Document:

SECURITY AGREEMENT

This Security Agreement is made on 8-1-04, between AmeriChip Tool and Abrasives,
LLC, a wholly owned subsidiary of AmeriChip International, Inc. of Detroit,
Michigan ("Debtor"), and National Abrasive Systems, Co., a Michigan Corporation
of Detroit, Michigan ("Secured Party").

1.    Grant of Security Interest. Debtor grants to Secured Party a continuing
security interest in all items listed in Attachment "A".

2.    Indebtedness Secured. The foregoing security interest is given to
secure payment and performance of all indebtedness and obligations of Debtor to
Secured Party under this Agreement and the indebtedness and obligations owing to
Secured Party by Debtor pursuant to a Promissory Note of even date, including
any and all modifications, extensions, and renewals.
      The indebtedness and obligations that are secured by this security
interest are collectively called the "indebtedness."

3.    Warranties, Representatives, and Agreements. Debtor warrants and
represents to Secured party, and agrees, as follows:
      (a) Debtor is a limited liability company and is organized and is in good
      standing under the laws of the state of Michigan; Debtor has full power
      and authority to enter into and perform its obligations under this
      agreement; the execution, delivery, and performance of this agreement have
      been duly authorized by all necessary action of Debtor's members and
      managers and will not violate Debtor's articles of organization or
      operating agreement; this agreement is the valid and binding obligation of
      Debtor, enforceable in accordance with its terms.
      (b) All information that Debtor has furnished or in the future furnishes
      to Secured Party concerning Debtor or the Collateral, including without
      limitation, all financial statements and all information concerning the
      condition, quality or value of the Collateral, is and will be correct and
      complete.
      (c) Debtor's exact legal name is set forth in the first paragraph of this
      Agreement.
      (d) Debtor is the owner of the collateral, and none of the collateral is
      subject to any lien, security interest, encumbrance, or claim in favor of
      any third party, and no financing statement is on file in any public
      office covering any of the collateral.

4. Agreements of Debtor. Debtor agrees that:
      (a) Debtor will not cause or permit any lien, security interest or
      encumbrance to be placed on any collateral, except in favor of Secured
      Party and Debtor will not sell, assign, or transfer any collateral or
      permit any collateral to be transferred by operation of law.
      (b) Debtor will maintain all records concerning the collateral at Debtor's
      address appearing on the first page of this agreement and will keep all
      collateral at the present location or locations of the collateral.
      (c) Debtor will furnish Secured Party with the information regarding the
      collateral that Secured Party shall from time to time request and will
      allow Secured Party at any reasonable time to inspect the collateral and
      Debtor's records regarding the collateral.
      (d) Debtor will execute, file, record, or procure from third persons the
      financing statements, subordination agreements, and other documents and
      take all other action that Secured party necessary to perfect, to continue
      perfection of, or to maintain first priority of Secured Party's security
      interest in the collateral.

<PAGE>

      (e) Secured Party may file a photography of this agreement as a financing
      statement evidencing Secured Party's security interest in the collateral.
      (f) Debtor will immediately notify Secured Party in writing of any change
      in Debtor's business structure, and of any change in the location of
      Debtor's place of business and of the location of each additional place of
      business established by Debtor.
      (g) Debtor will indemnify Secured Party with respect to all losses,
      damages, liabilities, and expenses (including attorney fees) incurred by
      Secured Party by reason of any failure of Debtor to comply with any of
      Debtor's obligations under this agreement or by reason of any warranty or
      representation made by Debtor to Secured Party in this agreement being
      false in any material respect.
      (h) Debtor will maintain all collateral in good condition and repair and
      maintain fire and extended coverage insurance covering all tangible
      collateral in the amounts and against the risks that are customarily
      maintained by similar businesses, or as Secured Party may reasonably
      request. Each insurance policy will contain a standard lender's loss
      payable endorsement and will provide that its proceeds will be payable to
      Secured Party to the extent of Secured Party's interest in the collateral
      and that the policy will not be canceled, and the coverage will not be
      reduced, without at least 10 days' prior written notice by the insurer to
      Secured Party and will be in the form and substance satisfactory to
      Secured Party. Debtor will provide Secured Party with evidence of the
      insurance coverage. On Secured Party's request, Debtor will deliver to
      Secured Party all policies providing for such insurance.
      (i) Debtor will pay, before they become delinquent, all taxes and
      assessments upon the collateral or for its use or operation.

5. Secured Party's Right to Perform. If Debtor fails to perform any obligation
of Debtor under this agreement, Secured Party may, without giving notice to or
obtaining the consent of Debtor, perform that obligation on behalf of Debtor.
For example, this may include obtaining insurance coverage for collateral or for
paying off liens on collateral. Debtor will reimburse Secured Party on demand
for any expense that Secured Party incurs in performing any such obligation.

      Secured Party is not required to perform an obligation that Debtor has
failed to perform. If Secured Party does so, that will not be a waiver of
Secured Party's right to declare the indebtedness immediately due and payable by
reason of Debtor's failure to perform.

6. Events of Default and Acceleration. Any part or all of the indebtedness
shall, at the option of Secured Party, become immediately due and payable
without notice or demand upon the occurrence of any of the following events of
default:
      (a) If default occurs in the payment or performance of any of the
      indebtedness, when and as it shall be due and payable, and if the default
      continues for 15 days after Secured Party has given written notice of it
      to Debtor.
      (b) If default occurs in the performance of any obligation of Debtor to
      Secured Party under this agreement or under the promissory note evidencing
      the indebtedness or under any other security agreement, loan agreement or
      other agreement that now or later secures or relates to any indebtedness
      or obligation now or later owing by Debtor to Secured Party or that
      secures any such indebtedness or obligation ("security documents") and if,
      in the case of a default that is capable of being cured, the default
      continues for 15 days after Secured Party has given written notice of it
      to Debtor.
      (c) If any attachment, garnishment, levy, execution, or other legal
      process is at any time issued against or placed upon any of the
      collateral.

<PAGE>

      (d) If all or any material part of any tangible collateral is destroyed or
      materially damaged by fire or other casualty, whether or not there is
      insurance coverage for the damage or destruction.

7. Secured Party's Rights and Remedies. Secured Party shall have all rights and
remedies of a secured party under applicable laws. Without limiting these rights
and remedies;

      (a) If all or any part of the indebtedness is not paid at maturity, then
      Debtor, upon demand by Secured party, shall deliver the collateral and
      proceeds of collateral to Secured Party as such place as Secured Party
      shall designate, and Secured Party may dispose of the collateral in any
      commercially reasonable manner. Any notification required to be given by
      Secured Party to Debtor regarding any sale or other disposition of
      collateral shall be considered reasonable if mailed at least ten days
      before the sale or other disposition. In connection with any disposition
      of collateral, Secured Party may comply with the requirements of any
      applicable state or federal law or regulation, and such compliance shall
      not cause the disposition to not be commercially reasonable.
      (b) The proceeds of any collection or disposition of collateral shall be
      applied first to expenses that Secured Party incurs in retaking, holding,
      preparing for disposition, processing and disposing of the Collateral and
      to Secured Party's attorney fees and expenses, as provided in pararaph 8,
      and then to the indebtedness, and Debtor shall be liable for any
      deficiency remaining. Secured Party has no obligatioin to prepare or
      process any Collateral for sale or other disposition. If Secured Party
      sells any of the collateral on credit, then Debtor will be credited only
      with payments that are actually made by the purchase, received by Secured
      Party and applied to the unpaid balance of the purchase price of the
      collateral. If the purchaser fails to pay for the collateral, then Secured
      Party may again dispose of the collateral and apply the proceeds in
      accordance with this paragraph.
            All rights and remedies of Secured Party shall be cumulative and may
      be exercised from time to time.

8.    Expenses. Debtor shall reimburse Secured Party on demand for all
attorney fees, legal expenses, and other expenses that Secured Party incurs in
protecting and enforcing its rights under this agreement. This includes fees and
expenses incurred in trying to take possession of collateral from Debtor, a
trustee or receiver in bankruptcy, or any other person. Secured Party may apply
any proceeds of collection or disposition of collateral to Secured Party's
reasonable attorney fees, legal expenses, and other expenses.

9.    Amendments and Waivers. No provision of this agreement may be modified
or waived except by a written agreement signed by Secured Party. Secured Party
will continue to have all of its rights under this agreement even if it does not
fully and promptly exercise them on all occasions. Debtor waives all defenses
based on suretyship or impairment of Collateral. Without limiting the generality
of the preceding sentence, (i) Secured Party may, at its option, (a) waive any
default, or defer an action on any default; (b) extend or modify the time or
manner of payment of the indebtedness or waive or modify any term or condition
relating to the indebtedness; (c) release collateral or other security for the
indebtedness; (d) make advances or other extensions of credit secured by this
agreement; all without giving Debtor notice or obtaining Debtor's consent; (ii)
any such action by Secured Party will not release or impair its security
interest in the collateral or Debtor's obligations under this agreement; (iii)
Secured Party's security interest in the collateral and Debtor's obligations
under this agreement will not be released or impaired if Secured Party fails to
obtain, perfect, or secure priority of any other security for the indebtedness
that is agreed to be given, or is given, by anyone else; and (iv)

<PAGE>

Secured Party is not required to sue upon or otherwise enforce payment of the
indebtedness or any other security before exercising its rights under this
agreement.

10.    Notices. Any notice to Debtor or to Secured Party shall be deemed to be
given if and when mailed, with postage prepaid, to the respective address of
Debtor or Secured Party appearing on the first page of this agreement, or if and
when delivered personally.

11.    Other. In this agreement, maturity of any of the indebtedness means the
time when that indetedness has become due and payable, for any reason
(including, for example, acceleration due to default or bankruptcy).

12.   Binding Effect. This agreement shall be binding upon and inure to the
benefit of Debtor and Secured Party and their respective successors, and
assigns.

      Debtor and Secured Party have executed this Security Agreement on the date
listed on the first page of this agreement.

                              DEBTOR

                              AmeriChip Tool and Abrasives, LLC, a wholly
                              owned subsidiary of AmeriChip International, Inc.

                              /s/ Edward D. Rutkowski
                              ---------------------------------------
                              by: Edward D. Rutkowski, Vice President
                                  AmeriChip International, Inc.

                              SECURED PARTY

                              National Abrasive Systems, Co.,
                              a Michigan Corporation

                              By: /s/ Marc A. Walther
                              ---------------------------------------
                              Marc A. Walther
                              Its: PresidentPROMISSORY NOTE

                                 August 2, 2004

Jersey City, New Jersey                                              $225,000.00

FOR VALUE RECEIVED, the undersigned, AMERICHIP INTERNATIONAL, INC., a Nevada
corporation (the "Company"), promises to pay CORNELL CAPITAL PARTNERS, LP (the
"Holder") at 101 Hudson Street, Suite 3700, Jersey City, New Jersey 07302 or
other address as the Holder shall specify in writing, the principal sum of Two
Hundred Twenty-Five Thousand (U.S.) Dollars and 00/100 ($225,000.00) pursuant
to the following terms:

1. Amount of Note. The face amount of this Promissory Note (this "Note")
together with twelve percent (12%) interest, per annum, shall be payable out of
the net proceeds to be received by the Company under that certain Standby Equity
Distribution Agreement (the "Standby Equity Distribution Agreement") dated as
May 25, 2004 between the Company and the Holder, or the Company shall pay all
amounts due under this Note shall be paid in full within sixty-two (62)
calendar days of the date hereof regardless of the availability of proceeds
under the Standby Equity Distribution Agreement. The Company agrees to escrow
three (3) requests for advances under the Standby Equity Distribution Agreement
in an amount not less than Fifty-Five Thousand Dollars ($55,000), and one (1)
request for advance under the Standby Equity Distribution Agreement in an amount
not less than Sixty-Three Thousand Nine Hundred Dollars and Eighty-Two
Cents ($63,900.82)(referred to as "Advance Notices") as well as ten million
(10,000,000) shares of the Company's Common as required under Section 2.2(c) of
the Standby Equity Distribution Agreement (the "Escrowed Shares"). The Escrowed
Shares are only an estimation of the shares of the Company's common stock
necessary to repay the principal amount and interest due hereunder. In the event
that during the life of this Note the Escrowed Shares are insufficient to repay
all amounts due hereunder the Company shall immediately escrow, pursuant to the
irrevocable transfer agent instructions dated the date hereof (the "Irrevocable
Transfer Agent Instructions") such number of shares of the Company's common
stock sufficient to repay all amounts due hereunder. The Advance Notice and the
shares of the Company's Common Stock will be held in escrow by the law firm of
Butler Gonzalez LLP, which shall release such request to the Holder commencing
on September 6, 2004. The Holder may at its sole discretion retain and apply the
net proceeds of each advance (after deducting any fees owed to the Holder under
the terms of the Standby Equity Distribution Agreement) to the outstanding
balance of this Note as existing from time to time. Interest shall be payable
upon the due date of this Note. If this Note is not paid in full when due the
outstanding principal owed hereunder shall be due and payable in full together
with interest thereon at the rate of fourteen percent (14%) per annum or the
highest permitted by applicable law, if lower. During the term of this Note the
Company shall have the option to repay the amounts due hereunder in immediately
available funds and withdraw any Advance Notices yet to be effected.

<PAGE>

2. Waiver and Consent. To the fullest extent permitted by law and except as
otherwise provided herein, the Company waives demand, presentment, protest,
notice of dishonor, suit against or joinder of any other person, and all other
requirements necessary to charge or hold the Company liable with respect to this
Note.

3. Costs, Indemnities and Expenses. The Company agrees to pay all reasonable
fees and costs incurred by the Holder in collecting or securing or attempting to
collect or secure this Note, including reasonable attorneys' fees and expenses,
whether or not involving litigation, collecting upon any judgments and/or
appellate or bankruptcy proceedings. The Company agrees to pay any documentary
stamp taxes, intangible taxes or other taxes which may now or hereafter apply to
this Note or any payment made in respect of this Note, and the Company agrees to
indemnify and hold the Holder harmless from and against any liability, costs,
attorneys' fees, penalties, interest or expenses relating to any such taxes, as
and when the same may be incurred.

4. Event of Default. Upon an Event of Default (as defined below), the entire
principal balance and accrued interest outstanding under this Note, and all
other obligations of the Company under this Note, shall be immediately due and
payable without any action on the part of the Holder, and the Holder shall be
entitled to seek and institute any and all remedies available to it. No remedy
conferred under this Note upon the Holder is intended to be exclusive of any
other remedy available to the Holder, pursuant to the terms of this Note or
otherwise. No single or partial exercise by the Holder of any right, power or
remedy hereunder shall preclude any other or further exercise thereof. The
failure of the Holder to exercise any right or remedy under this Note or
otherwise, or delay in exercising such right or remedy, shall not operate as a
waiver thereof. An "Event of Default" shall be deemed to have occurred upon the
occurrence of any of the following: (i) the Company should fail for any reason
or for no reason to make payment of the outstanding principal balance plus
accrued interest pursuant to this Note within the time prescribed herein or the
Company fails to satisfy any other obligation or requirement of the Company
under this Note; or (ii) any proceedings under any bankruptcy laws of the United
States of America or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution, liquidation or any similar law or statute of
any jurisdiction now or hereinafter in effect (whether in law or at equity) is
filed by or against the Company or for all or any part of its property.

5. Maximum Interest Rate. In no event shall any agreed to or actual interest
charged, reserved or taken by the Holder as consideration for this Note exceed
the limits imposed by New Jersey law. In the event that the interest provisions
of this Note shall result at any time or for any reason in an effective rate of
interest that exceeds the maximum interest rate permitted by applicable law,
then without further agreement or notice the obligation to be fulfilled shall be
automatically reduced to such limit and all sums received by the Holder in
excess of those lawfully collectible as interest shall be applied against the
principal of this Note immediately upon the Holder's receipt thereof, with the
same force and effect as though the Company had specifically designated such
extra sums to be so applied to principal and the Holder had agreed to accept
such extra payment(s) as a premium-free prepayment or prepayments.

                                       2
<PAGE>

6. Cancellation of Note. Upon the repayment by the Company of all of its
obligations hereunder to the Holder, including, without limitation, the face
amount of this Note, plus accrued but unpaid interest, the indebtedness
evidenced hereby shall be deemed cancelled and paid in full. Except as otherwise
required by law or by the provisions of this Note, payments received by the
Holder hereunder shall be applied first against expenses and indemnities, next
against interest accrued on this Note, and next in reduction of the outstanding
principal balance of this Note.

7. Severability. If any provision of this Note is, for any reason, invalid or
unenforceable, the remaining provisions of this Note will nevertheless be valid
and enforceable and will remain in full force and effect. Any provision of this
Note that is held invalid or unenforceable by a court of competent jurisdiction
will be deemed modified to the extent necessary to make it valid and enforceable
and as so modified will remain in full force and effect.

8. Amendment and Waiver. This Note may be amended, or any provision of this Note
may be waived, provided that any such amendment or waiver will be binding on a
party hereto only if such amendment or waiver is set forth in a writing executed
by the parties hereto. The waiver by any such party hereto of a breach of any
provision of this Note shall not operate or be construed as a waiver of any
other breach.

9. Successors. Except as otherwise provided herein, this Note shall bind and
inure to the benefit of and be enforceable by the parties hereto and their
permitted successors and assigns.

10. Assignment. This Note shall not be directly or indirectly assignable or
delegable by the Company. The Holder may assign this Note as long as such
assignment complies with the Securities Act of 1933, as amended.

11. No Strict Construction. The language used in this Note will be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party.

12. Further Assurances. Each party hereto will execute all documents and take
such other actions as the other party may reasonably request in order to
consummate the transactions provided for herein and to accomplish the purposes
of this Note.

13. Notices, Consents, etc. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) trading day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

                                       3
<PAGE>

If to Company:                          AmeriChip International, Inc.
                                        12933 W. 8 Mile Road
                                        Detroit, MI  48325
                                        Attention: Marc Walther, President
                                        Telephone: (313) 341-1663
                                        Facsimile: (313) 341-4667

With Copy to:                           Schiff Hardin LLP
                                        1101 Connecticut Avenue, N.W., Suite 600
                                        Washington, DC  20036
                                        Attention: Ernest M. Stern, Esq.
                                        Telephone: (202) 778-6461
                                        Facsimile: (202) 778-6460

If to the Holder:                       Cornell Capital Partners, L.P.
                                        101 Hudson Street, Suite 3700
                                        Jersey City, NJ 07302
                                        Attention: Mark A. Angelo
                                        Telephone: (201) 324-1619
                                        Facsimile: (201) 324-1447

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) trading days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

14. Remedies, Other Obligations, Breaches and Injunctive Relief. The Holder's
remedies provided in this Note shall be cumulative and in addition to all other
remedies available to the Holder under this Note, at law or in equity (including
a decree of specific performance and/or other injunctive relief), no remedy of
the Holder contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit the
Holder's right to pursue actual damages for any failure by the Company to comply
with the terms of this Note. Every right and remedy of the Holder under any
document executed in connection with this transaction may be exercised from time
to time and as often as may be deemed expedient by the Holder. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, and specific
performance without the necessity of showing economic loss and without any bond
or other security being required.

                                       4
<PAGE>

15. Governing Law; Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New Jersey, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
Jersey or any other jurisdictions) that would cause the application of the laws
of any jurisdictions other than the State of New Jersey. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state courts sitting in
Hudson County and the federal courts sitting in Essex County, New Jersey, for
the adjudication of any dispute hereunder or in connection herewith or
therewith, or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

16. No Inconsistent Agreements. None of the parties hereto will hereafter enter
into any agreement, which is inconsistent with the rights granted to the parties
in this Note.

17. Third Parties. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or entity, other than the parties
to this Note and their respective permitted successor and assigns, any rights or
remedies under or by reason of this Note.

18. Waiver of Jury Trial. AS A MATERIAL INDUCEMENT FOR THE HOLDER TO LOAN TO THE
COMPANY THE MONIES HEREUNDER, THE COMPANY HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND
ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

19. Entire Agreement. This Note (including the recitals hereto) and the
Irrevocable Transfer Agent Instructions set forth the entire understanding of
the parties with respect to the subject matter hereof, and shall not be modified
or affected by any offer, proposal, statement or representation, oral or
written, made by or for any party in connection with the negotiation of the
terms hereof, and may be modified only by instruments signed by all of the
parties hereto.
                              [Signature to Follow]

                                       5
<PAGE>

IN WITNESS WHEREOF, this Note is executed by the undersigned as of the date
hereof.

                                        CORNELL CAPITAL PARTNERS, LP

                                        By: Yorkville Advisors, LLC
                                        Its: General Partner

                                        By: ____________________________________
                                        Name: Mark Angelo
                                        Its:  Portfolio Manager

                                        AMERICHIP INTERNATIONAL, INC.

                                        By: /s/ Marc Walther
                                           -------------------------------------
                                        Name:  Marc Walther, President
                                        Title: President

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