control.

(b)      Future Grant of Stock or Options. The Executive may be awarded
         restricted stock or stock options as incentive compensation in the
         future at the complete discretion of the board.

SECTION 5. EXECUTIVE BENEFITS

In General. During the term of employment under this Agreement, the Executive
shall be eligible to participate in the executive benefit plans and executive
compensation programs maintained by the Company, including (without limitation)
savings or profit-sharing plans, deferred compensation plans, stock option,
incentive or other bonus plans, life, disability, health, accident and other
insurance programs, five weeks of paid vacation per annum, and similar plans or
programs, subject in each case to the generally applicable terms and conditions
of the plan or program in question and to the discretion and determinations of
any person, committee or entity administering such plan or program.

SECTION 6. BUSINESS EXPENSES AND TRAVEL

During the term of employment under this Agreement, the Executive shall be
authorized to incur necessary and reasonable travel, entertainment and other
business expenses in connection with the Executive's duties hereunder. The
Company shall reimburse the Executive for such expenses upon presentation of an
itemized account and appropriate supporting documentation, all in accordance
with generally applicable policies.

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SECTION 7. INVOLUNTARY ACTUAL OR CONSTRUCTIVE TERMINATION WITHOUT CAUSE OR
           DISABILITY

In the event that, during the term of this Agreement, the Executive's employment
terminates in a Qualifying Termination, as defined in Subsection (a), then,
after executing the release of claims described in Section 7(d), the Executive
shall be entitled to receive the payments and rights described in Subsections
(b), (c) and (d).

(a)      Qualifying Termination.  A Qualifying Termination occurs if:

         (1)      The Company terminates the Executive's employment for any
                  reason other than Cause or Disability; or

         (2)      The Executive resigns from employment with the Company as a
                  result of a "Constructive Termination." For the purposes of
                  this Agreement, a Constructive Termination means that the
                  Executive resigns from the Company within 60 days of any of
                  the following events that occur without his written consent:
                  (i) the Executive's responsibilities are materially
                  diminished; (ii) the Executive ceases to be CEO of the
                  Company; ( (iii) the Executive is removed from the Board of
                  Directors, (iv) the Executive's office is relocated more than
                  35 miles from his current office location; or (vi) the
                  Executive's Base Salary or Target Bonus is reduced by more
                  than 10%.

(b)      Severance. For a period of 12 months following the date of the
         Qualifying Termination, the Executive shall receive, in accordance with
         standard payroll procedures, an amount equal to the Executive's monthly
         Base Compensation in effect on the date of the employment termination.

(c)      Continued Vesting of Stock Options. If the Qualifying Termination does
         not occur within the 365-day period following a Change of Control,
         then, for a period of 12 months following the date of the Qualifying
         Termination, the Executive shall continue to vest, subject to Section
         4(a) above, in any outstanding restricted stock or options to purchase
         stock in the Company. Nothing in this Agreement shall give the
         Executive the right to receive grants of new options to purchase stock
         in the Company following a Qualifying Termination.

(d)      Immediate Vesting of Stock Options. If the Qualifying Termination
         occurs within the 365-day period following a Change of Control, then
         the Executive shall be vested immediately in all unvested shares of
         restricted stock or options to purchase stock in the Company.

(e)      Release of Claims. As a condition to the receipt of the payments and
         benefits described in this Section 7, the Executive shall be required
         to execute a release of all claims arising out of the Executive's
         employment or the termination thereof including, but not limited to,
         any claim of discrimination under state or federal law, but excluding
         claims for indemnification from the Company under any indemnification
         agreement with the Company, its certificate of incorporation and
         by-laws or applicable law or claims for directors and officers'
         insurance coverage.

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(f)      No Mitigation. The Executive shall not be required to mitigate the
         amount of any payment or benefit contemplated by this Section 7, nor
         shall any such payment or benefit be reduced by any earnings or
         benefits that the Executive may receive from any other source.

(g)      Conditions to Receipt of Payments and Benefits. In view of Executive's
         position and his access to Confidential Information, as a condition to
         the receipt of payments and benefits described in this Section 7, the
         Executive shall not, without the Company's written consent, directly or
         indirectly, alone or as a partner, joint venturer, officer, director,
         Executive, consultant, agent or stockholder (other than a less than 5%
         stockholder of a publicly traded company) (i) solicit any of the
         Company's Executives, consultants or customers, (iii) hire any of the
         Company's Executives or consultants in an unlawful manner or actively
         encourage Executives or consultants to leave the Company, or (iv)
         otherwise breach his Confidential Information obligations.

SECTION 8. DEFINITION OF CHANGE IN CONTROL

For all purposes under this Agreement, "Change in Control" shall mean means the
occurrence of any of the following:

         (i)      The consummation of a merger or consolidation of the Company
                  with or into another entity or any other corporate
                  reorganization, if more than 50% of the combined voting power
                  of the continuing or surviving entity's securities outstanding
                  immediately after such merger, consolidation or other
                  reorganization is owned by persons who were not stockholders
                  of the Company immediately prior to such merger, consolidation
                  or other reorganization;

         (ii)     The sale, transfer or other disposition of all or
                  substantially all of the Company's assets;

         (iii)    A change in the composition of the Board after April 30, 2002,
                  as a result of which fewer that one-half of the incumbent
                  directors are directors who either (i) had been directors of
                  the Company on the date 12 months prior to the date of the
                  event that may constitute a Change in Control (the "original
                  directors") or (ii) were elected, or nominated for election,
                  to the Board with the affirmative votes of at least a majority
                  of the aggregate of the original directors who were still in
                  office at the time of the election or nomination and the
                  directors whose election or nomination was previously so
                  approved;

         (iv)     Any transaction after April 30, 2002 as a result of which any
                  person becomes the "beneficial owner" (as defined in Rule
                  13d-3 under the Exchange Act), directly or indirectly, of
                  securities of the Company representing at least 20% of the
                  total voting power represented by the Company's then
                  outstanding voting securities. For purposes of this

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                  Paragraph (iii), the term "person" shall have the same meaning
                  as when used in sections 13(d) and 14(d) of the Exchange Act
                  but shall exclude:

                  (A)      A trustee or other fiduciary holding securities under
                           an employee benefit plan of the Company or a
                           subsidiary of the Company;

                  (B)      A corporation owned directly or indirectly by the
                           stockholders of the Company in substantially the same
                           proportions as their ownership of the common stock of
                           the Company; and

                  (C)      The Company; or

         (v)      A complete liquidation or dissolution of the Company.

SECTION 9. CONFIDENTIAL INFORMATION

(a)      Acknowledgement. The Company and the Executive acknowledge that the
         services to be performed by the Executive under this Agreement are
         unique and extraordinary and that, as a result of the Executive's
         employment, the Executive will be in a relationship of confidence and
         trust with the Company and will come into possession of "Confidential
         Information" (1) owned or controlled by the Company, (2) in the
         possession of the Company and belonging to third parties or (3)
         conceived, originated, discovered or developed, in whole or in part, by
         the Executive. As used herein "Confidential Information" includes trade
         secrets and other confidential or proprietary business, technical,
         personnel or financial information, whether or not the Executive's work
         product, in written, graphic, oral or other tangible or intangible
         forms, including but not limited to specifications, samples, records,
         data, computer programs, drawings, diagrams, models, customer names,
         ID's or e-mail addresses, business or marketing plans, studies,
         analyses, projections and reports, communications by or to attorneys
         (including attorney-client privileged communications), memos and other
         materials prepared by attorneys or under their direction (including
         attorney work product), and software systems and processes. Any
         information that is not readily available to the public shall be
         considered to be a trade secret and confidential and proprietary, even
         if it is not specifically marked as such, unless the Company advises
         the Executive otherwise in writing.

(b)      Nondisclosure. The Executive agrees that the Executive will not,
         without the prior written consent of the Company, directly or
         indirectly use or disclose Confidential Information to any person,
         during or after the Executive's employment, except as may be necessary
         in the ordinary course of performing the Executive's duties under this
         Agreement. The Executive will keep the Confidential Information in
         strictest confidence and trust. This Section 9 shall apply
         indefinitely, both during and after the term of this Agreement.

(c)      Surrender Upon Termination. The Executive agrees that in the event of
         the termination of the Executive's employment for any reason, the
         Executive will immediately deliver to the Company all property
         belonging to the Company, including all documents and materials of any
         nature pertaining to the Executive's work with the Company, and will
         not take with the Executive any documents or materials of any
         description, or any

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         reproduction thereof of any description, containing or pertaining to
         any Confidential Information. It is understood that the Executive is
         free to use information that is in the public domain (not as a result
         of a breach of this Agreement).

SECTION 10. SUCCESSORS

(a)      Company's Successors. The Company shall require any successor (whether
         direct or indirect and whether by purchase, lease, merger,
         consolidation, liquidation or otherwise) to all or substantially all of
         the Company's business and/or assets, by an agreement in substance and
         form satisfactory to the Executive, to assume this Agreement and to
         agree expressly to perform this Agreement in the same manner and to the
         same extent as the Company would be required to perform it in the
         absence of a succession. The Company's failure to obtain such agreement
         prior to the effectiveness of a succession shall be a breach of this
         Agreement and shall entitle the Executive to all of the compensation
         and benefits to which the Executive would have been entitled hereunder
         if the Company had involuntarily terminated the Executive's employment
         without Cause or Disability, on the date when such succession becomes
         effective. For all purposes under this Agreement, the term "Company"
         shall include any successor to the Company's business and/or assets
         that executes and delivers the assumption agreement described in this
         Subsection (a) or that becomes bound by this Agreement by operation of
         law.

(b)      Executive's Successors. This Agreement and all rights of the Executive
         hereunder shall inure to the benefit of, and be enforceable by, the
         Executive's personal or legal representatives, executors,
         administrators, successors, heirs, distributees, devisees and legatees.

SECTION 11. MISCELLANEOUS PROVISIONS

(a)      Waiver. No provision of this Agreement shall be modified, waived or
         discharged unless the modification, waiver or discharge is agreed to in
         writing and signed by the Executive and by an authorized officer of the
         Company (other than the Executive). No waiver by either party of any
         breach of, or of compliance with, any condition or provision of this
         Agreement by the other party shall be considered a waiver of any other
         condition or provision or of the same condition or provision at another
         time.

(b)      Whole Agreement. No agreements, representations or understandings
         (whether oral or written and whether express or implied) that are not
         expressly set forth in this Agreement have been made or entered into by
         either party with respect to the subject matter hereof. In addition,
         the Executive hereby acknowledges and agrees that this Agreement
         supersedes in its entirety any employment agreement between the
         Executive and the Company in effect immediately prior to the effective
         date of this Agreement. As of the effective date of this Agreement,
         such employment agreement shall terminate without any further
         obligation by either party thereto, and the Executive hereby
         relinquishes any further rights that the Executive may have had under
         such prior employment agreement.

(c)      Notice. Notices and all other communications contemplated by this
         Agreement shall be in writing and shall be deemed to have been duly
         given when personally delivered or

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         when mailed by U.S. registered or certified mail, return receipt
         requested and postage prepaid. In the case of the Executive, mailed
         notices shall be addressed to the Executive at the home address that
         the Executive most recently communicated to the Company in writing. In
         the case of the Company, mailed notices shall be addressed to its
         corporate headquarters, and all notices shall be directed to the
         attention of its Chief Executive Officer.

(d)      Choice of Law. The validity, interpretation, construction and
         performance of this Agreement shall be governed by the laws of the
         State of California, irrespective of California's choice-of-law
         principles.

(e)      Severability. The invalidity or unenforceability of any provision or
         provisions of this Agreement shall not affect the validity or
         enforceability of any other provision hereof, which shall remain in
         full force and effect.

(f)      Arbitration. Except as otherwise provided in Section 14 and in the
         enforcement of Section 15, any dispute or controversy arising out of
         the Executive's employment or the termination thereof, including, but
         not limited to, any claim of discrimination under state or federal law,
         shall be settled exclusively by arbitration in San Francisco,
         California, in accordance with the rules of the American Arbitration
         Association then in effect. Judgment may be entered on the arbitrator's
         award in any court having jurisdiction.

(g)      No Assignment of Benefits. The rights of any person to payments or
         benefits under this Agreement shall not be made subject to option or
         assignment, either by voluntary or involuntary assignment or by
         operation of law, including (without limitation) bankruptcy,
         garnishment, attachment or other creditor's process, and any action in
         violation of this Subsection (i) shall be void.

(h)      Employment at Will; Limitation of Remedies. The Company and the
         Executive acknowledge that the Executive's employment is at will, as
         defined under applicable law. If the Executive's employment terminates
         for any reason, the Executive shall not be entitled to any payments,
         benefits, damages, awards or compensation other than as provided by
         this Agreement.

(i)      Employment Taxes. All payments made pursuant to this Agreement shall be
         subject to withholding of applicable taxes.

(j)      Benefit Coverage Non-Additive. In the event that the Executive is
         entitled to life insurance and health plan coverage under more than one
         provision hereunder, only one provision shall apply, and neither the
         periods of coverage nor the amounts of benefits shall be additive.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written. Executive has consulted (or has had the opportunity to consult)
with his own counsel (who is other than the Company's counsel) prior to
execution of this Agreement.

                                   ---------------------------------------------
                                                 Joseph A. Wagda

                                   BrightStar Information Technology Group, Inc.

                                   By the Compensation Committee of the Board

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

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

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                                                                   EXHIBIT 10.38

                               SECURITY AGREEMENT
                (under the Uniform Commercial Code of California)

                                                               December 16, 2002

BFI Business Finance
1655 The Alameda
San Jose, California 95126

         This Agreement confirms the understanding and agreement by and between
BFI BUSINESS FINANCE, a California corporation ("Lender") and BRIGHTSTAR
INFORMATION TECHNOLOGY SERVICES, INC. AND BRIGHTSTAR INFORMATION TECHNOLOGY
GROUP, INC., each a DELAWARE CORPORATION (individually and collectively,
"Borrower") regarding the loan to be made by Lender and its terms and
conditions.

         1. Lender shall from time to time in Lender's sole discretion advance
sums to Borrower up to EIGHTY FIVE PERCENT (85%) of the Net Face Amount of Prime
Accounts (as defined below in Paragraph 6) and such other sums as Lender may
determine (an "Advance"), but in no event shall the aggregate indebtedness
(under this Agreement or under all Obligations) to Lender at any one time exceed
without Lender's prior written approval, the sum of SEVEN HUNDRED FIFTY THOUSAND
AND 00/100 DOLLARS ($750,000.00) (the "Maximum Amount"). In the event that the
balance owing under this Security Agreement (the "Agreement") exceeds the sum
set forth in this Paragraph 1, or in the event that said balance exceeds the
percentage set forth above of the Value of Prime Accounts as determined by
Lender, Borrower understands and agrees that Lender shall make no further
Advances to the Borrower unless and until Borrower pays Lender the amount of
such excess (the "Overadvance"), and Borrower hereby promises to pay such excess
to Lender upon Lender's demand.

         2. Each Advance and Borrower's total indebtedness to Lender shall be
paid by Borrower as follows: (a) the delivery to Lender of all collections
received by Borrower on Accounts assigned to Lender; (b) the delivery to Lender
from time to time on demand, of a sum equal to the Net Face Amount of all
Accounts assigned to Lender and which remain uncollected more than ninety (90)
days from the date of each invoice or which are more than sixty (60) days past
due. In addition, Borrower's entire unpaid indebtedness, whenever and however
created, shall become immediately due and payable upon the occurrence of an
Event of Default as defined in Paragraph 19 or in the case of termination, as
set forth in Paragraph 21, whether by notice, lapse of time or otherwise,
whichever occurs first. Payments received shall be applied first against fees
and costs, if any, then against interest and then against principal. Each
accounting rendered by Lender to Borrower shall be deemed correct and binding
unless Borrower notifies Lender in writing to the contrary within thirty (30)
days after the date of each accounting rendered by Lender.

         3. Advances hereunder shall bear interest, on the average daily
outstanding balance, at the rate of FOUR PERCENTAGE POINT(S) (4.0%) PER ANNUM
over and above the rate announced as the "prime" rate in the Western Edition of
the Wall Street Journal which is in effect from time to time (the "Prime Rate");
provided that the Prime Rate shall at all times be deemed to be not less than
four and one quarter percent (4.25%) per annum (the "Deemed Prime Rate") and
provided that the minimum amount of interest and fees payable shall in no event
be less than ONE THOUSAND AND 00/100 DOLLARS ($1,000.00) per month (the
"Minimum Monthly Interest Payment"). In the event that the Prime Rate is
changed, the adjustment in the interest rate charged shall be made on the day
such change occurs. The Prime Rate is a rate used by certain financial
institutions as one of their index rates and serves as a basis upon which
effective rates of interest are calculated for loans making reference thereto
and may not be the lowest of such financial institutions' index rates. Interest
shall be computed on the basis of a 360-day year for the actual number of days
elapsed. Interest shall be due and payable monthly on the first day of each
month, and if not so paid, shall bear interest at the rate hereinabove
specified. At Lender's option, accrued interest may be charged as an Advance
under this Agreement. Notwithstanding anything to the contrary contained in this
Agreement, no payment made by check shall be deemed made until THREE (3)
business days after receipt thereof by Lender, to allow for and subject to,
clearance of such checks.

         4. At the time of execution hereof, Borrower agrees to pay Lender a
one-time fee of ONE PERCENT (1.0%) of the Maximum Amount (the "Loan Origination
Fee"). A sum of ONE HALF OF ONE PERCENT (0.50%) of the Maximum Amount will be
paid annually, every twelve (12) months from the date of this Agreement,
thereafter (the "Annual Fee"). While any indebtedness remains outstanding
pursuant to this Agreement, on or before the first day of each month, Borrower
agrees to pay an administrative fee equal to ONE HALF OF ONE PERCENT (0.50%) per
month of the average daily outstanding balance during the preceding month (the
"Administrative Fee"). For purposes of computing the average daily outstanding
balance during the month and the Administrative Fee payable on account thereof,
payments made by check shall be applied as set forth in Paragraph 2 and 3 above.

         5. All Advances and charges hereunder, together with all obligations
and indebtedness to Lender, however and whenever created (collectively, the
"Obligations"), shall be secured by a continuing security interest in (a) all of
Borrower's present and hereafter acquired Inventory, including, but not by way
of limitation, raw materials, work in process and finished goods of all nature
and description; (b) all present and hereafter acquired plant, office and/or
other equipment, including, but not limited to machinery and all attachments and
appurtenances hereto, tools, dies, molds, jigs, bores, patterns, appliances,
fixtures, furniture and furnishings; (c) assignment and pledge of all our
Accounts now existing or hereafter arising during the term hereof, (d) all
present and hereafter acquired contracts, contract rights, purchase orders,
chattel paper, negotiable documents, insurance policies and proceeds; (e) all
cash, cash in banks, savings institutes, certificates of deposit, etc., now
owned or hereafter acquired, and proceeds thereof; (if) all present and
hereafter acquired general intangibles, including, but not by way of limitation
to the name and goodwill of debtor, trademarks, tradenames, copyrights,
processes, patents, patent rights,

                                                      Initial Here [/s/ JW]  [ ]

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patent applications, licenses, inventions, royalties and/or commissions; (g)
such other security as shown by separate written instruments which Borrower now
or hereafter gives Lender, and (h) any and all other property of Borrower coming
into Lender's possession or under Lender's control all of which security
interests, assignments and pledges Borrower hereby grants to Lender in
accordance with and subject to Division 9 of the California Commercial Code, (i)
any and all products and proceeds of the foregoing. Each new Advance (and all
prior Advances, indebtedness or liabilities) shall be covered by all security
agreements that Borrower has then given or caused to be given to Lender.

         6. As used in this Agreement, unless otherwise indicated by the
context, "Accounts" shall mean all present and future right of Borrower to
payment for goods sold or leased, or for services rendered, which are not
evidenced by instruments or chattel paper, and whether or not earned by
performance. "Net Face Amount" shall mean with respect to an Account, the gross
face amount of such Account less all trade discounts or other deductions to
which the account debtor is entitled. "Prime Accounts" shall mean Accounts
created by Borrower which: (a) are acceptable to Lender; (b) are credit worthy;
(c) have been validly assigned to Lender; (d) as of the date of determination,
are not more than sixty (60) days past due or remain uncollected more than
ninety (90) days from the date of each invoice; and (e) strictly comply with all
Borrower's warranties and representations to Lender. "Value" shall mean the
lower of cost or fair market value. "Inventory" shall mean all of Borrower's now
owned and hereafter existing or acquired raw materials, work in process,
finished goods and all other inventory of whatsoever kind or nature (or as
described in any Financing Statement which Lender has been authorized to file)
wherever located and including but not limited to inventory located at 4900
HOPYARD BOULEVARD, SUITE 200, PLEASANTON, CALIFORNIA 94588, which is Borrower's
chief executive office (the "Chief Executive Office"), and 1515 HANCOCK STREET,
QUINCY, MASSACHUSETTS 02169 AND 14673 MIDWAY ROAD, SUITE 118, ADDISON, TEXAS
75001 (collectively the "Premises"). The Inventory and Equipment shall not at
any time now or hereafter be stored with a landlord, bailee, warehouseman, or
similar party without Lender's prior written consent.

         7. Borrower shall not relocate its Chief Executive Office or Premises,
or open any new locations unless Borrower (a) gives thirty (30) days prior
written notification to Lender; (b) executes and delivers, or causes to be
executed and delivered, to Lender such agreements, documents, and instruments as
Lender may deem reasonably necessary or desirable to protect its interests in
the collateral at such locations, including without limitation, UCC-1 Financing
Statements and waivers from any landlord, bailee, or warehouseman in form and
substance satisfactory to Lender.

         8. So long as Borrower is indebted to Lender, Borrower warrants,
represents and agrees that: (a) all collateral security given or caused to be
given by Borrower to Lender is and will be a first security interest on the
property described in each such security agreement (except insofar as Borrower
has notified Lender to the contrary in writing); (b) the property covered by all
security agreements given or caused to be given by Borrower to Lender is solely
owned by Borrower or the party described in such security agreement; (c) the
property covered by all security agreements given or caused to be given by
Borrower to Lender (except for sales of Inventory in the ordinary course of
business) is free and clear of all liens, encumbrances, security interest and
adverse claims other than created by such security agreements; (d) the property
covered by all security agreements given or caused to be given by Borrower to
Lender is kept in good condition and repair, is not subject to waste, will not
(except for sales of Inventory in the ordinary course of business) be sold,
transferred or assigned or removed from the Premises described in such security
agreements without first obtaining Lender's prior written consent; (e) all
Accounts when assigned to Lender will be Prime Accounts and will have been
created by absolute sales of Borrower's merchandise or services, will be
genuine, bona fide and collectible, and Borrower will have and convey good,
unencumbered and absolute title to Lender free of all third party claims; (f)
Accounts assigned to Lender will not be subject to any dispute, right of offset,
counterclaim, or right of cancellation or return; (g) at the time of assignment
of Accounts to Lender, all property giving rise to such Accounts will have been
delivered (from Premises in the United States) to, and unconditionally accepted
by, each account debtor; (h) prior to the assignment and pledge of an Account to
Lender, Borrower will have performed all things required by the terms of all
agreements or purchase orders giving rise to such Account; (i) at the time of
assignment to Lender, all Accounts will be due and unconditionally payable on
terms of thirty (30) days or less, or on such other terms (as are acceptable to
Lender) which are expressly set forth on the face of all invoices, copies of
which shall be delivered to Lender and no Account will then be past due; (j)
Accounts do not consist of progress billings, bill and hold invoices or
retainage invoices; (k) neither the account debtor nor any officer, employee or
agent of the account debtor with respect to such Accounts is an officer,
employee or agent of or affiliated with Borrower directly or indirectly by
virtue of family membership, ownership, control, management or otherwise; (l)
the account debtors with respect to such Accounts are not any foreign
government, the United States of America, any State or any political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State or any political
subdivision, department, agency or instrumentality thereof the Federal
Assignment of Claims Act of 1940, as amended, or any similar State or local law,
if applicable, has been complied with in a manner satisfactory to Lender; (m)
Accounts of a single account debtor or its affiliates do not constitute more
than twenty-five percent (25%) of all otherwise Prime Accounts (but the portion
of the Accounts not in excess of such percentage may be deemed Prime Accounts);
(n) Accounts are not owed by any account debtor who has Accounts unpaid more
than ninety (90) days after the date of the original invoice therefore and which
constitute more than twenty-five percent (25%) of the total Accounts from such
account; (o) all facts figures, representations given, or caused to be given by
Borrower to Lender in connection with the Value of the property given to Lender
as security or regarding each Advance or Account or pertaining to anything done
under this Agreement shall be true and correct; (p) Borrower's books and records
fully and accurately reflect all of Borrower's assets and liabilities (absolute
and contingent), are kept in the ordinary course of business in accordance with
generally accepted accounting principles consistently applied and all
information contained therein is true and correct; (q) the fair market value of
the property covered by all security agreements given by Borrower to Lender, is
and shall at all times be, not less than the price which Borrower paid therefor
(less normal depreciation caused by ordinary wear and tear) and as represented
to Lender; (r) Borrower will not borrow any money except under this Agreement
without first notifying Lender; (s) Borrower will not sell or assign any of
Borrower's Accounts or pledge, encumber, hypothecate, first mortgage or
otherwise create or give any security interest on any property without notifying
Lender; (t) all taxes of any governmental or taxing authority due

                                                        Initial Here [JW]  [ ]

                                  Page 2 of 12
<PAGE>

or payable by, or imposed or assessed against Borrower have been paid and shall
be paid in full before delinquency; (u) there are no actions or proceedings
pending by or against Borrower before any court or administrative agency, and
there are no pending, threatened, or known to be imminent litigations,
governmental investigations or claims, complaints, or prosecutions involving
Borrower except as heretofore disclosed in writing to Lender; (v) Borrower has
the legal power and authority to enter into this Agreement and to perform and
discharge obligations hereunder; (w) if Borrower is a CORPORATION, Borrower will
do all things necessary to preserve good standing as a CORPORATION under the
laws of the state(s) where Borrower conducts business, specifically
CALIFORNIA, MASSACHUSETTS, TEXAS, LOUISIANA, & ARKANSAS and under the laws of
DELAWARE, the state of Borrower's organization; and (x) every payment falling
due on Accounts assigned to Lender will be duly paid and received by Lender on
or before the earlier of ninety (90) days from the date of each invoice or sixty
(60) days from the due date of each invoice.

         9. Borrower agrees to execute upon demand by Lender any and all
Financing Statements, Continuation Statements or other statements intended to
perfect Lender's security interest hereunder, in whatsoever form Lender may
require, as provided for and defined in Division 9 of the California Commercial
Code, but Lender shall be entitled and is hereby expressly authorized to execute
and file the same on Borrower's behalf, and Lender is hereby appointed
Borrower's attorney-in-fact for such purpose.

         10. Each warranty, representation, and agreement contained in this
Agreement shall be automatically deemed repeated with each Advance and shall be
conclusively presumed to have been relied on by Lender regardless of any
investigation made, or information possessed by Lender. The warranties,
representations and agreements set forth herein shall be cumulative and in
addition to any and all other warranties, representations and agreements
contained in any other document or instrument which Borrower shall give, or
cause to be given, to Lender either now or hereafter.

         11. Notwithstanding termination of this Agreement, all assignments,
pledges, liens, and/or other security interest now or hereafter granted to
Lender shall continue in full force until all of our indebtedness and
liabilities to Lender have been paid.

         12. Borrower shall promptly pay any and all expenses of storing,
warehousing, insuring, handling and shipping of Borrower's property and any and
all excise, property, sales and other taxes (providing Lender with evidence of
payment thereof), security interest, encumbrances and liens, levied or imposed
by any governmental or taxing authority on Borrower or on any of Borrower's
property or any property caused to be given to Lender as security. If Borrower
fails to promptly pay when due, whether to Lender or any other person, monies
which Borrower is required to pay under any portion of this Agreement, Lender
may, but need not, pay the same and charge Borrower's account therefore and
Borrower shall promptly reimburse Lender therefor. Any and all sums shall become
additional indebtedness owing to Lender and shall bear interest at the rate
provided in Paragraph 3 hereof and shall be covered by all security now or
hereafter given by Borrower or which Borrower causes to be given to Lender.
Lender need not inquire as to, or contest the validity of, any such expense,
tax, security interest, encumbrance or lien, and the receipt of the usual
official for the payment thereof shall be conclusive evidence that the same was
validly due and owing.

         13. All documents to be delivered by Borrower shall contain such terms
and be in such form as Lender may require. Each assignment, pledge or other
security agreement shall include and cover all of Borrower's right, title and
interest in property described therein and all of Borrower's books, records and
files relating thereto. All ledger sheets, files, records and documents, files
and records relating to Accounts, Inventory, or other collateral assigned to
Lender shall, unless delivered to or removed by Lender, be kept on the Premises
in trust for, and without cost to Lender. Lender may at any time remove from the
Premises all documents, files and records relating to Lender's security.

         14. Prior to Lender's first verification of Inventory or audit of
Borrower's Accounts, Lender may, in its sale discretion, determine or
redetermine the Value of Borrower's Inventory or Accounts by applying to
Borrower's assigned Value thereof such percentage as Lender deems appropriate,
based upon Lender's initial sample of other basis. Lender may likewise determine
or redetermine the Value thereof between Lender's Inventory verifications and
audits, based upon Lender's last preceding verification, audit, sampling,
review, or other basis.

         15. Borrower shall have the revocable privilege to collect at
Borrower's expense the payments due on Accounts assigned to Lender, upon the
express condition, however, that all such collections shall (a) be received by
Borrower in trust for Lender; (b) not be mingled with Borrower's funds; and (c)
be delivered to Lender in kind within twenty-four (24) hours after Borrower's
receipt of the same. Borrower's collection privilege as described above is
subject to revocation by Lender at any time and shall be automatically revoked
upon the happening of an Event of Default as defined below. Unless the
instruments so received by Borrower are dishonored, or unless Borrower shall in
its discretion have remitted the amount thereof to Lender, Lender shall credit
the amount thereof against Borrower's indebtedness to Lender as set forth in
Paragraph 2 and 3 above. Lender is hereby irrevocably Borrower's
attorney-in-fact with authority and power to endorse our name on any checks,
notes, acceptances, money orders, drafts, or other forms of payment or security
that may come into Lender's possession; to sign Borrower's name on any invoice
or bill of lading related to any Accounts, on drafts against account debtors, on
schedules and assignments of Accounts, on verification of Accounts, and notices
to account debtors; to establish a lock box arrangement and/or at Lender's sole
discretion to notify the post office authorities to change the address for
delivery of Borrower's mail; to receive and open all mail addressed to Borrower
and to retain all mail relating to Lender's security, forwarding all other mail
to Borrower; to send, whether in writing or by telephone, requests for
verification of Accounts; and to do all things necessary to carry out this
Agreement.

         16. If any property referred to or covered by any Account assigned to
Lender shall remain in, or revert to, Borrower's possession, Borrower will
forthwith set it apart, mark and designate it as Lender's property and promptly
notify Lender. Borrower will prepare and deliver to Lender financial statements,
balance sheets, profit and

                                                     Initial Here [/s/ JW]  [ ]

                                  Page 3 of 12
<PAGE>

loss statements, schedules of Accounts, agings (listing the names and addresses
of, and amounts owing by date, by account debtors), preliminary fiscal year end
financial statements, reviewed fiscal year end statements and/or tax returns,
and such other reports, analysis and operating data as Lender may from time to
time reasonably request orally or in writing, all in form acceptable to Lender.
Lender or Lender's agents or employees shall have the right, during reasonable
business hours if prior to an Event of Default and at any time if on or after an
Event of Default, to have access to, examine, inspect and/or audit any or all of
Borrower's books and records, including but not limited to minute books,
ledgers, records indicating, summarizing or evidencing the assets (including
Accounts, Inventory and equipment) and liabilities, and all information relating
thereto, records indicating, summarizing or evidencing Borrower's business
operations or financial condition, and all computer programs, disc or tape
files, printouts, runs and other computer prepared information and the equipment
containing such information, and permit Lender or Lender's employees or agents
to copy and make extracts therefrom. Borrower hereby irrevocably authorizes all
accountants and third parties to disclose and deliver to Lender at Borrower's
expense all financial information, books and records, work papers, management
reports and other information in their possession relating to Borrower.

        17. Borrower shall accept no returns and shall grant no allowances or
credits to account debtors without notifying Lender at the time credit is
issued. Borrower shall maintain insurance at Borrower's expense on property
given to Lender as security with such carriers, covering such risks and
containing such amount of coverage and other terms (including an endorsement
providing for non-cancellation except upon thirty (30) days' written notice to
Lender and a loss payable endorsement, 438BFU, in Lender's favor) as Lender may
from time to time specify in writing. Borrower shall promptly deliver to Lender
copies of all policies, endorsements, evidence of premium payment, claims and
reports to insurance carriers.

         18. Borrower promises and agrees to pay all costs and expenses and all
attorneys' fees incurred by Lender in connection with this Agreement and the
transactions contemplated hereby (including without limitation the prosecution
of motions or actions seeking relief from any stay or restraint under the United
States Bankruptcy Code from pursuing any remedy hereunder), whether or not suit
between Borrower and Lender is brought. Lender may bring all proceedings for
collection in Lender's name or in Borrower's name and may exercise Borrower's
right of stoppage in transit, replevin, and reclamation.

         19. Without limiting any other portion of this Agreement, all
Borrower's indebtedness and Obligation shall automatically accelerate and become
immediately due and payable, and the revocable collection privilege referred to
in Paragraph 15 shall be automatically revoked, upon termination (by lapse of
time or otherwise) of this Agreement or upon the happening of any one of the
following which shall constitute an "Event of Default":

         (a) Borrower's failure to make any payment to Lender when due, or any
default under, or breach or violation of any warranty, representation,
obligation, agreement, condition or undertaking contained herein or in any other
written document which Borrower now or hereafter executes and delivers, or which
Borrower now or hereafter causes to be executed and delivered to Lender; (b) the
Obligations at any time exceed the Maximum Amount (c) Any change in Borrower's
business, (including, without limitation, the ownership thereof) or financial
condition or that of any guarantor of any of Borrower's Obligations or
indebtedness hereunder or any decline in the Value of any property given to
Lender as security, which causes Lender to deem itself insecure; (d) The
withdrawal or cancellation of any guarantor of any of Borrower's Obligations or
indebtedness hereunder, or the termination of any subordination agreement
whereby any indebtedness is subordinated to Borrower's Obligations; (e) The
ceasing to do business as a going concern, or the assignment of any property for
the benefit of creditors or the commission of any act of bankruptcy or
insolvency, by or on the part of Borrower or any guarantor of any of Borrower's
Obligations or indebtedness hereunder; (f) The filing by or against Borrower or
any guarantor of any of Borrower's Obligations or indebtedness hereunder of any
petition or application in bankruptcy, reorganization, arrangement, trusteeship
or receivership, whether under the United States Bankruptcy Code or otherwise,
or the appointment of a trustee or receiver over all or any part of the property
or business of Borrower or any guarantor of any of Borrower's Obligations or
indebtedness hereunder, or the levying of an attachment or garnishment on any of
Borrower's property which is not released within ten (10) days; (g) Any of the
property covered by any of the security agreements given or caused to be given
by Borrower to Lender is lost, secreted, misused or destroyed; or (h) Any
delinquency on Borrower's part in paying any tax when it comes due.

         20. Borrower waives presentment, demand, protest, and notice of
dishonor as to any instrument. Borrower consents to any extensions,
modifications, allowances, compromises or releases of security which Lender may
grant, none of which shall release Borrower or any guarantors from, or affect,
any of Borrower's or Guarantor's Obligations.

         21. This Agreement shall be effective as of the date first set forth
above and shall remain in full force and effect for a period of TWENTY FOUR (24)
MONTH(S) (the "Basic Term"). Notwithstanding the preceding sentence, this
Agreement shall be renewed automatically for successive periods (each, a
"Renewal Term") equal to the Basic Term unless this Agreement is terminated by
Borrower giving written notice (a "Termination Notice") to Lender specifying
such termination. Termination Notices shall be given by mailing a registered or
certified letter specifying such termination not less than thirty (30) days
prior to the effective date of such termination, addressed to Lender at the
address set forth herein, and the termination shall be effective as of the date
fixed in such notice. Notwithstanding the foregoing, Lender reserves the right
to terminate this Agreement at Lender's sole discretion upon giving thirty (30)
days prior written notice to Borrower or should Borrower be in default of one or
more provisions of this Agreement, Lender may terminate this Agreement at any
time without notice. After termination and when Lender has received all sums
due, Lender shall reassign to Borrower all collateral held by Lender, and shall
execute a cancellation of, and/or reconveyance under, all security agreements
given by Borrower to Lender, upon the execution and delivery of mutual general
releases.

         22. The Obligations may be prepaid by Borrower at any time and to the
extent such Prepayment occurs, Borrower shall pay to Lender a fee equal to the
amount of the Minimum Monthly Interest Payment times the number

                                                        Initial Here [JW]  [ ]

                                  Page 4 of 12
<PAGE>

of months remaining in the Basic Term or Renewal Term, as applicable (the
"Prepayment Fee"). In addition, Borrower shall also pay any prepayment fees or
penalties provided for in any other agreement with Lender. "Prepayment" includes
any payment or other reduction of the balance of the Obligations, regardless of
whether such payment or other reduction (a) is voluntary or involuntary; (b) is
occasioned by Lender's acceleration of the Obligations or demand hereunder; (c)
is made by Borrower or other third party, including Guarantor; (d) results from
Lender's receipt or collection of proceeds of its collateral, including
insurance proceeds and condemnation awards; (e) results from Lender's exercise
of its right of setoff; and/or (f) is made during a bankruptcy, reorganization
or other proceeding, or is made pursuant to any plan of reorganization or
liquidation.

         23. Borrower will reimburse Lender for all out-of-pocket expenses
incurred by Lender, including, without limitation, the cost of title searches,
title reports, title insurance, recording fees, filing fees, publication fees,
attorneys' fees, appraisals, and all other expenses similar to the foregoing. If
during the term hereof, Borrower fails to make any such payment required, Lender
may, but need not, pay the same and charge Borrower's account therefore.

         24. Lender may, in its discretion, make advances under this Agreement
or under the Obligations to make any payments due from Borrower to Lender under
this Agreement or any of the Obligations. Lender may also, in its sole
discretion, reserve under this Agreement or under the Obligations, for amounts
due under this Agreement or any of the Obligations

         25. In case of any breach or default by Borrower, or the occurrence of
any Event of Default described in Paragraph 19, or if Borrower fails or neglects
to promptly pay any and all of their Obligations, when due, all of their
Obligations shall, without notice or demand, become immediately due and payable
at Lender's option. Thereafter, all amounts outstanding shall bear interest at
the rate of an additional THREE PERCENT (3.0%) per annum in excess of the then
applicable interest rate (the "Default Rate"). Upon the occurrence of any such
Event of Default Lender may immediately, or at any time or times thereafter,
without any demand or notice to Borrower or any guarantor of any of our
Obligations and without advertisement or notice, all of which are expressly
waived, commence an action for the recovery of any and all such Obligations,
commence proceedings to sell, lease or otherwise dispose of any and all
collateral covered by this Agreement and by all security agreements given or
caused to be given by Borrower to Lender or, without legal proceedings, enter
such places as any of such collateral may be found and take possession of such
collateral and sell the same. Such collateral may be sold where it is located at
the time of the breach or default, or elsewhere, at public or private sale, for
cash, upon credit or otherwise at Lender's sole option and discretion. Borrower
hereby further waives all notices of seizure and sale, and all requirements that
such property be physically present at the place of sale. Any person, including
Lender, may purchase at any such sale, free from any right of redemption which
is expressly waived, and if Lender is the purchaser, may turn all or part of any
of Borrower's indebtedness to Lender in toward payment of the purchase price.
The proceeds of any such sale or other disposition shall be applied, first to
all expenses of setting all liens and claims against, and all costs, charges and
expenses incurred in taking, removing, holding, repairing and selling such
collateral, including without limitation, all attorneys' fees and costs incurred
by Lender, and second, to the payment of all Obligations, whether due, or to
become due, and whether arising under this Agreement or otherwise. The surplus,
if any, shall be delivered to Borrower. Borrower shall pay any deficiency
forthwith.

         26. All notices or demands hereunder shall be in writing and sent by
certified, first class mail. They shall be deemed received when deposited in a
United States Post Office Mail Box, postage paid, properly addressed to Lender
or Borrower at the addresses set forth herein or to such other address as Lender
or Borrower may from time to time specify in writing.

         27. Lender shall not be liable for any claims, demands, losses or
damages made, claimed or suffered by Borrower, except such as may arise through
or could be caused by Lender's gross negligence or willful misconduct. Lender
shall not be liable or responsible for the safekeeping of any collateral. Lender
shall not be responsible for any lost profits of Borrower arising from any
breach of contract, tort (excluding the Lender's gross negligence or willful
misconduct), or any other wrong arising from the establishment, administration,
or collection of the Obligations.

         28. Borrower hereby releases and exculpates Lender, its officers,
employees, agents, designees, attorneys, and accountants from any liability
arising from any acts under this Agreement or in furtherance thereof, whether of
omission or commission, and whether based upon any error of judgment or mistake
of law or fact, except for gross negligence or willful misconduct. In no event
shall Lender have any liability to Borrower for lost profits or other special or
consequential damages.

         29. If there are two or more Borrowers, then (a) regardless of the form
of Lender's check or other papers, Advances hereunder shall be deemed to be made
to each and all Borrowers and each Borrower shall be jointly and severally
obligated to repay the Obligations; (b) each Borrower jointly and severally
makes, and is liable for, each and every warranty, representation, obligation,
covenant and undertaking under this Agreement; and (c) when permitted by the
context, the word "Borrower" shall include and mean all, or any one of the
undersigned Borrowers.

         30. Lender's rights and remedies under this Agreement and all security
agreements shall be cumulative and Lender shall have all other rights and
remedies not inconsistent therewith as provided by law; no exercise by Lender of
one right or remedy shall be deemed an election and no waiver by Lender of any
default in Borrower's part shall be deemed a continuing waiver. No delay by
Lender shall constitute a waiver or election. This Agreement shall be binding
when signed by Lender where indicated below and shall bind and inure to the
benefit of Lender's and Borrower's respective successors and assigns. However,
Borrower may not assign this Agreement or any rights hereunder without Lender's
prior written consent. No such consent by Lender shall release Borrower or any
guarantor of any Obligation or indebtedness hereunder. Paragraphs and paragraph
numbers have been set forth herein for convenience only; unless the contrary is
compelled by the context, everything contained in each paragraph

                                                        Initial Here [JW]  [ ]

                                  Page 5 of 12

<PAGE>

applies equally to all paragraphs herein. Neither this Agreement nor any
uncertainty, or ambiguity herein shall be construed or resolved against Lender
or Borrower whether under any rule of construction or otherwise; on the
contrary, this Agreement has been reviewed by all parties and shall be construed
and interpreted according to the ordinary meaning of the words so used as to
fairly accomplish the purposes and intentions of all parties hereto. When
permitted by the context, the singular includes the plural and vice versa.

         31. This Agreement and all transactions contemplated hereunder and/or
evidenced hereby shall be governed by, construed under, and enforced in
accordance with the internal laws of the State of California. This Agreement and
all agreements relating to the subject matter hereof are the product of
negotiation and preparation by and among each party and its respective
attorneys, and shall be construed accordingly. The parties waive the provisions
of California Civil Code ss. 1654.

         32. Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP. All other terms contained in this Agreement, which are not
specifically defined herein, shall have the meanings provided in the UCC to the
extent the same are used herein. All references herein to the singular or plural
shall also mean the plural or the singular, respectively. "GAAP" means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and pronouncements of the Financial Accounting Standards Board (or
any successor authority) that are applicable as of the date of determination.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in the
State of California, as amended from time to time, and any successor statute.

         33. Each and every provision of this Agreement shall be severable from
every other provision for the purposes of determining legal enforceability of
any such provision or provisions.

         34. ANY LAWSUIT OR OTHER PROCEEDING ARISING OR CONNECTED WITH THIS
AGREEMENT OR THE SECURITY INTERESTS CREATED HEREUNDER SHALL, TO THE EXTENT
PERMITTED BY LAW, BE BROUGHT AND TRIED SOLELY IN THE SUPERIOR COURT OF SANTA
CLARA COUNTY, CALIFORNIA. WE HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN ANY
ACTION HEREUNDER OR ARISING OUT OF OUR TRANSACTIONS WITH YOU.

         35. Borrower shall comply with the reporting requirements set forth
below:

               (a)  Monthly internally prepared financial statements due within
                    30 days of month end;

               (b)  Monthly accounts payable agings due within 15 days of month
                    end;

               (c)  Payroll tax receipts due within 30 days of payment. All
                    taxes must be paid when due;

               (d)  Preliminary year-end statements due within 60 days of fiscal
                    year end; and

               (e)  Corporate Tax Returns or Reviewed Fiscal Year End Statements
                    due within 120 days of fiscal year end.

                                                        Initial Here [JW]  [ ]

                                  Page 6 of 12
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed as of the date first set forth above.

         This Security Agreement is subject to the terms and conditions set
forth in Addendum A attached hereto and made a part hereof.

                               BRIGHTSTAR INFORMATION TECHNOLOGY SERVICES, INC.
                               ("Borrower")

                                /s/ JOSEPH A. WAGDA
                                ----------------------------------------------
                                By:  Joseph A. Wagda
                                Its: C.E.O.

                                BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
                                ("Borrower")

                                /s/ JOSEPH A. WAGDA
                                ----------------------------------------------
                                By:  Joseph A. Wagda
                                Its: C.E.O.

                                BFI BUSINESS FINANCE ("Lender")

                                /s/ DAVID DROGOS
                                ----------------------------------------------
                                By:  David Drogos
                                Its: President

                                  Page 7 of 12
<PAGE>

                        ADDENDUM A TO SECURITY AGREEMENT

         Pursuant to this Addendum A to Security Agreement (this "Addendum"),
the foregoing Security Agreement by and between BFI Business Finance, BRIGHTSTAR
INFORMATION TECHNOLOGY SERVICES, INC. and BRIGHTSTAR INFORMATION TECHNOLOGY
GROUP, INC. (the "Agreement") is hereby amended and/or supplemented by the
following terms and conditions, which are incorporated by this reference in the
Agreement as the following additional paragraphs to the Agreement:

         36. Each Borrower hereby waives its rights of subrogation,
reimbursement, indemnification, and contribution and any other rights and
defenses that are or may become available to either Borrower by reason of
Sections 2787 to 2855, inclusive, of the California Civil Code.

         37. Each Borrower waives all rights and defenses arising out of an
election of remedies by Lender, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed either Borrower's rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the Code of Civil Procedure or
otherwise, and each Borrower further waives any and all benefits or defenses, if
any, arising directly or indirectly under any one or more of Sections 3116,
3118, 3119, 3419, 3605, 9504, 9505, and 9507 of the California Uniform
Commercial Code.

         38. Notwithstanding the provisions of Section 1, the advance rate
against the Net Face Amount of Prime Accounts shall be (a) seventy-five per cent
(75%) of the Net Face Amount of Prime Accounts issued prior to January 1, 2003,
provided that the time cards associated with the invoices issued in connection
with such Prime Accounts have been signed by the employee and/or subcontractor
of Borrower; and (b) eighty-five percent (85%) of the Net Face Amount of Prime
Accounts issued after January 1, 2003, provided that the time cards associated
with the invoices issued in connection with such Prime Accounts have been signed
by Borrower's client. However, notwithstanding the foregoing, the amount that
would otherwise be available to be advanced to Borrower shall be reduced by
certain amounts to be reserved under the Agreement (each, a "Reserved Amount")
with respect to (a) certain tax claims of Washington State, for which the sum of
Twenty-two Thousand Five Hundred Dollars ($22,500) will be reserved; (b) certain
tax claims of Arkansas, for which the sum of Four Thousand Five Hundred Dollars
($4,500) will be reserved; and (c) the amount of the Reserved Amount, as
described below in Section 54 (b). Lender reserves the right to change such
Reserved Amounts, or to establish additional Reserved Amounts if facts and
circumstances require them to be changed, in Lender's sole discretion.

         39. Notwithstanding the provisions of Section 3, the Minimum Monthly
Interest Payment shall be the amount of One Thousand and 00/100 Dollars
($1,000.00) during the first six (6) months of the loan, shall be in the amount
of Two Thousand Three Hundred Seventy Five and 00/100 Dollars ($2,375.00) during
the next three (3) months, and shall be in the amount of Three Thousand Seven
Hundred Fifty and 00/100 Dollars ($3,750.00) thereafter.

         40. Notwithstanding the provisions of Section 6, Borrower has advised
Lender and Lender hereby acknowledges that the facility located at 14673 Midway
Road, Suite 118, Addison, Texas 75001 may be closed on or about the month of
February 2003.

         41. Notwithstanding the provisions of Section 8(p), such Section shall
be deemed to require Borrower's books and records to fully and accurately
reflect in all material respects all of Borrower's assets and liabilities.

         42. The following verbiage shall be added to the end of Section 8(u):
"except as heretofore disclosed in writing to Lender".

         43. Notwithstanding the provisions of Sections 8m, Borrower warrants
and agrees that Accounts of a single account debtor or its affiliates do not
constitute more than thirty five percent (35%) of all otherwise Prime Accounts,
(but the portion of the Accounts not in excess of such percentage may be deemed
Prime Accounts) (with such maximum percentage being the "Concentration Limit").
Notwithstanding the foregoing, the Concentration Limit for Arkansas Blue Cross
of not greater than sixty percent (60%) shall be permitted on a direct
notification basis.

         44. Notwithstanding the provisions of the last sentence of Section 13,
Lender shall only remove any original documents, files, and records relating to
Lender's security if an Event of Default has occurred. Otherwise, Lender shall
only remove copies of such documents, files, and records.

         45. Notwithstanding the provisions of Section 15, Lender shall not
notify the post office authorities to change the address for delivery of
Borrower's mail except upon the occurrence of an Event of Default, and in such
event, Lender shall retain copies of Borrower's mail and return the originals to
Borrower.

         46. Notwithstanding the provisions of Section 21, any renewal term
shall be for a period of twelve (12) months.

         47. Section 21 is hereby further amended to replace the words "reassign
to Borrower" with "release any lien on all collateral pledged to Lender".

         48. Notwithstanding the provisions of Section 22, Lender shall waive
the Prepayment Fee should Borrower, after the first six (6) months of the loan
made pursuant to the Agreement, either (i) obtain financing from U.S. Bank or
(ii) sell all or substantially all of Borrower's assets or stock or merge either
Borrower with another entity. Should either of these events occur during the
first six (6) months of the loan, Borrower shall pay a Prepayment Fee equal to
the amount of the Minimum Monthly Interest Payment times six (6) months. After
the first

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<PAGE>

twelve (12) months of the loan, Lender shall waive the Prepayment Fee unless
Borrower obtains similar commercial financing in Lender's place. In this case,
Borrower shall pay a Prepayment Fee equal to the amount of the Minimum Monthly
Interest Payment times three (3) months. Also notwithstanding the provisions of
Section 22, the Prepayment Fee shall not apply to a payment from any source
which payment is used to reduce but not retire the loan made under the
Agreement.

         49. Section 28 is hereby amended by adding the following verbiage after
"any event": "except in the case of gross negligence or willful misconduct".

         50. In the event that either Borrower provides services for the benefit
of the other Borrower, on any of the other Borrower's Accounts, the economic
benefit resulting from such services shall be remitted to such Borrower on
receipt of such economic benefit by the other Borrower.

         51. Borrower agrees that Borrower shall not undertake, without the
prior written consent of Lender, any of the following actions, with respect to
any subsidiaries, affiliates, or related entities (each a "Related Entity" and
collectively, the "Related Entities"); (a) take any steps to activate or operate
any such Related Entities; (b) transfer any assets to such Related Entities; (c)
downstream any monies to such Related Entities; or (d) pledge to any party a
security interest in any asset of any such Related Entity.

         52. Borrower shall keep Lender apprised on a monthly basis of all
litigation and shall advise Lender promptly upon the occurrence of any
significant developments in any litigation to which either Borrower is a party.

         53. Conditions Precedent to any Advance:

         (a) Borrower shall have reached a resolution satisfactory to Lender for
any and all judgment and or tax liens, including but not limited to that certain
judgment lien regarding Compaq Computers.

         (b) Borrower shall have provided to Lender, time cards in support of
each and every invoice issued (a) prior to January 1, 2003, which time cards
have been signed by the employee and/or subcontractor of Borrower; and (b) after
January 1, 2003, which time cards have been signed by Borrower's client.

         54. Conditions Subsequent to Advance:

         (a) On or before December 31, 2002, Borrower shall file an Annual
Report with the Secretary of State of Delaware to reflect the corporate officers
of Borrower as represented to Lender, and shall provide Lender with a copy of
the recorded document by January 15, 2003.

         (b) In the event that Lender shall not have received a signed
Subordination Agreement from _______ (the "Subordination Agreement") prior to
the date on which the initial advance under this Agreement is to be funded,
Borrower shall within thirty (30) days of the date hereof, either: (a) provide
such signed _____ Subordination Agreement to Lender, or (b) take appropriate
enforcement action to compel _____ to sign the ______ Subordination Agreement.
In any event, until such time as ______ has executed the _______ Subordination
Agreement, the sum of Eighty-Five Thousand Dollars ($85,000.00) shall be a
reserved Amount reserved under the loan made pursuant to the Agreement, meaning
the loan that would otherwise be available to be advanced to Borrower shall be
reduced by such Reserved Amount.

         55. All references in the Agreement to the "assignment" of accounts
shall be deemed to refer to the assignment for collateral purposes of such
accounts only.

         56. All references in the Agreement to attorneys' fees and costs
charged by Lender pursuant to this Agreement shall be deemed to be required to
be reasonable.

         57. All references in the Agreement to defaults, breaches, violations
or failures to act shall be deemed to require them to be material defaults in
order to constitute an Event of Default, except that in any event fraud and/or
conversion shall be deemed to be material.

         58. Borrower has made certain disclosures to Lender regarding potential
claims of certain Swiss, Washington, and Arkansas taxing authorities to Lender,
which disclosures are attached hereto as a schedule entitled Potential Tax
Claims.

         59. Borrower has made certain disclosures to Lender regarding
litigation and potential litigation, which is attached hereto on a schedule
entitled Litigation.

         60. Lender agrees that all financial and other information concerning
the business of Borrower disclosed by Borrower to Lender shall (except to the
extent required to be disclosed to any government or governmental or political
subdivision or any agency, authority, bureau, central bank, or comparable
agency, or any court, tribunal or grand jury by legal or by governmental process
or otherwise by law or if such documentation becomes publicly available other
than by action of Lender) be held in confidence and used solely in connection
with the administration and enforcement of this Agreement, any other document
contemplated hereby or any other agreement between Lender and Borrower;
provided, however, that Lender may disclose such documentation and other
information to any financial organization to which Lender sells or proposes to
sell a participation in any portion of the Advances under this Agreement if such
financial institution, prior to such disclosure, agrees for the benefit of
Borrower to comply with the foregoing confidentiality provision.

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<PAGE>

         61. Borrower has advised Lender that it may re-locate its Chief
Executive Office to a facility located at 6601 Owens Drive, Suite 115,
Pleasanton, CA 94588. Borrower will advise Lender in writing if and when it
signs a lease for such potential new leased facility and when it actually
re-locates its Chief Executive Office.

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<PAGE>

                         LITIGATION DISCLOSURE SCHEDULE

1. Borrower's Litigation Summary

(a) Saleh Igal Employment Contract Claim

A former employee of Brian R. Blackmarr and Associates, Inc. (BRBA) filed a wage
claim in September 2001 against BRBA and BrightStar Group with the Texas Wage
Commission for approximately $280,000 related to some alleged contract
obligations on the part of BRBA (a subsidiary of Borrower that filed for
bankruptcy in June 2002 and whose Chapter 7 case was completed and the Trustee
dismissed in November 2002). The case was heard and the Wage Commission, after
an administrative appeal, found no liability for the defendants. The claimant
failed to make a further appeal. Subsequently, in August of 2002, claimant filed
a legal action in Dallas County district court alleging similar theories against
the same defendants. Defendants have moved for summary judgment as the action is
barred by the Texas Labor Code. No hearing has been scheduled yet.

(b) Infomart Litigation

Plaintiff Infomart's owner alleges that Borrower is liable for approximately
$400,000 in unpaid rents relating to the premises leased by BRBA at the
Infomart, alleging various alter-ego and fraudulent conveyance theories. The
third motion for summary judgment is about to be filed (the first was denied and
the second was not heard for technical reasons) for a hearing before a new
judge. Lender has copies of the previous documents and will promptly receive the
new documents when they are filed.

(c) City of Austin. About a year ago, a $7,000 claim was asserted against
Borrower by the City of Austin for failure to perform services for which payment
was allegedly made. A draft complaint was received but to the best of our
knowledge was never filed. This is a contingent liability subject to compromise.

(d) BRBA has been the subject of claims and litigation, but in view of the
completion of its Chapter 7 bankruptcy, those liabilities are now moot.

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                         TAX CLAIMS DISCLOSURE SCHEDULE

1. Tax Claims.

Borrower has disclosed the following potential tax claims and made the following
representation with respect to such disclosure:

(a) At least two years ago, a claim in Switzerland was reportedly made by Swiss
cantonal tax authorities in the sum of approximately Two Hundred Thousand
Dollars ($200,000) against a Swiss subsidiary of Borrower as the result of the
subsidiary having located to a different canton. Borrower has been advised by
counsel that this amount is negotiable. Nevertheless, Borrower believes that
there is no exposure in the U.S. to this obligation, but is willing to make a
nominal payment (say in the neighborhood of 10%) as a corporate housekeeping
matter to resolve the claim. No contact in the U.S. has ever been received from
the Swiss and this is a low priority clean up item.

(b) About two years ago, the State of Washington had asserted a sales tax claim
against Software Consulting Services America, Inc. ("SCSA"), a subsidiary of
Borrower, and agreed to waive interest and penalties in return for adhering to a
payment schedule. Although the agreed upon payments had been completed, a formal
closing agreement had not been executed. The State has requested representations
of SCSA's insolvency in order to complete the closing agreement without further
payment. If the closing agreement cannot be executed, approximately $20,000 of
interest and penalties would be payable by SCSA. We have no intention currently
of making any further payments and expect to close this out with the appropriate
documentation.

(c) We were recently informed that a judgment had been entered in Arkansas
against Software Innovators, Inc. a wholly owned subsidiary of Borrower. Upon
subsequent discussion with the State's auditor, she reviewed our documentation
and advised us that she would issue a new assessment of approximately $4,500, in
replacement of the $110,000 judgment item. Upon receipt of this assessment, we
shall immediately pay it.

(d) There are other minor tax liens and items that have shown up on BFI's lien
search, which we have or will promptly payoff.

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                                  Page 12 of 12

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