Document:

EXHIBIT 10.19

THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii)
RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE SECURITIES ACT IS NOT REQUIRED
IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF
ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY
NOTE ISSUED IN EXCHANGE FOR THIS NOTE OR ANY SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS NOTE.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE COMPANY AND PAYEE HEREUNDER ARE
SUBJECT TO THE SUBORDINATION PROVISIONS SET FORTH IN SECTION 2 HEREOF. IN THE
EVENT OF A CONFLICT BETWEEN ANY TERMS OF THIS NOTE AND THE TERMS OF SUCH SECTION
2, THE TERMS OF SECTION 2 SHALL GOVERN.

        ________________________________________________________________

                               eB2B COMMERCE, INC.

No. _________                                            $______________

                       Senior Subordinated Secured Convertible Note

      eB2B Commerce, Inc., a New Jersey corporation (the "Company"), for value
received, hereby promises to pay to the order of ___________________ (the
"Payee") on the earlier of: (i) _________, 2007 [60 months after initial
issuance]; (ii) a merger or combination of the Company in which the shareholders
of the Company prior to the transaction own less than a majority of the
outstanding shares of the surviving or combined entity after such transaction (a
"Change of Control"); or (iii) the sale of all or substantially all of the
assets of the Company to one or more third parties or the purchase by a single
entity or person or group of affiliated entities or persons of issued and
outstanding shares of the Company representing more than 50% of the voting power
(the "Maturity Date") at the offices of the Company, subject to the following
sentence, the principal sum of _____________________ Dollars ($______________)
or such lesser principal amount as shall at such time be outstanding hereunder
(the "Principal Amount"). Each payment by the Company pursuant to this Note
shall be made without set-off or counterclaim and shall be made in lawful
currency of the United States of America and in immediately available funds.

      Interest on this Note shall accrue on the Principal Amount outstanding
from time to time at a rate per annum computed in accordance with Section 3
hereof and shall be payable on the Maturity Date. All payments by the Company
hereunder shall be applied first to pay any interest which is due, but unpaid,
then to reduce the Principal Amount.

      The Company (i) waives presentment, demand, protest or notice of any kind
in connection with this Note and (ii) agrees to pay to the Payee, on demand, all
costs and expenses (including reasonable legal fees and expenses) incurred in
connection with the enforcement and collection or this Note.

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      This Note is issued in connection with a private placement by the Company
(the "Placement") of notes (the "Notes") pursuant to a Subscription Agreement,
between the Company and the Payee (the "Subscription Agreement"), a copy of
which agreement is available for inspection at the Company's principal office.
Notwithstanding any provision to the contrary contained herein, this Note is
subject and entitled to those terms, conditions, covenants and agreements
contained in the Subscription Agreement that are expressly applicable to the
Notes. Any transferee of this Note, by its acceptance hereof, assumes the
obligations of the Payee in the Subscription Agreement with respect to the
conditions and procedures for transfer of this Note. Reference to the
Subscription Agreement shall in no way impair the absolute and unconditional
obligation of the Company to pay both principal hereof and interest hereon as
provided herein.

      The obligations of the Company under the Notes are secured by liens on the
Company's assets, including its intellectual property rights, as set forth in
and pursuant to a General Security Agreement (the "Security Agreement") of even
date herewith.

      1. Prepayment. The Principal Amount of this Note may be prepaid, without
premium, in whole or in part at any time upon fifteen (15) days' prior written
notice to the Payee (a "Prepayment Notice").

      2. Subordination. The Company, for itself, its successors and assigns,
covenants and agrees, and the Payee and each successive holder of this Note, by
its acceptance of this Note, likewise covenants and agrees (expressly for the
benefit of the present and future holders of the Senior Debt (as hereinafter
defined)), that the payment of principal of, and interest on, this Note is
hereby expressly subordinated in right of payment to the prior payment in full
of the principal of, premium (if any) and interest on, all Senior Debt of the
Company (other than the Notes), hereafter incurred or created. "Senior Debt"
means, collectively, (i) all Indebtedness for Borrowed Money (and all renewals,
extensions, refundings, amendments and modifications of any such Indebtedness
for Borrowed Money); and (ii) all payment obligations of the Company pursuant to
any capitalized lease with an entity that is not an affiliate of the Company,
unless by the terms of the instrument creating or evidencing any such
indebtedness it is expressly provided that such indebtedness is not superior in
right of payment to the Notes.

       "Indebtedness for Borrowed Money" means (i) all payment obligations of
the Company to a bank, insurance company, finance company or other institutional
lender or other entity regularly engaged in the business of extending credit in
the form of borrowed money, provided such entity is not an affiliate of the
Company (each of the foregoing, an "Institutional Lender") in respect of
extensions of credit to the Company (or to a subsidiary of the Company to the
extent such obligations are guaranteed by the Company pursuant to a written
guarantee executed by the appropriate officers of the Company) and (ii) all
obligations, contingent or otherwise, relative to the face amount of all
asset-based letters of credit, whether or not drawn, and banker's acceptances,
in each case issued for the account of the Company (other than such as may be
for the benefit of an affiliate of the Company).

      The provisions of this Section 2 are not for the benefit of the Company,
but are solely for the purpose of defining the relative rights of the holders of
the Senior Debt, on the one hand, and the holders of the Notes, on the other
hand. Nothing contained herein (i) shall impair, as between the Company and the
holder of this Note, the obligations of the Company, which are absolute and

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unconditional, to pay to the holder hereof all amounts payable in respect of
this Note as and when the same shall become due and payable in accordance with
the terms hereof or (ii) is intended to or shall affect the relative rights of
the holder of this Note and the creditors of the Company, or (iii) shall prevent
the holder of this Note from exercising all rights, powers and remedies
otherwise permitted by applicable law or upon a default or Event of Default
under this Note as set forth in these subordination provisions.

      3. Computation of Interest. All computations of interest hereunder shall
be made based on the actual number of days elapsed in a year of 365 days
(including the first day but excluding the last day during which any such
Principal Amount is outstanding).

            A. Base Interest Rate. Subject to Sections 3B and 3C below, the
outstanding Principal Amount shall bear interest at the rate of seven percent
(7%) per annum.

            B. Penalty Interest. In the event this Note is not repaid on the
Maturity Date, the rate of interest applicable to the unpaid Principal Amount
shall be adjusted to twelve percent (12%) per annum from the Maturity Date until
repayment; provided, that in no event shall the interest rate exceed the Maximum
Rate provided in Section 3C below.

            C. Maximum Rate. In the event that it is determined that, under the
laws relating to usury applicable to the Company or the indebtedness evidenced
by this Note ("Applicable Usury Laws"), the interest charges and fees payable by
the Company in connection herewith or in connection with any other document or
instrument executed and delivered in connection herewith cause the effective
interest rate applicable to the indebtedness evidenced by this Note to exceed
the maximum rate allowed by law (the "Maximum Rate"), then such interest shall
be recalculated for the period in question and any excess over the Maximum Rate
paid with respect to such period shall be credited, without further agreement or
notice, to the Principal Amount outstanding hereunder to reduce said balance by
such amount with the same force and effect as though the Company had
specifically designated such extra sums to be so applied to principal and the
Payee had agreed to accept such extra payment(s) as a premium-free prepayment.
All such deemed prepayments shall be applied to the principal balance payable at
maturity. In no event shall any agreed-to or actual exaction as consideration
for this Note exceed the limits imposed or provided by Applicable Usury Laws in
the jurisdiction in which the Company is resident applicable to the use or
detention of money or to forbearance in seeking its collection in the
jurisdiction in which the Company is resident.

            D. Method of Payment. Interest on this Note shall be payable in cash
or in shares of Common Stock based on the average closing sale price for the ten
(10) trading days immediately preceding the Interest Payment Date. The method of
interest payment shall be at the option of the Company.

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      4. Covenants of Company.

            A. Affirmative Covenants. The Company covenants and agrees that, so
long as this Note shall be outstanding, it will perform the obligations set
forth in this Section 4A:

                  (i) Taxes and Levies. The Company will promptly pay and
discharge all material taxes, assessments, and governmental charges or levies
imposed upon the Company or upon its income and profits, or upon any of its
property, before the same shall become delinquent, as well as all material
claims for labor, materials and supplies which, if unpaid, might become a lien
or charge upon such properties or any part thereof; provided, however, that the
Company shall not be required to pay and discharge any such tax, assessment,
charge, levy or claim so long as the validity thereof shall be contested in good
faith by appropriate proceedings and the Company shall set aside on its books
adequate reserves in accordance with generally accepted accounting principles
("GAAP") with respect to any such tax, assessment, charge, levy or claim so
contested.

                  (ii) Maintenance of Existence. The Company will do or cause to
be done all things reasonably necessary to preserve and keep in full force and
effect its corporate existence, rights and franchises and comply with all laws
applicable to the Company, except where the failure to comply would not have a
material adverse effect on the Company or otherwise in connection with an
acquisition of the Company.

                  (iii) Maintenance of Property. The Company will at all times
maintain, preserve, protect and keep its property used or useful in the conduct
of its business in good repair, working order and condition, and from time to
time make all needful and proper repairs, renewals, replacements and
improvements thereto as shall be reasonably required in the conduct of its
business.

                  (iv) Books and Records. The Company will at all times keep
true and correct books, records and accounts reflecting all of its business
affairs and transactions in accordance with GAAP.

                  (v) Notice of Certain Events. The Company will give prompt
written notice (with a description in reasonable detail) to the Payee of the
occurrence of any Event of Default or any event which, with the giving of notice
or the lapse of time, would constitute an Event of Default.

            B. Negative Covenants. The Company covenants and agrees that, so
long as this Note shall be outstanding, it will perform the obligations set
forth in this Section 4B:

                  (i) Liquidation, Dissolution. The Company will not liquidate
or dissolve, consolidate with, or merge into or with, any corporation or entity,
except that (1) any wholly-owned subsidiary may merge with another wholly-owned
subsidiary or with the Company (so long as the Company is the surviving
corporation and no Event of Default shall occur as a result thereof) and (2) the
Company may complete a merger or consolidation if the surviving entity has cash
and cash equivalents and/or net assets which are either (a) equal to or greater
than the then outstanding Principal Amount, Premium and accrued interest on the
Notes or (b) equal to or greater than the Company's cash and cash equivalents
and/or net assets immediately prior to such merger or consolidation.

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                  (ii) Sales of Assets. The Company will not sell, transfer,
lease or otherwise dispose of, or grant options, warrants or other rights with
respect to, all or substantially all of its properties or assets to any person
or entity other than in connection with a transaction covered by clause (i)
above unless this Note is repaid in full prior to or in connection with such
transaction; provided that this clause (ii) shall not restrict any disposition
made in the ordinary course of business and consisting of

                        (a) capital goods which are obsolete or have no
remaining useful life; or

                        (b) finished goods inventories.

      The sale of the Company's training center business shall be deemed not to
be a sale of all or substantially all of the properties or assets of the
Company.

                  (iii) Transactions with Affiliates. The Company will not enter
into any transaction, including, without limitation, the purchase, sale, lease
or exchange of property, real or personal, the purchase or sale of any security,
the borrowing or lending of any money, or the rendering of any service, with any
person or entity affiliated with the Company (including officers, directors and
shareholders owning 3% or more of the Company's outstanding capital stock),
except upon terms not less favorable than would be obtained in a comparable
arms-length transaction with any other person or entity not affiliated with the
Company except (a) transactions valued at less than $25,000 entered into in the
ordinary course of and pursuant to the reasonable requirements of its business
and upon fair and reasonable terms not less favorable than would be obtained in
a comparable arms-length transaction with any other person or entity not
affiliated with the Company, (b) transactions with Commonwealth Associates, L.P.
or (c) transactions approved by the majority of the independent members of the
Board of Directors.

                  (iv) Investments. The Company will not purchase, own, invest
in or otherwise acquire, directly or indirectly, any stock or other securities
or make or permit to exist any investment or capital contribution or acquire any
interest whatsoever in any other person or entity or permit to exist any loans
or advances for such purposes except for investments in direct obligations of
the United States of America or any state thereof or any agency thereof,
obligations guaranteed by the United States of America or any state thereof and
certificates of deposit or other obligations of any bank or trust company
organized under the laws of the United States or any state thereof and having
capital and surplus of at least $500,000,000; provided, however, that nothing
contained in this clause (iv) shall preclude the Company from making
acquisitions, organizing and making advances to subsidiaries, and entering into
joint ventures or other business arrangements for the purpose of expanding its
business.

                  (v) Proration of Payments. The Company shall not make or
permit any payment or other recovery (whether voluntary, involuntary, by
application of setoff or otherwise) on account of Principal Amount or Premium or
interest payable hereunder in excess of the Payee's pro rata share of payments
then being made in respect of all Notes.

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                  (vi) Indebtedness. Except for indebtedness existing on the
date hereof, the Company will not create, incur, assume or suffer to exist,
contingently or otherwise, any indebtedness for borrowed money that is either
(i) pari passu or senior in right of payment to the Notes (provided, however,
that the Company may incur Senior Debt) or (ii) at the time of incurrence would
preclude the timely repayment of this Note or otherwise render the Company
unable to pay its debts as they become due.

                  (vii) Negative Pledge. The Company will not hereafter create,
incur, assume or suffer to exist any mortgage, pledge, hypothecation,
assignment, security interest, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any financing lease) (each, a "Lien") upon any of its
property, revenues or assets, whether now owned or hereafter acquired, except:

                        (a) Liens granted to secure indebtedness incurred to
finance the acquisition (whether by purchase or capitalized lease) of tangible
assets, but only on the assets acquired with the proceeds of such indebtedness;

                        (b) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable without
penalty or being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books;

                        (c) Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the ordinary course of business for sums
not overdue or being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books;

                        (d) Liens (other than Liens arising under the Employee
Retirement Income Security Act of 1974, as amended, or Section 412(n) of the
Internal Revenue Code of 1986, as amended) incurred in the ordinary course of
business in connection with workers' compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure obligations
on surety or appeal bonds;

                        (e) judgment Liens in existence less than sixty (60)
days after the entry thereof or with respect to which execution has been stayed;

                        (f) the Liens in favor of the holders of the $2,000,000
principal amount of notes issued by the Company in January 2002;

                        (g) any other Permitted Liens (as defined in the
Security Agreement); and

                        (h) Liens for Senior Debt.

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                  (viii) Dividends. The Company will not declare or pay any
dividends or distributions on its outstanding capital stock other than as
provided for in any certificates of designation or certificates of amendment
with respect to shares of preferred stock.

                  (ix) Acceleration of Payments. The Company shall not make any
accelerated payment under any agreement, lease, loan or any other similar
instrument, entry of judgment or otherwise, which shall exceed $50,000 in any
one instance or $100,000 in the aggregate. Notwithstanding the preceding
sentence, the Company shall be permitted to (i) pay the liabilities reflected on
the balance sheet of the Company contained in the most recently filed Quarterly
Report on Form 10-QSB and other payables which are incurred in the ordinary
course of business, (ii) pay and settle liabilities of the Company for less than
the face amounts thereof and (iii) pay and settle contingent liabilities
described in the footnotes to the financial statements.

                  (x) Executive Compensation. The Company shall not increase the
compensation payable to any current executive officer of the Company without the
approval of the majority of the independent members of the Board.

      5. Events of Default.

            A. The term "Event of Default" shall mean any of the events set
forth in this Section 5A:

                  (i) Non-Payment of Obligations. The Company shall default in
the payment of the Principal Amount, interest or Premium when and as the same
shall become due and payable, whether by acceleration or otherwise.

                  (ii) Non-Performance of Affirmative Covenants. The Company
shall default in any material respect in the due observance or performance of
any covenant set forth in Section 4A, which default shall continue uncured for
ten (10) days.

                  (iii) Non-Performance of Negative Covenants. The Company shall
default in any material respect in the due observance or performance of any
covenant set forth in Section 4B.

                  (iv) Non-Performance of Other Obligations. The Company shall
default in the due observance or performance of any other material covenant or
agreement on the part of the Company to be observed or performed pursuant to the
terms hereof, which default shall continue uncured for five (5) days after such
default has been discovered by the Company.

                  (v) Bankruptcy, Insolvency, etc. The Company shall:

                        (a) become insolvent or generally fail or be unable to
pay, or admit in writing its inability to pay, its debts as they become due;

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                        (b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other custodian for the
Company or any of its property, or make a general assignment for the benefit of
creditors;

                        (c) in the absence of such application, consent or
acquiesce in, permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Company or for any part of its property;

                        (d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Company and, if such case or proceeding is not
commenced by the Company or converted to a voluntary case, such case or
proceeding shall be consented to or acquiesced in by the Company or shall result
in the entry of an order for relief or shall remain for 60 days undismissed; or

                        (e) take any corporate or other action authorizing or in
furtherance of, any of the foregoing.

                  (vi) Breach of Warranty. Any material representation or
warranty of the Company contained in the Subscription Agreement is or shall be
incorrect in any material respect when made.

                  (vii) Cross-Acceleration. Any indebtedness for borrowed money
of the Company or any subsidiary in an aggregate principal amount exceeding
$100,000 (1) shall be duly declared to be or shall become due and payable prior
to the stated maturity thereof, or (2) shall not be paid as and when the same
becomes due and payable, including any applicable grace period.

            B. Action if Bankruptcy. If any Event of Default described in
clauses (v)(a) through (d) of Section 5A shall occur, the outstanding Principal
Amount of this Note and all other obligations hereunder shall automatically be
and become immediately due and payable, without notice or demand.

            C. Action if Other Event of Default. If any Event of Default (other
than any Event of Default described in clauses (v)(a) through (d) of Section 5A)
shall occur for any reason, whether voluntary or involuntary, and be continuing,
the Holders may, upon notice to the Company, declare all or any portion of the
outstanding Principal Amount of this Note, together with the Premium (if
applicable) and interest accrued thereon to be due and payable and any or all
other obligations hereunder to be due and payable, whereupon the full unpaid
Principal Amount, such accrued interest and any and all other such obligations
which shall be so declared due and payable shall be and become immediately due
and payable, without further notice, demand, or presentment.

            D. Remedies. Subject to the provisions of Section 5C and 7A hereof,
in case any Event of Default shall occur and be continuing, the holders of not
less than 25% of the outstanding aggregate Principal Amount of the Notes may
proceed to protect and enforce their rights by a proceeding seeking the specific

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performance of any covenant or agreement contained in this Note or in aid of the
exercise of any power granted in this Note or may proceed to enforce the payment
of this Note or to enforce any other legal or equitable rights as such holders
shall determine.

      6. Conversion of Note.

            A. Optional Conversion. The Payee shall have the right, at its
option, at any time up to and including the later of the Maturity Date or three
business days following receipt of a Maturity Notice (as defined in Section 7J
hereof), to convert all or the maximum permissible amount of the outstanding
Principal Amount of this Note, together with accrued and unpaid interest, if
any, into shares of the Company's common stock at the Conversion Price. The
"Conversion Price" shall be $[ ] per share, subject to adjustment as provided in
Section 7C. The shares of Common Stock to be issued upon such conversion are
herein referred to as the "Conversion Shares." The Payee may exercise its right
of conversion after receipt of a Prepayment Notice and prior to the date set for
prepayment.

            B. Automatic Conversion. The Company shall have the right, at its
sole discretion, to convert the outstanding Principal Amount, together with
accrued and unpaid interest, into Common Stock at the Conversion Price if:

                  (i) (a) the average closing price per share of the Company's
Common Stock equals or exceeds 200% of the then Conversion Price for twenty (20)
consecutive trading days ending within five days of each notice to the Payee of
conversion pursuant to this Section 7 (the "20-day trailing period"); (b) at
least 90% of the Company's Series B and Series C preferred stock outstanding on
January 10, 2002 have converted into Common Stock; (c) the Common Stock is then
trading on the Nasdaq SmallCap, the Nasdaq National Market or a national
securities exchange; (d) either a registration statement covering the resale of
the Conversion Shares has been declared effective by the Securities and Exchange
Commission and remains effective or Rule 144(k) is available for resale of the
Conversion Shares; and (e) the Conversion Shares are not subject to any
contractual restrictions on transferability with the Company, its underwriter or
agent.

                  (ii) prior to the Maturity Date, the Company completes a
public offering of its securities resulting in gross proceeds to the Company in
excess of $25,000,000 at a per share price in excess of 200% of the Conversion
Price, provided that (a) the Common Stock is then trading on the Nasdaq
SmallCap, the Nasdaq National Market or a national securities exchange, (b)
either a registration statement covering the Conversion Shares has been declared
effective by the Securities and Exchange Commission and remains effective or
Rule 144(k) is available for resale of the Conversion Shares, and (c) the
Conversion Shares are not subject to more than a six-month lock-up agreement
required by the Company or its underwriter.

            C. Adjustment of Conversion Price. The Conversion Price in effect at
any time and the number and kind of securities issuable upon conversion of the
Notes shall be subject to adjustment from time to time upon the happening of
certain events as follows:

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                  (i) In case the Company shall hereafter (a) declare a dividend
or make a distribution on its outstanding shares of Common Stock in shares of
Common Stock, (b) subdivide or reclassify its outstanding shares of Common Stock
into a greater number of shares, or (c) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Conversion Price in
effect at the time of such dividend or distribution or of the effective date of
such subdivision, combination or reclassification shall be adjusted so that it
shall equal the price determined by multiplying the Conversion Price by a
fraction, the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such action, and the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
action. Such adjustment shall be made successively whenever any event listed
above shall occur.

                  (ii) Subject to the provisions of Subsections (x) and (xi)
below, in case the Company shall fix a record date for the issuance of rights or
warrants to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into Common Stock) at
a price (the "Subscription Price") (or having a conversion price per share) less
than the current market price on such record date or less than the Conversion
Price on such record date, the Conversion Price shall be adjusted so that the
same shall equal the lower of (i) the price determined by multiplying the
Conversion Price in effect immediately prior to the date of such issuance by a
fraction, the numerator of which shall be the sum of (x) the number of Common
Stock Equivalents Outstanding (as defined below) on the record date mentioned
below and (y) the number of additional shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered (plus the aggregate conversion price of the convertible securities so
offered) would purchase at such current market price per share of the Common
Stock, and the denominator of which shall be the sum of (x) the number of Common
Stock Equivalents Outstanding on such record date and (y) the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the convertible securities so offered are convertible) or (ii) in the
event the Subscription Price is equal to or higher than the current market price
but is less than the Conversion Price, the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance by a
fraction, the numerator of which shall be the sum of the (x) number of Common
Stock Equivalents Outstanding on the record date mentioned below and (y) the
number of additional shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so offered (plus the aggregate
conversion price of the convertible securities so offered) would purchase at the
Conversion Price in effect immediately prior to the date of such issuance, and
the denominator of which shall be the sum of (x) the number of Common Stock
Equivalents Outstanding on the record date mentioned below and (y) the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the convertible securities so offered are convertible). For purposes of
this Section 6C, "Common Stock Equivalents Outstanding" shall mean the number of
shares of Common Stock that is equal to the sum of (1) all shares of Common
Stock of the Company that are outstanding at the time in question, plus (2) all
shares of Common Stock of the Company issuable, directly or indirectly, upon
conversion of all shares of preferred stock, convertible notes or other stock or
other securities convertible into or exchangeable, directly or indirectly, for

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shares of Common Stock without the payment of additional consideration
("Convertible Securities") that are outstanding at the time in question. Such
adjustment shall be made successively whenever such rights or warrants are
issued and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such rights or warrants; and
to the extent that shares of Common Stock are not delivered (or securities
convertible into Common Stock are not delivered) after the expiration of such
rights or warrants the Conversion Price shall be readjusted to the Conversion
Price which would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made upon the basis of delivery of only the
number of shares of Common Stock (or securities convertible into Common Stock)
actually delivered.

                  (iii) In case the Company shall hereafter distribute to the
holders of its Common Stock evidences of its indebtedness or assets (excluding
cash dividends or distributions and dividends or distributions referred to in
Subsection (a) above) or subscription rights or warrants (excluding those
referred to in Subsection (b) above), then in each such case the Conversion
Price in effect thereafter shall be determined by multiplying the Conversion
Price in effect immediately prior thereto by a fraction, the numerator of which
shall be (x) the total number of Common Stock Equivalents Outstanding multiplied
by the current market price per share of Common Stock, less (y) the fair market
value (as determined by the Company's Board of Directors) of said assets or
evidences of indebtedness so distributed or of such rights or warrants, and the
denominator of which shall be the total number of Common Stock Equivalents
Outstanding multiplied by such current market price per share of Common Stock.
Such adjustment shall be made successively whenever such a record date is fixed.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date for the determination of
shareholders entitled to receive such distribution.

                  (iv) Subject to the provisions of Subsections (x) and (xi)
below, in case the Company shall hereafter issue shares of its Common Stock
(excluding shares (a) issued in any of the transactions described in Subsections
(i), (ii) or (v), (b) issued to shareholders of any corporation which merges
into the Company in proportion to their stock holdings of such corporation
immediately prior to such merger, upon such merger, (c) issued in a private
placement where the Offering Price (as defined below) is at least 85% of the
current market price and equal to or greater than the Conversion Price, (d)
issued in a bona fide public offering pursuant to a firm commitment
underwriting, (e) issued in connection with an acquisition of a business or
technology which has been approved by a majority of the Company's non-employee
directors, (f) issued in connection with the payment of interest or dividends
with respect to any securities issued to investors and/or their designees in
connection with the Placement or upon conversion or exercise of such securities,
or (g) issued upon exercise of options, warrants, convertible securities and
convertible debentures) for a consideration per share (the "Offering Price")
less than either the current market price or less than the Conversion Price, the
Conversion Price shall be adjusted immediately thereafter so that it shall equal
the lower of (i) the price determined by multiplying the Conversion Price in
effect immediately prior thereto by a fraction, the numerator of which shall be
the sum of (x) the number of Common Stock Equivalents Outstanding immediately
prior to the issuance of such additional shares and (y) the number of shares of
Common Stock which the aggregate consideration received for the issuance of such

                                       11
<PAGE>

additional shares would purchase at such current market price per share of
Common Stock, and the denominator of which shall be the number of Common Stock
Equivalents Outstanding immediately after the issuance of such additional shares
or (ii) in the event the Offering Price is equal to or higher than the current
market price per share but less than the Conversion Price, the price determined
by multiplying the Conversion Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be (x) the number of Common
Stock Equivalents Outstanding immediately prior to the issuance of such
additional shares and (y) the number of shares of Common Stock which the
aggregate consideration received (determined as provided in Subsection (viii)
below) for the issuance of such additional shares would purchase at the
Conversion Price in effect immediately prior to the date of such issuance, and
the denominator of which shall be the number of Common Stock Equivalents
Outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made, and to
the extent that shares of Common Stock (or securities convertible into Common
Stock), expire, are cancelled or are redeemed after their issuance, the
Conversion Price shall be readjusted to the Conversion Price that would then be
in effect had the adjustments made upon the issuance of convertible securities
been made upon the basis of delivery of only the number of shares of Common
Stock (or securities convertible into Common Stock) actually issued.

                  (v) Subject to the provisions of Subsections (x) and (xi)
below, in case the Company shall hereafter issue any securities convertible into
or exercisable or exchangeable for its Common Stock (excluding (a) securities
issued in transactions described in Subsections (ii), (iii) and (iv)(a) through
(g), (b) options granted to the Company's officers, directors, employees and
consultants under a plan or plans adopted by the Company's Board of Directors,
if such options would otherwise be included in this Subsection (v) (but only to
the extent that the aggregate number of shares issuable upon exercise of the
options excluded hereby and issued after the date hereof, shall not exceed 10%
of the Company's Common Stock outstanding, on a fully diluted basis, at the time
of any issuance unless such excess issuances are approved by a majority of the
non-employee members of the Company's Board of Directors or by a committee
comprised of a majority of non-employee directors) and (c) options, warrants,
convertible securities and convertible debentures outstanding as of the date
hereof or upon issuance, or subsequent exercise or conversion of, or in
connection with the payment of in kind interest or dividends with respect to,
any securities issued to investors and/or their designees in connection with the
Placement, or upon conversion or exercise of such securities) for a
consideration per share of Common Stock (the "Exchange Price") initially payable
and thereafter deliverable upon conversion, exercise or exchange of such
securities (determined as provided in Subsections (vii) and (viii) below) less
than the current market price or less than the Conversion Price, the Conversion
Price shall be adjusted immediately thereafter so that it shall equal the lower
of (i) the price determined by multiplying the Conversion Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of (x) the number of Common Stock Equivalents Outstanding immediately prior to
the issuance of such securities and (y) the number of shares of Common Stock
which the aggregate consideration paid for such securities (plus the aggregate
exercise price if such convertible securities are options or warrants) would
purchase at such current market price per share of Common Stock, and the
denominator of which shall be the sum of (x) the number of Common Stock

                                       12
<PAGE>

Equivalents Outstanding immediately prior to such issuance and (y) the maximum
number of shares of Common Stock of the Company deliverable upon conversion,
exercise or exchange of such securities at the initial Exchange Price or (ii) in
the event the Exchange Price is equal to or higher than the current market price
per share but less than the Conversion Price, the price determined by
multiplying the Conversion Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be the sum of (x) the
number of Common Stock Equivalents Outstanding immediately prior to the issuance
of such securities and (y) the number of shares of Common Stock which the
aggregate consideration received (determined as provided in Subsection (h)
below) for such securities would purchase at the Conversion Price in effect
immediately prior to the date of such issuance, and the denominator of which
shall be the sum of (x) the number of Common Stock Equivalents Outstanding
immediately prior to the issuance of such securities and (y) the maximum number
of shares of Common Stock of the Company deliverable upon conversion of or in
exchange for such securities at the initial conversion or exchange price or
rate. Such adjustment shall be made successively whenever such an issuance is
made; and to the extent that shares of Common Stock are not delivered after the
expiration of such securities the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made upon the
issuance of such securities been made upon the basis of delivery of only the
number of shares of Common Stock actually delivered.

                  (vi) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least two
cents ($0.02) in such price; provided, however, that any adjustments which by
reason of this Section 6C are not required to be made shall be carried forward
and taken into account in any subsequent adjustment required to be made
hereunder.

                  (vii) For purposes of any computation respecting consideration
received pursuant to Subsections (iv) and (v) above, the following shall apply:

                        (a) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;

                        (b) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors of the Company (irrespective
of the accounting treatment thereof), whose determination shall be conclusive;
and

                        (c) in the case of the issuance of securities
convertible into or exchangeable for shares of Common Stock, the aggregate
consideration received therefor shall be deemed to be the consideration received
by the Company for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion or
exchange thereof (the consideration in each case to be determined in the same
manner as provided in clauses (a) and (b) of this Subsection (vii)).

                  (viii) For the purpose of any computation under Subsections
(ii), (iii), (iv) and (v) above, the current market price per share of Common
Stock at any date shall be deemed to be the higher of (x) the average of the

                                       13
<PAGE>

prices for thirty (30) consecutive business days before such date or (y) the
average of the prices for the five (5) consecutive business days immediately
preceding such date determined as follows:

                        (a) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the Nasdaq Stock Market ("Nasdaq"), the current market
value shall be the closing price of the Common Stock on such exchange or market
on such trading day or if no such sale is made on such day, the average closing
bid and asked prices for such day on such exchange or market;

                        (b) If the Common Stock is not so listed or admitted to
unlisted trading privileges, but is traded in the over-the-counter market, the
current market value shall be the mean of the average of the last reported bid
and asked prices reported by the National Quotation Bureau, Inc. for such
trading day; or

                        (c) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount, not less than book value thereof as at
the end of the most recent fiscal year of the Company ending prior to such
business day, determined in such reasonable manner as may be prescribed by the
Board of Directors of the Company.

                  (ix) All calculations under this Section 6C shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.
Anything in this Section 6C to the contrary notwithstanding, the Company shall
be entitled, but shall not be required, to make such changes in the Conversion
Price, in addition to those required by this Section 6C, as it shall determine,
in its sole discretion, to be advisable in order that any dividend or
distribution in shares of Common Stock, or any subdivision, reclassification or
combination of Common Stock, hereafter made by the Company shall not result in
any Federal Income tax liability to the holders of Common Stock or securities
convertible into Common Stock (including the Notes).

                  (x) Notwithstanding the provisions of this Section 6C, in the
event that the Company shall at any time prior to the date set forth in the last
sentence of this Subsection (x) issue securities under Subsections (ii), (iv) or
(v) (but subject to the exemptions specified therein and subject to a de minimus
exception of an aggregate of 50,000 shares of Common Stock issued or underlying
the securities) having an Offering Price, Subscription Price or Exchange Price
less than the Conversion Price (whether initially or due to provisions in such
securities requiring price reductions as a result of anti-dilution adjustments,
the passage of time, "discount to market" or similar provisions), then the
Conversion Price shall be immediately reset to equal such lower Offering Price,
Subscription Price or Exchange Price. The full-ratchet protection provided for
in this Subsection (x) shall terminate at such time as the full-ratchet
provisions of the Company's Series C preferred Stock are no longer applicable
and at least 75% of the Company's bridge warrants containing full-ratchet
anti-dilution provisions have been exercised or have expired.

                  (xi) No adjustment under Subsections (ii), (iii), (iv) and (v)
shall be required for issuances below the current market price if (A) the
current market price is equal to, or greater than, the Conversion Price then in
effect and (B) a registration statement covering the Conversion Shares is in

                                       14
<PAGE>

effect and remains in effect for the 90 days after such issuance or Rule 144(k)
under the Securities Act of 1933, as amended (the "Securities Act") is available
for resale of all of the Conversion Shares and the Conversion Shares are not
subject to any lock-up agreement with the Company, its underwriter or agent.

                  (xii) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (i) above, the Payee thereafter shall
become entitled to receive any shares of the Company, other than Common Stock,
thereafter the number of such other shares so receivable upon conversion of this
Note shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in Subsections (i) to (xi), inclusive above.

            D. Mechanics of Conversion.

                  (i) Optional Conversion. Before the Payee shall be entitled to
convert this Note into Conversion Shares in accordance with Section 6A, the
Payee shall surrender this Note at the office of the Company, and shall give
written notice to the Company at its principal corporate office, of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for the Conversion Shares are to be issued. The
Company shall, as soon as practicable thereafter, issue and deliver to the
Payee, or to the nominee or nominees of Payee, a certificate or certificates for
the number of Conversion Shares to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the Note to be
converted, and the person or persons entitled to receive the Conversion Shares
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock as of such date.

                  (ii) Automatic Conversion. In the event of a conversion
pursuant to the provisions of Section 6B hereof, the Company shall deliver to
the Payee at its address appearing on the records of the Company a written
notice of the imminent conversion of this Note (the "Conversion Notice"),
requesting surrender of this Note for cancellation and written instructions
regarding the registration and delivery of certificates for the Conversion
Shares. In the event the Payee receives a Conversion Notice, the Payee shall be
required to surrender this Note for cancellation within five business days of
the Conversion Notice (the "Conversion Date"), but the failure of the Payee so
to surrender this Note shall not affect the conversion of the outstanding
Principal Amount into Conversion Shares, provided that if the Note is not
surrendered, an affidavit of lost note shall be provided. No holder of this Note
shall be entitled upon conversion of this Note to have the Conversion Shares
registered in the name of another person or entity without first complying with
all applicable restrictions on the transfer of this Note. In the event the Payee
does not provide the Company with written instructions regarding the
registration and delivery of certificates for the Conversion Shares, the Company
shall issue such shares in the name of the Payee and shall forward such
certificates to the Payee at its address appearing on the records of the

                                       15
<PAGE>

Company. The person entitled to receive the Conversion Shares shall be deemed to
have become the holder of record of such shares at the close of business on the
Conversion Date and the person entitled to receive share certificates for the
Conversion Shares shall be regarded for all corporate purposes after the
Conversion Date as the record holder of the number of Conversion Shares to which
it is entitled upon the conversion. The Company may rely on record ownership of
this Note for all corporate purposes, notwithstanding any contrary notice. After
the Conversion Date, this Note shall, until surrendered to the Company,
represent the right to receive the Conversion Shares; provided, however, that
the Company shall have no obligation to issue the Conversion Shares until the
Payee has delivered either this Note or an affidavit of loss.

            E. Cash Payments. No fractional shares (or scrip representing
fractional shares) of Common Stock shall be issued upon conversion of this Note.
In the event that the conversion of the Principal Amount of this Note would
result in the issuance of a fractional share of Common Stock the Company shall
pay a cash adjustment in lieu of such fractional share to the holder of this
Note based upon the Conversion Price.

            F. Stamp Taxes, etc. The Company shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of shares of
Common Stock upon conversion of this Note; provided, however, that the Company
shall not be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for such shares
in a name other than that of the holder of this Note, and the Company shall not
be required to issue or deliver any such certificate unless and until the person
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the Company's satisfaction that such tax
has been paid.

            G. Validity of Stock. All shares of Common Stock that may be issued
upon conversion of this Note will, upon issuance by the Company in accordance
with the terms of this Note, be validly issued, free from all taxes and liens
with respect to the issuance thereof (other than those created by the holders),
free from all pre-emptive or similar rights and fully paid and non-assessable.

            H. Reservation of Shares. The Company covenants and agrees that it
will at all times have authorized and reserved, solely for the purpose of such
possible conversion, out of its authorized but unissued shares, a sufficient
number of shares of its Common Stock to provide for the exercise in full of the
conversion rights contained in this Note.

            I. Notice of Certain Transactions. In case at any time:

                  (i) The Company shall declare any dividend upon, or other
distribution in respect of, its Common Stock;

                  (ii) The Company shall offer for subscription to the holders
of its Common Stock any additional shares of stock of any class or any other
securities convertible into shares of stock or any rights to subscribe thereto;

                  (iii) There shall be any capital reorganization or
reclassification of the capital stock of the Company, or a sale of all or
substantially all of the assets of the Company, or a consolidation or merger of
the Company with another corporation (other than a merger with a subsidiary in
which merger the Company is the continuing corporation and which does not result
in any reclassification);

                                       16
<PAGE>

                  (iv) There shall be a voluntary or involuntary dissolution;
liquidation or winding up of the Company; or

                  (v) The Conversion Price shall have been adjusted in
accordance with the provisions of Section 6C;

then, in any one or more of said cases, the Company shall cause to be mailed to
the Payee at the earliest practicable time (and, in any event not less than 10
days before any record date or other date set for definitive action), written
notice of the date on which the books of the Company shall close or a record
shall be taken for such dividend, distribution or subscription rights or such
reorganization, reclassification, sale, consolidation, merger or dissolution,
liquidation or winding-up shall take place, as the case may be. Such notice
shall also set forth such facts as shall indicate the effect of such action (to
the extent such effect may be known at the date of such notice) on the
Conversion Price and the kind and amount of the shares of stock and other
securities and property deliverable upon the conversion of this Note. Such
notice shall also specify the date as of which the holders of the Common Stock
of record shall participate in said dividend, distribution or subscription
rights or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification, sale,
consolidation, merger or dissolution, liquidation or winding-up, as the case may
be.

      Nothing herein shall be construed as the consent of the holder of this
Note to any action otherwise prohibited by the terms of this Note or as a waiver
of any such prohibition.

            J. Notice of Maturity Date. The Company shall give written notice to
the Payee not less than 10 business days prior to event described in clause (ii)
or (iii) of the first paragraph of this Note which results in the Maturity Date
(a "Maturity Notice").

      7. Amendments and Waivers.

            A. The provisions of this Note, including, but not limited to, any
decision to convert the Notes, any waiver of the restrictive covenants or
anti-dilution provision and any change to the conversion price, may from time to
time be amended, modified or waived, if such amendment, modification or waiver
is in writing and consented to by the Company and the Holders of not less than
50% in principal amount of the Notes then outstanding (the "Required Holders");
provided, however, that no such amendment, modification or waiver which would
(i) modify this Section 7A, (ii) extend the Maturity Date for more than one
year, or (iii) reduce the Principal Amount payable hereunder shall be made
without the consent of the Payee of each Note so affected.

            B. No failure or delay on the part of the Payee in exercising any
power or right under this Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on the Company in any case shall entitle it to any notice or demand

                                       17
<PAGE>

in similar or other circumstances. No waiver or approval by the Payee shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.

            C. To the extent that the Company makes a payment or payments to the
Payee, and such payment or payments or any part thereof are subsequently for any
reason invalidated, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.

            D. After any waiver, amendment or supplement under this section
becomes effective, the Company shall mail to the Payee a copy thereof.

      8.    Miscellaneous

            A. Registered Holder. The Company may consider and treat the person
in whose name this Note shall be registered as the absolute owner thereof for
all purposes whatsoever (whether or not this Note shall be overdue) and the
Company shall not be affected by any notice to the contrary. In case of transfer
of this Note by operation of law, the transferee agrees to notify the Company of
such transfer and of its address, and to submit appropriate evidence regarding
such transfer so that this Note may be registered in the name of the transferee.
This Note is transferable only on the books of the Company by the Holder hereof,
in person or by attorney, on the surrender hereof, duly endorsed. Communications
sent to any registered owner shall be effective as against all Holders or
transferees of the Note not registered at the time of sending the communication.

            B. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York. Sections 5-1401 and 5-1402 of
the General Obligations Law of the State of New York shall apply to this Note
and the Company hereby waives any right to stay or dismiss on the basis of forum
non conveniens any action or proceeding brought before the courts of the State
of New York sitting in New York County or of United States of America for the
Southern District of New York and hereby submits to the jurisdiction of such
courts.

            C. Notices. Unless otherwise provided, all notices required or
permitted under this Note shall be in writing and shall be deemed effectively
given (i) upon personal delivery to the party to be notified, (ii) upon
confirmed delivery by Federal Express or other nationally recognized courier
service providing next-business-day delivery, or (iii) three business days after
deposit with the United States Postal Service, by registered or certified mail,
postage prepaid and addressed to the party to be notified, in each case at the
address set forth below, or at such other address as such party may designate by
written notice to the other party (provided that notice of change of address
shall be effective upon receipt by the party to whom such notice is addressed).

                                       18
<PAGE>

                  If sent to Payee, notices shall be sent to the address set
forth in the Subscription Agreement.

                  If sent to the Company, notices shall be sent to the following
address:

                  eB2B Commerce, Inc.
                  665 Broadway
                  New York, New York 10012
                  Attention: Richard S. Cohan

            D. Parties in Interest. All covenants, agreements and undertakings
in this Note binding upon the Company or the Payee shall bind and inure to the
benefit of the successors and permitted assigns of the Company and the Payee,
respectively, whether so expressed or not.

            E. Waiver of Jury Trial. THE PAYEE AND THE COMPANY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND
DELIVERED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE PAYEE OR THE COMPANY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S PURCHASING THIS NOTE.

                                       19
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name by its duly authorized officer.

                                    eB2B COMMERCE, INC.

                                    By
                                       ---------------------------------------
                                       Name:
                                       Title:

                                       20
<PAGE>

                            Schedule to Exhibit 10.19
                       Private Placement Promissory Notes

                       Aggregate     Amount of     Amount of      Amount of
                       Amount        1st Note      2nd Note       3rd Note
Subscriber's Name      Invested ($)  Issued ($(1)  Issued ($)(2)  Issued ($)(3)
-----------------      ------------  ------------  -------------  -------------

Robert Priddy          250,000       72,917        57,292         57,292

Alpine Ventures        300,000       87,500        68,750         68,750
  Capital Partners LP

Chesed Congregations    65,000       18,958        14,896         14,896
  of America

Jacob Safier            35,000       10,208         8,021          8,021

J.F. Shea Co., Inc.    250,000       72,917        57,292         57,292

Comvest Venture        200,000       58,333        45,833         45,833
  Partners, LP

Bruce J. Haber          25,000        7,292         5,729          5,729

Richard S. Cohan        25,000        7,292         5,729          5,729

Robert Bacchi           25,000        7,292         5,729          5,729

Michael Dodier          25,000        7,292         5,729          5,729

(1)   Note to be dated as of July 15, 2002.
(2)   Note to be dated as of September 11, 2002.
(3)   Note to be dated as of November 4, 2002.

                                       21EXHIBIT 10.20

                           GENERAL SECURITY AGREEMENT

                                 (Floating Lien)

            SECURITY AGREEMENT, dated as of July 11, 2002, between eB2B
Commerce, Inc., a New Jersey corporation with its principal executive office
located at 665 Broadway, New York, New York 10012 (the "Debtor"), and Robert
Priddy with an address at 3435 Kingsboro Road, Apt. 1601, Atlanta, Georgia 30326
(the "Investor Representative"), as representative for the investors (the
"Investors") from time to time set forth on Annex I hereto (the Investor
Representative, acting in such capacity, the "Secured Party");

                                  W I T N E S S E T H :

            WHEREAS, Debtor has issued and/or will issue to the Investors a
series of 7% senior subordinated secured convertible promissory notes in the
aggregate principal amount of up to $1,350,000 from time to time in a private
placement (herein collectively, as at any time amended, extended, restated,
renewed or modified, the "Notes"), pursuant to a Confidential Term Sheet of the
Debtor dated July 11, 2002;

            WHEREAS, it is a condition to the willingness of the Investors to
make the loan evidenced by the Notes that Debtor enter into this Agreement and
grant to the Secured Party, for the ratable benefit of the Investors, the
security interest provided for herein;

            WHEREAS, the Investors have appointed the Investor Representative
pursuant to the Investor Representative Appointment Agreement attached as
Exhibit 4 hereto.

            NOW, THEREFORE, FOR VALUE RECEIVED, IT IS AGREED:

      Section 1. Terms. Unless otherwise defined herein, capitalized terms used
in this Agreement shall have the meaning specified therefor in the Notes. As
used herein the following terms shall have the meanings specified and shall
include in the singular number the plural and in the plural number the singular:

            "Assigned Agreements" shall mean all contracts and agreements of the
Debtor.

            "Collateral" means all of the Debtor's right, title and interest in
and under or arising out of each and all of the following:

                  All personal property and fixtures of the Debtor of any type
            or description, wherever located and now existing or hereafter
            arising or acquired, including but not limited to the following:

            (i) all of the Debtor's goods including, without limitation:

            (A)   all inventory, including without limitation, equipment held
                  for lease, whether raw materials, in process or finished, all
                  material or equipment usable in processing the same and all
                  documents of title covering any inventory (as such term is

<PAGE>

                  defined in the Uniform Commercial Code, as in effect from time
                  to time in the State of New York (the "NYUCC")) (all of the
                  foregoing, "Inventory"), including without limitation that
                  located at the locations listed on Schedule 1 annexed hereto;

            (B)   all equipment (the "Equipment") employed in connection with
                  the Debtor's business, together with all present and future
                  additions, attachments and accessions thereto and all
                  substitutions therefor and replacements thereof, including
                  without limitation that located at the locations listed on
                  Schedule 1 annexed hereto;

            (ii) all of the Debtor's present and future accounts, accounts
      receivable, general intangibles, as such terms are defined in the NYUCC,
      and all contracts and contract rights (herein sometimes referred to as
      "Receivables"), including but not limited to the Debtor's rights
      (including rights to payment) under all Assigned Agreements, together with

            (A)   all claims, rights, powers or privileges and remedies of the
                  Debtor relating thereto or arising in connection therewith
                  including, without limitation, all rights of the Debtor to
                  make determinations, to exercise any election (including, but
                  not limited to, election of remedies) or option or to give or
                  receive any notice, consent, waiver or approval, together with
                  full power and authority to demand, receive, enforce, collect
                  or receipt for any of the foregoing or any property which is
                  the subject of the Assigned Agreements, to enforce or execute
                  any checks, or other instruments or orders, to file any claims
                  and to take any action which (in the opinion of the Secured
                  Party) may be necessary or advisable in connection with any of
                  the foregoing, (B) all liens, security, guaranties,
                  endorsements, warranties and indemnities and all insurance and
                  claims for insurance relating thereto or arising in connection
                  therewith,

            (C)   all rights to property forming the subject matter of the
                  Receivables including, without limitation, rights to stoppage
                  in transit and rights to returned or repossessed property,

            (D)   all writings relating thereto or arising in connection
                  therewith including without limitation, all notes, contracts,
                  security agreements, guaranties, chattel paper and other
                  evidence of indebtedness or security, all powers-of-attorney,
                  all books, records, ledger cards and invoices, all credit
                  information, reports or memoranda and all evidence of filings
                  or registrations relating thereto,

            (E)   all catalogs, computer and automatic machinery software and
                  programs, and the like pertaining to operations by the Debtor
                  in, on or about any of its plants or warehouses, all sales
                  data and other information relating to sales or service of
                  products now or hereafter manufactured on or about any of its
                  plants, and all accounting information pertaining to

                                       2
<PAGE>

                  operations in, on or about any of its plants, and all media in
                  which or on which any of the information or knowledge or data
                  is stored or contained, and all computer programs used for the
                  compilation or printout of such information, knowledge,
                  records or data, and

            (F)   all accounts, contract rights, general intangibles and other
                  property rights of any nature whatsoever arising out of or in
                  connection with the foregoing, including without limitation,
                  payments due and to become due, whether as repayments,
                  reimbursements, contractual obligations, indemnities, damages
                  or otherwise;

            (iii) all other personal property of the Debtor of any nature
      whatsoever, including, without limitation, all accounts, bank accounts,
      deposits, credit balances, contract rights, inventory, general
      intangibles, goods, equipment, instruments, chattel paper, machinery,
      furniture, furnishings, fixtures, tools, supplies, appliances, plans and
      drawings, together with all customer and supplier lists and records of the
      business, and all property from time to time described in any financing
      statement signed by the Debtor naming the Investor Representative as
      secured party;

            (iv) all of the Debtor's right, title, and market in and to any
      shares of capital stock of any subsidiary corporation and the certificates
      representing any such shares;

            (v) any and all of Debtor's right, title and interest in its
      intellectual property, including, without limitation, (a) each of the
      Trademarks (as hereinafter defined), and the goodwill of the business
      symbolized by each of the Trademarks, all customer lists and other records
      of the Debtor relating to the distribution of products bearing the
      Trademarks and each of the registrations described in Schedule 2-A hereto;
      (b) each of the Patents (as hereinafter defined) and each of the
      registrations listed on Schedule 2-B hereto; (c) all of the tradenames
      listed on Schedule 1 hereto (the "Tradenames") and (d) any and all
      proceeds of the foregoing, including, without limitation, any claims by
      Debtor against third parties for infringement of the Trademarks or the
      Patents (collectively, the "Intellectual Property");

            (vi) all additions, accessions, replacements, substitutions or
      improvements and all products and proceeds including, without limitation,
      proceeds of insurance, of any and all of the Collateral described in
      clauses (i) through (iv) above; and

            (vii) any consideration received from the sale, exchange, lease or
      other disposition of any asset or property which constitutes Collateral,
      any other value received as a consequence of the possession of any
      Collateral and any payment received from any insurer or other person or
      entity as a result of the destruction, loss, theft or other involuntary
      conversion of whatever nature of any asset or property that constitutes
      Collateral.

                                       3
<PAGE>

Notwithstanding the foregoing, the term "Collateral" does not include any
license or contract rights to the extent the granting of a security interest in
it would be contrary to applicable law.

            "Instrument" shall have the meaning specified in Article 3 of the
NYUCC and shall also include any other writing which evidences a right to the
payment of money and is not itself a security agreement or lease and is of a
type which is in the ordinary course of business transferred by delivery with
any necessary endorsement or assignment.

            "Lien" means any mortgage, pledge, hypothecation, assignment,
security interest, deposit arrangement, encumbrance (including any easement,
right of way, zoning restriction and the like), lien (statutory or other) or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease involving substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the NYUCC or comparable law of any jurisdiction).

            "Patents" shall mean (i) all letters patent of the United States or
any other country, all right, title and interest therein and thereto, and all
applications, registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any state or province thereof or any other country or any political
subdivision thereof, all whether now owned or hereafter acquired by Debtor,
including, but not limited to, those described in Schedule 2-B annexed hereto
and made a part hereof, and (ii) all reissues, continuations,
continuations-in-part, extensions or divisionals thereof and all licenses
thereof.

            "Permitted Liens" means:

            (i) Liens for taxes, assessments or other governmental charges or
      levies not at the time delinquent or thereafter payable without penalty or
      being contested in good faith by appropriate proceedings and for which
      adequate reserves in accordance with generally accepted accounting
      principles shall have been set aside on its books;

            (ii) Liens of carriers, warehousemen, mechanics, materialmen and
      landlords incurred in the ordinary course of business for sums not overdue
      or being contested in good faith by appropriate proceedings and for which
      adequate reserves shall have been set aside on its books;

            (iii) Liens (other than Liens arising under the Employee Retirement
      Income Security Act of 1974, as amended, or Section 412(n) of the Internal
      Revenue Code of 1986, as amended) incurred in the ordinary course of
      business in connection with workers' compensation, unemployment insurance
      or other forms of governmental insurance or benefits, or to secure
      performance of tenders, statutory obligations, leases and contracts (other
      than for borrowed money) entered into in the ordinary course of business
      or to secure obligations on surety or appeal bonds;

            (iv) judgment Liens in existence less than 60 days after the entry
      thereof or with respect to which execution has been stayed;

                                       4
<PAGE>

            (v) ground leases in respect of real property on which facilities
      owned or leased by the Debtor or any of its subsidiaries are located;

            (vi) easements, rights-of-way, restrictions, minor defects or
      irregularities in title and other similar charges or encumbrances not
      interfering in any material respect with the business of the Debtor and
      its subsidiaries taken as a whole;

            (vii) any interest or title of a lessor secured by a lessor's
      interest under any lease of real property on which facilities owned or
      leased by the Debtor or any of its subsidiaries are located;

            (viii) leases or subleases and licenses or sublicenses granted to
      others not interfering in any material respect with the business of the
      Debtor and its subsidiaries taken as a whole;

            (ix) a Lien on any asset securing indebtedness (including
      capitalized lease obligations) incurred or assumed for the purpose of
      financing the purchase price (including capitalized lease payments in the
      nature thereof) of such asset, provided that such Lien attaches only to
      the asset acquired with the proceeds of such indebtedness and attaches
      concurrently with or within ten (10) days following the acquisition
      thereof;

            (x) Liens securing Senior Debt (as defined in the Notes); and

            (xi) Liens existing on the date hereof as disclosed on Schedule (1)
      hereto.

            "Person" means any natural person, corporation, firm, association,
partnership, joint venture, limited liability company, joint-stock company,
trust, unincorporated organization, government, governmental agency or
subdivision, or any other entity, whether acting in an individual, fiduciary or
other capacity.

            "Receivables" has the meaning specified therefor in clause (ii) of
the definition of Collateral.

            "Secured Obligations" means all obligations of the Debtor, whether
for fees, expenses or otherwise, now existing or hereafter arising under this
Agreement and the Notes, including, without limitation, full and prompt payment
and performance of (i) all principal and interest on the Notes when and as due,
whether at maturity, by acceleration, or otherwise and (ii) all obligations of
the Debtor at any time and from time to time under this Agreement.

            "Trademarks" shall mean (i) all trademarks, trade names, trade
styles, service marks, prints and labels on which said trademarks, trade names,
trade styles and service marks have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
right, title and interest therein and thereto, and all applications,
registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or province thereof, or any other country or any political subdivision
thereof, all whether now owned or hereafter acquired by Debtor, including, but

                                        5
<PAGE>

not limited to, those described in Schedule 2-A annexed hereto and made a part
hereof, and (ii) all reissues, extensions or renewals thereof and all licenses
thereof.

      Section 2. Security Interests.

      (a) As security for the payment and performance of all Secured
Obligations, and subject to the last sentence of this Section 2, the Debtor does
hereby create, grant and assign to the Secured Party, for its own benefit and
for the ratable benefit of the Investors, a continuing security interest in all
of the Collateral, whether now existing or hereafter arising or acquired and
wherever located, subject to the priority, if any, of Permitted Liens (the
"Security Interest"). Without limiting the foregoing, the Secured Party is
hereby authorized to file one or more financing statements, continuation
statements or such other documents, including, without limitation, the
Assignment of Security (Trademarks) attached hereto as Exhibit 1, for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest.

      (b) The Debtor hereby assigns to the Secured Party all of Debtor's right,
title and interest in and to any and all moneys which may become due and payable
with respect to the Collateral under any policy insuring the Collateral (except
proceeds relating to tangible personal property which are applied to restoration
or replacement), including return of unearned premium, and shall cause any such
insurance company, after the occurrence of an Event of Default or, if prior to
the Maturity Date (as such term is defined in the Notes) acceleration of the
Notes ("Acceleration") to make payment directly to the Secured Party for
application to amounts outstanding under the Notes in accordance with the terms
of the Notes and, to the extent not provided therein, in such order as the
Secured Party shall determine.

      Section 3. General Representations, Warranties and Covenants. The Debtor
represents, warrants and covenants, which representations, warranties and
covenants shall survive execution and delivery of this Agreement, as follows:

      (a) This Agreement is made with full recourse to the Debtor and pursuant
to and upon all the warranties, representations, covenants, and agreements on
the part of the Debtor contained herein, in the Notes and otherwise made in
writing in connection herewith or therewith.

      (b) Except for the Security Interest of the Secured Party therein, the
Debtor is, and as to Collateral acquired from time to time after the date hereof
the Debtor will be, the owner of all the Collateral free from any lien, security
interest, encumbrance or other right, title or interest of any Person (other
than Permitted Liens and licenses granted in the ordinary course of business)
and the Debtor shall defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Secured Party (other than Permitted Liens and licenses granted in the ordinary
course of business).

      (c) There is no financing statement, assignment of trademark, or
assignment of patent (or similar statement or instrument of registration under
the law of any jurisdiction) now on file or registered in any public office
covering any interest of any kind in the Collateral, or, to the knowledge of
Debtor intended to cover any such interest, which has not been terminated or
released by the secured party named therein and so long as the Notes remain
outstanding or any of the Secured Obligations of the Debtor remain unpaid, the
Debtor will not execute and there will not be on file in any public office any

                                        6
<PAGE>

financing statement, assignment of trademark, or assignment of patent (or
similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except (i) financing
statements, assignment of trademark, or assignment of patent filed or to be
filed in respect of and covering the Security Interest of the Secured Party
hereby granted and provided for, (ii) those listed on Schedule 2, and (iii) with
respect to Permitted Liens.

      (d) The chief executive office and chief place of business of the Debtor
is located at the address of the Debtor listed on the signature page hereof, and
the Debtor will not move its chief executive office and chief place of business
except to such new location as the Debtor may establish in accordance with the
last sentence of this Section 3(d). The originals of all Assigned Agreements and
all documents (as well as all duplicates thereof) evidencing all Receivables and
all other contract rights or accounts and other property of the Debtor and the
only original books of account and records of the Debtor relating thereto are,
and will continue to be, kept at such chief executive office or at such new
location as the Debtor may establish in accordance with the last sentence of
this Section 3(d). The Debtor shall establish no such new location until (i) it
shall have given to the Secured Party not less than 15 days' prior written
notice of its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the Secured Party
may reasonably request, and (ii) with respect to such new location, it shall
have taken such action, satisfactory to the Secured Party (including, without
limitation, all action required by Section 7 hereof), to maintain the Security
Interest of the Secured Party in the Receivables intended to be granted at all
times fully perfected and in full force and effect.

      (e) Debtor has no Collateral located outside of the State of New York or
other states in which inventory may be held on consignment.

      (f) The name of the Debtor is as set forth on the signature page hereto
and the Debtor shall not change such name, conduct its business in any other
name or take title to the Collateral in any other name while this Agreement
remains in effect. The Debtor has never had any name, or conducted business
under any name in any jurisdiction, other than its name set forth on the
signature page hereto, during the past six years other than as set forth in
Schedule 2 annexed hereto.

      (g) At the Debtor's own expense, the Debtor will: (i) without limiting the
provisions of the Notes, keep the Collateral fully insured at all times with
financially sound and responsible insurance carriers against loss or damage by
fire and other risks, casualties and contingencies and in such manner and to the
same extent that like properties are customarily so insured by other entities
engaged in the same or similar businesses similarly situated and keep adequate
insurance at all times against liability on account of damage to persons and
properties and under all applicable workers' compensation laws, by financially
sound and reputable insurers and in amounts usually carried by similar
businesses, for the benefit of the Debtor and the Secured Party, (ii) upon
request by the Secured Party, promptly deliver the insurance policies or
certificates thereof to the Secured Party, and (iii) keep the Collateral in good
condition at all times (normal wear and tear excepted). Upon any failure of the
Debtor to comply with its obligations pursuant to this Section 3(g), the Secured
Party may at its option and after 20 days' prior written notice to Debtor, and
without affecting any of its other rights or remedies provided herein or as a

                                        7
<PAGE>

secured party under the NYUCC, procure the insurance protection it deems
necessary to be made to the Collateral and the cost of either or both of which
shall be a lien against the Collateral added to the amount of the indebtedness
secured hereby and payable on demand with interest at a rate per annum equal to
8%. (h) The Debtor will not use the Collateral in material violation of any
statute or ordinance or applicable insurance policy and will promptly pay all
material taxes and assessments levied against the Collateral; provided that the
Debtor shall not be required to pay any such tax or assessment that is being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained. (i) The Debtor will not sell, transfer, change
the registration, if any, dispose of, attempt to dispose of, substantially
modify (other than in the ordinary course of business) or abandon the Collateral
or any material part thereof other than sales of Inventory in the ordinary
course of business and the disposition of obsolete or worn-out Equipment in the
ordinary course of business.

      (j) The Debtor will not assert against the Secured Party any claim or
defense which the Debtor may have against any seller of the Collateral or any
part thereof or against any other Person with respect to the Collateral or any
part thereof.

      (k) The Debtor will indemnify and hold the Secured Party harmless from and
against any loss, liability, damage, costs and expenses whatsoever arising from
the Debtor's use, operation, ownership or possession of the Collateral or any
part thereof other than liabilities arising as a result of Secured Party's gross
negligence or willful misconduct.

      (l) The Debtor will maintain the confidentiality of all customer lists and
not sell or otherwise dispose of such lists except that the Debtor shall deliver
copies thereof to the Secured Party upon its request, which may be made at any
time and from time to time after an Event of Default (as such term is defined in
the Notes).

      (m) In addition to, and not in limitation of, the foregoing, with respect
to the Intellectual Property, the Debtor hereby represents and warrants:

            (i) Subject to Permitted Liens, Debtor has the sole, full and clear
      title to the Trademarks shown on Schedule 2-A hereto for the goods and
      services covered by the registrations thereof and such registrations are
      valid and subsisting.

            (ii) Debtor will perform all acts and execute all documents, to the
      extent reasonable, including, without limitation, assignments for security
      in form suitable for filing with the United States Patent and Trademark
      Office, substantially in the forms of Exhibits 1 and 2 hereof,
      respectively, requested by the Secured Party at any time to evidence,
      perfect, maintain, record and enforce the Secured Party's interest in the
      Patents and Trademarks or otherwise in furtherance of the provisions of
      this Agreement, and Debtor hereby authorizes the Secured Party to execute
      and file one or more financing statements (and similar documents) or
      copies thereof or of this Agreement with respect to the Intellectual
      Property signed only by the Secured Party.

                                        8
<PAGE>

            (iii) None of the Trademarks have been abandoned or invalidated,
      and, except to the extent that the Secured Party, upon 10 days' prior
      written notice by the Debtors, shall consent, and except to the extent
      such Debtor has a valid business purpose for doing otherwise (so long as
      any action on the part of any such Debtor would not have a material
      adverse effect on Debtor's business), Debtor (either itself or through
      licensees) will continue to use the Trademarks on each and every trademark
      class of goods in order to maintain the Trademarks in full force free from
      any claim of abandonment for nonuse and Debtor will not (nor will it
      permit any licensee thereof to) do any act or knowingly omit to do any act
      whereby any Trademark may become abandoned or invalidated, and Debtor
      shall notify the Secured Party immediately if it knows of any reason or
      has reason to know that any pending application or issued Trademark may
      become abandoned or invalidated.

            (iv) Subject to Permitted Liens, Debtor has the sole, full and clear
      title to each of the Patents shown on Schedule 2-B hereto and the issued
      Patents are subsisting. None of the Patents has been abandoned or
      dedicated, and, except to the extent that the Secured Party, upon 10 days'
      prior written notice by the Debtor, shall consent, and except to the
      extent such Debtor has a valid business purpose for doing otherwise (so
      long as any action on the part of any such Debtor would not have a
      material adverse effect on Debtor's business), Debtor will not do any act,
      or omit to do any act, whereby the Patents may become abandoned or
      dedicated and shall notify the Secured Party immediately if it knows of
      any reason or has reason to know that any pending application or issued
      Patent may become abandoned or dedicated.

            (v) In no event shall Debtor, either itself or through any agent,
      employee, licensee or designee, (A) file an application for the
      registration of any Patent or Trademark with the United States Patent and
      Trademark Office or any similar office or agency of the United States, any
      state or province thereof, any other country or any political subdivision
      thereof or (B) file any assignment of any patent or trademark, which
      Debtor may acquire from a third party, with the United States Patent and
      Trademark Office or any similar office or agency of the United States, any
      state or province thereof, any other country or any political subdivision
      thereof, unless Debtor shall promptly notify the Secured Party thereof,
      and, upon request of the Secured Party, execute and deliver any and all
      assignments, agreements, instruments, documents and papers as the Secured
      Party may reasonably request to evidence the Secured Party's interest in
      such Patent or Trademark and the goodwill and general intangibles of
      Debtor relating thereto or represented thereby, and Debtor hereby
      constitutes the Secured Party its attorney-in-fact to execute and file all
      such writings for the foregoing purposes, all acts of such attorney being
      hereby ratified and confirmed, such power being coupled with an interest
      is irrevocable until the Secured Obligations are paid in full.

            (vi) Except to the extent that the Secured Party, upon prior written
      notice from Debtor, shall consent (which consent shall not be unreasonably
      withheld), Debtor will not assign, sell, mortgage, lease, transfer,
      pledge, hypothecate, grant a security interest in or lien upon, encumber,
      grant an exclusive or non-exclusive license (except in the ordinary course
      of business), or otherwise dispose of any of the Intellectual Property,

                                        9
<PAGE>

      and nothing in this Agreement shall be deemed a consent by the Secured
      Party to any such action except as expressly permitted herein.
      Notwithstanding the foregoing, the Debtor may sell its training center
      operations.

            (vii) As of the date hereof neither Debtor nor any affiliate or
      subsidiary thereof owns any Patents or Trademarks registered in, or the
      subject of pending applications in, the United States Patent and Trademark
      Office or any similar office or agency of the United States, any state or
      province thereof, any other country or any political subdivision thereof,
      other than those described in Schedules 2-A and 2-B hereto.

            (viii) Except to the extent Debtor has a valid business purpose for
      doing otherwise (so long as any action on the part of Debtor would not
      have a material adverse effect on Debtor's business), Debtor will take all
      necessary steps in any proceeding before the United States Patent and
      Trademark Office or any similar office or agency of the United States, any
      state or province thereof, any other country or any political subdivision
      thereof, to maintain each application and registration of the Trademarks
      and Patents, including, without limitation, filing of renewals, affidavits
      of use, affidavits of incontestability and opposition, interference and
      cancellation proceedings (except to the extent that dedication,
      abandonment or invalidation is permitted under paragraphs (ii) and (iii)
      hereof).

            (ix) Debtor agrees that the Secured Party does not assume, and shall
      have no responsibility for, the payment of any sums due or to become due
      under any agreement or contract included in the Intellectual Property or
      the performance of any obligations to be performed under or with respect
      to any such agreement or contract by Debtor, and the Debtor hereby agrees
      to indemnify and hold the Secured Party harmless with respect to any and
      all claims by any person relating thereto.

            (x) Debtor agrees that if it, or any affiliate or subsidiary
      thereof, learns of any use by any person of any term or design likely to
      cause confusion with any Trademark, it shall promptly notify the Secured
      Party of such use and, if requested by the Secured Party, shall join with
      the Secured Party, at the Secured Party's expense, in such action as the
      Secured Party, in its reasonable discretion may deem advisable for the
      protection of the Secured Party's interest in and to such Trademarks.

            (xi) All licenses of Trademarks and Patents which Debtor has granted
      to third parties are set forth in Schedule B hereto.

            (xii) If Debtor shall acquire title to any new Trademarks or
      Patents, the provisions of this Agreement shall automatically apply
      thereto. Debtor shall promptly notify the Secured Party in writing of any
      rights to any new Trademarks or Patents acquired by Debtor after the date
      hereof and of any registrations issued or applications for registration
      made after the date hereof. Concurrently with the filing of an application
      for registration for any Trademarks or Patents, Debtor shall execute,
      deliver and record in all places where this Agreement is recorded an
      appropriate agreement, substantially in the form hereof, with appropriate
      insertions, or an amendment to this Agreement, in form and substance
      reasonably satisfactory to the Secured Party, pursuant to which Debtor

                                       10
<PAGE>

      shall grant a security interest to the extent of its interest in such
      registration as provided herein to the Secured Party.

      Section 4. Special Provisions Concerning Assigned Agreements. The Debtor
represents, warrants and agrees as follows:

      (a) The Assigned Agreements constitute the legal, valid and binding
obligations of the Debtor and, to the best of its knowledge, the other parties
thereto, enforceable in accordance with their respective terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforcement of
creditors' rights or by the effect of general equitable principles.

      (b) The Debtor will use best efforts to abide by, perform and discharge
each and every material obligation, covenant and agreement to be performed by
the Debtor under the Assigned Agreements.

      (c) At the request of the Secured Party, and at the sole cost and expense
of the Debtor, the Debtor will use best efforts to enforce or secure the
performance of each and every material obligation, covenant, condition and
agreement contained in the Assigned Agreements to be performed by the other
parties thereto.

      (d) The Debtor will not modify, amend or agree to vary any of the Assigned
Agreements in any material respect other than in the ordinary course of
business, or otherwise act or fail to act in a manner likely (directly or
indirectly) to entitle any party thereto to claim that the Debtor is in material
default under the terms thereof.

      (e) The Debtor will not terminate or permit the termination of any
material Assigned Agreement, except in accordance with its terms, other than in
the ordinary course of business.

      (f) Without the prior written consent of the Secured Party, the Debtor
will not, other than in the ordinary course of business, waive or in any manner
release or discharge any party to any material Assigned Agreement from any of
the material obligations, covenants, conditions and agreements to be performed
by it under such Assigned Agreement including, without limitation, the
obligation to make all payments in the manner and at the time and places
specified.

      (g) If the Secured Party so requests after the occurrence and continuance
of an Event of Default and, if prior to the Maturity Date, Acceleration, the
Debtor will hold any payments received by it which are assigned and set over to
the Secured Party by this Agreement for and on behalf of the Secured Party and
turn them promptly over to the Secured Party forthwith in the same form in which
they are received (together with any necessary endorsement) for application to
amounts outstanding under the Notes in accordance with the terms of the Notes
and, to the extent not provided therein, in such order as the Secured Party
shall determine.

      (h) The Debtor will appear in and defend every action or proceeding
arising under, growing out of or in any manner connected with the Assigned
Agreements or the obligations, duties or liabilities of the Debtor and any
assignee thereunder.

                                       11
<PAGE>

      (i) Should the Debtor fail to make any payment or to do any act as herein
provided after 30 days' notice by the Secured Party, the Secured Party may (but
without obligation on the Secured Party's part to do so and without notice to or
demand on the Debtor and without releasing the Debtor from any obligation
hereunder) make or do the same in such manner and to such extent as the Secured
Party may deem reasonably necessary to protect the Security Interests provided
hereby, including specifically, without limiting the general powers, the right
to appear in and defend any action or proceeding purporting to affect the
Security Interests provided hereby and the Debtor, and the Secured Party may
also perform and discharge each and every obligation, covenant and agreement of
the Debtor contained in any Assigned Agreement and, in exercising any such
powers, pay necessary costs and expenses, employ counsel and incur and pay
reasonable attorneys' fees.

      (j) Upon the request of the Secured Party, the Debtor will send to the
Secured Party copies of all material notices, documents and other papers
furnished or received by it with respect to any of the Assigned Agreements.

      Section 5. Special Provisions Concerning Receivables.

      (a) As of the time when each Receivable arises, the Debtor shall be deemed
to have warranted as to each such Receivable that such Receivable and all papers
and documents relating thereto are genuine and in all respects what they purport
to be, and that all papers and documents relating thereto:

            (i) will be signed by the account debtor named therein (or such
      account debtor's duly authorized agent) or otherwise be binding on the
      account debtor;

            (ii) will represent the genuine, legal, valid and binding obligation
      of the account debtor evidencing indebtedness unpaid and owed by such
      account debtor arising out of the performance of labor or services or the
      sale and delivery of merchandise or both;

            (iii) to the extent evidenced by writings, will be the only original
      writings evidencing and embodying such obligation of the account debtor
      named therein; and

            (iv) will be in compliance and will conform, in all material
      respects, with all applicable federal, state and local laws (including
      applicable usury laws) and applicable laws of any relevant foreign
      jurisdiction.

      (b) The Debtor will keep and maintain at the Debtor's own cost and expense
satisfactory and complete records of the Receivables, including, but not limited
to, records of all payments received, all credits granted thereon, all
merchandise returned and all other dealings therewith, and the Debtor will make
the same available to the Secured Party, at the Debtor's own cost and expense,
at any and all reasonable times during the existence of an Event of Default upon
demand of the Secured Party. The Debtor shall, at the Debtor's own cost and
expense, deliver the Receivables (including, without limitation, all documents
evidencing the Receivables) and such books and records to the Secured Party or
to its representatives upon its demand at any time during the existence of an
Event of Default and, if prior to the Maturity Date, Acceleration. If the

                                       12
<PAGE>

Secured Party shall so request during the existence of an Event of Default, the
Debtor shall legend, in form and manner satisfactory to the Secured Party, the
Receivables and other books, records and documents of the Debtor evidencing or
pertaining to the Receivables with an appropriate reference to the fact that the
Receivables have been assigned to the Secured Party and that the Secured Party
has a security interest therein.

      (c) Except in the ordinary course of business prior to an Event of Default
and, if prior to the Maturity Date, Acceleration, the Debtor will not rescind or
cancel any indebtedness evidenced by any Receivable or modify any term thereof
or make any adjustment with respect thereto, or extend or renew the same, or
compromise or settle any dispute, claim, suit or legal proceeding relating
thereto, or sell any Receivable or interest therein, without the prior written
consent of the Secured Party, except that the Debtor may grant discounts in
connection with the prepayment of any Receivable in an amount which is customary
in the line of business in which the Debtor is engaged and consistent with the
Debtor's past practices.

      (d) The Debtor will duly fulfill all obligations on its part to be
fulfilled under or in connection with the Receivables and will do nothing to
impair the rights of the Secured Party in the Receivables.

      (e) The Debtor shall endeavor to collect or cause to be collected from the
account debtor named in each Receivable, as and when due (including, without
limitation, Receivables which are delinquent, such Receivables to be collected
in accordance with generally accepted lawful collection procedures) any and all
amounts owing under or on account of such Receivable, and credit forthwith (on a
daily basis) upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable. The costs and expenses (including
attorney's fees) of collection, whether incurred by the Debtor or the Secured
Party, shall be borne by the Debtor.

      (f) If any of the Receivables becomes evidenced by an Instrument (other
than a check received in payment of a Receivable and deposited in the ordinary
course of business), the Debtor will notify the Secured Party thereof, and, upon
request by the Secured Party after an Event of Default, promptly deliver such
Instrument to the Secured Party appropriately endorsed to the order of the
Secured Party as further security for the satisfaction in full of the Secured
Obligations.

      (g) Upon request of the Secured Party, at any time when an Event of
Default and, if prior to the Maturity Date, Acceleration shall exist, the Debtor
shall promptly notify (in manner, form and substance satisfactory to the Secured
Party) all Persons who are at any time obligated under any Receivable that the
Secured Party possesses a Security Interest in such Receivable and that all
payments in respect thereof are to be made to such account as the Secured Party
directs.

      Section 6. Special Provisions Concerning Equipment. The Debtor will do
nothing to impair the rights of the Secured Party in the Equipment. The Debtor
shall cause the Equipment to at all times constitute and remain personal
property. The Debtor retains all liability and responsibility in connection with
the Equipment and the liability of the Debtor to pay the Secured Obligations
shall in no way be affected or diminished by reason of the fact that such

                                       13
<PAGE>

Equipment may be lost, destroyed, stolen, damaged or for any reason whatsoever
unavailable to the Debtor.

      Section 7. Financing Statements; Documentary Stamp Taxes.

      (a) The Debtor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Secured Party from time to time such
lists, descriptions and designations of Inventory, warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the Security Interest hereby granted, which the Secured Party
reasonably deems appropriate or advisable to perfect, preserve or protect its
Security Interest in the Collateral. The Debtor hereby constitutes the Secured
Party its attorney-in-fact to execute and file in the name and on behalf of the
Debtor such additional financing statements as the Secured Party may reasonably
request, such acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable until the Secured
Obligations are paid in full. Further, to the extent permitted by applicable
law, the Debtor authorizes the Secured Party to file any such financing
statements without the signature of the Debtor and Secured Party shall use
reasonable efforts to notify Debtor of any such filings. The Debtor will pay all
applicable filing fees and related expenses in connection with any such
financing statements.

      (b) The Debtor agrees to procure, pay for, affix to any and all documents
and cancel any documentary tax stamps required by and in accordance with,
applicable law and the Debtor will indemnify and hold the Secured Party harmless
against any liability (including interest and penalties) in respect of such
documentary stamp taxes.

      Section 8. Special Provisions Concerning Remedies and Sale.

      (a) In addition to any rights and remedies now or hereafter granted under
applicable law and not by way of limitation of any such rights and remedies,
during the existence of an Event of Default and, if prior to the Maturity Date,
Acceleration, the Secured Party shall have all of the rights and remedies of a
secured party under the NYUCC as enacted in any applicable jurisdiction in
addition to the rights and remedies provided herein, in the Notes and in any
other agreement executed in connection with the Notes whereby the Debtor has
granted any Lien to the Secured Party. Without in any way limiting the
foregoing, at any time when an Event of Default and, if prior to the Maturity
Date, Acceleration shall exist upon the giving of notice to the Debtor of
Secured Party's intent to pursue any one or all of the following or any other
remedies the Secured Party shall have the right, in the name of the Debtor or in
the name of the Secured Party or otherwise:

            (i) to ask for, demand, collect, receive, compound and give
      acquittance for the Receivables or any part thereof;

            (ii) to extend the time of payment of, compromise or settle for
      cash, credit or otherwise, but only upon commercially reasonable terms and
      conditions, any of the Receivables;

                                       14
<PAGE>

            (iii) to endorse the name of the Debtor on any checks, drafts or
      other orders or instruments for the payment of moneys payable to the
      Debtor which shall be issued in respect of any Receivable;

            (iv) to file any claims, commence, maintain or discontinue any
      actions, suits or other proceedings deemed by the Secured Party necessary
      or advisable for the purpose of collecting or enforcing payment of any
      Receivable;

            (v) to make test verifications of the Receivables or any portion
      thereof;

            (vi) to notify any or all account debtors under any or all of the
      Receivables to make payment thereof directly to the Secured Party for the
      account of the Secured Party and to require the Debtor to forthwith give
      similar notice to the account debtors;

            (vii) to require the Debtor forthwith to account for and transmit to
      the Secured Party in the same form as received all proceeds (other than
      physical property) of collection of Receivables received by the Debtor
      and, until so transmitted, to hold the same in trust for the Secured Party
      and not commingle such proceeds with any other funds of the Debtor;

            (viii) to take possession of any or all of the Collateral and, for
      that purpose, to enter, with the aid and assistance of any Person or
      Persons and with or without legal process, any premises where the
      Collateral, or any part thereof, are, or may be, placed or assembled, and
      to remove any of such Collateral;

            (ix) to execute any instrument and do all other things necessary and
      proper to protect and preserve and realize upon the Collateral and the
      other rights contemplated hereby;

            (x) upon notice to such effect, to require the Debtor to deliver, at
      the Debtor's expense, any or all Collateral to the Secured Party at a
      place designated by the Secured Party;

            (xi) without obligation to resort to other security, at any time and
      from time to time, to sell, re-sell, assign and deliver all or any of the
      Collateral, in one or more parcels at the same or different times, and all
      right, title and interest, claim and demand therein and right of
      redemption thereof, at public or private sale, for cash, upon credit or
      for future delivery, and at such price or prices and on such terms as the
      Secured Party may determine, with the amounts realized from any such sale
      to be applied to the Secured Obligations in the manner determined by the
      Secured Party;

            (xii) to enforce (and shall have the exclusive right to enforce), at
      any time (without assuming any liability or obligation thereunder),
      against any licensee or sublicensee, all rights and remedies of Debtor in,
      to and under any one or more license agreements with respect to the
      Intellectual Property, and take or refrain from taking any action under
      any thereof, and Debtor hereby releases the Secured Party from, and agrees

                                       15
<PAGE>

      to hold the Secured Party free and harmless from and against any claims
      arising out of, any action taken or omitted to be taken with respect to
      any such license agreement;

            (xiii) in addition to the foregoing, in order to implement the
      assignment, sale or other disposal of any of the Intellectual Property
      pursuant to this Agreement, the Secured Party may, at any time, pursuant
      to the authority granted in the Power of Attorney described herein (such
      authority becoming effective on the occurrence or continuation as
      hereinabove provided of an Event of Default), execute and deliver on
      behalf of the applicable Debtor, one or more instruments of assignment of
      the Patents or Trademarks (or any application or registration thereof), in
      form suitable for filing, recording or registration in any country. Debtor
      agrees to pay when due all reasonable costs incurred in any such transfer
      of the Patents or Trademarks, including any taxes, fees and reasonable
      attorneys' fees, and all such costs shall be added to the Secured
      Obligations.

      (b) In the event of any license, assignment, sale or other disposition of
the Intellectual Property, or any of it, after the occurrence or continuation as
hereinabove provided of an Event of Default, Debtor shall supply its know-how
and expertise relating to the manufacture and sale of the products bearing or in
connection with the Trademarks or Patents, and its customer lists and other
records relating to the Trademarks or Patents and to the distribution of said
products, to the Secured Party or its designee.

      (c) The Secured Party shall not be obligated to do any of the acts
hereinabove authorized, but in the event that the Secured Party elects to do any
such act, the Secured Party shall not be responsible to the Debtor except for
its gross negligence or willful misconduct.

      (d) Such remedies may be exercised from time to time separately or in
combination with respect to or all or any part of the Collateral and are in
addition to and not in substitution for any other rights of the Secured Party,
however created. The Secured Party may proceed by way of any action, suit or
other proceeding available at law or in equity and no right, remedy or power of
the Secured Party shall be exclusive of or dependent on any other. The Secured
Party may exercise any of its rights, remedies or powers separately or in
combination and at any time.

      (e) The Secured Party shall not be bound to exercise any such right,
remedy or power and the exercise of such right, remedy and power shall be
without prejudice to the rights of the Secured Party in respect of the Secured
Obligations including the right to claim for any deficiency. At any time when an
Event of Default and, if prior to the Maturity Date, Acceleration shall exist,
the Secured Party may take legal proceedings for the appointment of a receiver
or receivers (to which the Secured Party shall be entitled as a matter of right)
to take possession of the Collateral pending the sale thereof pursuant either to
the powers of sale granted by this Agreement or to a judgment, order or decree
made in any judicial proceeding for the foreclosure or involving the enforcement
of this Agreement. If, after the exercise of any or all of such rights and
remedies, any of the Secured Obligations shall remain unpaid, the Debtor shall
remain liable for any deficiency. After the indefeasible payment in full of the
Secured Obligations, any proceeds of the Collateral received or held by the
Secured Party shall be turned over to the Debtor and the Collateral shall be
reassigned to the Debtor by the Secured Party without recourse to the Secured
Party and without any representations, warranties or agreements of any kind.

                                       16
<PAGE>

      (f) Upon any sale of any of the Collateral, whether made under the power
of sale hereby given or under judgment, order or decree in any judicial
proceeding for the foreclosure or involving the enforcement of this Agreement:

            (i) the Secured Party may, to the extent permitted by law, bid for
      and purchase the property being sold, and upon compliance with the terms
      of sale may hold, retain and possess and dispose of such property in its
      own absolute right without further accountability, and may, in paying the
      purchase money therefor, deliver any Notes or claims for interest thereon
      and any other instruments evidencing the Secured Obligations or agree to
      the satisfaction of all or a portion of the Secured Obligations in lieu of
      cash in payment of the amount which shall be payable thereon, and the
      Notes and such instruments, in case the amounts so payable thereon shall
      be less than the amount due thereon, shall be returned to the Secured
      Party after being appropriately stamped to show partial payment;

            (ii) the Secured Party may make and deliver to the purchaser or
      purchasers a good and sufficient deed, bill of sale and instrument of
      assignment and transfer of the property sold;

            (iii) the Secured Party is hereby irrevocably appointed the true and
      lawful attorney-in-fact of the Debtor in its name and stead, to make all
      necessary deeds, bills of sale and instruments of assignment and transfer
      of the property thus sold and for such other purposes as are necessary or
      desirable to effectuate the provisions (including, without limitation,
      this Section 8) of this Agreement, and for that purpose it may execute and
      deliver all necessary deeds, bills of sale and instruments of assignment
      and transfer, and may substitute one or more Persons with like power, the
      Debtor hereby ratifying and confirming all that its said attorney, or such
      substitute or substitutes, shall lawfully do by virtue hereof; but if so
      requested by the Secured Party or by any purchaser, the Debtor shall
      ratify and confirm any such sale or transfer by executing and delivering
      to the Secured Party or to such purchaser all property, deeds, bills of
      sale, instruments or assignment and transfer and releases as may be
      designated in any such request;

            (iv) all right, title, interest, claim and demand whatsoever, either
      at law or in equity or otherwise, of the Debtor of, in and to the property
      so sold shall be divested; such sale shall be a perpetual bar both at law
      and in equity against the Debtor, its successors and assigns, and against
      any and all Persons claiming or who may claim the property sold or any
      part thereof from, through or under the Debtor, its successors or assigns;

            (v) the receipt of the Secured Party or of the officer thereof
      making such sale shall be a sufficient discharge to the purchaser or
      purchasers at such sale for his or their purchase money, and such
      purchaser or purchasers, and his or their assigns or personal
      representatives, shall not, after paying such purchase money and receiving
      such receipt of the Secured Party or of such officer therefor, be obliged
      to see to the application of such purchase money or be in any way
      answerable for any loss, misapplication or nonapplication thereof; and

                                       17
<PAGE>

            (vi) to the extent that it may lawfully do so, and subject to any
      legal requirement that the Secured Party act in a commercially reasonable
      manner, the Debtor agrees that it will not at any time insist upon, or
      plead, or in any manner whatsoever claim or take the benefit or advantage
      of, any appraisement, valuation, stay, extension or redemption laws, or
      any law permitting it to direct the order in which the Collateral or any
      part thereof shall be sold, now or at any time hereafter in force, which
      may delay, prevent or otherwise affect the performance or enforcement of
      this Agreement, the Notes or any other agreement executed in connection
      with the Notes whereby the Debtor has granted any Lien to the Secured
      Party, and the Debtor hereby expressly waives all benefit or advantage of
      any such laws and covenants that it will not hinder, delay or impede the
      execution of any power granted or delegated to the Secured Party in this
      Agreement, but will suffer and permit the execution of every such power as
      though no such laws were in force. In the event of any sale of Collateral
      pursuant to this Section, the Secured Party shall, at least 10 days before
      such sale, give the Debtor written, telecopied or telex notice of its
      intention to sell.

      (g) Any receiver appointed by the Secured Party shall be vested with the
rights and remedies which could be exercised by the Secured Party in respect of
the Debtor or the Collateral and such other powers and discretions as are
granted in the instrument of appointment and any instrument or instruments
supplemental thereto. The identity of the received, any replacement thereof and
any remuneration thereof shall be within the sole and unfettered discretion of
the Secured Party. Any receiver appointed by the Secured Party shall act as
agent for the Secured Party for the purposes of taking possession of the
Collateral, but otherwise and for all other purposes (except as provided below
and with respect to its discharge), as agent for the Debtor or as agent for the
Secured Party (but in all cases shall take direction from the Secured Party) as
the Secured Party may determine in its sole and unfettered discretion. The
Debtor agrees to ratify and confirm all actions of the receiver acting as agent
for the Debtor, and to release and indemnify the receiver in respect of all such
actions. The Secured Party, in appointing or refraining from appointing any
receiver, shall not incur liability to the receiver, the Debtor or otherwise and
shall not be responsible for any misconduct or negligence of such receiver.

      Section 9. Application of Moneys.

      (a) Except as otherwise provided herein or in the Notes, all moneys which
the Secured Party shall receive, in accordance with the provisions hereof, shall
be applied (to the extent thereof) in the following manner: First, to the
payment of all costs and expenses reasonably incurred in connection with the
administration and enforcement of, or the preservation of any rights under, this
Agreement or any of the reasonable expenses and disbursements of the Secured
Party (including, without limitation, the reasonable fees and disbursements of
its counsel and agents); Second, to the payment of all Secured Obligations
arising out of the Notes in accordance with the terms of the Notes and, if not
therein provided, in such order as the Secured Party may determine; and Third,
to the payment of all other Secured Obligations in such order as the Secured
Party may determine.

      (b) If after applying any amounts which the Secured Party has received in
respect of the Collateral any of the Secured Obligations remain unpaid, the
Debtor shall continue to be liable for any deficiency, together with interest.

                                       18
<PAGE>

      Section 10. Fees and Expenses, etc. Any and all reasonable fees, costs and
expenses of whatever kind or nature, including but not limited to the reasonable
attorneys' fees and legal expenses incurred by the Secured Party in connection
with this Agreement, the filing or recording of any documents (including all
taxes in connection therewith) in public offices, the payment or discharge of
any taxes, counsel fees, maintenance fees, fees and other costs relating to the
encumbrances or otherwise protecting, maintaining, preserving the Collateral, or
in defending or prosecuting any actions or proceedings arising out of or related
to the Collateral, shall be borne and paid by the Debtor on written demand by
the Secured Party setting forth in reasonable detail the nature of such expenses
and until so paid shall be added to the principal amount of the Secured
Obligations and shall bear interest at the rate accruing thereon. In addition,
the Debtor will pay, and indemnify and hold the Secured Party harmless from and
against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the Collateral, including (without limitation)
claims of patent or trademark infringement and any claim of unfair competition
or anti-trust violation, other than liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements arising
as a result of Secured Party's gross negligence or willful misconduct.

      Section 11. Power of Attorney.

            Concurrently with the execution and delivery hereof, the Debtor is
executing and delivering to the Secured Party, in the form of Exhibit 2 hereto,
three originals of a Power of Attorney for the implementation of the assignment,
sale or other disposal of the Collateral, including the Trademarks and Patents
pursuant to this Agreement and Debtor hereby releases the Secured Party from any
claims, causes of action and demands at any time arising out of or with respect
to any actions taken or omitted to be taken by the Secured Party under the
powers of attorney granted herein, other than actions taken or omitted to be
taken through the gross negligence or willful misconduct of the Secured Party.

      Section 12. Miscellaneous.

      (a) All notices, communications and distributions hereunder shall be in
writing (including telecopied communication) and mailed by certified mail,
telecopied, personally delivered or delivered by Federal Express or other
reputable overnight courier service, if to the Debtor addressed to it at its
address set forth opposite its signature below, if to the Secured Party,
addressed to it at its address set forth opposite its signature below, or as to
either party at such other address as shall be designated by such party in a
written notice to such other party complying as to delivery with the terms of
this Section. All such notices and other communications shall be effective (i)
if mailed by certified mail, three days after the date of deposit thereof with
the U.S. Postal Service, properly addressed with postage prepaid, (ii) if
telecopied, upon receipt by the addressee, (iii) if personally delivered, upon
such delivery and (iv) if delivered by overnight courier service, on the
business day following delivery thereof to such courier service in time for
next-business-day delivery.

      (b) No delay on the part of the Secured Party in exercising any of its
rights, remedies, powers and privileges hereunder or partial or single exercise
thereof, shall constitute a waiver thereof. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner

                                       19
<PAGE>

whatsoever unless in writing duly signed by the Debtor and the Secured Party. No
notice to or demand on the Debtor in any case shall entitle the Debtor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Secured Party to any other or
further action in any circumstances without notice or demand.

      (c) The obligations of the Debtor hereunder shall remain in full force and
effect without regard to, and shall not be impaired by, (i) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like of the Debtor; (ii) any exercise or non-exercise, or any waiver of,
any right, remedy, power or privilege under or in respect of the Notes, this
Agreement or any other agreement executed in connection with the Notes whereby
the Debtor has granted any Lien to the Secured Party or any other agreement
executed in connection with any of the foregoing, the Secured Obligations or any
security for any of the Secured Obligations; or (iii) any amendment to or
modification of any of the foregoing; whether or not the Debtor shall have
notice or knowledge of any of the foregoing. The rights and remedies of the
Secured Party herein provided are cumulative and not exclusive of any rights or
remedies which the Secured Party would otherwise have.

      (d) This Agreement shall be binding upon the Debtor and its successors and
assigns and shall inure to the benefit of the Secured Party and its successors
and assigns, except that the Debtor may not transfer or assign any of its
obligations, rights or interest hereunder without the prior written consent of
the Secured Party and any such purported assignment by the Debtor shall be void.
All agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement. (e) The descriptive headings of the
several sections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.

      (f) Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

      (g) All rights, remedies and powers provided by this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and the provisions hereof are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement invalid, unenforceable in whole or in part or not entitled to be
recorded, registered or filed under the provisions of any applicable law.

      (h) This Agreement and the rights and obligations of the parties hereunder
shall be construed in accordance with and be governed by the laws of the State
of New York except to the extent that matters of title, or creation, perfection
and priority of the Security Interests created hereby, or procedural issues of
foreclosure are required to be governed by the laws of the state in which the
Collateral, or part thereof, is located.

                                       20
<PAGE>

      (i) It is expressly agreed, anything herein, in the Notes or in any other
agreement or instrument executed in connection with the Notes to the contrary
notwithstanding, that the Debtor shall remain liable to perform all of the
obligations, if any, assumed by it with respect to the Collateral and the
Secured Party shall not have any obligations or liabilities with respect to any
Collateral by reason of or arising out of this Agreement, nor shall the Secured
Party be required or obligated in any manner to perform or fulfill any of the
obligations of the Debtor under or pursuant to any or in respect of any
Collateral.

      (j) This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which counterparts taken
together shall be deemed to constitute one and the same instrument.

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.

                                    EB2B COMMERCE, INC.

                                    as Debtor

                                    By:
                                        ------------------------------------
                                        Name:
                                        Title:

                                    ----------------------------------------
                                    Robert Priddy, as Investor
                                    Representative and Secured Party

                                       21
<PAGE>

                                   Schedule 1

      LOCATION OF CERTAIN INVENTORY AND EQUIPMENT COLLATERAL

Current place(s) of business of the Debtor:
-------------------------------------------

Corporate Headquarters:

665 Broadway, New York, New York 10012

29 West 38th Street, New York, New York  10018

Locations of Inventory and Equipment:
-------------------------------------

Same as above

Currently Existing Lien Which Constitutes a Permitted Lien:
-----------------------------------------------------------

Security interest of holders of 7% senior subordinated secured convertible notes
issued on January 11, 2002, but subject to the subordination agreement related
thereto.

                                       22
<PAGE>

                                   Schedule 2

                          EXISTING FINANCING STATEMENTS

                Date of     Number of                Description   Amount of
  Secured      Financing    Financing     Location        of      Indebtedness
   Party       Statement    Statement      Filed      Collateral    Secured
   -----       ---------    ---------      -----      ----------    -------

   Cisco
  Systems
  Capital
Corporation     12/4/00       232456       NYSOS

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

              OTHER NAMES UNDER WHICH DEBTOR HAS CONDUCTED BUSINESS

DynamicWeb Enterprises, Inc.

Seahawk Capital Corporation

Seahawk Oil International, Inc.

Netlan Inc.

                                       23
<PAGE>

                                  Schedule 2-A

                                   TRADEMARKS
                                   ----------

Trademark                     Status/Registration Date   Registration Number
---------                     ------------------------   -------------------

EB2B                          Pending                    75/677470

EB2B Commerce                 Pending                    75/677469

EB2B.com                      Pending                    75/677471

DynamicWeb                    Active                     2380214

NETLAN                        Active                     1984055

Former Netlan N Logo Design   Active                     1979722

                                  Schedule 2-B

                                     PATENTS
                                     -------

                                      NONE

The definition of Intellectual Property shall also include the Domain Names
listed below.

                                  DOMAIN NAMES
                                  ------------

Description                               Domain Name
-----------                               -----------

EB2B                                      Domain Name

EB2B Commerce                             Domain Name

EB2B.com                                  Domain Name

EB2B Buy                                  Domain Name

DynamicWeb                                Domain Name

Netlan.com                                Domain Name

Icisolutions.com                          Domain Name

Buyspots.com                              Domain Name

Interactivecom.com                        Domain Name

Softmail.com                              Domain Name

                                       24
<PAGE>

                                   Schedule B

                                    LICENSES

                                       25
<PAGE>

                                                 Exhibit 1 to Security Agreement

                         SCHEDULE 1-A TO ASSIGNMENT FOR SECURITY

                                  (TRADEMARKS)

            WHEREAS, eB2B Commerce, Inc., a New Jersey corporation (herein
referred to as "Assignor"), has adopted, used and is using the trademarks listed
on Schedule 1-A annexed hereto as part hereof (the "Trademarks");

            WHEREAS, Assignor is obligated to Robert Priddy as investor
representative (referred to herein as the "Assignee") for the investors to whom
Assignor has issued a series of 7% senior subordinated secured convertible notes
in the aggregate principal amount of up to $1,350,000 and Assignor has entered
into a Security Agreement dated the date hereof (the "Agreement") in favor of
Assignee; and

            WHEREAS, pursuant to the Agreement, Assignor has assigned to
Assignee and granted to Assignee a security interest in, and mortgage on, all
right, title and interest of Assignor in and to the Trademarks, together with
the goodwill of the business symbolized by the Trademarks and the applications
and registrations thereof, and all proceeds thereof, including, without
limitation, any and all causes of action which may exist by reason of
infringement thereof (the "Collateral"), to secure the payment, performance and
observance of the Secured Obligations (as defined in the Agreement);

            NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, Assignor does hereby further assign unto Assignee
and grant to Assignee a security interest in, and mortgage on, the Collateral to
secure the prompt payment, performance and observance of the Secured
Obligations.

            Assignor does hereby further acknowledge and affirm that the rights
and remedies of Assignee with respect to the assignment of, security interest in
and mortgage on the Collateral made and granted hereby are more fully set forth
in the Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.

            Assignee's address is 665 Broadway, New York, New York 10012 .

            IN WITNESS WHEREOF, Assignor has caused this Assignment to be duly
executed by its officer thereunto duly authorized as of the day of
________________, 2002.

                                          EB2B COMMERCE, INC.

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

                                              Name:
                                                    -------------------------

                                              Title:
                                                    -------------------------

                                       26
<PAGE>

                     SCHEDULE 1-A TO ASSIGNMENT FOR SECURITY

                                   TRADEMARKS

Trademark                       Status/Registration Date   Registration Number
---------                       ------------------------   -------------------

EB2B                            Pending                    75/677470

EB2B Commerce                   Pending                    75/677469

EB2B.com                        Pending                    75/677471

DynamicWeb                      Active                     2380214

NETLAN                          Active                     1984055

Former Netlan N Logo Design     Active                     1979722

                                       27
<PAGE>

                                                                    Exhibit 2 to
                                                              Security Agreement

                            SPECIAL POWER OF ATTORNEY

STATE OF NEW YORK  )
                   : ss.:
COUNTY OF NEW YORK )

            KNOW ALL MEN BY THESE PRESENTS, THAT eB2B Commerce, Inc., a New
Jersey corporation with its principal office at 665 Broadway, New York, New York
10012 (hereinafter called "Assignor") hereby appoints and constitutes Robert
Priddy (referred to herein as the "Assignee") for the investors to whom Assignor
has issued a series of 7% senior subordinated secured convertible notes in the
aggregate principal amount of up to $1,350,000 its true and lawful attorney,
with full power of substitution, and with full power and authority to perform
the following acts on behalf of Assignor:

                  1. For the purpose of assigning, selling, licensing or
            otherwise disposing of all right, title and interest of Assignor in
            and to any letters patent of the United States or any other country
            or political subdivision thereof, and all registrations, recordings,
            reissues, continuations, continuations-in-part and extensions
            thereof, and all pending applications therefor, and for the purpose
            of the recording, registering and filing of, or accomplishing any
            other formality with respect to, the foregoing, to execute and
            deliver any and all agreements, documents, instruments of assignment
            or other papers necessary or advisable to effect such purpose;

                  2. For the purpose of assigning, selling, licensing or
            otherwise disposing of all right, title and interest of Assignor in
            and to any trademarks, trade names, trade styles and service marks,
            and all registrations, recordings, reissues, extensions and renewals
            thereof, and all pending applications therefor, and for the purpose
            of the recording, registering and filing of, or accomplishing any
            other formality with respect to, the foregoing, to execute and
            deliver any and all agreements, documents, instruments of assignment
            or other papers necessary or advisable to effect such purpose;

                  3. To execute any and all documents, statements, certificates
            or other papers necessary or advisable in order to obtain the
            purposes described above as Assignee may in its sole discretion
            determine.

                                       28
<PAGE>

            This power of attorney is made pursuant to a Security Agreement,
dated the date hereof, between Assignor and Assignee and takes effect solely for
the purposes of Section 8 thereof and is subject to the conditions thereof and
may not be revoked until the payment in full of all "Secured Obligations" as
defined in such Security Agreement.

Dated:  ___________, 2002

[Corporate Seal]                          EB2B COMMERCE INC.

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

                                              Name:
                                                    -------------------------

                                              Title:
                                                    -------------------------

STATE OF NEW YORK  )
                   : ss.:
COUNTY OF NEW YORK )

            On this __________ day of _______ 200_, before me personally
appeared [__________________], to me known, who, being by me duly sworn, did
depose and say that he resides at __________________ and that he is
__________________ of eB2B Commerce, Inc., the New Jersey corporation described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was affixed pursuant to authority of the Board of Directors of said
corporation, and that he signed his name thereto pursuant to such authority.

                                              ----------------------------------
                                                         Notary Public

                                       29

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