Document:

LOAN & SECURITY AGREEMENT

  
 Exhibit 10.11 
  
 LOAN AND SECURITY AGREEMENT 
  
 between

  
 MEGA GROUP, INC. 
  
 and 
  
 SMALL BUSINESS INVESTMENT CORPORATION 

OF AMERICA, INC. 
  
 “Borrower”

  
 and 
  
 MATAH HOLDINGS, LLC 
  
 “Lender” 
  
 Dated:  July 15, 2002 
  

  
 LOAN AND SECURITY AGREEMENT 
  

THIS AGREEMENT (the “Agreement”), dated July 15, 2002, between MEGA GROUP, INC., a New York corporation (“Mega”), and SMALL BUSINESS INVESTMENT
CORPORATION OF AMERICA, INC., an Oregon corporation (“SBICOA”), both with offices at 1730 Rhode Island Avenue, N.W., Washington, D.C. 20036 (Mega and SBICOA are referred to herein collectively as “Borrower”), and MATAH HOLDINGS,
LLC, a New Jersey limited liability company, with offices at 215 West Clinton Avenue, Suite 4, Oaklyn, NJ 08107 (“Lender”); 
  
 W I T N E S S E T H : 
  
 In consideration of the premises and of the mutual covenants herein
contained and to induce Lender to extend credit to Borrower, the parties agree as follows: 
  
 1.  Definitions.    Capitalized terms that are not otherwise defined herein shall have the meanings set forth in Exhibit 1 hereto. 
  
 2.  The Loan Facility. 
  
 2.1  Term Loan.    On the terms and subject to the conditions set forth in this Agreement, Lender shall make a term loan (the “Term Loan” or the “Loan”) to Borrower in
the aggregate original unpaid principal amount of $500,000. Lender shall disburse the proceeds of the Term Loan to Borrower, by wire transfer or otherwise in immediately available funds, to such bank account or accounts or payees as Borrower may
designate in writing, in three advances (each, an “Advance,” and collectively, the “Advances”). The first Advance, disbursed upon the execution hereof, shall be in the amount of $150,000; the second Advance, disbursed not more
than ten (10) days after the date hereof, shall be in the amount of $150,000; and the third Advance, disbursed not more than thirty (30) days after the date hereof, shall be in the amount of $200,000. Once repaid, principal of the Term Loan may not
be reborrowed. 
  
 2.2  Promissory Note.    Each
Advance shall be evidenced by and payable in accordance with the terms of a promissory note (as amended, modified, supplemented, restated or renewed from time to time, each, a “Term Note” or “Note,” and collectively, the
“Term Notes” or “Notes”), in the form attached hereto as Exhibit 2.2, executed by Borrower and delivered to Lender therewith. Each Term Note shall be in the original unpaid principal amount then being disbursed, shall be dated
the date of the Advance, shall be due (except as provided in Section 2.3(b) below) one hundred eighty (180) days after the date hereof (the “Term Loan Maturity Date”), and shall be repayable in accordance with the terms of the Term Note
and this Agreement. 

  
 2.3  Repayment of Loan. 
  
 (a)  All principal of and accrued and unpaid interest on, and all other fees and expenses with respect to, the
Term Loan shall be due and payable in full on the Term Loan Maturity Date. 
  
 (b)  Borrower shall make each required payment of principal of and interest on the Loan and fees hereunder not later than 12:00 noon (local time Oaklyn, New Jersey) on the date when due, without set off, counterclaim or
other deduction, in immediately available funds to Lender at its address set forth above (or at such other address as Lender may hereafter designate to Borrower in writing). Whenever any payment of principal of, or interest on, the
Loan or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time. 
  
 2.4  Overdue
Amounts.    Any payments not made as and when due shall bear interest from the date due until paid at the Default Rate, in Lender’s discretion. 
  
 2.5  Calculation of Interest.    All interest under any Note or hereunder shall be calculated on the basis of the
Actual/360 Computation, as defined in the Note. 
  
 2.6  Termination.    Lender may terminate its obligation to make any future Advance hereunder at any time, on three days’ notice, upon or after the occurrence of an Event of Default.

  
 2.7  Shares of Mega.    In reliance on Lender’s
representations, warranties, and covenants set forth in Section 9.13 below, Mega has authorized the issuance, delivery, and transfer to Lender, free of any and all liens and encumbrances, of 100,000 unregistered shares of Mega’s common stock
(the “Shares”) as additional consideration for Lender entering into this Agreement and disbursing not less than $300,000 as provided in Section 2.1 above. Promptly upon the disbursement by Lender to Borrower of not less than $300,000
hereunder, Mega shall cause its transfer agent to execute, issue, and deliver to Lender, or to such of its officers, members, or affiliates as Lender may designate in writing, one or more certificates for the Shares; provided, however, that
any such officer, member, or affiliate shall first execute a written statement agreeing to be bound by the provisions of Section 9.13 below. 
  
 3.  Conditions Precedent to Borrowing. 
  
 3.1.  Conditions Precedent.    In addition to any other requirement set forth in this Agreement, Lender will not make any Advance under the Term Loan unless and until the following conditions
shall have been satisfied: 
  
 (a)  Loan Documents.    Borrower
and each other party to any Loan Document, as applicable, shall have executed and delivered this Agreement, the related Note and all other required Loan Documents, all in form and substance reasonably satisfactory to Lender. 

 
 2 

 Execution and delivery of this Agreement and any other Loan Document by facsimile transmission shall be effective when
received provided that executed originals are provided by overnight delivery within 24 hours thereafter. 
  
 (b)  Supporting Documents.    Borrower shall have caused to be delivered to Lender an incumbency certificate and certified resolutions of the board of directors of Borrower, signed by the
Secretary or another authorized officer of Borrower or such other Person, authorizing the execution, delivery and performance of the Loan Documents. 
  
 (c)  Additional Documents.    Borrower shall have delivered to Lender all additional opinions, documents, certificates
and other assurances required to be delivered by Borrower herein. 
  
 (d)  Payment of
Fees.    Borrower shall have paid all fees, costs and expenses as required by the Loan Documents in connection with the Closing. 
  
 4.  Representations and Warranties.    In order to induce Lender to enter into this Agreement and to make the Loan provided for herein, Borrower hereby represents
and warrants (the representations and warranties set forth in Sections 4.1, 4.2, and 4.10 only shall survive the execution and delivery of the Loan Documents) that, except as may be set forth in an Exhibit attached hereto or any financial statements
delivered hereunder: 
  
 4.1.  Valid Existence and Power.    It
is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is duly qualified or licensed to transact business in all places where the failure to be so qualified could reasonably
be expected to have a Material Adverse Effect on it; and it and each other Person which is a party to any Loan Document (other than Lender) has the power to make and perform the Loan Documents executed by it, and all such instruments will constitute
the legal, valid and binding obligations of such Person, enforceable in accordance with their respective terms, subject only to bankruptcy and similar laws affecting creditors’ rights generally. 
  
 4.2.  Authority.    The execution, delivery and performance thereof by it and each
other Person (other than Lender) executing any Loan Document have been duly authorized by all necessary action of such Person, and do not and will not violate any provision of law or regulation, or any writ, order or decree of any court or Authority
or any provision of the governing instruments of such Person, and do not and will not, with the passage of time or the giving of notice, result in a breach of, or constitute a default or require any consent under, or result in the creation of any
Lien upon any property or assets of such Person pursuant to, any law, regulation, instrument or agreement to which any such Person is a party or by which any such Person or its respective properties may be subject, bound or affected. 

 
 4.3.  Financial Condition.    Other than as disclosed in financial
statements delivered on or prior to the date hereof to Lender, (a) neither it nor (to its knowledge) any Guarantor has any direct or contingent obligations or liabilities (including any guarantees or leases) or any unrealized or anticipated losses
from any commitments of such Person which could reasonably be expected to have a Material Adverse Effect; (b) all such financial statements 

 
 3 

 have been prepared in accordance with GAAP and fairly present the financial condition of Borrower or Guarantor, as the
case may be, as of the date thereof; and it is not aware of any adverse fact (other than facts which are generally available to the public and not particular to it, such as general economic or industry trends) concerning its financial or business
condition or future prospects or any Guarantor which could reasonably be expected to have a Material Adverse Effect and which has not been fully disclosed to Lender, including any adverse change in the operations or financial condition of such
Person since the date of the most recent financial statements delivered to Lender; (c) neither it nor any of its assets are subject to any unpaid judgments (whether or not stayed) or any judgment liens in any jurisdiction; (d) it has no unfunded
liabilities with respect to any pension, profit sharing or other benefit plan subject to the Employee Retirement Income Security Act Investment Company Act; (e) it possesses all licenses, certificates, franchises, permits and other authorizations
from governmental and political subdivisions or regulatory authorities, and all patents, trademarks, service marks, trade names, copyrights, franchises, licenses and other rights that are necessary for ownership, maintenance and operation of any of
its material Properties and assets, and it is not in violation of any such authorizations or rights, which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect (without limiting the generality of the
foregoing, and, in any event, it possesses all intellectual property rights necessary for the ownership, operation and development of its business as conducted, or contemplated to be conducted, by it; and (f) it is Solvent, and after consummation of
the transactions set forth in this Agreement and the other Loan Documents, it will be Solvent. 
  
 4.4.  Litigation.    To the best of its knowledge, there are no suits or proceedings pending, or to its knowledge threatened, before any court or by or before any governmental or regulatory
authority, commission, bureau or agency or public regulatory body against or affecting it or (to its knowledge) any Guarantor, or their assets, which if adversely determined could reasonably be expected to have a Material Adverse Effect.

  
 4.5.  Agreements, Etc.    To the best of its knowledge, it
is not a party to any agreement or instrument or subject to any court order, governmental decree or any charter or other corporate restriction, adversely affecting its business, assets, operations or condition (financial or otherwise), nor is it in
default in the performance, observance or fulfillment of any of the material obligations, covenants or conditions contained in any agreement or instrument to which it is a party, or any law, regulation, decree, order or the like. 

 
 4.6.  Authorizations.    To the best of its knowledge, all authorizations,
consents, approvals and licenses required under applicable law or regulation for the ownership or operation of the property owned or operated by it or for the conduct of any business in which it is engaged have been duly issued and are in full force
and effect, and it is not in default, nor has any event occurred which with the passage of time or the giving of notice, or both, would constitute a default, under any of the terms or provisions of any part thereof, or under any order, decree,
ruling, regulation, closing agreement or other decision or instrument of any Authority having jurisdiction over such Person, which default could reasonably be expected to have a Material Adverse Effect. Except as noted herein, no approval, consent
or authorization of, or filing or registration with, any Authority or agency is required with respect to the execution, delivery or performance of any Loan Document. 

 
 4 

  
 4.7.  Title.    To the best
of its knowledge, Borrower has good title to all of the assets shown in its financial statements free and clear of all Liens, except Permitted Liens. 
  
 4.8.  Collateral.    To the best of its knowledge, the security interests granted to Lender herein and pursuant to any
other Security Agreement (a) constitute and, as to subsequently acquired property included in the Collateral covered by the Security Agreement, will constitute, security interests under the Code entitled to all of the rights, benefits and priorities
provided by the Code and (b) are, and as to such subsequently acquired Collateral will be, fully perfected, superior and prior to the rights of all third persons, now existing or hereafter arising, subject only to Permitted Liens; and all of the
Collateral is intended for use solely in its business. 
  
 4.9.  Location.    Its chief executive office, where its business records are maintained, is located at the address first set forth above. 
  

4.10.  Taxes.    It has filed all federal and state income and other tax returns which are required to be filed,
and have paid all taxes as shown on said returns and all taxes, including withholding, FICA and ad valorem taxes, shown on all assessments received by it to the extent that such taxes have become due; and it is not subject to any federal, state or
local tax Liens nor has it received any notice of deficiency or other official notice to pay any taxes; and it has paid all sales and excise taxes payable by it. 
  
 4.11.  Subsidiaries.    SBICOA is the wholly-owned Subsidiary of Mega. SBICOA has no Subsidiaries, and Mega has no
other Subsidiaries. 
  
 4.12.  Names.    It currently conducts
all business only under its legal name as set forth above in the introductory section of this Agreement; and except as disclosed on Exhibit 4.12, during the preceding five (5) years it has not (i) been known as or used any other corporate,
fictitious or trade name, (ii) been the surviving entity of a merger or consolidation or (iii) acquired all or substantially all of the assets of any Person. 
  
 4.13.  Compliance with Covenants; No Default.    It is, and upon funding of the Loan will be, in compliance with all of
the covenants hereof; and no Default or Event of Default has occurred, and the execution, delivery and performance of the Loan Documents and the funding of the Loan will not cause a Default or Event of Default. 
  
 4.14.  Full Disclosure.    There is no material fact which is known or which should
be known by it that it has not disclosed to Lender which could have a Material Adverse Effect; and no Loan Document, nor any agreement, document, certificate or statement delivered by it to Lender, contains any untrue statement of a material fact or
omits to state any material fact which is known or which should be known by it necessary to keep the other statements from being misleading. 

 
 5 

  
 5.  Affirmative Covenants.    Borrower
covenants and agrees that from the date hereof and until payment in full of the Obligations and the formal termination of this Agreement, Borrower: 
  
 5.1.  Use of Loan Proceeds.    Shall use the proceeds of the Loan only for general working capital needs of SBICOA, to
operate SBICOA’s business, to defray its costs and expenses in entering into this transaction, and to provide for its future working capital needs and to furnish Lender all evidence that Lender may reasonably require with respect to such use.

  
 5.2.  Maintenance of Business and Properties.    Shall at
all times maintain, preserve and protect its material property used or useful in the conduct of its business, and keep the same in good repair, working order and condition, and from time to time make, or cause to be made, all material needful and
proper repairs, renewals, replacements, betterments and improvements thereto so that the business carried on in connection therewith may be conducted properly and in accordance with standards generally accepted in businesses of a similar type and
size at all times, and maintain and keep in full force and effect all licenses and permits necessary to the proper conduct of its business. 
  
 5.3.  Insurance.    Shall maintain such liability insurance, workers’ compensation insurance, business interruption insurance and casualty insurance as may be
required by law, customary and usual for prudent businesses in its industry or as may be reasonably required by Lender and shall insure and keep insured all of its material properties in good and responsible insurance companies satisfactory to
Lender. 
  
 5.4.  Notice of Default.    Shall provide to Lender,
within five days of the occurrence thereof, notice of (a) the occurrence of a Default or Event of Default and what action (if any) it is taking to correct the same, (b) any material litigation or material changes in existing litigation or any
judgment against it or its assets, (c) any damage or loss to property that could reasonably be expected to have a Material Adverse Effect, (d) any notice from taxing authorities as to claimed deficiencies or any tax lien or any notice relating to
alleged ERISA violations, (e) any Reportable Event, as defined in ERISA, (f) any rejection, return, offset, dispute, loss or other circumstance that could reasonably be expected to have a Material Adverse Effect, (g) the cancellation or termination
of, or any default under, any agreement to which it is a party or by which any of its properties are bound, which cancellation or termination could reasonably be expected to have a Material Adverse Effect, or any acceleration of the maturity of any
of its Debt; and (h) any loss or threatened loss of licenses or permits, which loss could reasonably be expected to have a Material Adverse Effect. 
  
 5.5.  Inspections.    Shall permit inspections of its financial records, at such times and in such manner as may be
reasonably required by Lender, and shall further permit such inspections, reviews and examinations of its other records and its properties (with such reasonable frequency and at such reasonable times as Lender may desire) by Lender as Lender may
deem necessary or desirable from time to time. The cost of any such examinations, reviews, verifications and inspections shall be borne by Lender; provided, however, that if an inspection is part of the process of collection after the
occurrence of an Event of Default as provided in Section 7.1 that has not been cured, the cost of inspection will be borne by Borrower. 

 
 6 

  
 5.6.  Financial
Information.    Shall maintain books and records in accordance with GAAP and shall furnish to Lender the following periodic financial information: 
  
 (a)  Interim Statements of Borrower.    Within forty (45) days after the end of each fiscal quarter, Borrower’s
consolidated and consolidating unaudited balance sheet at the end of that period and its consolidated and consolidating income statement and statement of cash flows for that period (and for the portion of the fiscal year ending with such period),
together with all supporting schedules, setting forth in comparative form the figures for the same period of the preceding fiscal year, and certified by its chief financial officer as true and correct and fairly representing its financial condition
and that such statements are prepared in accordance with GAAP, except without footnotes and subject to normal year-end audit adjustments; 
  
 (b)  Annual Statements of Borrower.    Within one hundred twenty (120) days after the end of each fiscal year, Borrower’s financial statements containing a
consolidated and consolidating balance sheet at the end of that period and a consolidated and consolidating income statement and statement of cash flows for that period, setting forth in comparative form the figures for the preceding fiscal year,
together with all supporting schedules and footnotes, and containing a review report of independent certified public accountants acceptable to Lender that the financial statements were prepared in accordance with GAAP. Any management letter,
supplemental letter, or other document accompanying the report will also be provided to Lender. In addition, promptly upon receipt, one copy of each written report submitted to Borrower by independent accountants for any other annual, quarterly or
special audit will be provided to Lender; 
  
 (c)  No Default
Certificates.    Together with each report required by Subsection (a) and (b), a certificate of Borrower’s president or chief financial officer that no Default or Event of Default then exists or if a Default or Event of
Default exists, the nature and duration thereof and its intention with respect thereto, and in addition, shall cause its independent auditors (if applicable) to submit to Lender, together with its audit report, a statement that, in the course of
such audit, it discovered no circumstances which it believes would result in a Default or Event of Default or if it discovered any such circumstances, the nature and duration thereof; 
  
 (d)  Tax Returns.    Within thirty (30) days of filing thereof, copies of Borrower’s federal income tax returns
(including all schedules, exhibits and attachments), and if any extension request is filed, copies thereof (including all schedules, exhibits and attachments) within thirty (30) days of the filing thereof; 
  
 (e)  Other Information.    Such other information reasonably requested by Lender from
time to time concerning the business, properties or financial condition of Borrower. 
  
 5.7.  Maintenance of Existence and Rights.    Shall preserve and maintain its corporate existence, authorities to transact business, rights and franchises, trade names, patents, trademarks and
permits necessary to the conduct of its business. 

 
 7 

  
 5.8.  Subordination.    Shall cause all debt and other obligations now or hereafter owed to any shareholder or Affiliate to be subordinated in right of payment and security to the Obligations in
accordance with subordination agreements proposed by and satisfactory to Lender. 
  
 5.9.  Further Assurances.    Shall take such further action and provide to Lender such further assurances as may be reasonably requested to ensure compliance with the intent of this Agreement and
the other Loan Documents. 
  
 6.  Negative Covenants of Borrower.    Borrower
covenants and agrees that, from the date hereof and until payment in full of the Obligations and the formal termination of this Agreement, Borrower: 
  
 6.1.  Debt.    Shall not create or permit to exist any new Debt, including any guaranties or other contingent
obligations, except Permitted Debt. 
  
 6.2.  Liens.    Shall
not create or permit to exist any new Liens on any of its property, except Permitted Liens. 
  
 6.3.  Dividends.    Shall not pay or declare any dividends (other than stock dividends) or other distribution or purchase, redeem or otherwise acquire any stock or other equity interests or pay or
acquire any debt subordinate to the Obligations. 
  
 6.4.  Salaries.    Shall not pay salaries to directors, executives or managers in excess of current levels. 
  
 6.5.  Loans and Other Investments.    Shall not make or permit to exist any advances or loans to, or guarantee or
become contingently liable, directly or indirectly, in connection with the obligations, leases, stock or dividends of, or own, purchase or make any commitment to purchase any stock, bonds, notes, debentures or other securities of, or any interest
in, or make any capital contributions to (all of which are sometimes collectively referred to herein as “Investments”) any Person except for (a) purchases of direct obligations of the federal government, (b) deposits in commercial banks,
(c) commercial paper of any U.S. corporation having the highest ratings then given by the Moody’s Lenders Services, Inc. or Standard & Poor’s Corporation, (d) investments in Subsidiaries, (e) endorsement of negotiable instruments for
collection in the ordinary course of business, and (f) advances to employees for business travel and other expenses incurred in the ordinary course of business which do not at any time exceed $10,000 in the aggregate. 
  
 6.6.  Change in Business.    Shall not enter into any business which is substantially
different from the business in which it is presently engaged. 
  
 6.7.  Transactions
with Affiliates.    Shall not directly or indirectly purchase, acquire or lease any property from, or sell, transfer or lease any property to, pay any management fees to or otherwise deal with, in the ordinary course of
business or otherwise, any Affiliate; provided, however, that any acts or transactions prohibited by this Section may be 

 
 8 

 performed or engaged in after written notice to Lender if upon terms not less favorable to Borrower than if no such
relationship existed. 
  
 6.8.  No Change in Name,
Offices.    Shall not, unless it shall have given 60 days’ advance written notice thereof to Lender, (a) change its name or the location of its chief executive office or other office where books or records are kept, or
(b) use any new trade or fictitious name (provided its use of any trade or fictitious name shall be in compliance with all laws regarding the use of such names), 
  
 6.9.  Subsidiaries.    Shall not acquire, form or dispose of any Subsidiaries or permit any Subsidiary to issue capital
stock except to its parent. 
  
 6.10.  Liquidation, Mergers, Consolidations and
Dispositions of Substantial Assets.    Shall not (i) dissolve or liquidate, or become a party to any merger or consolidation, or acquire by purchase, lease or otherwise, all or a substantial part (more than 10% in the
aggregate during the term hereof) of the assets of any Person, nor (ii) sell, transfer, lease or otherwise dispose of all or a substantial part (more than 10% in the aggregate during the term hereof) of its property or assets, except for the sale of
inventory in the ordinary course of business, nor (iii) sell or dispose of any equity ownership interests in any Subsidiary. 
  
 6.11.  Change of Fiscal Year or Accounting Methods.    Shall not change its fiscal year or its accounting methods. 

 
 9 

  
 7.  Default. 
  
 7.1.  Events of Default.    Each of the following shall constitute an Event of
Default: 
  
 (a)  There shall occur any default by Borrower in the payment, when due, of
any principal of or interest on any Note, any amounts due hereunder or any other Loan Document, or any other Obligations, including under any interest rate agreement; or 
  
 (b)  There shall occur any default by Borrower or any other party to any Loan Document (other than Lender), which default shall not have been
cured 30 days after notice thereof shall have been provided to Borrower, in the performance of any agreement, covenant or obligation contained in this Agreement or such Loan Document or in any interest rate agreement not provided for elsewhere in
this Section 7; or 
  
 (c)  Any representation or warranty made by Borrower or any other
party to any Loan Document (other than Lender) herein or therein or in any certificate or report furnished in connection herewith or therewith shall prove to have been untrue or incorrect in any material respect when made, which default shall not
have been cured 30 days after notice thereof shall have been provided to Borrower; or 
  
 (d)  Any other obligation now or hereafter owed by Borrower or any other party to any Loan Document to Lender shall be in default and not cured within the grace period, if any, provided therein, or Borrower shall be in
default under any obligation in excess of $10,000 owed to any other obligee, which default entitles the obligee to accelerate any such obligations or exercise other remedies with respect thereto, and which default shall not have been cured 30 days
after notice thereof shall have been provided to Borrower; or 
  
 (e)  Borrower or any
other party to any Loan Document shall voluntarily dissolve, liquidate or terminate operations or apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of such Person or of all or of
a substantial part of its assets, admit in writing its inability, or be generally unable, to pay its debts as the debts become due, make a general assignment for the benefit of its creditors, commence a voluntary case under the federal Bankruptcy
Code (as now or hereafter in effect), file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an involuntary case under Bankruptcy Code, or take any corporate action for the purpose of effecting any of the foregoing; or 
  

(f)  An involuntary petition or complaint shall be filed against Borrower or any other party to any Loan Document seeking bankruptcy relief
or reorganization or the appointment of a receiver, custodian, trustee, intervenor or liquidator of Borrower or any other party to any Loan Document, of all or substantially all of its assets, and such petition or complaint shall not have been
dismissed within sixty (60) days of the filing thereof; or an order, 

 
 10 

 order for relief, judgment or decree shall be entered by any court of competent jurisdiction or other competent authority
approving or ordering any of the foregoing actions; or 
  
 (g)  A judgment in excess of
$10,000 shall be rendered against the Borrower or any other party to any Loan Document and shall remain undischarged, undismissed and unstayed for more than thirty days (except judgments validly covered by insurance with a deductible of not more
than $10,000) or there shall occur any levy upon, or attachment, garnishment or other seizure of, any material portion of the assets of Borrower or any other party to any Loan Document by reason of the issuance of any tax levy, judicial attachment
or garnishment or levy of execution, which default shall not have been cured 30 days after notice thereof shall have been provided to Borrower; or 
  
 (h)  Any Guarantor shall repudiate or revoke any Guaranty Agreement, which default shall not have been cured 30 days after notice thereof shall
have been provided to Borrower; or 
  
 (i)  There shall occur any event or condition that
could reasonably be expected to have a Material Adverse Effect, which default shall not have been cured 30 days after notice thereof shall have been provided to Borrower. 
  
 7.2.  Remedies.    If an Event of Default shall have occurred and be continuing, Lender may at its option take any or
all of the following actions: 
  
 (a)  Lender may declare any or all Obligations to be
immediately due and payable (if not earlier demanded), terminate its obligation to make Advances to Borrower, bring suit against Borrower to collect the Obligations, exercise any remedy available to Lender hereunder or at law and take any action or
exercise any remedy provided herein or in any other Loan Document or under applicable law. No remedy shall be exclusive of other remedies or impair the right of Lender to exercise any other remedies. 
  
 (b)  Without waiving any of its other rights hereunder or under any other Loan Document, subject to and
effective upon Lender’s disbursing to Borrower not less than $300,000 as provided in Section 2.1 above, Lender shall have all rights and remedies of a secured party under the Code (and the Uniform Commercial Code of any other applicable
jurisdiction) and such other rights and remedies as may be available hereunder, under other applicable law or pursuant to contract. If requested by Lender, Borrower will promptly assemble the Collateral and make it available to Lender at a place to
be designated by Lender. Borrower agrees that any notice by Lender of the sale or disposition of the Collateral or any other intended action hereunder, whether required by the Code or otherwise, shall constitute reasonable notice to Borrower if the
notice is mailed to Borrower by regular or certified mail, postage prepaid, at least five days before the action to be taken. Borrower shall be liable for any deficiencies in the event the proceeds of the disposition of the Collateral do not satisfy
the Obligations in full. 
  
 (c)  Subject to and effective upon Lender’s disbursing to
Borrower not less than $300,000 as provided in Section 2.1 above, Lender may demand, collect and sue for all amounts owed pursuant to any Accounts, General Intangibles, Chattel Paper, or Instruments 

 
 11 

 included in the Collateral or for Proceeds of any Collateral (either in Borrower’s name or Lender’s name at the
latter’s option), with the right to enforce, compromise, settle or discharge any such amounts. 
  
 (d)  Any notice of sale, disposition or other action by Lender required by law and sent to Borrower at Borrower’s address herein, or at such other address of Borrower as may from time to time be shown on the records of
Lender, at least five (5) days prior to such action, shall constitute reasonable notice to Borrower. Notice shall be deemed given or sent when mailed postage prepaid to Borrower’s address as provided herein. Lender shall be entitled to apply
the proceeds of any sale or other disposition of the Collateral, and the payments received by Lender with respect to any of the Collateral, to Obligations in such order and manner as Lender may determine. Collateral that is subject to rapid declines
in value and is customarily sold in recognized markets may be disposed of by Lender in a recognized market for such collateral without providing notice of sale. Borrower waives any and all requirements that the Lender sell or dispose of all or any
part of the Collateral at any particular time, regardless of whether Borrower has requested such sale or disposition. 
  
 (e)  Subject to and effective upon Lender’s disbursing to Borrower not less than $300,000 as provided in Section 2.1 above, Lender may demand, take possession of, transfer into its own name on the transfer
books and records of Borrower, vote, receive dividends and distributions on, and sell, transfer, assign, and otherwise realize upon the value of any Investment Securities included in the Collateral, all to the extent of any unpaid Obligations and in
compliance with any other applicable agreements and the federal and state securities laws. 
  
 7.3.  Receiver.    In addition to any other remedy available to it, Lender shall have the absolute right, upon the occurrence of an Event of Default, to seek and obtain the appointment of a
receiver to take possession of and operate and/or dispose of the business and assets of Borrower and any costs and expenses incurred by Lender in connection with such receivership shall bear interest at the Default Rate, at Lender’s option.

  
 7.4.  Deposits; Insurance.    After the occurrence of an
Event of Default, Borrower authorizes Lender to collect and apply against the Obligations when due any cash or deposit accounts in its possession, and irrevocably appoints Lender as its attorney-in-fact to endorse any check or draft or take other
action necessary to obtain such funds. 

 
 12 

  
 8.  Security Agreement. 
  
 8.1.  Security Interest.    Subject to and effective upon Lender’s disbursing to
Borrower not less than $300,000 as provided in Section 2.1 above: 
  
 (a)  As security for
the payment and performance of any and all of the Obligations and the performance of all other obligations and covenants of Borrower hereunder and under the other Loan Documents, certain or contingent, now existing or hereafter arising, which are
now, or may at any time or times hereafter be owing by Borrower to Lender, Borrower hereby pledges to Lender and gives Lender a continuing security interest in and general Lien upon and right of set-off against, all right, title and interest of
Borrower in and to the Collateral, whether now owned or hereafter acquired by Borrower and wherever located. 
  
 (b)  Except as herein or by applicable law otherwise expressly provided, Lender shall not be obligated to exercise any degree of care in connection with any Collateral in its possession, to take any steps necessary to
preserve any rights in any of the Collateral or to preserve any rights therein against prior parties, and Borrower agrees to take such steps. In any case Lender shall be deemed to have exercised reasonable care if it shall have taken such steps for
the care and preservation of the Collateral or rights therein as Borrower may have reasonably requested Lender to take and Lender’s omission to take any action not requested by Borrower shall not be deemed a failure to exercise reasonable care.
No segregation or specific allocation by Lender of specified items of Collateral against any liability of Borrower shall waive or affect any security interest in or Lien against other items of Collateral or any of Lender’s options, powers or
rights under this Agreement or otherwise arising. 
  
 (c)  Lender may at any time and from
time to time, with or without notice to Borrower, (i) transfer into the name of Lender or the name of Lender’s nominee any of the Collateral, (ii) notify any Account Debtor or other obligor of any Collateral to make payment thereon direct to
Lender of any amounts due or to become due thereon and (iii) receive and after a Default or Event of Default direct the disposition of any proceeds of any Collateral. 
  
 (d)  Borrower shall enter into any other agreement or arrangement, and shall issue any instructions, reasonably necessary for the protection of
Lender’s interest in the Collateral, including any safekeeping, escrow, lock-up, or other agreement with any holder of the Collateral and any instructions to its stock transfer agent to note, in its transfer books and records, the continuing
security interest of Lender in the Collateral. 
  
 8.2.  Power of
Attorney.    Lender is authorized to file financing statements relating to the Collateral without Borrower’s signature where authorized by law. Borrower authorizes Lender at Borrower’s expense to file any financing
statements relating to the Collateral (without Borrower’s signature thereon) which Lender deems appropriate and Borrower irrevocably appoints Lender as its attorney-in-fact to execute any such financing statements in Borrower’s name and to
perform all other acts which Lender deems appropriate to perfect and to continue perfection of the security interest of Lender. Borrower hereby appoints Lender as Borrower’s attorney-in-fact to endorse, present and collect on behalf of Borrower
and 

 
 13 

 in Borrower’s name any draft, checks or other documents necessary or desirable to collect any amounts which Borrower
may be owed. Borrower hereby also constitutes and appoints Lender the true and lawful attorney of Borrower with full power of substitution to take any and all appropriate action and to execute any and all documents or instruments that may be
necessary or desirable to accomplish the purpose and carry out the terms of this Agreement. Lender is hereby granted a license or other right to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks and advertising matter, or any Property of a similar nature, as it pertains to the Collateral, in advertising for sale and selling any Collateral, and Borrower’s rights under all licenses and all franchise
agreements shall inure to Lender’s benefit. The proceeds realized from the sale or other disposition of any Collateral may be applied, after allowing two (2) Business Days for collection, first to the reasonable costs, expenses and
attorneys’ fees and expenses incurred by Lender for collection and for acquisition, completion, protection, removal, storage, sale and delivering of the Collateral; secondly, to interest due upon any of the Obligations; and thirdly, to the
principal amount of the Obligations. If any deficiency shall arise, Borrower and each Guarantor shall remain jointly and severally liable to Lender therefor. 
  
 8.3.  Entry.    Borrower hereby irrevocably consents to any act by Lender or its agents in entering upon any premises
for the purposes of either (i) inspecting the Collateral or (ii) taking possession of the Collateral and Borrower hereby waives its right to assert against Lender or its agents any claim based upon trespass or any similar cause of action for
entering upon any premises where the Collateral may be located. 
  
 8.4.  Other
Rights.    Borrower authorizes Lender without affecting Borrower’s obligations hereunder or under any other Loan Document from time to time (i) to take from any party and hold additional collateral or guaranties for the
payment of the Obligations or any part thereof, and to exchange, enforce or release such collateral or guaranty of payment of the Obligations or any part thereof and to release or substitute any endorser or guarantor or any party who has given any
security interest in any collateral as security for the payment of the Obligations or any part thereof or any party in any way obligated to pay the Obligations or any part thereof; and (ii) upon the occurrence of any Event of Default to direct the
manner of the disposition of the collateral and the enforcement of any endorsements, guaranties, letters of credit or other security relating to the Obligations or any part thereof as Lender in its sole discretion may determine. 

 
 8.5.  Control.    Borrower will cooperate with Lender in obtaining control
with respect to any Collateral consisting of Deposit Accounts. 
  
 8.6.  Waiver of
Marshaling.    Borrower hereby waives any right it may have to require marshaling of its assets. 
  
 9.  Miscellaneous. 
  
 9.1.  No Waiver, Remedies
Cumulative.    No failure on the part of Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder 

 
 14 

 preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are
cumulative and are in addition to any other remedies provided by law, any Loan Document or otherwise. 
  
 9.2  Notices.    Any notice or other communication hereunder or under the Note to any party hereto or thereto shall be by hand delivery, overnight delivery, facsimile, telegram, telex or
registered or certified mail and unless otherwise provided herein shall be deemed to have been given or made when delivered, or three (3) Business Days after having been deposited in the mails, postage prepaid, addressed to the party at its business
address first set forth above. Any party may change its address for notice by giving notice as provided herein. The facsimile numbers for the parties are as follows: Lender: (856) 854-0151; Borrower: (202) 296-9308. 

 
 9.3  Governing Law.    This Agreement and the Loan Documents shall be
deemed contracts made under the laws of the State of New Jersey and shall be governed by and construed in accordance with the laws of said state (excluding its conflict of laws provisions if such provisions would require application of the laws of
another jurisdiction). 
  
 9.4  Successors and Assigns.    This
Agreement shall be binding upon and shall inure to the benefit of Borrower and Lender, and their respective successors and assigns; provided, that Borrower may not assign any of its rights hereunder without the prior written consent of Lender, and
any such assignment made without such consent will be void. 
  
 9.5  Counterparts.    This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which when taken together shall constitute but one and the same instrument. 
  
 9.6  No Usury.    Regardless of any other provision of this Agreement, the Note or in any other Loan Document, if for any reason the effective interest should exceed the maximum lawful interest,
the effective interest shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would be excessive interest shall be deemed applied to the reduction of the principal balance of the Note and not to the payment
of interest, and (ii) if the Loan evidenced by the Note have been or is thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of the Note or the refunding of excess to be a complete
settlement and acquittance thereof. 
  
 9.7  Powers.    All
powers of attorney granted to Lender are coupled with an interest and are irrevocable. 
  
 9.8  Approvals.    If this Agreement calls for the approval or consent of Lender, such approval or consent may be given or withheld in the discretion of Lender unless otherwise specified herein.

  
 9.9  Waiver of Jury Trial.    To the extent permitted by
law, the parties hereby irrevocably waive any right they may have to a jury trial with regard to any dispute relating to the Loan, the Loan Documents or Lender’s conduct in connection with the Loan. 

 
 15 

  
 9.10  Waiver of Certain
Defenses.    To the fullest extent permitted by applicable law, upon the occurrence of any Event of Default, neither Borrower nor anyone claiming by or under Borrower will claim or seek to take advantage of any law requiring
Lender to attempt to realize upon any collateral or collateral of any surety or guarantor, or any appraisement, evaluation, stay, extension, homestead, redemption or exemption laws now or hereafter in force in order to prevent or hinder the
enforcement of this Agreement. Borrower, for itself and all who may at any time claim through or under Borrower, hereby expressly waives to the fullest extent permitted by law the benefit of all such laws. All rights of Lender and all obligations of
Borrower hereunder shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any
departure from any provision of the Loan Documents, (ii) any exchange, release or non-perfection of any other collateral given as security for the Obligations, or any release or amendment or waiver of or consent to departure from any guaranty for
all or any of the Obligations, or (iii) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower or any third party, other than payment and performance in full of the Obligations. 

 
 9.11  Consent to Venue; Jurisdiction.    BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT SITTING IN, OR WHOSE JURISDICTION ENCOMPASSES, CAMDEN COUNTY, NEW JERSEY OR WITHIN THE BOUNDARIES OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW
JERSEY, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS, AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
UNITED STATES FEDERAL OR STATE COURT. BORROWER HEREBY AGREES THAT SERVICE OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY OR IS REQUIRED TO BE SERVED IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY COURT IN OR OF THE STATE OF NEW JERSEY
(INCLUDING SUCH UNITED STATES DISTRICT COURT) MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO GUARANTOR BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY OVERNIGHT AIR COURIER SERVICE, TO THE BORROWER AT THE ADDRESS REFERRED TO IN
SECTION 9.2 HEREOF. 
  
 9.12  Indirect Means.    Any act which
Borrower is prohibited from doing shall not be done indirectly through a Subsidiary or by any other indirect means. 
  
 9.13  Lender’s Representations and Warranties.    Lender represents and warrants to Borrower that: 
  
 (a)  The Shares have not been registered under the Securities Act of 1933, as amended (the “1933 Act”), or under the securities laws of
any state or other jurisdiction, and the issuance and sale of the Shares to Lender is being made in reliance upon exemptions from 

 
 16 

 registration under Section 4(2) of the 1933 Act and Rule 506 thereunder and comparable provisions of state law.

  
 (b)  Lender is sophisticated by business and investment experience to expect, demand,
and understand the kind of information about Borrower that would ordinarily be set forth in a registration statement covering the Shares. 
  
 (c)  Lender has had access to, and has carefully read, all reports or filings filed by Mega with the Securities and Exchange Commission prior to Lender’s execution and delivery of this
Agreement (collectively, the “SEC Reports”). Borrower has made available for inspection, by Lender, its attorney, accountant, or other professional advisors, all documents, financial statements, records, and books pertaining to Borrower
that Lender has requested from Borrower. Lender and/or its advisors have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of Borrower concerning Borrower, and all such questions have been
answered to the full satisfaction of Lender and its advisors. 
  
 (d)  Lender is acquiring
the Shares for its own account, for investment and not with a view of resale or distribution, except in compliance with the 1933 Act. Lender will not sell or otherwise transfer the Shares without registration under the 1933 Act or applicable state
securities laws or an exemption therefrom. Only Mega may register the Shares, and Borrower has no obligation to do so. Lender has not offered or sold any portion of the Shares nor does it have any present intention of dividing the Shares with others
or of selling, distributing, or otherwise disposing of any portion of the Shares either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstance in
violation of the 1933 Act. 
  
 (e)  Lender recognizes that an investment in the Shares
involves substantial risks, including the risk of a loss of the entire amount of such investment. 
  
 (f)  In the absence of an effective registration statement under the 1933 Act covering the Shares, Lender shall not offer, sell, transfer, or otherwise dispose of the Shares without either first obtaining an opinion of
counsel, reasonably satisfactory to Borrower and its counsel, that the disposition may be made without registration of the Shares in question under the 1933 Act, or first obtain a letter from the Division of Corporation Finance of the Securities and
Exchange Commission (the “Commission”) to the effect that it will recommend no action to the Commission if any of the Shares to be disposed of are so disposed of without registration. 
  

(g)  In the event that Lender, or anyone acting on its behalf who shall be entitled to dispose of the Shares, shall decide to dispose of the
Shares in the absence of an effective registration statement, as a condition to any such disposition, Lender shall first obtain, if required by Borrower or its counsel, an agreement in writing from each person to whom such disposition is proposed to
be made to the same effect as the agreement, understandings, and representations which are made hereby. 
  
 (h)  All legal fees and other expenses incurred in connection with the rendering of opinions or the obtaining of “no-action” letters in accordance with the provisions 

 
 17 

 hereof shall be entirely the obligation and responsibility of the Lender and shall not be the responsibility of Borrower,
and the Lender will promptly pay and discharge the same. 
  
 (i)  All certificates for the
Shares shall be stamped or otherwise endorsed with a legend substantially in the following form: 
  
 THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT), AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT OR AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER AND ITS COUNSEL TO THE EFFECT THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT IS AVAILABLE OR THAT COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE 1933 ACT IS NOT
OTHERWISE REQUIRED. 
  
  
 (j)  Lender shall indemnify
and hold harmless Borrower, and each director, officer and controlling person of Borrower who is or may be a party or is or may be threatened to be made a party to any threatened, pending or contemplated action, suit or proceeding, whether civil,
criminal, administrative or investigative, from and against all losses, liabilities and expenses for which Borrower, or any director, officer or controlling person of Borrower, has not otherwise been reimbursed (including attorney’s fees,
judgments, fines and amounts paid in settlement) actually and reasonably incurred by Borrower or such director, officer or controlling person in connection with such action, suit, or proceeding, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state facts made or alleged to have been made by Lender to Borrower, concerning Lender or its authority to invest or financial position in connection with its purchase of the
Shares, including, without limitation, any such misrepresentation, misstatement, or omission contained in this Agreement, or any other document submitted by the Lender, in connection with its purchase of the Shares. 
  
 (k)  Lender is not subscribing for the Shares as a result of, or pursuant to, any advertisement, article,
notice, or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio or presented at any seminar or meeting. 
  
 9.14  Indemnity By Borrower.    Borrower shall indemnify and hold harmless Lender, and each director, officer and
controlling person of Lender who is or may be a party or is or may be threatened to be made a party to any threatened, pending or contemplated action, suit or proceeding, whether civil, criminal, administrative or investigative, from and against all
losses, liabilities and expenses for which Lender, or any director, officer or controlling person of Lender, has not otherwise been reimbursed (including attorney’s fees, judgments, fines and amounts paid in settlement) actually and reasonably
incurred by Lender or such director, officer or controlling person in connection with such action, suit or proceeding, by reason of or arising 

 
 18 

 from Lender’s furnishing of funds to Borrower under this Agreement, other than for any such loss, liability or
expense arising from Lender’s negligence or willful misconduct. 
  
 9.15  Entire
Agreement.    This Agreement constitutes the entire agreement of the parties as to the subject matter herein contained, superseding any and all prior or contemporaneous negotiations and oral and written agreements,
commitments, and understandings. 

 
 19 

  
 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written. 
  
 
	 LENDER:
  
 MATAH HOLDINGS, LLC
 
	 
	 By:
 	 	 /s/    AL
WELLINGTON        
 

	  	 	 Al Wellington
 Managing
Member
 
	 
	 BORROWER:
  
 MEGA GROUP, INC.
 
	 
	 By:
 	 	 /s/    JOHN H.
BROWN        
 

	  	 	 John H. Brown
 Chairman and
Chief Executive Officer
 
	 
	 By:
 	 	 /s/    JOYCE L. BROWN
        
 

	  	 	 Joyce L. Brown
 Secretary
 
	 
	  	 	 [SEAL]
 
	 
	 SMALL BUSINESS INVESTMENT CORPORATION
OF AMERICA, INC.
 
	 
	 By:
 	 	 /s/    JOHN H.
BROWN          
 

	  	 	 John H. Brown  
 Chairman and Chief Executive Officer
 
	 
	 By:
 	 	 /s/    JOYCE L. BROWN
        
 

	  	 	 Joyce L. Brown
 Secretary
 
	 
	  	 	 [SEAL]
 

 

 
 20 

  
 SCHEDULE OF EXHIBITS 
  
 (If any exhibit is omitted, the information called for therein 
 shall be considered
“None” or “Not Applicable”) 
  
 
	 Exhibit
 
	    	 Section Reference
 
	    	 Title
 

	 
	     1     
 	    	 (“Definitions”)
 	    	 Definition
 
	 
	     2.2  
 	    	 (“Promissory Note”)
 	    	 Form of Promissory Note
 
	 
	     4.12
 	    	 (“Names”)
 	    	 Names
 
	 
	     5.6  
 	    	 (“Financial Information”)
 	    	 Form of No Default Certificate
 

 

  
 Exhibit 1 
  
 DEFINITIONS 
  
 1.1  Defined
Terms: 
  
 “Account” means all “accounts” as defined in the Code from time to time, together
with any guaranties, Letters of Credit and other security therefor. 
  
 “Account Debtor” means an
“account debtor” as defined in the Code from time to time. 
  
 “Affiliate” of a Person means (a)
any Person directly or indirectly owning 5% or more of the voting stock or rights of such named Person or of which the named Person owns 5% or more of such voting stock or rights; (b) any Person controlling, controlled by or under common control
with such named Person; (c) any officer, director or employee of such named Person or any Affiliate of the named Person; and (d) any family member of the named Person or any Affiliate of such named Person. 
  
 “Authority” shall mean any governmental authority, central bank or comparable agency charged with the interpretation or
administration of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof. 
  
 “Business Day” means a weekday on which commercial banks are open for business in Camden County, New Jersey. 
  
 “Chattel Paper” means “chattel paper” as defined in the Code from time to time, together with any guaranties, Letters of Credit and other security
therefor. 
  
 “Code” means the Uniform Commercial Code, as in effect in New Jersey from time to time.

  
 “Collateral” means 2,500,000 issued and outstanding shares of the common stock of Borrower held of
record and beneficially by John H. Brown and Joyce L. Brown, officers and directors of Borrower and Guarantors of Borrower’s Obligations hereunder, all certificates and other records and evidence thereof, and all replacements, substitutions,
profits and cash and non-cash Proceeds of any of the foregoing (including insurance proceeds payable by reason of loss or damage thereto) in any form and wherever located. Collateral shall include all written or electronically recorded books and
records relating to any such Collateral and other rights relating thereto. 
  
 “Debt” means all liabilities
of a Person as determined under GAAP and all obligations which such Person has guaranteed or endorsed or is otherwise secondarily or jointly liable for, and shall include, without limitation (a) all obligations for borrowed money or purchased
assets, (b) obligations secured by assets whether or not any personal liability exists, (c) the capitalized amount of any capital or finance lease obligations, and any operating lease or rental obligations, whether on or off-balance sheet, (d) the
unfunded portion of pension or benefit plans or other similar liabilities, (e) obligations as a general partner, (f) contingent obligations pursuant to 

 guaranties, endorsements, letters of credit and other secondary liabilities, and (g) obligations for deposits. 
  
 “Default” or “default” means any of the events specified in Section 7.1, whether or not any requirement in such
Section for the giving of notice or the lapse of time or the happening of any further condition, event or act shall have been satisfied. 
  
 “Default Rate” means the “default rate” of interest per annum specified in the Note. 
  
 “Deposit Account” means “deposit account” as defined in the Code from time to time. 
  
 “Document” means “document” as defined in the Code from time to time. 
  
 “Event of Default” means any event specified as such in Section 7.1 hereof, provided that there shall have been satisfied any requirement in connection with such event for the giving of notice or the lapse of time, or both.

  
 “Fixtures” means “fixtures” as defined in the Code from time to time. 

 
 “GAAP” means generally accepted accounting principles as in effect in the United States from time to time.

  
 “General Intangibles” means “general intangibles” as defined in the Code from time to time,
including “payment intangibles” and “software” (each as defined in the Code from time to time). 
  
 “Guarantor” means any Person now or hereafter guaranteeing, endorsing or otherwise becoming liable for any Obligations. 
  
 “Guaranty Agreement” means any guaranty instrument now or hereafter executed and delivered by any Guarantor to Lender, as it may be modified. 
  
 “Instrument” means “instrument” as defined in the Code from time to time. 
  
 “Lien” means any mortgage, pledge, statutory lien or other lien arising by operation of law, security interest, trust
arrangement, security deed, financing lease, collateral assignment or other encumbrance, conditional sale or title retention agreement, or any other interest in property designed to secure the repayment of Obligations, whether arising by agreement
or under any statute or law or otherwise. 
  
 “Loan Documents” means this Agreement, the Note, each
Guaranty Agreement and all other documents and instruments now or hereafter evidencing, describing, guaranteeing or securing the Obligations contemplated hereby or delivered in connection herewith, as they may be modified. 
  
 “Material Adverse Effect” means any (i) material adverse effect upon the validity, performance or enforceability of any of the
Loan Documents or any of the transactions contemplated hereby or thereby, (ii) material adverse effect upon the properties, business, prospects or condition 

 
 2 

 (financial or otherwise) of Borrower, any Subsidiary and/or any other Person obligated under any of the Loan Documents, or (iii) material
adverse effect upon the ability of Borrower, any Subsidiary or any other Person to fulfill any obligation under any of the Loan Documents. 
  
 “Obligations” means all obligations now or hereafter owed to Lender by Borrower, whether related or unrelated to the Loan, including, without limitation, amounts owed or to be owed under the terms of the Loan
Documents, or arising out of the transactions described therein, including, without limitation, the Loan, sums advanced to pay overdrafts on any account maintained by Borrower with Lender, all fees, all costs of collection, attorneys’ fees and
expenses of or advances by Lender which Lender pays or incurs in discharge of obligations of Borrower, whether such amounts are now due or hereafter become due, direct or indirect and whether such amounts due are from time to time reduced or
entirely extinguished and thereafter re-incurred. 
  
 “Permitted Debt” means (a) the Obligations; (b) Debt
for money borrowed not exceeding $10,000 in aggregate principal amount at any time outstanding for Borrower and all Subsidiaries; (c) Debt not incurred through the borrowing of money; (d) other Debt payable to suppliers and other trade creditors in
the ordinary course of business on ordinary and customary trade terms and which is not past due; (e) Debt of any Subsidiary to Borrower or another Subsidiary; and (f) endorsement of checks for collection in the ordinary course of business.

  
 “Permitted Liens” means (a) Liens securing the Obligations; (b) Liens for taxes and other statutory
Liens, landlord’s Liens and similar Liens arising out of operation of law so long as the obligations secured thereby are not past due or are being contested and the proceedings contesting such obligations have the effect of preventing the
forfeiture or sale of the property subject to such Lien; (c) Liens for deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, social security and similar laws; (d) attachment, judgment
and other similar non-tax Liens arising in connection with court proceedings but only if and for so long as (i) the execution or enforcement of such Liens is and continues to be effectively stayed and bonded on appeal, (ii) the validity and/or
amount of the claims secured thereby are being actively contested in good faith by appropriate legal proceedings and (iii) such Liens do not, in the aggregate, materially detract from the value of the assets of the Person whose assets are subject to
such Lien or materially impair the use thereof in the operation of such Person’s business; (e) Liens securing Permitted Debt incurred solely for the purpose of financing the acquisition of equipment, provided that such Lien does not secure more
than the purchase price of such equipment and does not encumber property other than the purchased property; and (f) Liens in the nature of easements or other similar encumbrances or restrictions (not securing Debt) on the use of Borrower’s
Properties, so long as such Liens do not materially impair Borrower’s use of such Property. 
  
 “Person” means any natural person, corporation, unincorporated organization, trust, joint-stock company, joint venture, association, company, limited or general partnership, limited liability company, any government or any
agency or political subdivision of any government, or any other entity or organization. 
  
 “Proceeds”
means “proceeds” as defined in the Code from time to time. 

 
 3 

  
 “Security Agreement” means this Agreement as it relates to a security
interest in the Collateral and any other mortgage, security agreement or similar instrument now or hereafter executed by Borrower or other Person granting Lender a security interest in any Collateral to secure the Obligations (including any arising
under any Interest Rate Agreement). 
  
 “Solvent” means, as to any Person, that such Person has capital
sufficient to carry on its business and transactions in which it is currently engaged and all business and transactions in which it is about to engage, is able to pay its debts as they mature, and has assets having a fair valuation greater than its
liabilities, at fair valuation. 
  
 “Subordinated Debt” means Debt of Borrower that is subordinated to the
Obligations pursuant to a written agreement in form and substance satisfactory to Lender in its sole discretion. 
  
 “Subsidiary” means any corporation, partnership or other entity in which Borrower, directly or indirectly, owns more than fifty percent (50%) of the stock, capital or income interests, or other beneficial interests, or
which is effectively controlled by such Person. 
  
 1.2.  Financial
Terms.    All financial terms used herein shall have the meanings assigned to them under GAAP unless another meaning shall be specified. 

 
 4 

  
 Exhibit 2.12 
  
 Form of Promissory Note 
  
 PROMISSORY
NOTE 
  
 
	 [Principal Amount of Advance]
 	 	 [Date]
 

 
  
 MEGA GROUP, INC., a New York corporation, and SMALL BUSINESS
INVESTMENT CORPORATION OF AMERICA, INC., an Oregon corporation, both with offices at 1730 Rhode Island Avenue, N.W., Washington, D.C. 20036 (jointly and severally, “Borrower”) 
  
 MATAH HOLDINGS, LLC, a New Jersey limited liability company, 215 West Clinton Avenue, Suite 4, Oaklyn, NJ 08107 (“Lender”) 
  
 For value received, Borrower promises to pay to the order of Lender, in lawful money of the United States of America, at its office
indicated above or wherever else Lender may specify, the sum of [Principal Amount of Advance] or such sum as may be outstanding from time to time, with interest on the unpaid principal balance at the rate and on the terms provided in
this Promissory Note (including all renewals, extensions or modifications hereof, this “Note”). 
  
 This
Note is subject to the terms and conditions of that certain Loan and Security Agreement between Lender and Borrower dated as of July 15, 2002, as the same may be modified and amended from time to time (the “Loan Agreement”). All
capitalized terms not otherwise defined herein shall have such meaning as assigned to them in the Loan Agreement. 
  
 INTEREST RATE TO BE APPLIED.    Interest Rate.    Interest shall accrue on the unpaid principal balance of this Note from the date hereof at a fixed rate equal to twelve percent
(12.00%) per annum (the “Fixed Interest Rate”). Default Rate. In addition to all other rights contained in this Note, if a Default in the payment of principal or interest under this Note shall occur and be continuing, interest on
the unpaid principal balance of this Note shall accrue at the Fixed Interest Rate plus 4% (“Default Rate”). The Default Rate shall also apply from acceleration until the Obligations or any judgment thereon is paid in full, except as
otherwise required by law. 
  
 INTEREST COMPUTATION.    Interest shall be computed on the
basis of a 360-day year for the actual number of days in the interest period (“Actual/360 Computation”). The Actual/360 Computation determines the annual effective interest yield by taking the stated (nominal) interest rate for a
year’s period and then dividing said rate by 360 to determine the daily periodic rate to be applied for each day in the interest period. Application of the Actual/360 Computation produces an annualized effective interest rate exceeding that of
the nominal rate. 
  
 REPAYMENT TERMS.    The entire unpaid principal amount
hereof, together with accrued and unpaid interest thereon and all other amounts payable hereunder, shall be due and payable on 

  
 [180 days after the execution of the Loan Agreement and the initial Advance] (the
“Maturity Date”). 
  
 PREPAYMENT TERMS.    The Loan may be prepaid, in whole or
in part, at any time and from time to time without penalty. 
  
 RESCISSION OF
PAYMENTS.    If any payment received by Lender under this Note or the other Loan Documents is rescinded, avoided or for any reason returned by Lender because of any adverse claim or threatened action, the returned payment
shall remain payable as an obligation of all Persons liable under this Note or the other Loan Documents as though such payment had not been made. 
  
 ATTORNEYS’ FEES AND OTHER COLLECTION COSTS.    Borrower shall pay all of Lender’s reasonable expenses incurred to enforce or collect any of the Obligations,
including, without limitation, reasonable arbitration, paralegals’, attorneys’ and experts’ fees and expenses, whether incurred without the commencement of a suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding. 
  
 USURY.    Regardless of any other provision of
this Note or other Loan Documents, if for any reason the effective interest should exceed the maximum lawful interest, the effective interest shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would be
excessive interest shall be deemed applied to the reduction of the principal balance of this Note and not to the payment of interest, and (ii) if the loan evidenced by this Note has been or is thereby paid in full, the excess shall be returned to
the party paying same, such application to the principal balance of this Note or the refunding of excess to be a complete settlement and acquittance thereof. 
  
 EVENT OF DEFAULT.    An “Event of Default” shall exist if any one or more of the following events shall occur (individually, an “Event of Default,” and
collectively, “Events of Default”): Non-Payment; Non-Performance. The failure of timely payment or performance of the Obligations under this Note. Cross-Default. The occurrence of an Event of Default under any of the other
Loan Documents. 
  
 REMEDIES UPON EVENT OF DEFAULT.    Upon the occurrence of an Event of
Default, Lender may at any time thereafter, take the following actions: Acceleration Upon Event of Default. Accelerate the maturity of this Note and all other Obligations, and all of the Obligations shall be immediately due and payable.
Cumulative. Exercise any rights and remedies as provided under this Note and other Loan Documents, or as provided by law or equity. 
  
 WAIVERS AND AMENDMENTS.    No waivers, amendments or modifications of this Note and other Loan Documents shall be valid unless in writing and signed by an officer of Lender. No waiver by Lender of
any Default or Event of Default shall operate as a waiver of any other Default or Event of Default or the same Default or Event of Default on a future occasion. Neither the failure nor any delay on the part of Lender in exercising any right, power,
or remedy under this Note and other Loan Documents shall operate as a waiver thereof, nor shall a single or 

 
 2 

 partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 

 
 Borrower or any other Person liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice
of intention to accelerate maturity, notice of acceleration of maturity, notice of sale and all other notices of any kind. Further, each agrees that Lender may extend, modify or renew this Note or make a novation of the loan evidenced by this Note
for any period and grant any releases, compromises or indulgences with respect to any collateral securing this Note, or with respect to Borrower or any Person liable under this Note or other Loan Documents, all without notice to or consent of
Borrower or any Person who may be liable under this Note or other Loan Documents and without affecting the liability of Borrower or any Person who may be liable under this Note or other Loan Documents. 
  
 MISCELLANEOUS PROVISIONS.    Assignment.    This Note and other Loan Documents shall inure
to the benefit of and be binding upon the parties and their respective heirs, legal representatives, successors and assigns. Lender’s interests in and rights under this Note and other Loan Documents are freely assignable, in whole or in part,
by Lender. Borrower shall not assign its rights and interest hereunder without the prior written consent of Lender, and any attempt by Borrower to assign without Lender’s prior written consent is null and void. Any assignment shall not release
Borrower from the Obligations. Applicable Law; Conflict Between Documents. This Note and other Loan Documents shall be governed by and construed under the laws of the state where Lender first shown above is located as shown in the heading of
this Note without regard to that state’s conflict of laws principles. If the terms of this Note should conflict with the terms of the Loan Documents, the terms of this Note shall control. Severability. If any provision of this Note or of
the other Loan Documents shall be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Note or other such document. Plural; Captions. All references in the Loan Documents to Borrower, Guarantor, Person, document or other nouns of reference mean both the singular and plural form, as the case may be. The
captions contained in the Loan Documents are inserted for convenience only and shall not affect the meaning or interpretation of the Loan Documents. Binding Contract. Borrower by execution of and Lender by acceptance of this Note agree that
each party is bound to all terms and provisions of this Note. Entirety. This Note and the other Loan Documents delivered in connection herewith and therewith embody the entire agreement between the parties and supersede all prior agreements
and understandings relating to the subject matter hereof and thereof. Posting of Payments. Unless otherwise permitted by Lender, any repayments of this Note, other than immediately available U.S. currency, will not be credited to the
outstanding loan balance until Lender receives collected funds. Fees and Taxes. Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on this transaction whether assessed at closing or arising from time to
time, together with any interest and/or penalties relating thereto. Business Purpose. Borrower represents that the loan evidenced hereby is being obtained for business purposes. 

 
 3 

  
 PLACE OF EXECUTION AND DELIVERY. 
 Borrower hereby certifies that this Note and the other Loan Documents 
 were executed in the State of New
Jersey and delivered to the 
 Lender in the State of New Jersey.  
  
 IN WITNESS WHEREOF, Borrower, as of the day and year first above written, has caused this Note to be executed under seal. 
  
 
	 MEGA GROUP, INC.
 
	 
	 By:
 	 	 

	  	 	 John H. Brown
 Chairman and
Chief Executive Officer
 
	 
	 Attest:
 	 	 Joyce L. Brown        
 
	 
	 Title:
 	 	                 
Secretary
 
	 
	  	 	 [SEAL]
 
	 
	 Taxpayer Identification Number:
 
	 
	 

	 
	 SMALL BUSINESS INVESTMENT
 CORPORATION OF AMERICA, INC.
 
	 
	 By:
 	 	 

	  	 	 John H. Brown
 Chairman and
Chief Executive Officer
 
	 
	 Attest:
 	 	 Joyce L. Brown        
 
	 
	 Title:
 	 	                 
Secretary
 
	 
	  	 	 [SEAL]
 
	 
	 Taxpayer Identification Number:
 
	 
	 

 

 
 4 

  
 Exhibit 4.12 
  
 Names 
  
 None.

  

  
 Exhibit 5.6 
  
 Form of No Default Certificate 
  
 MEGA
GROUP, INC. 
 1730 Rhode Island Avenue, N.W. 
 Washington, DC
20036 
  
 and 
  
 SMALL BUSINESS INVESTMENT CORPORATION OF AMERICA, INC. 
 1730 Rhode Island Avenue, N.W. 

Washington, DC 20036 
  
 [Date]

  
 Matah Holdings, L.L.C. 
 215 West Clinton Avenue, Suite 4 
 Oaklyn, NJ 08107 
  
 Re:    Loan and Security Agreement dated July 15, 2002 
          Between Mega Group, Inc. and Small Business Investment Corporation of 
          America, Inc., Borrower, and Matah Holdings, L.L.C., Lender 
  
 Gentlemen: 
  
 In accordance with Section 5.6(c) of the captioned
agreement, I hereby certify that no Default or Event of Default, as defined in the agreement, currently exists. 
  
 
	 Sincerely yours,
 
	 
	 

	 Chief Financial Officer
 Mega Group, Inc. and
 Small Business Investment Corporation of
 America, Inc.
 

 

  
 AMENDMENT TO LOAN AND SECURITY AGREEMENT 
  
 AMENDMENT (this “Amendment”), dated as of July 18, 2002, to that certain LOAN AND SECURITY AGREEMENT (the “Agreement”)
dated July 15, 2002, between MEGA GROUP, INC., a New York corporation (“Mega”), and SMALL BUSINESS INVESTMENT CORPORATION OF AMERICA, INC., an Oregon corporation (“SBICOA”), both with offices at 1730 Rhode Island Avenue, N.W.,
Washington, D.C. 20036 (Mega and SBICOA are referred to herein collectively as “Borrower”), and MATAH HOLDINGS, LLC, a New Jersey limited liability company, with offices at 215 West Clinton Avenue, Suite 4, Oaklyn, NJ 08107
(“Lender”). 
  
 The parties agree as follows: 
  
 1.  Notwithstanding any statement in any Loan Document to the contrary, Lender’s first Advance under the Agreement and Term Loan was made,
and Borrower’s Note evidencing the first Advance was executed and delivered, on July 18, 2002. Accordingly, interest on the first Advance shall begin to accrue as of July 18, 2002, and Borrower’s Term Note dated July 15, 2002, and each
succeeding Term Note issued under the Agreement, shall be due (except as provided in Section 2.3(b) of the Agreement) 180 days after July 18, 2002. The parties have agreed that this paragraph shall be attached to the Borrower’s Note dated July
15, 2002 as an allonge. 
  
 2.  The second Advance under the Agreement and Term Loan shall
be disbursed not more than ten (10) days after July 18, 2002, and the third Advance under the Agreement and Term Loan shall be disbursed not more than thirty (30) days after July 18, 2002. 
  
 3.  All capitalized terms not otherwise defined herein shall have such meaning as assigned to them in the Agreement. 

  
 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written. 
  
 
	 LENDER:
  
 MATAH HOLDINGS, LLC
 
	 
	 By:
 	 	 /s/    AL
WELLINGTON        
 

	  	 	 Al Wellington
 Managing
Member
 

 
 
	 
	 BORROWER:
  
 MEGA GROUP, INC.
 
	 
	 By:
 	 	 /s/    JOHN H.
BROWN        
 

	  	 	 John H. Brown
 Chairman and
Chief Executive Officer
 
	 
	 Attest:
 	 	 /s/    JOYCE L.
BROWN        
 

	  	 	 Joyce L. Brown
 Secretary
 
	 
	  	 	 [SEAL]
 
	 
	 SMALL BUSINESS INVESTMENT CORPORATION
OF AMERICA, INC.
 
	 
	 By:
 	 	 /s/    JOHN H.
BROWN        
 

	  	 	 John H. Brown
 Chairman and
Chief Executive Officer
 
	 
	 Attest:
 	 	 /s/    JOYCE L.
BROWN        
 

	  	 	 Joyce L. Brown
 Secretary
 
	 
	  	 	 [SEAL]
 

 

 
 -2- 

  
 ALLONGE 
  
 Notwithstanding any statement in any Loan Document to the contrary, Lender’s first Advance under the Agreement and Term Loan was made, and Borrower’s Note
evidencing the first Advance was executed and delivered, on July 18, 2002. Accordingly, interest on the first Advance shall begin to accrue as of July 18, 2002, and Borrower’s Term Note dated July 15, 2002, and each succeeding Term Note issued
under the Agreement, shall be due (except as provided in Section 2.3(b) of the Agreement) 180 days after July 18, 2002. The parties have agreed that this paragraph shall be attached to the Borrower’s Note dated July 15, 2002 as an allonge.THESE  SECURITIES HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND HAVE BEEN TAKEN
FOR  INVESTMENT  PURPOSES  ONLY AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION
WITH ANY  DISTRIBUTION  THEREOF.  THESE  SECURITIES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,  IS IN EFFECT  WITH  RESPECT  TO SUCH  SECURITIES  OR THE  COMPANY  HAS
RECEIVED AN OPINION IN FORM AND SUBSTANCE  SATISFACTORY TO THE COMPANY PROVIDING
THAT AN EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS  OF THE SECURITIES ACT OF
1933, AS AMENDED, IS AVAILABLE.

                            ALTAIR INTERNATIONAL INC.

                          COMMON SHARE PURCHASE WARRANT

_______ Series 2002D Warrants                    Warrant Certificate No. 2002D-_

                  Void after 5:00 p.m., Mountain Standard Time
            on ______, 2007 or on such earlier date specified herein

                            ALTAIR INTERNATIONAL INC.
                    (Incorporated under the laws of Ontario)

This Series 2002D  Warrant  Certificate  ("Warrant  Certificate")  is to certify
that, for value  received,  _____________  or registered  assigns (the "Holder")
shall have the right to purchase  from Altair  International  Inc.  (hereinafter
called the "Corporation") one fully paid and non-assessable  Common Share of the
Corporation (a "Common  Share") for each Series 2002D Warrant  (individually,  a
"Warrant")  represented  by this  Warrant  Certificate  during  the time  period
commencing  on the date this  Warrant is executed by the Company and  continuing
until 5:00 p.m. (Mountain Standard time) on the earlier of (i) ______, 2007, and
(ii) the date 30 days following the fifth day (whether or not  consecutive)  the
closing  price of the Common  Shares on the Nasdaq  National  Market (or, if the
Company is not listed  thereon,  its principal U.S.  trading market at the time)
equals or exceeds U.S.  $4.50 (the "Expiry  Time").  The exercise  price for the
purchase of each such Common Share shall be U.S.  $1.50 per share (the "Exercise
Price").  The number of Common  Shares to be received  upon the exercise of each
Warrant and the Exercise  Price may be adjusted from time to time as hereinafter
set forth.

The Warrants shall be subject to the following terms and conditions:

1.       For the purposes of this Warrant, the term "Common Shares" means common
         shares without  nominal or par value in the capital of the  Corporation
         as  constituted  on the date  hereof;  provided  that in the event of a
         change,   subdivision,    redivision,    reduction,    combination   or
         consolidation  thereof or any other  adjustment under clause 10 hereof,
         or successive  such  changes,  subdivisions,  redivisions,  reductions,
         combinations,  consolidations or other adjustments, then subject to the
         adjustments, if any, having been made in accordance with the provisions
         of this Warrant Certificate,  "Common Shares" shall thereafter mean the
         shares,  other securities or other property resulting from such change,
         subdivision,  redivision,  reduction,  combination or  consolidation or
         other adjustment.

<PAGE>

2.       This  Warrant  Certificate  shall  be  signed  by  an  officer  of  the
         Corporation  holding office at the time of signing, or any successor or
         replacement person and notwithstanding any change in any of the persons
         holding  said  offices  between  the  time of  actual  signing  and the
         delivery  of the  Warrant  Certificate  and  notwithstanding  that such
         officer signing may not have held office at the date of the delivery of
         the Warrant  Certificate,  the Warrant  Certificate  so signed shall be
         valid and binding upon the Corporation.

3.       All rights  under any of the  Warrants in respect of which the right of
         subscription  and purchase  therein  provided for shall not theretofore
         have been exercised  shall wholly cease and determine and such Warrants
         shall be wholly void and of no valid or binding effect after the Expiry
         Time.

4.       The right to purchase  Common Shares  pursuant to the Warrants may only
         be exercised by the Holder at or before the Expiry Time by:

         (a)      duly completing and executing a Subscription  Form in the form
                  attached hereto, in the manner therein indicated; and

         (b)      surrendering  this Warrant  Certificate and the duly completed
                  and  executed  Subscription  Form  to the  Corporation  at the
                  address  specified in clause 22 below together with payment of
                  the purchase price for the Common Shares subscribed for in the
                  form of cash or a certified  cheque payable to the Corporation
                  in an  amount  equal to the  then  applicable  Exercise  Price
                  multiplied by the number of Common Shares subscribed for.

 5.      Upon receipt of the Subscription  Form, this Warrant  Certificate,  and
         payment as aforesaid,  the Corporation  shall cause to be issued to the
         Holder  the number of Common  Shares to be issued and the Holder  shall
         become a  shareholder  of the  Corporation  in respect  of such  Common
         Shares,  effective as of the date of receipt by the Corporation of such
         Subscription  Form,  Warrant  Certificate,  and  payment  and  shall be
         entitled to delivery of a certificate or  certificates  evidencing such
         shares. The Corporation shall cause such certificate or certificates to
         be mailed to the Holder at the address or  addresses  specified in such
         Subscription  Form within ten (10)  business  days of such  receipt and
         payment as herein provided or, if so instructed by the Holder, held for
         pick-up  by the Holder at the  principal  office of the  registrar  and
         transfer agent of the Common Shares, Equity Transfer Services Inc. (the
         "Transfer Agent").

6.       No fractional shares or stock  representing  fractional shares shall be
         issued upon the  exercise  of any  Warrant.  In lieu of any  fractional
         shares which would otherwise be issuable,  the Corporation shall either
         pay cash equal to the product of such  fraction  multiplied by the fair
         market value of one share of Common  Stock on the date of exercise,  as
         determined in good faith by the  Corporation's  Board of Directors,  or
         issue  the  next  largest   whole  number  of  Common   Shares  at  the
         Corporation's option.

7.       The Warrants may not be exercised  unless at the time of exercise (i) a
         registration statement registering the Common Shares issuable upon such
         exercise is effective under the Securities Act of 1933, as amended (the
         "1933 Act"),  or the  transaction in which such shares are to be issued
         is exempted from the  application of the  registration  requirements of
         the 1933 Act, and (ii) the Common Shares  issuable upon exercise of the
         Warrants  have  been  registered  or  qualified  under  any  applicable
         Canadian,  provincial,  state  securities  laws  or an  exemption  from
         registration or  qualification is available under such laws. The Common
         Shares  issuable  upon  exercise  of  this  Warrant  are  and  will  be
         "restricted  securities"  under the 1933 Act inasmuch as they are being
         acquired from the  Corporation in a transaction  not involving a public
         offering,  and  that,  under  the 1933 Act and  applicable  regulations
         thereunder,  such securities may be resold without  registration  under
         the  1933  Act  only  in  certain  limited   circumstances.   Unless  a

                                      -2-
<PAGE>

         registration  statement  registering  the Common  Shares  issuable upon
         exercise  of any  Warrant is  effective  under the 1933 Act at the time
         such Common Shares are issued, the certificates  evidencing such Common
         Shares shall bear the legend set forth below,  together  with any other
         legends  required by the laws of the  Province of Ontario and any other
         state or province with jurisdiction:

                  THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED,  OR QUALIFIED UNDER  APPLICABLE STATE
                  SECURITIES  LAWS AND HAVE BEEN TAKEN FOR  INVESTMENT  PURPOSES
                  ONLY AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY
                  DISTRIBUTION  THEREOF.  THESE  SECURITIES  MAY  NOT BE SOLD OR
                  OTHERWISE TRANSFERRED UNLESS A REGISTRATION STAEMENT UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED,  IS IN EFFECT WITH RESPECT
                  TO SUCH  SECURITIES  OR THE COMPANY HAS RECEIVED AN OPINION IN
                  FORM AND SUBSTANCE  SATISFACTORY TO THE COMPANY PROVIDING THAT
                  AN  EXEMPTION  FROM  THE  REGISTRATION   REQUIREMENTS  OF  THE
                  SECURITIES ACT OF 1933, AS AMENDED, IS AVAILABLE.

         The legend set forth above shall be removed by the Corporation from any
         certificate  evidencing the Common Shares issuable upon exercise of the
         Warrants only (i) upon receipt by the Corporation of an opinion in form
         and substance  satisfactory to the Corporation  that such legend may be
         removed pursuant to Rule 144 promulgated  under the 1933 Act, (ii) upon
         confirmation  that a  registration  statement  under the 1933 Act is at
         that time in effect with  respect to such  Common  Shares and that such
         transfer  will  not  jeopardize   the  exemption  or  exemptions   from
         registration  pursuant  to which  the  respective  Common  Shares  were
         issued.

8.       The holding of a Warrant shall not  constitute the Holder a shareholder
         of the  Corporation nor entitle him to any right or interest in respect
         thereof except as herein expressly provided.

9.       The Corporation  covenants and agrees that until the Expiry Time, while
         any of the Warrants  shall be  outstanding,  it shall reserve and there
         shall remain unissued out of its authorized capital a sufficient number
         of Common Shares to satisfy the right of purchase herein  provided,  as
         such right of purchase  may be  adjusted  pursuant to clauses 10 and 11
         hereof.  All Common  Shares  which shall be issued upon the exercise of
         the right to purchase herein provided for, upon payment therefor of the
         amount  at  which  such  Common  Shares  may at the  time be  purchased
         pursuant to the  provisions  hereof,  shall be issued as fully paid and
         non-assessable  shares and the holders  thereof  shall not be liable to
         the Corporation or its creditors in respect thereof.

10.      (a)      If and whenever at any time after the date hereof and prior to
                  the Expiry Time the Corporation shall (i) subdivide,  redivide
                  or change its then  outstanding  Common  Shares into a greater
                  number of Common Shares,  (ii) reduce,  combine or consolidate
                  its then  outstanding  Common  Shares into a lesser  number of
                  Common  Shares or (iii)  issue  Common  Shares (or  securities
                  exchangeable  for or  convertible  into Common  Shares) to the
                  holders of all or  substantially  all of its then  outstanding
                  Common Shares by way of a stock dividend or other distribution
                  (any  of  such   events   herein   called  a   "Common   Share
                  Reorganization"),  then the  Exercise  Price shall be adjusted
                  effective  immediately  after the  effective  date of any such
                  event in (i) or (ii)  above or the  record  date at which  the
                  holders of Common Shares are determined for the purpose of any
                  such dividend or  distribution in (iii) above, as the case may
                  be,  by  multiplying  the  Exercise  Price in  effect  on such
                  effective  date or  record  date,  as the  case  may be,  by a
                  fraction, the numerator of which shall be the number of Common

                                      -3-
<PAGE>

                  Shares  outstanding  on such effective date or record date, as
                  the case may be,  before  giving  effect to such Common  Share
                  Reorganization  and the  denominator  of  which  shall  be the
                  number of Common Shares  outstanding  immediately after giving
                  effect to such Common Share Reorganization  including,  in the
                  case where  securities  exchangeable  for or convertible  into
                  Common  Shares are  distributed,  the number of Common  Shares
                  that would be  outstanding if such  securities  were exchanged
                  for or converted into Common Shares.

         (b)      If and whenever at any time after the date hereof and prior to
                  the Expiry Time, the Corporation shall distribute any class of
                  shares or rights,  options  or  warrants  or other  securities
                  (other  than  those   referred  to  in  clause  10(a)  above),
                  evidences  of   indebtedness   or  property   (excluding  cash
                  dividends  paid in the  ordinary  course) to holders of all or
                  substantially all of its then outstanding  Common Shares,  the
                  number of Common Shares to be issued by the Corporation  under
                  this  Warrant  shall,  at the time of exercise of the right of
                  subscription and purchase under this Warrant  Certificate,  be
                  appropriately  adjusted and the Holder shall receive,  in lieu
                  of the  number of the  Common  Shares in  respect of which the
                  right to  purchase  is then  being  exercised,  the  aggregate
                  number of Common  Shares or other  securities or property that
                  the Holder would have been  entitled to receive as a result of
                  such  event,  if, on the record date  thereof,  the Holder had
                  been the  registered  holder of the number of Common Shares to
                  which the Holder was theretofore entitled upon the exercise of
                  the rights of the Holder hereunder.

         (c)      If and whenever at any time after the date hereof and prior to
                  the  Expiry  Time  there is a  capital  reorganization  of the
                  Corporation  or a  reclassification  or  other  change  in the
                  Common Shares (other than a Common Share  Reorganization) or a
                  consolidation  or merger or  amalgamation  of the  Corporation
                  with or into any other corporation or other entity (other than
                  a consolidation,  merger or amalgamation which does not result
                  in any  reclassification of the outstanding Common Shares or a
                  change of the  Common  Shares  into  other  securities),  or a
                  transfer  of all  or  substantially  all of the  Corporation's
                  assets to  another  corporation  or other  entity in which the
                  holders of Common Shares are entitled to receive shares, other
                  securities or other  property (any of such events being called
                  a  "Capital  Reorganization"),  the  Holder,  where he has not
                  exercised the right of  subscription  and purchase  under this
                  Warrant  Certificate  prior  to the  effective  date  of  such
                  Capital Reorganization, shall be entitled to receive and shall
                  accept,  upon the exercise of such right,  on such date or any
                  time thereafter,  for the same aggregate consideration in lieu
                  of the  number  of Common  shares to which he was  theretofore
                  entitled to subscribe for and purchase,  the aggregate  number
                  of shares or other  securities  or  property  which the Holder
                  would  have  been  entitled  to  receive  as a result  of such
                  Capital  Reorganization if, on the effective date thereof,  he
                  had been the registered  holder of the number of Common Shares
                  to which he was  theretofore  entitled  to  subscribe  for and
                  purchase.

         (d)      If and whenever at any time after the date hereof and prior to
                  the Expiry  Time,  any of the events set out in clause  10(a),
                  (b) or (c)  shall  occur  and the  occurrence  of  such  event
                  results in an adjustment of the Exercise Price pursuant to the
                  provisions of this clause 10, then the number of Common Shares
                  purchaseable  pursuant  to  this  Warrant  shall  be  adjusted
                  contemporaneously with the adjustment of the Exercise Price by
                  multiplying   the  number  of  Common  Shares  then  otherwise
                  purchaseable  on  the  exercise  thereof  by a  fraction,  the
                  numerator  of which  shall  be the  Exercise  Price in  effect
                  immediately  prior to the  adjustment  and the  denominator of
                  which  shall  be  the  Exercise  Price   resulting  from  such
                  adjustment.

                                      -4-
<PAGE>

         (e)      If the  Corporation  takes any  action  affecting  its  Common
                  Shares to which the foregoing provisions of this clause 10, in
                  the  opinion  of the board of  directors  of the  Corporation,
                  acting  in good  faith,  are not  strictly  applicable,  or if
                  strictly  applicable would not fairly adjust the rights of the
                  Holder  against  dilution  in  accordance  with the intent and
                  purposes  hereof,  or would  otherwise  materially  affect the
                  rights  of the  Holder  hereunder,  then the  Corporation  may
                  execute  and  deliver  to  the  Holder  an  amendment   hereto
                  providing  for  an  adjustment  in  the  application  of  such
                  provisions  so as to adjust such rights as  aforesaid  in such
                  manner  as the  board  of  directors  of the  Corporation  may
                  determine to be equitable in the circumstances, acting in good
                  faith.  The  failure  of the  taking of action by the board of
                  directors of the  Corporation to so provide for any adjustment
                  on or prior to the effective  date of any action or occurrence
                  giving rise to such state of facts will be conclusive evidence
                  that  the  board  of  directors  has  determined  that  it  is
                  equitable to make no adjustment in the circumstances.

11.      The  following  rules  and  procedures   shall  be  applicable  to  the
         adjustments made pursuant to clause 10:

         (a)      any Common  Shares  owned or held by or for the account of the
                  Corporation shall be deemed not be to outstanding except that,
                  for the  purposes of clause 10, any Common  Shares  owned by a
                  pension  plan or  profit  sharing  plan for  employees  of the
                  Corporation or any of its subsidiaries shall not be considered
                  to be owned or held by or for the account of the Corporation;

         (b)      no adjustment in the Exercise Price shall be required unless a
                  change of at least 1% of the  prevailing  Exercise Price would
                  result,  provided,  however, that any adjustment which, except
                  for the provisions of this clause 11(b),  would otherwise have
                  been required to be made,  shall be carried  forward and taken
                  into account in any subsequent adjustment;

                                      -5-
<PAGE>

         (c)      the  adjustments  provided for in clause 10 are cumulative and
                  shall  apply  to  successive   subdivisions,   consolidations,
                  dividends,  distributions  and other  events  resulting in any
                  adjustment under the provisions of such clause;

         (d)      in the absence of a  resolution  of the board of  directors of
                  the  Corporation  fixing a record  date  for any  dividend  or
                  distribution  referred  to in  clause  10(a)(iii)  above,  the
                  Corporation  shall be deemed to have fixed as the record  date
                  therefor the date on which such  dividend or  distribution  is
                  effected;

         (e)      if the  Corporation  sets a record date to take any action and
                  thereafter  and before the taking of such action  abandons its
                  plan to take such action,  then no  adjustment to the Exercise
                  Price will be required by reason of the setting of such record
                  date;

         (f)      forthwith  after any  adjustment to the Exercise  Price or the
                  number of Common Shares purchaseable pursuant to the Warrants,
                  the  Corporation  shall provide to the Holder a certificate of
                  an officer of the  Corporation  certifying as to the amount of
                  such  adjustment  and, in reasonable  detail,  describing  the
                  event  requiring  and the manner of computing  or  determining
                  such adjustment; and

         (g)      any question that at any time or from time to time arises with
                  respect to the amount of any  adjustment to the Exercise Price
                  or  other   adjustment   pursuant   to   clause  10  shall  be
                  conclusively  determined  by a firm of  independent  chartered
                  accountants (who may be the Corporation's  auditors)  selected
                  by the  board of  directors  of the  Corporation  and shall be
                  binding upon the Corporation and the Holder.

12.      With 30 days after the effective date or record date, as applicable, of
         any event  referred to in clause 10, the  Corporation  shall notify the
         Holder of the particulars of such event and the estimated amount of any
         adjustment required as a result thereof.

13.      On the happening of each and every such event set out in clause 10, the
         applicable  provisions of this Warrant,  including the Exercise  Price,
         shall,  ipso  facto,  be  deemed  to be  amended  accordingly  and  the
         Corporation  shall take all necessary  action so as to comply with such
         provisions as so amended.

14.      The  Corporation  shall not be  required  to deliver  certificates  for
         Common Shares while the share  transfer  books of the  Corporation  are
         properly  closed,  having regard to the provisions of clauses 10 and 11
         hereof,  prior to any  meeting of  shareholders  or for the  payment of
         dividends or for any other purpose and in the event of the surrender of
         any Warrant in accordance with the provisions  hereof and the making of
         any  subscription  and payment for the Common Shares called for thereby
         during any such period delivery of  certificates  for Common Shares may
         be  postponed  for not more  than  five (5) days  after the date of the
         re-opening of said share transfer books.  Provided,  however,  that any
         such  postponement  of  delivery  of  certificates   shall  be  without
         prejudice  to the  right of the  Holder  so  surrendering  the same and
         making  payment  during such period to receive after the share transfer
         books shall have been re-opened such certificates for the Common Shares
         called for,  as the same may be adjusted  pursuant to clauses 10 and 11
         hereof as a result of the  completion  of the event in respect of which
         the transfer books were closed.

15.      Subject as  hereinafter  provided,  all or any of the rights  conferred
         upon the Holder by the terms  hereof may be  enforced  by the Holder by
         appropriate   legal   proceedings.   No  recourse  under  or  upon  any
         obligation, covenant or agreement contained herein shall be had against
         any  shareholder  or  officer of the  Corporation  either  directly  or
         through the  Corporation,  it being expressly  agreed and declared that

                                      -6-
<PAGE>

         the obligations under the Warrants are solely corporate obligations and
         that no personal  liability  whatever shall attach to or be incurred by
         the  shareholders  or  officers  of the  Corporation  or any of them in
         respect  thereof,  any and all  rights and  claims  against  every such
         shareholder,  officer or director  being hereby  expressly  waived as a
         condition of and as a consideration for the issue of the Warrants.

16.      (a) The Warrants may not be assigned or transferred  except as provided
         herein and in accordance with and subject to the provisions of the 1933
         Act  and the  Rules  and  Regulations  promulgated  thereunder  and any
         applicable state,  Canadian, and provincial securities laws. Assignment
         of a Warrant will be permitted only (i) upon receipt by the Corporation
         of an opinion in form and  substance  satisfactory  to the  Corporation
         that the Warrant may be  transferred  pursuant to Rule 144  promulgated
         under  the 1933  Act,  or (ii) upon  confirmation  that a  registration
         statement  under the 1933 Act is at that time in effect with respect to
         the Warrant and that such transfer will not jeopardize the exemption or
         exemptions from registration  pursuant to which the Warrant was issued.
         Any purported transfer or assignment made other than in accordance with
         this Section 16 shall be null and void and of no force and effect.

         (b) Any assignment  permitted  hereunder  shall be made by surrender of
         this Warrant  Certificate to the  Corporation  at its principal  office
         with the  Assignment  Form  annexed  hereto  duly  executed  and  funds
         sufficient  to pay any  transfer  tax. In such event,  the  Corporation
         shall, without charge, execute and deliver a new Warrant Certificate in
         the  name of the  assignee  named  in  such  Assignment  Form,  and the
         Warrants  represented  by this Warrant  Certificate  shall  promptly be
         cancelled.  This Warrant  Certificate  may be divided or combined  with
         other Warrants which carry the same rights upon presentation thereof at
         the principal office of the Corporation  together with a written notice
         signed by the Holder thereof, specifying the names and denominations in
         which new Warrants are to be issued. The terms "Warrant" and "Warrants"
         as used herein include any Warrants in substitution  for or replacement
         of this Warrant,  or into which the Warrant represented by this Warrant
         Certificate may be divided or exchanged.

17.      The Holder may  subscribe  for and purchase any lesser number of Common
         Shares than the number of shares expressed in this Warrant Certificate.
         In the case of any  subscription  for a lesser  number of Common Shares
         than  expressed  in  this or any  successor  Warrant  Certificate  or a
         transfer of any of the Warrants pursuant to clause 16, the Holder shall
         be  entitled  to  receive  at no  cost  to  the  Holder  a new  Warrant
         Certificate in respect of the balance of Warrants not then exercised or
         transferred.  Any new  Warrant  Certificate(s)  shall be  mailed to the
         Holder  or  assignee  by the  Corporation  or,  at its  direction,  the
         Transfer  Agent,  within  five  (5)  business  days of  receipt  by the
         Corporation  of  all  materials   required  by  clauses  5  or  16,  as
         applicable.

18.      Each Holder of this Warrant,  the Warrant  Shares or any other security
         issued or issuable upon  exercise of this Warrant  shall  indemnify and
         hold harmless the  Corporation,  its  directors and officers,  and each
         person,  if any,  who  controls  the  Corporation,  against any losses,
         claims,  damages  or  liabilities,  joint  or  several,  to  which  the
         Corporation or any such director, officer or any such person may become
         subject  under the 1933 Act or statute or common  law,  insofar as such
         losses, claims, damages or liabilities,  or actions in respect thereof,
         arise out of or are based upon the  disposition  by such  Holder of the
         Warrant the Common Shares issuable upon the exercise of this Warrant in
         violation of the terms of this Warrant Certificate.

19.      If  any  Warrant  Certificate  becomes  stolen,   lost,   mutilated  or
         destroyed,  the  Corporation  shall,  on  such  terms  as it may in its
         discretion  acting  reasonably  impose,  issue  and sign a new  Warrant
         Certificate  of  like  denomination,  tenor  and  date  as the  Warrant
         Certificate so stolen, lost, mutilated or destroyed for delivery to the
         Holder.

                                      -7-
<PAGE>

20.      The  Corporation  and  the  Transfer  Agent  may  deem  and  treat  the
         registered  holder of any Warrant  Certificate as the absolute owner of
         the Warrants represented thereby for all purposes,  and the Corporation
         and neither the Corporation nor the Transfer Agent shall be affected by
         any notice or knowledge to the contrary except where the Corporation or
         the Transfer Agent is required to take notice by statute or by order of
         a court of  competent  jurisdiction.  A Holder shall be entitled to the
         rights evidenced by such Warrant  Certificate free from all equities or
         rights of set-off  or  counterclaim  between  the  Corporation  and the
         original  or any  intermediate  holder  thereof and all persons may act
         accordingly  and the  receipt by any such  Holder of the Common  Shares
         purchaseable  pursuant to such Warrant shall be a good discharge to the
         Corporation  and the  Transfer  Agent  for the  same  and  neither  the
         Corporation  nor the Transfer  Agent shall be bound to inquire into the
         title of any such Holder except where the  Corporation  or the Transfer
         Agent is  required  to take notice by statute or by order of a court of
         competent jurisdiction.

21.      Provisions  of  this  Warrant   Certificate  may  be  amended  and  the
         observance  thereof may be waived (either  generally or in a particular
         instance  and either  retroactively  or  prospectively),  only with the
         written  consent  of  the  Company  and  the  Holder  of  this  Warrant
         Certificate.

22.      All notices to be sent hereunder shall be deemed to be validly given to
         the  Holders  of the  Warrants  on the date of  receipt  if  personally
         delivered, sent by telecopier or overnight courier, charges prepaid, or
         five days after  deposit in the United  States mail,  by  registered or
         certified  mail,  postage  prepaid,  addressed to such holders at their
         post office  addresses  appearing  in the  register of Warrant  holders
         caused to be  maintained  by the  Corporation.  All  notices to be sent
         hereunder shall be deemed to be validly given to the Corporation on the
         date  of  receipt  if  personally  delivered,  sent  by  telecopier  or
         overnight courier,  charges prepaid,  or five days after deposit in the
         United States mail, by registered or certified mail,  postage  prepaid,
         addressed to the Corporation at 1725 Sheridan Avenue,  Suite 140, Cody,
         Wyoming  82414 or such  other  address  as the  Corporation  shall have
         designated by written notice to such registered owner.

23.      This  Warrant  shall be governed by the laws of the State of Nevada and
         the  federal  laws of the  United  States  applicable  therein  (within
         reference to the conflict of laws provisions thereof).

24.      The Holder may not  exercise  the Warrant to the extent  such  exercise
         would  result  in the  Holder  together  with  any  affiliate  thereof,
         beneficially  owning (as determined in accordance with Section 13(d) of
         the Securities  Exchange Act of 1934, as amended (the  "Exchange  Act")
         and the rules  promulgated  thereunder) in excess of 9.999% of the then
         issued and  outstanding  Common  Shares of the  Corporation,  including
         shares  issuable  upon  such  exercise  and  held by the  Holder  after
         application  of this  Section.  The Holder shall have the authority and
         obligation  to  determine  whether the  restriction  contained  in this
         Section will limit any particular  exercise  under the Warrant.  To the
         extent that the Holder determines that the limitation contained in this
         Section  would apply to any  particular  exercise,  the Holder shall be
         responsible   for   determining   which   portion  of  the  Warrant  is
         exercisable, for notifying the Corporation which portion of the Warrant
         is exercisable at the time of the Holder's  exercise of the Warrant and
         for not  attempting to exercise the Warrant with respect to a number of
         Common  Shares that would exceed the limits set forth in this  Section.
         The Holder  acknowledges  and agrees:  (a) that the  Corporation is not
         responsible  for  tracking  (and has no means to track)  the  number of
         Common Shares  beneficially  owned by the Holder,  (b) that neither the
         Corporation  nor its counsel has  provided,  or has any  obligation  to
         provide,  advice to the Holder  regarding  the  Holder's  ownership  of
         Common Shares or compliance with governing securities laws and (c) that
         the Corporation  shall not be liable for any civil or criminal  damages

                                      -8-
<PAGE>

         or sanctions  that may be imposed upon or against holder as a result of
         his failure to comply with the  provisions  of the Warrant or governing
         state or federal securities laws.

         IN WITNESS WHEREOF the Corporation has caused this Warrant  Certificate
to be signed by its duly authorized officer.

         DATED as of the ___ day of ______, 200_.

                                           ALTAIR INTERNATIONAL INC.

                                           By: _________________________________

                                           Its: ________________________________

                                      -9-
<PAGE>

                                SUBSCRIPTION FORM

TO BE COMPLETED IF WARRANTS ARE TO BE EXERCISED:

The undersigned hereby subscribes for  ________________  common shares of Altair
International  Inc.  according  to the  terms  and  conditions  set forth in the
annexed warrant  certificate (or such number of other  securities or property to
which such  warrant  entitles  the  undersigned  to acquire  under the terms and
conditions  set  forth  in the  annexed  warrant  certificate).  The  subscriber
acknowledges and agrees that any legend required by applicable law may be placed
on any certificates representing common shares delivered to the undersigned.

         Address for Delivery of Shares:    ------------------------------------

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

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

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

                                            Attention: _________________________

         Tendered (U.S. $_____ per share) Exercise Price $______________________

         Dated at ________________, this _______ day of _______________, _______

                  Witness:                  )        ---------------------------
                                            )        Holder's Name
                                            )
                                            )
                                            )        ---------------------------
                                            )        Authorized Signature
                                            )
                                            )
                                            )        ---------------------------
                                            )        Title (if applicable)

Signature guaranteed:

                                      -10-
<PAGE>

                                 ASSIGNMENT FORM

TO BE COMPLETED IF WARRANTS ARE TO BE ASSIGNED:

TO:      ALTAIR INTERNATIONAL INC.
         1725 Sheridan Avenue
         Suite 140
         Cody, Wyoming 82414

         By signing below, the undersigned represents, warrants and certifies to
Altair International Inc. as follows:

         (a)  the  undersigned  is  the  record  and  beneficial  owner  of  the
         Warrant(s) represented by the Warrant  Certificate attached hereto; and

                  (b) either _____ (i) attached hereto is an opinion in form and
         substance  satisfactory  to the  Corporation  that the Warrant(s) to be
         transferred hereby may be transferred  pursuant to Rule 144 promulgated
         under the 1933 Act, or

                  ______ (ii) a registration  statement under the 1933 Act is at
         that time in effect with respect to the  Warrant(s)  to be  transferred
         hereby  and  transfer  of  such  Warrant(s)  will  not  jeopardize  the
         exemption  or  exemptions  from  registration  pursuant  to which  such
         Warrant(s) were issued.

By signing below,  the  undersigned  hereby  transfers,  assigns and conveys all
right,  title and interest in and to _________  of the Warrants  represented  by
this Warrant  Certificate to  __________________________________________________
residing at____________________________________________________________ for good
and valuable  consideration.  You are hereby  instructed  to take the  necessary
steps to effect this transfer.

         Dated at ___________________, this ______ day of _____________, _____.

                  Witness:                  )        ---------------------------
                                            )        Holder's Name
                                            )
                                            )        ---------------------------
                                            )        Authorized Signature
                                            )
                                            )
                                            )        ---------------------------
                                            )        Title (if applicable)
                                            )
Signature guaranteed:                       )

                                      -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]